Xilio Therapeutics(US:XLO)2022-03-01 21:07Part I Business Xilio Therapeutics is a clinical-stage biotechnology company developing tumor-selective immuno-oncology therapies using its proprietary Geographically Precise Solutions (GPS) platform Overview and Pipeline Xilio Therapeutics is a clinical-stage biotechnology company utilizing its Geographically Precise Solutions (GPS) platform to develop tumor-selective immuno-oncology (I-O) therapies - The company's core technology is its Geographically Precise Solutions (GPS) platform, designed to engineer molecules that are activated by proteases preferentially active in the tumor microenvironment (TME), aiming to localize therapeutic effects and minimize systemic toxicity233044 Product Pipeline and Anticipated Milestones (as of Feb 2022) | Tumor-Selective Programs | Mechanism of Action | Discovery | IND-Enabling | Phase 1 | Phase 2 | Anticipated Upcoming Milestones | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | XTX101 | Anti-CTLA-4 | ✓ | ✓ | Ongoing | Ongoing | Preliminary Phase 1 monotherapy data mid-2022 | | XTX202 | IL-2 | ✓ | ✓ | Ongoing | Ongoing | Preliminary Phase 1 data 2H 2022 | | XTX301 | IL-12 | ✓ | Ongoing | | | IND submission 2H 2022 | | XTX401 | IL-15 | ✓ | Ongoing | | | IND-enabling studies | - Key strategic elements include advancing XTX202 and XTX101 through clinical development, progressing preclinical candidates XTX301 and XTX401, expanding the portfolio using the GPS platform, and building a fully-integrated I-O company while exploring strategic collaborations3235 XTX101 Program (Anti-CTLA-4) XTX101 is a tumor-selective anti-CTLA-4 monoclonal antibody designed to improve the therapeutic index over existing therapies like ipilimumab - A Phase 1/2 clinical trial for XTX101 in patients with advanced solid tumors was initiated in September 2021. Preliminary monotherapy data is expected in mid-2022, and combination therapy (with pembrolizumab) data is expected in the second half of 20226286 - In a preclinical mouse model, XTX101 at a 0.3 mg/kg dose achieved a similar anti-tumor response and complete response (CR) rate as an ipilimumab analog at a 3.0 mg/kg dose, suggesting a 10-fold increase in potency75 - Preclinical data indicated tumor-selective activity, with XTX101 increasing CD8+ T cells and decreasing Tregs within the tumor without a corresponding increase in CD4+ T cells in the blood, unlike the ipilimumab analog which showed systemic activity7980 Cytokine Programs The company's cytokine programs aim to develop tumor-selective versions of potent cytokines to overcome their historical toxicity limitations - XTX202 (IL-2): A Phase 1/2 trial was initiated in January 2022 for patients with solid tumors, with preliminary data expected in the second half of 2022. The program targets RCC and melanoma95139 - XTX202 Preclinical Results: In mouse models, XTX202 demonstrated comparable tumor growth inhibition to aldesleukin and a non-masked IL-2 at their maximum tolerated doses, but without the associated systemic toxicities like vascular leak syndrome (VLS), splenomegaly, or body weight loss121122127 - XTX301 (IL-12): The company plans to submit an IND to the FDA in the second half of 2022. Preclinical studies showed the molecule was well-tolerated in NHPs at doses at least 50-fold higher than a non-masked IL-12 control150157169 - XTX401 (IL-15): Currently in preclinical IND-enabling studies. Preclinical data showed tumor-selective activation of NK and NKT cells in the tumor without systemic expansion in the blood170178179 Competition, IP, and Manufacturing Xilio faces substantial competition from major pharmaceutical and biotech companies developing various immuno-therapies, including specific competitors in the anti-CTLA-4, IL-2, IL-12, and IL-15 spaces - The company faces competition from established and developing therapies, including Yervoy (ipilimumab) for anti-CTLA-4 and Proleukin (aldesleukin) for IL-2, as well as numerous companies with programs in development for CTLA-4, IL-2, IL-12, and IL-15189191192 - As of February 15, 2022, the company's patent portfolio consists of 11 owned, co-owned, or exclusively licensed patent application families. Patents issuing from these applications are expected to expire between 2037 and 2042195197 - Material license agreements include a cross-license with AskGene for IL-2 and IL-15 technology, an exclusive license from City of Hope for the anti-CTLA-4 program, and an exclusive license from WuXi Biologics for anti-CTLA-4 mAb technology217224227 - The company relies on third-party contract manufacturers for all clinical and potential commercial supply of its product candidates and does not own or operate its own manufacturing facilities231 Government Regulation The company's operations are subject to extensive regulation by the FDA in the United States and comparable authorities abroad, covering research, development, testing, manufacturing, and marketing - The company must navigate a multi-step regulatory process with the FDA, including preclinical testing, filing an Investigational New Drug (IND) application, and conducting Phase 1, 2, and 3 clinical trials before submitting a Biologics License Application (BLA) for marketing approval235237244 - The company's biologic products may be eligible for 12 years of regulatory exclusivity in the U.S. under the BPCIA, which would prevent the FDA from approving a biosimilar version during that period288290 - Operations are subject to various healthcare laws, including the federal Anti-Kickback Statute, False Claims Act, HIPAA, and the Physician Payments Sunshine Act, which regulate interactions with healthcare providers and third-party payors301576 - The company is subject to complex data privacy regulations globally, such as the GDPR in Europe and the CCPA/CPRA in California, which govern the collection, use, and transfer of personal data, including health information from clinical trials315313 Risk Factors This section details numerous risks that could materially affect the company's business, financial condition, and results of operations - Financial Risks: The company has a history of significant operating losses ($75.8 million in 2021) and expects to incur more. It will require substantial additional funding to complete development, and failure to raise capital could force delays or elimination of programs328333 - Development and Clinical Risks: The business is highly dependent on the success of its early-stage product candidates (XTX101, XTX202). The GPS platform is unproven in humans, and preclinical results may not translate to clinical trials. Trials may be delayed or halted due to enrollment difficulties, safety issues, or unfavorable results347358360 - Third-Party Reliance: The company relies on third-party Contract Manufacturing Organizations (CMOs) for all manufacturing, which is complex and subject to regulatory oversight and potential disruptions. It also relies on Contract Research Organizations (CROs) to conduct clinical trials397416 - Commercial and IP Risks: The company faces substantial competition from well-resourced companies. Its ability to successfully commercialize products depends on obtaining and maintaining broad patent protection, which is uncertain. It also relies on in-license agreements that impose obligations and could be terminated432461470 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None665 Properties The company leases approximately 28,000 square feet of office and laboratory space for its headquarters in Waltham, Massachusetts - The company leases approximately 28,000 square feet of office and laboratory space in Waltham, Massachusetts, under a lease that expires in March 2030667 Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings668 Mine Safety Disclosures This item is not applicable to the company - Not applicable669 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock began trading on the Nasdaq Global Select Market under the symbol "XLO" on October 22, 2021 - The company's common stock began trading on the Nasdaq Global Select Market under the symbol "XLO" on October 22, 2021671 - The company closed its IPO on October 26, 2021, raising aggregate net proceeds of $116.4 million after deducting underwriting discounts, commissions, and offering expenses680682 - The company has never paid cash dividends and does not anticipate paying any in the foreseeable future, intending to retain future earnings for reinvestment673 Management's Discussion and Analysis of Financial Condition and Results of Operations For the year ended December 31, 2021, Xilio reported a net loss of $75.8 million, driven by increased operating expenses, and ended the year with $198.1 million in cash Results of Operations For the fiscal year 2021, the company's net loss increased to $75.8 million from $55.2 million in 2020 Comparison of Results of Operations (in thousands) | | Year Ended December 31, | | Change | | :--- | :--- | :--- | :--- | | | 2021 | 2020 | ($) | | Research and development | $51,188 | $43,910 | $7,278 | | General and administrative | $23,856 | $10,653 | $13,203 | | Total operating expenses | $75,044 | $54,563 | $20,481 | | Loss from operations | $(75,044) | $(54,563) | $(20,481) | | Net loss | $(75,800) | $(55,219) | $(20,581) | Research and Development Expenses Breakdown (in thousands) | | Year Ended December 31, | | Change | | :--- | :--- | :--- | :--- | | | 2021 | 2020 | ($) | | XTX202 | $14,143 | $14,866 | $(723) | | XTX101 | $5,941 | $11,554 | $(5,613) | | Other early programs & indirect R&D | $15,292 | $9,483 | $5,809 | | Personnel-related | $15,812 | $8,007 | $7,805 | | Total R&D expenses | $51,188 | $43,910 | $7,278 | - The increase in G&A expenses was primarily driven by a $7.5 million increase in personnel-related costs and a $4.1 million increase in professional and consulting fees related to transitioning to and operating as a public company723727 Liquidity and Capital Resources As of December 31, 2021, the company had $198.1 million in cash and cash equivalents, which is expected to fund operations into 2024 - The company had cash and cash equivalents of $198.1 million as of December 31, 2021, which is expected to fund operations and capital expenditures into 2024725738 Summary of Cash Flows (in thousands) | | Year Ended December 31, | | :--- | :--- | :--- | | | 2021 | 2020 | | Net cash used in operating activities | $(80,751) | $(36,091) | | Net cash used in investing activities | $(1,100) | $(2,188) | | Net cash provided by financing activities | $260,668 | $10,029 | | Net increase (decrease) in cash | $178,817 | $(28,250) | - Net cash from financing activities in 2021 was $260.7 million, primarily from the IPO and issuances of Series B and C convertible preferred stock733 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Xilio Therapeutics is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide this information776 Financial Statements and Supplementary Data This section indicates that the company's audited consolidated financial statements and supplementary data are appended to the Annual Report on Form 10-K - The financial statements required by this item are appended to the Annual Report on Form 10-K777 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None778 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2021 - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective781 - A management report on internal control over financial reporting is not included due to the transition period for newly public companies782 Part III Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees The information required for Items 10 through 14 will be included in the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Stockholders787791792 Part IV Exhibits and Financial Statement Schedules This section provides an index of the consolidated financial statements and a list of all exhibits filed as part of the Annual Report on Form 10-K - This item contains the index to the consolidated financial statements and the exhibit index for the Form 10-K filing796801 Form 10-K Summary The company indicates that there is no Form 10-K summary - None805 Financial Statements Consolidated Financial Statements The consolidated financial statements present Xilio Therapeutics' financial position as of December 31, 2021, showing $218.1 million in total assets and a $75.8 million net loss for the year Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $198,053 | $19,238 | | Total current assets | $202,517 | $20,590 | | Total assets | $218,060 | $36,317 | | Liabilities and Equity | | | | Total current liabilities | $12,778 | $22,155 | | Total liabilities | $32,631 | $41,602 | | Total stockholders' equity (deficit) | $185,429 | $(83,287) | | Total liabilities and equity | $218,060 | $36,317 | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Research and development | $51,188 | $43,910 | | General and administrative | $23,856 | $10,653 | | Total operating expenses | $75,044 | $54,563 | | Loss from operations | $(75,044) | $(54,563) | | Net loss | $(75,800) | $(55,219) | Notes to Consolidated Financial Statements The notes detail accounting policies, liquidity, intellectual property licenses, and commitments, including $198.1 million cash and significant NOL carryforwards - The company's October 2021 IPO generated net proceeds of $116.4 million. Management believes its cash and cash equivalents of $198.1 million as of Dec 31, 2021, are sufficient to fund operations for at least the next twelve months842844 - The company has significant license agreements, including a $6.0 million upfront payment to AskGene in 2020 for IL-2 patent rights, and potential future milestone payments of up to $13.0 million per product901905 - As of December 31, 2021, the company had federal and state net operating loss (NOL) carryforwards of approximately $149.5 million and $141.0 million, respectively. A full valuation allowance has been recorded against the net deferred tax assets980981