Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies and cytokines for the treatment of cancer and autoimmune diseases, today reported financial results for the second quarter ended June 30, 2021 and provided a review of recent business and portfolio highlights.
"Xencor is applying its leading protein engineering tools and XmAb technology to overcome historical challenges in creating therapeutic molecules from bispecific antibodies or cytokines. For our most advanced clinical programs, we recently initiated a Phase 2 clinical study for XmAb717, our PD-1 x CTLA-4 bispecific antibody, in metastatic prostate cancer, and we plan to initiate a Phase 2 study of plamotamab in lymphoma. Our cytokine portfolio is rapidly advancing with XmAb306, our long-acting IL-15 for oncology, and XmAb564, our IL-2 for autoimmune disease, both of which are in Phase 1 studies," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "We are also at the forefront of efforts to engage CD28 to selectively activate T cells, and we plan to initiate clinical studies in 2022 for XmAb808, our B7-H3 x CD28 bispecific antibody, as well as our third clinical cytokine program, an IL-12-Fc candidate."
"Additionally, Vir Biotechnology and GSK's sotrovimab was recently authorized for the treatment of mild-to-moderate COVID-19, becoming the third antibody incorporating XmAb technology to be made commercially available for patients. The licensing of our XmAb technologies expands their application to areas of medicine outside our internal focus and provides us with important sources of non-dilutive capital, which we use to advance and expand our broad internal portfolio of novel bispecific antibodies and cytokine drug candidates."
Recent Portfolio Highlights and Upcoming Data Presentations
Partnership Updates
Second Quarter Ended June 30, 2021 Financial Results
Cash, cash equivalents and marketable investment securities totaled $603.7 million at June 30, 2021, compared to $604.0 million at December 31, 2020. Total proceeds from royalties, milestones, sale of an investment equity security, and a net increase in the value of marketable equity securities offset net spending of $90.5 million on operations for the first six months of 2021.
Total revenue for the second quarter ended June 30, 2021 was $67.4 million, compared to $13.1 million for the same period in 2020. Revenues in the second quarter were primarily related to revenue earned under the Company's Janssen, Genentech and Novartis collaborations, and royalties from Alexion, Vir and MorphoSys, compared to revenues from the same period in 2020, which were primarily licensing revenue from Gilead and royalty revenue from Alexion. Total revenue for the six months ended June 30, 2021 was $101.4 million, compared to $45.5 million for the same period in 2020. Revenues for the six-month period in 2021 were primarily revenue earned from research collaborations with Janssen, Genentech and Novartis, milestone revenue from MorphoSys, and royalty revenue from Alexion, Vir and MorphoSys, compared to the same period in 2020, which were primarily licensing revenue from Gilead and Aimmune, milestone revenue from MorphoSys, and royalty revenue from Alexion.
Research and development (R&D) expenses for the second quarter ended June 30, 2021 were $49.5 million, compared to $43.5 million for the same period in 2020. Total R&D expenses for the six months ended June 30, 2021 were $90.9 million, compared to $77.4 million for the same period in 2020. Increased R&D expenses for the second quarter and first six months of 2021 over amounts for the same periods in 2020 were primarily due to additional spending on XmAb104 (PD-1 x ICOS) and XmAb819 development programs and other early-stage programs. Additional spending on XmAb306 also contributed to increased R&D expenses during the first six months of 2021.
General and administrative (G&A) expenses for the second quarter ended June 30, 2021 were $8.9 million, compared to $7.2 million for the same period in 2020. Total G&A expenses for the six months ended June 30, 2021 were $17.1 million, compared to $14.4 million for the same period in 2020. Increased G&A expenses for the second quarter and first six months of 2021 over amounts for the same periods in 2020 were primarily due to increased G&A staffing and spending on professional services.
Other income for the second quarter ended June 30, 2021 was $43.2 million, compared to $2.6 million in the same period in 2020. Other income for the six months ended June 30, 2021 was $56.3 million, compared to $3.3 million in the same period in 2020. Other income for the second quarter and first six months of 2021 includes realized gains on the sale of an investment equity security and an increase in unrealized gains on the Company's marketable equity investments.
Non-cash, stock-based compensation expense for the six months ended June 30, 2021 was $17.6 million, compared to $14.7 million for same period in 2020.
Net income for the second quarter ended June 30, 2021 was $52.2 million, or $0.87 on a fully diluted per share basis, compared to net loss of $35.0 million, or $(0.61) on a fully diluted per share basis, for the same period in 2020. For the six months ended June 30, 2021, net income was $49.8 million, or $0.82 on a fully diluted per share basis, compared to net loss of $43.1 million, or $(0.76) on a fully diluted per share basis, for the same period in 2020. Net income reported for the second quarter ended June 30, 2021 and first six months of 2021, compared to the net loss reported for the same periods in 2020, were primarily due to higher collaboration, milestone and royalty revenues and other income in 2021 compared to 2020.
The total shares outstanding were 58,315,485 as of June 30, 2021, compared to 57,214,253 as of June 30, 2020.
Financial Guidance
Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations into 2024. Xencor expects to end 2021 with between $475 million and $500 million in cash, cash equivalents and marketable securities.
Conference Call and Webcast
Xencor will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss these second quarter 2021 financial results and provide a corporate update.
The live call may be accessed by dialing (877) 359-9508 for domestic callers or +1 (224) 357-2393 for international callers and referencing conference ID number 1389708. A live webcast of the conference call will be available online from the Investors section of Xencor's website at https://www.xencor.com/. The webcast will be archived on Xencor's website for 30 days.
About Xencor, Inc.
Xencor is a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies and cytokines for the treatment of cancer and autoimmune diseases. Currently, 22 candidates engineered with Xencor's XmAb® technology are in clinical development internally and with partners. Xencor's XmAb antibody engineering technology enables small changes to the structure of proteins resulting in new mechanisms of therapeutic action. For more information, please visit https://www.xencor.com/.
Forward-Looking Statements
Certain statements contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements that are not purely statements of historical fact, and can generally be identified by the use of words such as "potential," "can," "will," "plan," "may," "could," "would," "expect," "anticipate," "seek," "look forward," "believe," "committed," "investigational," and similar terms, or by express or implied discussions relating to Xencor's business, including, but not limited to, statements regarding the timing of data from Xencor's early and clinical-stage programs; the timing of additional clinical studies the timing of submission of an IND for XmAb819; the Company's ability to fund research and development programs and operations into 2024; the Company's year-end cash position; the quotations from Xencor's president and chief executive officer and other statements that are not purely statements of historical fact. Such statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Xencor and are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks described in Xencor's public securities filings. For a discussion of these and other factors, please refer to Xencor's annual report on Form 10-K for the year ended December 31, 2020 as well as Xencor's subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended to date. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law.
Xencor, Inc. | |||||
Condensed Balance Sheets | |||||
(in thousands) | |||||
June 30, | December 31, | ||||
2021 |
2020 |
||||
(unaudited) | |||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ |
115,842 |
$ |
163,544 |
|
Short-term marketable securities |
|
288,976 |
|
434,156 |
|
Equity securities |
|
45,230 |
|
5,303 |
|
Accounts receivable |
|
14,825 |
|
11,443 |
|
Contract asset |
|
500 |
|
12,500 |
|
Prepaid expenses and other current assets |
|
15,594 |
|
10,726 |
|
Total current assets |
|
480,967 |
|
637,672 |
|
Property and equipment, net |
|
23,132 |
|
21,682 |
|
Intangible assets, net |
|
16,384 |
|
15,977 |
|
Long-term marketable securities |
|
153,619 |
|
1,030 |
|
Equity securities - noncurrent |
|
17,146 |
|
16,071 |
|
Other assets |
|
4,354 |
|
10,812 |
|
Total assets | $ |
695,602 |
$ |
703,244 |
|
Liabilities and stockholders' equity | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities |
|
24,440 |
$ |
26,557 |
|
Current portion of deferred revenue |
|
19,200 |
|
92,615 |
|
Current portion of lease liability |
|
2,322 |
|
1,889 |
|
Total current liabilities |
|
45,962 |
|
121,061 |
|
Lease liability, less current portion |
|
2,702 |
|
9,739 |
|
Total liabilities |
|
48,664 |
|
130,800 |
|
Stockholders' equity |
|
646,938 |
|
572,444 |
|
Total liabilities and stockholders' equity | $ |
695,602 |
$ |
703,244 |
The 2020 balance sheet was derived from the 2020 annual financial statements included in the Form 10-K that was filed on February 24, 2021 |
Xencor Inc. | |||||||||||||||
Condensed Statements of Comprehensive Income (Loss) | |||||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
Three months ended June 30, |
Six months ended
|
||||||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
|
||||||||
(unaudited) | |||||||||||||||
Revenues | $ | 67,447 |
|
$ | 13,089 |
|
$ | 101,412 |
|
$ | 45,474 |
|
|||
Operating expenses: | |||||||||||||||
Research and development | 49,497 |
|
43,458 |
|
90,908 |
|
77,401 |
|
|||||||
General and administrative | 8,863 |
|
7,231 |
|
17,090 |
|
14,449 |
|
|||||||
Total operating expenses | 58,360 |
|
50,689 |
|
107,998 |
|
91,850 |
|
|||||||
Income (loss) from operations | 9,087 |
|
(37,600 |
) |
(6,586 |
) |
(46,376 |
) |
|||||||
Other income, net | 43,161 |
|
2,582 |
|
56,347 |
|
3,284 |
|
|||||||
Net income (loss) | 52,248 |
|
(35,018 |
) |
49,761 |
|
(43,092 |
) |
|||||||
Other comprehensive income (loss) | |||||||||||||||
Net unrealized gain (loss) on marketable securities | (112 |
) |
427 |
|
(90 |
) |
322 |
|
|||||||
Comprehensive income (loss) | $ | 52,136 |
|
$ | (34,591 |
) |
$ | 49,671 |
|
$ | (42,770 |
) |
|||
Net income (loss) per share: | |||||||||||||||
Basic net income (loss) per share | $ | 0.90 |
|
$ | (0.61 |
) |
$ | 0.86 |
|
$ | (0.76 |
) |
|||
Diluted net income (loss) per share | $ | 0.87 |
|
$ | (0.61 |
) |
$ | 0.82 |
|
$ | (0.76 |
) |
|||
Weighted-average number of common shares used in net income (loss) per share applicable to common stockholders - basic | 58,247,941 |
|
57,059,610 |
|
58,123,319 |
|
57,003,162 |
|
|||||||
Weighted-average number of common shares used in net income (loss) per share applicable to common stockholders - diluted | 60,335,339 |
|
57,059,610 |
|
60,503,846 |
|
57,003,162 |
|
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