UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 6, 2019

 

 

XENCOR, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

111 West Lemon Avenue

Monrovia, California 91016

(Address of principal executive offices and zip code)

 

Registrant’s telephone number, including area code: (626) 305-5900

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 6, 2019, we announced our financial results for the quarter ended June 30, 2019 in the press release attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

The information herein and in the exhibit hereto is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

Exhibit 99.1

 

Xencor Reports Second Quarter 2019 Financial Results

-- Management to Host Conference Call at 4:30 p.m. ET today --

MONROVIA, Calif.--August 6, 2019--Xencor, Inc. (NASDAQ: XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer, autoimmune diseases, asthma and allergic diseases, today reported financial results for the second quarter ended June 30, 2019 and provided a review of recent business and clinical highlights.

“Over the last two years, Xencor has initiated six Phase 1 clinical studies evaluating XmAb® bispecific antibodies—both T cell engagers and tumor microenvironment (TME) activators—in patients with many types of advanced cancers, and we have also entered into strategic collaborations to advance select programs with our partners,” said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. “We anticipate several initial data presentations from these programs in the second half of 2019 and first half of 2020, and our strong financial position supports our broad pipeline and research into novel antibodies and cytokines engineered with XmAb bispecific technologies.”

Dr. Dahiyat added, “In the second quarter, we reopened the Phase 1 study of XmAb14045 to enrollment, and patients have since begun treatment under the amended protocol. We also advanced our second and third TME activating bispecific antibodies into Phase 1 clinical studies. TME bispecific antibodies are designed with tuned dual checkpoint or checkpoint-agonist mechanisms to generate anti-tumor immune responses in a targeted manner. Finally, we continued to strengthen our senior leadership with appointments in business development and regulatory affairs.”

 

Recent Business and Clinical Highlights and Anticipated Upcoming Milestones

 

CD3 Bispecific Antibodies: Xencor's initial bispecific antibody programs are tumor-targeted antibodies that contain both a tumor antigen binding domain and a cytotoxic T-cell binding domain (CD3). These bispecific antibodies activate T cells for highly potent and targeted killing of malignant cells.

 

 

 

 

Tumor Microenvironment (TME) Activating Bispecific Antibodies: Xencor's bispecific pipeline includes a suite of TME activators that engage multiple, different targets, such as T-cell checkpoint or agonist receptors. Xencor’s TME activators are designed to promote tumor-selective T-cell activation.

 

 

 

 

Cytokines: Xencor uses its bispecific Fc domain and Xtend™ technology to engineer cytokines, which are immune signaling proteins, that have potency tuned to improve therapeutic index and have longer half-life.

 

 

Partnered XmAb Programs: Xencor has eight licensing partnerships for XmAb technology. The most advanced program where the Company has licensed its technology is Alexion’s Ultomiris®, which has received marketing authorizations for the treatment of adult patients with paroxysmal nocturnal hemoglobinuria (PNH) in the U.S. (December 2018), Japan (June 2019) and Europe (July 2019).

 

Corporate: In June 2019, Xencor announced the planned October 31, 2019 retirement of Paul Foster, M.D., Chief Medical Officer. As the Company searches for Dr. Foster’s successor, Xencor strengthened its senior management team in the second quarter with the appointments of Jeremy Grunstein, Ph.D., as vice president, business development, and Kirk Rosemark, as vice president, regulatory affairs and quality assurance.

 

Ultomiris® is a registered trademark of Alexion Pharmaceuticals, Inc.

 

Second Quarter Ended June 30, 2019 Financial Results

 

Cash, cash equivalents and marketable securities totaled $626.1 million as of June 30, 2019, compared to $530.5 million at December 31, 2018. The increase reflects upfront proceeds of $135 million received in the first half of 2019 from the Genentech and Astellas collaborations, offset by cash used to fund operating activities in the first six months of 2019.

 

Total revenue for the second quarter ended June 30, 2019 was $19.5 million, which was primarily revenue recognized under the Astellas collaboration and a milestone and royalties earned from Alexion. Total revenue for the six months ended June 30, 2019 was $131.4 million and includes revenue earned from the Genentech and Astellas collaborations and the milestone and royalty revenue from Alexion. No revenue was reported for the same periods in 2018.

 

Research and development expenses for the second quarter of 2019 were $33.3 million, compared to $23.3 million for the same period in 2018. Total research and development expenses for the six months ended June 30, 2019 were $61.5 million, compared to $49.4 million for the same period in 2018. The increased research and development spending for the three and six months ended June 30, 2019 reflects increased stock-based compensation expense and additional spending on Xencor’s CD3 bispecific antibody and cytokine development candidates and technologies.

 

General and administrative expenses for the second quarter of 2019 were $5.8 million, compared to $5.0 million for the same period in 2018. Total general and administrative expenses for the six months ended June 30, 2019 were $11.3 million, compared to $9.5 million for the same period in 2018. The increased general and administrative spending for the three and six months ended June 30, 2019 reflects additional spending on intellectual property including patents and licensing and additional expenses related to personnel and professional services.

 

Non-cash, stock-based compensation expense for the six months ended June 30, 2019 was $15.2 million, compared to $9.4 million for the same period in 2018.

 

Net loss for the second quarter ended June 30, 2019 was $16.0 million, or $(0.28) on a fully diluted per share basis, compared to a net loss of $25.9 million, or $(0.46) on a fully diluted per share basis, for the same period in 2018. For the six months ended June 30, 2019, net income was $64.0 million, or $1.10 on a fully diluted per share basis, compared to a net loss of $55.4 million, or $(1.07) on a fully diluted per share basis, for the same period in 2018. The lower net loss reported for the three months ended June 30, 2019 over the same period in 2018 is primarily due to revenue from our Astellas and Alexion collaborations in 2019. The net income reported for the six months ended June 30, 2019 over the net loss reported for the same period in 2018 is primarily due to revenue recognized from our Genentech collaboration.

 

The total shares outstanding were 56,529,398 as of June 30, 2019, compared to 55,821,310 as of June 30, 2018.

 

Financial Guidance

 

Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations beyond 2024. Xencor expects to end 2019 with between $575 million and $600 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 first quarter 2019 financial results and provide a corporate update. The live call may be accessed by dialing (877) 359-9508 for domestic callers or (224) 357-2393 for international callers and referencing conference ID number 1597118. A live webcast of the conference call will be available under "Events & Presentations" in the Investors section of the Company's website located at www.xencor.com. The webcast will be archived on the company website for 30 days.

 

About Xencor, Inc.

 

Xencor is a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer, autoimmune diseases, asthma and allergic diseases. Currently, 13 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 monoclonal antibodies resulting in new mechanisms of therapeutic action. For more information, please visit www.xencor.com.

 

Forward Looking Statements

 

Statements contained in this press release regarding matters that are not historical facts are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, the quotations from Xencor's president and chief executive officer and any expectations relating to Xencor's financial expectations and business, the timing and success of clinical trials, future product candidates, Xencor's research and development programs, partnering efforts and capital requirements. Such statements involve 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, 2018 as well as Xencor's subsequent filings with the Securities and Exchange Commission. All forward-looking statements are based on Xencor's current information and belief as well as assumptions made by Xencor. 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. 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.

 

Contacts:

Charles Liles

626-737-8118

cliles@xencor.com

 

Media Contact

Jason I. Spark

Canale Communications

619-849-6005

jason@canalecomm.com

Xencor, Inc.

Condensed Balance Sheets

(in thousands)

 

 

The 2018 balance sheet was derived from the 2018 annual financial statements included in the Form 10-K that was filed on February 26, 2019

Xencor Inc.

Condensed Statements of Comprehensive Income (Loss)

(in thousands, except share and per share data)