0001558370-21-001522 | 10-K | XBRL Viewer

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Feb. 16, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-36182
Entity Registrant Name	Xencor, Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-1622502
Entity Address, Address Line One	111 West Lemon Avenue
Entity Address, City or Town	Monrovia
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91016
City Area Code	626
Local Phone Number	305-5900
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	XNCR
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		57,945,225
Entity Central Index Key	0001326732
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Public Float			$ 1,843,897,240
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 163,544	$ 50,312
Marketable securities	434,156	479,470
Equity securities	5,303
Accounts receivable	11,443	21,574
Income tax receivable		502
Contract asset	12,500
Prepaid expenses and other current assets	10,726	6,547
Total current assets	637,672	558,405
Property and equipment, net	21,682	15,805
Patents, licenses, and other intangible assets, net	15,977	14,421
Marketable securities - long term	1,030	71,526
Carrying value	16,071
Income tax receivable		402
Right-of-use assets	10,600	9,380
Other assets	212	311
Total assets	703,244	670,250
Current liabilities
Accounts payable	8,954	10,189
Accrued expenses	17,603	8,995
Lease liabilities	1,889	2,169
Deferred revenue	92,615	45,205
Total current liabilities	121,061	66,558
Lease liabilities, net of current portion	9,739	8,565
Deferred revenue, net of current portion		1,926
Total liabilities	130,800	77,049
Commitments and contingencies (see note 9)
Stockholders' equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2020 and 2019
Common stock, $0.01 par value: 200,000,000 authorized shares; 57,873,444 issued and outstanding shares at December 31, 2020 and 56,902,301 issued and outstanding at December 31, 2019	580	569
Additional paid-in capital	937,525	887,873
Accumulated other comprehensive income	74	1,161
Accumulated deficit	(365,735)	(296,402)
Total stockholders' equity	572,444	593,201
Total liabilities and stockholders' equity	$ 703,244	$ 670,250

Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue
Collaborations, licenses, milestones, and royalties	$ 122,694	$ 156,700	$ 40,603
Operating expenses
Research and development	169,802	118,590	97,501
General and administrative	29,689	24,286	22,472
Total operating expenses	199,491	142,876	119,973
Income (loss) from operations	(76,797)	13,824	(79,370)
Other income (expense)
Interest income, net	7,264	13,619	9,086
Other income (expense), net	200	(256)	(125)
Total other income, net	7,464	13,363	8,961
Income (loss) before income tax	(69,333)	27,187	(70,409)
Income tax expense	0	312	0
Net income (loss)	(69,333)	26,875	(70,409)
Other comprehensive income (loss)
Net unrealized gain (loss) on marketable securities available-for-sale	(1,087)	2,132	837
Comprehensive income (loss)	$ (70,420)	$ 29,007	$ (69,572)
Net income (loss) per share attributable to common stockholders:
Basic net income (loss) (in dollars per share)	$ (1.21)	$ 0.48	$ (1.31)
Diluted net income (loss) (in dollars per share)	$ (1.21)	$ 0.46	$ (1.31)
Weighted average shares used to compute net income (loss) per share attributable to common stockholders:
Basic (in shares)	57,212,737	56,531,439	53,942,116
Diluted (in shares)	57,212,737	58,467,880	53,942,116

Statement of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at Dec. 31, 2017	$ 470	$ 570,670	$ (1,808)	$ (252,868)	$ 316,464
Balance (in shares) at Dec. 31, 2017	47,002,488
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance cost	$ 84	245,420			245,504
Sale of common stock, net of issuance cost (in shares)	8,395,000
Issuance of common stock upon exercise of stock awards	$ 8	7,609			7,617
Issuance of common stock upon exercise of stock awards (in shares)	824,731
Issuance of common stock under the Employee Stock Purchase Plan	$ 1	1,119			1,120
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	57,323
Comprehensive income (loss)			837	(70,409)	(69,572)
Stock-based compensation		20,548			20,548
Balance at Dec. 31, 2018	$ 563	845,366	(971)	(323,277)	521,681
Balance (in shares) at Dec. 31, 2018	56,279,542
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock awards	$ 5	9,264			9,269
Issuance of common stock upon exercise of stock awards (in shares)	543,887
Issuance of common stock under the Employee Stock Purchase Plan	$ 1	1,392			1,393
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	67,561
Issuance of restricted stock units (in shares)	11,311
Comprehensive income (loss)			2,132	26,875	29,007
Stock-based compensation		31,851			31,851
Balance at Dec. 31, 2019	$ 569	887,873	1,161	(296,402)	593,201
Balance (in shares) at Dec. 31, 2019	56,902,301
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock awards	$ 9	16,608			16,617
Issuance of common stock upon exercise of stock awards (in shares)	858,470
Issuance of common stock under the Employee Stock Purchase Plan	$ 1	1,426			1,427
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	50,318
Issuance of restricted stock units	$ 1	(1)
Issuance of restricted stock units (in shares)	62,355
Comprehensive income (loss)			(1,087)	(69,333)	(70,420)
Stock-based compensation		31,619			31,619
Balance at Dec. 31, 2020	$ 580	$ 937,525	$ 74	$ (365,735)	$ 572,444
Balance (in shares) at Dec. 31, 2020	57,873,444

Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net income (loss)	$ (69,333)	$ 26,875	$ (70,409)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	5,794	4,298	3,251
Amortization of premium on marketable securities	(272)	(4,321)	(394)
Stock-based compensation	31,619	31,851	20,548
Abandonment of capitalized intangible assets	535	221	239
Loss on disposal of assets	4	8	102
Loss (gain) on sale of marketable securities available-for-sale	(153)		74
Equity received in connection with license agreement	(26,660)
Cash redemption of equity received in connection with license agreement	5,390
Change in fair value of equity security	(105)
Changes in operating assets and liabilities:
Accounts receivable	10,131	(11,321)	(9,045)
Interest receivable	1,190	(387)	(535)
Prepaid expenses and other current assets	(4,170)	3,828	(4,769)
Income tax receivable	895	704	(84)
Contract asset and deposits	(12,401)		(46)
Accounts payable	(1,235)	6,392	(3,072)
Accrued expenses	8,608	(667)	4,182
Deferred rent		(1,513)	398
Income tax payable			(157)
Lease liabilities and ROU assets	(325)	1,354
Deferred revenue	45,484	7,052	(20,039)
Net cash provided by (used in) operating activities	(5,004)	64,374	(79,756)
Cash flows from investing activities
Proceeds from sale and maturities of marketable securities available-for-sale	757,617	456,923	222,125
Proceeds from sale of property and equipment	1		9
Purchase of marketable securities	(643,658)	(496,855)	(377,840)
Purchase of intangible assets	(3,229)	(3,685)	(1,935)
Purchase of property and equipment	(10,539)	(7,353)	(7,212)
Proceeds from repayment of loan receivable			86
Net cash provided by (used in) investing activities	100,192	(50,970)	(164,767)
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards	16,617	9,269	7,617
Proceeds from issuance of common stock from Employee Stock Purchase Plan	1,427	1,393	1,120
Proceeds from issuance of common stock			260,245
Common stock issuance costs			(14,741)
Net cash provided by financing activities	18,044	10,662	254,241
Net increase in cash and cash equivalents	113,232	24,066	9,718
Cash and cash equivalents, beginning of year	50,312	26,246	16,528
Cash and cash equivalents, end of year	163,544	50,312	26,246
Cash paid for:
Interest	15	11	16
Taxes		400	233
Supplemental Schedule of Noncash Investing Activities
Net unrealized gain (loss) on marketable securities available-for-sale	$ (1,087)	$ 2,132	$ 837

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Description of Business

Xencor, Inc. (we, us, our, or the Company) was incorporated in California in 1997 and reincorporated in Delaware in September 2004. We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered monoclonal antibody and cytokine therapeutics to treat patients with cancer and autoimmune diseases who have unmet medical needs. We create our product candidates using our proprietary XmAb technology platforms, which focus on the portion of an antibody that interacts with multiple segments of the immune system, referred to as the Fc domain, which is constant and interchangeable among antibodies. Our engineered Fc domains, the XmAb technology, can increase antibody immune inhibition, improve cytotoxicity, extend half-life and most recently are used to create bispecific antibodies and cytokines.

Our operations are based in Monrovia, California and San Diego, California.

Basis of Presentation

The Company’s financial statements as of December 31, 2020, 2019, and 2018 and for the years then ended have been prepared in accordance with accounting principles generally accepted in the United States (U.S.).

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include useful lives of long-lived assets, the periods over which certain revenues and expenses will be recognized including collaboration revenue recognized from non-refundable upfront licensing payments, the amount of non-cash compensation costs related to share-based payments to employees and non-employees and the period over which these costs are expensed.

Recent Accounting Pronouncements

Pronouncements adopted in 2020

Effective January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as ASU No, 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The standard amends guidance on reporting credit losses for assets held at amortized cost basis and also provides an available-for-sale (AFS) debt security impairment model that is a modified version of the other-than-temporary-impairment (OTTI) model. The AFS debt security impairment model no longer allows consideration of the length of time during which the fair value has been less than its amortized cost when determining whether a credit loss exists. The adoption of this standard did not have any impact on the Company’s financial statements.

Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosures for transfers between Level 1 and Level 2 of the fair value hierarchy, modifies the Level 3 disclosure requirements for non-public entities and requires additional disclosure for Level 3 fair value hierarchy. The adoption of this standard did not have any impact on the Company’s financial statements.

Effective January 1, 2020, the Company adopted ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which provides guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard. The adoption of this standard did not have any impact on the Company’s financial statements.

Pronouncements not yet effective

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The standard removes specific exceptions to the general principles in Topic 740 and simplifies the accounting for income taxes. The Company does not anticipate that the standard will have a significant impact on its financial statements.

In January 2020, the FASB issued ASU No. 2020-01, which clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investment – Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321, Investments – Equity Securities immediately before applying or upon discontinuing the equity method. The amendment is effective for fiscal years beginning after December 15, 2020. The Company does not anticipate that the standard will have a significant impact on its financial statements.

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which amends a variety of topics in the Accounting Standards Codification to improve consistency and clarify guidance. The amendment is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the amendment and does not anticipate that it will have an impact on its financial statements.

Revenue Recognition

We have, to date, earned revenue from research and development collaborations, which may include research and development services, licenses of our internally developed technologies, licenses of our internally developed drug candidates, or combinations of these.

The terms of our license, research and development and collaboration agreements generally include non-refundable upfront payments, research funding, co-development payments and reimbursements, license fees, and milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain clinical, regulatory and sales-based events, as well as royalties on sales of any commercialized products.

The terms of our licensing agreements include non-refundable upfront fees, annual licensing fees, and contractual payment obligations for the achievement of pre-defined preclinical, clinical, regulatory and sales-based events by our partners. The licensing agreements also include royalties on sales of any commercialized products by our partners.

We recognize revenue through the five-step process in accordance with ASC 606 Revenue Recognition when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Deferred Revenue

Deferred revenue arises from payments received in advance of the culmination of the earnings process. We have classified deferred revenue for which we stand ready to perform within the next 12 months as a current liability. We recognize deferred revenue as revenue in future periods when the applicable revenue recognition criteria have been met. The total amounts reported as deferred revenue were $92.6 million and $47.1 million at December 31, 2020 and 2019, respectively.

Research and Development Expenses

Research and development expenses include costs we incur for our own and for our collaborators’ research and development activities. Research and development costs are expensed as incurred. These costs consist primarily of salaries and benefits, including associated stock-based compensation, laboratory supplies, facility costs, and applicable overhead expenses of personnel directly involved in the research and development of new technology and products, as

well as fees paid to other entities that conduct certain research development activities on our behalf. We estimate preclinical study and clinical trial expenses based on the services performed pursuant to the contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on our behalf based on the actual time and expenses incurred by them. Further, we accrue expenses related to clinical trials based on the level of patient enrollment and activity according to the related agreement. We monitor patient enrollment levels and related activity to the extent reasonably possible and adjust estimates accordingly.

We capitalize acquired research and development technology licenses and third-party contract rights where such assets have an alternative use and amortize the costs over the shorter of the license term or the expected useful life. We review the license arrangements and the amortization period on a regular basis and adjust the carrying value or the amortization period of the licensed rights if there is evidence of a change in the carrying value or useful life of the asset.

Cash and Cash Equivalents

We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase.

Marketable and Equity Securities

The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions.

The Company considers its marketable debt securities to be available-for-sale and does not intend to sell these securities, and it is not more likely than not the Company will be required to sell the securities before recovery of the amortized cost basis. These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss). There were no impairment losses or recoveries recorded for the years ended in December 31, 2020 and 2019, respectively. Accrued interest on marketable debt securities is included in marketable securities’ carrying value. Accrued interest was $1.4 million and $2.7 million at December 31, 2020 and 2019, respectively. Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis.

The Company receives equity securities in connection with certain licensing transactions with its partners. These investments in an equity security are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For equity securities with a readily determinable fair value, the Company remeasures these equity investments at each reporting period until such time that the investment is sold or disposed. If the Company sells an investment, any realized gains or losses on the sale of the securities will be recognized within other income (expense) in the Statement of Comprehensive Income (Loss) in the period of sale.

The Company also has an investment in an equity security without a readily determinable fair value, where the Company elects the measurement alternative to record at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Concentrations of Risk

Cash, cash equivalents and marketable debt securities are financial instruments that potentially subject the Company to concentrations of risk. We invest our cash in corporate debt securities and U.S. sponsored agencies with strong credit ratings. We have established guidelines relative to diversification and maturities that are designed to help ensure safety and liquidity. These guidelines are periodically reviewed to take advantage of trends in yields and interest rates.

Cash and cash equivalents are maintained at financial institutions, and at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits at December 31, 2020 and 2019 approximated $163.3 million and $50.0 million, respectively.

We have payables with one service provider that represent 49% of our total payables and with two service providers that represented 48% of our total payables at December 31, 2020 and 2019, respectively. We rely on three critical suppliers for the manufacture of our drug product for use in our clinical trials. While we believe that there are alternative vendors available, a change in manufacturing vendors could cause a delay in the availability of drug product and result in a delay of conducting and completing our clinical trials. No other vendor accounted for more than 10% of total payables at December 31, 2020 or 2019.

Fair Value of Financial Instruments

Our financial instruments primarily consist of cash and cash equivalents, marketable debt securities, accounts receivable, accounts payable and accrued expenses. Marketable debt securities and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximate their fair value due to their short maturities.

The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements. The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities.

Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity –e.g. determining an appropriate discount factor for illiquidity associated with a given security.

The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):


	December 31, 2020
	Total
	Fair Value		Level 1		Level 2		Level 3

Money Market Funds in Cash and Cash Equivalents	$	158,937	$	158,937	$	—	$	—
Corporate Securities		119,833		—		119,833		—
Government Securities		315,353		—		315,353		—
Equity Securities with Readily Determinable Fair Value		5,303		5,303		—		—
Equity Securities without Readily Determinable Fair Value		16,071		—		—		16,071
	$	615,497	$	164,240	$	435,186	$	16,071

	December 31, 2019
	Total
	Fair Value		Level 1		Level 2		Level 3

Money Market Funds in Cash and Cash Equivalents	$	32,009	$	32,009	$	—	$	—
Corporate Securities		281,751		—		281,751		—
Government Securities		269,245		—		269,245		—
	$	583,005	$	32,009	$	550,996	$	—

The Company holds equity securities without readily determinable fair value as of December 31, 2020. The Company elects the measurement alternative to record at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense as incurred, while renewals and improvements are capitalized. Useful lives by asset category are as follows:



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets

The cost of acquiring licenses is capitalized and amortized on the straight-line basis over the shorter of the term of the license or its estimated economic life, ranging from 5 to 25 years. Third-party costs incurred for acquiring patents are capitalized. Capitalized costs are accumulated until the earlier of the period that a patent is issued, or we abandon the patent claims. Cumulative capitalized patent costs are amortized on a straight-line basis from the date of issuance over the shorter of the patent term or the estimated useful economic life of the patent, ranging from 13 to 20 years. Our senior management, with advice from outside patent counsel, assesses three primary criteria to determine if a patent will be capitalized initially: i) technical feasibility, ii) magnitude and scope of new technical function covered by the patent compared to the company’s existing technology and patent portfolio, particularly assessing the value added to our product candidates or licensing business, and iii) legal issues, primarily assessment of patentability and prosecution cost. We review our intellectual property on a regular basis to determine if there are changes in the estimated useful life of issued patents and if any capitalized costs for unissued patents should be abandoned. Capitalized patent costs related to abandoned patent filings are charged off in the period of the decision to abandon. During 2020, 2019 and 2018, we abandoned previously capitalized patent and licensing related charges of $0.5 million, $0.2 million and $0.2 million, respectively.

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2020		2019
Patents, definite life	$	12,038	$	10,597
Patents, pending issuance		8,432		7,266
Licenses and other amortizable intangible assets		2,560		2,510
Nonamortizable intangible assets (trademarks)		399		399
Total gross carrying amount		23,429		20,772
Accumulated amortization—patents		(5,791)		(4,912)
Accumulated amortization—licenses and other		(1,661)		(1,439)
Total intangible assets, net	$	15,977	$	14,421

Amortization expense for patents, licenses, and other intangible assets was $1.1 million, $0.9 million and $0.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Future amortization expense for patent, licenses, and other intangible assets recorded as of December 31, 2020, and for which amortization has commenced, is as follows:


	Year ended
	December 31,
	(in thousands)
2021	$	947
2022		906
2023		829
2024		667
2025		589
Thereafter		3,208
Total	$	7,146

The above amortization expense forecast is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets, and other events. As of December 31, 2020, the Company has $8.4 million of intangible assets which are in-process and have not been placed in service, and accordingly amortization on these assets has not commenced.

Long-Lived Assets

Management reviews long-lived assets which include fixed assets and amortizable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

We did not recognize a loss from impairment for the years ended December 31, 2020, 2019 or 2018.

Income Taxes

We account for income taxes in accordance with accounting guidance which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is a 50% or less likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. We did not have any material uncertain tax positions at December 31, 2020 or 2019.

Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense.

The Tax Cuts and Jobs Act of 2017 (TCJA) enacted on December 22, 2017 included several key provisions impacting the accounting for and reporting of income taxes. The most significant provisions reduced the U.S. corporate statutory tax rate from 35% to 21%, eliminated the corporate Alternative Minimum Tax (AMT) system, and made changes to the carryforward of net operating losses beginning on January 1, 2018. The tax reform provided for a refund of unused AMT carryforwards for years beginning after December 31, 2017. We received an income tax refund during the years ended December 31, 2020 and 2019 of $0.8 million each year related to our federal AMT carryforwards.

Stock-Based Compensation

We recognize compensation expense using a fair-value-based method for costs related to all share-based payments, including stock options, restricted stock units (RSUs), and shares issued under our Employee Stock Purchase Plan (ESPP). Stock-based compensation cost related to employees and directors is measured at the grant date, based on the fair-value-based measurement of the award using the Black-Scholes method, and is recognized as expense over the requisite service period on a straight-line basis. We account for forfeitures when they occur. We recorded stock-based compensation and expense for stock-based awards to employees, directors and consultants of approximately $31.6 million, $31.9 million and $20.5 million for the years ended December 31, 2020, 2019 and 2018 respectively. Included in the 2020, 2019, and 2018 balances for total compensation expense is $0.8 million, $0.7 million and $0.7 million, respectively, relating to our ESPP.

Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income or loss by the weighted-average number of common shares outstanding during the period. Potentially dilutive securities were included

in the diluted net income per common share calculation for 2019. We included 1,923,310 options to purchase shares of common stock and 13,131 shares of RSUs in the calculation of the weighted-average common shares outstanding used in computing diluted net income per common share. We excluded 1,022,623 shares of options and RSUs from the calculation for 2019 because the inclusion of such shares would have had an antidilutive effect.

In 2020 and 2018, we excluded all options and awards from the calculations because we reported net losses in the periods, and the inclusion of such shares would have had an antidilutive effect.


	Year Ended December 31,
	2020		2019		2018

	(in thousands, except share and per share data)
Basic
Numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$	(69,333)	$	26,875	$	(70,409)
Denominator:
Weighted-average common shares outstanding		57,212,737		56,531,439		53,942,116
Basic net income (loss) per common share	$	(1.21)	$	0.48	$	(1.31)
Diluted
Numerator:
Net income (loss) attributable to common stockholders for diluted net income (loss) per share	$	(69,333)	$	26,875	$	(70,409)
Denominator:
Weighted average number of common shares outstanding used in computing basic net income (loss) per common share		57,212,737		56,531,439		53,942,116
Dilutive effect of employee stock options and ESPP		—		1,936,441		—
Weighted-average number of common shares outstanding used in computing diluted net income (loss) per common share		57,212,737		58,467,880		53,942,116
Diluted net income (loss) per common share	$	(1.21)	$	0.46	$	(1.31)

Segment Reporting

The Company determines its segment reporting based upon the way the business is organized for making operating decisions and assessing performance. The Company has only one operating segment related to the development of pharmaceutical products.

Marketable Securities

12 Months Ended

Dec. 31, 2020

Marketable Securities

Marketable Securities

3. Marketable Securities

The Company’s marketable debt securities held as of December 31, 2020 and 2019 are summarized below:


	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	158,937	$	—	$	—	$	158,937
Corporate Securities		119,782		57		(6)		119,833
Government Securities		315,319		37		(3)		315,353
	$	594,038	$	94	$	(9)	$	594,123

Reported as
Cash and cash equivalents							$	158,937
Marketable securities								435,186
Total investments							$	594,123


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	32,009	$	—	$	—	$	32,009
Corporate Securities		281,586		195		(30)		281,751
Government Securities		268,239		1,006		—		269,245
	$	581,834	$	1,201	$	(30)	$	583,005

Reported as
Cash and cash equivalents							$	32,009
Marketable securities								550,996
Total investments							$	583,005

The maturities of the Company’s marketable debt securities as of December 31, 2020 are as follows:


	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Mature in one year or less	$	434,071	$	434,156
Mature after one year through five years		1,030		1,030
	$	435,101	$	435,186

The unrealized losses on available-for-sale investments and their related fair values as of December 31, 2020 and 2019 are as follows:


	December 31, 2020
	Less than 12 months				12 months or greater
		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	15,843	$	(6)	$	—	$	—
Government Securities		40,802		(3)		—		—
	$	56,645	$	(9)	$	—	$	—


	December 31, 2019
	Less than 12 months				12 months or greater
		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	46,303	$	(24)	$	13,992	$	(6)

The unrealized losses from the listed securities are due to a change in the interest rate environment and not a change in the credit quality of the securities.

For the year ended December 31, 2020, the Company received shares of Aimmune common stock and MiRagen common stock in connection with the Aimmune and MiRagen Agreements (both as defined below). Aimmune common stock was redeemed for cash within the same year; MiRagen common stock is classified as equity securities with a readily determinable fair value at December 31, 2020. For the year ended December 31, 2020, the Company also received equity of a private company in connection with a licensing agreement. The Company elects measurement alternative to carry the investment at cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There has not been any impairment or observable price changes related to this investment. We did not hold any equity securities in our investment portfolio during the year ended December 31, 2019.

Net gains and losses during the year ended December 31, 2020 and 2019 consist of the following:


	Year Ended December 31,
	2020		2019


Net gains recognized on equity securities	$	105	$	—
Less: net gains recognized on equity securities redeemed		801		—
Unrealized losses recognized on equity securities	$	(696)	$	—

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

6. Income Taxes

Our effective tax rate differs from the statutory federal income tax rate, primarily as a result of the changes in valuation allowance. There was no provision for taxes for the years ended December 31, 2020 and December 31, 2018. The provision for income taxes for the year ended December 31, 2019 was $0.3 million, which represents the current state alternative minimum tax for the year.

A reconciliation of the federal statutory income tax to our effective income tax is as follows (in thousands):


	Year Ended
	December 31,
	2020		2019		2018
Federal statutory income tax	$	(14,559)	$	5,709	$	(14,795)
State and local income taxes		(4,659)		2,549		(4,767)
Research and development credit		(9,669)		(6,747)		(6,170)
Stock-based compensation		529		1,927		444
State credit		—		1,725		—
Other		56		(301)		414
Net change in valuation allowance		28,302		(4,550)		24,874
Income tax provision (benefit)	$	—	$	312	$	—

The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities at December 31, 2020 and 2019 is presented below (in thousands):


	December 31,
	2020		2019
Deferred income tax assets
Net operating loss carryforwards	$	56,182	$	36,891
Research credits		38,047		28,415
Depreciation		137		334
Unrealized loss on securities		195		—
Accrued compensation		8,464		4,788
Deferred revenue		11,925		11,215
State taxes		—		64
Gross deferred income tax assets		114,950		81,707
Valuation allowance		(105,995)		(77,389)
Net deferred income tax assets		8,955		4,318
Deferred income tax liabilities
Patent costs		(4,219)		(3,736)
Equity investment		(4,497)		—
Licensing costs		(194)		(229)
Capitalized legal costs		(21)		(26)
Unrealized gain on securities		(24)		(327)
Gross deferred income tax liabilities		(8,955)		(4,318)
Net deferred income tax asset	$	—	$	—

The Tax Cuts and Jobs Act of 2017 (TCJA) was enacted in December 2017 and made substantial changes in the U.S. tax system. One of the changes was elimination of the AMT tax system for corporations and allowance of an income tax refund for AMT tax credit carryforwards as of December 31, 2017. We have received an income tax refund of $0.8 million and $0.8 million for each year ended December 31, 2020 and 2019 for U.S. AMT credit carryforwards. We have net deferred tax assets relating primarily to net operating loss carryforwards and research and development tax credit carryforwards. Due to the uncertainty surrounding the realization of the benefits of our deferred tax assets in future tax periods, we have placed a valuation allowance against our deferred tax assets at December 31, 2020 and 2019. The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s net deferred income tax asset is not more likely than not to be realized due to the lack of sufficient sources of future taxable income and cumulative losses that have resulted over the years. During the year ended December 31, 2020, the valuation allowance increased by $28.6 million. The Company’s tax years starting in 2016 through 2019 remain open to potential examination by the U.S. and state taxing authorities due to carryforwards of net operating losses.

As of December 31, 2020, we had cumulative net operating loss carryforwards for federal and state income tax purposes of $213.6 million and $161.4 million, respectively, and available tax credit carryforwards of approximately $26.7 million for federal income tax purposes and $14.3 million for state income tax purposes, which can be carried forward to offset future taxable income, if any. The federal net operating loss carryforwards consist of $68.0 million of losses incurred prior to January 1, 2018, which are subject to carryforward limitations and $145.6 million of losses incurred after January 1, 2018, which may be carried forward indefinitely.

Our federal net operating loss carryforwards expire starting in 2026, state net operating loss carryforwards expire starting in 2035, and federal tax credit carryforwards began to expire in 2019. A total of $0.03 million in federal tax credits expired in 2019, and an additional $0.3 million will expire over the next five years if not utilized. Utilization of our net operating loss and tax credit carryforwards are subject to a substantial annual limitation under Section 382 of the Code due to the fact that we have experienced ownership changes. As a result of these changes, certain of our net operating loss and tax credit carryforwards may expire before we can use them.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Stock-Based Compensation

Stock-Based Compensation

7. Stock-Based Compensation

Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan (the 2010 Plan). In October 2013, our Board of Directors approved the 2013 Equity Incentive Plan (the 2013 Plan), and in November 2013 our stockholders approved the 2013 Plan. The 2013 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other stock awards. The 2013 Plan became effective as of December 2, 2013, the date of the pricing of the Company’s initial public offering. As of December 2, 2013, we suspended the 2010 Plan, and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the 2010 Plan that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve.

As of December 31, 2020, the total number of shares of common stock available for issuance under the 2013 Plan was 11,479,096. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year. On January 1, 2020, the total number of shares of common stock available for issuance under the 2013 Plan was increased by 1,138,046 shares, which is included in the number of shares available for issuance above. As of December 31, 2020, a total of 10,572,839 options have been granted under the 2013 Plan.

As of December 31, 2020, the Company has awarded 453,787 RSUs to certain employees pursuant to the 2013 Plan. Vesting of these awards will be in three equal annual installments and is contingent on continued employment terms. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period.

In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. Under the ESPP our employees may elect to have between 1-15% of their compensation withheld to purchase shares of the Company’s common stock at a discount. The ESPP had an initial two-year term that includes four six-month purchase periods, and employee withholding amounts may be used to purchase Company stock during each six-month purchase period. The initial two-year term ended in December 2015 and pursuant to the provisions of the ESPP, the second two-year term began automatically upon the end of the initial term. The total number of shares that can be purchased with the withholding amounts are based on the lower of 85% of the Company’s common stock price at the initial offering date or 85% of the Company’s stock price at each purchase date.

We have reserved a total of 581,286 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. On January 1, 2014, the total number of shares of common stock available for issuance under the ESPP was automatically increased by 313,545 shares, which is included in the number of shares reserved for issuance above. Pursuant to approval by our board, there were no increases in the number of authorized shares in the ESPP in years from 2015 to 2020. As of December 31, 2020, we have issued a total of 467,595 shares of common stock under the ESPP.

Total employee, director and non-employee stock-based compensation expense recognized was as follows:


	Year Ended
	December 31,
(in thousands)	2020		2019		2018
General and administrative	$	10,769	$	8,854	$	7,699
Research and development		20,850		22,997		12,849
	$	31,619	$	31,851	$	20,548

	Year Ended
	December 31,
(in thousands)	2020		2019		2018
Stock options	$	26,045	$	30,502	$	19,537
ESPP		804		687		744
RSUs		4,770		662		267
	$	31,619	$	31,851	$	20,548

Information with respect to stock options outstanding is as follows:


	December 31,
	2020		2019		2018
Exercisable options		4,668,179		3,950,965		3,058,659
Weighted average exercise price per share of exercisable options	$	21.75	$	17.79	$	15.12
Weighted average grant date fair value per share of options granted during the year	$	16.96	$	20.74	$	18.06
Options available for future grants		3,346,092		3,975,160		3,576,574
Weighted average remaining contractual life		7.00		7.32		7.51

The following table summarizes stock option activity for the years ended December 31, 2020 and 2019:


				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual	Aggregate
	Number of	Price		Term	Intrinsic Value
	Shares	(Per Share)⁽¹⁾		(in years)	(in thousands)⁽²⁾
Balances at December 31, 2018	5,966,928		19.71	7.51	$	99,273
Options granted	2,142,228		35.80
Options forfeited	(390,950)		32.23
Options exercised(3)	(543,887)		17.04
Balances at December 31, 2019	7,174,319		24.03	7.32	$	79,116
Options granted	1,679,324		33.08
Options forfeited	(243,384)		32.93
Options exercised(3)	(858,470)		19.36
Balances at December 31, 2020	7,751,789	$	26.23	7.00	$	134,941
As of December 31, 2020
Options vested and expected to vest	7,751,789	$	26.23	7.00	$	134,941
Exercisable	4,668,179	$	21.75	5.91	$	102,120

(1)	The weighted average exercise price per share is determined using exercise price per share for stock options.

(2)	The aggregate intrinsic value is calculated as the difference between the exercise price of the option and the fair value of our common stock for in-the-money options at December 31, 2020 and 2019.

(3)	The total intrinsic value of stock options exercised was $16.3 million, $11.5 million and $23.6 million for the years ended December 31, 2020, 2019 and 2018 respectively.

The stock options outstanding and exercisable by exercise price at December 31, 2020 are as follows:


Stock Options Outstanding					Stock Options Exercisable
		Weighted-
		Average
		Remaining	Weighted-			Weighted-
Range of		Contractual	Average			Average
Exercise	Number of	Term	Exercise Price		Number of	Exercise Price
Prices	Shares	(in years)	Per Share		Shares	Per Share
$4.25 – $10.28	153,038	2.68	$	4.29	153,038	$	4.29
$10.52 – $15.78	1,639,702	4.30	$	13.10	1,638,717	$	13.10
$15.91 – $23.87	1,980,437	6.53	$	22.75	1,654,609	$	22.67
$23.96 – $35.94	2,330,771	8.65	$	31.80	530,056	$	30.12
$35.99 – $53.99	1,647,841	8.34	$	37.63	691,759	$	37.51
	7,751,789	7.00	$	26.23	4,668,179	$	21.75

We estimated the fair value of employee and non-employee awards using the Black-Scholes valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. Management estimates the probability of non-employee awards being vested based upon an evaluation of the non-employee achieving their specific performance goals.

Options are issued at the fair market value of our stock on the date of grant.

The fair value of employee stock options was estimated using the following weighted average assumptions for the years ended December 31, 2020, 2019 and 2018:


	Options
	2020		2019		2018
Common stock fair value per share	$	20.69 - 45.91	$	29.96 - 44.19	$	21.80 - 43.16
Expected volatility		52.93% - 58.95%		60.67% - 61.33%		70.97% - 73.10%
Risk-free interest rate		0.29% - 1.71%		1.37% - 2.60%		2.29% - 3.10%
Expected dividend yield		—		—		—
Expected term (in years)		5.23 - 7.65		5.23 - 6.59		5.23 - 6.08


	ESPP
	2020	2019	2018
Expected term (years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Expected volatility	50.77% - 66.37%	50.77% - 71.37%	57.04% - 71.37%
Risk-free interest rate	0.09% - 1.65%	1.47% - 2.70%	1.47% - 2.70%
Expected dividend yield	—	—	—

The expected term of stock options represents the average period the stock options are expected to remain outstanding. The expected stock price volatility for our stock options for the years ended December 31, 2020 and 2019 was determined using a blended volatility by examining the historical volatility for industry peer companies and the volatility of our stock from the effective date that our shares were publicly traded on a national stock exchange. For the year ended December 31, 2018, expected stock volatility was determined by examining the historical volatilities for industry peers and adjusting for differences in our life cycle and financing leverage. Industry peers consist of several public companies in the biopharmaceutical industry.

We determined the average expected life of stock options based on the anticipated time period between the measurement date and the exercise date by examining the option holders’ past exercise patterns.

The risk-free interest rate assumption is based on the U.S. Treasury instruments, for which the term was consistent with the expected term of our stock options.

The expected dividend assumption is based on our history and expectation of dividend payouts. We have not paid dividends and did not have any dividend payout at December 31, 2020.

The following table summarizes RSU activity for the years ended December 31, 2020:


		Weighted-
		Average
		Grant Date
	Number of	Fair Value
	Shares	(Per Unit)
Unvested at December 31, 2018	33,933	$	27.64
Granted	71,566		36.68
Vested	(11,311)		27.64
Forfeited	(4,182)		31.12
Unvested at December 31, 2019	90,006	$	34.66
Granted	348,288		32.51
Vested	(62,355)		32.61
Forfeited	(17,114)		32.33
Unvested at December 31, 2020	358,825	$	33.04

As of December 31, 2020 and 2019, the unamortized compensation expense related to unvested stock options was $48.9 million and $51.1 million, respectively. The remaining unamortized compensation expense will be recognized over the next 2.54 years. At December 31, 2020 and 2019, the unamortized compensation expense was $0.9 million and $1.4 million respectively under our ESPP. The remaining unamortized expense will be recognized over the next 0.94 years. At December 31, 2020 and 2019, the unamortized compensation expense related to unvested restricted stock units was $8.5 million and $2.5 million, respectively. The remaining unamortized compensation expense will be recognized over the next 2.13 years.

Collaboration and Licensing Agreements

12 Months Ended

Dec. 31, 2020

Collaboration and Licensing Agreements

Collaboration and Licensing Agreements

10. Collaboration and Licensing Agreements

Following is a summary description of the material revenue arrangements, including arrangements that generated revenue in the period ended December 31, 2020, 2019, and 2018. The revenue reported for each agreement has been adjusted to reflect the adoption of ASC 606 for each period presented.

Janssen Biotech, Inc.

In November 2020, the Company entered into a Collaboration and License Agreement (the Janssen Agreement) with Janssen Biotech, Inc. (Janssen) pursuant to which Xencor and Janssen will conduct research and development activities to discover novel CD28 bispecific antibodies for the treatment of prostate cancer. Janssen and Xencor will conduct joint research activities for up to a three-year period to discover XmAb bispecific antibodies against CD28 and against an undisclosed prostate tumor-target with Janssen maintaining exclusive worldwide rights to develop and commercialize Licensed Products identified from the research activities.

Under the Janssen Agreement, the Company will conduct research activities and apply its bispecific Fc technology to antibodies targeting prostate cancer provided by Janssen. Upon completion of the research activities Janssen will have a candidate selection option to advance an identified candidate for development and commercialization. The activities will be conducted under a research plan agreed to by both parties. Janssen will assume full responsibility for development and commercialization of the CD28 bispecific antibody candidate. Pursuant to the Janssen Agreement, the Company received an upfront payment of $50.0 million and is eligible to receive up to $662.5 million in milestones which include $161.9 million in development milestones, $240.6 million in regulatory milestones and $260.0 million in sales milestones. If commercialized, the Company is eligible to receive royalties on net sales that range from the high-single to low-double digit percentages.

Pursuant to the Janssen Agreement, upon development of a bispecific candidate by Janssen through proof of concept, we have the right to opt-in to fund 20% of development costs and to perform 30% of detailing efforts in the U.S. If we exercise this right, we will be eligible to receive tiered royalties in the low-double digit to mid-teen percentage range.

We evaluated the Janssen Agreement under ASC 606 and identified the performance obligation under the Agreement to be delivery of CD28 bispecific antibodies to Janssen from the research activities outlined in the research

plan. The Company determined that the license to the bispecific antibodies is not a separate performance obligation because it is not capable of being distinct, the license to the antibodies cannot be separated from the underlying antibodies.

Janssen will benefit from delivery of the bispecific antibodies upon completion of the research activities.

The Company determined that the transaction price of the Janssen Agreement at inception was $50.0 million consisting of the upfront payment. The potential milestones are not included in the transaction price as these are contingent on future events and the Company would not recognize these in revenue until it is not probable that these would not result in significant reversal of revenue amounts in future periods. The candidate selection option payment is substantive and is a separate performance obligation. The Company will re-assess the transaction price at each reporting period and when event outcomes are resolved or changes in circumstances occur.

The Company allocated the transaction price to the single performance obligation, delivery of CD28 bispecific antibodies to Janssen.

The Company will recognize the $50.0 million transaction price as it satisfies its performance obligation to deliver CD28 bispecific antibodies to Janssen. The Company will recognize revenue related to the performance obligation over the expected period of time to complete and deliver the CD28 bispecific antibodies to Janssen using the expected input method which considers an estimate of the Company’s efforts to complete the research activities outlined in the Janssen Agreement.

No revenue was recognized under this arrangement for the year ended December 31, 2020, and there is $50.0 million in deferred revenue as of December 31, 2020 related to our obligation to complete research activities and deliver CD28 bispecific antibodies under the Janssen Agreement.

Aimmune Therapeutics, Inc.

On February 4, 2020, the Company entered into a License, Development and Commercialization Agreement (the Aimmune Agreement) with Aimmune Therapeutics, Inc. (Aimmune) pursuant to which the Company granted Aimmune an exclusive worldwide license to XmAb7195, which was renamed AIMab7195. Under the Aimmune Agreement, Aimmune will be responsible for all further development and commercialization activities for XmAb7195. The Company received an upfront payment of $5.0 million and 156,238 shares of Aimmune common stock with an aggregate value of $4.6 million on the closing date. Under the Aimmune Agreement, the Company is also eligible to receive up to $385.0 million in milestones, which include $22.0 million in development milestones, $53.0 million in regulatory milestones and $310.0 million in sales milestones, and tiered royalties on net sales of approved products from high-single to mid-teen percentage range.

Under the Aimmune Agreement, Aimmune received exclusive worldwide rights to manufacture, develop and commercialize XmAb7195. They also received the rights to all data, information and research materials related to the XmAb7195 program.

The Company evaluated the Aimmune Agreement under the revenue recognition standard ASC 606 and identified the following performance obligations that it deemed to be distinct at the inception of the contract:

●

license to the rights to the XmAb7195 drug candidate; and

●

rights to material, data, and information that the Company had accumulated in connection with manufacturing, testing, and conducting clinical trials for the XmAb7195 program and intellectual property filings and information (XmAb7195 data).

The Company considered the licenses as functional intellectual property as Aimmune has the right to use XmAb7195 at the time that the Company transfers such rights. The rights to the XmAb7195 data are not considered to be separate from the license to XmAb7195 as Aimmune cannot benefit from the license without the supporting data and documentation.

The Company determined the transaction price at inception is $9.6 million which consists of the $5.0 million upfront payment and the 156,238 shares of Aimmune common stock which had a value of $4.6 million on the closing date. The Company determined that the transaction price is to be allocated to the performance obligations. The Aimmune Agreement includes variable consideration for potential future milestones and royalties that are contingent on future success factors for the XmAb7195 program. The Company used the “most likely amount” method to determine the variable consideration. None of the development, regulatory or sales milestones or royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur.

The Company determined the transaction price at inception of the Aimmune Agreement and allocated it to the performance obligation, delivery of the XmAb7195 license.

The Company completed delivery of its performance obligations in March 2020. The license to XmAb7195 was transferred to Aimmune at inception of the Aimmune Agreement, and the XmAb7195 data were transferred to Aimmune in March 2020.

The Company recognized $9.6 million of revenue related to the agreement for the year ended December 31, 2020. There is no deferred revenue as of December 31, 2020 related to this agreement.

Genentech

In February 2019, the Company entered into a collaboration and license agreement (the Genentech Agreement) with Genentech, Inc. and F. Hoffman-La Roche Ltd (collectively, Genentech) for the development and commercialization of novel IL-15 collaboration products (Collaboration Products), including XmAb306, the Company’s IL-15/IL15Rα-Fc candidate.

Under the terms of the Genentech Agreement, Genentech received an exclusive worldwide license to XmAb306 and other Collaboration Products, including any new IL-15 programs identified during the joint research collaboration. Genentech and Xencor will jointly collaborate on worldwide development of XmAb306 and potentially other Collaboration Products.

The Company received a $120.0 million upfront payment and is eligible to receive up to an aggregate of $160.0 million in clinical milestone payments for XmAb306 and up to $180.0 million in clinical milestone payments for each new Collaboration Product. The Company is also eligible to receive 45% share of net profits for sales of XmAb306 and other Collaboration Products, while also sharing in net losses at the same percentage rate. The parties will jointly share in development and commercialization costs for all programs designated as a development program under the Genentech Agreement at the same percentage rate, while Genentech will bear launch costs entirely. The initial 45% profit-cost share percentage is subject to a one-time downward adjustment at the Company’s discretion and convertible to a royalty under certain circumstances.

Pursuant to the Genentech Agreement, XmAb306 is designated as a development program and all costs incurred for developing both XmAb306 is being shared with Genentech under the initial cost-sharing percentage.

Under the Genentech Agreement, the Company and Genentech will conduct joint research activities for a two-year period to identify and discover additional IL-15 candidates developed from the Company’s cytokine and bispecific technologies. The two-year research term may be extended an additional year if both parties agree. The Company and Genentech are each responsible for their own costs in conducting the research activities. The Company is eligible for clinical milestone payments for new Collaboration Products identified from the research efforts.

The Company evaluated the Genentech Agreement under the provisions of ASU No. 2014-09, Revenue from Contracts with Customers and all related amendments (collectively, ASC 606) as well as ASC 808, Collaborative Arrangements. Certain provisions of the Genentech Agreement including the cost-sharing of development programs are governed by ASC 808. We have determined that Genentech is a customer for purposes of the delivery of specific performance obligations under the Genentech Agreement and applied the provisions of ASC 606 to the transaction.

The Company identified the following performance obligations under the Genentech Agreement: (i) the license of XmAb306 and (ii) research services during a two-year period to identify up to potentially nine additional IL-15 candidates, each a separate research program and a separate performance obligation. The Company determined that the license and each of the potential research programs are separate performance obligations because they are capable of being distinct and are distinct in the context of the Genentech Agreement. The license to XmAb306 has standalone functionality as Genentech has exclusive worldwide rights to the program, including the right to sublicense to third parties. Upon the transfer of the license of XmAb306, Genentech could develop and commercialize XmAb306 without further assistance from the Company. The Company determined that the research services for each potential additional IL-15 candidate and research program were separate standalone performance obligations. The Genentech Agreement provides an outline of an integrated research plan for the programs to be conducted by the two companies, and the research activities are separate and distinct from the license to XmAb306. In October 2020, an additional program was declared a Collaboration Program under the Agreement, and the Company completed its performance obligation for that specific research program as the program and licensed rights were transferred to Genentech.

The Company determined the standalone selling price of the license to be $114.4 million using the adjusted market assessment approach considering similar collaboration and license agreements and transactions. The standalone selling price for the research activities for all nine of the potential IL-15 programs to be performed during the research term was determined to be $8.5 million using the expected cost approach which was derived from the Company’s experience and information from providing similar research activities to other parties.

The Company determined that the transaction price of the Genentech Agreement at inception was $120.0 million consisting of the upfront payment. The potential milestones are not included in the transaction price as these are contingent on future events and the Company would not recognize these in revenue until it is not probable that these would not result in significant reversal of revenue amounts in future periods. The Company will re-assess the transaction price at each reporting period and when event outcomes are resolved or changes in circumstances occur.

The Company allocated the transaction price to each of the separate performance obligations using the relative standalone selling price with $111.7 million allocated to the license to XmAb306, $4.1 million allocated to the additional program and $4.2 million allocated to the research services.

The Company recognized the $111.7 million allocated to the license when it satisfied its performance obligation and transferred the license to Genentech in March 2019. The license was transferred upon the effective date of the Genentech Agreement, and the $8.3 million allocated to the research activities is being recognized over a period of time through the end of the research term or the time that a program is delivered to Genentech. A total of $3.5 million and $2.2 million of revenue related to the research activities was recognized for the years ended December 31, 2020 and December 31, 2019, respectively.

For the years ended December 31, 2020 and December 31, 2019, we recognized $3.5 million and $113.9 million of income, respectively from the Genentech Agreement. As of December 31, 2020, there is a $3.2 million payable related to cost-sharing development activities during the fourth quarter of 2020. There is $2.5 million in deferred revenue as of December 31, 2020 which reflects our obligation to perform research services during the remaining research term.

Astellas

Effective March 29, 2019, the Company entered into a Research and License Agreement (Astellas Agreement) with Astellas Pharma Inc. (Astellas) pursuant to which the Company and Astellas will conduct a discovery program to characterize compounds and products for development and commercialization. Under the Astellas Agreement, Astellas was granted a worldwide exclusive license, with the right to sublicense products in the field created by the research activities.

Pursuant to the Astellas Agreement, the Company applied its bispecific Fc technology to research antibodies provided by Astellas to generate bispecific antibody candidates and returned the candidates to Astellas for further development and commercialization. The activities were conducted under a research plan agreed to by both parties to the Astellas Agreement. Astellas will assume full responsibility for development and commercialization of the antibody candidate. Pursuant to the Astellas Agreement, the Company received an upfront payment of $15.0 million and is eligible to receive up to $240.0 million in milestones, which include $32.5 million in development milestones, $57.5 million in regulatory milestones and $150.0 million in sales milestones. If commercialized, the Company is eligible to receive royalties on net sales that range from the high-single to low-double digit percentages.

We evaluated the Astellas Agreement under ASC 606 and identified the performance obligations under the Agreement to be (i) delivery of bispecific antibodies to Astellas from the antigen provided by Astellas and (ii) research activities against the bispecific antibodies as outlined in the research plan.

The Company determined the standalone selling price of the bispecific deliverable to be $17.1 million and the standalone selling price for the research activities to be performed was determined to be $1.4 million.

The Company determined that the transaction price of the Astellas Agreement is $17.5 million consisting of the upfront payment and an initial milestone of $2.5 million for Astellas initiating an IND enabling study. The additional milestones are not included in the transaction price as these are contingent on future events, and the Company would not recognize these in revenue until it is not probable that these would not result in significant reversal of revenue amounts in future periods. The Company will re-assess the transaction price at each reporting period and when event outcomes are resolved or changes in circumstances occur.

The Company allocated the transaction price to each of the separate performance obligations using the relative standalone selling price with $16.1 million allocated to delivery of the bispecific antibodies and the remainder of $1.4 million was allocated to the research activities.

The Company recognized the $13.6 million allocated to the bispecific antibodies when it satisfied its performance obligation to Astellas in 2019 and recognized $2.5 million related to the milestone in 2020. The $1.4 million allocated to the research activities was recognized as the research services were completed.

We recognized $3.5 million and $14.0 million of revenue under this arrangement for the years ended December 31, 2020 and December 31, 2019, respectively. There is a $2.5 million contract asset recorded at December 31, 2020 related to a milestone. There is zero and $1.0 million in deferred revenue as of December 31, 2020 and December 31, 2019, respectively.

Novartis

In June 2016, the Company entered into a Collaboration and License Agreement (Novartis Agreement) with Novartis Institutes for BioMedical Research, Inc. (Novartis), to develop and commercialize bispecific and other Fc engineered antibody drug candidates using the Company’s proprietary XmAb technologies and drug candidates. Pursuant to the Novartis Agreement:

●

The Company granted Novartis certain exclusive rights to research, develop and commercialize XmAb14045 (vibecotamab) and XmAb13676 (plamotamab), two development stage products that incorporate the Company’s bispecific Fc technology;

●

The Company will apply its bispecific technology in up to four target pair antibodies identified by Novartis (each a Global Discovery Program); and

●

The Company will provide Novartis with a non-exclusive license to certain of its Fc technologies to apply against up to ten targets identified by Novartis.

In December 2018, Novartis notified the Company it was terminating its rights with respect to the plamotamab program, which became effective June 2019. Under the Novartis Agreement, Novartis is responsible to fund its share of plamotamab development costs through June 2020. In November 2019, the Company and Novartis amended the Agreement, and Novartis paid the Company $1.4 million in settlement of its projected remaining cost-sharing due for the plamotamab program.

We completed delivery of a Global Discovery Program in 2017 and delivery of a second Global Discovery Program in 2018. In December 2019, Novartis dosed a patient in a Phase 1 study with an undisclosed bispecific antibody that is a Global Discovery Program, and we received a $10.0 million milestone payment.

Novartis will assume full responsibility for development and commercialization of each product candidate under each of the Global Discovery Programs.

Under ASC 606, revenue is recognized at the time that the Company’s performance obligation for each Global Discovery is completed upon delivery of each discovery program to Novartis. The Company delivered a discovery program to Novartis in 2017 and recognized $20.1 million of revenue in the period of delivery. In the third quarter of 2018, the Company delivered a second discovery program to Novartis and recognized an additional $20.0 million of revenue. In the third quarter of 2019, Novartis received notice of approval for an investigational new study (IND) from the Food and Drug Administration (FDA) for an application submitted for a Global Discovery Program, and we recognized $10.0 million of revenue.

During the year ended December 31, 2019 and 2018, the Company recognized $10.0 million and $20.0 million of revenue respectively. No revenue was recognized during the year ended December 31, 2020. There is a receivable of $0.9 million and $12.2 million as of December 31, 2020 and December 31, 2019, respectively, related to the arrangement, and we have recorded $40.1 million in deferred revenue as of December 31, 2020 related to the arrangement.

Amgen Inc.

In September 2015, the Company entered into a research and license agreement (the Amgen Agreement) with Amgen Inc. (Amgen) to develop and commercialize bispecific antibody product candidates using the Company’s proprietary XmAb® bispecific Fc technology. Under the Amgen Agreement, the Company granted an exclusive license to Amgen to develop and commercialize bispecific drug candidates from the Company’s preclinical CD38 Program. The Company also agreed to apply its bispecific technology to five previously identified Amgen provided targets (each a Discovery Program). The Company received a $45.0 million upfront payment and milestones totaling $15.5 million from Amgen and is eligible to receive up to $255.0 million in future development, regulatory and sales milestones in total for programs in development and is eligible to receive royalties on any global net sales of products.

Amgen will assume full responsibility for development and commercialization of product candidates under each of the Discovery Programs.

The Company evaluated the Amgen Agreement under ASC 606 and determined that it is a customer and that delivery of the CD38 Program and each of the five Discovery Programs represent the performance obligations under the contract.

The Company determined the transaction price at inception is the $45.0 million upfront payment to be allocated to the performance obligations. The Amgen Agreement includes variable consideration for potential future milestones and royalties that were contingent on future success factors for development programs. The Company used the “most likely” method to determine the variable consideration. In 2019, the Company recognized a $5.0 million milestone related to one of the Discovery Programs. No other development, regulatory or sales milestones or royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The Company completed performance obligations under the Amgen Agreement. In the third quarter of 2019, a $5.0 million milestone was recognized in connection with a development milestone for a Discovery Program.

During the years ended December 31, 2019 and 2018, the Company recognized $5.0 million and $0.6 million in revenue, respectively, under this arrangement. No revenue was recognized for the year ended December 31, 2020. As of December 31, 2020, there was no deferred revenue related to the arrangement.

MorphoSys AG

In June 2010, the Company entered into a Collaboration and License Agreement with MorphoSys AG (MorphoSys), which was subsequently amended in March 2012 and in 2020. The agreement provides MorphoSys with an exclusive worldwide license to the Company’s patents and know-how to research, develop, and commercialize the Company’s XmAb5574 product candidate (subsequently renamed MOR208 and tafasitamab) with the right to sublicense under certain conditions. If certain developmental, regulatory, and sales milestones are achieved, the Company is eligible to receive future milestone payments and royalties.

The Company recognized a total of $37.5 million of milestone revenue related to regulatory submission and approval of MorphoSys’ tafasitamab in the U.S., now Monjuvi, and royalties of $1.5 million on net sales of Monjuvi for the year ended December 31, 2020. There were no revenues recognized under this arrangement for the years ended December 31, 2019 and 2018. As of December 31, 2020, the Company has no deferred revenue related to this agreement and has recorded a receivable of $1.2 million for royalties due.

Alexion Pharmaceuticals, Inc.

In January 2013, the Company entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, the Company granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology. Alexion exercised its rights to include our technology in ALXN1210, which is now marketed as Ultomiris.

The Company is eligible to receive contractual milestones for certain development, regulatory and commercial achievements, and the Company is also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sub licensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product-by-product and country-by-country basis until the expiration of the last-to-expire valid claim in a licensed patent covering the applicable product in such country.

In 2018, Alexion completed certain regulatory submissions and regulatory approvals for Ultomiris, and the Company received $20.0 million in milestone payments.

In 2019, Alexion completed certain regulatory submissions for Ultomiris, and the Company received a total of $8.0 million in milestone payments. During 2019, the Company also recorded royalty revenue of $5.0 million in connection with reported net sales of Ultomiris by Alexion.

In 2020, the Company received $10.0 million for the achievement of certain sales milestones of Ultomiris in 2020 and also recorded royalty revenue of $16.2 million on net sales.

The total revenue recognized under this arrangement was $26.2 million, $13.0 million, and $20.0 million for the years ended December 31, 2020, 2019, and 2018, respectively. As of December 31, 2020, there is a receivable of $8.8 million, and there is no deferred revenue related to this agreement.

Gilead Sciences, Inc.

In January 2020, the Company entered into a Technology License Agreement (the Gilead Agreement) with Gilead Sciences, Inc. (Gilead), in which the Company provided Gilead an exclusive license to its Cytotoxic Fc and Xtend Fc technologies for an initial identified antibody and options for up to three additional antibodies directed to the

same molecular target. Gilead is responsible for all development and commercialization activities for all target candidates. The Company received an upfront payment of $6.0 million and is eligible to receive up to $67.0 million in milestones, which include $10.0 million in development milestones, $27.0 million in regulatory milestones and $30.0 million in sales milestones for each product incorporating the antibodies selected. In addition, the Company is eligible to receive royalties in the low-single digit percentage range on net sales of approved products.

In the second quarter of 2020, Gilead exercised options on three additional antibody compounds, and in April 2020, we received a total of $7.5 million in payment of the three options.

The Company evaluated the Gilead Agreement under the revenue recognition standard ASC 606 and identified the following performance obligations that it deemed to be distinct at the inception of the contract:

●

non-exclusive license to its Cytotoxic Fc and Xtend Fc technologies; and

●

options for four exclusive commercial licenses to incorporate the licensed technologies on approved target compounds.

The Company considered the licenses as functional intellectual property as Gilead has the right to use the technologies at the time that the Company transfers such rights. Each of the four options is considered a separate performance obligation as the arrangement does not confer material rights to the options without payment of the option exercise fee. Gilead will benefit from each option upon exercise of each of the four options and payment of each option fee as Gilead has access to each technology at inception of the arrangement and the rights are transferred upon payment of each option fee.

The total transaction price is $13.5 million which includes the upfront payment of $6.0 million and the option fee payment of $7.5 million which was contractually due with the exercise of the three options by Gilead. The milestone payments are variable consideration to which the Company applied the “most likely amount” method and concluded at inception of the Gilead Agreement it is unlikely that the Company will collect such payments. The milestone payments were not included in the transaction price, and the Company will review this conclusion and update at each reporting period.

The Company allocated $3.5 million of the transaction price to the licenses to the cytotoxic Fc and Xtend Fc technologies and recognized income for the licenses at inception of the arrangement when Gilead began benefiting access to them. The Company allocated $2.5 million to the initial option exercise which was effective at inception of the arrangement and payment of the upfront amount, and the Company allocated $7.5 million to the three remaining options which became effective in April 2020 when Gilead paid the option fees.

The Company recognized $13.5 million of revenue related to the Gilead Agreement for the year ended December 31, 2020. There is no deferred revenue as of December 31, 2020 related to this agreement.

Omeros Corporation

In August 2020, the Company entered into a Technology License Agreement (the Omeros Agreement) with Omeros Corporation (Omeros), in which the Company provided Omeros a non-exclusive license to its Xtend Fc technology, an exclusive license to apply its Xtend technology to an initial identified antibody and options to apply its Xtend technology to three additional antibodies. Omeros is responsible for all development and commercialization activities for all target candidates. The Company received an upfront payment of $5.0 million and is eligible to receive up to $65.0 million in milestones, which include $15.0 million in development milestones, $25.0 million in regulatory milestones and $25.0 million in sales milestones for each product incorporating the antibodies selected. In addition, the Company is eligible to receive royalties in the mid-single digit percentage range on net sales of approved products.

The Company evaluated the Omeros Agreement under the revenue recognition standard ASC 606 and identified the following performance obligations that it deemed to be distinct at the inception of the contract:

●

non-exclusive license to its Xtend Fc technologies; and

●

options for four exclusive commercial licenses to incorporate the licensed technologies on approved target compounds.

The Company considered the license as functional intellectual property as Omeros has the right to use the technology at the time that the Company transfers such rights. Each of the four options is considered a separate performance obligation as the arrangement does not confer material rights to the options without payment of the option exercise fee. Omeros will benefit from each option upon exercise of each of the four options and payment of each option fee as Omeros has access to each technology at inception of the arrangement and the rights are transferred upon payment of each option fee.

The total transaction price is $5.0 million, which includes the upfront payment. The milestone payments are variable consideration to which the Company applied the “most likely amount” method and concluded at inception of the Omeros Agreement it is unlikely that the Company will collect such payments. The milestone payments were not included in the transaction price and the Company will review this conclusion and update at each reporting period.

The Company allocated $2.0 million of the transaction price to the licenses to the Xtend Fc technology and recognized income for the licenses at inception of the arrangement when Omeros began benefiting access to it. The Company allocated $3.0 million to the initial option exercise which was effective at inception of the arrangement.

The Company recognized $5.0 million of revenue related to the Omeros Agreement for the year ended December 31, 2020. There is no deferred revenue as of December 31, 2020 related to this agreement.

MiRagen Therapeutics, Inc./Viridian Therapeutics, Inc.

In December 2020, we entered into a Technology License Agreement (MiRagen Agreement) with MiRagen Therapeutics, Inc. (MiRagen), in which we provided MiRagen a non-exclusive license to our Xtend Fc technology and an exclusive license to apply our Xtend Fc technology to antibodies targeting IGF-1R. MiRagen subsequently changed its name to Viridian Therapeutics, Inc. Viridian is responsible for all development and commercialization activities. We received an upfront payment of 322,407 shares of Viridian common stock valued at $6.0 million and are eligible to receive up to $55.0 million in milestones, which include $10.0 million in development milestones, $20.0 million in regulatory milestones and $25.0 million in sales milestones. We are also eligible to receive royalties in the mid-single digit percentage range on net sales of approved products.

The Company evaluated the MiRagen Agreement under the revenue recognition standard ASC 606 and identified the following performance obligation that it deemed to be distinct at the inception of the contract:

●

non-exclusive license to its Xtend Fc technologies

The Company considered the license as functional intellectual property as MiRagen has the right to use the technology at the time that the Company transfers such rights.

The total transaction price is $6.0 million, which includes the upfront payment of 322,407 MiRagen shares at their fair value at the date of the Agreement. The milestone payments are variable consideration to which the Company applied the “most likely amount” method and concluded at inception of the MiRagen Agreement it is unlikely that the Company will collect such payments. The milestone payments were not included in the transaction price, and the Company will review this conclusion and update at each reporting period.

The Company allocated $6.0 million of the transaction price to the licenses to the Xtend Fc technology and recognized income for the licenses at inception of the arrangement when MiRagen began benefiting access to it. The Company recognized $6.0 million of revenue related to the MiRagen Agreement for the year ended December 31, 2020. There is no deferred revenue as of December 31, 2020 related to this agreement.

Private Biotech Company License Agreement

In November 2020, the Company entered into a License Agreement with a newly formed, privately held biotechnology company (Private BioCo) pursuant to which the Company granted Private BioCo exclusive worldwide rights to develop and commercialize to three preclinical-stage Fc-engineered drug candidates: XmAb6755, XPro9523 and XmAb10717. Under the Agreement, Private BioCo will be responsible for all further development and commercialization activities for XmAb6755, XPro9523 and XmAb10717. The Company received a 15% equity interest in Private BioCo with a fair value of $16.1 million, and the Company is eligible to receive royalties on net sales of approved products in the mid-single digit to mid-teen percentage range.

Under the License Agreement, Private BioCo received exclusive worldwide rights to manufacture, develop and commercialize XmAb6755, XPro9523 and XmAb10717. They also received the rights to all data, information and research materials related to the three preclinical stage programs.

The Company evaluated the License Agreement under the revenue recognition standard ASC 606 and identified the following performance obligations that it deemed to be distinct at the inception of the contract:

●

exclusive license to the XmAb6755, XPro9523 and XmAb10717 drug candidates; and

●

rights to material, data, and information that the Company had accumulated in connection with conducting preclinical activities for each of the three programs and intellectual property filings and information.

The Company considered the licenses as functional intellectual property as Private BioCo has the right to use each of XmAb6755, XPro9523 and XmAb10717 at the time that the Company transfers such rights. The rights to the preclinical programs’ data are not considered to be separate from the license to programs as Private BioCo cannot benefit from the license without the supporting data and documentation.

The total transaction price is $16.1 million, which includes the upfront payment of 15% of the equity of Private BioCo at its fair value at the date of the Agreement. The License Agreement includes variable consideration for potential future royalties that were contingent on future success factors for the licensed programs. The Company used the “most likely amount” method to determine the variable consideration. None of the royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur.

The Company determined the transaction price at inception of the License Agreement and allocated it to the performance obligation, delivery of the XmAb6755, XPro9523 and XmAb10717 licenses.

The Company completed delivery of its performance obligations in December 2020. The licenses to XmAb6755, XPro9523, and XmAb10717 were transferred to Private BioCo at inception of the Agreement, and the related research data and documentation was transferred to Private BioCo in December 2020.

The Company recognized $16.1 million of revenue related to the agreement for the year ended December 31, 2020. There is no deferred revenue as of December 31, 2020 related to this agreement.

INmune Bio, Inc.

In October 2017, the Company entered into a License Agreement with INmune Bio, Inc. (INmune). Under the terms of the agreement, the Company provided INmune with an exclusive license to certain rights to a proprietary protein, XPro1595. Under the agreement the Company received an upfront payment of $100,000, 1,585,000 shares of INmune common stock and an option to purchase an additional 10% interest of the fully diluted shares of INmune for $10.0 million. The Company is eligible to receive a percentage of sublicensing revenue received for XPro1595 and also royalties in the mid-single digit percent range on the sale of approved products.

In 2018, INmune filed a registration statement on a Form S-1 with the Securities and Exchange Commission (SEC) which was declared effective by the SEC on December 19, 2018.

Under ASC 606, the Company determined that the performance obligation under the agreement was the license to XPro1595, and performance occurred at the effective date of the agreement. The total consideration under the agreement was determined to be $100,000 as the equity interest, and the option at inception of the Agreement had an insignificant fair value. The Company recognized $100,000 as revenue related to the agreement for the year ended December 31, 2017 and did not recognize any revenue related to the agreement for the years ended December 31, 2020, 2019, or 2018. There is no deferred revenue as of December 31, 2020 related to this agreement. The INmune shares are recorded at cost on the Company’s balance sheet as of December 31, 2020.

Vir Biotechnology, Inc.

In 2019, the Company entered into a Patent License Agreement (the Vir Agreement) with Vir Biotechnology (Vir) pursuant to which the Company provided a non-exclusive license to its Xtend technology for up to two targets. Under the terms of the Vir Agreement, the Company received an upfront payment and is eligible to receive total milestones of $155.0 million which include $5.0 million of development milestones, $30.0 million of regulatory milestones and $120.0 million of sales milestones. In addition, the Company is eligible to receive royalties on the net sales of approved products in the low-single digits.

The Company evaluated the Vir Agreement and determined that the single performance obligation was access to a non-exclusive license to certain patents of the Company which were transferred to Vir upon execution of the Vir Agreement in July 2019.

Vir initiated a Phase 1 study with a licensed antibody in 2019, and in the second quarter of 2020, it initiated a Phase 1 study with a second licensed antibody.

In March 2020, the Company entered into a second Patent License Agreement (the Second Vir Agreement) with Vir pursuant to which the Company provided a non-exclusive license to its Xtend technology to extend the half-life of novel antibodies Vir is investigating as potential treatments for patients with COVID-19. Under the terms of the Second Vir Agreement, Vir is responsible for all research, development, regulatory and commercial activities for the antibody, and the Company is eligible to receive royalties on the net sales of approved products in the mid-single digit percentage range.

Vir initiated a Phase 3 study with a licensed antibody to treat patients with COVID-19 in 2020.

The Company determined that the Second Vir Agreement was a modification of the original agreement, and the transfer of the license occurred at inception of the Vir Agreement. The total consideration under the arrangement did not change with the Second Vir Agreement as the Company will potentially receive additional royalty revenue which is variable consideration and is not included in the transaction price.

The Company recognized $0.3 million and $0.8 million of license and milestone revenue related to the agreement for the years ended December 31, 2020 and 2019, respectively. There is no deferred revenue as of December 31, 2020 related to this agreement.

Revenue Earned

The $122.7 million, $156.7 million, and $40.6 million of revenue recorded for the years ended December 31, 2020, 2019 and 2018, respectively, were earned principally from the following licensees (in millions):


	Year Ended
	December 31,
	2020		2019		2018
Aimmune	$	9.6	$	—	$	—
Amgen		—		5.0		0.6
Alexion		26.2		13.0		20.0
Astellas		3.5		14.0		—
Genentech		3.5		113.9		—
Gilead		13.5		—		—
MiRagen/Viridian		6.0		—		—
MorphoSys		39.0		—		—
Novartis		—		10.0		20.0
Omeros		5.0		—		—
Vir		0.3		0.8		—
Private BioCo		16.1		—		—
Total	$	122.7	$	156.7	$	40.6

The table below summarizes the disaggregation of revenue recorded for the years ended December 31, 2020, 2019 and 2018 (in millions):


	Year Ended
	December 31,
	2020		2019		2018
Research collaboration	$	4.5	$	16.3	$	20.1
Milestone		50.2		23.2		20.5
Licensing		50.2		112.2		—
Royalties		17.8		5.0		—
Total	$	122.7	$	156.7	$	40.6

A portion of our revenue is earned from collaboration partners outside the United States. Non-U.S. revenue is denominated in U.S. dollars. A breakdown of our revenue from U.S. and non-U.S. sources for the years ended December 31, 2020, 2019 and 2018 is as follows (in millions):


	Year Ended
	December 31,
	2020		2019		2018
U.S. Revenue	$	64.1	$	142.7	$	40.6
Non-U.S. Revenue		58.6		14.0		—
Total	$	122.7	$	156.7	$	40.6

Remaining Performance Obligations and Deferred Revenue

Our remaining performance obligations are delivery of two additional Global Discovery Programs under the Novartis Agreement and conducting research activities pursuant to research plans under the Genentech and Janssen Agreements. As of December 31, 2020 and 2019, we have deferred revenue of $92.6 million and $47.1 million, respectively. All of the deferred revenue was classified as short term as of December 31, 2020 as our obligations to perform research services are due on demand when requested by Novartis, Genentech and Janssen under the respective Agreements. As of December 31, 2019, $45.2 million of deferred revenue was classified as current liabilities as our

obligations to perform services are due on demand when requested by Novartis and Astellas under the Novartis and Astellas Agreements, respectively. A total of $1.9 million of deferred liability is classified as long-term for the obligation to perform research services to Genentech under the Genentech Agreement after one year.

Summary of Significant Accounting Policies (Polices)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Recent Accounting Pronouncements

Pronouncements adopted in 2020

Pronouncements not yet effective

Revenue Recognition

Deferred Revenue

Research and Development Expenses

Cash and Cash Equivalents

We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase.

Marketable and Equity Securities

Concentrations of Risk

Fair Value of Financial Instruments

Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities.


	December 31, 2020
	Total
	Fair Value		Level 1		Level 2		Level 3

Money Market Funds in Cash and Cash Equivalents	$	158,937	$	158,937	$	—	$	—
Corporate Securities		119,833		—		119,833		—
Government Securities		315,353		—		315,353		—
Equity Securities with Readily Determinable Fair Value		5,303		5,303		—		—
Equity Securities without Readily Determinable Fair Value		16,071		—		—		16,071
	$	615,497	$	164,240	$	435,186	$	16,071

	December 31, 2019
	Total
	Fair Value		Level 1		Level 2		Level 3

Money Market Funds in Cash and Cash Equivalents	$	32,009	$	32,009	$	—	$	—
Corporate Securities		281,751		—		281,751		—
Government Securities		269,245		—		269,245		—
	$	583,005	$	32,009	$	550,996	$	—

Property and Equipment



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2020		2019
Patents, definite life	$	12,038	$	10,597
Patents, pending issuance		8,432		7,266
Licenses and other amortizable intangible assets		2,560		2,510
Nonamortizable intangible assets (trademarks)		399		399
Total gross carrying amount		23,429		20,772
Accumulated amortization—patents		(5,791)		(4,912)
Accumulated amortization—licenses and other		(1,661)		(1,439)
Total intangible assets, net	$	15,977	$	14,421

Amortization expense for patents, licenses, and other intangible assets was $1.1 million, $0.9 million and $0.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Future amortization expense for patent, licenses, and other intangible assets recorded as of December 31, 2020, and for which amortization has commenced, is as follows:


	Year ended
	December 31,
	(in thousands)
2021	$	947
2022		906
2023		829
2024		667
2025		589
Thereafter		3,208
Total	$	7,146

Long-Lived Assets

We did not recognize a loss from impairment for the years ended December 31, 2020, 2019 or 2018.

Income Taxes

Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense.

Stock-Based Compensation

Net Income (Loss) Per Share

In 2020 and 2018, we excluded all options and awards from the calculations because we reported net losses in the periods, and the inclusion of such shares would have had an antidilutive effect.


	Year Ended December 31,
	2020		2019		2018

	(in thousands, except share and per share data)
Basic
Numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$	(69,333)	$	26,875	$	(70,409)
Denominator:
Weighted-average common shares outstanding		57,212,737		56,531,439		53,942,116
Basic net income (loss) per common share	$	(1.21)	$	0.48	$	(1.31)
Diluted
Numerator:
Net income (loss) attributable to common stockholders for diluted net income (loss) per share	$	(69,333)	$	26,875	$	(70,409)
Denominator:
Weighted average number of common shares outstanding used in computing basic net income (loss) per common share		57,212,737		56,531,439		53,942,116
Dilutive effect of employee stock options and ESPP		—		1,936,441		—
Weighted-average number of common shares outstanding used in computing diluted net income (loss) per common share		57,212,737		58,467,880		53,942,116
Diluted net income (loss) per common share	$	(1.21)	$	0.46	$	(1.31)

Segment Reporting

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Schedule of assets recorded at fair value


	December 31, 2020
	Total
	Fair Value		Level 1		Level 2		Level 3

Money Market Funds in Cash and Cash Equivalents	$	158,937	$	158,937	$	—	$	—
Corporate Securities		119,833		—		119,833		—
Government Securities		315,353		—		315,353		—
Equity Securities with Readily Determinable Fair Value		5,303		5,303		—		—
Equity Securities without Readily Determinable Fair Value		16,071		—		—		16,071
	$	615,497	$	164,240	$	435,186	$	16,071

	December 31, 2019
	Total
	Fair Value		Level 1		Level 2		Level 3

Money Market Funds in Cash and Cash Equivalents	$	32,009	$	32,009	$	—	$	—
Corporate Securities		281,751		—		281,751		—
Government Securities		269,245		—		269,245		—
	$	583,005	$	32,009	$	550,996	$	—

Schedule of useful lives by asset category



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Schedule of finite-lived intangible assets


	December 31,
	2020		2019
Patents, definite life	$	12,038	$	10,597
Patents, pending issuance		8,432		7,266
Licenses and other amortizable intangible assets		2,560		2,510
Nonamortizable intangible assets (trademarks)		399		399
Total gross carrying amount		23,429		20,772
Accumulated amortization—patents		(5,791)		(4,912)
Accumulated amortization—licenses and other		(1,661)		(1,439)
Total intangible assets, net	$	15,977	$	14,421

Schedule of indefinite-lived intangible assets

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2020		2019
Patents, definite life	$	12,038	$	10,597
Patents, pending issuance		8,432		7,266
Licenses and other amortizable intangible assets		2,560		2,510
Nonamortizable intangible assets (trademarks)		399		399
Total gross carrying amount		23,429		20,772
Accumulated amortization—patents		(5,791)		(4,912)
Accumulated amortization—licenses and other		(1,661)		(1,439)
Total intangible assets, net	$	15,977	$	14,421

Future amortization expense for patents, licenses, and other intangible assets


	Year ended
	December 31,
	(in thousands)
2021	$	947
2022		906
2023		829
2024		667
2025		589
Thereafter		3,208
Total	$	7,146

Schedule of basic and diluted net income (loss) per common share


	Year Ended December 31,
	2020		2019		2018

	(in thousands, except share and per share data)
Basic
Numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$	(69,333)	$	26,875	$	(70,409)
Denominator:
Weighted-average common shares outstanding		57,212,737		56,531,439		53,942,116
Basic net income (loss) per common share	$	(1.21)	$	0.48	$	(1.31)
Diluted
Numerator:
Net income (loss) attributable to common stockholders for diluted net income (loss) per share	$	(69,333)	$	26,875	$	(70,409)
Denominator:
Weighted average number of common shares outstanding used in computing basic net income (loss) per common share		57,212,737		56,531,439		53,942,116
Dilutive effect of employee stock options and ESPP		—		1,936,441		—
Weighted-average number of common shares outstanding used in computing diluted net income (loss) per common share		57,212,737		58,467,880		53,942,116
Diluted net income (loss) per common share	$	(1.21)	$	0.46	$	(1.31)

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2020

Marketable Securities

Schedule of marketable securities


	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	158,937	$	—	$	—	$	158,937
Corporate Securities		119,782		57		(6)		119,833
Government Securities		315,319		37		(3)		315,353
	$	594,038	$	94	$	(9)	$	594,123

Reported as
Cash and cash equivalents							$	158,937
Marketable securities								435,186
Total investments							$	594,123


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	32,009	$	—	$	—	$	32,009
Corporate Securities		281,586		195		(30)		281,751
Government Securities		268,239		1,006		—		269,245
	$	581,834	$	1,201	$	(30)	$	583,005

Reported as
Cash and cash equivalents							$	32,009
Marketable securities								550,996
Total investments							$	583,005

Schedule of maturities of marketable securities


	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Mature in one year or less	$	434,071	$	434,156
Mature after one year through five years		1,030		1,030
	$	435,101	$	435,186

Schedule of unrealized losses on available-for-sale investments


	December 31, 2020
	Less than 12 months				12 months or greater
		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	15,843	$	(6)	$	—	$	—
Government Securities		40,802		(3)		—		—
	$	56,645	$	(9)	$	—	$	—


	December 31, 2019
	Less than 12 months				12 months or greater
		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	46,303	$	(24)	$	13,992	$	(6)

Schedule of net gains and losses


	Year Ended December 31,
	2020		2019


Net gains recognized on equity securities	$	105	$	—
Less: net gains recognized on equity securities redeemed		801		—
Unrealized losses recognized on equity securities	$	(696)	$	—

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Reconciliation of the federal statutory income tax rate to our effective income tax rate


	Year Ended
	December 31,
	2020		2019		2018
Federal statutory income tax	$	(14,559)	$	5,709	$	(14,795)
State and local income taxes		(4,659)		2,549		(4,767)
Research and development credit		(9,669)		(6,747)		(6,170)
Stock-based compensation		529		1,927		444
State credit		—		1,725		—
Other		56		(301)		414
Net change in valuation allowance		28,302		(4,550)		24,874
Income tax provision (benefit)	$	—	$	312	$	—

Schedule of tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities


	December 31,
	2020		2019
Deferred income tax assets
Net operating loss carryforwards	$	56,182	$	36,891
Research credits		38,047		28,415
Depreciation		137		334
Unrealized loss on securities		195		—
Accrued compensation		8,464		4,788
Deferred revenue		11,925		11,215
State taxes		—		64
Gross deferred income tax assets		114,950		81,707
Valuation allowance		(105,995)		(77,389)
Net deferred income tax assets		8,955		4,318
Deferred income tax liabilities
Patent costs		(4,219)		(3,736)
Equity investment		(4,497)		—
Licensing costs		(194)		(229)
Capitalized legal costs		(21)		(26)
Unrealized gain on securities		(24)		(327)
Gross deferred income tax liabilities		(8,955)		(4,318)
Net deferred income tax asset	$	—	$	—

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Stock-Based Compensation

Schedule of total employee, director and non-employee stock-based compensation expense recognized


	Year Ended
	December 31,
(in thousands)	2020		2019		2018
General and administrative	$	10,769	$	8,854	$	7,699
Research and development		20,850		22,997		12,849
	$	31,619	$	31,851	$	20,548

	Year Ended
	December 31,
(in thousands)	2020		2019		2018
Stock options	$	26,045	$	30,502	$	19,537
ESPP		804		687		744
RSUs		4,770		662		267
	$	31,619	$	31,851	$	20,548

Schedule of stock options outstanding


	December 31,
	2020		2019		2018
Exercisable options		4,668,179		3,950,965		3,058,659
Weighted average exercise price per share of exercisable options	$	21.75	$	17.79	$	15.12
Weighted average grant date fair value per share of options granted during the year	$	16.96	$	20.74	$	18.06
Options available for future grants		3,346,092		3,975,160		3,576,574
Weighted average remaining contractual life		7.00		7.32		7.51

Summary of stock option activity


				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual	Aggregate
	Number of	Price		Term	Intrinsic Value
	Shares	(Per Share)⁽¹⁾		(in years)	(in thousands)⁽²⁾
Balances at December 31, 2018	5,966,928		19.71	7.51	$	99,273
Options granted	2,142,228		35.80
Options forfeited	(390,950)		32.23
Options exercised(3)	(543,887)		17.04
Balances at December 31, 2019	7,174,319		24.03	7.32	$	79,116
Options granted	1,679,324		33.08
Options forfeited	(243,384)		32.93
Options exercised(3)	(858,470)		19.36
Balances at December 31, 2020	7,751,789	$	26.23	7.00	$	134,941
As of December 31, 2020
Options vested and expected to vest	7,751,789	$	26.23	7.00	$	134,941
Exercisable	4,668,179	$	21.75	5.91	$	102,120

Schedule of stock options outstanding and exercisable by exercise price


Stock Options Outstanding					Stock Options Exercisable
		Weighted-
		Average
		Remaining	Weighted-			Weighted-
Range of		Contractual	Average			Average
Exercise	Number of	Term	Exercise Price		Number of	Exercise Price
Prices	Shares	(in years)	Per Share		Shares	Per Share
$4.25 – $10.28	153,038	2.68	$	4.29	153,038	$	4.29
$10.52 – $15.78	1,639,702	4.30	$	13.10	1,638,717	$	13.10
$15.91 – $23.87	1,980,437	6.53	$	22.75	1,654,609	$	22.67
$23.96 – $35.94	2,330,771	8.65	$	31.80	530,056	$	30.12
$35.99 – $53.99	1,647,841	8.34	$	37.63	691,759	$	37.51
	7,751,789	7.00	$	26.23	4,668,179	$	21.75

Schedule of weighted average assumptions used for estimation of fair value of stock options


	Options
	2020		2019		2018
Common stock fair value per share	$	20.69 - 45.91	$	29.96 - 44.19	$	21.80 - 43.16
Expected volatility		52.93% - 58.95%		60.67% - 61.33%		70.97% - 73.10%
Risk-free interest rate		0.29% - 1.71%		1.37% - 2.60%		2.29% - 3.10%
Expected dividend yield		—		—		—
Expected term (in years)		5.23 - 7.65		5.23 - 6.59		5.23 - 6.08

Schedule of weighted average assumptions used for estimation of fair value of ESPP


	ESPP
	2020	2019	2018
Expected term (years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Expected volatility	50.77% - 66.37%	50.77% - 71.37%	57.04% - 71.37%
Risk-free interest rate	0.09% - 1.65%	1.47% - 2.70%	1.47% - 2.70%
Expected dividend yield	—	—	—

Summary of restricted stock unity activity


		Weighted-
		Average
		Grant Date
	Number of	Fair Value
	Shares	(Per Unit)
Unvested at December 31, 2018	33,933	$	27.64
Granted	71,566		36.68
Vested	(11,311)		27.64
Forfeited	(4,182)		31.12
Unvested at December 31, 2019	90,006	$	34.66
Granted	348,288		32.51
Vested	(62,355)		32.61
Forfeited	(17,114)		32.33
Unvested at December 31, 2020	358,825	$	33.04

Collaboration and Licensing Agreements (Tables)

12 Months Ended

Dec. 31, 2020

Collaboration and Licensing Agreements

Schedule of revenue by licensees


	Year Ended
	December 31,
	2020		2019		2018
Aimmune	$	9.6	$	—	$	—
Amgen		—		5.0		0.6
Alexion		26.2		13.0		20.0
Astellas		3.5		14.0		—
Genentech		3.5		113.9		—
Gilead		13.5		—		—
MiRagen/Viridian		6.0		—		—
MorphoSys		39.0		—		—
Novartis		—		10.0		20.0
Omeros		5.0		—		—
Vir		0.3		0.8		—
Private BioCo		16.1		—		—
Total	$	122.7	$	156.7	$	40.6

Schedule of disaggregation of revenue


	Year Ended
	December 31,
	2020		2019		2018
Aimmune	$	9.6	$	—	$	—
Amgen		—		5.0		0.6
Alexion		26.2		13.0		20.0
Astellas		3.5		14.0		—
Genentech		3.5		113.9		—
Gilead		13.5		—		—
MiRagen/Viridian		6.0		—		—
MorphoSys		39.0		—		—
Novartis		—		10.0		20.0
Omeros		5.0		—		—
Vir		0.3		0.8		—
Private BioCo		16.1		—		—
Total	$	122.7	$	156.7	$	40.6

Schedule of revenue from U.S. and Non U.S. sources


	Year Ended
	December 31,
	2020		2019		2018
U.S. Revenue	$	64.1	$	142.7	$	40.6
Non-U.S. Revenue		58.6		14.0		—
Total	$	122.7	$	156.7	$	40.6

Summary of Significant Accounting Policies - Intangibles (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Patents, licenses, and other intangible assets
Number of primary criteria to determine capitalization of patent \| item	3
Abandonment costs	$ 535	$ 221	$ 239
Total gross carrying amount	23,429	20,772
Total intangible assets, net	15,977	14,421
Amortization expense for patents, licenses, and other intangible assets	1,100	900	$ 900
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2021	947
2022	906
2023	829
2024	667
2025	589
Thereafter	3,208
Total	7,146
Nonamortizable intangible assets (trademarks)
Patents, licenses, and other intangible assets
Nonamortizable intangible assets (trademarks)	$ 399	399
Acquired licenses \| Minimum
Patents, licenses, and other intangible assets
Estimated economic life	5 years
Acquired licenses \| Maximum
Patents, licenses, and other intangible assets
Estimated economic life	25 years
Patents
Patents, licenses, and other intangible assets
Accumulated amortization	$ (5,791)	(4,912)
Patents \| Minimum
Patents, licenses, and other intangible assets
Estimated economic life	13 years
Patents \| Maximum
Patents, licenses, and other intangible assets
Estimated economic life	20 years
Patents, definite life
Patents, licenses, and other intangible assets
Amortizable intangible assets	$ 12,038	10,597
Patents, pending issuance
Patents, licenses, and other intangible assets
Amortizable intangible assets	8,432	7,266
Licenses and other amortizable intangible assets
Patents, licenses, and other intangible assets
Amortizable intangible assets	2,560	2,510
Accumulated amortization	$ (1,661)	$ (1,439)

Summary of Significant Accounting Policies - Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock-Based Compensation
Stock-based compensation expense									$ 31,619	$ 31,851	$ 20,548
Basic numerator:
Net income (loss) attributable to common stockholders									$ (69,333)	$ 26,875	$ (70,409)
Denominator:
Weighted average common shares outstanding, basic									57,212,737	56,531,439	53,942,116
Net income (loss) per common share, basic (in dollars per share)	$ (0.24)	$ (0.22)	$ (0.61)	$ (0.14)	$ (0.47)	$ (0.18)	$ (0.28)	$ 1.42	$ (1.21)	$ 0.48	$ (1.31)
Diluted numerator:
Net income (loss) attributable to common stockholders for diluted net income (loss) per share									$ (69,333)	$ 26,875	$ (70,409)
Denominator
Weighted average common shares outstanding, basic									57,212,737	56,531,439	53,942,116
Dilutive effect of employee stock options and ESPP										1,936,441
Weighted average common shares outstanding, diluted									57,212,737	58,467,880	53,942,116
Net income (loss) per common share, diluted (in dollars per share)	$ (0.24)	$ (0.22)	$ (0.61)	$ (0.14)	$ (0.47)	$ (0.18)	$ (0.28)	$ 1.38	$ (1.21)	$ 0.46	$ (1.31)
Employee stock options
Net Income (Loss) Per Share
Securities excluded in calculation of EPS										1,022,623
Net Loss Per Share
Securities included in calculation of EPS										1,923,310
Securities excluded in calculation of EPS										1,022,623
Employee stock options
Stock-Based Compensation
Stock-based compensation expense									$ 26,045	$ 30,502	$ 19,537
Restricted stock units
Stock-Based Compensation
Stock-based compensation expense									4,770	$ 662	267
Net Loss Per Share
Securities included in calculation of EPS										13,131
ESPP
Stock-Based Compensation
Stock-based compensation expense									$ 804	$ 687	$ 744

Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock option activity, Number of Shares
Balance at the beginning of the period (in shares)	7,174,319	5,966,928
Options granted (in shares)	1,679,324	2,142,228
Options forfeited (in shares)	(243,384)	(390,950)
Options exercised (in shares)	(858,470)	(543,887)
Balance at the end of the period (in shares)	7,751,789	7,174,319	5,966,928
Options vested and expected to vest (in shares)	7,751,789
Exercisable (in shares)	4,668,179	3,950,965	3,058,659
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)	$ 24.03	$ 19.71
Options granted (in dollars per share)	33.08	35.80
Options forfeited (in dollars per share)	32.93	32.23
Options exercised (in dollars per share)	19.36	17.04
Balance at the end of the period (in dollars per share)	26.23	24.03	$ 19.71
Options vested and expected to vest (in dollars per share)	26.23
Exercisable (in dollars per share)	$ 21.75	$ 17.79	$ 15.12
Additional information
Weighted-Average Remaining Contractual Term, Balance outstanding	7 years	7 years 3 months 25 days	7 years 6 months 3 days
Weighted-Average Remaining Contractual Term, Options vested and expected to vest	7 years
Weighted-Average Remaining Contractual Term, Exercisable	5 years 10 months 28 days
Aggregate Intrinsic Value, Balance outstanding	$ 134,941	$ 79,116	$ 99,273
Aggregate Intrinsic Value, Options vested and expected to vest	134,941
Aggregate Intrinsic Value, Exercisable	102,120
Intrinsic value of options exercised	$ 16,300	$ 11,500	$ 23,600

Collaboration and Licensing Agreements (Details)			1 Months Ended											3 Months Ended									12 Months Ended
Collaboration and Licensing Agreements (Details)	Feb. 04, 2020 USD ($) shares	Mar. 29, 2019 USD ($)	Dec. 31, 2020 USD ($) shares	Nov. 30, 2020 USD ($) item	Aug. 31, 2020 USD ($) item Option	Apr. 30, 2020 USD ($)	Jan. 31, 2020 USD ($) item Option	Dec. 31, 2019 USD ($)	Nov. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) item company	Oct. 31, 2017 USD ($) shares	Jun. 30, 2016 item	Sep. 30, 2015 USD ($) item	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($) item	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($) Program item	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Collaboration research and licensing agreements
Deferred revenue			$ 92,600,000					$ 47,100,000						$ 92,600,000				$ 47,100,000					$ 92,600,000	$ 47,100,000
Revenue recorded														41,854,000	$ 35,366,000	$ 13,089,000	$ 32,385,000	3,516,000	$ 21,760,000	$ 19,485,000	$ 111,939,000		122,694,000	156,700,000	$ 40,603,000
Carrying value			16,071,000											16,071,000									16,071,000
Current portion of deferred revenue			92,615,000					45,205,000						92,615,000				45,205,000					92,615,000	45,205,000
Non Current portion of deferred revenue								1,926,000										1,926,000						1,926,000
Licensing
Collaboration research and licensing agreements
Revenue recorded																							50,200,000	112,200,000
Royalty
Collaboration research and licensing agreements
Revenue recorded																							17,800,000	5,000,000.0
Milestone
Collaboration research and licensing agreements
Revenue recorded																							50,200,000	23,200,000	20,500,000
Genentech
Collaboration research and licensing agreements
Revenue recorded																							3,500,000	113,900,000
Astellas
Collaboration research and licensing agreements
Revenue recorded																							$ 3,500,000	14,000,000.0
Novartis
Collaboration research and licensing agreements
Number of performance obligations \| item																							2
Revenue recorded																								10,000,000.0	20,000,000.0
Amgen, Inc.
Collaboration research and licensing agreements
Revenue recorded																								5,000,000.0	600,000
MorphoSys
Collaboration research and licensing agreements
Revenue recorded																							$ 39,000,000.0
Alexion
Collaboration research and licensing agreements
Revenue recorded																							26,200,000	13,000,000.0	20,000,000.0
Vir
Collaboration research and licensing agreements
Revenue recorded																							300,000	800,000
Aimmune
Collaboration research and licensing agreements
Revenue recorded																							9,600,000
Gilead
Collaboration research and licensing agreements
Revenue recorded																							13,500,000
Omeros
Collaboration research and licensing agreements
Revenue recorded																							5,000,000.0
MiRagen/Viridian
Collaboration research and licensing agreements
Revenue recorded																							6,000,000.0
Private
Collaboration research and licensing agreements
Revenue recorded																							16,100,000
Collaboration and License Agreement \| Genentech
Collaboration research and licensing agreements
Performance obligation										$ 120,000,000.0											120,000,000.0
Nonrefundable upfront payment										$ 120,000,000.0
Percentage of profits on net sales of the product										45.00%
Research license term										2 years
Revenue recognized																							3,500,000	113,900,000
Number of companies that conduct integrated research plan \| company										2
Cost sharing receivable (payable)			(3,200,000)											(3,200,000)									$ (3,200,000)
Number of programs \| item										9
Term of revenue recognized																							1 year
Collaboration and License Agreement \| Genentech \| XmAb306
Collaboration research and licensing agreements
Performance obligation										$ 111,700,000											111,700,000
Collaboration and License Agreement \| Genentech \| XmAb435
Collaboration research and licensing agreements
Performance obligation										4,100,000											4,100,000
Collaboration and License Agreement \| Genentech \| Research service
Collaboration research and licensing agreements
Performance obligation			8,300,000							4,200,000				8,300,000							4,200,000		$ 8,300,000
Revenue recognized																							3,500,000	2,200,000
Deferred revenue			2,500,000											2,500,000									2,500,000
Collaboration and License Agreement \| Genentech \| Licensing
Collaboration research and licensing agreements
Revenue recognized										111,700,000
Collaboration and License Agreement \| Genentech \| Maximum \| XmAb306
Collaboration research and licensing agreements
Potential milestone payment										160,000,000.0											160,000,000.0
Collaboration and License Agreement \| Genentech \| Maximum \| XmAb435
Collaboration research and licensing agreements
Potential milestone payment										180,000,000.0											180,000,000.0
Collaboration and License Agreement \| Genentech \| Cost approach \| Research service
Collaboration research and licensing agreements
Standalone selling price										8,500,000											8,500,000
Collaboration and License Agreement \| Genentech \| Cost approach \| Licensing
Collaboration research and licensing agreements
Standalone selling price										$ 114,400,000											$ 114,400,000
Collaboration and License Agreement \| Novartis
Collaboration research and licensing agreements
Revenue recognized																							0	10,000,000.0	20,000,000.0
Contract receivable			900,000					12,200,000						900,000				12,200,000					900,000	12,200,000
Deferred revenue			40,100,000											40,100,000									40,100,000
Remaining cost sharing settlement amount									$ 1,400,000
Collaboration and License Agreement \| Novartis \| Bispecific FC Technologies
Collaboration research and licensing agreements
Number of development stage products \| item												2
Collaboration and License Agreement \| Novartis \| Global Discovery Program
Collaboration research and licensing agreements
Proceeds from milestone payments								10,000,000.0
Revenue recognized																			10,000,000.0			$ 20,000,000.0				$ 20,100,000
Collaboration and License Agreement \| Novartis \| Global Discovery Program \| Maximum
Collaboration research and licensing agreements
Number of antibody targets for which bispecific technology applied \| item												4
Collaboration and License Agreement \| Novartis \| FC Licenses \| Maximum
Collaboration research and licensing agreements
Number of targets against which non-exclusive license is provided \| item												10
Collaboration and License Agreement \| MorphoSys
Collaboration research and licensing agreements
Revenue recognized																								0	0
Deferred revenue			0											0									0
Collaboration and License Agreement \| MorphoSys \| Royalty
Collaboration research and licensing agreements
Revenue recognized																							1,500,000
Contract receivable			1,200,000											1,200,000									1,200,000
Collaboration and License Agreement \| MorphoSys \| Milestone
Collaboration research and licensing agreements
Revenue recognized																							37,500,000
Collaboration and License Agreement \| Janssen Biotech, Inc
Collaboration research and licensing agreements
Performance obligation				$ 50,000,000.0
Nonrefundable upfront payment				50,000,000.0
Potential milestone payment				$ 662,500,000
Revenue recognized																							0
Deferred revenue			50,000,000.0											50,000,000.0									50,000,000.0
Percentage of funding for development costs				20.00%
Percentage of co-detailing activities				30.00%
Research and License Agreement \| Astellas
Collaboration research and licensing agreements
Performance obligation		$ 17,500,000
Nonrefundable upfront payment		15,000,000.0
Potential milestone payment		240,000,000.0
Revenue recognized																							3,500,000
Revenue recognized																								14,000,000.0
Deferred revenue			0					1,000,000.0						0				1,000,000.0					0	1,000,000.0
Initial milestone		2,500,000
Research and License Agreement \| Astellas \| Bispecific
Collaboration research and licensing agreements
Performance obligation		16,100,000
Revenue recognized																								13,600,000
Research and License Agreement \| Astellas \| Research service
Collaboration research and licensing agreements
Performance obligation		1,400,000
Revenue recognized		1,400,000
Research and License Agreement \| Astellas \| Milestone
Collaboration research and licensing agreements
Revenue recognized																							2,500,000
Contract receivable			2,500,000											2,500,000									2,500,000
Research and License Agreement \| Astellas \| Income approach \| Bispecific
Collaboration research and licensing agreements
Standalone selling price		17,100,000
Research and License Agreement \| Astellas \| Cost approach \| Research service
Collaboration research and licensing agreements
Standalone selling price		1,400,000
Research and License Agreement \| Amgen, Inc.
Collaboration research and licensing agreements
Performance obligation													$ 45,000,000.0
Nonrefundable upfront payment													45,000,000.0
Potential milestone payment													255,000,000.0
Revenue recognized																							0	5,000,000.0	600,000
Deferred revenue			0											0									0
Research and License Agreement \| Amgen, Inc. \| Milestone
Collaboration research and licensing agreements
Proceeds from milestone payments													$ 15,500,000
Research and License Agreement \| Amgen, Inc. \| Discovery Program
Collaboration research and licensing agreements
Revenue recognized																			$ 5,000,000.0					$ 5,000,000.0
Number of programs \| item													5
Previous targets which bispecific technology will be applied \| item													5
Number of delivered discover programs \| Program																								1
Milestones or royalties in transaction price																								$ 0
Option and License Agreement \| Alexion
Collaboration research and licensing agreements
Revenue recognized																							26,200,000	13,000,000.0	$ 20,000,000.0
Contract receivable			8,800,000											8,800,000									8,800,000
Deferred revenue			0											0									0
Option and License Agreement \| Alexion \| Royalty
Collaboration research and licensing agreements
Revenue recognized																							16,200,000	5,000,000.0
Option and License Agreement \| Alexion \| Milestone
Collaboration research and licensing agreements
Revenue recognized																							10,000,000.0	8,000,000.0
License Agreement \| INmune
Collaboration research and licensing agreements
Performance obligation											$ 100,000
Nonrefundable upfront payment											$ 100,000
Revenue recognized																										$ 100,000
Shares received in noncash transaction \| shares											1,585,000
Deferred revenue			0											0									0
Additional equity interests (as a percentage)											10.00%
Option payment											$ 10,000,000.0
License Agreement \| Private
Collaboration research and licensing agreements
Performance obligation				$ 16,100,000
Revenue recognized																							16,100,000
Value of share options or equity in noncash transaction				$ 16,100,000
Deferred revenue			0											0									0
Percentage of equity of private company				15.00%
Number of drug candidates \| item				3
Milestones or royalties in transaction price				$ 0
License, Development, and Commercialization Agreement \| Aimmune
Collaboration research and licensing agreements
Performance obligation	$ 9,600,000
Nonrefundable upfront payment	5,000,000.0
Potential milestone payment	$ 385,000,000.0
Revenue recognized																							9,600,000
Shares received in noncash transaction \| shares	156,238
Value of share options or equity in noncash transaction	$ 4,600,000
Deferred revenue			0											0									0
Patent License Agreement \| Vir
Collaboration research and licensing agreements
Potential milestone payment								155,000,000.0										155,000,000.0						155,000,000.0
Revenue recognized																							300,000	$ 800,000
Deferred revenue			0											0									0
Number of different target programs \| item																								2
Technology License Agreement \| Gilead
Collaboration research and licensing agreements
Performance obligation							$ 13,500,000
Nonrefundable upfront payment							6,000,000.0
Potential milestone payment							$ 67,000,000.0
Revenue recognized						$ 7,500,000																	13,500,000
Deferred revenue			0											0									0
Options exercised							3									3
Number of compounds \| item							3
Number of commercial licenses \| Option							4
Option fee						$ 7,500,000	$ 7,500,000
Technology License Agreement \| Gilead \| Cytotoxic Fc and Xtend Fc Technologies
Collaboration research and licensing agreements
Performance obligation							3,500,000
Technology License Agreement \| Gilead \| Initial Option Exercises
Collaboration research and licensing agreements
Performance obligation							2,500,000
Technology License Agreement \| Omeros
Collaboration research and licensing agreements
Performance obligation					$ 5,000,000.0
Nonrefundable upfront payment					$ 5,000,000.0
Revenue recognized																							5,000,000.0
Deferred revenue			0											0									0
Number of commercial options \| Option					4
Number of additional antibodies \| item					3
Technology License Agreement \| Omeros \| Maximum
Collaboration research and licensing agreements
Potential milestone payment					$ 65,000,000.0
Technology License Agreement \| Omeros \| Initial Option Exercises
Collaboration research and licensing agreements
Performance obligation					3,000,000.0
Technology License Agreement \| Omeros \| Xtend Fc Technology
Collaboration research and licensing agreements
Performance obligation					2,000,000.0
Technology License Agreement \| MiRagen/Viridian
Collaboration research and licensing agreements
Performance obligation			$ 6,000,000.0											6,000,000.0									6,000,000.0
Revenue recognized																							6,000,000.0
Shares received in noncash transaction \| shares			322,407
Value of share options or equity in noncash transaction			$ 6,000,000.0
Deferred revenue			0											0									0
Technology License Agreement \| MiRagen/Viridian \| Maximum
Collaboration research and licensing agreements
Potential milestone payment			55,000,000.0											55,000,000.0									55,000,000.0
Technology License Agreement \| MiRagen/Viridian \| Xtend Fc Technology
Collaboration research and licensing agreements
Performance obligation			6,000,000.0											6,000,000.0									6,000,000.0
Development-based \| Collaboration and License Agreement \| Janssen Biotech, Inc
Collaboration research and licensing agreements
Potential milestone payment				161,900,000
Development-based \| Research and License Agreement \| Astellas
Collaboration research and licensing agreements
Potential milestone payment		32,500,000
Development-based \| License, Development, and Commercialization Agreement \| Aimmune
Collaboration research and licensing agreements
Potential milestone payment	22,000,000.0
Development-based \| Patent License Agreement \| Vir
Collaboration research and licensing agreements
Potential milestone payment								5,000,000.0										5,000,000.0						$ 5,000,000.0
Development-based \| Technology License Agreement \| Gilead
Collaboration research and licensing agreements
Potential milestone payment							10,000,000.0
Development-based \| Technology License Agreement \| Omeros
Collaboration research and licensing agreements
Potential milestone payment					15,000,000.0
Development-based \| Technology License Agreement \| MiRagen/Viridian
Collaboration research and licensing agreements
Potential milestone payment			10,000,000.0											10,000,000.0									10,000,000.0
Regulatory-based \| Collaboration and License Agreement \| Janssen Biotech, Inc
Collaboration research and licensing agreements
Potential milestone payment				240,600,000
Regulatory-based \| Research and License Agreement \| Astellas
Collaboration research and licensing agreements
Potential milestone payment		57,500,000
Regulatory-based \| License, Development, and Commercialization Agreement \| Aimmune
Collaboration research and licensing agreements
Potential milestone payment	53,000,000.0
Regulatory-based \| Patent License Agreement \| Vir
Collaboration research and licensing agreements
Potential milestone payment								30,000,000.0										30,000,000.0						30,000,000.0
Regulatory-based \| Technology License Agreement \| Gilead
Collaboration research and licensing agreements
Potential milestone payment							27,000,000.0
Regulatory-based \| Technology License Agreement \| Omeros
Collaboration research and licensing agreements
Potential milestone payment					25,000,000.0
Regulatory-based \| Technology License Agreement \| MiRagen/Viridian
Collaboration research and licensing agreements
Potential milestone payment			20,000,000.0											20,000,000.0									20,000,000.0
Sales-based \| Collaboration and License Agreement \| Janssen Biotech, Inc
Collaboration research and licensing agreements
Potential milestone payment				$ 260,000,000.0
Sales-based \| Research and License Agreement \| Astellas
Collaboration research and licensing agreements
Potential milestone payment		$ 150,000,000.0
Sales-based \| License, Development, and Commercialization Agreement \| Aimmune
Collaboration research and licensing agreements
Potential milestone payment	$ 310,000,000.0
Sales-based \| Patent License Agreement \| Vir
Collaboration research and licensing agreements
Potential milestone payment								$ 120,000,000.0										$ 120,000,000.0						$ 120,000,000.0
Sales-based \| Technology License Agreement \| Gilead
Collaboration research and licensing agreements
Potential milestone payment							$ 30,000,000.0
Sales-based \| Technology License Agreement \| Omeros
Collaboration research and licensing agreements
Potential milestone payment					$ 25,000,000.0
Sales-based \| Technology License Agreement \| MiRagen/Viridian
Collaboration research and licensing agreements
Potential milestone payment			$ 25,000,000.0											$ 25,000,000.0									$ 25,000,000.0

Condensed Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Quarterly Financial Data (unaudited)
Total revenue	$ 41,854	$ 35,366	$ 13,089	$ 32,385	$ 3,516	$ 21,760	$ 19,485	$ 111,939	$ 122,694	$ 156,700	$ 40,603
Income (loss) from operations	(13,698)	(16,722)	(37,600)	(8,777)	(30,572)	(14,276)	(19,572)	78,244	(76,797)	13,824	(79,370)
Net income (loss)	$ (13,691)	$ (12,550)	$ (35,018)	$ (8,074)	$ (26,912)	$ (10,224)	$ (16,034)	$ 80,045	$ (69,333)	$ 26,875	$ (70,409)
Basic net income (loss) (in dollars per share)	$ (0.24)	$ (0.22)	$ (0.61)	$ (0.14)	$ (0.47)	$ (0.18)	$ (0.28)	$ 1.42	$ (1.21)	$ 0.48	$ (1.31)
Diluted net income (loss) (in dollars per share)	$ (0.24)	$ (0.22)	$ (0.61)	$ (0.14)	$ (0.47)	$ (0.18)	$ (0.28)	$ 1.38	$ (1.21)	$ 0.46	$ (1.31)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	57,873,444	56,902,301
Common stock, shares outstanding	57,873,444	56,902,301

Summary of Significant Accounting Policies - Concentration Risk (Details)	12 Months Ended
	Dec. 31, 2020 USD ($) customer	Dec. 31, 2019 USD ($) customer
Concentrations of risk
Deferred revenue	$ 92,600,000	$ 47,100,000
Accrued interest	1,400,000	2,700,000
Impairment loss or recoveries	0	0
Amounts on deposit in excess of federally insured limits approximately	$ 163,300,000	$ 50,000,000.0
Payables \| Service providers or vendors
Concentrations of risk
Number of service providers \| customer	1	2
Concentration risk percentage	49.00%	48.00%
Number of critical suppliers \| customer	3

Summary of Significant Accounting Policies - Property, Plant, and Equipment (Details)	12 Months Ended
	Dec. 31, 2020
Computers, software and equipment \| Minimum
Property and Equipment
Estimated useful lives of the assets	3 years
Computers, software and equipment \| Maximum
Property and Equipment
Estimated useful lives of the assets	5 years
Furniture and fixtures \| Minimum
Property and Equipment
Estimated useful lives of the assets	5 years
Furniture and fixtures \| Maximum
Property and Equipment
Estimated useful lives of the assets	7 years
Leasehold improvements \| Minimum
Property and Equipment
Estimated useful lives of the assets	5 years
Leasehold improvements \| Maximum
Property and Equipment
Estimated useful lives of the assets	7 years

Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes [Line Items]
US corporate tax rate	21.00%	21.00%	21.00%	35.00%
Federal
Income Taxes [Line Items]
Income tax refund	$ 0.8	$ 0.8

Summary of Significant Accounting Policies - Segments (Details)	12 Months Ended
	Dec. 31, 2020 segment
Segment Reporting
Number of Operating Segments	1

Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value of Financial Instruments
Money Market Funds	$ 163,544	$ 50,312
Marketable Securities	435,186
Equity Securities with Readily Determinable Fair Value	5,303
Equity Securities without Readily Determinable Fair Value	16,071
Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	158,937	32,009
Corporate Securities
Fair Value of Financial Instruments
Marketable Securities	119,833	281,751
Government Securities
Fair Value of Financial Instruments
Marketable Securities	315,353	269,245
Fair Value, Measurements, Recurring
Fair Value of Financial Instruments
Equity Securities with Readily Determinable Fair Value	5,303
Equity Securities without Readily Determinable Fair Value	16,071
Total Fair Value	615,497	583,005
Fair Value, Measurements, Recurring \| Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	158,937	32,009
Fair Value, Measurements, Recurring \| Corporate Securities
Fair Value of Financial Instruments
Marketable Securities	119,833	281,751
Fair Value, Measurements, Recurring \| Government Securities
Fair Value of Financial Instruments
Marketable Securities	315,353	269,245
Level 1 \| Fair Value, Measurements, Recurring
Fair Value of Financial Instruments
Equity Securities with Readily Determinable Fair Value	5,303
Total Fair Value	164,240	32,009
Level 1 \| Fair Value, Measurements, Recurring \| Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	158,937	32,009
Level 2 \| Fair Value, Measurements, Recurring
Fair Value of Financial Instruments
Total Fair Value	435,186	550,996
Level 2 \| Fair Value, Measurements, Recurring \| Corporate Securities
Fair Value of Financial Instruments
Marketable Securities	119,833	281,751
Level 2 \| Fair Value, Measurements, Recurring \| Government Securities
Fair Value of Financial Instruments
Marketable Securities	315,353	$ 269,245
Level 3 \| Fair Value, Measurements, Recurring
Fair Value of Financial Instruments
Equity Securities without Readily Determinable Fair Value	16,071
Total Fair Value	$ 16,071

Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 163,544	$ 50,312
Investments, amortized cost	594,038	581,834
Investments	594,123	583,005
Total amortized cost	435,101
Gross unrealized gains	94	1,201
Gross unrealized losses	(9)	(30)
Marketable Securities	435,186
Marketable securities
Schedule of Available-for-sale Securities
Marketable Securities	435,186	550,996
Money Market Funds
Schedule of Available-for-sale Securities
Cash and cash equivalents	158,937	32,009
Corporate Securities
Schedule of Available-for-sale Securities
Total amortized cost	119,782	281,586
Gross unrealized gains	57	195
Gross unrealized losses	(6)	(30)
Marketable Securities	119,833	281,751
Government Securities
Schedule of Available-for-sale Securities
Total amortized cost	315,319	268,239
Gross unrealized gains	37	1,006
Gross unrealized losses	(3)
Marketable Securities	315,353	269,245
Cash and Cash Equivalents
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 158,937	$ 32,009

Marketable Securities - Maturities (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Amortized Cost
Maturing in one year or less	$ 434,071
Maturing within two years	1,030
Total amortized cost	435,101
Estimate Fair Value
Maturing in one year or less	434,156
Maturing within two years	1,030
Total estimated fair value	$ 435,186

Marketable Securities - Unrealized losses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair value
Fair value, less than 12 months	$ 56,645
Unrealized losses
Unrealized losses, Less than 12 months	(9)
Corporate Securities
Fair value
Fair value, less than 12 months	15,843	$ 46,303
Fair value, 12 months or greater		13,992
Unrealized losses
Unrealized losses, Less than 12 months	(6)	(24)
Unrealized gain (losses), 12 months or greater		$ (6)
Government Securities
Fair value
Fair value, less than 12 months	40,802
Unrealized losses
Unrealized losses, Less than 12 months	$ (3)

Sale of Additional Common Stock (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2018
Proceeds from sale of common stock		$ 245,504
Common Stock
Sale of common stock	8,395,000	8,395,000
Proceeds from sale of common stock	$ 245,504	$ 84

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and equipment
Property and equipment, gross	$ 38,713	$ 28,410
Less accumulated depreciation and amortization	(17,031)	(12,605)
Property and equipment, net	21,682	15,805
Depreciation and amortization expense	4,700	3,400	$ 2,400
Computers, software and equipment
Property and equipment
Property and equipment, gross	31,229	21,087
Furniture and fixtures
Property and equipment
Property and equipment, gross	527	492
Leasehold and tenant improvements
Property and equipment
Property and equipment, gross	$ 6,957	$ 6,831

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reconciliation of federal statutory income tax to effective income tax
Federal statutory income tax rate	$ (14,559)	$ 5,709	$ (14,795)
State and local income taxes	(4,659)	2,549	(4,767)
Research and development credit	(9,669)	(6,747)	(6,170)
Stock based compensation	529	1,927	444
State credit		1,725
Other	56	(301)	414
Net change in valuation allowance	28,302	(4,550)	24,874
Income tax provision (benefit)	$ 0	$ 312	$ 0

Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred income tax assets
Net operating loss carryforwards	$ 56,182	$ 36,891
Research credits	38,047	28,415
Depreciation	137	334
Unrealized loss on securities	195
Accrued compensation	8,464	4,788
Deferred revenue	11,925	11,215
State taxes		64
Gross deferred income tax assets	114,950	81,707
Valuation allowance	(105,995)	(77,389)
Net deferred income tax assets	8,955	4,318
Deferred income tax liabilities
Patent costs	(4,219)	(3,736)
Equity investment	(4,497)
Licensing costs	(194)	(229)
Capitalized legal costs	(21)	(26)
Unrealized gain on securities	(24)	(327)
Gross deferred income tax liabilities	$ (8,955)	$ (4,318)

Stock-Based Compensation - Plan details (Details)			12 Months Ended
Stock-Based Compensation - Plan details (Details)	Jan. 01, 2020 shares	Jan. 01, 2014 shares	Dec. 31, 2020 item $ / shares shares	Dec. 31, 2019 $ / shares shares	Dec. 31, 2018 $ / shares shares	Dec. 31, 2017 shares	Dec. 31, 2016 shares	Dec. 31, 2015 shares	Nov. 30, 2013 shares
Stock options
Stock-based compensation
Total number of shares of common stock available for issuance			3,346,092	3,975,160	3,576,574
Options granted (in shares)			1,679,324	2,142,228
Information with respect to stock options outstanding
Exercisable options (in shares)			4,668,179	3,950,965	3,058,659
Weighted-average exercise price per share of exercisable options (in dollars per share) \| $ / shares			$ 21.75	$ 17.79	$ 15.12
Weighted average grant date fair value per share of options granted during the year (in dollars per share) \| $ / shares			$ 16.96	$ 20.74	$ 18.06
Weighted-average remaining contractual life			7 years	7 years 3 months 25 days	7 years 6 months 3 days
ESPP
Stock-based compensation
Total number of shares of common stock available for issuance									581,286
Initial term of plan			2 years
Second term of plan			2 years
Number of six month purchase periods \| item			4
Purchase period			6 months
Increase in shares of common stock available for issuance (in shares)		313,545	0	0	0	0	0	0
Awards issued under the plan (in shares)			467,595
ESPP \| Minimum
Stock-based compensation
Percentage of compensation that employees may withhold to purchase stock at a discount			1.00%
ESPP \| Maximum
Stock-based compensation
Percentage of compensation that employees may withhold to purchase stock at a discount			15.00%
Purchase price as percentage of stock price at the initial offering date			85.00%
Purchase price as percentage of stock price at the purchase date			85.00%
Annual percentage increase in shares of common stock available for issuance			1.00%
Annual increase in shares of common stock available for issuance (in shares)			621,814
Restricted stock units
Stock-based compensation
Restricted stock granted (in shares)			348,288	71,566
The 2010 Plan
Stock-based compensation
Total number of shares of common stock available for issuance			0
The 2013 Plan
Stock-based compensation
Total number of shares of common stock available for issuance			11,479,096
Annual percentage increase in shares of common stock available for issuance			4.00%
Increase in shares of common stock available for issuance (in shares)	1,138,046
Awards issued under the plan (in shares)			10,572,839
The 2013 Plan \| Restricted stock units
Stock-based compensation
Restricted stock granted (in shares)			453,787
Annual installment vesting periods \| item			3

Stock-Based Compensation - Options by exercise price (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Stock options outstanding and exercisable by exercise price
Stock Options Outstanding, Number of Shares \| shares	7,751,789
Stock Options Outstanding, Remaining Contractual Term	7 years
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 26.23
Stock Options Exercisable, Number of Shares \| shares	4,668,179
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 21.75
$4.25 - $10.28
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	4.25
Range of Exercise Prices, upper limit (in dollars per share)	$ 10.28
Stock Options Outstanding, Number of Shares \| shares	153,038
Stock Options Outstanding, Remaining Contractual Term	2 years 8 months 4 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 4.29
Stock Options Exercisable, Number of Shares \| shares	153,038
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 4.29
$10.52 - $15.78
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	10.52
Range of Exercise Prices, upper limit (in dollars per share)	$ 15.78
Stock Options Outstanding, Number of Shares \| shares	1,639,702
Stock Options Outstanding, Remaining Contractual Term	4 years 3 months 18 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 13.10
Stock Options Exercisable, Number of Shares \| shares	1,638,717
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 13.10
$15.91 - $23.87
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	15.91
Range of Exercise Prices, upper limit (in dollars per share)	$ 23.87
Stock Options Outstanding, Number of Shares \| shares	1,980,437
Stock Options Outstanding, Remaining Contractual Term	6 years 6 months 10 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 22.75
Stock Options Exercisable, Number of Shares \| shares	1,654,609
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 22.67
$23.96 - $35.94
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	23.96
Range of Exercise Prices, upper limit (in dollars per share)	$ 35.94
Stock Options Outstanding, Number of Shares \| shares	2,330,771
Stock Options Outstanding, Remaining Contractual Term	8 years 7 months 24 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 31.80
Stock Options Exercisable, Number of Shares \| shares	530,056
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 30.12
$35.99 - $53.99
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	35.99
Range of Exercise Prices, upper limit (in dollars per share)	$ 53.99
Stock Options Outstanding, Number of Shares \| shares	1,647,841
Stock Options Outstanding, Remaining Contractual Term	8 years 4 months 2 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 37.63
Stock Options Exercisable, Number of Shares \| shares	691,759
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 37.51

Leases (Details) - USD ($) $ in Thousands	12 Months Ended
Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Nov. 30, 2020	Jul. 31, 2017
Lessee, Lease, Description [Line Items]
Option to extend	true
2021	$ 2,429
2022	2,269
2023	1,415
2024	1,436
2025	1,396
Thereafter	5,342
Total undiscounted lease payments	14,287
Less: Imputed interest	(2,659)
Present value of lease payments	$ 11,628
Monrovia, CA - office and laboratory space
Lessee, Lease, Description [Line Items]
Renewal term		5 years
Lease term		62 months
Monrovia, CA - office and laboratory space with additional space
Lessee, Lease, Description [Line Items]
Renewal term			5 years
San Diego, CA - office space
Lessee, Lease, Description [Line Items]
Renewal term	5 years
San Diego, CA - second office space
Lessee, Lease, Description [Line Items]
Renewal term	5 years

Leases - Operating lease liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Leases
Lease liability - short-term	$ 1,889	$ 2,169
Lease liability - long-term	9,739	$ 8,565
Operating lease liabilities	$ 11,628

Leases - Lease costs (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Lease costs (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Leases
Operating lease cost	$ 2,503	$ 2,596
Variable lease cost	150	80
Total lease costs	2,653	2,676
Rent expense			$ 2,500
Cash paid for amounts included in the measurement of lease liabilities	2,233	$ 1,929
ROU assets exchanged for lease liabilities	$ 3,100
Remaining lease term	7 years 4 months 24 days	5 years 6 months
Discount rate	5.50%	5.50%

Collaborative and Licensing Agreements - Revenue Recognition (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded	$ 41,854	$ 35,366	$ 13,089	$ 32,385	$ 3,516	$ 21,760	$ 19,485	$ 111,939	$ 122,694	$ 156,700	$ 40,603
Deferred revenue	92,600				47,100				92,600	47,100
Current portion of deferred revenue	92,615				45,205				92,615	45,205
Non Current portion of deferred revenue					1,926					1,926
Research collaboration
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									4,500	16,300	20,100
Milestone
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									50,200	23,200	20,500
Licensing
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									50,200	112,200
Royalty
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									17,800	5,000
United States
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									64,100	142,700	40,600
Non - United States
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									58,600	14,000
Aimmune
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									9,600
Amgen, Inc.
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded										5,000	600
Alexion
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									26,200	13,000	20,000
Astellas
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									3,500	14,000
Genentech
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									3,500	113,900
Gilead
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									13,500
MiRagen/Viridian
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									6,000
MorphoSys
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									$ 39,000
Novartis
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of performance obligations \| item									2
Revenue recorded										10,000	$ 20,000
Omeros
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									$ 5,000
Vir
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									300	800
Private
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recorded									$ 16,100
Collaboration and License Agreement \| Genentech
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Term of revenue recognized									1 year
Collaboration and License Agreement \| MorphoSys
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Deferred revenue	0								$ 0
Collaboration and License Agreement \| MorphoSys \| Royalty
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Contract receivable	1,200								1,200
Collaboration and License Agreement \| Novartis
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Contract receivable	900				$ 12,200				900	$ 12,200
Deferred revenue	$ 40,100								$ 40,100

401(k) Plan (Details) - USD ($) $ in Millions			12 Months Ended
401(k) Plan (Details) - USD ($) $ in Millions	Mar. 31, 2020	Jan. 01, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan employer matching contribution percent	4.00%	3.50%
Employer contributions			$ 0.8	$ 0.6	$ 0.5
Vesting period			3 years
Annual vesting percentage			33.00%
1% of participating employee contributions
Defined Benefit Plan Disclosure [Line Items]
Percentage of company matching to defined contribution plan	100.00%	100.00%
Defined contribution plan employer matching contribution percent	1.00%	1.00%
5% of participating employee contributions
Defined Benefit Plan Disclosure [Line Items]
Percentage of company matching to defined contribution plan		50.00%
Defined contribution plan employer matching contribution percent		5.00%
6% of participating employee contributions
Defined Benefit Plan Disclosure [Line Items]
Percentage of company matching to defined contribution plan	50.00%
Defined contribution plan employer matching contribution percent	6.00%