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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 001-36182

Xencor, Inc.

(Exact name of registrant as specified in its charter)

Delaware

20-1622502

(State or other jurisdiction of incorporation

or organization)

(I.R.S. Employer Identification No.)

111 West Lemon Avenue, Monrovia, CA

91016

(Address of principal executive offices)

(Zip Code)

(626) 305-5900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common Stock, par value $0.01 per share

XNCR

The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    Accelerated filer    Non-accelerated filer    Smaller reporting company Emerging growth company

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes   No 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class

Outstanding at July 28, 2021

Common stock, par value $0.01 per share

58,323,914

Table of Contents

Xencor, Inc.

Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2021

Table of Contents

Page

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

3

PART I.

FINANCIAL INFORMATION

5

Item 1.

Financial Statements

5

Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020

5

Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

6

Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

7

Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)

8

Notes to Financial Statements (unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

Item 4.

Controls and Procedures

40

PART II.

OTHER INFORMATION

41

Item 1.

Legal Proceedings

41

Item 1A.

Risk Factors

41

Item 6.

Exhibits

42

Signatures

43

In this report, unless otherwise stated or the context otherwise indicates, references to “Xencor,” “the Company,” “we,” “us,” “our” and similar references refer to Xencor, Inc. The Xencor logo is a registered trademark of Xencor, Inc. This report also contains registered marks, trademarks, and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders.

2

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). You should not place undue reliance on these statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under Part II, Item 1A, “Risk Factors” in this Quarterly Report. These statements, which represent our current expectations or beliefs concerning various future events, may contain words such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” the negative of such terms or other words indicating future results.

These forward-looking statements should, therefore, be considered in light of various important factors, including but not limited to, the following:

the effects of the ongoing COVID-19 pandemic on our financial condition, results of operations, cash flows and performance;

our ability to execute on our plans to research, develop and commercialize our product candidates;

the success of our ongoing and planned clinical trials;

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

our ability to accurately estimate expenses, future revenue, capital requirements and needs for additional financing;

our ability to identify additional products or product candidates with significant commercial potential that are consistent with our business objectives;

our ability to receive research funding and achieve anticipated milestones under our collaborations;

our ability to attract collaborators with development, regulatory, and commercial expertise;

our ability to protect our intellectual property position;

the rate and degree of market acceptance and clinical utility of our products;

costs of compliance and our failure to comply with new and existing governmental regulations;

the capabilities and strategy of our suppliers and vendors including key manufacturers of our clinical drug supplies;

significant competition in our industry;

costs of litigation and the failure to successfully defend lawsuits and other claims against us;

the potential loss or retirement of key members of management;

our failure to successfully execute our growth strategy, including any delays in our planned future growth;

our failure to maintain effective internal controls; and

3

Table of Contents

our ability to accurately estimate expenses, future revenues, capital requirements and needs for additional financing.

The factors, risks and uncertainties referred to above and others are more fully described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and this Quarterly Report on Form 10-Q. Forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We cannot guarantee future results, events, levels of activity, performance, or achievements. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

4

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PART I — FINANCIAL INFORMATION

Item1.          Financial Statements

Xencor, Inc.

Balance Sheets

(in thousands, except share and per share data)

    

June 30, 

    

December 31, 

2021

2020

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

115,842

$

163,544

Marketable securities

288,976

434,156

Equity securities

45,230

5,303

Accounts receivable

14,825

 

11,443

Contract asset

500

12,500

Prepaid expenses and other current assets

15,594

 

10,726

Total current assets

480,967

 

637,672

Property and equipment, net

 

23,132

 

21,682

Patents, licenses, and other intangible assets, net

16,384

 

15,977

Marketable securities - long term

153,619

1,030

Equity securities - long term

17,146

16,071

Other assets

 

4,354

 

10,812

Total assets

$

695,602

$

703,244

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

7,112

$

8,954

Accrued expenses

17,328

 

17,603

Lease liabilities

2,322

1,889

Deferred revenue

19,200

 

92,615

Total current liabilities

45,962

 

121,061

Lease liabilities, net of current portion

2,702

9,739

Total liabilities

48,664

 

130,800

Commitments and contingencies

Stockholders’ equity

Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at June 30, 2021 and December 31, 2020

Common stock, $0.01 par value: 200,000,000 authorized shares at June 30, 2021 and December 31, 2020; 58,315,485 issued and outstanding at June 30, 2021 and 57,873,444 issued and outstanding at December 31, 2020

584

 

580

Additional paid-in capital

962,343

 

937,525

Accumulated other comprehensive income (loss)

(15)

 

74

Accumulated deficit

 

(315,974)

 

(365,735)

Total stockholders’ equity

 

646,938

 

572,444

Total liabilities and stockholders’ equity

$

695,602

$

703,244

See accompanying notes.

5

Table of Contents

Xencor, Inc.

Statements of Comprehensive Income (Loss)

(unaudited)

(in thousands, except share and per share data)

Three Months Ended

 

Six Months Ended

June 30, 

 

June 30, 

    

2021

    

2020

 

2021

    

2020

Revenue

Collaborations, licenses, milestones, and royalties

$

67,447

$

13,089

$

101,412

$

45,474

Operating expenses

Research and development

 

49,497

 

43,458

 

90,908

 

77,401

General and administrative

 

8,863

 

7,231

 

17,090

 

14,449

Total operating expenses

 

58,360

 

50,689

 

107,998

 

91,850

Income (loss) from operations

 

9,087

 

(37,600)

 

(6,586)

 

(46,376)

Other income (expenses)

Interest income, net

 

147

 

2,090

 

362

 

5,129

Other income (expense), net

(6)

134

(17)

133

Gain (loss) on equity securities, net

43,020

358

56,002

(1,978)

Total other income, net

 

43,161

 

2,582

 

56,347

 

3,284

Net income (loss)

52,248

(35,018)

49,761

(43,092)

Other comprehensive income (loss)

Net unrealized gain (loss) on marketable securities

(112)

427

(90)

322

Comprehensive income (loss)

$

52,136

$

(34,591)

$

49,671

$

(42,770)

Basic net income (loss) per common share

$

0.90

$

(0.61)

$

0.86

$

(0.76)

Diluted net income (loss) per common share

$

0.87

$

(0.61)

$

0.82

$

(0.76)

Basic weighted average common shares outstanding

58,247,941

57,059,610

58,123,319

57,003,162

Diluted weighted average common shares outstanding

60,335,339

57,059,610

60,503,846

57,003,162

See accompanying notes.

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Xencor, Inc.

Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share data)

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

Stockholders’ Equity

Shares

Amount

Capital

Income (Loss)

Deficit

Equity

Balance, December 31, 2020

57,873,444

$

580

$

937,525

$

74

$

(365,735)

$

572,444

Issuance of common stock upon exercise of stock awards

230,701

2

5,337

5,339

Issuance of restricted stock units

117,808

1

(1)

Comprehensive income (loss)

23

(2,487)

(2,464)

Stock-based compensation

8,293

8,293

Balance, March 31, 2021

58,221,953

583

951,154

97

(368,222)

583,612

Issuance of common stock upon exercise of stock awards

52,790

1

902

903

Issuance of restricted stock units

10,190

Issuance of common stock under the Employee Stock Purchase Plan

30,552

937

937

Comprehensive income (loss)

(112)

52,248

52,136

Stock-based compensation

9,350

9,350

Balance, June 30, 2021

58,315,485

$

584

$

962,343

$

(15)

$

(315,974)

$

646,938

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

Stockholders’ Equity

Shares

Amount

Capital

Income (Loss)

Deficit

Equity

Balance, December 31, 2019

56,902,301

$

569

$

887,873

$

1,161

$

(296,402)

$

593,201

Issuance of common stock upon exercise of stock awards

79,930

1

1,470

1,471

Issuance of restricted stock units

19,022

Comprehensive loss

(105)

(8,074)

(8,179)

Stock-based compensation

6,512

6,512

Balance, March 31, 2020

57,001,253

570

895,855

1,056

(304,476)

593,005

Issuance of common stock upon exercise of stock awards

181,856

2

3,273

3,275

Issuance of restricted stock units

2,800

Issuance of common stock under the Employee Stock Purchase Plan

28,344

725

725

Comprehensive income (loss)

427

(35,018)

(34,591)

Stock-based compensation

8,231

8,231

Balance, June 30, 2020

57,214,253

$

572

$

908,084

$

1,483

$

(339,494)

$

570,645

See accompanying notes.

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Table of Contents

Xencor, Inc.

Statements of Cash Flows

(unaudited)

(in thousands)

Six Months Ended

June 30, 

    

2021

    

2020

Cash flows from operating activities

Net income (loss)

$

49,761

$

(43,092)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

 

3,391

 

2,816

Amortization of premium (accretion of discount) on marketable securities

 

1,711

 

(838)

Stock-based compensation

 

17,643

 

14,743

Abandonment of capitalized intangible assets

 

310

 

167

Equity received in connection with license agreement

(4,589)

Equity received in connection with sale of financial assets

(3,300)

Change in fair value of equity securities

(37,701)

1,978

(Gain) loss on disposal of assets

(4)

5

Gain on sale of marketable securities available for sale

(153)

Changes in operating assets and liabilities:

Accounts receivable

 

(3,382)

 

12,649

Interest receivable

496

914

Contract asset and deposits

11,938

Prepaid expenses and other assets

 

(4,868)

 

(843)

Accounts payable

 

(1,842)

 

324

Accrued expenses

 

(275)

 

162

Income taxes

91

Lease liabilities and right of use (ROU) assets

(83)

(110)

Deferred revenue

 

(73,415)

 

(2,446)

Net cash used in operating activities

 

(39,620)

 

(18,222)

Cash flows from investing activities

Purchase of marketable securities

 

(231,459)

 

(302,319)

Proceeds from sale of property and equipment

4

Purchase of intangible assets

 

(1,324)

 

(1,467)

Purchase of property and equipment

 

(4,234)

 

(2,695)

Proceeds from maturities and sale of marketable securities

221,752

378,454

Net cash (used in) provided by investing activities

 

(15,261)

 

71,973

Cash flows from financing activities

Proceeds from issuance of common stock upon exercise of stock awards

 

6,242

 

4,746

Proceeds from issuance of common stock under the Employee Stock Purchase Plan

937

725

Net cash provided by financing activities

 

7,179

 

5,471

Net (decrease) increase in cash and cash equivalents

 

(47,702)

 

59,222

Cash and cash equivalents, beginning of period

 

163,544

 

50,312

Cash and cash equivalents, end of period

$

115,842

$

109,534

Supplemental disclosure of cash flow information

Cash paid during the period for:

Interest

$

9

$

11

Supplemental disclosures of non-cash investing activities

Unrealized gain (loss) on marketable securities

$

(90)

$

322

See accompanying notes.

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Table of Contents

Xencor, Inc.

Notes to Financial Statements

(unaudited)

June 30, 2021

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period.

The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 24, 2021.

Use of Estimates

The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets, and related amortization. Significant estimates in these interim financial statements include estimates: made for royalty revenue, accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization, estimated standalone selling price of performance obligations, estimated time for completing delivery of performance obligations under certain arrangements, the likelihood of recognizing variable consideration, the carrying value of equity instruments without a readily determinable fair value, and recoverability of deferred tax assets.

Intangible Assets

The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impairment charges recorded for the three and six months ended June 30, 2021 and 2020.

The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. There was no material abandonment of in-process intangible assets during the three and six months ended June 30, 2021 and 2020.

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Table of Contents

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 because it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost. 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 three and six months ended June 30, 2021 and 2020. Accrued interest on marketable debt securities is included in the marketable securities’ carrying value. 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 equity securities 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 re-measures 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 gain or loss on the sale of the securities will be recognized within other income (expense) in the Statements of Comprehensive Income (Loss) in the period of sale.

The Company also has investments in equity securities without readily determinable fair values, 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.

Recent Accounting Pronouncements

Pronouncements Adopted in 2021

Effective January 1, 2021, the Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes specific exceptions to the general principles in Topic 740 and simplifies the accounting for income taxes. The adoption of this standard did not have a significant impact on the Company’s financial statements.

Effective January 1, 2021, the Company adopted 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 adoption of this standard did not have a significant impact on the Company’s financial statements.

Effective January 1, 2021, the Company adopted ASU No. 2020-10, Codification Improvements, which amends a variety of topics in the Accounting Standards Codification to improve consistency and clarify guidance. The adoption of this standard did not have a significant impact on the Company’s financial statements.

There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2020 Annual Report on Form 10-K.

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Table of Contents

2. Fair Value of Financial Instruments

Financial instruments included in the financial statements include cash and cash equivalents, marketable debt and equity securities, accounts receivable, accounts payable, and accrued expenses. Marketable debt securities, equity securities, and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short-term maturities.

The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification 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):

June 30, 2021

(unaudited)

December 31, 2020

    

Total

    

    

    

Total

    

    

Fair Value

Level 1

Level 2

Level 3

Fair Value

Level 1

Level 2

Level 3

Available-for-Sale Debt Securities:

Money Market Funds

$

71,703

$

71,703

$

$

$

158,937

$

158,937

$

$

Corporate Securities

104,957

104,957

119,833

119,833

Government Securities

337,638

337,638

315,353

315,353

Equity Securities:

Securities with Readily Determinable Fair Value

45,230

45,230

5,303

5,303

Securities without Readily Determinable Fair Value

17,146

17,146

16,071

16,071

$

576,674

$

116,933

$

442,595

$

17,146

$

615,497

$

164,240

$

435,186

$

16,071

Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. During the three and six months ended June 30, 2021 and 2020, there were no transfers between Level 1 and Level 2. During the three and six months ended June 30, 2021, an equity investment without a readily determinable fair value was transferred to Level 1 from Level 3.

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Table of Contents

The following table provides a rollforward for recurring Level 3 fair value measurements (in thousands):

Securities without Readily Determinable Fair Value

Balance at December 31, 2020

$

16,071

Issuance

12,148

Transfer out of Level 3

(11,073)

Balance at June 30, 2021

$

17,146

The Company held equity securities without readily determinable fair value at June 30, 2021 and December 31, 2020, respectively. 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.

3. Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. Potentially dilutive securities consisting of stock issuable pursuant to outstanding options and restricted stock units (RSUs), and stock issuable pursuant to the 2013 Employee Stock Purchase Plan (ESPP) are not included in the per common share calculation in periods when the inclusion of such shares would have an anti-dilutive effect.

Basic and diluted net income (loss) per common share is computed as follows:

Three Months Ended

 

Six Months Ended

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

(in thousands, except share and per share data)

Numerator:

Net income (loss) attributable to common stockholders

$

52,248

$

(35,018)

$

49,761

$

(43,092)

Denominator:

Weighted-average common shares outstanding used in computing basic net income (loss)

 

58,247,941

 

57,059,610

58,123,319

57,003,162

Effect of dilutive securities

2,087,398

2,380,527

Weighted-average common shares outstanding used in computing diluted net income (loss)

60,335,339

57,059,610

60,503,846

57,003,162

Basic net income (loss) per common share

$

0.90

$

(0.61)

$

0.86

$

(0.76)

Diluted net income (loss) per common share

$

0.87

$

(0.61)

$

0.82

$

(0.76)

For the three and six months ended June 30, 2021, we excluded 1,374,608 and 698,917 shares of stock issuable pursuant to outstanding options and RSUs from the calculation, respectively, because the inclusion of such shares would have had an antidilutive effect. For the three and six months ended June 30, 2020, all outstanding potentially dilutive securities have been excluded from the calculation of diluted net income (loss) per common share as the effect of including such securities would have been anti-dilutive.

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4. Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). For the three and six months ended June 30, 2021 and 2020, the only component of other comprehensive income (loss) is net unrealized gain (loss) on marketable securities. There were no material reclassifications out of accumulated other comprehensive income (loss) during the three and six months ended June 30, 2021 and 2020.

5. Marketable and Equity Securities

The Company’s marketable debt securities held as of June 30, 2021 and December 31, 2020 are summarized below:

Gross

Gross

    

Amortized

    

Unrealized

Unrealized

    

June 30, 2021

Cost

Gains

Losses

Fair Value

(in thousands)

Money Market Funds

$

71,703

$

$

$

71,703

Corporate Securities

104,975

13

(31)

104,957

Government Securities

337,625

36

(23)

337,638

$

514,303

$

49

$

(54)

$

514,298

Reported as

Cash and cash equivalents

$

71,703

Marketable securities

442,595

Total investments

$

514,298

Gross

Gross

    

Amortized

    

Unrealized

Unrealized

    

December 31, 2020

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)