SEC Filing | Xencor, Inc.

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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 September 30, 2022


☐	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 November 3, 2022
Common stock, par value $0.01 per share		59,924,016

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Xencor, Inc.

Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2022

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		Page

	SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	3
PART I.	FINANCIAL INFORMATION	5
Item 1.	Financial Statements	5
	Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	5
	Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	6
	Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	7
	Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	8
	Notes to Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 6.	Exhibits	41

Signatures		42

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.

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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 in the United States and abroad 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, cost, and timing 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;

●

the ability of our publicly announced preliminary clinical trial data to support continued clinical development and regulatory approval for specific treatments;

●

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; and

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●

our failure to maintain effective internal controls.

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, 2021 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.

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PART I — FINANCIAL INFORMATION

ITEM 1. Financial Statements

Xencor, Inc.

Balance Sheets

(in thousands, except share and per share data)


	September 30,		December 31,
	2022		2021
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	52,654	$	143,480
Marketable debt securities		515,398		153,767
Marketable equity securities		32,184		36,860
Accounts receivable		44,876		66,384
Prepaid expenses		22,886		23,877
Total current assets		667,998		424,368
Property and equipment, net		51,040		28,240
Patents, licenses, and other intangible assets, net		18,094		16,493
Marketable debt securities - long term		41,720		300,465
Marketable equity securities - long term		31,124		31,262
Notes receivable - long term		5,000		5,000
Right of use (ROU) asset		19,680		31,730
Other assets		613		653
Total assets	$	835,269	$	838,211
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	14,618	$	14,001
Accrued expenses		19,289		19,443
Lease liabilities		20,551		—
Deferred revenue		35,186		37,294
Income tax payable		388		—
Total current liabilities		90,032		70,738
Lease liabilities, net of current portion		22,539		33,969
Total liabilities		112,571		104,707
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at September 30, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value: 200,000,000 authorized shares at September 30, 2022 and December 31, 2021; 59,773,337 issued and outstanding at September 30, 2022 and 59,355,558 issued and outstanding at December 31, 2021		598		595
Additional paid-in capital		1,058,219		1,017,523
Accumulated other comprehensive loss		(9,875)		(1,510)
Accumulated deficit		(326,244)		(283,104)
Total stockholders’ equity		722,698		733,504
Total liabilities and stockholders’ equity	$	835,269	$	838,211

See accompanying notes.

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Xencor, Inc.

Statements of Comprehensive Income (Loss)

(unaudited)

(in thousands, except share and per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021

Revenue
Collaborations, milestones, and royalties	$	27,299	$	19,683	$	142,969	$	121,096
Operating expenses
Research and development		53,273		50,610		148,111		141,519
General and administrative		12,374		10,373		34,738		27,462
Total operating expenses		65,647		60,983		182,849		168,981
Loss from operations		(38,348)		(41,300)		(39,880)		(47,885)
Other income (expenses)
Interest income, net		1,379		196		2,749		558
Other expense, net		(1)		(593)		(244)		(610)
Gain (loss) on equity securities, net		5,299		1,506		(4,676)		57,507
Total other income (expense), net		6,677		1,109		(2,171)		57,455

Income (loss) before income tax expense		(31,671)		(40,191)		(42,051)		9,570
Income tax expense		1,088		—		1,088		—
Net income (loss)		(32,759)		(40,191)		(43,139)		9,570

Other comprehensive loss
Net unrealized loss on marketable debt securities		(931)		(59)		(8,366)		(149)
Comprehensive income (loss)	$	(33,690)	$	(40,250)	$	(51,505)	$	9,421

Basic net income (loss) per common share	$	(0.55)	$	(0.69)	$	(0.72)	$	0.16
Diluted net income (loss) per common share	$	(0.55)	$	(0.69)	$	(0.72)	$	0.16

Basic weighted average common shares outstanding		59,716,594		58,350,647		59,564,985		58,199,928
Diluted weighted average common shares outstanding		59,716,594		58,350,647		59,564,985		60,346,480

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, 2021	59,355,558	$	595	$	1,017,523	$	(1,510)	$	(283,104)		$	733,504
Issuance of common stock upon exercise of stock awards	36,500		—		731		—		—			731
Issuance of restricted stock units	137,134		1		(1)		—		—			—
Comprehensive income (loss)	—		—		—		(5,611)		23,594			17,983
Stock-based compensation	—		—		10,805		—		—			10,805
Balance, March 31, 2022 (unaudited)	59,529,192	$	596	$	1,029,058	$	(7,121)	$	(259,510)		$	763,023

Issuance of common stock upon exercise of stock awards	70,874		1		1,315		—		—			1,316
Issuance of restricted stock units	15,774		—		—		—		—			—
Issuance of common stock under the Employee Stock Purchase Plan	68,580		1		1,196		—		—			1,197
Comprehensive loss	—		—		—		(1,823)		(33,975)			(35,798)
Stock-based compensation	—		—		12,603		—		—			12,603
Balance, June 30, 2022	59,684,420		598		1,044,172		(8,944)		(293,485)			742,341

Issuance of common stock upon exercise of stock awards	71,530		—		1,287		—		—			1,287
Issuance of restricted stock units	17,387		—		—		—		—			—
Comprehensive loss	—		—		—		(931)		(32,759)			(33,690)
Stock-based compensation	—		—		12,760		—		—			12,760
Balance, September 30, 2022 (unaudited)	59,773,337	$	598	$	1,058,219	$	(9,875)	$	(326,244)		$	722,698

						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 (unaudited)	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

Issuance of common stock upon exercise of stock awards	132,709		1		3,228		—		—			3,229
Issuance of restricted stock units	6,617		—		—		—		—			—
Comprehensive loss	—		—		—		(59)		(40,191)			(40,250)
Stock-based compensation	—		—		8,943		—		—			8,943
Balance, September 30, 2021 (unaudited)	58,454,811	$	585	$	974,514	$	(74)	$	(356,165)		$	618,860

See accompanying notes.

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Xencor, Inc.

Statements of Cash Flows

(unaudited)

(in thousands)


	Nine Months Ended
	September 30,
	2022		2021
Cash flows from operating activities
Net (loss) income	$	(43,139)	$	9,570
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		6,640		5,384
Amortization of premium on marketable securities		909		2,632
Stock-based compensation		36,168		26,586
Abandonment of capitalized intangible assets		1,331		727
Equity received in connection with sale of financial assets		—		(3,300)
Change in fair value of equity securities		4,676		(39,206)
Impairment on equity securities		138		563
Loss on disposal of assets		132		17
Changes in operating assets and liabilities:
Accounts receivable and contract asset		21,508		3,398
Interest receivable from marketable debt securities		(392)		182
Prepaid expenses and other assets		1,031		(10,599)
Accounts payable		617		177
Accrued expenses		(154)		4,505
Income taxes		388		—
Lease liabilities and ROU assets		21,171		386
Deferred revenue		(2,108)		(79,665)
Net cash provided by (used in) operating activities		48,916		(78,643)
Cash flows from investing activities
Purchase of marketable debt securities		(317,058)		(387,826)
Purchase of equity securities		—		(842)
Proceeds from sale of property and equipment		—		4
Purchase of intangible assets		(3,977)		(2,348)
Purchase of property and equipment		(28,528)		(6,979)
Proceeds from maturities of marketable debt securities		205,290		343,882
Net cash used in investing activities		(144,273)		(54,109)
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards		3,334		9,471
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		1,197		937
Net cash provided by financing activities		4,531		10,408
Net decrease in cash and cash equivalents		(90,826)		(122,344)
Cash and cash equivalents, beginning of period		143,480		163,544
Cash and cash equivalents, end of period	$	52,654	$	41,200

Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	13	$	13
Income taxes	$	72	$	—
Supplemental disclosures of non-cash investing activities
Unrealized loss on marketable debt securities	$	(8,366)	$	(149)

See accompanying notes.

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Xencor, Inc.

Notes to Financial Statements

(unaudited)

September 30, 2022

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 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 24, 2022.

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, evaluation of intangible assets, investments, leases and other assets for evidence of impairment, fair value measurements, and contingencies. Significant estimates in these interim financial statements include estimates made for royalty revenue, accrued research and development expenses, stock-based compensation expenses, intangible assets, incremental borrowing rate for right-of-use asset and lease liability, 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 was no impairment charge recorded for the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $0.4 million related to an acquired license.

The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. We abandoned $0.3 million and $1.3 million of in-process intangible assets during the three and nine months ended September 30, 2022, respectively. There was no material abandonment of in-process intangible assets during the three months ended September 30, 2021. We abandoned $0.3 million of in-process intangible assets during the nine months ended September 30, 2021.

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Marketable Debt 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 nine months ended September 30, 2022 and 2021. 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. During the three and nine months ended September 30, 2022, the Company recorded an unrealized loss of $0.9 million and $8.4 million, respectively, in its portfolio of marketable debt securities. The unrealized losses are due to the changing interest rate environment and are not due to changes in the credit quality of the underlying securities. The unrealized losses are recorded in other comprehensive income (loss) for the three and nine months ended September 30, 2022.

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 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 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 a readily determinable fair value, where the Company elects the measurement alternative to record the investment 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. There was no impairment charge recorded for the three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $0.1 million in connection with equity securities without a readily determinable fair value. During the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $0.6 million.

Recent Accounting Pronouncements

Pronouncements Not Yet Effective

In June 2022, the Financial Accounting Standards Board (FASB) issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which is effective for fiscal years beginning on and after December 15, 2023, and interim periods within those fiscal years. The standard clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and is not considered in measuring fair value. The Company does not anticipate that the standard will have a significant impact on its financial statements.

There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2021 Annual Report on Form 10-K.

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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):


	September 30, 2022
	(unaudited)						December 31, 2021
	Total						Total
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
Money Market Funds	$	24,506	$	24,506	$	—	$	123,892	$	123,892	$	—
Corporate Securities		186,597		—		186,597		144,418		—		144,418
Government Securities		370,521		—		370,521		309,814		—		309,814
	$	581,624	$	24,506	$	557,118	$	578,124	$	123,892	$	454,232

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 nine months ended September 30, 2022 and 2021, there were no transfers between Level 1 and Level 2.

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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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands, except share and per share data)				(in thousands, except share and per share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(32,759)	$	(40,191)	$	(43,139)	$	9,570
Denominator:
Weighted-average common shares outstanding used in computing basic net income (loss)		59,716,594		58,350,647		59,564,985		58,199,928
Effect of dilutive securities		—		—		—		2,146,552
Weighted-average common shares outstanding used in computing diluted net income (loss)		59,716,594		58,350,647		59,564,985		60,346,480
Basic net income (loss) per common share	$	(0.55)	$	(0.69)	$	(0.72)	$	0.16
Diluted net income (loss) per common share	$	(0.55)	$	(0.69)	$	(0.72)	$	0.16

For the three and nine months ended September 30, 2022 and three months ended September 30, 2021, we excluded all shares of stock issuable pursuant to outstanding options and RSUs from the calculation, because the inclusion of such shares would have had an anti-dilutive effect. For the nine months ended September 30, 2021, we excluded 1,139,403 shares of stock issuable pursuant to outstanding options and RSUs from the calculation, because the inclusion of such shares would have had an anti-dilutive effect.

4. Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). For each of the three- and nine-month periods ended September 30, 2022 and 2021, the only component of other comprehensive loss is net unrealized loss on marketable debt securities. There were no material reclassifications out of accumulated other comprehensive loss during each of the three- and nine-month periods ended September 30, 2022 and 2021.

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5. Marketable Debt and Equity Securities

The Company’s marketable debt securities held as of September 30, 2022 and December 31, 2021 are summarized below:


			Gross		Gross
	Amortized		Unrealized		Unrealized
September 30, 2022	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	24,506	$	—	$	—	$	24,506
Corporate Securities		188,360		—		(1,763)		186,597
Government Securities		378,623		—		(8,102)		370,521
	$	591,489	$	—	$	(9,865)	$	581,624

Reported as
Cash and cash equivalents							$	24,506
Marketable securities								557,118
Total investments							$	581,624



			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2021	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	123,892	$	—	$	—	$	123,892
Corporate Securities		144,584		—		(166)		144,418
Government Securities		311,148		1		(