Xencor Reports Fourth Quarter and Full Year 2020 Financial Results -- Management to Host Conference Call at 4:30 p.m. ET Today -- MONROVIA, Calif.

Xencor Reports Fourth Quarter and Full Year 2020 Financial Results

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

MONROVIA, Calif.--Feb. 23, 2021--Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies and cytokines for the treatment of cancer and autoimmune diseases, today reported financial results for the fourth quarter and full year ended December 31, 2020 and provided a review of recent business and clinical highlights.

"Throughout 2020, we advanced multiple clinical programs, introduced several new XmAb bispecific technologies, and saw the progress of many partnered programs, including U.S. regulatory approval for tafasitamab, the second antibody with XmAb technology to achieve commercialization. Internally, early-stage clinical data have guided our decisions to advance several candidates into new studies scheduled for 2021. These include a potentially registrational study to evaluate the chemotherapy-free, triple combination of plamotamab, tafasitamab and lenalidomide for patients with relapsed or refractory DLBCL and a study of XmAb717 in patients with prostate cancer, a population with high unmet need and in whom we have seen encouraging activity to date," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "To continue enriching our pipeline, we have entered into new collaborations with partners who identify novel tumor targets that we can engineer XmAb bispecific antibodies against. This includes our recently started partnership with Janssen Biotech, where we are engineering CD28 bispecific antibodies against a prostate tumor target and can also access their leading prostate cancer therapeutics portfolio for combination clinical studies with our growing prostate cancer pipeline."

Dr. Dahiyat added, "Looking ahead, we will continue to present maturing data from our clinical-stage programs and soon expect to initiate a Phase 1 study for XmAb564, our wholly owned IL-2 cytokine that we engineered to preferentially activate regulatory T cells, an emerging mechanism for treating patients with autoimmune diseases. In addition, we plan to submit an IND by year-end for XmAb819, an ENPP3 x CD3 bispecific antibody for renal cell carcinoma. Notably, this program is engineered with our multi-valent XmAb 2+1 format, which enables CD3 bispecific antibodies with greater tumor selectivity and against an expanded set of novel tumor antigens."

Recent Business and Clinical Highlights

Select New Collaborations and Progress Across Partnered Programs

Monjuvi is a registered trademark of MorphoSys AG. Ultomiris is a registered trademark of Alexion Pharmaceuticals, Inc.

Fourth Quarter and Full Year Ended December 31, 2020 Financial Results

Cash, cash equivalents and marketable securities totaled $604.0 million as of December 31, 2020, compared to $601.3 million on December 31, 2019. During the year, the Company received upfront payments, milestone payments and royalties from partners of $165 million, which offset spending on operations and resulted in an increase in the year-end cash balance.

Revenues for the fourth quarter ended December 31, 2020 were $41.9 million, compared to $3.5 million for the same period in 2019. Revenues for full year 2020 were $122.7 million, compared to $156.7 million in 2019. Revenues for the three-month period ended December 31, 2020 were earned primarily from the licensing of XmAb technologies and drug candidates and a sales-based milestone payment from Alexion, compared to revenues from the same period in 2019, which were primarily Alexion royalties. Total revenues earned in 2020 included royalties and milestones from the MorphoSys and Alexion agreements and the licensing of XmAb technologies and drug candidates, compared to revenue earned from Xencor's Genentech and Astellas collaborations in 2019.

Research and development expenditures for the fourth quarter ended December 31, 2020 were $47.9 million, compared to $27.3 million for the same period in 2019. Research and development expenditures were $169.8 million for the full year ended December 31, 2020, compared to $118.6 million in 2019. Research and development spending for the fourth quarter and full year ended December 31, 2020 was greater than expenditures incurred over the comparable periods in 2019, primarily due to increased spending on Xencor's bispecific antibody and cytokine candidates and technologies.

General and administrative expenses for the fourth quarter ended December 31, 2020 were $7.6 million, compared to $6.7 million in the same period in 2019. General and administrative expenses were $29.7 million in the full year 2020, compared to $24.3 million in 2019. Additional general and administrative spending for the full year ended December 31, 2020 over the comparable period in 2019 reflects increased staffing, professional expenses and spending on intellectual property.

Non-cash, share based compensation expense for the year ended December 31, 2020 was $31.6 million, compared to $31.9 million for the year ended December 31, 2019.

Net loss for the fourth quarter ended December 31, 2020 was $13.7 million, or $(0.24) on a fully diluted per share basis, compared to a net loss of $26.9 million, or $(0.47) on a fully diluted per share basis, for the same period in 2019. For the full year ended December 31, 2020, net loss was $69.3 million, or $(1.21) on a fully diluted per share basis, compared to a net income of $26.9 million, or $0.46 on a fully diluted per share basis, for the full year ended December 31, 2019. The lower net loss reported for the three months ended December 31, 2020 compared to the same period in 2019 is primarily due to higher revenue reported in the three months ended December 31, 2020, while the net loss reported for 2020 compared to the net income reported for 2019 is primarily due to higher research and development expenses and lower licensing and milestone revenue reported in 2020.

The total shares outstanding were 57,873,444 as of December 31, 2020, compared to 56,902,301 as of December 31, 2019.

Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations into 2024. Xencor expects to end 2021 with between $425 million and $475 million in cash, cash equivalents and marketable securities.

Conference Call and Webcast

Xencor will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss these fourth quarter and full year 2020 financial results and provide a corporate update.

The live call may be accessed by dialing (877) 359-9508 for domestic callers or +1 (224) 357-2393 for international callers and referencing conference ID number 1163598. A live webcast of the conference call will be available online from the Investors section of the Company's website at www.xencor.com. The webcast will be archived on the company's website for 30 days.

Xencor is a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies and cytokines for the treatment of cancer and autoimmune diseases. Currently, 20 candidates engineered with Xencor's XmAb technology are in clinical development internally and with partners. Xencor's XmAb engineering technology enables small changes to a protein's structure that result in new mechanisms of therapeutic action. For more information, please visit www.xencor.com.

Forward-Looking Statements

Certain statements contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements that are not purely statements of historical fact, and can generally be identified by the use of words such as "potential," "can," "will," "plan," "may," "could," "would," "expect," "anticipate," "seek," "look forward," "believe," "committed," "investigational," and similar terms, or by express or implied discussions relating to Xencor's business, including, but not limited to, statements regarding the timing of data from Xencor's clinical-stage programs; the timing of the Phase I study for XmAb564, the Phase 1b study of XmAb717 and additional studies of vibecotamab; the ability of the collaboration with MorphoSys AG and Incyte Corporation to generate new clinical insights and accelerate development timelines for the related program; Xencor's eligibility for milestone and royalty payments pursuant to its agreement with Janssen; the timing of submission of an IND for XmAb819; the quotations from Xencor's president and chief executive officer and other statements that are not purely statements of historical fact. Such statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Xencor and are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks described in Xencor's public securities filings. For a discussion of these and other factors, please refer to Xencor's annual report on Form 10-K for the year ended December 31, 2020 as well as Xencor's subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended to date. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law.

Canale Communications