Xencor Reports Second Quarter 2022 Financial Results -- Management to Host Conference Call at 4:30 p.m. ET Today -- MONROVIA, Calif.

Xencor Reports Second Quarter 2022 Financial Results

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

MONROVIA, Calif.--August 3, 2022-- Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of cancer and autoimmune diseases, today reported financial results for the second quarter ended June 30, 2022 and provided a review of recent business and clinical highlights.

"Xencor is applying our leading protein engineering tools and proprietary XmAb technologies to create a broad portfolio of novel bispecific antibodies and cytokines, and we are using our resources on multiple clinical programs where the data to date indicate we have the greatest potential for success," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "We are expanding and maturing our clinical portfolio of XmAb drug candidates, recently dosing the first patient in a Phase 1 study of XmAb819, our ENPP3 x CD3 bispecific antibody for renal cell carcinoma, which is engineered with our multivalent 2+1 antibody format, as well as the first patient in our second Phase 2 study of vudalimab, our PD-1 x CTLA-4 bispecific antibody, in certain gynecologic tumors and clinically defined high-risk mCRPC."

"Later this year, we plan to present additional clinical data from our vudalimab and plamotamab programs and initial data from our IL2-Fc autoimmune program, XmAb564, in healthy volunteers. Near year-end we also expect to dose the first patient in the Phase 1 study of XmAb808, our B7-H3 x CD28 bispecific antibody, placing Xencor at the forefront of efforts to engage CD28 to selectively activate T cells."

Recent Portfolio Highlights

Progress Across Partnerships

Financial Results for the Second Quarter Ended June 30, 2022

Cash, cash equivalents, receivables and marketable debt securities totaled $679.7 million as of June 30, 2022, compared to $664.1 million on December 31, 2021. During the first half of 2022, the Company received royalty and milestone payments from partners of $113.7 million, which offset net spending on operations of $105.0 million and resulted in an increase in cash balance amounts at June 30 relative to the 2021 year-end amount.

Total revenue for the second quarter ended June 30, 2022 was $30.2 million, compared to $67.4 million for the same period in 2021. Revenues earned in the second quarter of 2022 were primarily royalties from the Alexion and Vir agreements, compared to the same period in 2021, which were primarily from the Janssen and Novartis collaborations, and royalty revenue from Alexion. Revenues for the six months ended June 30, 2022 were $115.7 million, compared to $101.4 million for the same period in 2021. Revenues for the six-month period in 2022 were primarily from milestone revenue from Astellas and royalty revenue from Alexion and Vir, compared to the same period in 2021, which were earned primarily from the collaborations with Janssen and Novartis, milestone revenue from MorphoSys and the royalties from Alexion and Vir.

Research and development (R&D) expenses for the second quarter ended June 30, 2022 were $47.1 million, compared to $49.5 million for the same period in 2021. Decreased R&D spending for second quarter of 2022 compared to 2021 reflects decreased spending on plamotamab and XmAb819 (ENPP3 x CD3) programs, partially offset by increased spending on our new development programs, XmAb808 (B7-H3 x CD28) and XmAb662 (IL12-Fc). R&D expenses for the six months ended June 30, 2022 were $94.8

million, compared to $90.9 million for the same period in 2021. Increased R&D spending for the first six months of 2022 compared to 2021 is primarily due to an increase in stock-based compensation charges.

General and administrative (G&A) expenses for the second quarter ended June 30, 2022 were $11.1 million, compared to $8.9 million for the same period in 2021. G&A expenses for the six months ended June 30, 2022 were $22.4 million, compared to $17.1 million for the same period of 2021. Increased G&A spending for the second quarter and first six months of 2022 compared to amounts for the same periods in 2021 reflects increased spending on professional services and additional facility costs.

Other expenses for the second quarter ended June 30, 2022 were $6.0 million, compared to other income of $43.2 million in the same period in 2021. Other expenses for the six months ended June 30, 2022 were $8.8 million, compared to other income of $56.3 million in the same period in 2021. Other expenses for the second quarter and first six months of 2022 include unrealized losses on the Company's marketable equity investments while other income for the second quarter and first six months of 2021 includes realized gains on the sale of an investment equity security and an increase in unrealized gains on the Company's marketable equity investments.

Non-cash, stock-based compensation expense for the six months ended June 30, 2022 was $23.4 million, compared to $17.6 million for the same period in 2021.

Net loss for the second quarter ended June 30, 2022 was $34.0 million, or $(0.57) on a fully diluted per share basis, compared to net income of $52.2 million, or $0.87 on a fully diluted per share basis, for the same period in 2021. For the six months ended June 30, 2021, net loss was $10.4 million, or $(0.17) on a fully diluted per share basis, compared to net income of $49.8 million, or $0.82 on a fully diluted per share basis, for the same period in 2021. Net loss reported for the second quarter ended June 30, 2022 and first six months of 2022, compared to the net income reported for the same periods in 2021, were primarily due to realized gain on an equity investment and an increase in unrealized gains on marketable equity securities during the second quarter and six months ended June 30, 2021.

The total shares outstanding were 59,684,420 as of June 30, 2022, compared to 58,315,485 as of June 30, 2021.

Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations through the end of 2025. The Company expects to end 2022 with between $550 million and $575 million in cash, cash equivalents, receivables and marketable debt 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 the second quarter 2022 financial results and provide a corporate update. To participate in the conference call,

The live webcast will be available under "Events & Presentations" in the Investors section of the Company's website at investors.xencor.com and will be archived for at least 30 days. Conference call participants may register through the following link: register.vevent.com/register/BI8b3886bf9772414c8dd5900d3aa4457b.

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 planned presentations of clinical data, planned

additional clinical trials, the quotations from Xencor's president and chief executive officer, our projected financial resources 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, including the ability of publicly disclosed preliminary clinical trial data to support continued clinical development and regulatory approval for specific treatments, in each case as 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, 2021 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.