Full Press Release Details
Xencor Reports Third Quarter 2019 Financial Results
-- Management to Host Conference Call at 4:30 p.m. ET today --
MONROVIA, Calif.--Nov. 5, 2019--Xencor, Inc. (NASDAQ: XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer, autoimmune diseases, asthma and allergic diseases, today reported financial results for the third quarter ended September 30, 2019 and provided a review of recent business and clinical highlights.
The plug-and-play nature of Xencor's XmAb technology has enabled the development of a broad and diversified portfolio of therapeutic bispecific antibodies and cytokines, including six programs currently being evaluated in Phase 1 studies. Our strong financial position will support expanded clinical development plans for these programs, as well as research into a growing set of opportunities, said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. Our technology's inherent portability also allows us to provide partners with selective access, and our partners' near-term plans to initiate Phase 1 studies evaluating XmAb bispecifics represent continued validation of our bispecific platform and Fc engineering capabilities.
Recent Business and Clinical Highlights and Anticipated Upcoming Milestones
CD3 Bispecific Antibodies: Xencor's initial bispecific antibody programs are tumor-targeted antibodies that contain both a tumor antigen binding domain and a cytotoxic T-cell binding domain (CD3). These bispecific antibodies activate T cells for highly potent and targeted killing of malignant cells.
Tumor Microenvironment (TME) Activating Bispecific Antibodies: Xencor's bispecific pipeline includes a suite of TME activators that engage multiple, different targets, such as T-cell checkpoint or agonist receptors. Xencor's TME activators are designed to promote tumor-selective T-cell activation.
Cytokines: Xencor engineers cytokines to tune their potency and applies its bispecific Fc domain and Xtend technology for improved therapeutic index and longer half-life. Cytokines are immune signaling proteins that can be used to enhance immune responses against tumors.
Partnered XmAb Programs: Xencor has eight partnerships for its XmAb technology, which has resulted in one marketed product, four clinical-stage candidates and two candidates that have open INDs and are pending Phase 1 initiations.
Corporate: In September 2019, the Company appointed Celia Eckert as vice president, general counsel and corporate secretary. Ms. Eckert serves on the senior management team and is responsible for all legal matters, including transactions, corporate governance and employment law, as well as overseeing the Company's intellectual property portfolio.
Ultomiris is a registered trademark of Alexion Pharmaceuticals, Inc.
Third Quarter Ended September 30, 2019 Financial Results
Cash, cash equivalents and marketable securities totaled $620.5 million as of September 30, 2019, compared to $530.5 million at December 31, 2018. The increase reflects upfront proceeds of $135 million received in 2019 from the Genentech and Astellas collaborations, offset by cash used to fund operating activities in the first nine months of 2019.
Total revenue for the third quarter ended September 30, 2019 was $21.8 million, which was primarily revenue recognized from milestones from the Company's Novartis, Alexion and Amgen collaborations. Total revenue for the nine months ended September 30, 2019 was $153.2 million and includes revenue earned from the Genentech and Astellas collaborations and the milestone revenue recognized from the Company's Novartis, Alexion and Amgen collaborations. Total revenue for the third quarter and nine months ended September 30, 2018 was $29.0 million and includes collaboration revenue earned from Novartis and milestone revenue earned from the Company's Alexion collaboration.
Research and development expenses for the third quarter of 2019 were $29.8 million, compared to $21.0 million for the same period in 2018. Total research and development expenses for the nine months ended September 30, 2019 were $91.3 million, compared to $70.4 million for the same period in 2018. The increased research and development spending for the three and nine months ended September 30, 2019 reflects increased stock-based compensation expense and additional spending on Xencor's CD3 bispecific antibody and cytokine development candidates and technologies.
General and administrative expenses for the third quarter of 2019 were $6.3 million, compared to $7.4 million for the same period in 2018. Total general and administrative expenses for the nine months ended September 30, 2019 were $17.5 million, compared to $17.0 million for the same period in 2018. The decreased general and administrative spending for the three months ended September 30, 2019 reflects decreased spending on expenses related to personnel. The increased spending for the nine months ended September 30, 2019 reflects additional spending on intellectual property including patents and licenses and expenses related to professional services.
Non-cash, stock-based compensation expense for the nine months ended September 30, 2019 was $24.7 million, compared to $15.5 million for the same period in 2018.
Net loss for the third quarter ended September 30, 2019 was $10.2 million, or $(0.18) on a fully diluted per share basis, compared to a net income of $3.2 million, or $0.05 on a fully diluted per share basis, for the same period in 2018. For the nine months ended September 30, 2019, net income was $53.8 million, or $0.92 on a fully diluted per share basis, compared to a net loss of $52.2 million, or $(0.98) on a fully diluted per share basis, for the same period in 2018. The net loss reported for the three months ended September 30, 2019 over the net income reported for the same period in 2018 is primarily due to lower collaboration revenue earned and higher research and development expenses. The net income reported for the nine months ended September 30, 2019 over the net loss reported for the same period in 2018 is primarily due to revenue recognized from the Genentech and Astellas collaborations and milestone revenue earned from the Novartis and Amgen collaborations.
The total shares outstanding were 56,714,788 as of September 30, 2019, compared to 56,212,449 as of September 30, 2018.
Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations beyond 2024. Xencor expects to end 2019 with between $590 million and $625 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 third quarter 2019 financial results and provide a corporate update. The live call may be accessed by dialing (877) 359-9508 for domestic callers or (224) 357-2393 for international callers and referencing conference ID number 9415077. A live webcast of the conference call will be available under "Events & Presentations" in the Investors section of the Company's website located at www.xencor.com. The webcast will be archived on the company website for 30 days.
Xencor is a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer, autoimmune diseases, asthma and allergic diseases. Currently, 14 candidates engineered with Xencor's XmAb technology are in clinical development internally and with partners. Xencor's XmAb antibody engineering technology enables small changes to the structure of monoclonal antibodies resulting in new mechanisms of therapeutic action. For more information, please visit www.xencor.com.
Forward Looking Statements
Statements contained in this press release regarding matters that are not historical facts are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, the quotations from Xencor's president and chief executive officer and any expectations relating to Xencor's financial expectations and business, the timing and success of clinical trials, future product candidates, Xencor's research and development programs, partnering efforts and capital requirements. Such statements involve 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, 2018 as well as Xencor's subsequent filings with the Securities and Exchange Commission. All forward-looking statements are based on Xencor's current information and belief as well as assumptions made by Xencor. 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. 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.
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Condensed Balance Sheets
| September 30, | December 31, | |||||
| 2019 | 2018 | |||||
| (Unaudited) | ||||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 51,189 | $ | 26,246 | ||
| Short-term marketable securities | 495,292 | 268,115 | ||||
| Accounts receivable | 4,349 | 10,187 | ||||
| Income tax receivable | 402 | 804 | ||||
| Contract asset | 15,000 | |||||
| Other current assets | 7,533 | 10,375 | ||||
| Total current assets | 573,765 | 315,727 | ||||
| Property and equipment, net | 13,868 | 11,813 | ||||
| Long-term marketable securities | 73,995 | 236,108 | ||||
| Intangible assets, net | 14,027 | 11,969 | ||||
| Income tax receivable | 402 | 804 | ||||
| Other assets | 10,187 | 311 | ||||
| Total assets | $ | 686,244 | $ | 576,732 | ||
| Liabilities and stockholders' equity | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 16,136 | $ | 13,459 | ||
| Deferred revenue | 45,579 | 40,079 | ||||
| Lease liabilities | 2,197 | 315 | ||||
| Income tax payable | 400 | |||||
| Total current liabilities | 64,312 | 53,853 | ||||
| Lease liabilities, net of current portion | 9,082 | 1,198 | ||||
| Deferred revenue, net of current portion | 2,613 | |||||
| Total liabilities | 76,007 | 55,051 | ||||
| Stockholders' equity | 610,237 | 521,681 | ||||
| Total liabilities and stockholders' equity | $ | 686,244 | $ | 576,732 |
The 2018 balance sheet was derived from the 2018 annual financial statements included in the Form 10-K that was filed on February 26, 2019
Condensed Statements of Comprehensive Income (Loss)
(in thousands, except share and per share data)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenues | $ | 21,760 | $ | 29,039 | $ | 153,184 | 29,039 | |||||
| Operating expenses: | ||||||||||||
| Research and development | 29,770 | 20,953 | 91,250 | 70,371 | ||||||||
| General and administrative | 6,266 | 7,435 | 17,537 | 16,955 | ||||||||
| Total operating expenses | 36,036 | 28,388 | 108,787 | 87,326 | ||||||||
| Income (loss) from operations | (14,276) | 651 | 44,397 | (58,287) | ||||||||
| Other income, net | 3,702 | 2,499 | 9,990 | 6,077 | ||||||||
| Income (loss) before income expense (benefit) | (10,574) | 3,150 | 54,387 | (52,210) | ||||||||
| Income tax expense (benefit) | (350) | 600 | ||||||||||
| Net income (loss) | (10,224) | 3,150 | 53,787 | (52,210) | ||||||||
| Other comprehensive income (loss) | ||||||||||||
| Net unrealized gain (loss) on marketable securities | (193) | (330) | 2,407 | (530) | ||||||||
| Comprehensive income (loss) | $ | (10,417) | $ | 2,820 | $ | 56,194 | (52,740) | |||||
| Net income (loss) per share: | ||||||||||||
| Basic net income (loss) per share | $ | (0.18) | $ | 0.06 | $ | 0.95 | $ | (0.98) | ||||
| Diluted net income (loss) per share | $ | (0.18) | $ | 0.05 | $ | 0.92 | $ | (0.98) | ||||
| Weighted-average number of common shares used in net income (loss) per share applicable to common stockholders - basic | 56,643,075 | 55,974,080 | 56,449,678 | 53,165,774 | ||||||||
| Weighted-average number of common shares used in net income (loss) per share applicable to common stockholders - diluted | 56,643,075 | 58,313,002 | 58,365,158 | 53,165,774 |