8-K: Xencor Reports Fourth Quarter and Full Year 2024 Financial Results, Provides Clinical Updates and 2025 Priorities

Xencor, a clinical-stage biopharmaceutical company, announced its Q4 and full year 2024 financial results, along with clinical program updates and priorities for 2025, emphasizing a rebalancing of its pipeline and advancements in oncology and autoimmune disease programs.

Summary

• Xencor reported its financial results for the fourth quarter and full year ended December 31, 2024.
• The company is rebalancing its pipeline to focus on XmAb drug candidates that leverage its protein engineering strengths.
• Xencor is enthusiastic about its oncology portfolio of T-cell engager programs and has introduced several candidates for autoimmune diseases.
• Initial first-in-human data for XmAb942, an anti-TL1A antibody for inflammatory bowel disease, is expected in the first half of 2025.
• Data from the Phase 1 dose-escalation study of XmAb819, a bispecific T-cell engager targeting ENPP3 in ccRCC, is planned for presentation in the second half of 2025.
• Xencor initiated dosing of healthy volunteers in the first-in-human study of XmAb942 in Q4 2024.
• A Phase 1 dose-escalation study to evaluate XmAb541 in patients with ovarian cancer and other CLDN6-expressing tumor types is ongoing, with characterization of target dose levels anticipated to begin during 2025.
• Dose escalation in an ongoing Phase 1 study combining XmAb808 with pembrolizumab resumed late in the fourth quarter of 2024, and enrollment in the final dose-escalation cohort is complete.
• Xencor has paused further development of vudalimab and has prioritized resources to advance other pipeline programs.
• Xencor plans to evaluate plamotamab in RA, in which patients have progressed through prior standard-of-care treatment and initiate a Phase 1b/2a proof-of-concept study in the first half of 2025.
• Xencor plans to initiate a first-in-human study of XmAb657 in the second half of 2025.
• Xencor anticipates selecting a lead candidate for its TL1A x IL23 program in 2025 and initiating first-in-human studies during 2026.
• Amgen initiated a Phase 3 study of xaluritamig in patients with mCRPC, triggering a $30 million milestone payment to Xencor in 2025.
• Novartis initiated a Phase 2 study to evaluate an investigational antibody that incorporates an XmAb Fc domain, resulting in a $4 million milestone payment to Xencor in 2025.
• Xencor expects to end 2025 with between $535 million and $585 million in cash, cash equivalents and marketable debt securities, and to have cash to fund research and development programs and operations into 2028.
• Cash, cash equivalents, and marketable debt securities totaled $706.7 million as of December 31, 2024, compared to $697.0 million as of December 31, 2023.
• Total revenue for 2024 was $110.5 million compared to $174.6 million for 2023.
• Research and development expenses for 2024 were $227.7 million compared to $253.6 million for 2023.
• Net loss attributable to Xencor for the full year ended December 31, 2024 was $232.6 million or $(3.58) on a fully diluted per share basis compared to net loss of $133.1 million or $(2.20) on a fully diluted per share basis, for the same period in 2023.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company reported a larger net loss and decreased revenue, it has a strong cash position, promising clinical programs, and partnerships with major pharmaceutical companies. The pipeline rebalancing and focus on key programs are viewed favorably.

Positives

• Xencor's pipeline rebalancing aims to improve clinical success rates.
• Multiple clinical programs are advancing, with data readouts expected in 2025.
• Partnerships with Amgen and Novartis are progressing, generating milestone revenue.
• The company has a strong cash position, expected to fund operations into 2028.
• Xencor is initiating new clinical studies for plamotamab and planning studies for XmAb657 and a TL1A x IL23 bispecific antibody.

Negatives

• Xencor reported a net loss of $232.6 million for the full year 2024, which is higher than the $133.1 million loss in 2023.
• Revenue decreased from $174.6 million in 2023 to $110.5 million in 2024.
• The company has paused further development of vudalimab, prioritizing other pipeline programs.

Risks

• Clinical trial outcomes are uncertain, and preliminary data may not support continued development or regulatory approval.
• The process of drug discovery, development, manufacturing, and commercialization carries inherent risks.
• The company's financial performance is subject to market conditions and the success of its partnered programs.
• The pipeline rebalancing may not yield the expected improvements in clinical success.

Future Outlook

Xencor expects to end 2025 with between $535 million and $585 million in cash, cash equivalents and marketable debt securities, and to have cash to fund research and development programs and operations into 2028.

Management Comments

• In 2024, we began rebalancing our pipeline to focus on XmAb drug candidates that leverage our protein engineering strengths and reduce exposure to biological uncertaintieschanges we believe increase our overall opportunities for clinical success.
• We are enthusiastic about ongoing advancement within our oncology portfolio of T-cell engager programs that are nearing important clinical inflection points.
• We have also introduced several candidates to be developed for patients with autoimmune disease, where there is a great need for new therapeutic agents beyond standard of care, and many of these programs will reach clinical milestones this year, said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor.

Industry Context

Xencor's focus on engineered antibodies and bispecific T-cell engagers aligns with the broader industry trend towards developing more targeted and effective therapies for cancer and autoimmune diseases. The company's partnerships with major pharmaceutical companies like Amgen and Novartis highlight the value of its XmAb technology platform.

Comparison to Industry Standards

• Xencor's approach to engineering antibodies with its XmAb technology is comparable to companies like Regeneron (with its VelociSuite technology) and Genmab (with its DuoBody platform), which also focus on creating differentiated antibody therapeutics.
• The development of bispecific T-cell engagers, such as XmAb819 and XmAb541, places Xencor in competition with companies like Amgen (with Blincyto) and Roche (with Hemlibra), which have already successfully commercialized bispecific antibodies.
• Xencor's focus on autoimmune diseases mirrors the strategies of companies like Bristol Myers Squibb and UCB, which are actively developing novel therapies for inflammatory bowel disease and rheumatoid arthritis.

Stakeholder Impact

• Shareholders: The financial results and pipeline updates will impact shareholder value.
• Employees: The pipeline rebalancing and program prioritization may affect employee roles and responsibilities.
• Patients: The clinical development of new therapies could provide new treatment options for cancer and autoimmune diseases.
• Partners: The progress of partnered programs will impact revenue and future collaborations.

Next Steps

• Present initial data from the single-ascending dose portion of the XmAb942 study in the first half of 2025.
• Present data from the multiple-ascending dose portion of the XmAb942 study in the second half of 2025 and initiate a Phase 2 study in participants with ulcerative colitis.
• Present initial data from the Phase 1 study of XmAb819 at a medical conference during the second half of 2025.
• Characterize target dose levels in the Phase 1 dose-escalation study of XmAb541 during 2025.
• Evaluate plamotamab in RA and initiate a Phase 1b/2a proof-of-concept study in the first half of 2025.
• Initiate a first-in-human study of XmAb657 in the second half of 2025.
• Select a lead candidate for the TL1A x IL23 program in 2025 and initiate first-in-human studies during 2026.
• Participate in the TD Cowen 45th Annual Health Care Conference on March 4, 2025, and the Leerink Partners Global Healthcare Conference on March 11, 2025.

Key Dates