8-K: Xilio Therapeutics Enters Into $50 Million At-the-Market Offering Agreement

Xilio Therapeutics has entered into a sales agreement with Leerink Partners to sell up to $50 million of its common stock through an at-the-market offering.

Summary

• Xilio Therapeutics, Inc. has entered into a Sales Agreement with Leerink Partners LLC, effective March 11, 2025.
• Under the agreement, Xilio may sell shares of its common stock, up to a total of $50.0 million, from time to time through Leerink Partners.
• The sales will be made in what is deemed an 'at the market offering' directly on or through the Nasdaq Global Select Market.
• Leerink Partners will receive compensation of 3.0% of the gross proceeds from any shares sold under the agreement.
• The agent is not required to sell any specific amount of securities but will use commercially reasonable efforts.
• There is no assurance that the Company will sell any shares of common stock under the Sales Agreement, or, if it does, as to the price or amount of shares of common stock that it sells or the dates when such sales will take place.
• The company has agreed to provide indemnification and contribution to the Agent with respect to certain liabilities.
• The agreement can be terminated by either party with specified prior written notice.
• The issuance and sale of shares will be made pursuant to the Company's existing Registration Statement on Form S-3.
• Wilmer Cutler Pickering Hale and Dorr LLP has issued a legal opinion relating to the shares that may be sold pursuant to the Sales Agreement.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the company is raising capital, which could be seen as a sign of financial need, the ATM offering provides flexibility and is a common practice in the biotech industry.

Positives

• The agreement provides Xilio Therapeutics with a flexible mechanism to raise capital.
• The 'at the market' offering allows the company to sell shares gradually, potentially minimizing the impact on the stock price.
• The company has agreed to provide indemnification and contribution to the Agent with respect to certain liabilities.

Negatives

• There is no guarantee that Xilio will successfully sell all or any of the $50 million worth of shares.
• The 3.0% commission will reduce the net proceeds received by the company.
• The company may be in a position where it needs to raise capital.

Risks

• The market may not be receptive to the offering, potentially leading to lower prices or an inability to sell all the shares.
• The offering could dilute existing shareholders' ownership.
• The company's stock price could be negatively impacted by the announcement of the offering.
• The company may be in a position where it needs to raise capital.

Future Outlook

The company may sell shares of its common stock from time to time through Leerink Partners, but there is no guarantee of the amount or timing of such sales.

Industry Context

At-the-market offerings are a common way for biotech companies to raise capital, particularly when they need flexibility in timing and amount.

Comparison to Industry Standards

• Comparable companies such as [Competitor A] and [Competitor B] have also utilized ATM offerings to fund their operations and clinical trials.
• The 3.0% commission is within the typical range for ATM offerings in the biotech industry.
• The size of the offering, $50 million, is relatively standard for companies of Xilio's market capitalization.

Stakeholder Impact

• Shareholders may experience dilution if the company sells a significant number of shares.
• The company will have additional capital to fund its operations and research and development.
• The company's financial position may be strengthened by the capital raise.

Next Steps

• Xilio Therapeutics may issue Placement Notices to Leerink Partners to initiate sales of common stock.
• Leerink Partners will use commercially reasonable efforts to sell the shares according to the terms of the Placement Notices.
• The company will file prospectus supplements with the SEC as required.
• The company will disclose the number of shares sold and the proceeds in its quarterly and annual reports.

Key Dates