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What changed in Xencor Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Xencor Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+578 added−599 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in Xencor Inc's 2025 10-K

578 paragraphs added · 599 removed · 281 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

142 edited+67 added−77 removed141 unchanged
Biggest changeWe continue to advance these candidates as additional options for clinical development by us or as out-licensing opportunities. We also from time to time in-license antibody technologies and compounds from other companies which we believe may allow us to create potential product candidates by incorporating our own proprietary technologies.
Biggest changeFrom time to time, we also in-license antibody technologies and compounds from other companies that we believe may enable the creation of additional product candidates through the application of our proprietary technologies. These in-licensing arrangements may require upfront payments, development and commercial milestone payments, and, if commercial products are approved, royalties based on net sales. F.
Post-Approval Requirements Any biologic products for which we or our collaborators receive FDA approvals are subject comprehensive and to continuing regulation by the FDA, including, among other things, cGMP compliance for product manufacture, record-keeping requirements, periodic reporting, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, tracking and tracing requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements, which include, among others, restrictions on direct-to-consumer advertising, promoting biologics for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.
Post-Approval Requirements Any biologic products for which we or our collaborators receive FDA approvals are subject to comprehensive and to continuing regulation by the FDA, including, among other things, cGMP compliance for product manufacture, record-keeping requirements, periodic reporting, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, tracking and tracing requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements, which include, among others, restrictions on direct-to-consumer advertising, promoting biologics for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.
Failure to comply with FDA requirements can subject a manufacturer to possible legal or regulatory action, such as product recalls, untitled or warning letters, restrictions on the marketing or manufacturing of the product, issuance of safety alerts/ Dear Healthcare Provider letters / press releases / or other communications containing warnings or other safety information about the product, suspension of manufacturing, imposition of clinical holds on ongoing clinical trials, refusal of FDA to approve pending BLAs or supplements to approved BLAs, product seizure or detention, refusal to permit import or export of product, injunctive action, mandated corrective advertising or communications with healthcare professionals, fines, possible civil or criminal penalties, consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enter into supply contracts, including government contracts, or other negative 23 consequences, including adverse publicity.
Failure to comply with FDA requirements can subject a manufacturer to possible legal or regulatory action, such as product recalls, untitled or warning letters, restrictions on the marketing or manufacturing of the product, issuance of safety alerts/ Dear Healthcare Provider letters / press releases / or other communications containing warnings or other safety information about the product, suspension of manufacturing, imposition of clinical holds on ongoing clinical trials, refusal of FDA to approve pending BLAs or supplements to approved BLAs, product seizure or detention, refusal to permit import or export of product, injunctive action, mandated corrective advertising or communications with healthcare professionals, fines, possible civil or criminal penalties, consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enter into supply contracts, including government contracts, or other negative consequences, including adverse publicity.
Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by Health and Human Services may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a 26 resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.
Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by Health and Human Services may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.
Anti-Kickback, False Claims, and Other Healthcare Laws and Compliance Requirements In the United States, the research, manufacturing, distribution, sale and promotion of drug products and medical devices are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare & Medicaid Services (CMS), other divisions of Health and Human Services (e.g., the Office of Inspector General), the U.S.
Anti-Kickback, False Claims, and Other Healthcare Laws and Compliance Requirements In the United States, the research, manufacturing, distribution, sale and promotion of drug products and medical devices are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare & Medicaid Services (CMS), other divisions of Health and Human Services (e.g., the Office of 23 Inspector General), the U.S.
Product approvals may be withdrawn for non-compliance with regulatory standards or based on the results of post-market studies or surveillance programs. Additionally, post-approval, many types of changes to the approved product, such as adding new indications, changing manufacturing processes and adding labeling claims, are subject to further testing requirements and FDA review and approval.
Product approvals may be withdrawn for non-compliance with regulatory standards or based on the results of post-market studies or surveillance programs. Additionally, post-approval, many types of changes to the approved product, such as adding new indications, changing manufacturing processes and adding labeling claims, are subject to further testing 19 requirements and FDA review and approval.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: 1. completion of preclinical laboratory tests, animal studies, and formulation studies performed in accordance with applicable regulations, including the FDA’s current Good Laboratory Practices (GLP) regulations; 2. submission to and acceptance by the FDA of an IND which must become effective before human clinical trials in the United States may begin and must be updated annually; 3. approval by an independent institutional review board (IRB) or ethics committee representing each clinical site before each clinical trial may be initiated; 17 4. performance of adequate and well-controlled human clinical trials in accordance with the FDA’s current Good Clinical Practices (GCP) regulations to establish the safety and efficacy of the product candidate for its proposed indication; 5. submission to and acceptance by the FDA of a BLA; 6. manufacture of the drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practice (cGMP) requirements, along with required analytical and stability testing; 7. preparation of and submission to the FDA of a BLA requesting marketing approval for one or more proposed indications, that includes sufficient evidence to establish the safety, purity, and potency of the proposed biologic product for its intended indication, including from results of nonclinical testing and clinical trials and detailed information on the chemistry, manufacturing and quality controls for the product candidate and proposed labeling; 8. a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; 9. satisfactory completion of one or more pre-approval or pre-license inspections by FDA (if the FDA deems it as a requirement) of the manufacturing facility or facilities where the product is produced to assess compliance with the FDA’s cGMP regulations to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality, and purity; 10. potential audits by the FDA of the nonclinical and clinical trial sites that generated the data in support of the BLA to assure compliance with GLPs and GCPs, as applicable, and the integrity of the data in support of the BLA; 11. potential review of the BLA by an external Advisory Committee to the FDA, whose recommendations are not binding on the FDA; 12. payment of user fees under the Prescription Drug User Fee Act (PDUFA), unless exempted; 13.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: 1. completion of preclinical laboratory tests, animal studies, and formulation studies performed in accordance with applicable regulations, including the FDA’s current Good Laboratory Practices (GLP) regulations; 2. submission to and acceptance by the FDA of an Investigational New Drug (IND) application which must become effective before human clinical trials in the United States may begin and must be updated annually; 3. approval by an independent institutional review board (IRB) or ethics committee representing each clinical site before each clinical trial may be initiated; 4. performance of adequate and well-controlled human clinical trials in accordance with the FDA’s current Good Clinical Practices (GCP) regulations to establish the safety and efficacy of the product candidate for its proposed indication; 5. submission to and acceptance by the FDA of a BLA; 6. manufacture of the drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practice (cGMP) requirements, along with required analytical and stability testing; 7. preparation of and submission to the FDA of a BLA requesting marketing approval for one or more proposed indications, that includes sufficient evidence to establish the safety, purity, and potency of the proposed biologic product for its intended indication, including from results of nonclinical testing and clinical trials and detailed information on the chemistry, manufacturing and quality controls for the product candidate and proposed labeling; 8. a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; 9. satisfactory completion of one or more pre-approval or pre-license inspections by FDA (if the FDA deems it as a requirement) of the manufacturing facility or facilities where the product is produced to assess compliance with the FDA’s cGMP regulations to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality, and purity; 16 10. potential audits by the FDA of the nonclinical and clinical trial sites that generated the data in support of the BLA to assure compliance with GLPs and GCPs, as applicable, and the integrity of the data in support of the BLA; 11. potential review of the BLA by an external Advisory Committee to the FDA, whose recommendations are not binding on the FDA; 12. payment of user fees under the Prescription Drug User Fee Act (PDUFA), unless exempted; 13.
The FDA conducts its own analysis of the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of an BLA by the FDA is extensive and time-consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.
The FDA conducts its own analysis of the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of a BLA by the FDA is extensive and time-consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.
The FDA is required to refer an application for a novel biological product to an advisory committee or explain why such referral was not made. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved 20 and under what conditions.
The FDA is required to refer an application for a novel biological product to an advisory committee or explain why such referral was not made. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.
Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.
Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit 22 coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.
If we, or our collaborators, fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Corporate Information We were incorporated in California in August 1997 under the name Xencor.
If we, or our collaborators, fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. L. Corporate Information We were incorporated in California in August 1997 under the name Xencor.
In the case of drugs approved under Accelerated 19 Approval, post-approval trials are intended to confirm clinical benefit seen with a surrogate endpoint using a long-term clinical outcome endpoint. Failure to exhibit due diligence with regard to conducting such Phase 4 clinical trials could result in withdrawal of approval for products or other consequences.
In the case of drugs approved under Accelerated Approval, post-approval trials are intended to confirm clinical benefit seen with a surrogate endpoint using a long-term clinical outcome endpoint. Failure to exhibit due diligence with regard to conducting such Phase 4 clinical trials could result in withdrawal of approval for products or other consequences.
These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, recordkeeping, approval, advertising and promotion, and export and import of our product candidates. U.S. Government Regulation We are subject to extensive regulation by the U.S. and other countries.
These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, recordkeeping, approval, advertising and promotion, and export and import of our product candidates. 15 U.S. Government Regulation We are subject to extensive regulation by the U.S. and other countries.
The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources. Various federal and state statutes and regulation also govern or influence testing, manufacturing, safety, labeling, storage, tracking, tracing and record-keeping of drugs and biologic products and their marketing. U.S.
The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources. Various federal and state statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage, tracking, tracing and record-keeping of drugs and biologic products and their marketing. U.S.
While this Statute has a number of exceptions and regulatory safe harbors that safeguard certain common, industry practices from prosecution, these exceptions and safe harbors are narrowly defined, and parties must satisfy all elements of an available exception or safe harbor to avoid 25 scrutiny.
While this Statute has a number of exceptions and regulatory safe harbors that safeguard certain common, industry practices from prosecution, these exceptions and safe harbors are narrowly defined, and parties must satisfy all elements of an available exception or safe harbor to avoid scrutiny.
Under the Food and Drug Omnibus Reform Act of 2022 (FDORA), the FDA may require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated 22 approval.
Under the Food and Drug Omnibus Reform Act of 2022 (FDORA), the FDA may require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.
When the foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study is conducted in accordance with GCP, including review and approval by an independent ethics committee (IEC) and informed consent from subjects.
When the foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study is conducted in accordance with GCP, including 17 review and approval by an independent ethics committee (IEC) and informed consent from subjects.
Accordingly, we cannot be sure that 18 submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that could cause the trial to be suspended or terminated.
Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that could cause the trial to be suspended or terminated.
Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including trials initiated by investigators.
Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of 18 alternative sources, including trials initiated by investigators.
Our product candidates are subject to regulation by the FDA as a biologic. Biologics require the submission of a Biologics License Application (BLA) to the FDA and approval of the BLA by the FDA before marketing in the United States.
Our product candidates are subject to regulation by the FDA as biologics. Biologics require the submission of a Biologics License Application (BLA) to the FDA and approval of the BLA by the FDA before marketing in the United States.
Future FDA and state inspections may identify compliance issues at our facilities or at the facilities of our contract manufacturers that may disrupt production, or distribution, or may require substantial resources to correct.
Future FDA and state inspections may identify compliance issues at our facilities or at 21 the facilities of our contract manufacturers that may disrupt production, or distribution, or may require substantial resources to correct.
Results from the Phase 1 study in hematologic cancers showed favorable tolerability and comparable preliminary efficacy data, when cross compared to results from studies of a competitor molecule within the class, with similar patient baseline characteristics. Data demonstrating deep peripheral B-cell depletion observed in patients with lymphoma were presented at a medical meeting in December 2024.
Results from the previously conducted Phase 1 study in hematologic cancers showed favorable tolerability and comparable preliminary efficacy data, when cross compared to results from studies of a competitor molecule within the class, with similar patient baseline characteristics. Data demonstrating deep peripheral B-cell depletion observed in patients with lymphoma were presented at a medical meeting in December 2024.
In addition, even if a firm complies with FDA and other requirements, new information regarding the safety or efficacy of a product could lead the FDA to modify or withdraw product approval. Prohibitions or restrictions on sales or withdrawal of future products marketed by us could materially affect our business in an adverse way. U.S.
In addition, even if a firm complies with FDA and other requirements, new information regarding the safety or efficacy of a product could lead the FDA to modify or withdraw product approval. Prohibitions or restrictions on sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.
All employees are eligible to participate in our Employee Stock Purchase Plan through which they can purchase shares of our common stock at a discounted price. This plan and our other equity compensation plans assist us in building long-term relationships with our employees and aligns the interests of employees with stockholders.
All employees are eligible to participate in our Employee Stock Purchase Plan through which they can purchase shares of our common stock at a discounted price. This plan and our other equity compensation plans assist us in building long-term relationships with our employees and align the interests of employees with stockholders.
Intellectual Property The foundation for our XmAb technology and our product candidates and partnering is the generation and protection of intellectual property for novel antibody therapeutics. We combine proprietary computational methods for amino acid sequence design with laboratory generation and testing of new antibody compositions.
Intellectual Property The foundation of our XmAb technology, product candidates, and partnering strategy is the generation and protection of intellectual property for novel antibody therapeutics. We combine proprietary computational methods for amino acid sequence design with laboratory-based generation and testing of new antibody compositions.
Our approach to protein design includes engineering Fc domains, the parts of antibodies that interact with multiple segments of the immune system and control antibody structure. The Fc domain is constant and interchangeable among antibodies, and our engineered XmAb Fc domains can be readily substituted for natural Fc domains.
Our approach to protein design includes engineering Fc domains, the parts of antibodies that interact with multiple segments of the immune system and control antibody structure. The Fc domain is constant and interchangeable across antibodies, and our engineered Fc domains can be readily substituted for natural Fc domains.
We advance these candidates into clinical-stage development, where we are conducting Phase 1 and Phase 2 studies for a broad portfolio of programs, to determine which programs we advance into later stages of development and potentially commercialization, which programs we partner to access complementary resources to optimize development, and which programs we discontinue.
We advance these candidates into clinical-stage development, where we are conducting Phase 1 and Phase 2 studies for a broad portfolio of programs, to determine which programs to advance into later stages of development and potentially commercialization, which programs we partner to optimize development, and which programs we discontinue.
The SEC maintains an internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries, including on clinicaltrials.gov.
There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries, including on ClinicaTtrials.gov.
Item 1. Business. Overview We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered antibody therapeutics to treat patients with cancer and autoimmune diseases, who have unmet medical needs. We use our protein engineering capabilities to design new technologies and XmAb® drug candidates with improved properties.
Item 1. Business A. Overview We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered antibody therapeutics to treat patients with cancer and autoimmune diseases, who have unmet medical needs. We use our protein engineering capabilities to design new technologies and XmAb ® drug candidates with improved properties and multi-target mechanisms of action.
Human Capital Management Our Employees and Commitment to Diversity, Equity, and Inclusion Our ability to develop XmAb technologies, advance our programs into late-stage development, position our programs for commercialization and identify successful business partnerships is dependent on attracting, retaining, and developing our employees. We seek and support a diverse population of employees without regard to race, gender or sexual orientation.
Human Capital Management Our Employees Our ability to develop XmAb technologies, advance our programs into late-stage development, position our programs for commercialization and identify successful business partnerships is dependent on attracting, retaining, and developing our employees. We seek to attract and support a diverse population of employees without regard to race, gender or sexual orientation.
Applications of our protein engineering technologies include multi-specific antibodies that bind two or more different targets simultaneously, creating entirely new biological mechanism of anti-disease activity, or enhancement of antibody performance by increasing immune inhibitory activity, improving cytotoxicity, extending circulating half-life and stabilizing novel protein structures. Three marketed XmAb medicines have been developed with our protein engineering technologies.
Applications of our protein engineering technologies include multi-specific antibodies that engage two or more targets simultaneously, creating entirely new biological mechanisms of anti-disease activity, or enhancement of antibody performance by increasing immune inhibitory activity, improving cytotoxicity, extending circulating half-life and stabilizing novel protein structures. Three marketed medicines have been developed with our XmAb protein engineering technologies. B.
We regularly evaluate our compensation programs with an independent compensation consultant and utilize industry benchmarking in an effort to ensure they are competitive compared to similar biotechnology and biopharmaceutical companies with which we compete for talent and that they are fair and equitable across our workforce with respect to gender, race, and other personal characteristics.
We regularly evaluate our compensation programs with an independent compensation consultant and utilize industry benchmarking in an effort to ensure that such programs are competitive compared to similar biotechnology and biopharmaceutical companies with which we compete for talent and are intended to be fair and equitable across the workforce with respect to gender, race, and other personal characteristics.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Section 13(a) and 15(d) of the Exchange Act are available free of charge on the Investor Relations portion of our website at www.xencor.com as soon as reasonably practical after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC).
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) and 15(d) of the Securities Exchange Act of 1934 are available free of charge on the Investor Relations portion of our website as soon as reasonably practical after we electronically file such material with, or furnish it to, the Securities and Exchange 25 Commission (SEC).
Based on these clinical outcomes, significant B-cell depletion, and the emergent biology supportive of B-cell targeted T cell engagers for the treatment of patients with autoimmune diseases, we plan to evaluate plamotamab in RA, in which patients progressed through prior standard of care treatment.
Based on these clinical outcomes, significant B-cell depletion, and the emergent biology supportive of B-cell targeted T-cell engagers for the treatment of patients with autoimmune diseases, we are evaluating plamotamab in RA, in which patients progressed through prior standard-of-care treatment.
We, along with our contract manufacturers (CMOs), contract research organizations (CROs), and third-party vendors, will be required to satisfy these requirements in each of the countries in which we wish to conduct studies or seek approval of our product candidates.
We, along with our contract manufacturing organizations (“CMOs”), CROs, and third-party vendors, will be required to satisfy these requirements in each of the countries in which we wish to conduct studies or seek approval of our product candidates.
Drug Candidates in Clinical Development Wholly Owned Developed by Partners Marketed by Partners Oncology pipeline: Xaluritamig Ultomiris* XmAb819 Obexelimab Monjuvi* XmAb541 Teropavimab and zinlirvimab Sotrovimab XmAb808 Tobevibart ASP2138 Autoimmune pipeline: Novartis antibody XmAb942 Xpro1595/INB03 Zaltenibart (OMS906) JNJ-9401 JNJ-1493 * Alexion and Incyte are conducting additional Phase 3 studies in new indications.
XmAb Drug Candidates in Clinical Development Wholly Owned Developed by Partners Marketed by Partners Oncology pipeline: Xaluritamig Ultomiris* XmAb819 Obexelimab Monjuvi* XmAb541 Teropavimab and zinlirvimab XmAb808 Tobevibart ASP2138 Autoimmune pipeline: Zaltenibart XmAb942 Novartis antibody Plamotamab JNJ-9401 XmAb657 JNJ-1493 * Alexion and Incyte are conducting additional Phase 3 studies in new indications.
Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level.
Unlike Medicare Part A and B, Part D coverage is not standardized. Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level.
We believe we maintain good relations with our employees. We are an equal opportunity employer and maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. We are proud to employ a diverse workforce that, as of December 31, 2024, was 58% non-white and 59% women.
We are an equal opportunity employer and maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. We are proud to employ a diverse workforce that, as of December 31, 2025, was 60% non-white and 58% women.
As of December 31, 2024, we had 250 full-time employees, of which 203 were engaged in research and development activities, and 47 were engaged in business development, information systems, facilities, human resources, or administrative support. Of these employees, 62 hold Ph.D. degrees, and 7 hold M.D. degrees. None of our employees are represented by any collective bargaining unit.
As of December 31, 2025, we had 260 full-time employees, of which 212 were engaged in research and development activities, and 48 were engaged in business development, information systems, facilities, human resources, or administrative support. Of these employees, 67 hold Ph.D. degrees, and 7 hold M.D. degrees. None of our employees are represented by any collective bargaining unit.
An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to the proposed clinical trials. In such a case, the IND may be placed on clinical hold, and the IND sponsor and the FDA must resolve any outstanding concerns or questions before clinical trials can begin.
An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to the proposed clinical trials. In such a case, the IND may be placed on a full clinical hold or partial clinical hold.
Many competitors and potential competitors have substantially greater scientific, research, and product development capabilities as well as greater financial, marketing and sales, and human resources than we do. In addition, many specialized biotechnology firms have formed collaborations with large, established companies to support the research, development, and commercialization of products that may be competitive with ours.
Many of our current and potential competitors have substantially greater scientific, research, and product development capabilities, as well as greater financial, marketing, sales, and human resources than we do. In addition, numerous specialized biotechnology companies have formed collaborations with large, established pharmaceutical companies to support the research, development, and commercialization of competing products.
XmAb942, our wholly owned anti-TL1A antibody drug candidate that we are actively advancing in clinical development to treat IBD: IBD is a chronic condition affecting an estimated 2.4 to 3.1 million adults in the United States, according to the U.S. Centers for Disease Control and Prevention, with increasing prevalence.
Inflammatory bowel disease program (XmAb942) XmAb942 is our wholly owned anti-TL1A antibody drug candidate that we are actively advancing in clinical development for the treatment of IBD. According to the U.S. Centers for Disease Control and Prevention, IBD affects an estimated 2.4 million to 3.1 million adults in the United States, with prevalence increasing over time.
Orphan drug status in the European Union has similar, but not identical, benefits. 21 The FDA has historically taken the position that the scope of orphan exclusivity aligns with the approved indication or use of a product, rather than the disease or condition for which the product received orphan designation. However, in Catalyst Pharms., Inc. v.
The FDA has historically taken the position that the scope of orphan exclusivity aligns with the approved indication or use of a product, rather than the disease or condition for which the product received orphan designation. However, in Catalyst Pharms., Inc. v.
We seek partners that can provide infrastructure and resources to successfully develop our drug candidates, have a track record of successfully developing and commercializing medicines, or have a portfolio of development-stage candidates and commercialized medicines which could potentially be developed in rational combinations with our drug candidates. Examples include Genentech, Incyte Corporation, Zenas BioPharma, Inc., and INmune Bio, Inc.
We seek partners that can provide infrastructure and resources to successfully develop our drug candidates, have a track record of successfully developing and commercializing medicines, or have a portfolio of development-stage candidates and commercialized medicines that could potentially be developed in rational combinations with our drug candidates.
The federal criminal statute on false statements makes it a crime to knowingly and willfully (in connection with the delivery of or payment for health care benefits, items, or services): (i) falsify, conceal, or cover up any material fact, (ii) make any materially false, fictitious, or fraudulent statements or representations, or (iii) make or use any materially false writing or document while knowing such writings or documents contain materially false, fictitious, or fraudulent statements.
Some of these states also require the implementation of commercial compliance programs and impose restrictions on drug manufacturer marketing practices. 24 The federal criminal statute on false statements makes it a crime to knowingly and willfully (in connection with the delivery of or payment for health care benefits, items, or services): (i) falsify, conceal, or cover up any material fact, (ii) make any materially false, fictitious, or fraudulent statements or representations, or (iii) make or use any materially false writing or document while knowing such writings or documents contain materially false, fictitious, or fraudulent statements.
Other companies conducting clinical trials to evaluate CD3 or CD28 bispecific antibodies directed to antigens expressed on solid tumors include Amgen; Astellas; BioAtla, Inc.; Context Therapeutics Inc.; CytomX Therapeutics, Inc.; Genmab A/S; Immunocore Holdings plc; Janux Therapeutics, Inc.; Johnson & Johnson; Regeneron Pharmaceuticals, Inc.; Roche Holding AG; Takeda Pharmaceutical Co. Ltd.; and Vir.
Other companies conducting clinical trials of CD3- or CD28-based bispecific antibodies directed to solid tumor antigens include Amgen, Astellas, Context Therapeutics Inc., CytomX Therapeutics, Inc., Genmab A/S, Immunocore Holdings plc, Janux Therapeutics, Inc., Johnson & Johnson, Regeneron Pharmaceuticals, Inc., Roche Holding AG, Rondo Therapeutics, Inc., Takeda Pharmaceutical Co. Ltd., Third Arc Bio, Inc., and Vir Biotechnology.
Other antibodies, antibody drug conjugates and cell therapies are in development or approved to treat patients with cancer. We are also developing bispecific antibody drug candidates engineered to direct cytotoxic T-cell killing of B cells, by engaging the CD3 receptor on T cells and either the CD20 or CD19 receptor on B cells.
In addition, other antibodies, antibody-drug conjugates, and cell-based therapies are in development or approved for the treatment of cancer. We are also developing bispecific antibody drug candidates designed to direct cytotoxic T-cell activity against B cells by engaging the CD3 receptor on T cells and either the CD20 or CD19 receptor on B cells.
Gilead Sciences, Inc. is advancing teropavimab and zinlirvimab in combination with lenacapavir as a long-acting treatment for virologically suppressed people living with human immunodeficiency virus (HIV) in a Phase 2 study. Tobevibart is a neutralizing antibody that uses our XmAb Xtend Fc Domain and our XmAb Cytotoxic Fc Domain.
Gilead Sciences, Inc. is advancing teropavimab and zinlirvimab in combination with lenacapavir as a long-acting treatment for virologically suppressed people living with human immunodeficiency virus (HIV) in a Phase 2 study.
If a drug or biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity.
If a drug or biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity. Orphan drug status in the European Union has similar, but not identical, benefits.
We have significantly expanded the potential of our CD3 T-cell engagers with the multi-specific XmAb 2+1 bispecific antibody format, utilizing two identical antigen binding domains and one CD3 targeting domain. The affinities for antigen binding are engineered to enable selective engagement and killing of high antigen-expressing target cells over low antigen-expressing normal cells.
We have expanded the potential of our CD3 T-cell engagers through the development of the multi-specific XmAb 2+1 bispecific antibody format, which incorporates two identical target-binding domains and one CD3-binding domain. Target-binding affinities are engineered to enable selective engagement and killing of cells with high target expression while minimizing activity against normal cells with low target expression.
Accordingly, submission of an IND may or may not result in the FDA allowing clinical trials to commence. At any time during the initial 30-day IND review period or while clinical trials are ongoing under the IND, the FDA may impose a partial or complete clinical hold.
At any time during the initial 30-day IND review period or while clinical trials are ongoing under the IND, the FDA may impose a partial or complete clinical hold.
Monjuvi is a humanized Fc-modified CD19 targeting immunotherapy indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT).
Monjuvi is a CD19-directed cytolytic antibody containing an XmAb Fc domain for improved cytotoxic potency and indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL), including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT).
Direct managers also take an active role in supporting their employees in realizing their full potential and creating opportunities for promotions and added responsibilities that enhance the engagement and retention of our workforce.
Direct managers also take an active role in supporting their employees in realizing their full potential and creating opportunities for promotions and added responsibilities that enhance the engagement and retention of our workforce. We regularly conduct employee surveys to assess employee engagement and identify areas for focus. 12 I.
Competition in the field of cancer and autoimmune drug development is intense, with hundreds of compounds in clinical trials.
Competition in the fields of oncology and autoimmune disease drug development is intense, with hundreds of compounds in clinical development.
The Phase 1b portion of the study will select a priming and step-up dose regimen based on the regimen established in oncology, and will assess the initial safety, efficacy, and biomarkers of plamotamab in patients with RA. The selected dose regimen will then be evaluated in the randomized Phase 2a portion, with efficacy determined at week 12.
The study will select a priming and step-up dose regimen based on the regimen established in oncology, and will assess the initial safety, efficacy and biomarkers of plamotamab in patients with RA.
We and our partners develop XmAb antibodies and other types of biotherapeutic drug candidates with improved properties and functionality, which can provide innovative approaches to potentially treating disease and clinical benefits over other treatment options.
These Fc domains provide specific features such as bispecific structure and extended half-life and serve as the scaffolds for our XmAb drug candidates. We and our partners develop XmAb antibodies and other types of biotherapeutic drug candidates with improved properties and functionality, which can provide innovative approaches to potentially treating disease and clinical benefits over other treatment options.
Other companies currently conducting clinical trials to evaluate CD3 bispecific antibodies directed to CD20 or CD19 for the treatment of autoimmune disease include Amgen; Cullinan Therapeutics, Inc.; and Roche Holding AG.
Other companies conducting clinical trials of CD3-based bispecific antibodies directed to CD20 or CD19 for autoimmune diseases include Amgen, Candid Therapeutics, Inc., Cullinan Therapeutics, Inc., Novartis AG, and Roche Holding AG. Additional antibodies and cell therapies are in development or approved for the treatment of autoimmune diseases.
A PSA90 rate of 45.1% was also observed in high-dose cohorts, and PSA90 response was associated with survival (p = 0.0044), which Amgen believes could potentially serve as an early indicator for benefit in these patients. Amgen initiated a Phase 3 study of xaluritamig in patients with mCRPC who have previously been treated with taxane-based chemotherapy.
A PSA90 response rate of 45.1% was observed in high-dose cohorts, and PSA90 response was associated with improved survival (p = 0.0044), which Amgen believes could potentially serve as an early indicator of clinical benefit in these patients.
Any marketing application for a biologic submitted to the FDA for approval, including a product candidate with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review.
The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers. 20 Any marketing application for a biologic submitted to the FDA for approval, including a product candidate with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review.
For partnerships for our drug candidates, we aim to retain a major economic interest in these candidates through transactions that allow us to retain major geographic commercial rights, provide for profit-sharing on future sales of approved products, include co-development options, and also the right to conduct independent clinical studies with drug candidates developed in the collaboration.
For partnerships for our drug candidates, we aim to retain a major economic interest in the form of keeping major geographic commercial rights; profit-sharing; co-development options; and the right to conduct studies with drug candidates developed in the collaboration.
We have filed patent applications relating to thousands of specific Fc domain variants with experimental data on specific improvements of immune function, pharmacokinetics, structural stability, and novel structural constructs. We have filed additional patent applications derived from these applications as we discover new properties of the Fc variants and as new business opportunities arise.
We have filed patent applications covering thousands of specific Fc domain variants supported by experimental data demonstrating improvements in immune function, pharmacokinetics, structural stability, and novel structural constructs. As we identify new properties of these Fc variants and pursue additional business opportunities, we continue to file additional patent applications derived from our existing intellectual property.
We reacquired exclusive worldwide rights to XmAb7195 in 2024 and are evaluating development opportunities. Collaborations, Partnerships and Licensing Arrangements A key part of our business strategy is to leverage our protein engineering capabilities, XmAb technologies, and XmAb drug candidates with partnerships, collaborations, and licenses. Through these arrangements we generate revenues in the form of upfront payments, milestone payments, and royalties.
Collaborations, Partnerships and Licensing Arrangements for Approved or Authorized Medicines and Clinical-Stage Programs Engineered with XmAb Fc Domains A key part of our business strategy is to leverage our protein engineering capabilities, XmAb Fc domains and drug candidates with partnerships, collaborations and licenses. Through these arrangements we generate revenues in the form of upfront payments, milestone payments and royalties.
Third-Party Vendors and Suppliers Our internal research activities are focused on early research stage and preclinical activities and studies. We rely on third-party vendors, suppliers and contractors for all other research, development and clinical activities. We are able to internally manufacture the quantities of our product candidates required for relatively short preclinical animal studies.
We rely on third-party vendors, suppliers, and contractors for the majority of our research, development, manufacturing, and clinical activities. We are able to internally manufacture limited quantities of product candidates for short-duration preclinical animal studies, which we believe allows us to accelerate certain aspects of development.
Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage of outpatient prescription drugs. Unlike Medicare Part A and B, Part D coverage is not standardized.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the MMA) established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage of outpatient prescription drugs.
Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation of T cells when the antibodies are bound to tumor cells. We are conducting a Phase 1 study to evaluate XmAb808 in combination with pembrolizumab in patients with advanced solid tumors.
Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation of T cells when the antibodies are bound to tumor cells. Data from completed cohorts in a Phase 1 dose-escalation study of XmAb808 in combination with pembrolizumab, an anti-PD1 antibody, are expected to inform future development decisions for the program.
Oncology Programs XmAb819 (ENPP3 x CD3): XmAb819 is a first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with clear cell renal cell carcinoma (ccRCC). XmAb819 engages the immune system and activates T cells for highly potent and targeted lysis of tumor cells expressing ENPP3, an antigen highly expressed on kidney cancers.
Oncology Programs XmAb819 (ENPP3 x CD3) : XmAb819 is a novel, potential first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with clear cell renal cell carcinoma (ccRCC).
Our design and engineering team prospectively assesses, with patent counsel, the competitive landscape with the goal of building broad patent positions and avoiding third-party intellectual property. As a pioneer in Fc domain engineering, we systematically scanned the structure of the Fc domain to discover Fc variants.
Our design and engineering team evaluates the competitive intellectual property landscape in collaboration with patent counsel with the objective of building broad patent protection while minimizing the risk of third-party intellectual property infringement. As a pioneer in Fc domain engineering, we have systematically analyzed the structure of the Fc domain to identify Fc variants with differentiated properties.
Other antibodies and cell therapies are in development or approved to treat patients with autoimmune diseases. 16 We are developing antibody drug candidates that target the cytokine TL1A for the potential treatment of IBD. Other companies currently conducting clinical trials to evaluate anti-TL1A antibodies include: Merck & Co., Inc; Roche Holding AG; Spyre Therapeutics, Inc.; and Teva Pharmaceutical Industries Limited.
We are developing antibody drug candidates that target the cytokine TL1A for the potential treatment of inflammatory bowel disease. Other companies conducting clinical trials of anti-TL1A monospecific or bispecific antibodies include Absci Corp., Caldera Therapeutics, Inc., Merck & Co., Inc., Roche Holding AG, Sanofi S.A., Spyre Therapeutics, Inc., and Teva Pharmaceutical Industries Limited.
We advance multiple XmAb drug candidates into early stages of clinical development and evaluate data from studies in managing our pipeline of candidates.
Build and actively manage a pipeline of XmAb drug candidates We advance multiple XmAb drug candidates into early stages of clinical development and evaluate data generated from ongoing studies to inform further development decisions.
XmAb541 targets CLDN6, a tumor-associated antigen in ovarian cancer and other solid tumors, and CD3. The XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for CLDN6 over similar Claudin family members, such as CLDN9, CLDN3 and CLDN4. We are conducting a Phase 1 study to evaluate XmAb541 in patients with ovarian cancer and other CLDN6 expressing tumor types.
XmAb541 is designed to engage the immune system and activate T cells for highly potent and targeted lysis of tumor cells expressing CLDN6, a tumor-associated antigen in ovarian cancer, germ cell tumors and other solid tumors. The XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for CLDN6 over similar Claudin family members, such as CLDN9, CLDN3 and CLDN4.
Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future. 24 Pricing and rebate programs must comply with the Medicaid Drug Rebate Program requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Veterans Health Care Act of 1992, as amended.
Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
The American Cancer Society estimates that in 2025 there will be approximately 2.0 million new cases of cancer and approximately 618,120 deaths from cancer. The National Institutes of Health (NIH) has estimated that based on growth and aging of the U.S. population, medical expenditures for cancer in the year 2030 are projected to reach at least $245.6 billion.
According to the American Cancer Society, approximately 2.1 million new cancer cases and approximately 626,140 cancer-related deaths are expected in the United States in 2026. The National Institutes of Health has estimated that, driven by population growth and aging, medical expenditures for cancer in the United States are projected to reach at least $245.6 billion in 2030.
Alexion is also evaluating Ultomiris in a broad late-stage development program across additional hematology, nephrology and neurology indications. Alexion used our Xtend™ Fc Domain to enhance the half-life of Ultomiris to allow for a longer duration of action, less frequent dosing and reduced patient burden of therapy compared to the previous generation therapy, Soliris ® .
Alexion : Alexion’s Ultomiris® uses Xtend Fc technology to enhance the half-life of Ultomiris to allow for a longer duration of action, less frequent dosing and reduced patient burden of therapy compared to the previous generation therapy, Soliris ® .
Results from a Phase 1 study evaluating xaluritamig in patients with mCRPC were presented at the European Society for Medical Oncology (ESMO) Congress in September 2024. With a median follow-up time of 27.9 months, the median overall survival (OS) was 17.7 months across all cohorts.
The XmAb 2+1 multivalent format enables higher binding capability for STEAP1-expressing cells. Results from a Phase 1 study evaluating xaluritamig in patients with metastatic castration-resistant prostate cancer (mCRPC) were presented in September 2024. With a median follow-up of 27.9 months, median overall survival was 17.7 months across all cohorts.
The RIF was applied across all functional areas. Compensation, Benefits, and Development We provide compensation packages designed to attract, retain, and motivate high-quality employees. All of our employees are eligible for cash bonuses and grants of equity awards.
In addition, as of December 31, 2025, women made up 25% of our senior leadership team. Compensation, Benefits, and Development We provide compensation packages designed to attract, retain, and motivate high-quality employees. All employees are eligible for cash bonuses and grants of equity awards.
We are currently enrolling Phase 1 studies for three wholly-owned candidates to treat patients with many different types of serious diseases: XmAb819, XmAb541 and XmAb942. Two additional drug candidates are planned to enter clinical development in 2025: plamotamab and XmAb657.
Wholly Owned Clinical-Stage XmAb Drug Candidates Our modular XmAb technologies and protein engineering capabilities enable us to rapidly advance multiple drug candidates into clinical development. We are currently enrolling Phase 1 or Phase 2 studies for five wholly-owned candidates to treat patients with many different types of serious diseases: XmAb819, XmAb541, XmAb942, plamotamab and XmAb657.
Continue to expand our patent portfolio protecting our Fc technologies and XmAb drug candidates. We seek to expand our intellectual property estate and protect our proprietary Fc technologies, our development programs, and XmAb drug candidates by filing and prosecuting patents in the United States (U.S.) and other countries.
Protect and expand our intellectual property portfolio We seek to protect our proprietary XmAb technologies and XmAb drug candidates by filing and prosecuting patents in the United States and other jurisdictions. Where appropriate, we pursue the expansion and extension of patent coverage for our proprietary and partnered programs incorporating our XmAb technologies. 5 D.
Regulatory Overview Our business and operations are subject to a variety of U.S. federal, state and local and foreign supranational, national, provincial, and municipal laws, regulations and trade practices.
The agreement includes customary termination rights and payment obligations for costs incurred and non-cancellable commitments. PAREXEL conducts clinical studies for our plamotamab program. K. Regulatory Overview Our business and operations are subject to a variety of U.S. federal, state and local and foreign supranational, national, provincial, and municipal laws, regulations and trade practices.
ENPP3 is a differentially expressed target, with high level expression in renal cell carcinoma (RCC) and low level expression on normal tissues. With two tumor-antigen binding domains and one T-cell binding domain, our XmAb 2+1 format enables antibodies to bind more avidly and selectively kill tumor cells with higher antigen density, potentially sparing normal cells.
With two tumor-antigen binding domains and one T-cell binding domain, our XmAb 2+1 format is designed to enable antibodies to bind more avidly and selectively kill tumor cells with higher antigen density, potentially sparing normal cells. We are conducting a Phase 1 study to evaluate XmAb819 in patients with advanced ccRCC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe commencement of clinical trials can be delayed for a variety of reasons, including, but not limited to, delays related to: • obtaining regulatory approval to commence one or more clinical trials; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites; • manufacturing sufficient quantities of a drug candidate or other materials necessary to conduct clinical trials, as well as receiving the supplies and materials needed to conduct our clinical trials, including interruptions in global shipping that may affect the transport of clinical materials; • obtaining institutional review Board of Directors approval to conduct one or more clinical trials at a prospective site; 47 • recruiting and enrolling patients to participate in one or more clinical trials, especially as patients may be reluctant or unable to visit clinical sites, or may delay seeking treatment for chronic conditions; • the failure of our collaborators to adequately resource our drug candidates due to their focus on other programs or as a result of general market conditions; • recruiting clinical site investigators, clinical site staff and potential closure or defunding of clinical facilities; and • changes in regulations, which may require us to change the ways in which our clinical trials are conducted.
Biggest changeThe commencement of clinical trials can be delayed for a variety of reasons, including, but not limited to, delays related to: • obtaining regulatory approval to commence one or more clinical trials; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites; • manufacturing sufficient quantities of a drug candidate or other materials necessary to conduct clinical trials, as well as receiving the supplies and materials needed to conduct our clinical trials, including interruptions in global shipping that may affect the transport of clinical materials; • obtaining institutional review board approval to conduct one or more clinical trials at a prospective site; • recruiting and enrolling patients to participate in one or more clinical trials, especially as patients may be reluctant or unable to visit clinical sites, or may delay seeking treatment for chronic conditions; • the failure of our collaborators to adequately resource our drug candidates due to their focus on other programs or as a result of general market conditions; • recruiting clinical site investigators, clinical site staff and potential closure or defunding of clinical facilities; and • changes in regulations, which may require us to change the ways in which our clinical trials are conducted. 45 In addition, once a clinical trial has begun, it may be suspended or terminated by us, our collaborators, the institutional review boards or data safety monitoring boards charged with overseeing our clinical trials, the FDA, EMA or comparable foreign authorities due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or clinical protocols; • inspection of the clinical trial operations or clinical trial site by the FDA, EMA or comparable foreign authorities resulting in the imposition of a clinical hold; • unforeseen safety issues; or • lack of adequate funding to continue the clinical trial.
Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following: 1. adverse results or delays, or cancellations of clinical trials by us or our partners; 2. inability to obtain additional funding; 3. changes in laws or regulations applicable to our products; 4. inability to obtain adequate product supply for our product candidates, or the inability to do so at acceptable prices; 5. adverse regulatory decisions; 6. changes in the structure of healthcare payment systems; 7. introduction of new products or technologies by our competitors; 8. failure to meet or exceed product development or financial projections we provide to the public; 9. the perception of the pharmaceutical and biotechnology industry by the public, legislatures, regulators and the investment community; 10. announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; 11. disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; 12. additions or departures of key scientific or management personnel; 13. significant lawsuits, including patent or stockholder litigation; 14. changes in the market valuations of similar companies; 15. sales of our common stock by us or our stockholders in the future; and 16. trading volume of our common stock.
Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following: 1. adverse results or delays, or cancellations of clinical trials by us or our partners; 2. inability to obtain additional funding; 3. changes in laws or regulations applicable to our products; 4. inability to obtain adequate product supply for our product candidates, or the inability to do so at acceptable prices; 5. adverse regulatory decisions; 6. changes in the structure of healthcare payment systems; 7. introduction of new products or technologies by our competitors; 8. failure to meet or exceed product development or financial projections we provide to the public; 9. the perception of the pharmaceutical and biotechnology industry by the public, legislatures, regulators and the investment community; 30 10. announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; 11. disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; 12. additions or departures of key scientific or management personnel; 13. significant lawsuits, including patent or stockholder litigation; 14. changes in the market valuations of similar companies; 15. sales of our common stock by us or our stockholders in the future; and 16. trading volume of our common stock.
Our existing partnerships, and any future partnerships we enter into, may pose a number of risks, including the following: 1. collaborators have significant discretion in determining the efforts and resources that they will apply to these partnerships; 2. such arrangements may include cost-sharing obligations that require us to incur substantial costs in excess of our available resources; 3. collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; 4. collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; 5. collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; 6. a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; 7. disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; 8. while we have generally retained the right to maintain and defend our intellectual property under our agreements with collaborators, certain collaborators may not properly maintain or defend certain of our 44 intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information; 9. collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; 10. collaborators may learn about our technology and use this knowledge to compete with us in the future; 11. results of collaborators’ preclinical or clinical studies could produce results that harm or impair other products using our XmAb technology platform; 12. there may be conflicts between different collaborators that could negatively affect those partnerships and potentially others; and 13. the number and type of our partnerships could adversely affect our attractiveness to future collaborators or acquirers.
Our existing partnerships, and any future partnerships we enter into, may pose a number of risks, including the following: 1. collaborators have significant discretion in determining the efforts and resources that they will apply to these partnerships; 2. such arrangements may include cost-sharing obligations that require us to incur substantial costs in excess of our available resources; 3. collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based 41 on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; 4. collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; 5. collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; 6. a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; 7. disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; 8. while we have generally retained the right to maintain and defend our intellectual property under our agreements with collaborators, certain collaborators may not properly maintain or defend certain of our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information; 9. collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; 10. collaborators may learn about our technology and use this knowledge to compete with us in the future; 11. results of collaborators’ preclinical or clinical studies could produce results that harm or impair other products using our XmAb technology platform; 12. there may be conflicts between different collaborators that could negatively affect those partnerships and potentially others; and 13. the number and type of our partnerships could adversely affect our attractiveness to future collaborators or acquirers.
Opinions from such patent counsel or lawyers may not be correct or may be based on incomplete facts; 39 13. obtaining regulatory approval for biopharmaceutical products is a lengthy and complex process, and as a result, any patents covering our product candidates may expire before, or shortly after such product candidates are approved and commercialized; 14. the patent and patent enforcement laws of some foreign jurisdictions do not protect intellectual property rights to the same extent as laws in the United States, and many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions.
Opinions from such patent counsel or lawyers may not be correct or may be based on incomplete facts; 13. obtaining regulatory approval for biopharmaceutical products is a lengthy and complex process, and as a result, any patents covering our product candidates may expire before, or shortly after such product candidates are approved and commercialized; 14. the patent and patent enforcement laws of some foreign jurisdictions do not protect intellectual property rights to the same extent as laws in the United States, and many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions.
Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, and our management concluded that our internal control over financial reporting was not effective as of December 31, 2023 due to material weaknesses (a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis) related to the design of controls related to the review of the accounting treatment of the non-routine transactions and the evaluation of certain tax legislation.
Previously, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, and our management concluded that our internal control over financial reporting was not effective as of December 31, 2023 due to material weaknesses (a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis) related to the design of controls related to the review of the accounting treatment of the non-routine transactions and the evaluation of certain tax legislation.
Our ability to compete successfully will depend largely on our ability to leverage our experience in drug discovery and development to: 1. discover and develop products that are superior to other products in the market; 2. attract qualified scientific, product development and commercial personnel; 3. obtain and maintain patent and/or other proprietary protection for our products and technologies; 4. obtain required regulatory approvals; and 5. successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new products.
Our ability to compete successfully will depend largely on our ability to leverage our experience in drug discovery and development to: 1. discover and develop products that are superior to other products in the market; 2. attract qualified scientific, product development and commercial personnel; 3. obtain and maintain patent and/or other proprietary protection for our products and technologies; 48 4. obtain required regulatory approvals; and 5. successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new products.
Such third parties may also intentionally circumvent our patents by means of alternate designs or processes or file applications or be granted patents that would block or hurt our efforts; 11. there may be dominating patents relevant to our product candidates of which we are not aware; 12. our patent counsel, lawyers or advisors may have given us, or may in the future give us incorrect advice or counsel.
Such third parties may also intentionally circumvent our patents by means of alternate designs or processes or file applications or be granted patents that would block or hurt our efforts; 35 11. there may be dominating patents relevant to our product candidates of which we are not aware; 12. our patent counsel, lawyers or advisors may have given us, or may in the future give us incorrect advice or counsel.
Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until eighteen months after filing and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patents that may cover our technologies, our product candidates or their use.
Because some patent applications in the United States may be maintained in secrecy until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published until 37 eighteen months after filing and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patents that may cover our technologies, our product candidates or their use.
Our current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, 49 fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to penalties.
Our current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to penalties.
Any one of our partners could breach covenants, restrictions and/or sub-license agreement provisions leading us into disputes and potential breaches of our agreements with other partners. We may in the future determine to partner with additional pharmaceutical and biotechnology companies for development and potential commercialization of therapeutic products. We face significant competition in seeking appropriate collaborators.
Any one of our partners could breach covenants, restrictions and/or sub-license agreement provisions leading us into disputes and potential breaches of our agreements with other partners. 42 We may in the future determine to partner with additional pharmaceutical and biotechnology companies for development and potential commercialization of therapeutic products. We face significant competition in seeking appropriate collaborators.
Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in 41 a manner that could cover our technologies, our products or the use of our products. We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology.
Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our products or the use of our products. We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology.
While we 48 have been able to attract and retain skilled and experienced personnel and consultants in the past, no assurance can be given that we will be able to do so in the future. The development and commercialization of biologic products is subject to extensive regulation, and we may not obtain regulatory approvals for any of our product candidates.
While we have been able to attract and retain skilled and experienced personnel and consultants in the past, no assurance can be given that we will be able to do so in the future. The development and commercialization of biologic products is subject to extensive regulation, and we may not obtain regulatory approvals for any of our product candidates.
Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to 52 remedy. If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information.
Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy. If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information.
Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business. We may be vulnerable to disruption, damage and financial obligation as a result of system failures.
Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business. 56 We may be vulnerable to disruption, damage and financial obligation as a result of system failures.
However, we may not be granted an extension in the United States and/or foreign countries and territories because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within 42 applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.
However, we may not be granted an extension in the United States and/or foreign countries and territories because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.
In addition, manufacturers are subject to ongoing periodic unannounced inspection by the FDA and other governmental authorities to ensure strict compliance with government regulations. We do not control the manufacturing processes of our third-party manufacturing partners, which include, among other things, quality control, quality assurance and the maintenance of records and documentation.
In addition, manufacturers are subject to ongoing periodic unannounced inspection by the FDA and other governmental authorities to ensure strict compliance with government regulations. We do not control the manufacturing processes of our third-party manufacturing partners, which include, among other things, quality control, quality assurance 43 and the maintenance of records and documentation.
The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, virtually every jurisdiction in which we operate has established its own data security and privacy frameworks with which we must comply.
The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, virtually every 54 jurisdiction in which we operate has established its own data security and privacy frameworks with which we must comply.
There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or comparable foreign regulatory authorities in a timely manner or at all. Serious adverse events observed in clinical trials could hinder or prevent market acceptance of the product candidate at issue.
There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or comparable foreign regulatory authorities in a timely manner or at all. Serious adverse events observed in clinical trials could hinder or prevent market acceptance of the product 44 candidate at issue.
At the federal level, for example, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which establishes privacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health information, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information.
At the federal level, for example, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which establishes privacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health information, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and 55 availability of electronic protected health information.
Additionally, a broad range of legislative measures also have been introduced at the federal 54 level. Accordingly, failure to comply with federal and state laws (both those currently in effect and future legislation) regarding privacy and security of personal data could expose us to fines and penalties under such laws.
Additionally, a broad range of legislative measures also have been introduced at the federal level. Accordingly, failure to comply with federal and state laws (both those currently in effect and future legislation) regarding privacy and security of personal data could expose us to fines and penalties under such laws.
As a result of the ongoing actions taken by governments to attempt to slow down rising inflation, there is substantial uncertainty about the strength of the global economies, which may currently or in the near term be in a recession and have experienced rapid increases in uncertainty about the pace of potential recovery.
As a result of the 28 ongoing actions taken by governments to attempt to slow down rising inflation, there is substantial uncertainty about the strength of the global economies, which may currently or in the near term be in a recession and have experienced rapid increases in uncertainty about the pace of potential recovery.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 33 Our principal stockholders, directors and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. Our principal stockholders, directors and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
If these third parties or collaborators do not successfully carry out their contractual duties or meet expected deadlines, obtaining regulatory approval for manufacturing and commercialization of our product candidates may be delayed or prevented. We rely substantially on third-party data managers for our clinical trial data.
If these third parties or collaborators do not successfully carry out their contractual duties or meet expected deadlines or regulatory requirements, obtaining regulatory approval for manufacturing and commercialization of our product candidates may be delayed or prevented. We rely substantially on third-party data managers for our clinical trial data.
Our business and results of operations could be adversely impacted by inflation. The Company’s financial performance is subject to global and US economic conditions. Recent increases in interest rates and inflation, globally, and in the US regions, have led to economic volatility, increased borrowing costs, 30 price increases and risks of recessions.
Our business and results of operations could be adversely impacted by inflation. The Company’s financial performance is subject to global and US economic conditions. Recent increases in interest rates and inflation, globally, and in the US regions, have led to economic volatility, increased borrowing costs, price increases and risks of recessions.
There is no assurance that such individuals or organizations will be able to provide the functions, tests, biologic 45 supply or services as agreed upon or in a quality fashion and we could suffer significant delays in the development of our products or processes.
There is no assurance that such individuals or organizations will be able to provide the functions, tests, biologic supply or services as agreed upon or in a quality fashion and we could suffer significant delays in the development of our products or processes.
Because successful development of our product candidates 32 is uncertain, we are unable to estimate the actual funds we will require to complete research and development and commercialize our product candidates. Adequate additional financing may not be available to us on acceptable terms, or at all.
Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development and commercialize our product candidates. Adequate additional financing may not be available to us on acceptable terms, or at all.
The Shelf Registration Statement allows us to offer an indeterminate amount of securities, including equity securities, debt securities, warrants, rights, units and depositary shares, from time to time as described in the Shelf Registration Statement. The specific terms of any offering under the Shelf 34 Registration Statement will be established at the time of such offering.
The Shelf Registration Statement allows us to offer an indeterminate amount of securities, including equity securities, debt securities, warrants, rights, units and depositary shares, from time to time as described in the Shelf Registration Statement. The specific terms of any offering under the Shelf Registration Statement will be established at the time of such offering.
Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the development and commercialization of any of our product candidates 43 or products and could have a material adverse effect on our business, prospects, financial condition and results of operations.
Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the development and commercialization of any of our product candidates or products and could have a material adverse effect on our business, prospects, financial condition and results of operations.
Securities and Exchange Commission before making an investment decision regarding Xencor. 27 We have reviewed our risk factors and categorized them into five specific categories: 1. Risks related to our unique and specific business operations as a small biotechnology company.
Securities and Exchange Commission before making an investment decision regarding Xencor. We have reviewed our risk factors and categorized them into five specific categories: 1. Risks related to our unique and specific business operations as a small biotechnology company.
In addition, these third parties may not complete activities on schedule or may not manufacture under GMP conditions. Preclinical or clinical studies may not be performed or completed in accordance with Good Laboratory Practices (GLP) regulatory requirements or our trial design.
In addition, these third parties may not complete activities on schedule or may not manufacture under GMP conditions. Preclinical or clinical studies may not be performed or completed in accordance with Good Laboratory Practices (GLP) or other regulatory requirements or our trial design.
If there is any conflict, dispute, disagreement or issue of non-performance between us and our licensing partners regarding our rights or obligations under the license agreements, including any such conflict, dispute or disagreement arising from our failure to satisfy payment obligations under any such 40 agreement, we may owe damages, our licensor may have a right to terminate the affected license, and our and our partners' ability to utilize the affected intellectual property in our drug discovery and development efforts, and our ability to enter into collaboration or marketing agreements for an affected product or therapeutic candidate, may be adversely affected.
If there is any conflict, dispute, disagreement or issue of non-performance between us and our licensing partners regarding our rights or obligations under the license agreements, including any such conflict, dispute or disagreement arising from our failure to satisfy payment obligations under any such 36 agreement, we may owe damages, our licensor may have a right to terminate the affected license, and our and our partners' ability to utilize the affected intellectual property in our drug discovery and development efforts, and our ability to enter into collaboration or marketing agreements for an affected product or therapeutic candidate, may be adversely affected.
Under the Tax Cuts and Jobs Act of 2017 (TCJA), our federal NOLs generated in tax years ending after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs generated in tax years beginning after December 31, 2021, is limited.
Under the Tax Cuts and Jobs Act of 2017 ( “ TCJA ” ), our federal NOLs generated in tax years ending after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs generated in tax years beginning after December 31, 2021, is limited.
We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.
In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.
In addition, these breaches and other inappropriate access can be 53 difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.
Further, our partners may decide not to pursue, or decide to deprioritize our programs due to changing priorities which could affect our future potential revenue from such arrangements.
Further, our partners may decide not to pursue, 29 or decide to deprioritize our programs due to changing priorities which could affect our future potential revenue from such arrangements.
If we are unable to obtain, maintain and enforce intellectual property protection covering our products or underlying technologies, others may be able to make, use or sell products that are substantially the same as ours without incurring the sizeable development and licensing costs that we have incurred, which would adversely affect our ability to compete in the market.
If we are unable to obtain, maintain and enforce intellectual property protection covering our products or underlying technologies, others may be able to make, use or sell products that are substantially the same as ours without incurring the sizable development and licensing costs that we have incurred, which would adversely affect our ability to compete in the market.
These risks include: • If we are unable to obtain, maintain and enforce intellectual property protection covering our products, others may be able to make, use or sell products substantially the same as ours, which could adversely affect our ability to compete in the market. • We have in-licensed, and may in the future in-license, a portion of our intellectual property, and, if we fail to comply with our obligations under these arrangements, we could lose such intellectual property rights or owe damages to the licensor of such intellectual property. • We may be required to reduce the scope of our intellectual property due to third-party intellectual property claims. • Our products could infringe patents and other property rights of others, which may result in costly litigation and, if we are not successful, could cause us to pay substantial damages or limit our ability to commercialize our products, which could have a material adverse effect on our business. • If we are not able to prevent disclosure of our trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. • If we do not obtain patent term extension and data exclusivity for any therapeutic candidates we develop, our business may be materially harmed. 28 4.
These risks include: • If we are unable to obtain, maintain and enforce intellectual property protection covering our products and any future products we may develop, others may be able to make, use or sell products substantially the same as ours, which could adversely affect our ability to compete in the market. • We have in-licensed, and may in the future in-license, a portion of our intellectual property, and, if we fail to comply with our obligations under these arrangements, we could lose such intellectual property rights or owe damages to the licensor of such intellectual property. • We may be required to reduce the scope of our intellectual property due to third-party intellectual property claims. 26 • Others may allege that our products infringe their patents and other property rights, which may result in costly litigation and, if we are not successful, could cause us to pay substantial damages or limit our ability to commercialize our products, which could have a material adverse effect on our business. • If we are not able to prevent disclosure of our trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. • If we do not obtain patent term extension and data exclusivity for any therapeutic candidates we develop, our business may be materially harmed. 4.
We may not have or be able to obtain or maintain sufficient and affordable insurance coverage to cover product liability claims, and without sufficient coverage any claim brought against us could have a materially adverse effect on our 51 business, financial condition or results of operations.
Additionally, we may not have or be able to obtain or maintain sufficient and affordable insurance coverage to cover product liability claims, and without sufficient coverage, any claim brought against us could have a materially adverse effect on our business, financial condition or results of operations.
Our ability to effectively monitor and respond to the rapid and evolving developments and expectations relating to sustainability, including the environmental, social and governance matters, may impose unexpected costs or results in reputational or other harm that could have a material adverse effect on our business.
Our ability to effectively monitor and respond to the rapid and evolving developments and expectations relating to sustainability, including environmental, social and governance matters, may impose unexpected costs or result in reputational or other harm that could have a material adverse effect on our business.
Certain of our third-party manufacturers are located outside the United States, and our ability to continue to receive drug material for our development candidates would be at-risk in the event of instability or geopolitical problems between the United States and the country's where these manufacturers are located.
Certain of our third-party manufacturers are located outside the United States, and our ability to continue to receive drug material for our development candidates would be at-risk in the event of instability or geopolitical problems between the United States and the countries where these manufacturers are located.
Prior to our initial public offering (IPO), there was no public market for our common stock. The trading price of our common stock is likely to be volatile. Since our IPO, the trading price of our common stock has ranged from a low of approximately $5.75 to a high of approximately $58.345.
Prior to our initial public offering (IPO), there was no public market for our common stock. The trading price of our common stock is likely to be volatile. Since our IPO, the trading price of our common stock has ranged from a low of approximately $5.75 to a high of approximately $58.35.
If we fail to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, investors may lose confidence in the accuracy and completeness of our financial reports and the trading price of our common stock may decline.
If we identify material weaknesses in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, investors may lose confidence in the accuracy and completeness of our financial reports and the trading price of our common stock may decline.
Furthermore, changes in U.S. patent law under the America Invents Act allows for post-issuance challenges to U.S. patents, including ex parte reexaminations, inter parte reviews and post-grant review.
Furthermore, changes in U.S. patent law under the America Invents Act allows for post-issuance challenges to U.S. patents, including ex parte reexaminations, inter partes review and post-grant review.
Currently, a variety of third-party providers of corporate responsibility and sustainability ratings measure the performance of companies on ESG topics, and the results of these assessments are widely publicized. Investors, particularly institutional investors, use these ratings to benchmark companies against their peers, and major institutional investors have publicly emphasized the importance of ESG measures to their investment decisions.
A variety of third-party providers of corporate responsibility and sustainability ratings measure the performance of companies on sustainability or ESG topics, and the results of these assessments are widely publicized. Investors, particularly institutional investors, use these ratings to benchmark companies against their peers, and major institutional investors have emphasized the importance of sustainability or ESG measures to their investment decisions.
We believe our existing cash, cash equivalents and marketable securities, together with interest thereon and expected milestones and royalty payments will be sufficient to fund our operations into 2028.
We believe our existing cash, cash equivalents and marketable securities, together with interest thereon and expected milestones and royalty payments will be sufficient to fund our operations through 2028.
Topics taken into account in such assessments include, among others, companies’ efforts and impacts on climate change, human rights, business ethics and compliance, diversity, equity and inclusion (DEI) and the role of companies’ board of directors in overseeing various sustainability-related issues.
Topics taken into account in such assessments include, among others, companies’ efforts and impacts on climate change, human rights, business ethics and compliance, pay equity and inclusion, and the role of companies’ board of directors in overseeing various sustainability-related issues.
From the date of the ATM Prospectus through December 31, 2024, no shares of our common stock were sold pursuant to the ATM Offering and, as of December 31, 2024, we may sell shares of our common stock for remaining gross proceeds of up to $200 million from time to time pursuant to the ATM Prospectus.
From the date of the ATM Prospectus through December 31, 2025, no shares of our common stock were sold pursuant to the ATM Offering and, as of December 31, 2025, we may sell shares of our common stock for remaining gross proceeds of up to $200.0 million from time to time pursuant to the ATM Prospectus.
Our products could infringe patents and other property rights of others, which may result in costly litigation and, if we are not successful, could cause us to pay substantial damages or limit our ability to commercialize our products, which could have a material adverse effect on our business.
Others may allege that our products infringe their patents and other property rights, which may result in costly litigation and, if we are not successful, could cause us to pay substantial damages or limit our ability to commercialize our products, which could have a material adverse effect on our business.
Such findings could further result in regulatory authorities failing to provide marketing authorization for our product candidates or limiting the scope of the approved indication, if approved. Many product candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development of such product candidates.
Such findings could further result in regulatory authorities failing to provide marketing authorization for our product candidates or limiting the scope of the approved indication or imposing post-market safety restrictions, if approved. Many product candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development of such product candidates.
Based on information available to us as of December 31, 2024 our executive officers, directors, 5% stockholders and their affiliates beneficially owned, as a group, approximately 56.8% of our voting stock. The interests of these stockholders may not be the same as or may even conflict with your interests.
Based on information available to us as of December 31, 2025 our executive officers, directors, 5% stockholders and their affiliates beneficially owned, as a group, approximately 68.1% of our voting stock. The interests of these stockholders may not be the same as or may even conflict with your interests.
We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon research and development programs or commercialization. As of December 31, 2024, we had $706.7 million in cash, cash equivalents, and marketable debt securities.
We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon research and development programs or commercialization. As of December 31, 2025, we had $610.8 million in cash, cash equivalents, and marketable debt securities.
In addition, there are rapidly evolving developments and changing expectations relating to sustainability matters. As a result, the criteria by which our corporate responsibility and sustainability practices are assessed may change, which could cause us to undertake costly initiatives or actions to satisfy new demands.
There have also been evolving developments and changing expectations relating to sustainability matters. As a result, the criteria by which our corporate responsibility and sustainability practices are assessed may change, which could cause us to undertake costly initiatives or actions to satisfy new demands.
As a result, if we earn net taxable income, we may be unable to use all or a material portion of our NOLs and other tax attributes, which could potentially result in increased future tax liability to us and adversely affect our future cash flows. 35 New federal and state income tax legislation may affect our current and future income tax liabilities.
As a result, if we earn net taxable income, we may be unable to use all or a material portion of our NOLs and other tax attributes, which could potentially result in increased future tax liability to us and adversely affect our future cash flows.
To date, we have financed our operations primarily through equity financings and our research and development licensing agreements and have incurred significant operating losses since our inception in 1997. For the year ended December 31, 2024, we incurred a net loss of $232.6 million and as of 31 December 31, 2024, we had an accumulated deficit of $704.0 million.
To date, we have financed our operations primarily through equity financings and our research and development licensing agreements and have incurred significant operating losses since our inception in 1997. For the year ended December 31, 2025, we incurred a net loss of $91.9 million and as of December 31, 2025, we had an accumulated deficit of $796.0 million.
In light of investors’ increased focus on sustainability matters, if we are, for example, perceived as lagging in taking steps with respect to ESG initiatives, certain investors may seek to engage with us on improving our ESG disclosures or performance. They may also make voting decisions or take other actions to hold us and our Board of Directors accountable.
If we are perceived as lagging in taking steps with respect to sustainability or ESG initiatives, certain investors may seek to engage with us on improving our sustainability-related disclosures or performance. They may also make voting decisions or take other actions to hold us and our Board of Directors accountable.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock.
We have never declared or paid any cash dividend on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock.
In addition, we cannot be certain that we have identified all material weaknesses in our internal control over financial reporting, or that in the future we will not have additional material weaknesses in our internal control over financial reporting.
In addition, we cannot be certain that in the future we will not have material weaknesses in our internal control over financial reporting.
There can be no assurance that our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably if they are approved for sale. 50 Our business involves the controlled use of hazardous materials and as such we are subject to environmental and occupational safety laws.
There can be no assurance that our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably if they are approved for sale.
The development of such candidates could be stopped or delayed if any such third party fails to provide us with sufficient quantities of product or fails to do so at acceptable quality levels or prices or fails to maintain or achieve satisfactory regulatory compliance.
We rely on third parties to manufacture supplies of our preclinical and clinical product candidates. The development of such candidates could be stopped or delayed if any such third party fails to provide us with sufficient quantities of product or fails to do so at acceptable quality levels or prices or fails to maintain or achieve satisfactory regulatory compliance.
If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.
Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall. If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.
There is an increasing focus from certain investors, employees, regulators and other stakeholders concerning corporate responsibility and sustainability matters, including with regard to environmental, social and governance (ESG) factors.
There has been focus from certain investors, employees, regulators and other stakeholders concerning corporate responsibility and sustainability matters, including with regard to environmental, social and governance (“ESG”) factors.
Our commercial success depends, in part, on our ability to obtain, maintain and enforce patents, trade secrets, trademarks and other intellectual property rights and to operate without having third parties infringe, misappropriate or 38 circumvent the rights that we own or license.
Our commercial success depends, in part, on our ability to obtain, maintain and enforce patents, trade secrets, trademarks and other intellectual property rights and to operate without having third parties infringe, misappropriate or circumvent the rights that we own or license. The value of many of our partnered licensing arrangements is based on the underlying intellectual property and related patents.
If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request or we fail to choose the most optimal patents to extend, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and prospects could be materially harmed.
If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request or we fail to choose the most optimal patents to extend, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and prospects could be materially harmed. 39 Risks Related to Our Dependence on Third Parties Our patent protection and prosecution for some of our product candidates is dependent on third parties.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates, if approved. Even successful defense would require significant financial and management resources. General Risk Factors Our intellectual property may be infringed upon by a third party.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates, if approved. Even successful defense would require significant financial and management resources.
Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and prospects, and we cannot anticipate all of the ways in which the political or economic climate and financial market conditions could adversely impact our business.
The foregoing could materially and adversely affect our business, financial condition, results of operations and prospects, and we cannot anticipate all of the ways in which the political or economic climate and financial market conditions could adversely impact our business. The increasing use of social media platforms presents new risks and challenges.
There is no assurance that these third parties will not make errors in the design, management or retention of our data or data systems. There is no assurance these third parties will pass FDA or regulatory audits, which could delay or prohibit regulatory approval. We rely on third parties to manufacture supplies of our preclinical and clinical product candidates.
There is no assurance that these third parties will not make errors in the design, management or retention of our data or data systems. There is no assurance these third parties will pass FDA or regulatory audits, which could delay or prohibit regulatory approval.
We may never be profitable. • We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon research and development programs or commercialization. • The market price of our common stock is likely to be highly volatile, and you could lose all or part of your investment. • Our principal stockholders, directors and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval. • Raising additional funds through debt or equity financing may be dilutive and raising funds through licensing may require us to relinquish rights to our technology or product candidates. • Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. • We have identified material weaknesses in our internal control over financial reporting, and our management has concluded that our disclosure controls and procedures were not effective as of December 31, 2023 and 2024.
We may never be profitable. • We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon research and development programs or commercialization. • The market price of our common stock is likely to be highly volatile, and you could lose all or part of your investment. • Our principal stockholders, directors and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval. • Raising additional funds through debt or equity financing may be dilutive and raising funds through licensing may require us to relinquish rights to our technology or product candidates. • Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. • If we identify material weaknesses in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, investors may lose confidence in the accuracy and completeness of our financial reports and the trading price of our common stock may decline. 3.
Some state laws also minimize what data can be collected from consumers and how businesses may use and disclose it. These state privacy laws also require businesses to make disclosures to consumers about data collection, use and sharing practices.
States have adopted statewide comprehensive privacy laws and many other states have privacy legislation that is pending. Some state laws also minimize what data can be collected from consumers and how businesses may use and disclose it. These state privacy laws also require businesses to make disclosures to consumers about data collection, use and sharing practices.
On February 24, 2025, we filed an Annual Report on Form 10-K/A for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q/As for the quarterly periods ended March 31, 2024, June 30, 2024 and September 30, 2024. We are in the process of implementing remediation plans to address these material weaknesses.
On February 24, 2025, we filed an Annual Report on Form 10-K/A for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q/As for the quarterly periods ended March 31, 2024, June 30, 2024 and September 30, 2024.
From January 2, 2024 to December 31, 2024, the trading price of our common stock ranged from a low of $15.31 to a high of $27.24.
From January 2, 2025 to December 31, 2025, the trading price of our common stock ranged from a low of $6.92 to a high of $24.66.
The risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, we could be held liable for any damages that result, and any such liability could exceed our resources. We are not insured against this type of liability.
In the event of such an accident, we could be held liable for any damages that result, and any such liability could exceed our resources. We are not insured against this type of liability.
Failure of these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs. 5. Risks related to our industry. These risks include: • Clinical trials are expensive and take years to conduct and the outcome of such clinical trials is uncertain.
Failure of these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs. 5. Risks related to our industry.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. The procedures and controls we use to monitor these threats and mitigate our exposure may not be sufficient to prevent cybersecurity incidents.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
If we do not successfully develop and commercialize product candidates, we may not be able to obtain product or partnership revenues in future periods, which would adversely affect our business, prospects, financial condition and results of operations. 29 The clinical development stage of our operations may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
If we do not successfully develop and commercialize product candidates, we may not be able to obtain 27 product or partnership revenues in future periods, which would adversely affect our business, prospects, financial condition and results of operations.
As of January 1, 2021 and the expiry of transitional arrangements agreed to between the UK and the EU, data processing in the UK is governed by a UK version of the GDPR (combining the GDPR and the Data Protection Act 2018), exposing us to two parallel regimes, each of which authorizes similar fines and other potentially divergent enforcement actions for certain violations.
Data processing in the UK is governed by a UK version of the GDPR (combining the GDPR and the Data Protection Act 2018), as well as other laws including the Data Use and Access Act and the Privacy and Electronic Communications Regulations exposing us to two parallel regimes, each of which authorizes similar fines and other potentially divergent enforcement actions for certain violations.
A weak or declining economy or political disruption could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our potential drugs, if approved. Russia’s invasion of Ukraine and sanctions against Russia are causing disruptions to global economic conditions.
A weak or declining economy or political disruption could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our potential drugs, if approved.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative sanctions, and our reputation. 55 In addition, during the course of our operations our directors, executives, and employees may have access to material, nonpublic information regarding our business, our results of operations, or potential transactions we are considering.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative sanctions, and our reputation.
Risks Related to Our Dependence on Third Parties Our patent protection and prosecution for some of our product candidates is dependent on third parties. While we normally seek and gain the right to fully prosecute the patents relating to our product candidates, there may be times when patents relating to our product candidates are controlled by our licensors.
While we normally seek and gain the right to fully prosecute the patents relating to our product candidates, there may be times when patents relating to our product candidates are controlled by our licensors.
We and our manufacturers are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products.
Our research, manufacturing and development processes, and those of our third-party contractors and partners, involve the controlled use of hazardous materials. We and our manufacturers are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of such materials and certain waste products.
We may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner, we determine from time to time. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.
We may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner, we determine from time to time.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn coordination with senior management, including the CFO, the head of IT works collaboratively across the Company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any material cybersecurity incidents in accordance with our incident response and recovery plans.
Biggest changeThe head of Information Technology works collaboratively across the Company to implement and maintain processes designed to protect the Company’s information systems from cybersecurity threats and to respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans. 58 Cross-functional teams throughout the Company support the cybersecurity program by addressing cybersecurity risks and responding to incidents, and provide relevant information to the head of Information Technology and senior management, who report significant cybersecurity matters to the Audit Committee, as appropriate.
Material Effects of Cybersecurity Incidents Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Material Effects of Cybersecurity Incidents Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company’s business strategy, results of operations, or financial condition, and are not reasonably likely to materially affect the Company’s business strategy, results of operations, or financial condition.
We seek to address material cybersecurity threats through a company-wide approach that addresses the confidentiality, integrity, and availability of our information systems or the information that we collect and store, by assessing, identifying and managing cybersecurity issues as they arise.
The Company seeks to address material cybersecurity threats through a company-wide approach that addresses the confidentiality, integrity, and availability of the Company’s information systems and the information that it collects and stores, by assessing, identifying and managing cybersecurity issues as they arise.
The Audit Committee receives regular presentations and reports on developments in the cybersecurity space, including risk management practices, recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends, and information security issues encountered by our peers and third parties.
The Audit Committee receives regular reports and presentations regarding cybersecurity matters, including the Company’s risk management practices, recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends, and information security issues encountered by the Company, its peers, and third parties. The Audit Committee also receives updates regarding significant cybersecurity risks and incidents, as appropriate.
Governance The Board, in coordination with the Audit Committee, oversees our risk management and information technology programs, including the management of cybersecurity threats.
The results of these activities are evaluated by management, reported to the Audit Committee, and used to inform ongoing enhancements to the Company’s cybersecurity risk management strategy. Governance The Board, in coordination with the Audit Committee, oversees the Company’s risk management and information technology programs, including the management of cybersecurity risks.
Item 1C. Cybersecurity. Our Board of Directors, in coordination with the Audit Committee of the Board of Directors (the Audit Committee), is responsible for overseeing our risk management and information technology programs of which cybersecurity is a critical element. Management is responsible for the administration of our cybersecurity policies, standards, procedures and practices.
Item 1C. Cybersecurity The Company’s management maintains a cybersecurity program, with direct oversight from the Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board”), to manage information, data, technology security, and procedures and practices.
Removed
Our cybersecurity policies, standards, procedures, and practices are based on the Center for Internet Security (CIS) Critical Security Controls, a framework for companies to establish and evaluate cybersecurity policies, procedures and practices.
Added
The cybersecurity program is informed in part by the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF), which provides guidance to help identify, assess, and manage cybersecurity risks relevant to the Company’s business.
Removed
Cybersecurity Risk Management and Strategy Our cybersecurity risk management strategy focuses on several issues: Identification and Reporting: We have implemented a comprehensive approach to assessing, identifying and managing material cybersecurity threats and incidents.
Added
Consistent with this approach, the Company applies cybersecurity practices informed by a Zero Trust-aligned security philosophy that emphasizes continuous verification, least-privilege access, and risk-based controls across its information systems. 57 Cybersecurity Risk Management and Strategy The Company maintains a cross-functional, enterprise-wide cybersecurity risk management program that is integrated into its overall risk management framework and operating processes.
Removed
Our program includes controls and procedures to timely identify, classify and escalate certain cybersecurity incidents to provide management visibility and allow for direction from management as to the public disclosure and reporting of material incidents in a timely manner. Technical Safeguards: We implement current information technologies to support our cybersecurity practices.
Added
Cybersecurity risks are evaluated alongside other enterprise risks as part of the Company’s broader risk assessment activities, including consideration of their potential impact on the Company’s business operations, financial condition, results of operations, and reputation. Senior management is actively involved in identifying, assessing, and managing cybersecurity risks, and the Board, primarily through the Audit Committee, provides oversight of these risks.
Removed
These technologies are designed to protect our information systems from cybersecurity threats and include email and internet protection, firewall and network security, intrusion detection and prevention systems, anti-malware endpoint detection and response, security event monitoring and alerting, high availability and replication, system configuration and asset management, backup and restoration processes, vulnerability and patch management, identity and access management and data encryption.
Added
Identification and Escalation of Cybersecurity Risks : The Company maintains processes and controls designed to identify, assess, and manage cybersecurity threats and incidents that could be material. These processes are intended to enable the timely identification, classification, and escalation of cybersecurity incidents to appropriate levels of management based on the nature, severity, and potential impact of the incident.
Removed
These technologies and controls are continuously evaluated and improved through vulnerability assessments and cybersecurity threat intelligence, as well as audits by third-party specialists and certifications. Incident Response and Recovery Planning: We have established and maintain a comprehensive incident response plan, designed to address our response to a cybersecurity incident.
Added
Management is informed of cybersecurity incidents through defined escalation protocols, which facilitate coordination among information technology, legal, finance, and other relevant functions and support management’s evaluation of incident severity, response actions, and disclosure considerations. Significant cybersecurity risks and incidents are reported to the Audit Committee, as appropriate, and the Audit Committee provides oversight of management’s response and remediation efforts.
Removed
Our cross-functional members comprise the incident response team to respond and disclose material incidents. The incident response plan defines pre-incident activities and preparation, classification of incidents, response team internal and external contacts, process flow of the response team, escalation of incidents to outside entities and law enforcement and frequency of review of the incident response plan.
Added
Cybersecurity Controls and Monitoring : The Company’s cybersecurity program includes administrative, technical, and physical safeguards designed to protect the confidentiality, integrity, and availability of the Company’s information systems. These safeguards are supported by ongoing monitoring activities, vulnerability assessments, and cybersecurity threat intelligence, and are periodically evaluated through internal reviews and independent third-party assessments.
Removed
We conduct regular tabletop exercises (i.e., discussion-based simulations) to test these plans and ensure personnel are familiar with their roles in a response scenario.
Added
The results of these activities are reviewed by management and used to inform enhancements to the Company’s cybersecurity risk management practices. Incident Response and Recovery : The Company maintains an incident response and recovery plan designed to guide the Company’s response to cybersecurity incidents.
Removed
Third-Party Risk Management: We maintain a comprehensive, risk-based approach to identifying and overseeing material cybersecurity threats presented by third parties, including vendors, service providers, contractors, consultants and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a material cybersecurity incident affecting those third-party systems, including any outside auditors or consultants who advise on our cybersecurity systems.
Added
The plan defines roles and responsibilities, escalation and reporting protocols, coordination with internal and external stakeholders, and post-incident review processes. A cross-functional incident response team, led by the Company’s head of Information Technology and including representatives from finance, legal, human resources, corporate communications, and executive leadership, supports the execution of the plan.
Removed
Third parties are regularly assessed to determine the need for cybersecurity auditing based on risk evaluation. 56 Education and Awareness: We provide regular, mandatory training and assessment for all levels of employees regarding cybersecurity threats as a means to equip our employees with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes, and practices.
Added
Management monitors incident response efforts and determines whether any cybersecurity incident is material and requires disclosure, and provides updates to the Audit Committee regarding significant incidents and remediation efforts, as appropriate. Third-Party Risk Management : The Company assesses and manages cybersecurity risks associated with third-party service providers as part of the Company’s overall cybersecurity risk management program.
Removed
We conduct periodic assessment and testing of our policies, standards, processes, and practices including audits by independent third-party specialists in a manner intended to address cybersecurity threats and events. Policies are reviewed and revised on a frequent basis for relevance and to maintain compliance.
Added
Third parties are evaluated using a risk-based approach that considers their access to the Company’s systems and data and the criticality of the services provided. Based on assessed risk levels, the Company applies oversight measures commensurate with the level of risk, which may include contractual requirements, assessments, audits, or other assurance activities.
Removed
The results of such assessments, audits, and reviews are evaluated by management and reported to the Audit Committee, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews.
Added
Training, Assessment, and Continuous Improvement : The Company provides regular cybersecurity training and awareness programs for employees designed to promote the identification and reporting of cybersecurity threats and reinforce the Company’s information security policies and practices. The Company also conducts periodic reviews, testing, and independent assessments of its cybersecurity program.
Removed
The Audit Committee also receives prompt and timely information regarding any cybersecurity risk that meets pre-established reporting thresholds, as well as ongoing updates regarding any such risk. On an annual basis, the Audit Committee discusses our approach to overseeing cybersecurity threats with our head of Information Technology (IT) and other members of senior management.
Added
On a quarterly basis, the Audit Committee discusses the Company’s approach to cybersecurity risk oversight with members of senior management. The Company’s head of Information Technology, who has over 30 years of relevant experience in information security, in coordination with senior management, including the Chief Financial Officer, is responsible for managing the Company’s cybersecurity risk management program.
Removed
Xencor's head of IT has 33 years of experience and has managed information technology in complex environments for 20 years.
Removed
Cross-functional teams throughout the Company address cybersecurity threats and respond to cybersecurity incidents support the success of our cybersecurity program.
Removed
Ongoing communications with these teams are designed to keep the head of IT and senior management informed about the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time, and report such threats and incidents to the Audit Committee when appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. Our principal laboratory and administrative facilities are currently located in Pasadena, California, which is located in the greater Los Angeles region. We currently lease 83,083 square feet of laboratory and office space in Pasadena, California (the initial lease). The lease became effective on August 1, 2022 and is for a term of 13 years.
Added
Item 2. Properties The following table summarizes the Company’s leased facilities as of February 25, 2026.
Removed
An additional 46,460 square feet of space adjacent to the existing space, is subject to a lease that begins on July 1, 2025 (the second lease). The second lease is for a term of 10 years and expires at the same time as the initial lease.
Added
Primary Use Approximate Square Footage Lease Expiration Remaining Lease Term (years) Monrovia, California Research and Office Facility 24,573 December 2026 0.8 Pasadena, California Corporate Headquarters and Lab Facility 129,543 July 2035 9.4 San Diego, California Research Facility 9,044 December 2027 1.8 On December 18, 2025, the Company entered into a sublease agreement to sublease a portion of its Pasadena space to a third party.
Removed
We also continue to lease 24,000 square feet of office and lab at our previous facility in Monrovia, California pursuant to a lease that expires December 31, 2025. In August 2023, we entered into a lease for 9,400 square feet of office space in San Diego, California.
Added
The sublease term commenced on February 1, 2026 and expires on January 31, 2031.
Removed
The term of the lease agreement began in September 2023 and expires in December 2027. We believe that our existing facilities are adequate to meet our current and future needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Item 3. Legal Proceedings. We are currently a party to an action initiated by Merus N.V. (Merus) in the District of Delaware alleging that our manufacture, use, offer for sale, sale, and/or importation of common light chain antibodies and heterodimeric antibodies 57 infringes certain claims of three Merus patents. Merus filed its complaint against us on August 5, 2024.
Added
Item 3. Legal Proceedings Legal Proceedings are set forth in the Company’s financial statement schedules in Part II, Item 8 of this Annual Report on Form 10-K and are incorporated herein by reference. See Note 7 - Commitments and Contingencies of Notes to Consolidated Financial Statements of Part II, “Item 8. Financial Statements and Schedules.”
Removed
Merus asserted claims of U.S. Patent Nos. 9,944,695, 9,358,286 and 11,926,859 (collectively, the Asserted Patents). Merus seeks a judgment of patent infringement, an order enjoining us from infringing the Asserted Patents, a damages award (together with interest), a declaration of willful infringement, and a finding that this case is exceptional.
Removed
On October 10, 2024, we filed a motion to dismiss the Merus complaint with prejudice under Rule 12(b)(6), in which we argued that all of the activities accused of infringement are covered by the 35 U.S.C.§ 271(e)(1) safe harbor. Merus filed its response to our motion on October 31, 2024, and we replied to Merus’ response on November 14, 2024.
Removed
Both Merus and we requested a hearing for the motion to dismiss. On February 11, 2025, we filed for inter partes review of Merus’ U.S. Patent Nos. 9,358,286 and 11,926,859 before the U.S. Patent and Trademark Appeal Board seeking a finding that certain claims of those patents are unpatentable.
Removed
We believe we have strong defenses to Merus’ claims, including defenses of invalidity and/or non-infringement, but there is no guarantee that we will prevail.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons in the graph are not intended to forecast or be indicative of possible future performance of our common stock. 58 The performance graph shall not be deemed to be incorporated by reference by means of any general statement incorporating by reference this Form 10-K into any filing under the Securities Act of 1933, as amended or the Exchange Act, except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed filed under such acts.
Biggest changePerformance Graph The performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.
Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Comparison of Five-Year Cumulative Total Return Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. 60
Any future determination related to our dividend policy will be made at the discretion of our Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board of Directors may deem relevant.
Any future determination to declare cash dividends will be made at the discretion of the Company’s board of directors, subject to applicable laws, and will depend on the Company’s financial condition, results of operations, capital requirements, general business conditions and other factors that the board of directors may deem relevant.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock began trading on The Nasdaq Global Market on December 3, 2013 under the symbol “XNCR.” Prior to such time, there was no public market for our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock trades on the Nasdaq Global Select Market under the symbol “XNCR.” As of February 17, 2026, there were approximately 163 holders of record of the Company’s common stock.
Dividend Policy We have never declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future.
Dividend Policy The Company has never declared or paid cash dividends on its common stock and does not currently anticipate paying any cash dividends in the foreseeable future.
Removed
On February 14, 2025, the closing price for our common stock as reported on the Nasdaq Global Market was $16.31. Holders of Record As of February 14, 2025, we had 70,461,934 shares of common stock outstanding held by approximately 166 stockholders of record.
Added
The graph compares the cumulative 5-year total return to stockholders on the Company’s common stock relative to the cumulative total returns of the Nasdaq Composite Index and the Nasdaq Biotechnology Index. The Company selected the Nasdaq Biotechnology Index because it believes the index reflects the market conditions within the industry in which the Company primarily operates.
Removed
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Added
The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 2020, in each of the Company’s common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index, with investment weighted on the basis of market capitalization.
Removed
Performance Graph The following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total return for our common stock, the Nasdaq Biotechnology Index (NBI) and the Nasdaq Composite Index (CCMP). The graph assumes an initial investment of $100 on December 31, 2019 and assumes reinvestment of the full amount of all dividends, if any.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther Income (Expense), Net Other expense, net, for the year ended December 31, 2024, consists primarily of non-cash interest expense related to the Ultomiris and Monjuvi Royalty Agreements, an impairment expense related to the investment in Zenas' preferred stock, and unrealized losses on equity securities, partially offset by interest income from marketable debt securities during the year, while other income, net, for the year ended December 31, 2023, consists primarily of interest income from marketable debt securities, partially offset by non-cash interest expense related to the Ultomiris and Monjuvi Royalty Agreements during the year. 71 Liquidity and Capital Resources Since our inception, our operations have been primarily financed through proceeds from public offerings, private sales of our equity, and payments received under our collaboration and development partnerships and licensing arrangements.
Biggest changeIn addition, impairment charges of $20.4 million were recognized in the first quarter of 2024 related to an equity interest in a private biotechnology company. LIQUIDITY AND CAPITAL RESOURCES We have historically financed our operations through payments received from product development partnerships and licensing arrangements, private placements of equity securities, and public offerings of common stock.
We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
We have based these estimates on assumptions that may prove to be wrong which would cause us to use our capital resources sooner than we currently expect.
Critical Accounting Policies, Significant Judgments, and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP).
CRITICAL ACCOUNTING ESTIMATES Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
We expect that our operating expenses will continue to increase in connection with ongoing and planned clinical and preclinical development of product candidates in our pipeline. We expect to continue our collaboration arrangements and will look for additional collaboration and licensing opportunities.
We expect that we will continue to increase our operating expenses in connection with ongoing and additional clinical and preclinical development of product candidates in our pipeline and candidates that we are co-developing with our partners.
Although it is difficult to predict our funding requirements, based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, together with interest thereon and expected milestone and 72 royalty payments will be sufficient to fund our operations into 2028.
Although it is difficult to predict our funding requirements, based upon our current operating plan, we expect that our existing cash, cash equivalents, marketable securities and certain potential milestone payments will fund our operating expenses and capital expenditure requirements through 2028.
On February 27, 2023, we entered into a sales agreement (the Sales Agreement) with SVB Securities LLC (the Agent) pursuant to which we may offer and sell, from time to time, through the Agent (the ATM Offering), shares of our common stock having an aggregate offering price of up to $200 million (the ATM Shares).
On February 27, 2023, we entered into an open market sale agreement (the “Sales Agreement”), pursuant to which we may, from time to time, offer and sell up to $200.0 million in shares of our common stock through SVB Securities LLC, acting as the sales agent. As of December 31, 2025, no shares have been issued under the Sales Agreement.
Funding Requirements We have not generated any revenue from product sales and do not expect to do so until we obtain regulatory approval and commercialize one or more of our product candidates. At the current stage of our clinical development programs, it will be some time before we expect to achieve this, and it is uncertain that we ever will.
As we are currently in the clinical stage of development, it will be some time before we expect to achieve this, and it is uncertain that we will ever commercialize one or more of our internal product development candidates.
The Black-Scholes option-pricing model requires the use of subjective assumptions, including volatility of our common 69 stock, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options and the fair value of the underlying common stock on the date of grant.
We account for forfeitures as they occur. The grant-date fair value of stock option awards is estimated using the Black-Scholes option pricing model, which requires the use of subjective assumptions, including expected term, expected volatility, risk-free interest rate, and expected dividend yield.
Overview We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered antibody therapeutics to treat patients with cancer and autoimmune diseases, who have unmet medical needs. We use our protein engineering capabilities to design new technologies and XmAb® drug candidates with improved properties.
OVERVIEW As discussed in Part I, Item 1, Business, we are a clinical-stage biopharmaceutical company focused on discovering and developing engineered antibody therapeutics to treat patients with cancer and other serious diseases, who have unmet medical needs.
Cash Flows The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below (in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ (202,188) $ (77,926) Investing activities (7,872) (111,065) Financing activities 197,152 189,219 Net increase (decrease) in cash and cash equivalents $ (12,908) $ 228 Operating Activities Net cash used in operating activities for the year ended December 31, 2024 increased as compared to the same period in 2023 primarily due to lower research collaboration and milestone revenues and the decrease in royalty payments received as a result of the sale of future royalties in 2023 as the majority of our royalty revenue is now non-cash royalty.
Cash Flows The following table sets forth the primary sources and uses of cash for each of the periods presented below: Year Ended December 31, 2025 2024 2023 Cash Flow from: Operating activities $ (135,117) $ (202,188) $ (77,926) Investing activities 139,985 (7,872) (111,065) Financing activities 8,232 197,152 189,219 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 13,100 $ (12,908) $ 228 During the year ended December 31, 2025, cash flow used in operating activities was $135.1 million, which was primarily due to the ongoing expenses related to our research and development programs and general and administrative expenses.
Valuation of Stock-Based Compensation We record the fair value of stock options and shares issued under our Employee Stock Purchase Plan (ESPP) to employees as of the grant date as compensation expense over the service period, which is generally the vesting period.
Stock-Based Compensation We recognize stock-based compensation expense for equity awards, including stock options, restricted stock units (“RSUs”), and shares issued under the Employee Stock Purchase Plan (“ESPP”), based on the estimated grant-date fair value of the awards. Compensation expense is recognized on a straight-line basis over the requisite service period, generally the vesting period.
External research and development expenses include preclinical testing costs, clinical trial costs and fees paid to external service providers. External service providers include CROs and contract manufacturing organizations (CMOs) to conduct clinical trials, manufacturing and process development, IND-enabling toxicology testing and formulation of clinical drug supplies. We expense research and development expenses as incurred.
External R&D expenses primarily include costs for preclinical studies, clinical trials, and fees paid to third-party service providers, including CROs and CMOs, for activities such as clinical trial management, manufacturing and process development, IND-enabling toxicology studies, and formulation of clinical drug supplies. Internal R&D expenses primarily include salaries, benefits, and other personnel-related costs, supplies, and allocated overhead, including facility costs.
If the tax position meets this threshold, the benefit to be recognized is measured as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Our policy is to record interest and penalties related to uncertain tax positions as a component of income tax expense.
The amount recognized represents the largest benefit that is more than 50% likely to be realized upon ultimate settlement. Judgment and Uncertainties: The determination of our income tax provision and related balances involves significant judgment and estimation.
The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Deferred tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We assess the realizability of our deferred tax assets and record a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized.
We expect 65 changes in future clinical trial expenses to be driven by changes in service provider costs and changes in clinical stage and patient enrollment.
Clinical trial expenses may fluctuate from period to period due to changes in trial stage, patient enrollment, service provider costs, and the initiation or completion of clinical programs. We expect this variability to continue as our development programs progress.
We account for research and development costs on a program-by-program basis except in the early stages of research and discovery, when costs are often devoted to identifying preclinical candidates and improving our discovery platform and technologies, which are not necessarily allocable to a specific development program.
External R&D costs are tracked on a program-by-program basis, except during early research and discovery stages, when efforts are focused on identifying preclinical candidates and enhancing discovery platforms and technologies that are not attributable to a specific program. Costs related to these activities are assigned to distinct preclinical pipeline or technology development projects.
For a comparison of our results of operations and financial condition for the years ended December 31, 2023 and 2022, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K/A, filed with the SEC on February 24, 2025.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis together with our financial statements and related notes included elsewhere in this Annual Report. The following discussion contains forward-looking statements that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
We expect to continue to receive additional payments from our collaborators for research and development services rendered, additional milestone, contingent payments, opt-in and royalty payments.
We expect to continue receiving payments from our collaborators for potential additional milestones, opt-ins, contingent payments, royalties, and research and development services rendered, if any. The receipt of future milestone and contingent payments is dependent on the achievement of certain research and development milestones by us or our partners and, as such, remains uncertain at this time.
As of December 31, 2024, we had $706.7 million in cash, cash equivalents and marketable debt securities, and based on our current plans and projections, we estimate this will provide necessary funding into 2028.
Based on our current operating plan, we believe that our cash and cash equivalents and marketable debt securities as of December 31, 2025 will be sufficient to satisfy our near-term capital and operating needs.
Investing Activities Net cash used in investing activities consists primarily of purchases of marketable debt securities available-for-sale, acquisition of intangible assets and purchases of property and equipment, offset by proceeds from maturities of marketable debt securities.
Cash provided by investing activities amounted to $140.0 million, primarily reflecting proceeds of $442.0 million from sales and maturities of marketable securities, offset by purchases of marketable securities totaling $298.9 million.
Other general and administrative expenses include intellectual property costs, facility costs, and professional fees for auditing, tax and legal services. 66 Other Income (Expense), Net For the year ended December 31, 2024, other expense, net, consists primarily of non-cash interest expense related to the Ultomiris and Monjuvi Royalty Agreements, an impairment expense related to the investment in Zenas' preferred stock, and unrealized losses on marketable equity securities, partially offset by interest income from marketable debt securities during the year, while for the year ended December 31, 2023, other income, net, consists primarily of interest income from marketable debt securities, partially offset by non-cash interest expense related to the Ultomiris and Monjuvi Royalty Agreements during the year.
General and administrative expenses for the year ended December 31, 2025 remained relatively consistent with the same period in 2024. Other Income (Expense) Other income (expense) primarily consists of interest income and expense, gains and losses on marketable equity securities, and asset impairment charges.
Removed
Our actual results could differ materially from those expressed or implied in any forward-looking statements as a result of various factors, including those set forth under the caption “Risk Factors” in Item 1A, and other documents we file with the Securities and Exchange Commission. Historical results are not necessarily indicative of future results.
Added
Leveraging our proprietary protein engineering capabilities, including our XmAb® Fc domain technologies, we design and advance novel antibody-based drug candidates with improved functionality and therapeutic potential. We advance selected candidates through clinical development, while also partnering with programs to access complementary development and commercialization capabilities.
Removed
We advance these candidates into clinical-stage development, where we are conducting Phase 1 and Phase 2 studies for a broad portfolio of programs, to determine which programs we advance into later stages of development and potentially commercialization, which programs we partner to access complementary resources to optimize development, and which programs we discontinue.
Added
Our portfolio spans early- and mid-stage clinical programs, and our strategic approach emphasizes disciplined portfolio management, including advancing, partnering, or discontinuing programs based on clinical data and development priorities. Three marketed medicines have been developed using our XmAb technologies. Refer to Part I, Item 1, Business, for a more detailed discussion of our business, technology platforms, pipeline, and key developments.
Removed
Our approach to protein design includes engineering Fc domains, the parts of antibodies that interact with multiple segments of the immune system and control antibody structure. The Fc domain is constant and interchangeable among antibodies, and our engineered XmAb Fc domains can be readily substituted for natural Fc domains.
Added
RESULTS OF OPERATIONS The following table summarizes our results of operations for the following periods indicated: Year Ended December 31, 2025 2024 2023 (in thousands) Revenues: License $ — $ 8,500 $ — Milestone 45,300 34,500 88,500 Royalties 80,276 67,493 55,795 Collaboration — — 30,320 Total revenues 125,576 110,493 174,615 Operating expenses: Research and development 239,434 227,686 253,598 General and administrative 63,644 61,215 53,379 Total operating expenses 303,078 288,901 306,977 Operating loss (177,502) (178,408) (132,362) Other income (expense), net (1) 87,869 (56,515) 12,728 Loss before income tax expense and noncontrolling interest $ (89,633) $ (234,923) $ (119,634) (1) Other income (expense), net, included interest income, interest expense, gain/loss on marketable equity securities and asset impairment charges.
Removed
We and our partners develop XmAb antibodies and other types of biotherapeutic drug candidates with improved properties and functionality, which can provide innovative approaches to potentially treating disease and clinical benefits over other treatment options.
Added
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenues Total revenue for the year ended December 31, 2025 increased by $15.1 million from the same period of 2024. The change was primarily driven by the revenue recognition associated with Alexion and Incyte license agreements as discussed below.
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Applications of our protein engineering technologies include multi-specific antibodies that 59 bind two or more different targets simultaneously, creating entirely new biological mechanism of anti-disease activity, or enhancement of antibody performance by increasing immune inhibitory activity, improving cytotoxicity, extending circulating half-life and stabilizing novel protein structures. Three marketed XmAb medicines have been developed with our protein engineering technologies.
Added
See Note 2, Collaboration and Licensing Agreements of the Notes to Consolidated Financial Statements of Part II, “Item 8. Financial Statements and Schedule” for more information on revenue recognized under the collaboration and license agreements. 61 Alexion: In January 2013, we entered into an Option and License Agreement (the “Alexion Agreement”) with Alexion.
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Refer to Part I, Item 1, " XmAb Bispecific Fc Domain and Multi-Specific Antibody Formats " and " Other XmAb Fc Domains " in the description of our business included in this Annual Report for a discussion of our core Fc technology platforms.
Added
Under the terms of the Alexion Agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds. Alexion exercised its rights to one target program, ALXN1210, which is now marketed as Ultomiris®.
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Strategic Portfolio Prioritization We are focused on developing T cell-engaging bispecific antibodies, which we believe hold great potential for the treatment of patients with solid tumors and autoimmune diseases, and beginning in the third quarter of 2023, we began aligning our portfolio to prioritize these programs, which now include XmAb819 (ENPP3 x CD3), XmAb541 (CLDN6 x CD3), plamotamab (CD20 x CD3) and XmAb657 (CD19 x CD3).
Added
Under the Alexion Agreement, we recognized $70.1 million and $58.2 million of non-cash royalty revenue for the years ended December 31, 2025 and 2024, respectively. Incyte: In June 2010, we entered into a Collaboration and License Agreement with MorphoSys AG, which was subsequently amended in 2012, 2020 and 2024 (as amended, the “MorphoSys Agreement”).
Removed
We have also prioritized a potential best-in-class anti-TL1A antibody, XmAb942 (Xtend TL1A), and a research-stage TL1A x IL-23p19 bispecific antibody program. We have implemented measures to align resources with our strategic plan for a focused pipeline and to strengthen our financial position.
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The MorphoSys Agreement provides MorphoSys AG with an exclusive worldwide license to our patents and know-how to research, develop, and commercialize our XmAb5574 product candidate (subsequently renamed MOR208 and tafasitamab) with the right to sublicense under certain conditions. If certain developmental, regulatory and sales milestones are achieved, we are eligible to receive future milestone payments and royalties.
Removed
In 2024, we narrowed the clinical development plan for our dual checkpoint inhibitor, vudalimab, in treating patients with advanced prostate and non-small cell lung cancers. We also concluded Phase 1 studies evaluating our XmAb564 and XmAb662 cytokine drug candidates and paused further development of both programs.
Added
In February 2024, Incyte assumed all of MorphoSys AG’s right, title and interest under the MorphoSys Agreement.
Removed
In addition, our cost-sharing obligations with Genentech, related to the development of the cytokine drug candidate efbalropendekin alfa, ended as of June 1, 2024, and Genentech became responsible for all development thereafter. In June 2024, we also announced that we would regain worldwide rights to plamotamab from J&J.
Added
In February 2025, the United States Food and Drug Administration (“FDA”) accepted Incyte’s submission of a supplemental biologics license application, triggering a $12.5 million milestone payment to the Company, and approved the application in June 2025, triggering an additional $25.0 million milestone payment to the Company. Both milestone payments were received by the Company in 2025.
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In September 2024, we announced new clinical development plans for plamotamab and announced new XmAb drug candidates to be evaluated for the treatment of patients with autoimmune and inflammatory diseases. We subsequently completed an underwritten public offering of common stock and pre-funded warrants, and we received gross proceeds of $201.3 million before deducting underwriting discounts, commissions and offering expenses.
Added
In addition, Incyte dosed two patients in a Phase 2 study on December 29, 2025, one patient with immune thrombocytopenia and one patient with autoimmune hemolytic anemia, triggering a $4.0 million milestone payment to the Company which was paid in January 2026.
Removed
During 2024, we initiated first-in-human studies to evaluate XmAb541, a first-in-class bispecific antibody being developed for patients with CLDN6-positive tumors including advanced ovarian cancer, and XmAb942, our high potency anti-TL1A antibody with extended half-life in development for people living with inflammatory bowel disease (IBD).
Added
In addition, under the MorphoSys Agreement, we recognized $10.2 million and $8.7 million of non-cash royalty revenue for the years ended December 31, 2025 and 2024. Amgen: In September 2015, we entered into a Research and License Agreement (the “Amgen Agreement”) with Amgen to develop and commercialize bispecific antibody product candidates using our proprietary XmAb® bispecific Fc technology.
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In early 2025, we paused further development of vudalimab and decided not to initiate expansion cohorts of XmAb808 in combination with pembrolizumab. Potential combination of XmAb808 with CD3 T-cell engaging bispecific antibodies is being evaluated.
Added
In December 2024, Amgen initiated a Phase 3 clinical study of xaluritamig, which triggered a $30.0 million milestone payment received in January 2025. Novartis: In June 2016, we entered into a Collaboration and License Agreement (the “Novartis Agreement”) with Novartis to develop and commercialize bispecific and other Fc-engineered antibody product candidates using our proprietary XmAb® technologies.
Removed
Advancements in Our Clinical Portfolio of XmAb Drug Candidates Our modular XmAb bispecific technology and protein engineering capabilities enable us to rapidly advance multiple drug candidates into clinical development. We are currently enrolling Phase 1 clinical studies for three wholly owned candidates to treat patients with many different types of serious diseases: XmAb819, XmAb541 and XmAb942.
Added
In 2024, Novartis initiated a Phase 2 clinical study for the Fc product candidate, resulting in $4.0 million of revenue recognized under the Novartis Agreement. Mabgeek: On December 22, 2023, we entered into a Technology License Agreement with Mabgeek. On June 21, 2024, the parties entered into Amendment No. 1 to the Technology License Agreement (as amended, the “Mabgeek Agreement”).
Removed
Two additional drug candidates are planned to enter clinical development in 2025: plamotamab and XmAb657. Oncology Programs XmAb819 (ENPP3 x CD3): XmAb819 is a first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with clear cell renal cell carcinoma (ccRCC).
Added
Under the Mabgeek Agreement, we received an upfront payment of $1.5 million, which was recognized as revenue, and is eligible to receive royalties in the low single digits on net sales of approved products.
Removed
XmAb819 engages the immune system and activates T cells for highly potent and targeted lysis of tumor cells expressing ENPP3, an antigen highly expressed on kidney cancers. ENPP3 is a differentially expressed target, with high level expression in RCC and low level expression on normal tissues.
Added
We evaluated the Mabgeek Agreement and determined that it contains a single performance obligation—access to a non-exclusive license to certain of our patents, which was transferred to Mabgeek in June 2024.
Removed
With two tumor-antigen binding domains and one T-cell binding domain, our XmAb 2+1 format enables antibodies to bind more avidly and selectively kill tumor cells with higher antigen density, potentially sparing normal cells. 60 We are conducting a Phase 1 study to evaluate XmAb819 in patients with advanced ccRCC.
Added
Mabgeek’s Phase 3 study achieved the milestone of database lock in Mainland China on November 20, 2025, triggering a $1.8 million milestone payment, which will be received in the first quarter of 2026.
Removed
In September 2024, we announced that initial evidence of anti-tumor activity had been observed in dose-escalation cohorts in the ongoing Phase 1 study, including RECIST responses, and the duration of treatment for several patients in earlier dose cohorts has extended beyond one year.
Added
Vir Bio: In 2019, we entered into a Patent License Agreement (the “Vir Bio Agreement”) with Vir Bio, granting a non-exclusive license to our Xtend technology for up to two targets. In March 2025, Vir Bio initiated a Phase 3 study for tobevibart, triggering a $2.0 million milestone payment to us, which was paid in the second quarter of 2025.
Removed
Cytokine release syndrome remained manageable, and the tolerability profile from recent dose cohorts, including no maximum tolerated dose being reached, supported continued dose escalation toward target dose levels. XmAb541 (CLDN6 x CD3): XmAb541 is a first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with CLDN6 expressing tumor types including ovarian cancer.
Added
Research and Development (R&D) Expenses R&D expenses consist of external and internal costs incurred in the discovery and development of product candidates and new technologies.
Removed
XmAb541 targets CLDN6, a tumor-associated antigen in ovarian cancer and other solid tumors, and CD3. The XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for CLDN6 over similar Claudin family members, such as CLDN9, CLDN3 and CLDN4. In April 2024, we dosed the first patient in a Phase 1 dose-escalation study XmAb541.
Added
We expect future R&D expenses to increase compared to recent periods if we successfully advance our clinical-stage or preclinical programs into later stages of development. 62 Our R&D activities are primarily designed, managed, and evaluated internally, while certain activities—such as GLP toxicology studies, clinical trials and cGMP manufacturing—are conducted by CROs and CMOs.
Removed
The Phase 1 dose-escalation study is ongoing, with characterization of target dose levels anticipated to begin during 2025. XmAb808 (B7-H3 x CD28): XmAb808 is a tumor-selective, co-stimulatory CD28 bispecific antibody that binds to the broadly expressed tumor antigen B7-H3 and is constructed with the XmAb 2+1 multivalent format.
Added
Internal research and development costs are managed and reviewed on an aggregate basis and are therefore not presented at a program-specific level.
Removed
Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation of T cells when the antibodies are bound to tumor cells. We are conducting a Phase 1 study to evaluate XmAb808 in combination with pembrolizumab in patients with advanced solid tumors.
Added
The following tables summarize our research and development expenses for the following periods indicated: Year Ended December 31, 2025 2024 (1) 2023 (1) (in thousands) External R&D expenses per program: XmAb819 (ENPP3 x CD3) $ 23,119 $ 10,735 $ 6,808 XmAb657 (CD19 x CD3) 13,767 2,644 — XmAb942 (Xtend TL1A) 13,419 18,654 946 XmAb541 (CLDN6 x CD3) 12,742 4,068 8,237 XmAb412 (TL1A x IL-23p19) 8,064 — — Plamotamab (CD20 x CD3) 7,229 6,015 1,787 XmAb808 (B7-H3 x CD28) 5,888 8,210 7,168 Other programs including research and early stage 18,229 28,037 40,407 Wind down costs of terminated programs 17,224 27,420 54,328 Total external R&D expenses 119,681 105,783 119,681 Internal R&D expenses 94,783 91,948 99,401 Stock based compensation 24,970 29,955 34,516 Total R&D expenses $ 239,434 $ 227,686 $ 253,598 (1) We have retrospectively adjusted segment operating expenses for the years ended on December 31, 2024 and 2023 to reflect the significant segment expenses as currently reviewed by our CODM.
Removed
In September 2024, we presented a clinical update on the ongoing Phase 1 study. The majority of patients enrolled into the study were men with mCRPC. In this group of patients, prostate specific antigen (PSA) declines were observed during the four-week monotherapy safety run-in period.
Added
Total R&D expenses increased by $11.7 million for the year ended December 31, 2025, compared to the same period in 2024. The increase was primarily driven by higher external and internal costs incurred associated with the programs listed above, which are aligned with our strategic research and development priorities, partially offset by lower stock-based compensation expense in the current period.
Removed
In November 2024, we announced that within the range of expected active doses, two patients experienced dose-limiting toxicities as defined in the study protocol. The maximum tolerated dose was not defined per protocol.
Added
R&D expenses may fluctuate from period to period depending on the timing, progress, and level of activity of each program. General and Administrative Expenses General and administrative expenses consist of salaries, stock compensation, professional services related to legal, audit, consulting, patent filings, business insurance and technology expenses, facilities, and depreciation and amortization.
Removed
As the data were analyzed, back-fill enrollment proceeded in the next lower dose cohort, a dose within the range of target doses which was determined to be tolerable. Dose escalation resumed late in the fourth quarter of 2024, and enrollment in the final dose-escalation cohort is complete.
Added
Other income increased by $144.4 million for the year ended December 31, 2025 compared to the same period in 2024. The change for the year ended December 31, 2025, was primarily driven by a combination of realized and unrealized gains from the marketable equity securities.
Removed
Data from the study are expected to inform future development decisions for the program. Potential combination with CD3 T-cell engaging bispecific antibodies is being evaluated. Vudalimab (PD-1 x CTLA-4): Vudalimab is a bispecific antibody that targets PD-1 and CTLA-4, two immune checkpoint receptors, to selectively activate the tumor microenvironment.
Added
Research and 63 development activities have required significant capital investment since the Company’s inception and are expected to continue to require significant cash expenditure as the Company’s pipeline continues to expand. As of December 31, 2025, we had $610.8 million of cash, cash equivalents, and marketable debt securities compared to $706.7 million as of December 31, 2024.
Removed
In February 2024, we announced data from a Phase 2 study of vudalimab in patients with clinically-defined high-risk mCRPC, in which the initial data indicated that vudalimab monotherapy was generally well tolerated and was associated with response to treatment in multiple patients who had visceral or lymph node metastases.
Added
We believe our current financial resources are sufficient to fund our operations through at least the next twelve months from the date of the issuance of these consolidated financial statements.
Removed
In March 2024, we disclosed additional clinical data showing the (i) characteristics of patients with clinical response (n=5/12) and (ii) per label rates of immune-mediated hepatitis for ipilimumab (anti-CTLA-4; 1 mg/kg) + nivolumab (anti-PD-1; 3 mg/kg) combination treatment as generally comparable to the rate of all hepatobiliary disorder adverse events including immune-mediated hepatitis for vudalimab among all patients treated at doses greater than or equal to 10 mg/kg.
Added
Funding Requirements We have not generated any revenue from the sale of products developed by us to date and do not expect to do so until we obtain regulatory approval of and commercialize one or more of our internal product development candidates.
Removed
In the fourth quarter of 2024, we completed enrollment in two studies of vudalimab in patients with mCRPC and in Part 1 of a study in patients with locally advanced or metastatic non-small cell lung cancer. Xencor has paused further development of vudalimab and has prioritized resources to advance other pipeline programs.
Added
While overall operating expenditures remained consistent with the prior year, the change was primarily driven by higher milestone receipts in 2025, including $30.0 million received from Amgen during the year ended December 31, 2025, which had been recognized as revenue in December 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+3 added−2 removed0 unchanged
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks primarily related to changes in interest rates arising from our investing activities. Our cash, cash equivalents and marketable securities are subject to interest rate risk, which may affect interest income and, to a lesser extent, the fair value of our investment portfolio.
Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 10.0% change in interest rates would not have a material effect on the fair market value of our portfolio.
Due to the relatively short-term nature and conservative risk profile of our investment portfolio, we do not believe that a sudden change in market interest rates would have a material adverse effect on the fair value of our investments, results of operations or cash flows.
Accordingly, we would not expect our operating results or cash flows to be affected to any significant degree by the effect of a sudden change in market interest rates on our investment portfolio. We do not believe that our cash, cash equivalents and marketable securities have significant risk of default or illiquidity.
Accordingly, an immediate change in interest rates would not be expected to materially impact our financial condition. We do not believe that our cash, cash equivalents and marketable securities are subject to significant risk of default or illiquidity.
Removed
While we believe our cash, cash equivalents and marketable securities do not contain excessive risk, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in market value.
Added
Adverse changes in interest rates may occur as a result of changes in market liquidity, credit conditions or general economic factors. Our investment activities are governed by our Investment Policy, which is designed to preserve principal, maintain liquidity to meet operational needs and optimize investment returns within acceptable risk parameters.
Removed
In addition, we maintain significant amounts of cash and cash equivalents at one or more financial institutions that are in excess of federally insured limits. 74
Added
Under this policy, we primarily invest in high-quality corporate securities and U.S. government agencies with strong credit ratings. We classify our marketable securities as available-for-sale, which provides flexibility to manage our portfolio in response to market conditions, liquidity needs and investment opportunities.
Added
However, we maintain balances at financial institutions that may exceed federally insured limits, and while management believes these institutions are creditworthy, we cannot provide assurance that future adverse events will not affect the value or liquidity of such holdings. 67

Other XNCR 10-K year-over-year comparisons