Xencor, Inc. (NASDAQ:XNCR) is a clinical-stage biopharmaceutical company focused on developing innovative antibody therapeutics to treat patients with cancer and other serious diseases. The company's modular XmAb® technology platforms enable the rapid advancement of a diverse pipeline of product candidates designed to address significant unmet medical needs.

Financials

In 2023, Xencor reported annual revenue of $168.3 million and a net loss of $126.1 million. The company generated $85.1 million in annual operating cash flow and $63.9 million in annual free cash flow. These financial results demonstrate Xencor's ability to generate substantial revenue from its partnerships and licensing agreements, while also investing heavily in its robust clinical pipeline.

Business Overview

Xencor's clinical pipeline is anchored by its bispecific antibody programs, which leverage the company's proprietary XmAb® technology to create novel molecules that can engage multiple targets simultaneously. The focus of Xencor's pipeline is on T-cell engagers for solid tumors, an area with growing promise but significant challenges.

Key Programs

One of Xencor's lead programs is vudalimab, a bispecific antibody that targets the immune checkpoint receptors PD-1 and CTLA-4. Vudalimab is being evaluated in two Phase 2 studies in metastatic castration-resistant prostate cancer (mCRPC), both as a monotherapy and in combination with chemotherapy. In the monotherapy study, Xencor recently reported encouraging data, with a 35% RECIST response rate and a 50% disease control rate in a heavily pretreated patient population. These results compare favorably to historical data for late-line chemotherapy in this setting, and the safety profile of vudalimab appears manageable, with only one Grade 5 immune-related adverse event observed across over 240 patients treated to date.

Xencor is also advancing several other bispecific T-cell engager programs, including XmAb819, which targets ENPP3 and CD3 for the treatment of renal cell carcinoma, and XmAb808, which targets B7-H3 and CD28 and is being evaluated in combination with pembrolizumab for the treatment of advanced solid tumors. Additionally, the company's XmAb541 program, targeting CLDN6 and CD3, is expected to enter the clinic in the first half of 2024 for the treatment of ovarian cancer and other CLDN6-expressing tumors.

Partnerships and Licensing

Xencor's partnerships and licensing agreements have also been a significant driver of the company's success. The company's Xtend™ Fc technology is utilized in Alexion's Ultomiris®, which has received multiple regulatory approvals for the treatment of paroxysmal nocturnal hemoglobinuria, atypical hemolytic uremic syndrome, generalized myasthenia gravis, and neuromyelitis optica spectrum disorder. Xencor earned $9.4 million in non-cash royalties from Alexion during the first quarter of 2024.

Additionally, Xencor's collaboration with Genentech for the development and commercialization of novel IL-15 collaboration products, including efbalropendekin alfa (XmAb306/RG6323), was recently amended to a royalty and milestone-based arrangement, with Xencor eligible to receive up to $600 million in potential milestones and tiered royalties.

Liquidity

Xencor's strong balance sheet, with $646.7 million in cash, cash equivalents, restricted cash, and marketable debt securities as of March 31, 2023, provides the company with the resources to advance its pipeline and execute on its strategic priorities. The company expects this cash runway to fund its operations into 2027.

Outlook

Looking ahead, Xencor's key priorities for 2024 include:

1. Advancing its solid tumor bispecific pipeline, with a focus on its CD3 and CD28 T-cell engager programs, as well as the continued development of vudalimab. 2. Selecting a new IND candidate from its discovery efforts on additional CD3 and CD28 bispecifics. 3. Concluding the Phase 1 studies for its cytokine programs, XmAb564 and XmAb662, and evaluating the future development path for these assets based on data and competitive landscape.

Conclusion

Xencor's diverse pipeline, strong financial position, and experienced management team position the company well to continue its progress in developing innovative antibody therapeutics to address significant unmet medical needs in oncology and other therapeutic areas.