Xencor Trial Results Webcast - XENCOR INC

Explicit Guidance:

• No explicit financial guidance (revenue, earnings, margins, capex, opex, cash flow, tax rate, share count, dividends, or buybacks) provided for any period.

Business-Segment Outlook:

• Phase 3 Study (XMAP819): A registration-enabling Phase 3 study for XMAP819 in advanced clear cell renal cell carcinoma (ccRCC) is expected to start in 2027.
• Dose Selection: The putative recommended Phase 3 dose (RP3D) is 400 mcg/kg IV target dose; data updates for this cohort (approx. 20 patients) and subcutaneous (SubQ) dosing are expected in the first half of 2027.
• Combination Studies: Plans exist to move XMAP819 into earlier lines of treatment (e.g., combination with PD-1 inhibitors for frontline studies) and explore rational combinations with standard-of-care therapies.
• Pipeline Expansion: Ongoing Phase 1 expansion cohorts for papillary RCC, microsatellite-stable (MSS) colorectal cancer, and non-squamous non-small-cell lung cancer (NSCLC) are enrolling; enrollment in these cohorts requires IHC confirmation of strong ENPP3 expression.
• Pivotal Timeline: Management expects XMAP819 to be the third XMAP platform program entering pivotal studies, following ASP2138 (Astellas) and Zaloridamig (Amgen), with the goal of achieving the first commercial stage program fully owned by Zencore approaching 2030.
• Regulatory Milestones: An End-of-Phase 1 meeting with the US FDA is scheduled for the first half of 2027 to discuss accelerated and full approval pathways.

Market and Competitive Outlook:

• Target Market: The post-IO and two prior VEGFR TKI market in the US represents >9,000 eligible patients annually; this population includes those who have exhausted all three current standard-of-care mechanisms (IO, VEGFR TKI, and HIF-2 alpha inhibitors).
• Commercial Potential: The addressable global market for renal cell carcinoma is currently >$11 billion and expected to grow through 2030; management views the initial approval in later lines as a pathway to "blockbuster status" ahead of earlier-line approvals.
• Competitive Advantage: XMAP819's 2+1 platform offers superior tumor vs. normal selectivity compared to 1+1 bispecifics, aiming to broaden therapeutic windows and reduce the cumulative toxicity often seen with VEGFR TKIs or standard immunotherapies.
• Pivotal Control: The Phase 3 trial is designed to power for a PFS hazard ratio of 0.7 against an active standard-of-care control (tivozanib), leveraging data from the Tenevo2 trial as a benchmark for current therapeutic limitations.

Macro / Industry Outlook:

• Regulatory Strategy: Zencore aims to utilize an accelerated approval pathway based on high response rates in the lower bounds of confidence intervals, with a confirmatory study planned for full approval.
• Dosing Convenience: Management anticipates a trend toward reduced inpatient monitoring (peeling back overnight stays during priming) to facilitate community administration, aligning with industry patterns seen in other TCE drugs (e.g., Amgen's Zaloridamig, Tarlatamab).

Strategic Initiatives:

• Platform Validation: The XMAP 2+1 platform is positioned as the core technology for Zencore, with XMAP819 serving as the first potentially commercial program to validate the modality for solid tumors.
• Formulation Strategy: Subcutaneous (SubQ) development is running parallel to IV; data is expected in H1 2027. Three paths are under consideration: using SubQ for the Phase 3 trial as the primary presentation, utilizing SubQ as a lifecycle optimization, or proceeding solely with IV if SubQ proves inferior.
• Partnerships: Two external partners are advancing XMAP assets: a Phase 3 program with Astellas (ASP2138) and a partnership with Amgen (Zaloridamig). Management is also awaiting data updates from J&J regarding a combination of Pasiridamig with their CD28 bispecific.
• Manufacturing: Commercial-scale manufacturing is established via CDMOs in the U.S., with drug substance/product stability for 60 months and a high-titer cell bank scalable to 2,000L.

Risks and Headwinds to Outlook:

• Toxicity Management: While tolerability is expected to be favorable, management notes that toxicity (CRS, rash, transaminitis) occurs primarily during the priming period; dose adjustments or interruptions could impact the study timeline or commercial feasibility.
• Regulatory Uncertainty: The specific patient numbers and endpoints required for accelerated approval must be finalized in discussions with health authorities during the End-of-Phase 1 meeting.
• Clinical Milestones: Success relies on the durability of responses and the ability to maintain EC80+ coverage without cumulative toxicity; delays in data maturation or negative readouts in expansion cohorts (papillary RCC, lung, colon) could impact the timeline.
• Market Dynamics: The market for triple-class exposed patients is currently limited, though expected to grow as new approvals (e.g., Belzutafan/Levatmib combination) enter the landscape.

Management Tone on the Future:

• Confidence: Management expresses high confidence ("optimistic," "excited," "high watermark") regarding the XMAP819 data, citing unprecedented response rates (45% at 400 mcg/kg) in heavily pretreated populations compared to current standards of care.
• Strategic Focus: The tone indicates a singular focus on XMAP819 as the catalyst for Zencore's transition to a commercial-stage company, with resource allocation matched to the 2027 clinical milestones.
• Momentum: There is a clear sentiment of accelerating pace, with "parallel efforts" to maximize regulatory approvals across the treatment landscape aiming for the start of approvals by 2030.

Miscellaneous:

• Dose Escalation Read: One patient in the 400 mcg/kg cohort who elected to dose-escalate to 100 mcg/kg (after 28 months of treatment) experienced a deepening of response.
• Subgroup Performance: A cohort of patients triple-treated (IO, VEGFR TKI, HIF-2 inhibitor) showed a 35% response rate and 78% disease control rate; a cohort with two prior VEGFR TKIs showed a 45.2% response rate.
• Scanning Protocols: Management acknowledges that in this unique drug class, scan timing (potentially extending to 8-10 weeks) may be adjusted to capture delayed responses (emerging in 25% of patients >4 months) that might otherwise be misclassified as progression.