Xencor Trial Results Webcast - XENCOR INC

Explicit Guidance:

• No specific revenue, earnings, margin, or cash flow guidance provided; company remains pre-revenue biopharmaceutical.
• Clinical Milestones (2027):
  • Phase 1b data for Plumodimab in Rheumatoid Arthritis (RA) due at ACR in "two weeks" (relative to call date).
  • Phase 1 data for XMAB412 (anti-IL-23) expected in 2027.
  • Primary endpoint data from global Phase 2b study of XMAB942 (Ulcerative Colitis) expected in 2027.
  • Phase 1b data for XMAB819 Subcutaneous (SC) formulation expected in the first half of 2027.
  • Confirmatory efficacy data (N=20+) for XMAB819 IV 400 mcg/kg target dose expected in the first half of 2027.
  • End-of-Phase I meeting with FDA scheduled for the first half of 2027.
  • Planned initiation of pivotal Phase 3 registration trial in 2027.
  • Target date for potential first regulatory approval (accelerated or full) by 2030.
• Capital Requirements: Continued focus on executing Phase 1 and preparing for Phase 3; no specific CapEx guidance.

Business-Segment Outlook:

• XMAB819 (Renal Cell Carcinoma):
  • Indication Expansion: Active enrollment opened for Papillary RCC, Microsatellite-Stable (MSS) Colorectal Cancer, and Non-Squamous Non-Small Cell Lung Cancer (NSCLC). Enrollment in non-clear cell cohorts is contingent on confirmed high ENPP3 expression via IHC.
  • Dose Selection: 400 mcg/kg IV selected as the putative Recommended Phase 3 Dose (RP3D); 400 mcg/kg is the highest tested dose showing a continued dose-response for disease control without increased toxicity compared to lower doses.
  • Efficacy Trajectory: 45.5% confirmed Objective Response Rate (ORR) at 400 mcg/kg in a heavily pretreated population; median time to response 2.7 months; durable responses extending up to 2.5 years observed.
  • Combination Strategy: Planning to explore combinations with standard-of-care PD-1 inhibitors (e.g., nivolumab, pembrolizumab) for earlier lines of treatment; preclinical data suggests PD-1 inhibition amplifies XMAB819 activity without overlapping toxicity.
  • Formulation: Subcutaneous (SC) development ongoing; aiming to demonstrate feasibility for reduced monitoring/hospitalization similar to industry peers (e.g., Amgen).
• Other Pipeline Programs:
  • ASP2138 (Astellas Partnership): Ongoing Phase 3 program in gastric cancer; data cited as positive for combination with chemo/PD-1 in frontline setting.
  • Zaloridamab (Amgen Partnership): Ongoing Phase 3 program; awaiting update on combination with J&J's G9401 (XNAB CD28 bispecific).
  • Plumodimab: Phase 1b expansion for RA (RA).
  • XMAB412: Bispecific targeting TNF-alpha/IL-23 (inflammatory bowel disease/colitis).
  • XMAB942: Global Phase 2b study in Ulcerative Colitis.
• Manufacturing: Established high-titer cell banks, stable drug substance/product (60 months liquid), and commercially validated CDMOs in the U.S.; scalable to 2,000 liters.

Market and Competitive Outlook:

• Clear Cell RCC Market: Addressable global market >$11 billion, expected to grow through 2030.
• Target Population: >9,000 eligible patients annually in the U.S. for the post-PD-1/VEGFR TKI (third-line) setting; significant unmet need in triple-class exposed patients (IO, VEGFR TKI, HIF-2 inhibitor).
• Competitive Positioning: XMAB819 positioned as a first-in-class "2+1" T-cell engager with superior selectivity over 1+1 formats; aims to avoid cumulative toxicity associated with VEGFR TKIs and offer durable responses.
• Commercial Strategy: Targeting full approval for later-line monotherapy first, with potential for accelerated approval based on high ORR in specific subgroups (triple-class exposed); aiming to expand into frontline settings and broader indications (Colorectal, Lung, Papillary RCC) by 2030.
• Treatment Paradigm Shift: Aim to reduce reliance on recycling VEGFR TKIs across lines of treatment; potential to create an immunotherapy-based regimen.

Macro / Industry Outlook:

• Regulatory Pathway: Expecting discussions with FDA for an accelerated approval pathway for the monotherapy indication in later-line settings; planning a global Registration-Enabling Study (Phase 3) with an active control arm (Tivozanib) to support full approval.
• Clinical Trial Design: Aiming for a PFS hazard ratio of 0.7 against Tivozanib (based on Tivozanib's 10.5% ORR and 5.4-month median PFS in the same setting) for the Phase 3 study.
• Standard of Care Context: Current market options in third-line RCC remain limited (Tivozanib, Belzutafan, Lenvatinib); XMAB819 expected to outperform existing monotherapies in ORR and durability.

Strategic Initiatives:

• Phase 3 Trial Design: Registration-enabling study to start in 2027; designed as a Global Randomized Controlled Trial (RCT) comparing XMAB819 vs. Tivozanib in patients previously exposed to PD-1/PD-L1 and VEGFR TKIs.
• Subcutaneous Formulation: Parallel development track; data expected in H1 2027 to inform final go/no-go decision on SC as primary commercial presentation or lifecycle addition.
• Basket Studies: Accelerating enrollment in "proof-of-concept" basket studies for ENPP3-positive tumors (Papillary RCC, MSS CRC, NSCLC) to broaden label potential.
• Monitoring Reduction: Actively piloting "reduced monitoring cohorts" to minimize inpatient overnight stays during priming (similar to Amgen's Charitable/Charlatumab), aiming for community-based administration.
• Partnerships: Leveraging existing collaborations with Amgen (Zaloridamab) and Astellas (ASP2138) to validate the "2+1" platform.

Risks and Headwinds to Outlook:

• Clinical Success: Reliance on successful Phase 3 enrollment and data readout in 2027; any safety signals or lack of efficacy in Phase 3 could delay or prevent approval.
• Regulatory Uncertainty: Final approval path (accelerated vs. full) contingent on FDA discussions at the End-of-Phase I meeting in H1 2027; metrics for accelerated approval (ORR lower bound, duration of response) must be met.
• Tumor Heterogeneity: Efficacy in non-clear cell indications (Lung, Colorectal, Papillary RCC) is not yet proven; outcomes depend on variable ENPP3 expression levels.
• Competitive Landscape: New approvals (e.g., Belzutafan + Lenvatinib) may alter the standard of care and patient eligibility in the third-line setting.
• Toxicity Management: While CRS and rash are manageable, future toxicity profiles in combination settings (e.g., with PD-1s) require validation; cumulative toxicity of partner drugs remains a variable.
• Execution: Ability to execute complex Phase 3 trials and secure manufacturing capacity for global launch.

Management Tone on the Future:

• Confidence Level: High optimism regarding the clinical data of XMAB819, describing results as a "high watermark" for Phase 1 RCC trials and "breakthrough potential."
• Strategic Certainty: Management views XMAB819 as the company's "first potential commercial program" and is allocating resources specifically to accelerate this asset to market.
• Forward Momentum: Described as a "pivotal year" for 2027; tone is aggressive and execution-focused, aiming to maximize regulatory approvals by 2030.
• Hedges: Standard forward-looking statement disclaimers regarding risks, uncertainties, and the possibility of data changes; regulatory pathways are described as "expectations" pending FDA discussions.