Xencor — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the third quarter ended September 30, 2026, was $116.5 million, compared to $21.0 million in the same period of 2025.
• Net income attributable to Xencor for the third quarter was $39.4 million ($0.50 per share fully diluted), compared to a net loss of $6.0 million ($(0.08) per share) in 2025.
• Research and development expenses were $84.3 million for the quarter, up from $54.4 million in 2025, driven by higher internal and external development costs.
• General and administrative expenses were $9.4 million for the quarter, down from $14.2 million in 2025, primarily due to a non-recurring legal expense recovery.
• Other income, net, was $16.4 million for the quarter, compared to $41.5 million in 2025, due to lower unrealized gains on equity securities.
• Cash, cash equivalents, and marketable debt securities totaled $555.7 million as of September 30, 2026, down from $610.8 million as of December 31, 2025.
• Cash inflows included $52.5 million from the Alexion settlement agreement and $66.9 million from the sale of an equity security.
• Total liabilities decreased to $210.1 million as of September 30, 2026, from $239.9 million as of December 31, 2025.
• Total stockholders' equity was $560.4 million as of September 30, 2026, compared to $635.6 million as of December 31, 2025.

Guidance and Future Outlook:

• Xencor expects to end 2026 with between $480 million and $500 million in cash, cash equivalents, and marketable debt securities.
• The company anticipates having sufficient cash resources to fund research and development programs and operations into 2029.
• Management expects the accelerating tempo of clinical development to present multiple opportunities for momentum into 2027.
• Xencor plans to engage with the FDA in the first half of 2027 regarding a potential accelerated approval pathway for XmAb819 in advanced ccRCC.
• By the end of 2027, Xencor anticipates initiating a global randomized Phase 3 study for XmAb819 against tivozanib in advanced ccRCC.
• Xencor expects to receive a final payment of $52.5 million from the Alexion settlement in the third quarter of 2027.

Business Segments and Product Lines:

• XmAb819 (ENPP3 x CD3): Expansion cohorts for advanced clear cell renal cell carcinoma (ccRCC) have completed enrollment. At the October 1, 2026 data cut, the 400 mcg/kg IV dose (n=11) showed a confirmed objective response rate of 45.5% and an unconfirmed rate of 55%. The 400 mcg/kg IV dose was selected as the recommended Phase 3 dose.
• XmAb819 Sub-Studies: Part C is enrolling patients with ENPP3+ papillary RCC, colorectal cancer, and non-small cell lung cancer. Part D is enrolling patients with IMDC intermediate-to-poor-risk ccRCC. Part F is planned as a safety study for combination with nivolumab.
• XmAb541 (CLDN6 x CD3) and XmAb808 (B7-H3 x CD28): The Phase 1 dose-escalation study is ongoing and expected to reach the target dose range in 2027.
• XmAb942 (anti-TL1A): The XENITH-UC Phase 2b study in ulcerative colitis is on track for blinded interim analysis around year-end 2026 and primary endpoint analysis in the second half of 2027.
• XmAb412 (TL1A x IL23p19): Enrollment of healthy participants is ongoing, with initial data expected in the first half of 2027.
• Plamotamab (CD20 x CD3): Early dose-escalation data from the Phase 1 study in rheumatoid arthritis will be presented at the ACR Convergence conference in November 2026.
• XmAb657 (CD19 x CD3): An update on the Phase 1 study progress is planned for the second half of 2026.

Market and Competitive Landscape:

• Amgen Partnership: Amgen is advancing two Phase 3 studies of xaluritamig (STEAP1 x CD3) in metastatic castration-resistant prostate cancer (mCRPC). Xencor is eligible for up to $225 million in future milestone payments and mid- to high-single digit tiered royalties.
• Astellas Partnership: Astellas dosed the first patient in a Phase 3 trial for ASP2138 (CLDN18.2 x CD3) in gastric/GEJ adenocarcinoma, triggering a $25.0 million milestone payment. Xencor is eligible for up to $207.5 million in future milestones and high-single to low-double digit tiered royalties.
• Zenas BioPharma Partnership: Zenas submitted a BLA for obexelimab (CD19) for IgG4-related disease in May 2026. Bristol Myers Squibb submitted a marketing authorization application in Japan in Q3 2026, triggering a $2.5 million milestone payment. Xencor is eligible for up to $447.5 million in future milestones and mid-single to mid-teen tiered royalties.
• Xencor owns 1.0 million shares of common stock in Zenas as of September 30, 2026.

Risks and Challenges:

• Forward-looking statements regarding clinical trial results, regulatory approvals, and milestone achievements are subject to significant risks, including the possibility that preliminary data may not support continued development.
• Risks include the potential loss of key management members, decline in the fair value of marketable equity securities, and uncertainties in the drug discovery and manufacturing process.
• Actual results may differ materially from expectations due to known and unknown risks described in the company's Form 10-K and subsequent filings.

Management Commentary and Tone:

• CEO Bassil Dahiyat described the clinical data for XmAb819 in advanced ccRCC as "compelling" and noted that plans to move the asset into earlier lines of treatment are underway.
• Management expressed confidence that the accelerating tempo of clinical development across the portfolio will provide momentum into 2027.
• The tone regarding the autoimmune portfolio was positive, highlighting the on-track status of the XENITH-UC study and the upcoming presentation of data for plamotamab and XmAb412.

Other Key Points:

• Revenue in Q3 2026 was primarily driven by royalty revenue from Alexion and Incyte, and milestone revenue from Astellas.
• The company selected the 400 mcg/kg IV dose for XmAb819 as the recommended Phase 3 dose based on maturing data from 11 patients and additional enrolled patients.
• XmAb412 is Xencor's first novel bispecific antibody developed using the XenLock™ platform.
• The XENITH-UC study primary endpoint is the percentage of patients achieving clinical remission defined by the modified Mayo score at week 12.
• Amgen demonstrated that four- to six-hour fully outpatient monitoring after cycle 1 step-up dosing for xaluritamig was feasible.