ENPP3

-- Clinical development focus on high-potential XmAb® T cell engagers and selective dual checkpoint inhibitor, vudalimab -- -- Vudalimab (PD-1 x CTLA-4) monotherapy generally well tolerated with encouraging clinical benefit for patients with high-risk mCRPC who have advanced beyond standard of care therapy -- -- Management to Host Conference Call at 4:30 p.m. ET Today -- PASADENA, Calif.--(BUSINESS WIRE)-- Xencor Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies for the treatment of cancer and other serious diseases, today reported financial results for the fourth quarter and full year ended December 31, 2023 and provided a review of recent business and clinical highlights. The Company also presented encouraging early clinical data from its Phase 2 study of vudalimab monotherapy for patients with clinically defined high-risk metastatic castration-resistant prostate cancer (mCRPC). “We begin 2024 with a focus on advancing our high-potential XmAb CD3 and CD28 T-cell engagers for the treatment of patients with solid tumors and the evaluation of our PD-1 x CTLA-4 dual checkpoint inhibitor, vudalimab, in patients with metastatic castration-resistant prostate cancer and front-line non-small cell lung cancer,” said Bassil Dahiyat, Ph.D., president and chief executive officer of Xencor. “This focused pipeline is supported by our strong financial foundation. In 2023, we significantly strengthened our balance sheet with our partial royalty monetization and milestone payments and royalties from our partners, for which we received more than $325 million in proceeds. “The growing validation of T-cell engagers in solid tumors has encouraged us to build a range of new XmAb bispecific T-cell engager candidates, and we plan to select our next candidate for clinical development this year.” Vudalimab (PD-1 x CTLA-4) Monotherapy in Patients with High-Risk mCRPC Xencor is advancing vudalimab, a selective dual checkpoint inhibitor, in multiple clinical studies, including a Phase 2 monotherapy study (Study XmAb717-05) in patients with clinically defined high-risk metastatic castration-resistant prostate cancer (mCRPC). Early data from the study indicates that vudalimab has been generally well tolerated and associated with response to treatment in multiple patients who have visceral or lymph node metastases. At the February 7, 2024 data cut off, 14 patients with clinically defined high-risk mCRPC had been treated with vudalimab every three weeks at a flat dose of 1000 mg, or 1200 mg for patients greater than 80 kg. Patients were a median of 72 years old and were heavily pretreated, having a median of four lines of prior therapy. 79% (11/14) of patients had metastatic disease at diagnosis; all patients had measurable disease. The efficacy-evaluable population included 12 patients who had baseline and at least one post-baseline RECIST assessment. The objective response rate was 33% (4/12). Three patients had a confirmed partial response per RECIST 1.1 guidelines, and one additional patient had an unconfirmed partial response. An additional two patients experienced a best overall response of stable disease. Prostate-specific antigen (PSA) reductions of more than 90% from baseline (PSA90) were observed in 25% (3/12) of evaluable patients. The safety analysis included all 14 patients. The most common immune-related adverse events of any grade were rash (29%) and alanine transaminase (ALT) increases (21%). Treatment-emergent adverse events led to treatment discontinuation for two patients (14%). One Grade 5 adverse event of autoimmune hepatitis was deemed treatment related; there have been no known additional cases of Grade 5 autoimmune hepatitis among three clinical studies with more than 240 patients treated with vudalimab. Additional Vudalimab Clinical Studies and 2024 Priorities Enrollment of patients with mCRPC in the study of vudalimab in combination with chemotherapy (Study XmAb717-04) is ongoing; revised chemotherapy dosing regimens are being evaluated, as previously disclosed. In the fourth quarter of 2023, the Company dosed the first patient in a Phase 1b/2 study (Study XmAb717-06) evaluating vudalimab as a first-line treatment in patients with locally advanced or metastatic non-small cell lung cancer (NSCLC). Xencor plans to: Continue enrollment and provide a data update and decision whether to advance vudalimab as a monotherapy for patients with mCRPC in the first half of 2025. Continue enrollment and provide a data update and decision whether to advance vudalimab in combination with chemotherapy for patients with mCRPC in the first half of 2025. Continue to enroll the Phase 1b part of a study of vudalimab in front-line metastatic NSCLC. Additional Program Highlights and 2024 Priorities XmAb819 (ENPP3 x CD3): XmAb819 is a bispecific antibody in Phase 1 clinical development for patients with advanced clear-cell renal cell carcinoma (ccRCC). XmAb819 is designed to engage the immune system, activating T cells for highly potent and targeted killing of tumor cells expressing ENPP3, an antigen highly expressed on kidney cancers. Xencor’s XmAb 2+1 multivalent format used in XmAb819 enables greater selectivity of ENPP3-expressing tumor cells compared to normal cells, which express lower levels of ENPP3. During 2024, Xencor plans to advance the ongoing Phase 1 dose-escalation study toward target dose levels. XmAb808 (B7-H3 x CD28): XmAb808 is a tumor-selective, co-stimulatory CD28 bispecific antibody in Phase 1 clinical development. XmAb808 binds to the broadly expressed tumor antigen B7-H3 and is constructed with the XmAb 2+1 format. 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. During 2024, Xencor plans to advance the ongoing Phase 1 dose-escalation study toward target dose levels. XmAb541 (CLDN6 x CD3): XmAb541 is a bispecific antibody being developed for patients with advanced ovarian cancer and other solid tumor types. XmAb541 is designed to engage the immune system, activating T cells for highly potent and targeted killing of tumor cells expressing Claudin-6 (CLDN6), a tumor-associated antigen. Xencor’s XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for cells expressing CLDN6 over similarly structured Claudin family members, which may be expressed on normal tissue. During the first half of 2024, Xencor plans to dose the first patient in a Phase 1 dose-escalation study. Engineered Cytokines: Xencor has been conducting Phase 1 studies evaluating engineered cytokines XmAb564 (IL2-Fc in autoimmune disease) and XmAb662 (IL12-Fc in solid tumors). In the first half of 2024, Xencor plans to conclude studies of XmAb564 and XmAb662, complete internal data packages, and pause further development of both programs until after assessments of future data from competitor programs in this class and safety and biomarker data from Xencor’s studies. Recent Partnership Developments Janssen Biotech, Inc., a Johnson & Johnson Company: JNJ-9401 (PSMA x CD28) and JNJ-1493 (CD20 x CD28) are clinical-stage XmAb bispecific antibodies that J&J is developing for patients with prostate cancer and B-cell malignancies, respectively. Both programs entered Phase 1 clinical development during the fourth quarter of 2023, and Xencor received $20 million in development milestones. J&J also selected two B-cell targeting CD28 bispecific antibody candidates for further development, and Xencor received an additional $7.5 million in research milestones. In the fourth quarter of 2023, Xencor completed enrollment in subcutaneous dose-escalation cohorts of a Phase 1 study evaluating plamotamab. Corporate Update: In January 2024, Xencor reduced its workforce to align resources with the company’s clinical development focus on high potential T cell engaging bispecific antibodies and a more narrowly defined clinical program to evaluate vudalimab. The workforce reductions affected approximately 10% of positions at the Company. Financial Guidance: Based on current operating plans, Xencor expects to end 2024 with between $475 million and $525 million in cash, cash equivalents and marketable debt securities, and to have cash to fund research and development programs and operations into 2027. Financial Results for the Fourth Quarter and Full Year Ended December 31, 2023 Cash, cash equivalents, and marketable debt securities totaled $697.4 million as of December 31, 2023, compared to $584.5 million on December 31, 2022. Total revenue for the fourth quarter ended December 31, 2023 was $44.7 million compared to $21.6 million for the same period in 2022. Revenues earned in the fourth quarter of 2023 were primarily from the research and milestone revenue from the two J&J collaboration agreements, and royalty revenue from Alexion and MorphoSys, compared to the same period in 2022, which were primarily royalty revenue from the Alexion and Vir agreements and research collaboration revenue from the second J&J collaboration. Revenues for the full year 2023 were $168.3 million compared to $164.6 million for the same period in 2022. Revenues for the full year 2023 were primarily milestone revenue from Alexion, Gilead, J&J, Omeros and Zenas and collaboration revenue from the second J&J collaboration, compared to the same period in 2022, which were earned primarily royalties from Alexion, MorphoSys and Vir, milestone revenue from Astellas and collaboration revenue from the second J&J collaboration. Research and development (R&D) expenses for the fourth quarter ended December 31, 2023 were $63.0 million compared to the same period in 2022 which were $51.5 million. R&D expenses for the year ended December 31, 2023 were $253.6 million compared to $199.6 million for the same period in 2022. Increased R&D spending for fourth quarter and full year 2023, compared to amounts for the same periods in 2022, reflects additional spending on XmAb bispecific antibody programs including XmAb541, vudalimab and early-stage research programs. General and administrative (G&A) expenses for the fourth quarter ended December 31, 2023 were $15.3 million compared to $12.8 million for the same period in 2022. G&A expenses for the full year ended December 31, 2023 were $53.4 million compared to $47.5 million for the same period in 2022. Increased G&A spending for the fourth quarter and full year 2023, compared to amounts for the same periods in 2022, reflects additional compensation costs on general and administrative staffing and spending on professional fees. Other income for the fourth quarter ended December 31, 2023 was $20.2 million compared to $30.1 million in the same period in 2022. Other income for both periods represents unrealized gain from the change in fair value of equity securities and interest income earned on investments. Other income for the full year ended December 31, 2023 was $18.2 million, compared to $28.0 million in the same period in 2022, which reflects a net decrease in unrealized gain from equity securities, partially offset by an increase in interest income in 2023. Non-cash, stock-based compensation expense for the full year ended December 31, 2023 was $53.8 million compared to $48.9 million for the same period in 2022. Net loss for the fourth quarter ended December 31, 2023 was $19.1 million or $(0.31) on a fully diluted per share basis, compared to net loss of $12.0 million or $(0.20) on a fully diluted per share basis, for the same period in 2022. For the full year ended December 31, 2023 net loss was $126.1 million or $(2.08) on a fully diluted per share basis, compared to net loss of $55.2 million or $(0.93) on a fully diluted per share basis, for the same period in 2022. Greater net loss reported for the fourth quarter ended December 31, 2023, compared to the same period in 2022, is primarily due to increased R&D spending. Greater net loss for the full year 2023, compared to the same period in 2022, is primarily due to increased R&D spending, a decrease in other income and an increase in tax expense in 2023. The total shares outstanding were 60,998,191 as of December 31, 2023, compared to 59,997,713 as of December 31, 2022. Conference Call and Webcast Xencor will host a conference call and webcast today at 4:30 p.m. ET (1:30 p.m. PT) to discuss the financial results, provide a corporate update and review the clinical update of vudalimab monotherapy in mCRPC. The live webcast may be accessed through “Events & Presentations” in the Investors section of the Company’s website, located at investors.xencor.com. Telephone participants may register to receive a dial-in number and unique passcode that can be used to access the call. A recording will be available for at least 30 days. About Xencor Xencor is a clinical-stage biopharmaceutical company developing engineered antibodies for the treatment of patients with cancer and other serious diseases. More than 20 candidates engineered with Xencor's XmAb® technology are in clinical development, and three XmAb medicines are marketed by partners. Xencor's XmAb engineering technology enables small changes to a proteins structure that result in new mechanisms of therapeutic action. For more information, please visit . Forward-Looking Statements Certain statements contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements that are not purely statements of historical fact, and can generally be identified by the use of words such as “potential,” “can,” “will,” “plan,” “may,” “could,” “would,” “expect,” “anticipate,” “seek,” “look forward,” “believe,” “committed,” “investigational,” and similar terms, or by express or implied discussions relating to Xencor’s business, including, but not limited to, statements regarding planned presentations of clinical data, planned clinical trials, projected financial resources, the quotations from Xencor's president and chief executive officer, and other statements that are not purely statements of historical fact. Such statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Xencor and are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks, including the ability of publicly disclosed preliminary clinical trial data to support continued clinical development and regulatory approval for specific treatments, in each case as described in Xencor's public securities filings. For a discussion of these and other factors, please refer to Xencor's annual report on Form 10-K for the year ended December 31, 2023 as well as Xencor's subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended to date. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law. Xencor, Inc. Selected Consolidated Balance Sheets Data (in thousands, except share and per share data) December 31, 2023 2022 Cash, cash equivalents and marketable debt securities - current $ 551,515 $ 580,631 Other current assets 71,645 94,711 Marketable debt securities - long term 145,892 3,826 Other long-term assets 183,640 167,098 Total assets $ 952,692 $ 846,266 Total current liabilities 84,709 63,844 Deferred income - long term 125,183 — Other long term liabilities 73,667 54,926 Total liabilities 283,559 118,770 Total stockholders' equity 669,133 727,496 Total liabilities and stockholders’ equity $ 952,692 $ 846,266 Xencor, Inc. Consolidated Statements of Loss (in thousands, except share and per share data) Three months Ended December 31, Year ended December 31, 2023 2022 2023 2022 (Unaudited) Revenue $ 44,689 $ 21,610 $ 168,338 $ 164,579 Operating expenses Research and development 63,046 51,452 253,598 199,563 General and administrative 15,272 12,751 53,379 47,489 Total operating expenses 78,318 64,203 306,977 247,052 Loss from operations (33,629) (42,593) (138,639) (82,473) Other income, net 20,177 30,136 18,200 27,965 Loss before income tax (13,452) (12,457) (120,439) (54,508) Income tax expense 5,811 (415) 5,811 673 Net loss (19,263) (12,042) (126,250) (55,181) Net loss attributable to non-controlling interest (163) — (163) — Net loss attributable to Xencor, Inc. (19,100) (12,042) (126,087) (55,181) Other comprehensive income (loss): Net unrealized gain (loss) on marketable debt securities available-for-sale 1,999 2,924 8,243 (5,442) Comprehensive loss attributable to Xencor, Inc. $ (17,101) $ (9,118) $ (117,844) $ (60,623) Net loss per common share attributable to Xencor, Inc.: Basic and Diluted $ (0.31) $ (0.20) $ (2.08) $ (0.93) Weighted average common shares used to compute net loss per share attributable to Xencor, Inc. Basic and Diluted 60,847,854 59,912,038 60,503,283 59,652,461

Management to Host Conference Call at 4:30 p.m. ET Today PASADENA, Calif.--(BUSINESS WIRE)-- Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of patients with cancer and autoimmune diseases, today reported financial results for the second quarter ended June 30, 2023 and provided a review of recent business and clinical highlights. “In the past quarter we continued to advance a clinical portfolio of XmAb drug candidates, enrolling patients across multiple Phase 1 and Phase 2 studies in oncology and autoimmune diseases. By year end we anticipate opening a Phase 2 study to evaluate vudalimab as a front-line treatment in metastatic non-small cell lung cancer, a large patient population with high unmet need,” said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. “Our ongoing studies with early-stage, novel XmAb bispecific antibodies continue to generate exceptionally strong interest among investigators, in particular our ENPP3-targeted CD3 T-cell engager in renal cell carcinoma, XmAb819, and our B7H3-targeted tumor-selective CD28 co-stimulatory T-cell engager, XmAb808. Both candidates use novel antibody formats to drive tumor-specific activity that has the potential to address current gaps in treatment approaches. “We also continue to expand the portfolio of XmAb programs. We recently initiated a Phase 1 study of our potency-tuned IL12-Fc, XmAb662, to be developed in oncology, and we expect to submit an IND application later this year for XmAb541, a 2+1 format CLDN6 x CD3 bispecific antibody that we are developing for patients with ovarian cancer and other tumor types. Additionally, we anticipate submitting an IND for our second internal CD28 program in 2024.” Program Updates Vudalimab (PD-1 x CTLA-4): Xencor plans to evaluate vudalimab, a T-cell selective checkpoint inhibitor, as a first-line treatment in patients with locally advanced or metastatic non-small cell lung cancer. Part 1 of a Phase 2 study would randomize a limited number of patients at one of two doses of vudalimab, in combination with chemotherapy. The study’s second part would randomize patients to either vudalimab plus chemotherapy or pembrolizumab plus chemotherapy. The primary outcome measure of Part 2 would be a comparison of progression-free survival. Xencor anticipates initiating the study by the end of 2023. Xencor is conducting an ongoing Phase 2 study evaluating vudalimab as a monotherapy in patients with high-risk metastatic castration-resistant prostate cancer (mCRPC) or advanced gynecologic malignancies and an ongoing Phase 2 study evaluating vudalimab in combination with chemotherapy or a PARP inhibitor in patients with mCRPC. Clinical data from these studies are anticipated to be presented at a medical conference in early 2024. XmAb564 (IL2-Fc): Results from a Phase 1a clinical study in healthy volunteers were presented at the European Congress of Rheumatology (EULAR) in May 2023. Data continue to indicate a single dose of subcutaneously administered XmAb564 was well tolerated and generated durable, dose-dependent and selective expansion of regulatory T cells. Xencor is conducting a randomized, double-blind, placebo-controlled Phase 1b study to evaluate the safety and tolerability of multiple ascending doses of XmAb564 in patients with atopic dermatitis or psoriasis. XmAb662 (IL12-Fc): XmAb662 is a potency-reduced interleukin-12 Fc (IL12-Fc) fusion protein engineered to increase anti-tumor activity and immunogenicity in the tumor microenvironment by promoting high levels of interferon gamma secretion from T cells and NK cells. In July 2023, Xencor initiated a Phase 1 study in patients with advanced solid tumors. Partnership Updates Alexion Pharmaceuticals, Inc.: In May 2023, Ultomiris® (ravulizumab-cwvz), which incorporates Xencor’s Xtend™ Fc domain, was approved in the EU and Japan for the treatment of certain adult patients with neuromyelitis optica spectrum disorder (NMOSD). In the second quarter of 2023, Xencor earned $11.2 million of royalty revenue from Alexion on net sales of Ultomiris. Amgen Inc.: Interim results from a Phase 1 study of xaluritamig (AMG 509), a STEAP1 x CD3 XmAb 2+1 bispecific antibody, in patients with mCRPC were accepted for presentation at the European Society for Medical Oncology (ESMO) Congress on October 20, 2023. Zenas BioPharma Ltd.: In the second quarter of 2023, Xencor earned a $10 million development milestone related to Zenas’ Phase 3 study evaluating obexelimab in patients with immunoglobulin G4-related disease (IgG4-RD). A manuscript with results from the Phase 2 study, which was sponsored and conducted by Xencor, was first published online in The Lancet Rheumatology in August 2023. Ultomiris is a registered trademark of Alexion Pharmaceuticals, Inc. Financial Results for the Second Quarter and Six Months Ended June 30, 2023 Cash, cash equivalents, receivables and marketable debt securities totaled $531.4 million as of June 30, 2023, compared to $613.5 million as of December 31, 2022. Total revenue for the second quarter ended June 30, 2023 was $45.5 million, compared to $30.2 million for the same period in 2022. Revenues earned in the second quarter of 2023 were primarily from research revenue from our second Janssen Biotech collaboration, royalty revenue from Alexion and milestone revenue from Zenas, compared to the same period in 2022, which were primarily royalties from Alexion and Vir Biotechnology. Revenues for the six months ended June 30, 2023 were $64.5 million, compared to $115.7 million for the same period in 2022. Revenue for the six-month period in 2023 were primarily from research revenue from our second Janssen collaboration, royalty revenue from Alexion and milestone revenue from Janssen and Zenas, compared to the same period in 2022, which were earned primarily from milestone revenue from Astellas and royalty revenue from Alexion, MorphoSys and Vir. Research and development (R&D) expenses for the second quarter ended June 30, 2023 were $60.1 million, compared to $47.1 million for the same period in 2022. Increased R&D spending for the second quarter of 2023 compared to 2022 is primarily due to increased spending on development programs including vudalimab, plamotamab, XmAb819 and XmAb541 and other research and early-stage programs. R&D expenses for the six months ended June 30, 2023 were $124.4 million, compared to $94.8 million for the same period in 2022. Increased R&D spending for the first six months of 2023 compared to 2022 is primarily due to an increase in spending on development programs including vudalimab, XmAb541 and XmAb564 and other research and early-stage programs. General and administrative (G&A) expenses for the second quarter ended June 30, 2023 were $11.5 million, compared to $11.1 million for the same period in 2022. G&A expenses for the six months ended June 30, 2023 were $25.4 million, compared to $22.4 million for the same period in 2022. Increased G&A spending for the second quarter and first six months of 2023 compared to the same periods in 2022 reflects increased spending on professional services and additional facility costs. Other income (expense) for the second quarter ended June 30, 2023 was $4.0 million, compared to $(6.0) million for the same period in 2022. Other income (expense) for the six months ended June 30, 2023 was $2.6 million, compared to $(8.8) million for the same period in 2022. The increase in other income for the three and six months ended June 30, 2023 over other expense for the same periods in 2022 is due to additional interest income earned and lower unrealized loss recorded from equity investments. Non-cash, stock-based compensation expense for the six months ended June 30, 2023 was $26.2 million, compared to $23.4 million for the same period in 2022. Net loss for the second quarter ended June 30, 2023 was $22.0 million, or $(0.37) on a fully diluted per share basis, compared to net loss of $34.0 million, or $(0.57) on a fully diluted per share basis, for the same period in 2022. Decreased net loss in the second quarter of 2023 compared to 2022 is primarily due to additional income and interest earned. For the six months ended June 30, 2023, net loss was $82.7 million, or $(1.38) on a fully diluted per share basis, compared to net loss of $10.4 million, or $(0.17) on a fully diluted per share basis, for the same period in 2022. Increased net loss in the first six months of 2023 compared to 2022 is primarily due to decreased royalties from Vir and increased R&D expenses. The total shares outstanding were 60,600,060 as of June 30, 2023, compared to 59,684,420 as of June 30, 2022. Financial Guidance Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations through the end of 2025. The Company expects to end 2023 with between $425 million and $475 million in cash, cash equivalents, receivables and marketable debt securities. Conference Call and Webcast Xencor will host a conference call and webcast today at 4:30 p.m. ET (1:30 p.m. PT) to discuss the second quarter 2023 financial results and provide a corporate update. The live webcast may be accessed through “Events & Presentations” in the Investors section of the Company’s website, located at investors.xencor.com. Telephone participants may register to receive a dial-in number and unique passcode that can be used to access the call. A recording will be available for at least 30 days. About Xencor, Inc. Xencor is a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of patients with cancer and autoimmune diseases. More than 20 candidates engineered with Xencor's XmAb® technology are in clinical development, and three XmAb medicines are marketed by partners. Xencor's XmAb engineering technology enables small changes to a protein's structure that result in new mechanisms of therapeutic action. For more information, please visit . Forward-Looking Statements Certain statements contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements that are not purely statements of historical fact, and can generally be identified by the use of words such as “potential,” “can,” “will,” “plan,” “may,” “could,” “would,” “expect,” “anticipate,” “seek,” “look forward,” “believe,” “committed,” “investigational,” and similar terms, or by express or implied discussions relating to Xencor’s business, including, but not limited to, statements regarding planned additional clinical trials, the quotations from Xencor's president and chief executive officer, our projected financial resources and other statements that are not purely statements of historical fact. Such statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Xencor and are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks, including the ability of publicly disclosed preliminary clinical trial data to support continued clinical development and regulatory approval for specific treatments, in each case as described in Xencor's public securities filings. For a discussion of these and other factors, please refer to Xencor's annual report on Form 10-K for the year ended December 31, 2022 as well as Xencor's subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended to date. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law. Xencor, Inc. Condensed Balance Sheets (in thousands) June 30, December 31, 2023 2022 (unaudited) Assets Current assets Cash and cash equivalents $ 34,710 $ 53,942 Marketable debt securities 476,667 526,689 Marketable equity securities 39,995 42,431 Accounts receivable 20,019 28,997 Prepaid expenses 22,171 23,283 Total current assets 593,562 675,342 Property and equipment, net 67,997 59,183 Intangible assets, net 18,708 18,500 Marketable debt securities - long term — 3,826 Marketable equity securities - long term 64,210 54,383 Right of use asset 33,046 34,419 Other assets 598 613 Total assets $ 778,121 $ 846,266 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued liabilities $ 32,537 $ 28,816 Deferred revenue 7,865 30,320 Lease liabilities 4,228 4,708 Total current liabilities 44,630 63,844 Lease liabilities, net of current portion 54,615 54,926 Total liabilities 99,245 118,770 Stockholders’ equity 678,876 727,496 Total liabilities and stockholders’ equity $ 778,121 $ 846,266 The 2022 balance sheet was derived from the 2022 annual financial statements included in the Form 10-K that was filed on February 24, 2023 Xencor Inc. Condensed Statements of Comprehensive Income (Loss) (in thousands, except share and per share data) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 (unaudited) Revenues $ 45,523 $ 30,175 $ 64,485 $ 115,670 Operating expenses: Research and development 60,060 47,084 124,439 94,839 General and administrative 11,460 11,091 25,408 22,364 Total operating expenses 71,520 58,175 149,847 117,203 Loss from operations (25,997 ) (28,000 ) (85,362 ) (1,533 ) Other income (expense), net 4,043 (5,975 ) 2,645 (8,847 ) Net loss (21,954 ) (33,975 ) (82,717 ) (10,380 ) Other comprehensive gain (loss) Net unrealized gain (loss) on marketable debt securities 1,765 (1,823 ) 5,093 (7,435 ) Comprehensive loss $ (20,189 ) $ (35,798 ) $ (77,624 ) $ (17,815 ) Net loss per share: Basic and diluted net loss per share $ (0.37 ) $ (0.57 ) $ (1.38 ) $ (0.17 ) Weighted-average number of common shares used in net loss per share applicable to common stockholders - basic and diluted 59,807,558 59,567,139 59,922,784 59,487,924 View source version on businesswire.com: Contacts For Investors: Charles Liles cliles@xencor.com (626) 737-8118 For Media: Jason I. Spark Evoke Canale jason.spark@evokegroup.com (619) 849-6005 Source: Xencor, Inc. View this news release online at:

PASADENA, Calif.--( BUSINESS WIRE )--Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of patients with cancer and autoimmune diseases, today reported financial results for the first quarter ended March 31, 2023 and provided a review of recent business and clinical highlights. “ In the first quarter, we and our partners continued to enroll patients across multiple Phase 1 and Phase 2 clinical studies of XmAb drug candidates in oncology and autoimmune diseases. Two new programs are planned to advance into clinical development this year, XmAb662, our engineered IL12-Fc cytokine, on track to start a Phase 1 study mid-year, and XmAb541, our CLDN6 x CD3 bispecific antibody for ovarian cancer, for which we anticipate submitting the IND by year end,” said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. “ And recently, we added to our team the expertise and talents of Nancy Valente, M.D., who will lead our clinical programs as our new executive vice president and chief development officer.” Program and Corporate Updates XmAb564 (IL2-Fc): The Company will present updated results from the Phase 1a single-ascending dose study in healthy volunteers at European Alliance of Associations for Rheumatology (EULAR) Congress, being held from May 31 to June 1, in Milan, Italy. The update will include additional biomarker data. Data previously presented demonstrate a single dose, administered subcutaneously in healthy volunteers, was well tolerated and generated durable, dose-dependent and selective expansion of regulatory T cells. XmAb104 (PD-1 x ICOS): XmAb104 is a bispecific antibody that targets PD-1, an immune checkpoint receptor, and ICOS, an immune co-stimulatory receptor, to selectively activate the tumor microenvironment. Initial dose-escalation data from a Phase 1 study, presented at ASCO 2022, indicates that XmAb104 was well tolerated and exhibited a distinct safety profile compared to other clinical-stage ICOS programs. Anti-tumor activity was observed in patients, and biomarker activity was consistent with engagement with T cells. The Company has opened an expansion portion in the study (Part C) to evaluate XmAb104 in combination with ipilimumab in patients with microsatellite stable or proficient mismatch repair colorectal cancer. Preclinical Data Presentation: Preclinical data generated from engineered CD28 bispecific antibodies targeting the solid tumor antigens CEACAM5, ENPP3, mesothelin, STEAP1 and Trop-2 were presented at the American Association for Cancer Research (AACR) Annual Meeting in April 2023. Corporate Update: Nancy Valente, M.D., was appointed as Xencor’s Executive Vice President, Chief Development Officer, effective May 1, having previously served as an independent member of the Company’s Board of Directors from September 2022 through April 2023. Dr. Valente brings with her more than 20 years of experience in late-stage biopharmaceutical product development. She most recently served as a senior vice president at Genentech, a member of the Roche Group, and as its global head and co-lead of global product development of its oncology and hematology therapeutic area. Progress Across Partnered Programs Alexion Pharmaceuticals, Inc.: In April 2023, Ultomiris ® (ravulizumab-cwvz), which incorporates Xencor’s Xtend™ Fc domain, was recommended for marketing authorization in the EU for the treatment of adult patients with neuromyelitis optica spectrum disorder (NMOSD) who are anti-aquaporin-4 antibody positive. In addition, AstraZeneca recently announced that a Phase 3 study of Ultomiris has been initiated in cardiac surgery-associated acute kidney injury. In the first quarter of 2023, Xencor earned $10.5 million of royalty revenue from Alexion on net sales of Ultomiris. Ultomiris is a registered trademark of Alexion Pharmaceuticals, Inc. Financial Results for the First Quarter Ended March 31, 2023 Cash, cash equivalents, receivables and marketable debt securities totaled $568.2 million as of March 31, 2023, compared to $613.5 million on December 31, 2022. Revenues for the first quarter ended March 31, 2023 were $19.0 million, compared to $85.5 million for the same period in 2022. Total revenues earned in the first quarter of 2023 included milestone revenue earned from Xencor’s Janssen collaboration and royalties from the Alexion agreement, compared to revenue earned from the Janssen collaboration, milestone revenue from Astellas, and royalties from the Alexion, MorphoSys and Vir agreements in the first quarter of 2022. Research and development expenses for the first quarter ended March 31, 2023 were $64.4 million, compared to $47.8 million for the same period in 2022. Increased research and development spending for first quarter of 2023 compared to 2022 reflects increased spending on the Company’s development programs including XmAb541 and XmAb564 and other research and early-stage programs. General and administrative expenses for the first quarter ended March 31, 2023 were $14.0 million, compared to $11.3 million in the same period in 2022. Increased general and administrative spending for the first quarter of 2023 compared to 2022 reflects increased facility expenses and additional spending on professional fees. Non-cash, stock-based compensation expense for the first quarter ended March 31, 2023 was $12.6 million, compared to $10.8 million for the same period in 2022. Net loss for the first quarter ended March 31, 2023 was $60.8 million, or $(1.02) on a fully diluted per share basis, compared to a net income of $23.6 million, or $0.39 on a fully diluted per share basis, for the same period in 2022. Net loss reported for the first quarter of 2023 compared to net income for the same period in 2022 is primarily due to decreased royalties from the Vir agreement. The total shares outstanding were 60,381,600 as of March 31, 2023, compared to 59,529,192 as of March 31, 2022. Financial Guidance Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations through the end of 2025. The Company expects to end 2023 with between $425 million and $475 million in cash, cash equivalents, receivables and marketable debt securities. Conference Call and Webcast Xencor will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss the first quarter 2023 financial results and provide a corporate update. The live webcast will be available under “Events & Presentations” in the Investors section of the Company’s website located at investors.xencor.com and will be archived for at least 30 days. Active participants in the conference call may receive credentials for telephone access by registering at the following link: https://register.vevent.com/register/BI0da076297f5f4f3b920845d8b0e7f2d3 . About Xencor, Inc. Xencor is a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of patients with cancer and autoimmune diseases. More than 20 candidates engineered with Xencor's XmAb ® technology are in clinical development, and three XmAb medicines are marketed by partners. Xencor's XmAb engineering technology enables small changes to a protein's structure that result in new mechanisms of therapeutic action. For more information, please visit www.xencor.com . Forward-Looking Statements Certain statements contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements that are not purely statements of historical fact, and can generally be identified by the use of words such as “potential,” “can,” “will,” “plan,” “may,” “could,” “would,” “expect,” “anticipate,” “seek,” “look forward,” “believe,” “committed,” “investigational,” and similar terms, or by express or implied discussions relating to Xencor’s business, including, but not limited to, statements regarding planned additional clinical trials, the quotations from Xencor's president and chief executive officer, our projected financial resources and other statements that are not purely statements of historical fact. Such statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Xencor and are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks, including the ability of publicly disclosed preliminary clinical trial data to support continued clinical development and regulatory approval for specific treatments, in each case as described in Xencor's public securities filings. For a discussion of these and other factors, please refer to Xencor's annual report on Form 10-K for the year ended December 31, 2022 as well as Xencor's subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended to date. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law. Xencor, Inc. Condensed Balance Sheets (in thousands) March 31, December 31, 2023 2022 (unaudited) Assets Current assets Cash and cash equivalents $ 72,394 $ 53,942 Marketable debt securities 475,922 526,689 Marketable equity securities 39,706 42,431 Accounts receivable 19,861 28,997 Prepaid expenses 22,093 23,283 Total current assets 629,976 675,342 Property and equipment, net 66,685 59,183 Intangible assets, net 18,244 18,500 Marketable debt securities - long term — 3,826 Marketable equity securities - long term 54,210 54,383 Right of use asset 33,697 34,419 Other assets 599 613 Total assets $ 803,411 $ 846,266 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued liabilities $ 30,481 $ 28,816 Deferred revenue 30,104 30,320 Lease liabilities 4,471 4,708 Total current liabilities 65,056 63,844 Lease liabilities, net of current portion 54,772 54,926 Total liabilities 119,828 118,770 Stockholders’ equity 683,583 727,496 Total liabilities and stockholders’ equity $ 803,411 $ 846,266 The 2022 balance sheet was derived from the 2022 annual financial statements included in the Form 10-K that was filed on February 24, 2023 Xencor Inc. Condensed Statements of Comprehensive Income (Loss) (in thousands, except share and per share data) Three months ended March 31, 2023 2022 (unaudited) Revenues $ 18,962 $ 85,495 Operating expenses: Research and development 64,379 47,756 General and administrative 13,948 11,273 Total operating expenses 78,327 59,029 Income (loss) from operations (59,365 ) 26,466 Other expense, net (1,398 ) (2,872 ) Net income (loss) (60,763 ) 23,594 Other comprehensive gain (loss) Net unrealized gain (loss) on marketable debt securities 3,327 (5,611 ) Comprehensive income (loss) $ (57,436 ) $ 17,983 Net income (loss) per share: Basic net income (loss) per share $ (1.02 ) $ 0.40 Diluted net income (loss) per share $ (1.02 ) $ 0.39 Weighted-average number of common shares used in net income (loss) per share applicable to common stockholders - basic 59,771,674 59,407,829 Weighted-average number of common shares used in net income (loss) per share applicable to common stockholders - diluted 59,771,674 61,078,494