On November 7, 2023 Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) reported financial results for the third quarter of 2023, along with recent product highlights and corporate updates (Press release, Zai Laboratory, NOV 7, 2023, View Source [SID1234637180]).

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"During the third quarter, we achieved important milestones, including the successful launch of VYVGART in China for patients with generalized myasthenia gravis (gMG) and the positive pivotal trial readout for efgartigimod in chronic inflammatory demyelinating polyneuropathy (CIDP)," said Dr. Samantha Du, Founder, Chairperson, and Chief Executive Officer of Zai Lab. "These developments underscore our unwavering commitment to delivering innovative medicines to patients in need. With new drug applications under review by the National Medical Products Administration (NMPA) and multiple ongoing pivotal trials evaluating drugs with significant market potential, we are well-positioned to accelerate our pipeline and to expand our portfolio of commercial assets as we work to elevate patient care worldwide."

"Our commercial team navigated macro-level challenges in the third quarter to achieve y-o-y net product revenue growth of 27% on a constant currency basis," said Josh Smiley, President and Chief Operating Officer of Zai Lab. "ZEJULA continues to be the leading PARP inhibitor in hospital sales for ovarian cancer in China, and there is exciting momentum with the launch of VYVGART, a potentially paradigm changing therapy for patients living with gMG in China. At least seven additional product launches in the next two to three years are expected to support meaningful revenue growth, and this growth, combined with enhanced operational efficiencies, will help lead us to profitability." Mr. Smiley concluded.

Third Quarter 2023 Financial Results

•Product revenues were $69.2 million for the third quarter of 2023, compared to $57.0 million for the same period in 2022, representing 22% y-o-y growth and 27% y-o-y growth at CER. This increase was primarily driven by increased sales volumes, the launch of VYVGART, and decreased negative effects from the COVID-19 pandemic. Our revenue growth was slowed by the effects on hospital and physician practices from the recent industry-wide anti-corruption enforcement efforts in China. Product revenues in the third quarter of 2023, compared to the same period in 2022, included:

–$41.6 million for ZEJULA, which increased from $39.2 million, as ZEJULA, which is in its third year on the NRDL, continued to be the leading PARP inhibitor in hospital sales for ovarian cancer in China;
–$11.6 million for Optune, which increased from $10.7 million, supported by increased patient access to this product in the private-pay market;
–$5.7 million for QINLOCK, which increased from $5.5 million, supported by the NRDL listing in March 2023;
–$5.5 million for NUZYRA, which increased from $1.5 million, supported by the NRDL listing in March 2023; and
–$4.9 million for VYVGART, compared to nil, due to the launch of VYVGART in September 2023.

•Research and Development (R&D) expenses were $58.8 million for the third quarter of 2023, compared to $99.5 million for the same period in 2022. This decrease was primarily due to a decrease in licensing fees in connection with decreased upfront and milestone payments for our licensed and collaboration agreements.

•Selling, General and Administrative expenses were $68.6 million for the third quarter of 2023, compared to $66.6 million for the same period in 2022. This increase was primarily due to higher general selling expenses to support new product launches, partially offset by a decrease in professional services fees.

•Net loss was $69.2 million for the third quarter of 2023, or a loss per ordinary share attributable to common stockholders of $0.07, compared to a net loss of $161.2 million for the same period in 2022, or a loss per ordinary
1

share of $0.17. The decrease in net loss was primarily due to increase of product revenue, the decrease of licensing fees, and the shift from foreign currency loss to gain.

•Cash and cash equivalents, short-term investments and restricted cash totaled $822.2 million as of September 30, 2023, compared to $876.4 million as of June 30, 2023.

Recent Product Highlights and Corporate Updates

Below are key product and corporate updates since our last earnings release:

Commercial Products

•VYVGART (efgartigimod, FcRn): In September 2023, we launched VYVGART as an add-on to standard therapy for the treatment of adult patients with gMG who are anti-acetylcholine receptor (AChR) antibody positive in mainland China, increasing our number of commercial products to five. We are in the negotiation process for VYVGART’s inclusion on the National Reimbursement Drug List (NRDL) to help support increased patient access for this therapy.

•ZEJULA (niraparib, PARP): In September 2023, we conducted the final overall survival (OS) analysis for the Phase 3 NORA study in Chinese patients with platinum-sensitive recurrent ovarian cancer, which supports the NMPA’s approval of ZEJULA for patients with recurrent ovarian cancer in China. The final OS results showed that niraparib maintenance treatment in the recurrent setting provides a favorable trend in OS irrespective of gBRCA mutation status compared with placebo. We expect to present detailed results at an upcoming medical conference.

Oncology Pipeline

•KRAZATI (adagrasib, KRASG12C):

–First-line non-small cell lung cancer (NSCLC): In October 2023, Zai Lab partner Mirati Therapeutics, Inc. (Mirati) announced updated results from the KRYSTAL-7 Phase 2 study evaluating adagrasib combined with pembrolizumab in first-line KRASG12C-mutated NSCLC at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress (ESMO) (Free ESMO Whitepaper) 2023. The results demonstrate a manageable safety profile and early signs of durability of adagrasib in combination with a checkpoint inhibitor in the first-line NSCLC setting. We are participating in the study in mainland China, Hong Kong, Macau and Taiwan (collectively, Greater China).
–Second-line+ NSCLC: In September 2023, Mirati presented two-year follow-up data from a pooled analysis of the Phase 1/1b Cohort and Phase 2 Cohort A for the KRYSTAL-1 study in previously treated patients with KRASG12C-mutated NSCLC at the 2023 World Conference on Lung Cancer (WCLC). In the pooled analysis, adagrasib demonstrated durable efficacy and a manageable long-term safety profile. We are participating in the ongoing confirmatory Phase 3 KRYSTAL-12 study in previously treated patients with KRASG12C-mutated NSCLC in Greater China.

•Repotrectinib (ROS1/TRK):

–NTRK-positive solid tumors: In August 2023, the Center for Drug Evaluation (CDE) of the NMPA granted Breakthrough Therapy Designation (BTD) for repotrectinib for the treatment of patients with advanced solid tumors that have an NTRK gene fusion who have progressed following treatment with TRK tyrosine kinase inhibitors (TKIs). This BTD was supported by data from both global and Chinese patients enrolled in the Phase 1/2 TRIDENT-1 study.

–ROS1-positive NSCLC: In August 2023, Zai Lab partner Bristol Myers Squibb (BMS) announced updated results from the registrational TRIDENT-1 study, demonstrating that repotrectinib continued to demonstrate high response rates and durable responses, including robust intracranial responses, in patients with ROS1-positive locally advanced or metastatic NSCLC who were TKI-naïve or previously treated with one TKI and no chemotherapy. We are participating in the study in Greater China.

◦Based on results from the TRIDENT-1 trial, the U.S. Food and Drug Administration (FDA) accepted the New Drug Application (NDA) submitted by BMS for repotrectinib in ROS1-positive NSCLC and granted Priority Review, with a Prescription Drug User Fee Act (PDUFA) goal date of November 27, 2023.

◦The NDA we submitted to the NMPA for repotrectinib in ROS1-positive NSCLC has been accepted with priority review.

•TIVDAK (tisotumab vedotin): In October 2023, Zai Lab partner Seagen Inc. and Genmab A/S presented results from the Phase 3 innovaTV 301 randomized global trial at the ESMO (Free ESMO Whitepaper) 2023 Congress in recurrent or metastatic cervical cancer patients with disease progression on or after front-line therapy. TIVDAK demonstrated superior OS, progression-free survival (PFS) and objective response rate, compared to chemotherapy alone, and there were no new safety signals. We are participating in the global trial and extension study in Greater China.
2

•Odronextamab (CD20xCD3): In September 2023, Zai Lab partner Regeneron announced that the FDA has accepted for Priority Review the Biologics License Application (BLA) for odronextamab to treat adult patients with relapsed/refractory (R/R) follicular lymphoma (FL) or R/R diffuse large B-cell lymphoma (DLBCL), who have progressed after at least two prior systemic therapies, with a PDUFA goal date of March 31, 2024. In August 2023, the European Medicines Agency (EMA) accepted for review the Marketing Authorization Application for odronextamab for the same indications.

•ZL-1211 (Claudin18.2): Based on a review of the competitive landscape and market opportunity, we decided to terminate ZL-1211 for internal development.

•Tumor Treating Fields: In August 2023, Zai Lab partner NovoCure Limited announced that the Phase 3 INNOVATE-3 clinical trial of TTFields together with paclitaxel in patients with platinum-resistant ovarian cancer did not meet its primary endpoint of OS at the final analysis. We did not participate in this study.

Autoimmune Disorders, Infectious Disease, and Neuroscience Pipeline

•Efgartigimod (FcRn): In September 2023, the CDE of China’s NMPA granted BTD for efgartigimod alfa injection (subcutaneous injection) (efgartigimod SC) in CIDP. This BTD was supported by positive data from both global and Chinese patients enrolled in the ADHERE study.

•KarXT (xanomeline-trospium, M1/M4-agonist):

–Schizophrenia: In September 2023, Zai Lab partner Karuna Therapeutics, Inc. (Karuna) announced that it had submitted an NDA to the FDA for the treatment of schizophrenia, supported by data from three positive registrational trials. We continue to enroll patients in the registrational bridging study in mainland China.

–Alzheimer’s disease psychosis (ADP): Karuna initiated the Phase 3 ADEPT-2 and ADEPT-3 trials in ADP in the third quarter. We plan to participate in these studies in Greater China next year.

Corporate Update

•Organizational update: In September 2023, Zai Lab appointed Robert J. Brown, M.D. as Chief Medical Officer, Oncology. Dr. Brown is an oncology drug development leader, with more than 16 years of translational, research, and clinical development expertise in the areas of oncology, immunology, and neurology. Dr. Brown reports to Dr. Rafael Amado, President, Head of Global Oncology Research and Development at Zai Lab, and provides strategic leadership and support with respect to the clinical development of our oncology pipeline.

Anticipated Major Milestones in 2023 / 2024

Oncology

ZEJULA (niraparib, PARP)

•Zai Lab to present the final OS analysis for the Phase 3 NORA study in Chinese patients with platinum-sensitive recurrent ovarian cancer at an upcoming medical conference in 2024.

Tumor Treating Fields

•NovoCure to submit a Premarket Approval Application with the FDA in second-line+ NSCLC post-platinum progression by the end of 2023.

•NovoCure to provide a topline data readout from the phase 3 METIS clinical trial in brain metastases in the first quarter of 2024. We are participating in the study in Greater China.

•NovoCure to provide a topline data readout from the phase 3 PANOVA-3 clinical trial in locally advanced pancreatic cancer in the second half of 2024. We are participating in the study in Greater China.

Repotrectinib (ROS1/TRK)

•Potential NMPA approval of the NDA in locally advanced or metastatic ROS1-positive NSCLC in 2024.

KRAZATI (adagrasib, KRASG12C)

•Zai Lab to submit an NDA to the NMPA in second-line+ KRASG12C-mutated NSCLC in 2024.

3

Bemarituzumab (FGFR2b)

•Zai Lab to join the global Phase 3 FORTITUDE-102 study of bemarituzumab in combination with nivolumab and chemotherapy in first-line gastric or gastroesophageal junction cancer in Greater China in the first half of 2024.

ZL-1310 (DLL3 ADC)

•Zai Lab to initiate a global Phase 1 study in relapsed and refractory second-line+ small cell lung cancer (SCLC) who have progressed after platinum-based treatment in the first quarter of 2024.

Autoimmune Disorders, Infectious Disease, and Neuroscience

Efgartigimod (FcRn)

•argenx to report topline data from the registrational Phase 3 ADVANCE-SC trial of efgartigimod SC in immune thrombocytopenia (ITP) in the fourth quarter of 2023. We are participating in the study in Greater China.

•argenx to report topline data from the registrational Phase 3 ADDRESS trial of efgartigimod SC in pemphigus around year-end 2023. We are participating in the study in Greater China.

•argenx to file the supplemental BLA in CIDP by the end of 2023.

•argenx to initiate a registrational study of efgartigimod in thyroid eye disease (TED) in the fourth quarter of 2023. We plan to participate in the program in Greater China in 2024.

•Potential NMPA approval of the supplemental BLA for efgartigimod SC in gMG in 2024.

KarXT (xanomeline-trospium, M1/M4-preferring muscarinic agonist)

•Karuna to launch KarXT for the treatment of schizophrenia, if approved by the FDA, in the second half of 2024.

XACDURO (Sulbactam-Durlobactam)

•Potential NMPA approval of the NDA in infections caused by susceptible isolates of Acinetobacter baumannii-calcoaceticus complex in 2024.

ZL-1102 (IL-17 Humabody)

•Zai Lab to initiate a global Phase 2 study in chronic plaque psoriasis in 2024.

Conference Call and Webcast Information

Zai Lab will host a live conference call and webcast tomorrow, November 8, 2023, at 8:00 a.m. ET. Listeners may access the live webcast by visiting the Company’s website at View Source Participants must register in advance of the conference call.

Details are as follows:

Registration Link: https://register.vevent.com/register/BI87a7a83f6a6441279fddbaae217dd092

All participants must use the link provided above to complete the online registration process in advance of the conference call. Dial-in details will be in the confirmation email which the participant will receive upon registering.

A replay will be available shortly after the call and can be accessed by visiting the Company’s website.

On November 7, 2023 XOMA Corporation (Nasdaq: XOMA), the biotech royalty aggregator, reported its third quarter 2023 financial results and highlighted recent portfolio activities expected to drive long-term shareholder value (Press release, Xoma, NOV 7, 2023, View Source [SID1234637179]).

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"Our existing royalty portfolio continues to mature, driven by increasing cash receipts of VABYSMO and IXINITY and the advancement of several assets, most notably the New Drug Application (NDA) filing of tovorafenib by Day One Biopharmaceuticals," stated Owen Hughes, Executive Chairman of XOMA. "With additional regulatory and development milestones forthcoming by year-end, we believe a solid foundation for future growth is upon us."

Key Third Quarter Events

Partner Event
Day One Biopharmaceuticals Tovorafenib NDA filed in mid-September
Zevra Therapeutics Zevra confirmed arimoclomol NDA to be filed in 4Q
Medexus Pediatric label expansion accepted for review – 1H 2024 decision
Financial Results

XOMA recorded total revenues of $0.8 million for the third quarter of 2023 and $0.5 million for the third quarter of 2022. The increase for the three months ended September 30, 2023, as compared to the same period in 2022, was primarily due to $0.2 million of milestone revenue earned under XOMA’s license agreement with Janssen.

General and administrative ("G&A") expenses were $6.4 million for the third quarter of 2023, compared to $4.8 million for the third quarter of 2022. The additional $1.6 million during the third quarter of 2023 reflects an increase in stock-based compensation expenses of $1.9 million, partially offset by a decrease of $0.6 million for legal and consulting costs.

In the third quarter of 2023, G&A expenses included $2.7 million in non-cash stock-based compensation expense, compared with $0.8 million in the third quarter of 2022. The increase in the 2023 period reflects $1.1 million of stock-based compensation expense related to the issuance of performance-based stock unit awards and $0.9 million related to stock options granted to our new executives at the beginning of 2023. During the quarter, XOMA received approximately $6.6 million from royalties and milestone payments. XOMA’s net cash used in operations in the third quarter of 2023 was $2.1 million, as compared with $3.7 million during the third quarter of 2022.

Other income, net was $0.3 million for the third quarter of 2023 and $0.2 million in the corresponding quarter of 2022. The increase in other income, net between quarters is primarily due to an increase in investment income.

Net loss for the third quarter of 2023 was $5.5 million, compared to net loss of $4.2 million for the third quarter of 2022.

On September 30, 2023, XOMA had cash of $33.5 million. In September 2023, XOMA received a $4.9 million cash payment from Roche representing XOMA’s 0.5% royalty interest related to VABYSMO sales during the first six months of 2023. The payment was recorded in the Company’s condensed consolidated balance sheet as of September 30, 2023, as a reduction of short-term royalty and commercial payment receivables. On October 16, 2023, the Company paid total cash dividends of $1.4 million on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) and on the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO). The Company ended December 31, 2022, with cash of $57.8 million. Based upon the cash flows XOMA expects to receive from VABYSMO and IXINITY sales in addition to its current cash position, the Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years.

Subsequent Events

On October 30, 2023, XOMA earned a $5 million milestone related to the FDA’s acceptance of Day One Biopharmaceuticals’ NDA for tovorafenib as a monotherapy in relapsed or progressive pediatric low-grade glioma. The FDA assigned a Prescription Drug User Fee Act target date of April 30, 2024.

On October 23, 2023, Organon notified XOMA Corporation of its termination of the License Agreement pertaining to the development of ebopiprant, an investigational, orally active, selective prostaglandin F2α (PGF2α) receptor antagonist being evaluated as a potential treatment for preterm labor by reducing inflammation and uterine contractions. Based on the existing human clinical data generated by ObsEva SA and the lack of adequate treatments to treat preterm labor, XOMA will seek to out-license ebopiprant in order to address this critical unmet need.

On November 7, 2023 Viracta Therapeutics, Inc. (Nasdaq: VIRX), a clinical-stage precision oncology company focused on the treatment and prevention of virus-associated cancers that impact patients worldwide, reported that Company’s Management will participate in upcoming investor conferences in November (Press release, Viracta Therapeutics, NOV 7, 2023, View Source [SID1234637178]).

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Details on the conferences can be found below:

Stifel 2023 Healthcare Conference
Presentation Date: Wednesday, November 15, 2023
Presentation Time: 10:20 – 10:50 AM ET

Piper Sandler 35th Annual Healthcare Conference
Presentation Date: Tuesday, November 28, 2023
Presentation Time: 12:10 – 12:30 PM ET

6th Annual Evercore ISI HealthCONx Conference
Presentation Date: Wednesday, November 29, 2023
Presentation Time: 3:25 – 3:45 PM ET

A live webcast of the presentation will be available on the Investors section of the Viracta website under "Events and Webcasts" and archived for 90 days.

On November 7, 2023 Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of cancer and autoimmune diseases, reported the sale of portions of financial interests from Alexion Pharmaceuticals, Inc., on sales of Ultomiris (ravulizumab-cwvz) and from MorphoSys AG on sales of Monjuvi (U.S.)/Minjuvi (ex-U.S.) (tafasitamab-cxix) to OMERS, one of Canada’s largest defined benefit pension plans (Press release, Xencor, NOV 7, 2023, View Source [SID1234637170]).

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Under the agreements, Xencor has received a $215 million payment from OMERS. OMERS has acquired royalties due to Xencor on global Ultomiris sales from July 1, 2023 onward, with annual caps beginning in 2026, and the majority of a milestone payment earned this year. Xencor will also be eligible for a new Ultomiris sales-based milestone payment from OMERS. OMERS has also acquired royalties on global Monjuvi sales from July 1, 2023 until OMERS has received 1.3 times the value of the Monjuvi purchase price.

"Xencor’s modular XmAb Fc domains and technologies are the foundation that enables our diversified approach to building value. Our platforms have been fundamental to the creation of three XmAb-based medicines marketed by partners, generating royalty income that drives further innovations in protein engineering and supports the advancement of our internal pipeline," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "A strengthened financial position offers us additional flexibility to execute on our internal clinical development programs with the greatest potential for success, and importantly, we are retaining potential economic upside from the sales performance of Ultomiris and Monjuvi/Minjuvi."

Ultomiris is a registered trademark of Alexion Pharmaceuticals, Inc. Monjuvi and Minjuvi are registered trademarks of MorphoSys AG.

On November 7, 2023 Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of patients with cancer and autoimmune diseases, reported financial results for the third quarter ended September 30, 2023 and provided a review of recent business and clinical highlights (Press release, Xencor, NOV 7, 2023, View Source [SID1234637169]).

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"Today we are announcing measures to strengthen our balance sheet and maximize our focus on the most promising programs created with XmAb technologies. First, we have sold a portion of our Ultomiris and Monjuvi royalties to OMERS Life Sciences for an upfront payment of $215 million. Importantly, we retain potential economic upside from the sales performance of these medicines," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "In addition, a core piece of Xencor’s strategy remains stringent decision making across our clinical pipeline based on emerging data from our programs, the evolving competitive landscape, and prudent management of our resources. We have decided to stop development of XmAb104, our PD-1 x ICOS bispecific antibody, narrow the enrollment for an ongoing study of vudalimab, and opt out of cost sharing with Genentech for our co-developed IL-15 program. Taken altogether, we believe our cash runway now extends into 2027.

"These pipeline decisions highlight an enhanced focus on targeted T cell-engaging bispecifics, which hold great potential for the treatment of patients with solid tumors, as recently shown at the ESMO (Free ESMO Whitepaper) conference by our partner Amgen. Our ENPP3 x CD3 and B7-H3 x CD28 bispecifics lead our internal clinical pipeline for this modality, and we expect to add our CLDN6 x CD3 program in 2024."

Xencor Receives $215 Million Through Royalty Transaction with OMERS Life Sciences

Xencor has sold portions of financial interests from Alexion Pharmaceuticals, Inc., on sales of Ultomiris (ravulizumab-cwvz) and from MorphoSys AG on sales of Monjuvi (U.S.)/Minjuvi (ex-U.S.) (tafasitamab-cxix) to OMERS, one of Canada’s largest defined benefit pension plans.

Under the agreements, Xencor has received a $215 million payment from OMERS. OMERS has acquired royalties due to Xencor on global Ultomiris sales from July 1, 2023 onward, with annual caps beginning in 2026, and the majority of a milestone payment earned this year. Xencor will also be eligible for a new Ultomiris sales-based milestone payment from OMERS. OMERS has also acquired royalties on global Monjuvi sales from July 1, 2023 until OMERS has received 1.3 times the value of the Monjuvi purchase price.

Pipeline Updates

Vudalimab (PD-1 x CTLA-4): As previously disclosed, Xencor anticipates initiating a Phase 1b/2 study to evaluate vudalimab, a T-cell selective checkpoint inhibitor, in combination with chemotherapy, as a first-line treatment in patients with advanced non-small cell lung cancer, by the end of 2023. Part 1 of the study will evaluate the safety and preliminary activity of two dose levels of vudalimab, enrolling up to 20 patients in each dose group, in order to recommend a dose level for Part 2 of the study.

Xencor has been evaluating vudalimab in ongoing studies, as a monotherapy in patients with high-risk metastatic castration-resistant prostate cancer (mCRPC) and in gynecologic tumors, and in combination with chemotherapy or a PARP inhibitor in patients with mCRPC. Due to the rapidly changing competitive environment in these indications, the Company has closed the gynecologic tumor cohorts in the monotherapy study. Prostate cancer clinical data are anticipated to be presented at a medical conference in early 2024.
XmAb104 (PD-1 x ICOS): Xencor will stop internal development of XmAb104 due to emerging data from Phase 1 expansion cohorts not meeting efficacy criteria for advancing the program. The study expansion enrolled patients with microsatellite stable colorectal cancer with or without liver metastases. The Company will continue to support patients currently enrolled and being treated.
Efbalropendekin alfa (XmAb306, IL15/IL15Rα-Fc Cytokine): Xencor exercised its right under the Genentech agreement to convert its co-development and sharing of profits and losses on efbalropendekin alfa into a milestone and royalty arrangement without cost-sharing. The Company expects to finalize contract changes before year end.
XmAb541 (CLDN6 x CD3): XmAb541 is a bispecific antibody that targets Claudin-6 (CLDN6), a tumor-associated antigen in ovarian cancer and other solid tumor types, and the CD3 receptor on T cells. The XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for CLDN6 over similar Claudin family members, such as CLDN9, CLDN3 and CLDN4. Xencor plans to submit an investigational new drug (IND) application by year end.
Progress Across Partnerships

Amgen Inc.: Encouraging interim results from a Phase 1 study of xaluritamig, a STEAP1 x CD3 XmAb 2+1 bispecific antibody, were presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress in October 2023.
Janssen Biotech, Inc.: Xencor received $15 million in development milestone payments under its two agreements with Janssen that are focused on the development of CD28 bispecific antibodies. Janssen submitted an IND application for a CD28 bispecific antibody targeted to an undisclosed prostate tumor target. Janssen also submitted a clinical trial application (CTA) for a bispecific candidate targeted against a B cell tumor target.
Gilead Sciences, Inc.: Xencor received a $6 million development milestone payment from Gilead Sciences, which initiated a Phase 2 study evaluating two broadly neutralizing anti-HIV antibodies that incorporate XmAb Fc technologies.
Omeros Corporation: Xencor received a $5 million development milestone payment from Omeros, which initiated a Phase 2 study evaluating a candidate that incorporates XmAb Fc technologies.
Additional Corporate Updates

In September, Xencor appointed Barbara J. Klencke, M.D., to its board of directors. Dr. Klencke is a world-class, patient-focused research and development expert, who has a successful track record in development and early commercialization of several medicines approved for the treatment of patients with cancer. She most recently served as chief medical officer and chief development officer at Sierra Oncology through mid-2023.
John Kuch, senior vice president and chief financial officer, plans to retire in March 2024, after a successful 23-year career with Xencor. The Company is initiating a search for a new chief financial officer.
Monjuvi and Minjuvi are registered trademarks of MorphoSys AG. Ultomiris is a registered trademark of Alexion Pharmaceuticals, Inc.

Financial Results for the Third Quarter and Nine Months Ended September 30, 2023

Cash, cash equivalents, receivables and marketable debt securities totaled $541.4 million as of September 30, 2023, compared to $613.5 million as of December 31, 2022. Net proceeds from the OMERS transaction are not included in this figure.

Total revenue for the third quarter ended September 30, 2023 was $59.2 million, compared to $27.3 million for the same period in 2022. Revenues earned in the third quarter of 2023 were primarily from milestone revenue from Alexion, Gilead, Janssen and Omeros, and royalty revenue from Alexion compared to the same period in 2022, which were primarily royalties from Alexion and Vir Biotechnology. Revenues for the nine months ended September 30, 2023 were $123.6 million, compared to $143.0 million for the same period in 2022. Revenue for the nine-month period in 2023 were primarily from research revenue from our second Janssen collaboration, royalty revenue from Alexion and milestone revenue from Alexion, Gilead, Janssen, Omeros 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 third quarter ended September 30, 2023 were $64.9 million, compared to $53.3 million for the same period in 2022. Increased R&D spending for the third quarter of 2023 compared to 2022 is primarily due to increased spending on development programs including vudalimab, XmAb541, and other research and early-stage programs. R&D expenses for the nine months ended September 30, 2023 were $189.4 million, compared to $148.1 million for the same period in 2022. Increased R&D spending for the first nine months of 2023 compared to 2022 is primarily due to an increase in spending on our new development programs including XmAb541, as well as spending on our vudalimab, XmAb819, XmAb564, and other research and early-stage programs.

General and administrative (G&A) expenses for the third quarter ended September 30, 2023 were $12.5 million, compared to $12.4 million for the same period in 2022. G&A expenses for the nine months ended September 30, 2023 were $37.9 million, compared to $34.7 million for the same period in 2022. Increased G&A spending for the first nine 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 third quarter ended September 30, 2023 was $(6.0) million and is comprised of unrealized loss on equity investments over interest income for the period, compared to $6.7 million for the same period in 2022 which is primarily unrealized gain on equity investments. Other income (expense) for the nine months ended September 30, 2023 was $(3.4) million, compared to $(2.2) million for the same period in 2022. The increase in other expense for the nine months ended September 30, 2023 over other expense for the same periods in 2022 is due to a higher unrealized loss from equity investments, partially offset by additional interest income earned.

Non-cash, stock-based compensation expense for the nine months ended September 30, 2023 was $39.1 million, compared to $36.2 million for the same period in 2022.

Net loss for the third quarter ended September 30, 2023 was $24.3 million, or $(0.40) on a fully diluted per share basis, compared to net loss of $32.8 million, or $(0.55) on a fully diluted per share basis, for the same period in 2022. Decreased net loss in the third quarter of 2023 compared to 2022 is primarily due to additional income earned. For the nine months ended September 30, 2023, net loss was $107.0 million, or $(1.77) on a fully diluted per share basis, compared to net loss of $43.1 million, or $(0.72) on a fully diluted per share basis, for the same period in 2022. Increased net loss in the first nine months of 2023 compared to 2022 is primarily due to decreased royalties from Vir and increased R&D expenses.

The total shares outstanding were 60,665,900 as of September 30, 2023, compared to 59,773,337 as of September 30, 2022.

Financial Guidance

Based on current operating plans and considering the net proceeds from the royalty sale transactions, Xencor expects to have cash to fund research and development programs and operations into 2027. The Company expects to end 2023 with between $615 million and $665 million in cash, cash equivalents 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 third 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.