Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 001-36182 | |
Entity Registrant Name | Xencor Inc | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1622502 | |
Entity Address, Address Line One | 111 West Lemon Avenue | |
Entity Address, City or Town | Monrovia | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91016 | |
City Area Code | 626 | |
Local Phone Number | 305-5900 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | XNCR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,924,016 | |
Entity Central Index Key | 0001326732 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 52,654 | $ 143,480 |
Marketable debt securities | 515,398 | 153,767 |
Marketable equity securities | 32,184 | 36,860 |
Accounts receivable | 44,876 | 66,384 |
Prepaid expenses | 22,886 | 23,877 |
Total current assets | 667,998 | 424,368 |
Property and equipment, net | 51,040 | 28,240 |
Patents, licenses, and other intangible assets, net | 18,094 | 16,493 |
Marketable debt securities - long term | 41,720 | 300,465 |
Marketable equity securities - long term | 31,124 | 31,262 |
Notes receivable - long term | 5,000 | 5,000 |
Right of use (ROU) asset | 19,680 | 31,730 |
Other assets | 613 | 653 |
Total assets | 835,269 | 838,211 |
Current liabilities | ||
Accounts payable | 14,618 | 14,001 |
Accrued expenses | 19,289 | 19,443 |
Lease liabilities | 20,551 | |
Deferred revenue | 35,186 | 37,294 |
Income tax payable | 388 | |
Total current liabilities | 90,032 | 70,738 |
Lease liabilities, net of current portion | 22,539 | 33,969 |
Total liabilities | 112,571 | 104,707 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at September 30, 2022 and December 31, 2021 | ||
Common stock, $0.01 par value: 200,000,000 authorized shares at September 30, 2022 and December 31, 2021; 59,773,337 issued and outstanding at September 30, 2022 and 59,355,558 issued and outstanding at December 31, 2021 | 598 | 595 |
Additional paid-in capital | 1,058,219 | 1,017,523 |
Accumulated other comprehensive loss | (9,875) | (1,510) |
Accumulated deficit | (326,244) | (283,104) |
Total stockholders' equity | 722,698 | 733,504 |
Total liabilities and stockholders' equity | $ 835,269 | $ 838,211 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 59,773,337 | 59,355,558 |
Common stock, shares outstanding | 59,773,337 | 59,355,558 |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Collaborations, milestones, and royalties | $ 27,299 | $ 19,683 | $ 142,969 | $ 121,096 |
Operating expenses | ||||
Research and development | 53,273 | 50,610 | 148,111 | 141,519 |
General and administrative | 12,374 | 10,373 | 34,738 | 27,462 |
Total operating expenses | 65,647 | 60,983 | 182,849 | 168,981 |
Loss from operations | (38,348) | (41,300) | (39,880) | (47,885) |
Other income (expenses) | ||||
Interest income, net | 1,379 | 196 | 2,749 | 558 |
Other expense, net | (1) | (593) | (244) | (610) |
Gain (loss) on equity securities, net | 5,299 | 1,506 | (4,676) | 57,507 |
Total other income (expense), net | 6,677 | 1,109 | (2,171) | 57,455 |
Income (loss) before income tax expense | (31,671) | (40,191) | (42,051) | 9,570 |
Income tax expense | 1,088 | 0 | 1,088 | 0 |
Net income (loss) | (32,759) | (40,191) | (43,139) | 9,570 |
Other comprehensive loss | ||||
Net unrealized loss on marketable debt securities | (931) | (59) | (8,366) | (149) |
Comprehensive income (loss) | $ (33,690) | $ (40,250) | $ (51,505) | $ 9,421 |
Net income (loss) per share attributable to common stockholders: | ||||
Basic net income (loss) per common share (in dollars per share) | $ (0.55) | $ (0.69) | $ (0.72) | $ 0.16 |
Diluted net income (loss) per common share (in dollars per share) | $ (0.55) | $ (0.69) | $ (0.72) | $ 0.16 |
Weighted average shares used to compute net income (loss) per share attributable to common stockholders: | ||||
Basic (in shares) | 59,716,594 | 58,350,647 | 59,564,985 | 58,199,928 |
Diluted (in shares) | 59,716,594 | 58,350,647 | 59,564,985 | 60,346,480 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 580 | $ 937,525 | $ 74 | $ (365,735) | $ 572,444 |
Balance (in shares) at Dec. 31, 2020 | 57,873,444 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon exercise of stock awards | $ 2 | 5,337 | 5,339 | ||
Issuance of common stock upon exercise of stock awards (in shares) | 230,701 | ||||
Issuance of restricted stock units | $ 1 | (1) | |||
Issuance of restricted stock units (in shares) | 117,808 | ||||
Comprehensive income (loss) | 23 | (2,487) | (2,464) | ||
Stock-based compensation | 8,293 | 8,293 | |||
Balance at Mar. 31, 2021 | $ 583 | 951,154 | 97 | (368,222) | 583,612 |
Balance (in shares) at Mar. 31, 2021 | 58,221,953 | ||||
Balance at Dec. 31, 2020 | $ 580 | 937,525 | 74 | (365,735) | 572,444 |
Balance (in shares) at Dec. 31, 2020 | 57,873,444 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Comprehensive income (loss) | 9,421 | ||||
Balance at Sep. 30, 2021 | $ 585 | 974,514 | (74) | (356,165) | 618,860 |
Balance (in shares) at Sep. 30, 2021 | 58,454,811 | ||||
Balance at Mar. 31, 2021 | $ 583 | 951,154 | 97 | (368,222) | 583,612 |
Balance (in shares) at Mar. 31, 2021 | 58,221,953 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon exercise of stock awards | $ 1 | 902 | 903 | ||
Issuance of common stock upon exercise of stock awards (in shares) | 52,790 | ||||
Issuance of restricted stock units (in shares) | 10,190 | ||||
Issuance of common stock under the Employee Stock Purchase Plan | 937 | 937 | |||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 30,552 | ||||
Comprehensive income (loss) | (112) | 52,248 | 52,136 | ||
Stock-based compensation | 9,350 | 9,350 | |||
Balance at Jun. 30, 2021 | $ 584 | 962,343 | (15) | (315,974) | 646,938 |
Balance (in shares) at Jun. 30, 2021 | 58,315,485 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon exercise of stock awards | $ 1 | 3,228 | 3,229 | ||
Issuance of common stock upon exercise of stock awards (in shares) | 132,709 | ||||
Issuance of restricted stock units (in shares) | 6,617 | ||||
Comprehensive income (loss) | (59) | (40,191) | (40,250) | ||
Stock-based compensation | 8,943 | 8,943 | |||
Balance at Sep. 30, 2021 | $ 585 | 974,514 | (74) | (356,165) | 618,860 |
Balance (in shares) at Sep. 30, 2021 | 58,454,811 | ||||
Balance at Dec. 31, 2021 | $ 595 | 1,017,523 | (1,510) | (283,104) | 733,504 |
Balance (in shares) at Dec. 31, 2021 | 59,355,558 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon exercise of stock awards | 731 | 731 | |||
Issuance of common stock upon exercise of stock awards (in shares) | 36,500 | ||||
Issuance of restricted stock units | $ 1 | (1) | |||
Issuance of restricted stock units (in shares) | 137,134 | ||||
Comprehensive income (loss) | (5,611) | 23,594 | 17,983 | ||
Stock-based compensation | 10,805 | 10,805 | |||
Balance at Mar. 31, 2022 | $ 596 | 1,029,058 | (7,121) | (259,510) | 763,023 |
Balance (in shares) at Mar. 31, 2022 | 59,529,192 | ||||
Balance at Dec. 31, 2021 | $ 595 | 1,017,523 | (1,510) | (283,104) | 733,504 |
Balance (in shares) at Dec. 31, 2021 | 59,355,558 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Comprehensive income (loss) | (51,505) | ||||
Balance at Sep. 30, 2022 | $ 598 | 1,058,219 | (9,875) | (326,244) | 722,698 |
Balance (in shares) at Sep. 30, 2022 | 59,773,337 | ||||
Balance at Mar. 31, 2022 | $ 596 | 1,029,058 | (7,121) | (259,510) | 763,023 |
Balance (in shares) at Mar. 31, 2022 | 59,529,192 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon exercise of stock awards | $ 1 | 1,315 | 1,316 | ||
Issuance of common stock upon exercise of stock awards (in shares) | 70,874 | ||||
Issuance of restricted stock units (in shares) | 15,774 | ||||
Issuance of common stock under the Employee Stock Purchase Plan | $ 1 | 1,196 | 1,197 | ||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 68,580 | ||||
Comprehensive income (loss) | (1,823) | (33,975) | (35,798) | ||
Stock-based compensation | 12,603 | 12,603 | |||
Balance at Jun. 30, 2022 | $ 598 | 1,044,172 | (8,944) | (293,485) | 742,341 |
Balance (in shares) at Jun. 30, 2022 | 59,684,420 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon exercise of stock awards | 1,287 | 1,287 | |||
Issuance of common stock upon exercise of stock awards (in shares) | 71,530 | ||||
Issuance of restricted stock units (in shares) | 17,387 | ||||
Comprehensive income (loss) | (931) | (32,759) | (33,690) | ||
Stock-based compensation | 12,760 | 12,760 | |||
Balance at Sep. 30, 2022 | $ 598 | $ 1,058,219 | $ (9,875) | $ (326,244) | $ 722,698 |
Balance (in shares) at Sep. 30, 2022 | 59,773,337 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net (loss) income | $ (43,139) | $ 9,570 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation and amortization | 6,640 | 5,384 |
Amortization of premium on marketable securities | 909 | 2,632 |
Stock-based compensation | 36,168 | 26,586 |
Abandonment of capitalized intangible assets | 1,331 | 727 |
Equity received in connection with sale of financial assets | (3,300) | |
Change in fair value of equity securities | 4,676 | (39,206) |
Impairment on equity securities | 138 | 563 |
Loss on disposal of assets | 132 | 17 |
Changes in operating assets and liabilities: | ||
Accounts receivable and contract asset | 21,508 | 3,398 |
Interest receivable from marketable debt securities | (392) | 182 |
Prepaid expenses and other assets | 1,031 | (10,599) |
Accounts payable | 617 | 177 |
Accrued expenses | (154) | 4,505 |
Income taxes | 388 | |
Lease liabilities and ROU assets | 21,171 | 386 |
Deferred revenue | (2,108) | (79,665) |
Net cash provided by (used in) operating activities | 48,916 | (78,643) |
Cash flows from investing activities | ||
Purchase of marketable securities | (317,058) | (387,826) |
Purchase of equity securities | (842) | |
Proceeds from sale of property and equipment | 4 | |
Purchase of intangible assets | (3,977) | (2,348) |
Purchase of property and equipment | (28,528) | (6,979) |
Proceeds from maturities and sale of marketable securities | 205,290 | 343,882 |
Net cash used in investing activities | (144,273) | (54,109) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock upon exercise of stock awards | 3,334 | 9,471 |
Proceeds from issuance of common stock from Employee Stock Purchase Plan | 1,197 | 937 |
Net cash provided by financing activities | 4,531 | 10,408 |
Net decrease in cash and cash equivalents | (90,826) | (122,344) |
Cash and cash equivalents, beginning of period | 143,480 | 163,544 |
Cash and cash equivalents, end of period | 52,654 | 41,200 |
Cash paid for: | ||
Interest | 13 | 13 |
Income taxes | 72 | |
Supplemental disclosures of non-cash investing activities | ||
Unrealized loss on marketable securities | $ (8,366) | $ (149) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 24, 2022. Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, evaluation of intangible assets, investments, leases and other assets for evidence of impairment, fair value measurements, and contingencies. Significant estimates in these interim financial statements include estimates made for royalty revenue, accrued research and development expenses, stock-based compensation expenses, intangible assets, incremental borrowing rate for right-of-use asset and lease liability, estimated standalone selling price of performance obligations, estimated time for completing delivery of performance obligations under certain arrangements, the likelihood of recognizing variable consideration, the carrying value of equity instruments without a readily determinable fair value, and recoverability of deferred tax assets. Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There was no impairment charge recorded for the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $0.4 million related to an acquired license. The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. We abandoned $0.3 million and $1.3 million of in-process intangible assets during the three and nine months ended September 30, 2022, respectively. There was no material abandonment of in-process intangible assets during the three months ended September 30, 2021. We abandoned $0.3 million of in-process intangible assets during the nine months ended September 30, 2021. Marketable Debt and Equity Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and concentration and diversification. The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions. The Company considers its marketable debt securities to be available-for-sale because it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost. These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss). There were no impairment losses or recoveries recorded for the three and nine months ended September 30, 2022 and 2021. Accrued interest on marketable debt securities is included in the marketable securities’ carrying value. Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis. During the three and nine months ended September 30, 2022, the Company recorded an unrealized loss of $0.9 million and $8.4 million, respectively, in its portfolio of marketable debt securities. The unrealized losses are due to the changing interest rate environment and are not due to changes in the credit quality of the underlying securities. The unrealized losses are recorded in other comprehensive income (loss) for the three and nine months ended September 30, 2022. The Company receives equity securities in connection with certain licensing transactions with its partners. These investments in equity securities are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For equity securities with a readily determinable fair value, the Company remeasures these equity investments at each reporting period until such time that the investment is sold or disposed. If the Company sells an investment, any realized gain or loss on the sale of the securities will be recognized within other income (expense) in the Statements of Comprehensive Income (Loss) in the period of sale. The Company also has investments in equity securities without a readily determinable fair value, where the Company elects the measurement alternative to record the investment at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There was no impairment charge recorded for the three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $0.1 million in connection with equity securities without a readily determinable fair value. During the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $0.6 million. Recent Accounting Pronouncements Pronouncements Not Yet Effective In June 2022, the Financial Accounting Standards Board (FASB) issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2021 Annual Report on Form 10-K. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 2. Fair Value of Financial Instruments Financial instruments included in the financial statements include cash and cash equivalents, marketable debt and equity securities, accounts receivable, accounts payable, and accrued expenses. Marketable debt securities, equity securities, and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short-term maturities. The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures Level 1— Level 2— Level 3— The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands): September 30, 2022 (unaudited) December 31, 2021 Total Total Fair Value Level 1 Level 2 Fair Value Level 1 Level 2 Money Market Funds $ 24,506 $ 24,506 $ — $ 123,892 $ 123,892 $ — Corporate Securities 186,597 — 186,597 144,418 — 144,418 Government Securities 370,521 — 370,521 309,814 — 309,814 $ 581,624 $ 24,506 $ 557,118 $ 578,124 $ 123,892 $ 454,232 Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. During the three and nine months ended September 30, 2022 and 2021, there were no transfers between Level 1 and Level 2. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Net Income (Loss) Per Common Share | |
Net Income (Loss) Per Common Share | 3. Net Income (Loss) Per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. Potentially dilutive securities consisting of stock issuable pursuant to outstanding options and restricted stock units (RSUs), and stock issuable pursuant to the 2013 Employee Stock Purchase Plan (ESPP) are not included in the per common share calculation in periods when the inclusion of such shares would have an anti-dilutive effect. Basic and diluted net income (loss) per common share is computed as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands, except share and per share data) (in thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders $ (32,759) $ (40,191) $ (43,139) $ 9,570 Denominator: Weighted-average common shares outstanding used in computing basic net income (loss) 59,716,594 58,350,647 59,564,985 58,199,928 Effect of dilutive securities — — — 2,146,552 Weighted-average common shares outstanding used in computing diluted net income (loss) 59,716,594 58,350,647 59,564,985 60,346,480 Basic net income (loss) per common share $ (0.55) $ (0.69) $ (0.72) $ 0.16 Diluted net income (loss) per common share $ (0.55) $ (0.69) $ (0.72) $ 0.16 For the three and nine months ended September 30, 2022 and three months ended September 30, 2021, we excluded all shares of stock issuable pursuant to outstanding options and RSUs from the calculation, because the inclusion of such shares would have had an anti-dilutive effect. For the nine months ended September 30, 2021, we excluded 1,139,403 shares of stock issuable pursuant to outstanding options and RSUs from the calculation, because the inclusion of such shares would have had an anti-dilutive effect. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Comprehensive Income (Loss) | |
Comprehensive Income (Loss) | 4. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). For each of the three- and nine-month periods ended September 30, 2022 and 2021, the only component of other comprehensive loss is net unrealized loss on marketable debt securities. There were no material reclassifications out of accumulated other comprehensive loss during each of the three- and nine-month periods ended September 30, 2022 and 2021. |
Marketable Debt and Equity Secu
Marketable Debt and Equity Securities | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Debt and Equity Securities | |
Marketable Debt and Equity Securities | 5. Marketable Debt and Equity Securities The Company’s marketable debt securities held as of September 30, 2022 and December 31, 2021 are summarized below: Gross Gross Amortized Unrealized Unrealized September 30, 2022 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 24,506 $ — $ — $ 24,506 Corporate Securities 188,360 — (1,763) 186,597 Government Securities 378,623 — (8,102) 370,521 $ 591,489 $ — $ (9,865) $ 581,624 Reported as Cash and cash equivalents $ 24,506 Marketable securities 557,118 Total investments $ 581,624 Gross Gross Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 123,892 $ — $ — $ 123,892 Corporate Securities 144,584 — (166) 144,418 Government Securities 311,148 1 (1,335) 309,814 $ 579,624 $ 1 $ (1,501) $ 578,124 Reported as Cash and cash equivalents $ 123,892 Marketable securities 454,232 Total investments $ 578,124 The maturities of the Company’s marketable debt securities as of September 30, 2022 are as follows: Amortized Estimated September 30, 2022 Cost Fair Value (in thousands) Mature in one year or less $ 523,629 $ 515,398 Mature within two years 43,354 41,720 $ 566,983 $ 557,118 The unrealized losses on available-for-sale investments and their related fair values as of September 30, 2022 and December 31, 2021 are as follows: Less than 12 months 12 months or greater Unrealized Unrealized September 30, 2022 Fair value losses Fair value losses (in thousands) Corporate Securities $ 143,625 $ (1,649) $ 2,880 $ (114) Government Securities 331,407 (6,582) 38,840 (1,520) $ 475,032 $ (8,231) $ 41,720 $ (1,634) Less than 12 months 12 months or greater Unrealized Unrealized December 31, 2021 Fair value losses Fair value losses (in thousands) Corporate Securities $ 50,337 $ (51) $ 45,872 $ (115) Government Securities 39,909 (54) 254,593 (1,281) $ 90,246 $ (105) $ 300,465 $ (1,396) The unrealized losses from the available-for-sale securities are primarily due to changes in the interest rate environment and not changes in the credit quality of the underlying securities in the portfolio. The Company’s equity securities include securities with a readily determinable fair value. These investments are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For the three and nine months ended September 30, 2022, a gain of $5.3 million and a loss of $4.7 million, respectively, were recorded under other income (expense) related to these securities. Equity securities with a readily determinable fair value, which are categorized as Level 1 in the fair value hierarchy under ASC 820, and their fair values (in thousands) as of September 30, 2022 and December 31, 2021 are as follows: Fair Value Fair Value September 30, 2022 December 31, 2021 Astria Common Stock $ 5,785 $ 3,449 INmune Common Stock 11,690 19,233 Viridian Common Stock 14,709 14,178 $ 32,184 $ 36,860 The Company also has investments in equity securities without a readily determinable fair value. The Company elects the measurement alternative to record these investments at their initial cost and evaluate such investments at each reporting period for evidence of impairment, or observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Equity securities without a readily determinable fair value and their carrying values (in thousands) as of September 30, 2022 and December 31, 2021 are as follows: Carrying Value Carrying Value September 30, 2022 December 31, 2021 Astria Preferred Stock $ 174 $ 312 Zenas Preferred Stock 30,950 30,950 $ 31,124 $ 31,262 In 2018, the Company received equity shares in Quellis Biosciences, Inc. (Quellis) in connection with a licensing transaction. In 2021, Quellis merged into Astria Therapeutics, Inc. (Astria) (formerly Catabasis Pharmaceuticals, Inc.), and the Company received common and preferred stock in Astria in exchange for its Quellis equity. The shares of Astria common stock have a readily determinable fair value. The adjustment in the fair value of the Astria common stock has been recorded as a gain in equity securities for the three and nine months ended September 30, 2022. The Company records its investment in the shares of Astria preferred stock as an equity interest without a readily determinable fair value. The Company elected to record the shares of preferred stock at their initial cost and to review the carrying value for impairment or other changes in carrying value at each reporting period. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $0.1 million related to its investment in Astria’s preferred stock. The Company currently holds 1,885,533 shares of common stock of INmune Bio, Inc. (INmune). The 1,885,533 shares of INmune common stock are classified as equity securities with a readily determinable fair value, and the adjustment in the fair value of the shares of INmune common stock has been recorded as a loss in equity securities for the three and nine months ended September 30, 2022. The Company currently holds 717,144 shares of common stock of Viridian Therapeutics, Inc. (Viridian). The shares of Viridian common stock are classified as equity securities with a readily determinable fair value, and the adjustment in the fair value of the shares of Viridian common stock was recorded as a gain in equity securities for the three and nine months ended September 30, 2022. The Company currently holds an equity interest in Zenas BioPharma Limited (Zenas), a private biotechnology company. The Company’s equity interests include preferred stock in Zenas and a warrant to acquire additional equity in Zenas in a subsequent financing. The Company also holds a convertible promissory note from Zenas. The Company elected the measurement alternative to carry the Zenas equity and the warrant at cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. During the three and nine months ended September 30, 2022, there has not been any impairment or observable price changes related to this investment. Unrealized (loss) gain recognized on equity securities during each of the three- and nine-month periods ended September 30, 2022 and 2021, consist of the following: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net gain (loss) recognized on equity securities $ 5,299 $ 1,506 $ (4,676) $ 57,507 Less: net gain recognized on sale of equity securities — — — (18,301) Unrealized gain (loss) recognized on equity securities $ 5,299 $ 1,506 $ (4,676) $ 39,206 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 6. Stock Based Compensation Our Board of Directors (the Board) and the requisite stockholders previously approved the 2010 Equity Incentive Plan (the 2010 Plan). In October 2013, the Board approved the 2013 Equity Incentive Plan (the 2013 Plan), and in November 2013, our stockholders approved the 2013 Plan, which became effective as of December 3, 2013. As of December 2, 2013, we suspended the 2010 Plan, and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the 2010 Plan that terminate after December 2, 2013 by expiration, forfeiture, cancellation, or other means without the issuance of such shares will be added to the 2013 Plan reserve. As of September 30, 2022, the total number of shares of common stock available for issuance under the 2013 Plan is 14,974,396. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 of each year by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year. Pursuant to approval by the Board, the total number of shares of common stock available for issuance under the 2013 Plan was increased by 2,374,222 shares on January 1, 2022. As of September 30, 2022, a total of 14,407,906 options have been granted under the 2013 Plan. In November 2013, the Board and our stockholders approved the ESPP, which became effective as of December 5, 2013. As of September 30, 2022, the total number of shares of common stock available for issuance under the ESPP is 576,409. Unless otherwise determined by the Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number of shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. Pursuant to approval by the Board, the total number of shares of common stock available for issuance under the ESPP was increased by 593,555 shares on January 1, 2022. As of September 30, 2022, we have issued a total of 598,432 shares of common stock under the ESPP. During the nine months ended September 30, 2022, the Company awarded 809,630 RSUs to certain employees. The standard vesting of these awards is generally in three equal annual installments and is contingent on an employee’s continued service to the Company. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period. As of September 30, 2022, a total of 1,934,117 RSUs have been granted under the 2013 Plan. Total employee, director and non-employee stock-based compensation expense recognized for the three months ended September 30, 2022 and 2021 are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 General and administrative $ 4,736 $ 3,370 $ 12,760 $ 9,300 Research and development 8,024 5,573 23,408 17,286 $ 12,760 $ 8,943 $ 36,168 $ 26,586 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock options $ 7,833 $ 6,959 $ 22,178 $ 20,844 ESPP 282 265 873 766 RSUs 4,645 1,719 13,117 4,976 $ 12,760 $ 8,943 $ 36,168 $ 26,586 The following table summarizes option activity under our stock plans and related information: Weighted Weighted Average Average Number of Exercise Remaining Aggregate Shares Subject Price Contractual Intrinsic to Outstanding (Per Term Value Options Share) (in years) (in thousands) Balance at December 31, 2021 8,676,329 $ 29.11 6.65 $ 100,057 Options granted 2,007,833 $ 29.58 Options forfeited (440,882) $ 33.77 Options exercised (178,904) $ 18.64 Balance at September 30, 2022 10,064,376 $ 29.18 6.51 $ 27,085 Exercisable 6,401,896 $ 26.57 5.21 $ 26,936 We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $25.98 per share as of September 30, 2022. The weighted-average fair value of options granted during the nine-month periods ended September 30, 2022 and 2021 were $15.50 and $21.96 per share, respectively. There were 1,662,574 options granted during the nine-month period ended September 30, 2021. We estimated the fair value of each stock option using the Black-Scholes option-pricing model based on the date of grant of such stock option with the following weighted average assumptions for the three and nine months ended September 30, 2022 and 2021: Options Options Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Expected term (years) 6.1 6.0 6.3 6.2 Expected volatility 51.9 % 55.6 % 53.0 % 55.6 % Risk-free interest rate 3.38 % 0.88 % 2.02 % 1.00 % Expected dividend yield — % — % — % — % ESPP ESPP Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Expected term (years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 43.2 - 55.7 % 46.1 - 66.4 % 43.2 - 55.7 % 46.1 - 66.4 % Risk-free interest rate 0.13 - 2.82 % 0.04 - 1.65 % 0.13 - 2.82 % 0.04 - 1.65 % Expected dividend yield — % — % — % — % As of September 30, 2022, the unamortized compensation expense related to unvested stock options was $59.1 million. The remaining unamortized compensation expense will be recognized over the next 2.5 years. As of September 30, 2022, the unamortized compensation expense under our ESPP was $1.4 million. The remaining unamortized expense will be recognized over the next 1.2 years. The following table summarizes the RSU activity for the nine-month period ended September 30, 2022: Weighted Restricted Average Grant Stock Date Fair Value Units (Per unit) Unvested RSUs at December 31, 2021 826,148 $ 37.79 Granted 809,630 29.61 Vested (170,295) 37.42 Forfeited (108,076) 33.65 Unvested RSUs at September 30, 2022 1,357,407 $ 33.28 As of September 30, 2022, the unamortized compensation expense related to unvested RSUs was $32.0 million. The remaining unamortized expense will be recognized over the next 2.0 years. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 7. Leases The Company leases office and laboratory space in Monrovia, California under a lease that expires in December 2025 with an option to renew for an additional five years at then market rates. The Company has assessed that it is unlikely to exercise the option to extend the lease term. In July 2017, under a separate agreement, the Company entered into a lease for additional space in the same building with a lease that continues through September 2022. The lease contained an option to renew for additional lease term and the option period has lapsed. In October 2022, the Company entered into an amendment to extend the lease under existing terms through January 31, 2023. For the three and nine months ended September 30, 2022, ROU assets obtained in exchange for new operating lease liabilities are $0.3 million. In June 2021, the Company entered into an Agreement of Lease (Lease Agreement) for laboratory and office space in Pasadena, California, which will expire in July 2035. The Lease Agreement provides for two separate phases of lease and occupancy. The first phase commences on August 1, 2022 and provides the Company with an improvement allowance up to $17.0 million. The second phase of the lease agreement will commence no later than September 30, 2026 and includes an additional improvement allowance up to $3.3 million. In August 2022, the Company entered into an amendment, which the Company would receive an additional $5.0 million in tenant improvement allowance in exchange for an increase in the rental rate of the phase 1 space. For the three and nine months ended September 30, 2022, ROU assets obtained in exchange for new operating lease liabilities are $11.4 million. The Company leases additional office space in San Diego, California through August 2022. In May 2022, the Company extended the term of the lease through December 2023. The Company also leases additional office space in Monrovia, California under a lease that extends through January 2023, with an option to extend for an additional two years . The Company has assessed that it is unlikely to exercise the option to extend the lease term. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. The following table reconciles the undiscounted cash flows for the operating leases at September 30, 2022 to the operating lease liabilities recorded on the balance sheet (in thousands): Years ending December 31, For the remainder of 2022 $ 727 2023 7,251 2024 6,072 2025 6,176 2026 5,638 2027 5,791 Thereafter 49,407 Total undiscounted lease payments 81,062 Less: Tenant allowance (3,489) Less: Imputed interest (34,483) Present value of lease payments $ 43,090 Lease liabilities - short-term $ 20,551 Lease liabilities - long-term 22,539 Total lease liabilities $ 43,090 The following table summarizes lease costs and cash payments for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Operating lease cost $ 1,589 $ 1,553 $ 4,725 $ 2,780 Variable lease cost 156 16 287 44 Total lease costs $ 1,745 $ 1,569 $ 5,012 $ 2,824 Cash paid for amounts included in the measurement of lease liabilities $ 564 $ 1,034 $ 1,913 $ 2,081 As of September 30, 2022, the weighted-average remaining lease term for operating leases is 11.9 years, and the weighted-average discount rate for operating leases is 9.1% . As of September 30, 2021, the weighted-average remaining lease term for operating leases is 12.3 years, and the weighted-average discount rate for operating leases is 5.7% . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies From time to time, the Company may be subject to various litigation and related matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred. The Company is obligated to make future payments to third parties under in license agreements, including sublicense fees, royalties, and payments that become due and payable on the achievement of certain development and commercialization milestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on the Company’s balance sheet. The Company has also entered into agreements with third-party vendors that will require us to make future payments upon the delivery of goods and services in future periods. |
Collaboration and Licensing Agr
Collaboration and Licensing Agreements | 9 Months Ended |
Sep. 30, 2022 | |
Collaboration and Licensing Agreements | |
Collaboration and Licensing Agreements | 9. Collaboration and Licensing Agreements The following is a summary description of the material revenue arrangements, including arrangements that generated revenue in the three and nine months ended September 30, 2022 and 2021. Alexion Pharmaceuticals, Inc. In January 2013, the Company entered into an Option and License Agreement (the Alexion Agreement) with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the Alexion Agreement, the Company granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use the Company’s Xtend technology to evaluate and advance compounds. Alexion exercised its rights to one target program, ALXN1210, which is now marketed as Ultomiris®. The Company is eligible to receive a contractual milestone for certain commercial achievements and is also entitled to receive royalties based on a percentage of net sales of Ultomiris sold by Alexion, its affiliates or its sublicensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product-by-product and country-by-country basis until the expiration of the last-to-expire valid claim in a licensed patent covering the applicable product in such country. Under ASC 606, Revenue from Contracts with Customers Amgen Inc. In September 2015, the Company entered into a research and license agreement (the Amgen Agreement) with Amgen Inc. (Amgen) to develop and commercialize bispecific antibody product candidates using the Company’s proprietary XmAb bispecific Fc technology. Under the Amgen Agreement, Amgen applied our bispecific Fc technology to create AMG 509, a STEAP1 x CD3 XmAb 2+1 bispecific antibody, which is currently being developed by Amgen in a Phase 1 study. No revenue was recognized under the Amgen Agreement during the three and nine months ended September 30, 2022 or 2021, and there is no deferred revenue related to the arrangement. Astellas Pharma Inc. Effective March 29, 2019, the Company entered into a Research and License Agreement (the Astellas Agreement) with Astellas Pharma Inc. (Astellas). Pursuant to the Astellas Agreement, the Company applied its bispecific Fc technology to research antibodies provided by Astellas to generate bispecific antibody candidates and returned the candidates to Astellas for further development and commercialization. Under the Astellas Agreement, Astellas developed ASP2138, a CLDN18.2 x CD3 bispecific antibody, which is currently being developed by Astellas in a Phase 1 study. At March 31, 2022, the Company recorded a contract asset of $5.0 million related to a future development milestone under the Astellas Agreement, and we received the milestone payment in July 2022. The Company recognized $5.0 million of revenue for the nine months ended September 30, 2022; no revenue was recognized related to the arrangement for the three months ended September 30, 2022, and 2021, or the nine months ended September 30, 2021. As of September 30, 2022, there is no deferred revenue related to the arrangement. Astria Therapeutics, Inc. In May 2018, the Company entered into an agreement with Quellis, pursuant to which the Company provided Quellis a non-exclusive license to its Xtend Fc technology to apply to an identified antibody. Quellis is responsible for all development and commercialization activities. The Company received an equity interest in Quellis and is eligible to receive development, regulatory and sales milestones, and royalties in the mid-single digit percentage range on net sales of approved products. In January 2021, Quellis merged into Astria (formerly Catabasis), and the Company received common stock and preferred stock of Astria in exchange for its equity in Quellis. The Company recognized an increase in the fair value of its equity interest for the exchange of shares, which was recorded as unrealized gain for the three months ended September 30, 2021. The Astria preferred stock is carried at its original cost and is reviewed for impairment or other changes at each reporting period. The Company recognized an unrealized gain of $3.9 million and $2.3 million related to its equity interest in Astria for the three and nine months ended September 30, 2022, respectively. The Company recognized an unrealized loss of $2.4 million and an unrealized gain of $6.7 million related to its equity interest in Astria for the three and nine months ended September 30, 2021, respectively. There is no deferred revenue as of September 30, 2022 related to this agreement. Genentech, Inc., and F. Hoffmann-La Roche Ltd In February 2019, the Company entered into a collaboration and license agreement (the Genentech Agreement) with Genentech, Inc. and F. Hoffmann-La Roche Ltd (collectively, Genentech) for the development and commercialization of novel IL-15 collaboration products (Collaboration Products), including XmAb306 (also named RG6323), the Company’s IL-15/IL-15Ra candidate. Pursuant to the Genentech Agreement, XmAb306 is designated as a development program and all costs incurred for developing XmAb306 from March 8, 2019, the effective date of the Genentech Agreement, are being shared with Genentech under the initial cost-sharing percentage of 45%. Pursuant to the Genentech Agreement, the Company and Genentech conducted joint research activities for a two-year period to identify and discover additional IL-15 candidates developed from the Company’s cytokine and bispecific technologies. The two-year research term expired in March 2021. The Company is eligible for clinical milestone payments for new Collaboration Products identified from the research efforts. The Company did not recognize revenue related to the Genentech Agreement for the three and nine months ended September 30, 2022, or the three months ended September 30, 2021. For the nine months ended September 30, 2021, the Company recognized $2.5 million of revenue. As of September 30, 2022, there is a $3.2 million payable related to cost-sharing development activities during the second quarter of 2022 for development studies being conducted under the Genentech Agreement. There is no deferred revenue as of September 30, 2022, as obligations to perform research activities have expired. INmune Bio, Inc. In October 2017, the Company entered into a License Agreement (the INmune Agreement) with INmune. Under the terms of the INmune Agreement, the Company provided INmune with an exclusive license to certain rights to a proprietary protein, XPro1595. In connection with the agreement, the Company received shares of INmune common stock. During the three months ended September 30, 2021, the Company determined that it should no longer record its investment in INmune under the equity method and recorded its investment in INmune pursuant to ASC 321. For the three and nine months ended September 30, 2022, the Company recorded an unrealized loss of $5.0 million and $7.5 million, respectively, related to its investment in INmune. For the three months ended September 30, 2021, the Company recorded $4.5 million of unrealized gain. For the nine months ended September 30, 2021, the Company recognized an unrealized gain of $32.5 million and a realized gain of $18.3 million. Janssen Biotech, Inc. Janssen Agreement In November 2020, the Company entered into a Collaboration and License Agreement (the Janssen Agreement) with Janssen Biotech, Inc. (Janssen) pursuant to which the Company and Janssen conducted research and development activities to discover novel CD28 bispecific antibodies for the treatment of prostate cancer with Janssen maintaining exclusive worldwide rights to develop and commercialize licensed products identified from the research activities. Under the Janssen Agreement, the Company conducted research activities and applied its bispecific Fc technology to antibodies targeting prostate cancer provided by Janssen. Upon completion of the research activities Janssen had a candidate selection option to advance an identified candidate for development and commercialization. In November 2021, the Company completed its performance obligations under the research activities and delivered CD28 bispecific antibodies to Janssen, and Janssen exercised its candidate selection option to select a bispecific CD28 antibody for further development. Janssen will assume full responsibility for development and commercialization of the CD28 bispecific antibody candidate. Second Janssen Agreement On October 1, 2021, the Company entered into a second Collaboration and License Agreement (the Second Janssen Agreement) with Janssen pursuant to which the Company granted Janssen an exclusive worldwide license to develop, manufacture, and commercialize plamotamab, the Company’s CD20 x CD3 development candidate, and pursuant to which Xencor and Janssen will conduct research and development activities to discover novel CD28 bispecific antibodies. The parties will conduct joint research activities for up to a two-year period to discover XmAb bispecific antibodies against CD28 and undisclosed B cell tumor-targets with Janssen receiving exclusive worldwide rights, subject to certain Xencor opt-in rights, to develop, manufacture and commercialize pharmaceutical products that contain one or more of such discovered antibodies (CD28 Licensed Antibodies). The Agreement became effective on November 5, 2021. Pursuant to the Second Janssen Agreement, the Company received an upfront payment of $100.0 million and is eligible to receive up to $1,187.5 million in milestones which include $289.4 million in development milestones, $378.1 million in regulatory milestones and $520.0 million in sales milestones. Under the terms of the Stock Purchase Agreement, Johnson & Johnson Innovation, JJDC, Inc. (JJDC), agreed to purchase $25.0 million of newly issued unregistered shares of the Company’s common stock, priced at a 30-day volume-weighted average price of $33.4197 per share as of October 1, 2021. The Company issued JJDC 748,062 shares of its common stock which had a fair market value of $28.9 million when the shares were transferred. The Company will collaborate with Janssen on further clinical development of plamotamab with Janssen and share development costs with Janssen paying 80% and the Company paying 20% of certain development costs. The Company is generally responsible for conducting research activities under the Second Janssen Agreement, and Janssen is generally responsible for all development, manufacturing, and commercialization activities for CD28 Licensed Antibodies that are advanced. There is a receivable of $3.7 million as of September 30, 2022, related to cost-sharing activities for development of plamotamab under the Second Janssen Agreement. The Company recognized $0.1 million and $6.3 million of revenue related to the two Janssen agreements for the three months ended September 30, 2022 and 2021, respectively. The Company recognized $2.1 million and $37.0 million of revenue related to the two Janssen agreements for the nine months ended September 30, 2022, and 2021, respectively, and there is $35.2 million in deferred revenue as of September 30, 2022 related to the Second Janssen Agreement. MorphoSys AG In June 2010, the Company entered into a Collaboration and License Agreement with MorphoSys AG (MorphoSys), which was subsequently amended. Under the agreement, we granted MorphoSys an exclusive worldwide license to the Company’s patents and know-how to research, develop and commercialize the XmAb5574 product candidate (subsequently renamed MOR208 and tafasitamab) with the right to sublicense under certain conditions. If certain developmental, regulatory and sales milestones are achieved, the Company is eligible to receive future milestone payments and royalties. The Company recognized $2.1 million and $1.3 million of royalty revenue during the three months ended September 30, 2022 and 2021, respectively. The Company recognized $5.6 million and $16.4 million of revenue during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, there is a receivable of $2.0 million related to estimated royalties due under the arrangement. As of September 30, 2022, there is no deferred revenue related to this agreement. Novartis Institute for Biomedical Research, Inc. In June 2016, the Company entered into a Collaboration and License Agreement (the Novartis Agreement) with Novartis Institutes for BioMedical Research, Inc. (Novartis) to develop and commercialize bispecific and other Fc engineered antibody drug candidates using the Company’s proprietary XmAb technologies and drug candidates. Pursuant to the Novartis Agreement, the Company and Novartis were co-developing vibecotamab worldwide and sharing development costs. In August 2021, Novartis notified the Company it was terminating its rights with respect to the vibecotamab program, which became effective in February 2022. Under the Novartis Agreement, Novartis is responsible for its share of vibecotamab development costs through February 2023. In June 2021, Novartis selected an Fc candidate and received a non-exclusive license to the Company’s Fc technology. Novartis will assume full responsibility for development and commercialization of the licensed Fc product candidate. The Company is eligible to receive development, clinical, and sales milestones and royalties on net sales of approved products for the licensed Fc candidate. No revenue was recognized during the three and nine months ended September 30, 2022, or the three months ended September 30, 2021, from the Novartis Agreement. The Company recognized $41.1 million of revenue during the nine months ended September 30, 2021. As of September 30, 2022, there is a receivable of $0.3 million related to cost-sharing of development activities for the third quarter of 2022 for the vibecotamab program, and there is no deferred revenue as of September 30, 2022. Vir Biotechnology, Inc. In the third quarter of 2019, the Company entered into a Patent License Agreement (the Vir Agreement) with Vir Biotechnology, Inc. (Vir) pursuant to which the Company provided a non-exclusive license to its Xtend technology for up to two targets. In March 2020, the Company entered into a second Patent License Agreement (the Second Vir Agreement) with Vir pursuant to which the Company provided a non-exclusive license to its Xtend technology to extend the half-life of two novel antibodies that Vir is investigating as potential treatments for patients with COVID-19. Under the terms of the Second Vir Agreement, Vir is responsible for all research, development, regulatory and commercial activities for the antibodies, and the Company is eligible to receive royalties on the net sales of approved products in the mid-single digit percentage range. In May 2021, the FDA granted emergency use authorization (EUA) to Vir’s COVID-19 antibody, sotrovimab (VIR-7831), for the treatment of mild-to-moderate COVID-19 in high-risk adults and patients. In February 2021, the Company entered into the Vir Amendment No. 1 to the Vir Agreement and the Vir Amendment No. 1 to the Second Vir Agreement (collectively, the Vir Amendments), in each case, pursuant to which the Company provided a non-exclusive license to additional Fc technology for the targets previously identified in the Vir Agreement and the Second Vir Agreement, respectively. If Vir incorporates additional Fc technologies in the identified targets, the Company is eligible to receive additional royalties on net sales of approved products from low to mid-single digit range. The Company recognized $17.8 million and $110.1 million of royalty revenue for the three and nine months ended September 30, 2022, respectively. The Company recognized $6.3 million and $7.7 million of revenue for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, there is a receivable of $17.8 million related to estimated royalty due under this agreement, and there is no deferred revenue related to this agreement. Viridian Therapeutics, Inc. In December 2020, the Company entered into a Technology License Agreement (Viridian Agreement) with Viridian, pursuant to which the Company provided Viridian a non-exclusive license to its Xtend Fc technology and an exclusive license to apply its Xtend Fc technology to antibodies targeting IGF-1R. Viridian is responsible for all development and commercialization activities. The Company received an upfront payment and is eligible to receive development, regulatory and sales milestones, and royalties on net sales in the mid-single digit percentage range. In December 2021, the Company entered into a second Technology License Agreement (Second Viridian Agreement) with Viridian for a non-exclusive license to certain antibody libraries developed by the Company. Under the Second Viridian Agreement, Viridian received a one-year research license to review the antibodies and the right to select up to three antibodies for further development. Viridian is responsible for all further development of the selected antibodies. The Company received an upfront payment and is eligible to receive development, regulatory and sales milestones, in addition to royalties on net sales of approved products under the Second Viridian Agreement. In connection with the Viridian Agreement and the Second Viridian Agreement, the Company received shares of Viridian common stock. The Company reported unrealized gain of $6.4 million and $0.5 million for the three and nine months ended September 30, 2022 related to the shares of Viridian common stock. The Company reported unrealized loss of $0.6 million for the three months ended September 30, 2021. For the nine months ended September 30, 2021, there was no unrealized gain or loss related to the shares of Viridian common stock. The Company did not recognize revenue for the three and nine months ended September 30, 2022 or 2021. There is no deferred revenue as of September 30, 2022 related to this agreement. Zenas BioPharma Limited In November 2020, the Company entered into a License Agreement (the Zenas Agreement) with Zenas, pursuant to which the Company granted Zenas exclusive, worldwide rights to develop and commercialize three preclinical-stage Fc-engineered drug candidates: XmAb6755, XPro9523, and XmAb10171. Under the Zenas Agreement, Zenas will be responsible for all further development and commercialization activities for the drug candidates. The Company received a 15% equity interest in Zenas with a fair value of $16.1 million and is eligible to receive royalties on net sales of approved products in the mid-single digit to mid-teen percentage range. The equity in Zenas is recorded at the fair value as of the date of the Zenas Agreement and is reviewed each reporting period for impairment or other evidence of change in value. In November 2021, the Company entered into a second License Agreement (Second Zenas Agreement) with Zenas, in which we licensed the exclusive worldwide rights to develop and commercialize the Company’s obexelimab (XmAb5871) drug candidate. Under the Second Zenas Agreement, Zenas will be responsible for all further development and commercialization activities for obexelimab. The Company received a warrant to acquire additional equity in Zenas and is eligible to receive development, regulatory and sales milestones, and royalties on net sales of approved products in the mid-single digit to mid-teen percentage range. The warrant in Zenas is recorded at its fair value as of the date of the Second Zenas Agreement and is reviewed each reporting period for impairment or other evidence of change in value. The Company did not record an impairment or change in the value of the Zenas equity or the warrant in Zenas in the three and nine months ended September 30, 2022 or 2021. The Company did not recognize any revenue related to the Zenas Agreement for the three and nine months ended September 30, 2022 or 2021, and there is no deferred revenue related to this agreement. Revenue earned The revenues recorded for the three and nine months ended September 30, 2022 and 2021 were earned principally from the following licensees (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Alexion $ 7.3 $ 5.8 $ 20.2 $ 16.4 Astellas — — 5.0 — Genentech — — — 2.5 Janssen 0.1 6.3 2.1 37.0 MorphoSys 2.1 1.3 5.6 16.4 Novartis — — — 41.1 Vir 17.8 6.3 110.1 7.7 Total $ 27.3 $ 19.7 $ 143.0 $ 121.1 The table below summarizes the disaggregation of revenue recorded for the three and nine months ended September 30, 2022 and 2021 (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Research collaboration $ 0.1 $ 6.3 $ 2.1 $ 79.7 Milestone — — 5.0 14.0 Royalties 27.2 13.4 135.9 27.4 Total $ 27.3 $ 19.7 $ 143.0 $ 121.1 Remaining Performance Obligations and Deferred Revenue The Company’s remaining performance obligation as of September 30, 2022 is conducting research activities pursuant to research plans under the Second Janssen Agreement. The Company’s obligation to perform research services under the Genentech and the Novartis Agreements ended upon expiration of the respective research terms for each agreement in the second quarter of 2021. As of September 30, 2022 and 2021, the Company has deferred revenue of $35.2 million and $13.0 million, respectively. All deferred revenue as of September 30, 2022 is classified as current liabilities as the Company’s obligations to perform services are due on demand when requested by Janssen under the Second Janssen Agreement. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Taxes | |
Income Taxes | 10. Income taxes The provision for income tax for the three and nine months ended September 30, 2022 is $1.1 million. There was no provision for income tax for the three and nine months ended September 30, 2021. Beginning in 2022, the Tax Cuts and Jobs Act (TCJA) requires taxpayers to capitalize certain research and development costs and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174. Previously, such costs could be deducted in the period they were incurred. This provision may increase our taxable income for the tax year ended December 31, 2022 and subsequent years, and result in additional cash payments for our federal income taxes. As of September 30, 2022, the Company’s deferred income tax assets, consisting primarily of net operating loss and tax credit carryforwards, have been fully offset by a valuation allowance. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Event | |
Subsequent Event | 11. Subsequent Event In November 2022, Zenas closed on a Series B financing, pursuant to which a warrant to purchase Zenas equity that was held by the Company was automatically exercised, and a convertible note issued to the Company by Zenas was automatically converted with both converting into shares of Zenas’ Series B preferred stock. After the financing transaction, we will continue to record our investment in Zenas at fair value adjusted at each reporting period for impairment or other evidence of change in value. The equity shares in Zenas received from exercise of the warrant and conversion of the notes have an estimated fair value of $34.5 million and $7.7 million, respectively. As a result of the Zenas financing transaction, the estimated fair value of our investment in equity securities would increase by $17.9 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Polices) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 24, 2022. |
Use of Estimates | Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, evaluation of intangible assets, investments, leases and other assets for evidence of impairment, fair value measurements, and contingencies. Significant estimates in these interim financial statements include estimates made for royalty revenue, accrued research and development expenses, stock-based compensation expenses, intangible assets, incremental borrowing rate for right-of-use asset and lease liability, estimated standalone selling price of performance obligations, estimated time for completing delivery of performance obligations under certain arrangements, the likelihood of recognizing variable consideration, the carrying value of equity instruments without a readily determinable fair value, and recoverability of deferred tax assets. |
Intangible Assets | Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There was no impairment charge recorded for the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $0.4 million related to an acquired license. The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. We abandoned $0.3 million and $1.3 million of in-process intangible assets during the three and nine months ended September 30, 2022, respectively. There was no material abandonment of in-process intangible assets during the three months ended September 30, 2021. We abandoned $0.3 million of in-process intangible assets during the nine months ended September 30, 2021. |
Marketable Debt and Equity Securities | Marketable Debt and Equity Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and concentration and diversification. The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions. The Company considers its marketable debt securities to be available-for-sale because it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost. These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss). There were no impairment losses or recoveries recorded for the three and nine months ended September 30, 2022 and 2021. Accrued interest on marketable debt securities is included in the marketable securities’ carrying value. Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis. During the three and nine months ended September 30, 2022, the Company recorded an unrealized loss of $0.9 million and $8.4 million, respectively, in its portfolio of marketable debt securities. The unrealized losses are due to the changing interest rate environment and are not due to changes in the credit quality of the underlying securities. The unrealized losses are recorded in other comprehensive income (loss) for the three and nine months ended September 30, 2022. The Company receives equity securities in connection with certain licensing transactions with its partners. These investments in equity securities are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For equity securities with a readily determinable fair value, the Company remeasures these equity investments at each reporting period until such time that the investment is sold or disposed. If the Company sells an investment, any realized gain or loss on the sale of the securities will be recognized within other income (expense) in the Statements of Comprehensive Income (Loss) in the period of sale. The Company also has investments in equity securities without a readily determinable fair value, where the Company elects the measurement alternative to record the investment at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There was no impairment charge recorded for the three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $0.1 million in connection with equity securities without a readily determinable fair value. During the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $0.6 million. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pronouncements Not Yet Effective In June 2022, the Financial Accounting Standards Board (FASB) issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2021 Annual Report on Form 10-K. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value of Financial Instruments | |
Schedule of assets recorded at fair value | September 30, 2022 (unaudited) December 31, 2021 Total Total Fair Value Level 1 Level 2 Fair Value Level 1 Level 2 Money Market Funds $ 24,506 $ 24,506 $ — $ 123,892 $ 123,892 $ — Corporate Securities 186,597 — 186,597 144,418 — 144,418 Government Securities 370,521 — 370,521 309,814 — 309,814 $ 581,624 $ 24,506 $ 557,118 $ 578,124 $ 123,892 $ 454,232 |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Net Income (Loss) Per Common Share | |
Schedule of basic and diluted net income (loss) per common share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (in thousands, except share and per share data) (in thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders $ (32,759) $ (40,191) $ (43,139) $ 9,570 Denominator: Weighted-average common shares outstanding used in computing basic net income (loss) 59,716,594 58,350,647 59,564,985 58,199,928 Effect of dilutive securities — — — 2,146,552 Weighted-average common shares outstanding used in computing diluted net income (loss) 59,716,594 58,350,647 59,564,985 60,346,480 Basic net income (loss) per common share $ (0.55) $ (0.69) $ (0.72) $ 0.16 Diluted net income (loss) per common share $ (0.55) $ (0.69) $ (0.72) $ 0.16 |
Marketable Debt and Equity Se_2
Marketable Debt and Equity Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Debt and Equity Securities | |
Schedule of marketable securities | Gross Gross Amortized Unrealized Unrealized September 30, 2022 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 24,506 $ — $ — $ 24,506 Corporate Securities 188,360 — (1,763) 186,597 Government Securities 378,623 — (8,102) 370,521 $ 591,489 $ — $ (9,865) $ 581,624 Reported as Cash and cash equivalents $ 24,506 Marketable securities 557,118 Total investments $ 581,624 Gross Gross Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 123,892 $ — $ — $ 123,892 Corporate Securities 144,584 — (166) 144,418 Government Securities 311,148 1 (1,335) 309,814 $ 579,624 $ 1 $ (1,501) $ 578,124 Reported as Cash and cash equivalents $ 123,892 Marketable securities 454,232 Total investments $ 578,124 |
Schedule of maturities of marketable securities | Amortized Estimated September 30, 2022 Cost Fair Value (in thousands) Mature in one year or less $ 523,629 $ 515,398 Mature within two years 43,354 41,720 $ 566,983 $ 557,118 |
Schedule of unrealized losses on available-for-sale investments | Less than 12 months 12 months or greater Unrealized Unrealized September 30, 2022 Fair value losses Fair value losses (in thousands) Corporate Securities $ 143,625 $ (1,649) $ 2,880 $ (114) Government Securities 331,407 (6,582) 38,840 (1,520) $ 475,032 $ (8,231) $ 41,720 $ (1,634) Less than 12 months 12 months or greater Unrealized Unrealized December 31, 2021 Fair value losses Fair value losses (in thousands) Corporate Securities $ 50,337 $ (51) $ 45,872 $ (115) Government Securities 39,909 (54) 254,593 (1,281) $ 90,246 $ (105) $ 300,465 $ (1,396) |
Schedule of equity securities with readily determinable fair value | The Company’s equity securities include securities with a readily determinable fair value. These investments are carried at fair value with changes in fair value recognized each period and reported within other income (expense). For the three and nine months ended September 30, 2022, a gain of $5.3 million and a loss of $4.7 million, respectively, were recorded under other income (expense) related to these securities. Equity securities with a readily determinable fair value, which are categorized as Level 1 in the fair value hierarchy under ASC 820, and their fair values (in thousands) as of September 30, 2022 and December 31, 2021 are as follows: Fair Value Fair Value September 30, 2022 December 31, 2021 Astria Common Stock $ 5,785 $ 3,449 INmune Common Stock 11,690 19,233 Viridian Common Stock 14,709 14,178 $ 32,184 $ 36,860 |
Schedule of equity securities without readily determinable fair value | Carrying Value Carrying Value September 30, 2022 December 31, 2021 Astria Preferred Stock $ 174 $ 312 Zenas Preferred Stock 30,950 30,950 $ 31,124 $ 31,262 |
Schedule of net gains and losses | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net gain (loss) recognized on equity securities $ 5,299 $ 1,506 $ (4,676) $ 57,507 Less: net gain recognized on sale of equity securities — — — (18,301) Unrealized gain (loss) recognized on equity securities $ 5,299 $ 1,506 $ (4,676) $ 39,206 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Schedule of total employee, director and non-employee stock-based compensation expense recognized | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 General and administrative $ 4,736 $ 3,370 $ 12,760 $ 9,300 Research and development 8,024 5,573 23,408 17,286 $ 12,760 $ 8,943 $ 36,168 $ 26,586 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock options $ 7,833 $ 6,959 $ 22,178 $ 20,844 ESPP 282 265 873 766 RSUs 4,645 1,719 13,117 4,976 $ 12,760 $ 8,943 $ 36,168 $ 26,586 |
Summary of stock option activity | Weighted Weighted Average Average Number of Exercise Remaining Aggregate Shares Subject Price Contractual Intrinsic to Outstanding (Per Term Value Options Share) (in years) (in thousands) Balance at December 31, 2021 8,676,329 $ 29.11 6.65 $ 100,057 Options granted 2,007,833 $ 29.58 Options forfeited (440,882) $ 33.77 Options exercised (178,904) $ 18.64 Balance at September 30, 2022 10,064,376 $ 29.18 6.51 $ 27,085 Exercisable 6,401,896 $ 26.57 5.21 $ 26,936 |
Schedule of weighted average assumptions used for estimation of fair value of stock options | Options Options Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Expected term (years) 6.1 6.0 6.3 6.2 Expected volatility 51.9 % 55.6 % 53.0 % 55.6 % Risk-free interest rate 3.38 % 0.88 % 2.02 % 1.00 % Expected dividend yield — % — % — % — % |
Schedule of weighted average assumptions used for estimation of fair value of ESPP | ESPP ESPP Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Expected term (years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 43.2 - 55.7 % 46.1 - 66.4 % 43.2 - 55.7 % 46.1 - 66.4 % Risk-free interest rate 0.13 - 2.82 % 0.04 - 1.65 % 0.13 - 2.82 % 0.04 - 1.65 % Expected dividend yield — % — % — % — % |
Summary of restricted stock unity activity | Weighted Restricted Average Grant Stock Date Fair Value Units (Per unit) Unvested RSUs at December 31, 2021 826,148 $ 37.79 Granted 809,630 29.61 Vested (170,295) 37.42 Forfeited (108,076) 33.65 Unvested RSUs at September 30, 2022 1,357,407 $ 33.28 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of operating lease liabilities maturities | The following table reconciles the undiscounted cash flows for the operating leases at September 30, 2022 to the operating lease liabilities recorded on the balance sheet (in thousands): Years ending December 31, For the remainder of 2022 $ 727 2023 7,251 2024 6,072 2025 6,176 2026 5,638 2027 5,791 Thereafter 49,407 Total undiscounted lease payments 81,062 Less: Tenant allowance (3,489) Less: Imputed interest (34,483) Present value of lease payments $ 43,090 Lease liabilities - short-term $ 20,551 Lease liabilities - long-term 22,539 Total lease liabilities $ 43,090 |
Summary of lease costs and cash disclosures | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Operating lease cost $ 1,589 $ 1,553 $ 4,725 $ 2,780 Variable lease cost 156 16 287 44 Total lease costs $ 1,745 $ 1,569 $ 5,012 $ 2,824 Cash paid for amounts included in the measurement of lease liabilities $ 564 $ 1,034 $ 1,913 $ 2,081 |
Collaboration and Licensing A_2
Collaboration and Licensing Agreements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Collaboration and Licensing Agreements | |
Schedule of revenue by licensees | The revenues recorded for the three and nine months ended September 30, 2022 and 2021 were earned principally from the following licensees (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Alexion $ 7.3 $ 5.8 $ 20.2 $ 16.4 Astellas — — 5.0 — Genentech — — — 2.5 Janssen 0.1 6.3 2.1 37.0 MorphoSys 2.1 1.3 5.6 16.4 Novartis — — — 41.1 Vir 17.8 6.3 110.1 7.7 Total $ 27.3 $ 19.7 $ 143.0 $ 121.1 |
Schedule of disaggregation of revenue | The table below summarizes the disaggregation of revenue recorded for the three and nine months ended September 30, 2022 and 2021 (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Research collaboration $ 0.1 $ 6.3 $ 2.1 $ 79.7 Milestone — — 5.0 14.0 Royalties 27.2 13.4 135.9 27.4 Total $ 27.3 $ 19.7 $ 143.0 $ 121.1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Patents, licenses, and other intangible assets | ||||
Abandonment costs | $ 1,331,000 | $ 727,000 | ||
Impairment of intangible assets | $ 0 | $ 400,000 | 0 | 400,000 |
Impairment loss or recoveries | 0 | 0 | 0 | 0 |
Net unrealized loss on marketable debt securities | (931,000) | (59,000) | (8,366,000) | (149,000) |
Impairment on equity securities | 0 | 600,000 | 138,000 | 563,000 |
In-process intangible assets | ||||
Patents, licenses, and other intangible assets | ||||
Abandonment costs | $ 300,000 | $ 0 | $ 1,300,000 | $ 300,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value of Financial Instruments | ||
Money Market Funds | $ 52,654 | $ 143,480 |
Marketable Securities | 557,118 | |
Total Fair Value | 581,624 | 578,124 |
Money Market Funds | ||
Fair Value of Financial Instruments | ||
Money Market Funds | 24,506 | 123,892 |
Corporate Securities | ||
Fair Value of Financial Instruments | ||
Marketable Securities | 186,597 | 144,418 |
Government Securities | ||
Fair Value of Financial Instruments | ||
Marketable Securities | 370,521 | 309,814 |
Level 1 | ||
Fair Value of Financial Instruments | ||
Total Fair Value | 24,506 | 123,892 |
Level 1 | Money Market Funds | ||
Fair Value of Financial Instruments | ||
Money Market Funds | 24,506 | 123,892 |
Level 2 | ||
Fair Value of Financial Instruments | ||
Total Fair Value | 557,118 | 454,232 |
Level 2 | Corporate Securities | ||
Fair Value of Financial Instruments | ||
Marketable Securities | 186,597 | 144,418 |
Level 2 | Government Securities | ||
Fair Value of Financial Instruments | ||
Marketable Securities | $ 370,521 | $ 309,814 |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Income (Loss) Per Common Share | ||||
Net income (loss) attributable to common stockholders | $ (32,759) | $ (40,191) | $ (43,139) | $ 9,570 |
Weighted-average common shares outstanding used in computing basic net income (loss) | 59,716,594 | 58,350,647 | 59,564,985 | 58,199,928 |
Effect of dilutive securities | 2,146,552 | |||
Weighted-average common shares outstanding used in computing diluted net income (loss) | 59,716,594 | 58,350,647 | 59,564,985 | 60,346,480 |
Basic net income (loss) per common share (in dollars per share) | $ (0.55) | $ (0.69) | $ (0.72) | $ 0.16 |
Diluted net income (loss) per common share (in dollars per share) | $ (0.55) | $ (0.69) | $ (0.72) | $ 0.16 |
Net Income (Loss) Per Common _4
Net Income (Loss) Per Common Share - Anti-dilutive securities (Details) | 9 Months Ended |
Sep. 30, 2021 shares | |
Net Income (Loss) Per Common Share | |
Securities excluded in calculation of EPS | 1,139,403 |
Marketable Debt and Equity Se_3
Marketable Debt and Equity Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Available-for-sale Securities | ||
Cash and cash equivalents | $ 52,654 | $ 143,480 |
Investments, amortized cost | 591,489 | 579,624 |
Investments | 581,624 | 578,124 |
Total amortized cost | 566,983 | |
Gross unrealized gains | 1 | |
Gross unrealized losses | (9,865) | (1,501) |
Marketable Securities | 557,118 | |
Marketable securities | ||
Schedule of Available-for-sale Securities | ||
Marketable Securities | 557,118 | 454,232 |
Money Market Funds | ||
Schedule of Available-for-sale Securities | ||
Cash and cash equivalents | 24,506 | 123,892 |
Cash and Cash Equivalents | ||
Schedule of Available-for-sale Securities | ||
Cash and cash equivalents | 24,506 | 123,892 |
Corporate Securities | ||
Schedule of Available-for-sale Securities | ||
Total amortized cost | 188,360 | 144,584 |
Gross unrealized losses | (1,763) | (166) |
Marketable Securities | 186,597 | 144,418 |
Government Securities | ||
Schedule of Available-for-sale Securities | ||
Total amortized cost | 378,623 | 311,148 |
Gross unrealized gains | 1 | |
Gross unrealized losses | (8,102) | (1,335) |
Marketable Securities | $ 370,521 | $ 309,814 |
Marketable Debt and Equity Se_4
Marketable Debt and Equity Securities - Maturities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Amortized Cost | |
Maturing in one year or less | $ 523,629 |
Maturing within two years | 43,354 |
Total amortized cost | 566,983 |
Estimate Fair Value | |
Maturing in one year or less | 515,398 |
Maturing within two years | 41,720 |
Total estimated fair value | $ 557,118 |
Marketable Debt and Equity Se_5
Marketable Debt and Equity Securities - Unrealized losses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair value | ||
Fair value, less than 12 months | $ 475,032 | $ 90,246 |
Fair value, 12 months or greater | 41,720 | 300,465 |
Unrealized losses | ||
Unrealized losses, Less than 12 months | (8,231) | (105) |
Unrealized losses, 12 months or greater | (1,634) | (1,396) |
Corporate Securities | ||
Fair value | ||
Fair value, less than 12 months | 143,625 | 50,337 |
Fair value, 12 months or greater | 2,880 | 45,872 |
Unrealized losses | ||
Unrealized losses, Less than 12 months | (1,649) | (51) |
Unrealized losses, 12 months or greater | (114) | (115) |
Government Securities | ||
Fair value | ||
Fair value, less than 12 months | 331,407 | 39,909 |
Fair value, 12 months or greater | 38,840 | 254,593 |
Unrealized losses | ||
Unrealized losses, Less than 12 months | (6,582) | (54) |
Unrealized losses, 12 months or greater | $ (1,520) | $ (1,281) |
Marketable Debt and Equity Se_6
Marketable Debt and Equity Securities - Equity Securities with Readily Determinable Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Equity Securities | |||||
Equity Securities with Readily Determinable Fair Value | $ 32,184 | $ 32,184 | $ 36,860 | ||
Unrealized gain (loss) recognized on equity securities | 5,299 | $ 1,506 | (4,676) | $ 39,206 | |
Common Stock | |||||
Equity Securities | |||||
Equity Securities with Readily Determinable Fair Value | 32,184 | 32,184 | 36,860 | ||
Astria/Catabasis | Common Stock | |||||
Equity Securities | |||||
Equity Securities with Readily Determinable Fair Value | 5,785 | 5,785 | 3,449 | ||
INmune | Common Stock | |||||
Equity Securities | |||||
Equity Securities with Readily Determinable Fair Value | 11,690 | 11,690 | 19,233 | ||
Viridian | Common Stock | |||||
Equity Securities | |||||
Equity Securities with Readily Determinable Fair Value | $ 14,709 | $ 14,709 | $ 14,178 |
Marketable Debt and Equity Se_7
Marketable Debt and Equity Securities - Equity Securities without Readily Determinable Fair Value (Details) - Preferred Stock - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Equity securities without readily determinable fair value | ||
Equity Securities without Readily Determinable Fair Value | $ 31,124 | $ 31,262 |
Astria/Catabasis | ||
Equity securities without readily determinable fair value | ||
Equity Securities without Readily Determinable Fair Value | 174 | 312 |
Zenas Bio Pharma Limited | ||
Equity securities without readily determinable fair value | ||
Equity Securities without Readily Determinable Fair Value | $ 30,950 | $ 30,950 |
Marketable Debt and Equity Se_8
Marketable Debt and Equity Securities - Equity Securities Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Equity Securities | |||||
Gain (loss) on equity securities, net | $ 5,299 | $ 1,506 | $ (4,676) | $ 57,507 | |
Impairment on equity securities | 0 | $ 600 | 138 | $ 563 | |
Preferred Stock | |||||
Equity Securities | |||||
Equity Securities without Readily Determinable Fair Value | 31,124 | 31,124 | $ 31,262 | ||
Astria/Catabasis | Preferred Stock | |||||
Equity Securities | |||||
Equity Securities without Readily Determinable Fair Value | $ 174 | 174 | $ 312 | ||
Impairment on equity securities | $ 100 | ||||
Technology License Agreement | Viridian | Common Stock | |||||
Equity Securities | |||||
Owned investment | 717,144 | 717,144 | |||
License Agreement | INmune | Common Stock | |||||
Equity Securities | |||||
Owned investment | 1,885,533 | 1,885,533 |
Marketable Debt and Equity Se_9
Marketable Debt and Equity Securities - Net gains and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Marketable Debt and Equity Securities | ||||
Net gain (loss) recognized on equity securities | $ 5,299 | $ 1,506 | $ (4,676) | $ 57,507 |
Less: net gain recognized on sale of equity securities | (18,301) | |||
Unrealized gain (loss) recognized on equity securities | $ 5,299 | $ 1,506 | $ (4,676) | $ 39,206 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 1 Months Ended | 9 Months Ended | 106 Months Ended | ||||
Jan. 01, 2022 shares | Dec. 02, 2013 shares | Dec. 31, 2013 | Nov. 30, 2013 shares | Sep. 30, 2022 item shares | Sep. 30, 2021 shares | Sep. 30, 2022 shares | |
Stock options | |||||||
Stock-based compensation | |||||||
Options granted (in shares) | 2,007,833 | 1,662,574 | |||||
ESPP | |||||||
Stock-based compensation | |||||||
Total number of shares of common stock available for issuance | 576,409 | 576,409 | |||||
Awards issued under the plan (in shares) | 598,432 | ||||||
Annual increase in shares of common stock available for issuance (in shares) | 593,555 | ||||||
ESPP | Maximum | |||||||
Stock-based compensation | |||||||
Annual percentage increase in shares of common stock available for issuance | 1% | ||||||
Annual increase in shares of common stock available for issuance (in shares) | 621,814 | ||||||
RSUs | |||||||
Stock-based compensation | |||||||
Granted | 809,630 | 1,934,117 | |||||
Annual installment vesting periods | item | 3 | ||||||
The 2013 Plan | |||||||
Stock-based compensation | |||||||
Total number of shares of common stock available for issuance | 2,374,222 | 14,974,396 | 14,974,396 | ||||
Annual percentage increase in shares of common stock available for issuance | 4% | ||||||
Increase in shares of common stock available for issuance (in shares) | 2,374,222 | ||||||
Options granted (in shares) | 14,407,906 | ||||||
The 2010 Plan | |||||||
Stock-based compensation | |||||||
Options granted (in shares) | 0 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-based compensation | ||||
Total employee, director and non-employee stock-based compensation expense | $ 12,760 | $ 8,943 | $ 36,168 | $ 26,586 |
Stock options | ||||
Stock-based compensation | ||||
Total employee, director and non-employee stock-based compensation expense | 7,833 | 6,959 | 22,178 | 20,844 |
ESPP | ||||
Stock-based compensation | ||||
Total employee, director and non-employee stock-based compensation expense | 282 | 265 | 873 | 766 |
RSUs | ||||
Stock-based compensation | ||||
Total employee, director and non-employee stock-based compensation expense | 4,645 | 1,719 | 13,117 | 4,976 |
General and administrative | ||||
Stock-based compensation | ||||
Total employee, director and non-employee stock-based compensation expense | 4,736 | 3,370 | 12,760 | 9,300 |
Research and development | ||||
Stock-based compensation | ||||
Total employee, director and non-employee stock-based compensation expense | $ 8,024 | $ 5,573 | $ 23,408 | $ 17,286 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Number of Shares subject to outstanding options | |||
Balance at the beginning of the period (in shares) | 8,676,329 | ||
Options granted (in shares) | 2,007,833 | 1,662,574 | |
Options forfeited (in shares) | (440,882) | ||
Options exercised (in shares) | (178,904) | ||
Balance at the end of the period (in shares) | 10,064,376 | 8,676,329 | |
Exercisable options (in shares) | 6,401,896 | ||
Weighted Average Exercise Price (Per Share) | |||
Balance at the beginning of the period (in dollars per share) | $ 29.11 | ||
Options granted (in dollars per share) | 29.58 | ||
Options forfeited (in dollars per share) | 33.77 | ||
Options exercised (in dollars per share) | 18.64 | ||
Balance at the end of the period (in dollars per share) | 29.18 | $ 29.11 | |
Exercisable (in dollars per share) | $ 26.57 | ||
Weighted-average remaining contractual life | 6 years 6 months 3 days | 6 years 7 months 24 days | |
Weighted-average remaining contractual life of awards exercisable | 5 years 2 months 15 days | ||
Aggregate intrinsic value of options outstanding | $ 27,085 | $ 100,057 | |
Aggregate intrinsic value of options exercisable | $ 26,936 | ||
Closing price of common stock (in dollars per share) | $ 25.98 | ||
Weighted average fair value of options granted (in dollars per share) | $ 15.50 | $ 21.96 |
Stock-Based Compensation - FV o
Stock-Based Compensation - FV of employee stock options (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock options | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected volatility (as a percent) | 51.90% | 55.60% | 53% | 55.60% |
Risk-free interest rate (as a percent) | 3.38% | 0.88% | 2.02% | 1% |
Expected term (years) | 6 years 1 month 6 days | 6 years | 6 years 3 months 18 days | 6 years 2 months 12 days |
Compensation expense | ||||
Period to recognize unamortized compensation expense | 2 years 6 months | |||
Unamortized compensation expense related to unvested options | $ 59.1 | $ 59.1 | ||
ESPP | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected volatility, low end of range (as a percent) | 43.20% | 46.10% | 43.20% | 46.10% |
Expected volatility, high end of range (as a percent) | 55.70% | 66.40% | 55.70% | 66.40% |
Risk-free interest rate, low end of range (as a percent) | 0.13% | 0.04% | 0.13% | 0.04% |
Risk-free interest rate, high end of range (as a percent) | 2.82% | 1.65% | 2.82% | 1.65% |
Compensation expense | ||||
Period to recognize unamortized compensation expense | 1 year 2 months 12 days | |||
Unamortized compensation expense related to unvested options | $ 1.4 | $ 1.4 | ||
ESPP | Minimum | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected term (years) | 6 months | 6 months | 6 months | 6 months |
ESPP | Maximum | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected term (years) | 2 years | 2 years | 2 years | 2 years |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted stock units (Details) - RSUs $ / shares in Units, $ in Thousands | 9 Months Ended | 106 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | |
Stock-based compensation | ||
Beginning balance | shares | 826,148 | |
Granted | shares | 809,630 | 1,934,117 |
Vested | shares | (170,295) | |
Forfeited | shares | (108,076) | |
Ending balance | shares | 1,357,407 | 1,357,407 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 37.79 | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 29.61 | |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 37.42 | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 33.65 | |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 33.28 | $ 33.28 |
Compensation expense | ||
Unamortized compensation expense related to unvested restricted stock units | $ | $ 32,000 | $ 32,000 |
Period to recognize unamortized compensation expense | 2 years |
Leases (Details)
Leases (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2021 item | Jul. 31, 2017 | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2026 USD ($) | Aug. 02, 2022 USD ($) | Aug. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||||
Option to extend | true | |||||||
For the remainder of 2022 | $ 727 | $ 727 | ||||||
2023 | 7,251 | 7,251 | ||||||
2024 | 6,072 | 6,072 | ||||||
2025 | 6,176 | 6,176 | ||||||
2026 | 5,638 | 5,638 | ||||||
2027 | 5,791 | 5,791 | ||||||
Thereafter | 49,407 | 49,407 | ||||||
Total undiscounted lease payments | 81,062 | 81,062 | ||||||
Less: Tenant allowance | (3,489) | (3,489) | ||||||
Less: Imputed interest | (34,483) | (34,483) | ||||||
Present value of lease payments | 43,090 | 43,090 | ||||||
Lease liability - long-term | $ 22,539 | $ 22,539 | $ 33,969 | |||||
Monrovia, CA - office and laboratory space | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Renewal term | 5 years | 5 years | ||||||
Monrovia, CA - office and laboratory space with additional space | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Renewal term | 2 years | 2 years | ||||||
ROU assets exchanged for operating lease liabilities | $ 300 | $ 300 | ||||||
San Diego, CA - office space | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
ROU assets exchanged for operating lease liabilities | 1,500 | |||||||
Pasadena, CA - office and laboratory space | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Phases of lease term | item | 2 | |||||||
Improvement allowance | $ 5,000 | $ 17,000 | ||||||
ROU assets exchanged for operating lease liabilities | $ 11,400 | $ 11,400 | ||||||
Forecast | Pasadena, CA - office and laboratory space | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Improvement allowance | $ 3,300 |
Leases - Operating lease liabil
Leases - Operating lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Lease liability - short-term | $ 20,551 | |
Lease liability - long-term | 22,539 | $ 33,969 |
Operating lease liabilities | $ 43,090 |
Leases - Lease costs (Details)
Leases - Lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||||
Operating lease cost | $ 1,589 | $ 1,553 | $ 4,725 | $ 2,780 |
Variable lease cost | 156 | 16 | 287 | 44 |
Total lease costs | 1,745 | 1,569 | 5,012 | 2,824 |
Cash paid for amounts included in the measurement of lease liabilities | $ 564 | $ 1,034 | $ 1,913 | $ 2,081 |
Remaining lease term | 11 years 10 months 24 days | 12 years 3 months 18 days | 11 years 10 months 24 days | 12 years 3 months 18 days |
Discount rate | 9.10% | 5.70% | 9.10% | 5.70% |
Collaboration and Licensing A_3
Collaboration and Licensing Agreements (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
Nov. 12, 2021 USD ($) shares | Oct. 01, 2021 USD ($) $ / shares | Mar. 08, 2019 | Dec. 31, 2021 USD ($) item | Nov. 30, 2020 USD ($) item | Mar. 31, 2020 item | Feb. 28, 2019 | Jan. 31, 2013 Program | Sep. 30, 2022 USD ($) agreement | Sep. 30, 2021 USD ($) agreement | Sep. 30, 2019 item | Sep. 30, 2022 USD ($) agreement | Sep. 30, 2021 USD ($) agreement | Mar. 31, 2022 USD ($) | |
Collaboration research and licensing agreements | ||||||||||||||
Receivable | $ 66,384,000 | $ 44,876,000 | $ 44,876,000 | |||||||||||
Revenue recorded | 27,299,000 | $ 19,683,000 | 142,969,000 | $ 121,096,000 | ||||||||||
Other income | (1,000) | (593,000) | (244,000) | (610,000) | ||||||||||
Impairment on equity securities | 0 | 600,000 | 138,000 | 563,000 | ||||||||||
Net gains recognized on sale of equity securities | 18,301,000 | |||||||||||||
Unrealized gain (loss) recognized on equity securities | 5,299,000 | 1,506,000 | (4,676,000) | 39,206,000 | ||||||||||
Net gains recognized on equity securities | 5,299,000 | 1,506,000 | (4,676,000) | 57,507,000 | ||||||||||
Accounts receivable | $ 66,384,000 | 44,876,000 | 44,876,000 | |||||||||||
Deferred revenue | 35,200,000 | 13,000,000 | 35,200,000 | 13,000,000 | ||||||||||
Royalties | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 27,200,000 | 13,400,000 | 135,900,000 | 27,400,000 | ||||||||||
Milestone | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 5,000,000 | 14,000,000 | ||||||||||||
Research collaboration | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 100,000 | 6,300,000 | 2,100,000 | 79,700,000 | ||||||||||
Alexion Pharmaceuticals, Inc. | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 7,300,000 | 5,800,000 | 20,200,000 | 16,400,000 | ||||||||||
Astellas | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 5,000,000 | |||||||||||||
Genentech | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 2,500,000 | |||||||||||||
Genentech | Collaboration and License Agreement | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 2,500,000 | |||||||||||||
MorphoSys | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 2,100,000 | 1,300,000 | 5,600,000 | 16,400,000 | ||||||||||
MorphoSys | Collaboration and License Agreement | Royalties | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 1,300,000 | |||||||||||||
Novartis | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 41,100,000 | |||||||||||||
Novartis | Collaboration and License Agreement | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 41,100,000 | |||||||||||||
Vir | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recorded | 17,800,000 | 6,300,000 | 110,100,000 | 7,700,000 | ||||||||||
Option and license agreement | Alexion Pharmaceuticals, Inc. | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Receivable | 12,500,000 | 12,500,000 | ||||||||||||
Accounts receivable | 12,500,000 | 12,500,000 | ||||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Number of different target programs | Program | 1 | |||||||||||||
Option and license agreement | Alexion Pharmaceuticals, Inc. | Royalties | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 7,300,000 | 5,800,000 | 20,200,000 | 16,400,000 | ||||||||||
Research and License Agreement | Amgen, Inc. | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 0 | 0 | 0 | 0 | ||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Research and License Agreement | Astellas | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 0 | 0 | 5,000,000 | 0 | ||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Research and License Agreement | Astellas | Milestone | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Contract asset | $ 5,000,000 | |||||||||||||
Collaboration and License Agreement | Genentech | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Initial cost-sharing percentage | 45% | |||||||||||||
Research license term | 2 years | |||||||||||||
Revenue recognized | 0 | 0 | 0 | |||||||||||
Collaboration and License Agreement | Genentech | XmAb24306 | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Cost sharing receivable (payable) | (3,200,000) | (3,200,000) | ||||||||||||
Collaboration and License Agreement | Genentech | Research service | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Collaboration and License Agreement | Janssen Biotech, Inc | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | $ 100,000 | $ 6,300,000 | $ 2,100,000 | $ 37,000,000 | ||||||||||
Number of collaboration and license agreements | agreement | 2 | 2 | 2 | 2 | ||||||||||
Collaboration and License Agreement | MorphoSys | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Deferred revenue | $ 0 | $ 0 | ||||||||||||
Collaboration and License Agreement | MorphoSys | Royalties | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Receivable | 2,000,000 | 2,000,000 | ||||||||||||
Revenue recognized | 2,100,000 | 5,600,000 | $ 16,400,000 | |||||||||||
Accounts receivable | 2,000,000 | 2,000,000 | ||||||||||||
Collaboration and License Agreement | Novartis | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 0 | $ 0 | 0 | |||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Collaboration and License Agreement | Novartis | Development | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Cost sharing receivable (payable) | 300,000 | 300,000 | ||||||||||||
Technology License Agreement | Astria/Catabasis | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Unrealized gain (loss) recognized on equity securities | 3,900,000 | (2,400,000) | 2,300,000 | 6,700,000 | ||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Technology License Agreement | Viridian | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Number of antibodies | item | 3 | |||||||||||||
Revenue recognized | 0 | 0 | 0 | 0 | ||||||||||
Unrealized gain (loss) recognized on equity securities | 6,400,000 | (600,000) | 500,000 | 0 | ||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
License Agreement | INmune | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Net gains recognized on sale of equity securities | 18,300,000 | |||||||||||||
Unrealized gain (loss) recognized on equity securities | (5,000,000) | 4,500,000 | (7,500,000) | 32,500,000 | ||||||||||
License Agreement | Zenas Bio Pharma Limited | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | 0 | 0 | 0 | 0 | ||||||||||
Purchase amount of share options or equity in noncash transaction | $ 16,100,000 | |||||||||||||
Impairment on equity securities | 0 | 0 | 0 | 0 | ||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Percentage of equity of private company | 15% | |||||||||||||
Number of drug candidates | item | 3 | |||||||||||||
Patent License Agreement | Vir | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Deferred revenue | 0 | 0 | ||||||||||||
Number of different target programs | item | 2 | 2 | ||||||||||||
Patent License Agreement | Vir | Royalties | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Receivable | 17,800,000 | 17,800,000 | ||||||||||||
Revenue recognized | 17,800,000 | $ 6,300,000 | 110,100,000 | |||||||||||
Accounts receivable | 17,800,000 | 17,800,000 | ||||||||||||
Patent License Agreement | Vir | Milestone | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Revenue recognized | $ 7,700,000 | |||||||||||||
Second Collaboration And License Agreement | Janssen Biotech, Inc | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Share development percentage | 80% | |||||||||||||
Nonrefundable upfront payment | $ 100,000,000 | |||||||||||||
Potential milestone payment | $ 1,187,500,000 | |||||||||||||
Research license term | 2 years | |||||||||||||
Deferred revenue | 35,200,000 | 35,200,000 | ||||||||||||
Cost sharing receivable (payable) | $ 3,700,000 | $ 3,700,000 | ||||||||||||
Percentage of responsibility for development costs | 20% | |||||||||||||
Second Collaboration And License Agreement | Johnson & Johnson Innovation, JJDC, Inc. | Common Stock | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Total equity shares | shares | 748,062 | |||||||||||||
Proceeds from sale of common stock | $ 28,900,000 | $ 25,000,000 | ||||||||||||
Term of weighted average price of stock | 30 days | |||||||||||||
Volume-weighted average per share price | $ / shares | $ 33.4197 | |||||||||||||
Second Technology License Agreement | Viridian | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Research license term | 1 year | |||||||||||||
Development-based | Second Collaboration And License Agreement | Janssen Biotech, Inc | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Potential milestone payment | $ 289,400,000 | |||||||||||||
Regulatory-based | Second Collaboration And License Agreement | Janssen Biotech, Inc | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Potential milestone payment | 378,100,000 | |||||||||||||
Sales-based | Second Collaboration And License Agreement | Janssen Biotech, Inc | ||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||
Potential milestone payment | $ 520,000,000 |
Collaborative and Licensing Agr
Collaborative and Licensing Agreements - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | $ 27,299 | $ 19,683 | $ 142,969 | $ 121,096 |
Deferred revenue | 35,200 | 13,000 | 35,200 | 13,000 |
Research collaboration | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 100 | 6,300 | 2,100 | 79,700 |
Milestone | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 5,000 | 14,000 | ||
Royalties | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 27,200 | 13,400 | 135,900 | 27,400 |
Alexion Pharmaceuticals, Inc. | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 7,300 | 5,800 | 20,200 | 16,400 |
Astellas | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 5,000 | |||
Genentech | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 2,500 | |||
Janssen | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 100 | 6,300 | 2,100 | 37,000 |
MorphoSys | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 2,100 | 1,300 | 5,600 | 16,400 |
Novartis | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | 41,100 | |||
Vir | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recorded | $ 17,800 | $ 6,300 | $ 110,100 | $ 7,700 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of federal statutory income tax to effective income tax | ||||
Income tax expense | $ 1,088 | $ 0 | $ 1,088 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) - Zenas Bio Pharma Limited - Subsequent Events $ in Millions | Nov. 30, 2022 USD ($) |
Collaboration research and licensing agreements | |
Increase in equity securities | $ 17.9 |
Warrant | |
Collaboration research and licensing agreements | |
Equity Securities without Readily Determinable Fair Value, Amount | 34.5 |
Convertible Note | |
Collaboration research and licensing agreements | |
Equity Securities without Readily Determinable Fair Value, Amount | $ 7.7 |