Xencor Inc Q3 FY2022 earnings call

• XmAb564 Phase 1a study in healthy volunteers showed subcutaneous XmAb564 is well-tolerated, selectively expanded regulatory T-cells, with exceptional durability. Phase 1b multiple ascending dose study in atopic dermatitis and psoriasis has started.
• Other programs: Vudalimab Phase 2 study in metastatic castration-resistant prostate cancer enrolling, with data to be presented at SITC; plamotamab Phase 1 study updates on non-Hodgkin's lymphoma, initiated subcutaneous dose cohort and continues Phase 2 combination study with tafasitamab and lenalidomide.
• Financial update: Total cash, cash equivalents, receivables, and marketable debt securities at September 30, 2022, totaled $564.6 million, with an updated year-end cash position estimate of $575 million to $600 million, and guidance to fund R&D through 2025.
• XmAb cytokine platform: 564 is the second clinical program, with XmAb662, a potency reduced IL-12 for oncology, expected to start Phase 1 studies in 2023.

Total revenue for the third quarter of 2022 was $27.3 million, and for the first nine months of 2022, it was $143 million. This revenue was primarily from royalty revenue from Xencor's partnerships with Vir and Alexion related to the sales of sotrovimab and ULTOMIRIS, respectively. The absolute revenue figures are $27.3 million for Q3 2022 and $143 million for the first nine months of 2022, with royalties from partnerships contributing significantly to the revenue.

• Updated year-end cash position estimate: Xencor now estimates to end 2022 with between $575 million and $600 million in cash, cash equivalents, receivables, and marketable debt securities.
• Guidance to fund R&D programs and operations through the end of 2025.

Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. These include risks detailed in Xencor's most recently filed annual report on Form 10-K and quarterly report on Form 10-Q.

Q: Greetings. Thank you very much and congrats on the exciting 564 data and I really appreciate the way you're laying out this entire cytokine pipeline that's emerging. So I wanted to get a sense what kind of duration of dosing should we expect in the atopic derm and psoriasis patients? Are you able to dose how long yet? And is this something where we could anticipate data in the back half next year? And then just following up on this sort of fit outside of your oncology area of expertise is 564 a potential partnering opportunity or do you ultimately have aspirations to really be in both oncology and autoimmune?

A: Thanks, Ted. So I guess with regard to duration of dosing, we're just going to have to follow the data. We just don't know. We know there's some bogeys out there where the market leader depicts in atopic dermatitis is every two weeks, and it's pretty firmly fixed there. It doesn't look like it will ever be able to extend, but we know that in autoimmune disease and particularly derm the long and the better. So we're just going to follow the biomarker data as we go through this study, look to see if we observe accumulation like we saw with our IL-15 cytokine program in the clinic and do the best we can. So too early to say anything there yet.

Q: Great. Thanks for taking the question and congrats on the 564 progress. Just wanted to ask on some of the variability we see at the three higher doses, but obviously, really robust and compelling expansion at these doses. Just wondered if this was just a phenomenon of small ends? And how much confidence or weight you put on the high-dose data? And then I guess, secondly, you mentioned the MAD study. Just wondered how many patients you'll dose in each of the indications, atopic derm and psoriasis? And whether or not sort of the placebo to drug arm ratios will be the same as we saw for the single ascending dose?

A: Maybe I'll have Allen or Ralph touch on the Phase 1b patient allocation. Ralph Zitnik: Yeah. Eight patients in psoriasis, six and two and 16 patients and 12 and four. We're going to double the AD patients. Allen Yang: And that's per cohort. Ralph Zitnik: Per cohort, yeah. Allen Yang: Yeah. And it depends on the number of cohorts we do will be dependent on the data we see. So it could be a few cohorts or it could be several cohorts. Bassil Dahiyat: Yeah. And we're doubling the end on the atopic derm, of course, to see if there is -- they have a better shot at looking at a signal, right. Now going back to the variability question, we have a lot of confidence in the data, even though it's relatively small numbers, six patients on study drug for the -- in the SAD study because of the consistency across multiple measures, in particular, looking at Treg/Tcon ratios that don't involve that baseline variability when you look at fold measurements as well as the consistency, I'm just looking at absolute Treg counts, right, the real data, not the full data. So though there's jumpiness in the data because of the small numbers. I think the trend is quite clear. We're really replicating a dose response curve like we saw in vitro, pretty nicely, as John said. So I think that all those things point with pretty high confidence in the data, and you can see the individual data play, those are individual subjects are those box plots. And so, you can see that the clustering is actually fairly consistent as well as the absolute cell count time course traces are very nicely convergent (ph).