Xencor Inc

Previous wording

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the consolidated financial statements and accompanying notes thereto for the fiscal year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025. See also “Special Note Regarding Forward-Looking Statements” included in this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the consolidated financial statements and accompanying notes thereto for the fiscal year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-

Previous wording

We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered antibody therapeutics to treat patients with cancer and autoimmune diseases who have unmet medical needs. Leveraging our XmAb® protein engineering platforms, we rapidly design, engineer and advance purpose-built drug candidates with novel mechanisms of action and improved therapeutic potential.

Current wording

We are a clinical-stage biopharmaceutical company focused on discovering and developing engineered antibody therapeutics to treat patients with cancer and autoimmune diseases, with an emphasis on addressing unmet medical needs. Leveraging our XmAb® protein engineering platforms, we rapidly design, engineer and advance purpose-built drug candidates with novel mechanisms of action and improved therapeutic potential.

Previous wording

We advance selected candidates through clinical development, while also partnering with programs to access complementary development and commercialization capabilities. Our portfolio spans early- and mid-stage clinical programs, and our strategic approach emphasizes disciplined portfolio management, including advancing, partnering, or discontinuing programs based on clinical data and development priorities. Three marketed medicines have been developed using our XmAb technologies.

Current wording

We advance selected candidates through clinical development, while also partnering selected programs to access complementary development and commercialization capabilities. Our portfolio spans early- and mid-stage clinical programs, and our strategic approach emphasizes disciplined portfolio management, including advancing, partnering, or discontinuing programs based on clinical data and development priorities. Three marketed medicines have been developed using our XmAb technologies.

Previous wording

XmAb819 (ENPP3 x CD3): XmAb819 is a novel, potential first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with clear cell renal cell carcinoma (ccRCC) and additional ENPP3+ tumors. XmAb819 is designed to engage the immune system and activate T cells for highly potent and targeted lysis of tumor cells expressing ENPP3. ENPP3 is differentially expressed with high level expression in several tumor types and low level expression on normal tissues. With two tumor-antigen binding domains and one T-cell binding domain, our XmAb 2+1 format is designed to enable antibodies to bind more avidly and selectively kill tumor cells with higher antigen density, potentially sparing normal cells. We are conducting a Phase 1 study to evaluate XmAb819 in patients with ENPP3+ tumors. Currently, expansion cohorts are evaluating intravenous doses to support selection of a dose for the planned Phase 3 pivotal study for patients with advanced ccRCC; dose escalation of subcutaneous administration in advanced ccRCC is ongoing; a sub-study for patients with ENPP3+ advanced colorectal cancer (CRC), non-small cell lung cancer (NSCLC) and papillary renal cell carcinoma (pRCC) began enrollment in the second quarter of 2026, and a sub-study for patients with intermediate- or poor-risk advanced ccRCC who have progressed after front-line immuno-oncology (IO) doublet therapy is planned to open for enrollment in the third quarter of 2026.

Current wording

XmAb819 (ENPP3 x CD3): XmAb819 is a novel, potential first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with clear cell renal cell carcinoma (ccRCC) and additional ENPP3+ tumors. XmAb819 is designed to engage the immune system and activate T cells for highly potent and targeted lysis of tumor cells expressing ENPP3. ENPP3 is differentially expressed with high level expression in several tumor types and low level expression on normal tissues. With two tumor-antigen binding domains and one T-cell binding domain, our XmAb 2+1 format is designed to enable antibodies to bind more avidly and selectively kill tumor cells with higher antigen density, potentially sparing normal cells.

Previous wording

XmAb808 is a tumor-selective, co-stimulatory CD28 bispecific antibody that binds to the broadly expressed tumor antigen B7-H3 and is also constructed with the XmAb 2+1 multivalent format. Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation when the antibodies are bound to tumor cells.

Current wording

XmAb808 is a tumor-selective, co-stimulatory CD28 bispecific antibody that is designed to bind to the broadly expressed tumor antigen B7-H3 and is also constructed with the XmAb 2+1 multivalent format. Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation when the antibodies are bound to tumor cells.

Previous wording

XmAb541 (CLDN6 x CD3): We have prioritized the development of XmAb541 in combination with XmAb808. XmAb541 monotherapy expansion cohorts at the putative recommended Phase 3 dose (RP3D) of 60 mg dosed every 3 weeks in high-grade serous ovarian carcinoma (TPS≥50) and germ cell tumors are expected to complete enrollment by year end, with the data intended to support further combination development with XmAb808.

Current wording

XmAb541 (CLDN6 x CD3): We have prioritized the development of XmAb541 in combination with XmAb808. XmAb541 monotherapy expansion cohorts at the proposed recommended Phase 3 dose (RP3D) of 60 mg dosed every 3 weeks in high-grade serous ovarian carcinoma (tumor proportion score (TPS) ≥50) and germ cell tumors are expected to complete enrollment by year end, with the data intended to support further combination development with XmAb808.

Previous wording

The safety profile of XmAb541 monotherapy at the putative RP3D supports further clinical evaluation, including future outpatient administration. Cytokine release syndrome (CRS) has been low grade and no cases of Grade ≥3 CRS were reported at any dose level. At the putative RP3D, Grade 1 CRS was reported in approximately 14% of patients, and Grade 2 CRS was reported in approximately 17%. No other clinically significant safety signals have been observed. Based on monotherapy data, in July 2026 the U.S. Food and Drug Administration granted Fast Track designation to XmAb541 for the treatment of patients with germ cell tumors who have relapsed following two or more lines of platinum therapy or were refractory to prior platinum therapy.

Current wording

Emerging clinical data from XmAb541 monotherapy support evaluation of XmAb541 in combination with XmAb808. As of August 4, 2026, at the proposed RP3D, clinical activity has been observed in heavily pretreated patients, with an approximate overall response rate of 14% in patients with ovarian cancer and an approximate overall response rate of 28% in patients with germ cell tumors. Potential additional anti-tumor activity was observed at doses above 60 mg; however, reversible hearing impairment limited XmAb541 exposure due to the frequency of dose interruptions and dose reductions at those higher dose levels. Hearing impairment is potentially on-target for CLDN6, which is expressed on cochlear hair cells. The safety results of XmAb541 monotherapy observed at the proposed RP3D support further clinical evaluation, including future outpatient administration. Cytokine release syndrome (CRS) was low grade and no cases of Grade ≥3 CRS were reported at any dose level. At the proposed RP3D, Grade 1 CRS was reported in approximately 14% of patients, and Grade 2 CRS was reported in approximately 17%. No other clinically significant safety signals have been observed. Based on monotherapy data, in July 2026, the FDA granted Fast Track designation to XmAb541 for the treatment of patients with germ cell tumors who have relapsed following two or more lines of platinum therapy or were refractory to prior platinum therapy.

Previous wording

XmAb942 (Xtend TL1A): XmAb942 is a high-potency, extended half-life, investigational anti-TL1A antibody in clinical development for patients with inflammatory bowel disease (IBD), such as ulcerative colitis (UC) and Crohn’s disease (CD). The first generation of anti-TL1A antibodies, designed to block the interaction between the DR3 receptor and its ligand TL1A, have reduced disease activity in patients with UC and CD in multiple clinical studies. We announced final results from a Phase 1 dose-escalation study in healthy participants at Digestive Disease Week (DDW) in May 2026. The results indicate that XmAb942 was well tolerated. Pharmacokinetic analysis of the single dose cohorts estimated a human half-life of 74.1 days, which supports a 12-week dosing interval during maintenance treatment. We initiated a Phase 2b study of XmAb942 in UC, the XENITH-UC Study, in the third quarter of 2025. XENITH-UC is a randomized, double-blind, placebo-controlled trial in patients with moderate-to-severe UC, whose disease has progressed after at least one conventional or advanced therapy.

Current wording

XmAb942 (Xtend TL1A): XmAb942 is a high-potency, extended half-life, investigational anti-TL1A antibody in clinical development for patients with inflammatory bowel disease (IBD), such as ulcerative colitis (UC) and Crohn’s disease (CD). The first generation of anti-TL1A antibodies, designed to block the interaction between the DR3 receptor and its ligand TL1A, have reduced disease activity in patients with UC and CD in multiple clinical studies. We announced final results from a Phase 1 dose-escalation study in healthy participants at Digestive Disease Week (DDW) in May 2026. The results indicate that XmAb942 was well tolerated. Pharmacokinetic analysis of the single-dose cohorts estimated a human half-life of 74.1 days, which supports a 12-week dosing interval during maintenance treatment. We initiated a Phase 2b study of XmAb942 in UC, the XENITH-UC Study, in the third quarter of 2025. XENITH-UC is a randomized, double-blind, placebo-controlled trial in patients with moderate-to-severe UC, whose disease has progressed after at least one conventional or advanced therapy. Enrollment expectations continue to support a XENITH-UC blinded interim analysis around year-end 2026 and reaching the primary endpoint analysis of the 12-week induction period in the second half of 2027. The primary endpoint of XENITH-UC is the percentage of patients achieving clinical remission defined by the modified Mayo score at week 12.

Previous wording

XmAb412 (TL1A x IL-23p19): XmAb412 is a novel bispecific antibody using the XenLock™ platform for dual targeting of inflammatory pathways in autoimmune and inflammatory disease. We presented preclinical characterization of XmAb412 at DDW in May 2026. XmAb412 robustly suppresses both TL1A and IL-23 inflammatory pathways and is predicted from preclinical pharmacokinetic data to have a human half-life between 60 and 70 days. XmAb412 supports high-concentration, low viscosity and citrate-free formulation suitable for subcutaneous dosing. We initiated a first-in-human study of XmAb412 in the third quarter of 2026.

Current wording

XmAb412 at DDW in May 2026. XmAb412 robustly suppresses both TL1A and IL-23 inflammatory pathways and is predicted from preclinical pharmacokinetic data to have a human half-life between 60 and 70 days. XmAb412 supports a high-concentration, low-viscosity and citrate-free formulation suitable for subcutaneous dosing. We initiated a first-in-human study of XmAb412 in the third quarter of 2026 and plan to present initial data from the study in the first half of 2027.

Previous wording

Plamotamab (CD20 x CD3): Plamotamab is a B-cell depleting bispecific T-cell engager that targets CD20, a target receptor on B cells. Based on clinical outcomes from a prior Phase 1 study in hematologic cancers, significant B-cell depletion, and the emergent biology supportive of B-cell targeted T-cell engagers for the treatment of patients with autoimmune diseases, we are evaluating plamotamab in a Phase 1b study for patients with rheumatoid arthritis (RA) who have progressed through prior standard of care treatment.

Current wording

Plamotamab (CD20 x CD3): Plamotamab is a B-cell depleting bispecific T-cell engager that targets CD20, a target receptor on B cells. Based on clinical outcomes from a prior Phase 1 study in hematologic cancers, significant B-cell depletion, and the emergent biology supportive of B-cell targeted T-cell engagers for the treatment of patients with autoimmune diseases, we are evaluating plamotamab in a Phase 1b study for patients with rheumatoid arthritis (RA) who have progressed through prior standard of care treatment. Initial data from the Phase 1b study were accepted for presentation during the American College of Rheumatology Convergence conference in November 2026.

Previous wording

XmAb657 deeply reduced B cells by over 99.98% in the peripheral compartment, bone marrow and lymph nodes, which was sustained for at least 42 days. Half-life in non-human primates was estimated to be 15 days, which indicates a potential for durable B-cell depletion in human clinical studies. XmAb657 was well tolerated preclinically, with no clinical signs of cytokine release syndrome. XmAb657 is in development for patients with idiopathic inflammatory myopathies (IIM), systemic sclerosis (SSc) and Sjögren's disease. We are conducting a first-in-human, Phase 1 study to evaluate XmAb657 in healthy volunteers and patients with IIM, SSc and Sjögren's disease.

Current wording

XmAb657 (CD19 x CD3): XmAb657 is a potentially long-acting CD19 x CD3 bispecific antibody, utilizing the XmAb 2+1 bispecific antibody format and Xtend Fc technology. In non-human primate studies, a single dose of XmAb657 deeply reduced B cells by over 99.98% in the peripheral compartment, bone marrow and lymph nodes, which was sustained for at least 42 days. Half-life in non-human primates was estimated to be 15 days, which indicates a potential for durable B-cell depletion in human clinical studies. XmAb657 was well tolerated preclinically, with no clinical signs of cytokine release syndrome. XmAb657 is in development for patients with idiopathic inflammatory myopathies (IIM), systemic sclerosis (SSc) and Sjögren’s disease. We are conducting a first-in-human, Phase 1 study to evaluate XmAb657 in healthy volunteers and patients with IIM, SSc and Sjögren’s disease, and we plan to provide an update on progress achieved in the Phase 1 study of XmAb657 in the second half of 2026.

Previous wording

Incyte: The FDA approved Monjuvi® (tafasitamab-cxix) under accelerated approval in July 2020. Monjuvi is a CD19-directed cytolytic antibody containing an XmAb Fc domain for improved cytotoxic potency and indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL), including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). In December 2024, Incyte announced positive full results from the pivotal study of tafasitamab in combination with lenalidomide and rituximab in relapsed or refractory follicular lymphoma (FL) and submitted a supplemental Biologics License Application (“sBLA”), which was accepted in February 2025. In June 2025, the FDA approved Monjuvi in combination with rituximab and lenalidomide for the treatment of adult patients with relapsed or refractory FL. Incyte has also announced positive results from a pivotal study of Monjuvi as a first-line treatment for DLBCL, and Incyte’s global regulatory submissions for Monjuvi/Minjuvi as a treatment for patients with newly diagnosed DLBCL were accepted for review in the second quarter of 2026. Tafasitamab was created and initially developed by us. Tafasitamab is marketed by Incyte under the brand name Monjuvi in the U.S. and under the brand name Minjuvi® in Europe and Canada. Incyte has exclusive commercialization rights to tafasitamab outside the U.S. In February 2024, Incyte acquired exclusive global development and commercialization rights to tafasitamab from MorphoSys AG. Monjuvi® and Minjuvi® are registered trademarks of Incyte.

Current wording

Incyte: The FDA approved Monjuvi® (tafasitamab-cxix) under accelerated approval in July 2020. Monjuvi is a CD19-directed cytolytic antibody containing an XmAb Fc domain for improved cytotoxic potency and indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). In June 2025, the FDA approved Monjuvi in combination with rituximab and lenalidomide for the treatment of adult patients with relapsed or refractory FL. In December 2025, the European Commission approved Minjuvi® in combination with rituximab and lenalidomide for the treatment of adult patients with relapsed or refractory follicular lymphoma (FL) following at least one prior line of systemic therapy. Minjuvi also received approvals in Japan for relapsed or refractory FL in December 2025 and relapsed or refractory DLBCL in June 2026. In January 2026, Incyte announced positive results from the pivotal frontMIND study evaluating tafasitamab and lenalidomide added to R-CHOP as a first-line treatment for patients with newly diagnosed, high-risk DLBCL. The study met its primary endpoint of progression-free survival and key secondary endpoint of event-free survival, and results were published in The Lancet in May 2026. Global regulatory submissions for tafasitamab in combination with lenalidomide and R-CHOP for the first-line treatment of DLBCL were accepted for review in the second quarter of 2026. Tafasitamab was created and initially developed by us. Tafasitamab is marketed by Incyte under the brand name Monjuvi in the U.S. and under the brand name Minjuvi® outside the U.S. Incyte has exclusive commercialization rights to tafasitamab outside the U.S. In February 2024,

Previous wording

In January 2026, Zenas announced positive results from the Phase 3 INDIGO trial of obexelimab in patients with immunoglobulin G4-related disease (IgG4-RD), in which the primary endpoint was met. Zenas announced that it submitted a BLA to the FDA for the treatment of IgG4-RD in May 2026 and anticipates submitting a Marketing Authorization Application to the European Medicines Agency in the second half of 2026. Zenas is also conducting a Phase 2 study of obexelimab in patients with systemic lupus erythematosus and has reported positive results from the Phase 2 MoonStone trial of obexelimab in patients with relapsing multiple sclerosis, in which the primary endpoint was met. As of June 30, 2026, we own 3,098,380 shares of common stock in Zenas.

Current wording

In January 2026, Zenas announced positive results from the Phase 3 INDIGO trial of obexelimab in patients with immunoglobulin G4-related disease (IgG4-RD), in which the primary endpoint was met. Detailed results were published in The New England Journal of Medicine in June 2026. Zenas submitted a Biologics License Application (BLA) to the FDA for the treatment of IgG4-RD in May 2026, which was accepted for review in August 2026, and in October 2026, announced that they submitted a marketing authorization application to the European Medicines Agency. In the third quarter of 2026, Bristol Myers Squibb submitted a marketing authorization application for obexelimab in IgG4-RD in Japan. Zenas is also conducting the Phase 2 SunStone trial of obexelimab in patients with systemic lupus erythematosus and has reported positive results from the Phase 2 MoonStone trial of obexelimab in patients with relapsing multiple sclerosis, in which the primary endpoint was met. As of September 30, 2026, we own 1,000,000 shares of common stock of Zenas.

Previous wording

Alexion: Alexion’s Ultomiris® uses Xtend Fc technology to enhance the half-life of Ultomiris to allow for a longer duration of action, less frequent dosing and reduced patient burden of therapy compared to the previous generation therapy, Soliris®. Ultomiris has received marketing authorizations in global markets for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), for certain patients with atypical hemolytic uremic syndrome (aHUS), for certain patients with generalized myasthenia gravis (gMG) and for certain patients with neuromyelitis optica spectrum disorder (NMOSD). Alexion is also evaluating Ultomiris in a broad development program across additional hematology, nephrology and neurology indications. In April 2026, Alexion announced positive high-level results from a prespecified interim analysis of the I CAN Phase 3 study in adults with immunoglobulin A nephropathy (IgAN) who are at risk of disease progression and that they will seek accelerated approval in key markets. Ultomiris and Soliris are registered trademarks of Alexion Pharmaceuticals, Inc.

Current wording

Alexion: Alexion’s Ultomiris® uses Xtend Fc technology to enhance the half-life of Ultomiris to allow for a longer duration of action, less frequent dosing and reduced patient burden of therapy compared to the previous generation therapy, Soliris®. Ultomiris has received marketing authorizations in global markets for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), for certain patients with atypical hemolytic uremic syndrome (aHUS), for certain patients with generalized myasthenia gravis (gMG) and for certain patients with neuromyelitis optica spectrum disorder (NMOSD). In October 2026, the FDA granted accelerated approval to Ultomiris to reduce proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk for disease progression, based on results from a prespecified interim analysis of the Phase 3 I CAN study. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the ongoing I CAN study. Alexion is also evaluating Ultomiris in a broad development program across additional hematology, nephrology and neurology indications. Ultomiris and Soliris are registered trademarks of Alexion Pharmaceuticals, Inc.

Previous wording

Refer to Part I, Item 1, Note 2, Collaboration and Licensing Agreements and Note 13, Subsequent Events of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of the key terms of our arrangements.

Current wording

Refer to Part I, Item 1, Note 2, Collaboration and Licensing Agreements of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of the key terms of our arrangements.

Previous wording

Total revenue increased by $7.6 million for the three months ended June 30, 2026 and decreased by $20.6 million for the six months ended June 30, 2026, compared to the corresponding periods in 2025. The change was primarily driven by the revenue recognition associated with Alexion and Incyte license agreements as discussed below. See Note 2, Collaboration and Licensing Agreements of the Notes to Consolidated Financial Statements of Part I, “Item 1. Financial Statements” for more information on revenue recognized under the collaboration and license agreements.

Current wording

Total revenue increased by $95.5 million and $74.9 million for the three and nine months ended September 30, 2026, respectively, compared to the corresponding periods in 2025. The change was primarily driven by the revenue recognition associated with Alexion, Incyte, and Astellas license agreements as discussed below. See Note 2, Collaboration and Licensing Agreements of the Notes to Consolidated Financial Statements of Part I, “Item 1. Financial Statements” for more information on revenue recognized under the collaboration and license agreements.

Previous wording

Alexion: In January 2013, we entered into an Option and License Agreement (the “Alexion Agreement”) with Alexion. Under the terms of the Alexion Agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds. Alexion exercised its rights to one target program, ALXN1210, which is now marketed as Ultomiris®.

Current wording

Alexion: In January 2013, we entered into the Alexion Agreement with Alexion. Under the terms of the Alexion Agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds. Alexion exercised its rights to one target program, ALXN1210, which is now marketed as Ultomiris®.

Previous wording

On December 9, 2025, a new patent related to the Xtend™ Fc domain for antibodies targeting C5 was announced, extending the expected royalty term for Ultomiris® net sales into December 2028 in the United States. On March 4, 2026, Alexion informed us that it had taken the position that it did not owe additional royalties for U.S. sales of Ultomiris and did not intend to make future payments for sales in the U.S. under the parties’ agreement. We disputed this position and, subsequent to June 30, 2026, entered into a settlement agreement with Alexion. See Note 13 for additional information.

Current wording

On December 9, 2025, a patent term extension related to the Xtend™ Fc domain for antibodies targeting C5 was announced, extending the expected royalty term for Ultomiris® net sales into December 2028 in the United States. On March 4, 2026, Alexion informed us that it had taken the position that it did not owe additional royalties for U.S. sales of Ultomiris and did not intend to make future payments for sales in the U.S. under the parties’ agreement. We disputed this position.

Previous wording

In the first quarter of 2026, we evaluated the effect of Alexion’s notice, including the variable consideration constraint and the sales‑ and usage‑based royalty guidance applicable to licenses of intellectual property. We concluded that royalties on disputed U.S. sales should be constrained to zero until the uncertainty was resolved. Accordingly, we recorded a reduction of $6.6 million to royalty revenue recorded in 2025 and a corresponding reduction to the related receivable in the first quarter of 2026. There was no cash impact from this entry in the period. Recognition of undisputed ex‑U.S. royalties was unaffected and continues in accordance with ASC Topic 606’s sales‑ and usage‑based royalty guidance.

Current wording

In the first quarter of 2026, we evaluated the effect of Alexion’s notice, including the variable consideration constraint and the sales‑ and usage‑based royalty guidance applicable to licenses of intellectual property. We concluded that royalties on disputed U.S. sales should be constrained to zero until the uncertainty was resolved. Accordingly, we recorded a reduction of $6.6 million to royalty revenue recorded and a corresponding reduction to the related receivable in the first quarter of 2026. There was no cash impact from this entry in the period. Recognition of undisputed ex‑U.S. royalties was unaffected and continues in accordance with ASC Topic 606’s sales‑ and usage‑based royalty guidance.

Previous wording

On July 29, 2026, we entered into a settlement agreement with Alexion, which resolved the uncertainty over the variable consideration earned related to U.S. Ultomiris royalties. As a result, we recognized $27.6 million of royalty revenue during the three and six months ended June 30, 2026, related to our royalty rights for U.S. Ultomiris sales from the period of dispute through June 30, 2026.

Current wording

We recognized $27.6 million of the settlement consideration as royalty revenue during the second quarter of 2026 related to our royalty rights for U.S. Ultomiris sales through June 30, 2026. The remaining $77.4 million of settlement consideration, which related to the settlement of royalty rights for periods subsequent to June 30, 2026, was recognized as royalty revenue during the three months ended September 30, 2026.

Previous wording

Under the Alexion Agreement, we recognized $37.3 million and $16.8 million of royalty revenue during the three months ended June 30, 2026 and 2025, respectively, and $38.8 million and $32.3 million during the six months ended June 30, 2026 and 2025, respectively.

Current wording

Under the Alexion Agreement, we recognized $83.5 million and $18.7 million of royalty revenue during the three months ended September 30, 2026 and 2025, respectively, and $122.3 million and $51.0 million during the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Incyte: In June 2010, we entered into a Collaboration and License Agreement with MorphoSys AG, which was subsequently amended in 2012, 2020 and 2024 (as amended, the “MorphoSys Agreement”). The MorphoSys Agreement provides MorphoSys AG with an exclusive worldwide license to our patents and know-how to research, develop, and commercialize our 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, we are eligible to receive future milestone payments and royalties. In February 2024, Incyte assumed all of MorphoSys AG’s right, title and interest under the MorphoSys Agreement.

Current wording

Incyte: In June 2010, we entered into the MorphoSys Agreement with MorphoSys AG, which was subsequently amended in 2012, 2020 and 2024. The MorphoSys Agreement provides MorphoSys AG with an exclusive worldwide license to our patents and know-how to research, develop, and commercialize our 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, we are eligible to receive future milestone payments and royalties. In February 2024, Incyte assumed all of MorphoSys AG’s right, title and interest under the MorphoSys Agreement.

Previous wording

During the second quarter of 2026, cumulative royalties payable to OMERS reached the $29.3 million maximum under the Monjuvi Royalty Sale Agreement. Under the MorphoSys Agreement, we recognized royalty revenue of $3.9 million and $6.8 million during the three and six months ended June 30, 2026, respectively, consisting of $3.1 million of non-cash royalty revenue and $0.8 million of royalties payable directly to us, compared to non-cash royalty revenue of $1.8 million and $4.5 million during the three and six months ended June 30, 2025, respectively.

Current wording

Under the MorphoSys Agreement, we recognized royalty revenue of $4.0 million and $10.8 million during the three and nine months ended September 30, 2026, respectively. Of the $10.8 million recognized during the nine months ended September 30, 2026, $6.0 million represented non-cash royalties payable to OMERS before the cumulative royalty cap was reached, and $4.8 million represented royalties retained by us after the cap was reached. As of September 30, 2026, we recorded $3.9 million in accounts receivable for estimated royalties due. For the three and nine months ended September 30, 2025, we recognized non-cash royalty revenue of $2.3 million and $6.8 million, respectively.

Previous wording

Vir Bio: In 2019, we entered into a Patent License Agreement (the “Vir Bio Agreement”) with Vir Bio, granting a non-exclusive license to its Xtend technology for up to two targets, including tobevibart. In March 2025, Vir Bio initiated a Phase 3 study for tobevibart, triggering a $2.0 million milestone payment to us, which was paid in the second quarter of 2025.

Current wording

Vir Bio: In 2019, we entered into the Vir Bio Agreement with Vir Bio, granting a non-exclusive license to our Xtend technology for up to two targets, including tobevibart. In March 2025, Vir Bio initiated a Phase 3 study for tobevibart, triggering a $2.0 million milestone payment to us, which was paid in the second quarter of 2025.

Previous wording

We recognized nominal amounts of royalty revenue for the three and six months ended June 30, 2026 and 2025.

Current wording

We recognized nominal amounts of royalty revenue for the three and nine months ended September 30, 2026 and 2025.

Previous wording

Zenas: In November 2020, we entered into a License Agreement (the “Zenas Agreement”) with Zenas, pursuant to which we granted Zenas exclusive worldwide rights to develop and commercialize three preclinical-stage Fc-engineered drug candidates. In November 2021, we entered into a second license agreement (the “Second Zenas Agreement”), pursuant to which we granted Zenas exclusive worldwide rights to develop and commercialize obexelimab (XmAb5871). We satisfied our performance obligations under the Zenas agreements in 2021.

Current wording

Zenas: In November 2020, we entered into the Zenas Agreement with Zenas, pursuant to which we granted Zenas exclusive worldwide rights to develop and commercialize three preclinical-stage Fc-engineered drug candidates. In November 2021, we entered into the Second Zenas Agreement, pursuant to which we granted Zenas exclusive worldwide rights to develop and commercialize obexelimab (XmAb5871). We satisfied our performance obligations under the Zenas agreements in 2021.

Previous wording

In May 2026, Zenas submitted a BLA to the FDA for obexelimab in IgG4-RD, which triggered a $10.0 million milestone payment to us under the Zenas Agreement that we received during the second quarter of 2026.

Current wording

In May 2026, Zenas submitted a BLA to the FDA for obexelimab in IgG4-RD, which triggered a $10.0 million milestone payment to us under the Second Zenas Agreement that we received during the second quarter of 2026. In addition, in the third quarter of 2026, Zenas’s partner submitted a marketing authorization application for obexelimab to the

Previous wording

R&D expenses include both external and internal costs related to discovering and developing product candidates and new technologies. External costs primarily consist of preclinical studies, clinical trials, and payments to CROs and CMOs for services such as trial management, manufacturing, toxicology studies, and drug formulation, while internal costs include personnel expenses, supplies, and allocated overhead like facilities. These expenses can fluctuate based on factors such as trial stage, patient enrollment, and program activity, and are expected to increase as programs advance. Although R&D activities are largely managed internally, many execution components are outsourced, with external costs tracked by program (except in early discovery stages), while internal costs are managed on an aggregate basis.

Current wording

R&D expenses include both external and internal costs related to discovering and developing product candidates and new technologies. External costs primarily consist of preclinical studies, clinical trials, and payments to contract research organizations and contract manufacturing organizations for services such as trial management, manufacturing, toxicology studies, and drug formulation, while internal costs include personnel expenses, supplies, and allocated overhead like facilities. These expenses can fluctuate based on factors such as trial stage, patient enrollment, and program activity, and are expected to increase as programs advance. Although R&D activities are largely managed internally, many execution components are outsourced, with external costs tracked by program (except in early discovery stages), while internal costs are managed on an aggregate basis.

Previous wording

R&D expenses increased by $10.2 million and $16.3 million for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The increase was primarily driven by higher external and internal costs incurred associated with the programs listed above, which are aligned with our strategic research and development priorities, partially offset by lower stock-based compensation expense in the current period. R&D expenses may fluctuate from period to period depending on the timing, progress, and level of activity of each program.

Current wording

R&D expenses increased by $29.9 million and $46.3 million for the three and nine months ended September 30, 2026, respectively, compared to the same period in 2025. The increase was primarily driven by higher external and internal costs incurred associated with the programs listed above, which are aligned with our strategic research and development priorities, partially offset by lower stock-based compensation expense in the current period. R&D expenses may fluctuate from period to period depending on the timing, progress, and level of activity of each program.

Previous wording

General and administrative expenses consist of salaries, stock compensation, professional services related to legal, audit, consulting, patent filings, business insurance and technology expenses, facilities, and depreciation and amortization. General and administrative expenses for the three and six months ended June 30, 2026 remained relatively consistent with the same period in 2025.

Current wording

General and administrative expenses consist of salaries, stock compensation, professional services related to legal, audit, consulting, patent filings, business insurance and technology expenses, facilities, and depreciation and amortization. General and administrative expenses decreased by $4.8 million and $3.2 million for the three and nine months ended September 30, 2026, respectively, compared to the same period in 2025. The decrease was primarily driven by a non-recurring recovery of previously incurred legal expenses during the three months ended September 30, 2026.

Previous wording

Other income (expense), net primarily consists of interest income and expense, gains and losses on marketable equity securities, and asset impairment charges. Other income increased by $13.1 million and other expense increased by $32.6 million for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025.

Current wording

Other income (expense), net primarily consists of interest income and expense, gains and losses on marketable equity securities, and asset impairment charges. Other income decreased by $25.1 million and other expense increased by $57.7 million for the three and nine months ended September 30, 2026, respectively, compared to the same period in 2025.

Previous wording

On February 25, 2026, we filed an automatic universal shelf registration statement on Form S-3 (File No. 333-270030) as a well-known seasoned issuer as defined in Rule 405 under the Securities Act of 1933, as amended, which became effective upon filing (the “Shelf Registration Statement”). The Shelf Registration Statement allows us to offer an indeterminate amount of securities, including equity securities, debt securities, warrants, rights, units and depositary shares, from time to time as described therein. The specific terms of any offering under the Shelf Registration Statement will be established at the time of such offering. The Shelf Registration Statement will expire on February 25, 2029.

Current wording

On February 25, 2026, we filed an automatic universal shelf registration statement on Form S-3 (File No. 333-293727) as a well-known seasoned issuer as defined in Rule 405 under the Securities Act of 1933, as amended, which became effective upon filing. The Shelf Registration Statement allows us to offer an indeterminate amount of securities, including equity securities, debt securities, warrants, rights, units and depositary shares, from time to time as described therein. The specific terms of any offering under the Shelf Registration Statement will be established at the time of such offering. The Shelf Registration Statement will expire on February 25, 2029.

Previous wording

On July 29, 2026, we entered into Settlement Agreement with Alexion with respect to a commercial dispute related to U.S. royalties on Ultomiris. Pursuant to the Settlement Agreement, we will receive an aggregate of $105.0 million from Alexion, payable in two equal installments of $52.5 million: the first payment is anticipated to be received in August 2026, and the second payment is due following the one-year anniversary of the date of the Settlement Agreement. Following the settlement, Alexion has no further obligation to pay royalties on U.S. sales of Ultomiris. The Settlement Agreement does not affect the Company’s right to receive royalties on ex-U.S. sales of Ultomiris under the existing terms of the Alexion Agreement, as amended.

Current wording

On July 29, 2026, we entered into the Settlement Agreement with Alexion with respect to a commercial dispute related to U.S. royalties on Ultomiris. Pursuant to the Settlement Agreement, we will receive an aggregate of $105.0 million from Alexion, payable in two equal installments of $52.5 million: the first payment was received in August 2026, and the second payment is due within 14 days following the one-year anniversary of the date of the Settlement Agreement. Following the settlement, Alexion has no further obligation to pay royalties on U.S. sales of Ultomiris. The Settlement Agreement does not affect our right to receive royalties on ex-U.S. sales of Ultomiris under the existing terms of the Alexion Agreement, as amended.

Previous wording

As of June 30, 2026, we had $486.4 million of cash, cash equivalents, and marketable debt securities compared to $610.8 million as of December 31, 2025.

Current wording

As of September 30, 2026, we had $555.7 million of cash, cash equivalents, and marketable debt securities compared to $610.8 million as of December 31, 2025.

Previous wording

Although it is difficult to predict our funding requirements, based upon our current operating plan, we expect that our existing cash, cash equivalents, marketable securities and certain potential milestone payments will fund our operating expenses and capital expenditure requirements through 2028. We have based these estimates on assumptions that may prove to be wrong which would cause us to use our capital resources sooner than we currently expect.

Current wording

Although it is difficult to predict our funding requirements, based upon our current operating plan, we expect that our existing cash, cash equivalents, marketable securities and certain potential milestone payments will fund our operating expenses and capital expenditure requirements into 2029. We have based these estimates on assumptions that may prove to be wrong which would cause us to use our capital resources sooner than we currently expect.

Previous wording

During the six months ended June 30, 2026, cash flow used in operating activities was $123.3 million, which was primarily due to the ongoing expenses related to our research and development programs and general and administrative expenses. The change was primarily driven by lower milestone receipts in 2026, as the prior year period included higher milestone collections, as well as higher operating expenditures in 2026 related to ongoing business activities. Cash provided by investing activities amounted to $111.8 million, primarily reflecting proceeds of $185.6 million from sales and maturities of marketable securities, offset by purchases of marketable securities totaling $72.7 million. Cash provided by financing activities of $2.0 million was primarily related to cash received from stock option exercises and ESPP purchases.

Current wording

During the nine months ended September 30, 2026, cash flow used in operating activities was $120.6 million, which was primarily due to the ongoing expenses related to our research and development programs and general and administrative expenses. The change was primarily driven by an increase in accounts receivable in 2026 related to the Alexion settlement, as well as higher operating expenditures in 2026 related to ongoing business activities. Cash provided by investing activities amounted to $119.1 million, primarily reflecting proceeds of $339.5 million from sales and maturities of marketable securities, offset by purchases of marketable securities totaling $217.4 million. Cash provided by financing activities of $12.0 million was primarily related to cash received from stock option exercises and ESPP purchases.

Previous wording

During the six months ended June 30, 2025, cash flow used in operating activities was $52.6 million, which was primarily due to the ongoing expenses related to our research and development programs and general and administrative expenses. Cash provided by investing activities amounted to $54.1 million, primarily reflecting proceeds of $232.8 million from sales and maturities of marketable securities, offset by purchases of marketable securities totaling $176.8 million. Cash provided by financing activities of $1.9 million was primarily related to cash received from stock option exercises, offset by payment to acquire noncontrolling interest.

Current wording

During the nine months ended September 30, 2025, cash flow used in operating activities was $83.4 million, which was primarily due to the ongoing expenses related to our research and development programs and general and administrative expenses. While overall operating expenditures remained consistent with the prior year, the change was primarily driven by higher milestone receipts in 2025, including $30.0 million received from Amgen Inc. during the nine months ended September 30, 2025, which had been recognized as revenue in December 2024. Cash provided by investing activities amounted to $68.8 million, primarily reflecting proceeds of $331.9 million from sales and maturities of marketable securities, offset by purchases of marketable securities totaling $261.0 million. Cash provided by financing activities of $1.9 million was primarily related to cash received from stock option exercises and the issuance of common stock under the ESPP, offset by payment to acquire noncontrolling interest.

Previous wording

There were no material changes outside of the ordinary course of business to our specific contractual obligations during the three and six months ended June 30, 2026.

Current wording

There were no material changes outside of the ordinary course of business to our specific contractual obligations during the three and nine months ended September 30, 2026.