Xilio Therapeutics Inc

Previous wording

We are a clinical-stage biotechnology company discovering and developing tumor-activated immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. We are leveraging our proprietary platform to build a pipeline of novel, tumor-activated I-O molecules that are designed to optimize the therapeutic index by localizing anti-tumor activity within the tumor microenvironment, including tumor-activated cytokines and antibodies (including bispecifics) and immune cell engagers (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers). Current I-O therapies have curative potential for patients with cancer; however, their potential is significantly curtailed by systemic toxicity that results from activity of the therapeutic molecule outside the tumor microenvironment. Our molecules are engineered to localize activity within the tumor microenvironment with minimal systemic effects, resulting in the potential to achieve enhanced anti-tumor activity and increasing the population of patients who may be eligible to receive our medicines. To date, we have presented data across our clinical-stage programs showing initial clinical validation for each of those molecules and our tumor-activated approach. Our most advanced clinical-stage product candidates are XTX101, an Fc-enhanced, tumor-activated, anti-CTLA-4 monoclonal antibody, or mAb, and XTX301, a tumor-activated, engineered interleukin 12, or IL-12, therapy. We are currently focusing on rapidly advancing clinical development for XTX101 in combination with atezolizumab (Tecentriq®) through our clinical trial collaboration with F. Hoffmann-La Roche Ltd., or Roche, and XTX301 through our exclusive license agreement with Gilead Sciences, Inc., or Gilead. In March 2024, we announced plans to discontinue further investment in XTX202, a tumor-activated, engineered interleukin 2, or IL-2, which was being evaluated in a Phase 2 clinical trial as a monotherapy, and to explore strategic opportunities to continue to develop XTX202 in combination with other agents. In addition to our clinical-stage product candidates, we are continuing to leverage our differentiated research platform and expertise in developing tumor-activated I-O therapies to advance preclinical development for differentiated tumor-activated bispecifics and immune cell engagers (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

Current wording

We are a clinical-stage biotechnology company discovering and developing tumor-activated immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. We are leveraging our proprietary platform to build a pipeline of novel, tumor-activated I-O molecules that are designed to optimize the therapeutic index by localizing anti-tumor activity within the tumor microenvironment, including tumor-activated cytokines, antibodies, bispecifics and immune cell engagers. Current I-O therapies have curative potential for patients with cancer; however, their potential is significantly curtailed by systemic toxicity that results from activity of the therapeutic molecule outside the tumor microenvironment. Our molecules are engineered to localize activity within the tumor microenvironment with minimal systemic effects, resulting in the potential to achieve enhanced anti-tumor activity and increasing the population of patients who may be eligible to receive our medicines. To date, we have presented data across our clinical-stage programs showing initial clinical validation for each of those molecules and our tumor-activated approach. Our most advanced clinical-stage product candidates are vilastobart (XTX101), an Fc-enhanced, tumor-activated, anti-CTLA-4 monoclonal antibody, or mAb, and XTX301, a tumor-activated, engineered interleukin 12, or IL-12, therapy. On November 7, 2024, we reported initial data from Phase 1C dose escalation for vilastobart in combination with atezolizumab (Tecentriq®) in patients with advanced solid tumors. We are currently advancing clinical development for vilastobart in combination with atezolizumab in a Phase 2 clinical trial in patients with microsatellite stable colorectal cancer, or MSS CRC, under our clinical trial collaboration with F. Hoffmann-La Roche Ltd., or Roche. We expect to report initial Phase 2 data for vilastobart in combination with atezolizumab in approximately 20 patients with MSS CRC in the fourth quarter of 2024 and in a total of approximately 40 patients with MSS CRC in the first quarter of 2025. We are also advancing clinical development for XTX301 in a Phase 1 clinical trial in patients with advanced solid tumors under our exclusive license agreement with Gilead Sciences, Inc., or Gilead, and plan to report safety, pharmacokinetic and pharmacodynamic data from the ongoing Phase 1 clinical trial for XTX301 in the fourth quarter of 2024. In addition to our clinical-stage product candidates, we are continuing to leverage our differentiated research platform and expertise in developing tumor-activated I-O therapies to advance preclinical development for XTX501, our tumor-activated PD-1/IL-2, which is designed to selectively stimulate PD-1 positive antigen-experienced T cells and enhance their function and is currently advancing in initial investigational new drug application, or IND, enabling activities,…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Since inception, we have incurred significant operating losses, including net losses of $31.1 million and $42.0 million for the six months ended June 30, 2024 and 2023, respectively, and a net loss of $76.4 million for the year ended December

Current wording

Since inception, we have incurred significant operating losses, including net losses of $45.1 million and $58.7 million for the nine months ended September 30, 2024 and 2023, respectively, and a net loss of $76.4 million for the year ended December 31, 2023. As of September 30, 2024, we had an accumulated deficit of $370.7 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

Previous wording

As a result, we will need substantial additional capital to support our continuing operations and pursue our strategy. As of June 30, 2024, we had cash and cash equivalents of $74.9 million. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of June 30, 2024 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2025. Since these amounts may not be sufficient to fund our operations for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. For more information, refer to “—Liquidity and Capital Resources—Capital Requirements and Going Concern” below and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

As a result, we will need substantial additional capital to support our continuing operations and pursue our strategy. As of September 30, 2024, we had cash and cash equivalents of $61.3 million. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of September 30, 2024 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through the end of the second quarter of 2025. Since these amounts are not expected to be sufficient to fund our operations for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. For more information, refer to “—Liquidity and Capital Resources—Capital Requirements and Going Concern” below and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

We recognized $2.4 million in license revenue for the three months ended June 30, 2024 under the license agreement and stock purchase agreement that we entered into with Gilead in March 2024.

Current wording

We recognized $2.3 million in license revenue for the three months ended September 30, 2024 under the license agreement and stock purchase agreement that we entered into with Gilead in March 2024.

Previous wording

Research and development expenses decreased by $2.0 million from $13.2 million for the three months ended June 30, 2023 to $11.2 million for the three months ended June 30, 2024. The changes in research and development expenses were primarily due to the following:

Current wording

Research and development expenses decreased by $0.3 million from $11.1 million for the three months ended September 30, 2023 to $10.8 million for the three months ended September 30, 2024. The changes in research and development expenses were primarily due to the following:

Previous wording

General and administrative expenses decreased by $1.1 million from $6.9 million for the three months ended June 30, 2023 to $5.8 million for the three months ended June 30, 2024. The changes in general and administrative expenses were primarily due to the following:

Current wording

General and administrative expenses were $6.3 million for each of the three months ended September 30, 2024 and 2023. The changes in general and administrative expenses were primarily due to the following:

Previous wording

We recognized less than $0.1 million in restructuring expenses for the three months ended June 30, 2024, consisting of employee outplacement service costs related to the workforce reduction announced in March 2024.

Current wording

We recognized a credit of $41,000 in restructuring expenses for the three months ended September 30, 2024, related to a change in estimate for costs of continuation of certain employee benefits related to the workforce reduction announced in March 2024.

Previous wording

Other income, net, decreased by $0.6 million from $1.6 million for the six months ended June 30, 2023 to $1.0 million for the six months ended June 30, 2024. The decrease in other income, net was primarily due to a decrease in interest income earned on our cash and cash equivalents due to a lower average cash balance and lower interest expense on our note payable as a result of the repayment of the remaining principal under our loan agreement with PacWest in March 2024.

Current wording

Other income, net, increased by $0.1 million from $0.6 million for the three months ended September 30, 2023 to $0.7 million for the three months ended September 30, 2024. The increase in other income, net, was primarily due to lower interest expense on our note payable as a result of the repayment of the remaining principal under our loan agreement with PacWest in March 2024.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

We recognized $2.4 million in license revenue for the six months ended June 30, 2024 under the license agreement and stock purchase agreement that we entered into with Gilead in March 2024.

Current wording

We recognized $4.6 million in license revenue for the nine months ended September 30, 2024 under the license agreement and stock purchase agreement that we entered into with Gilead in March 2024.

Previous wording

The following table summarizes our research and development expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Research and development expenses decreased by $7.7 million from $29.3 million for the six months ended June 30, 2023 to $21.6 million for the six months ended June 30, 2024. The changes in research and development expenses were primarily due to the following:

Current wording

Research and development expenses decreased by $8.0 million from $40.4 million for the nine months ended September 30, 2023 to $32.4 million for the nine months ended September 30, 2024. The changes in research and development expenses were primarily due to the following:

Previous wording

The following table summarizes our general and administrative expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

General and administrative expenses decreased by $2.3 million from $14.3 million for the six months ended June 30, 2023 to $12.0 million for the six months ended June 30, 2024. The changes in general and administrative expenses were primarily due to the following:

Current wording

General and administrative expenses decreased by $2.3 million from $20.6 million for the nine months ended September 30, 2023 to $18.3 million for the nine months ended September 30, 2024. The changes in general and administrative expenses were primarily due to the following:

Previous wording

We recognized $1.0 million in restructuring expenses for the six months ended June 30, 2024. The restructuring expenses were associated with the workforce reduction announced in March 2024 and consisted of employee severance, benefits continuation and outplacement service costs.

Current wording

We recognized $0.9 million in restructuring expenses for the nine months ended September 30, 2024. The restructuring expenses were associated with the workforce reduction announced in March 2024 and consisted of employee severance, benefits continuation and outplacement service costs.

Previous wording

Other income, net, was relatively unchanged and was $0.8 million for both the three months ended June 30, 2024 and 2023. This was primarily due to an offsetting decrease in interest income earned on our cash and cash equivalents due to a lower average cash balance and lower interest expense on our note payable as a result of the repayment of the remaining principal under our loan agreement with PacWest in March 2024.

Current wording

in interest income earned on our cash and cash equivalents due to a lower average cash balance and lower interest expense on our note payable as a result of the repayment of the remaining principal under our loan agreement with PacWest in March 2024.

Previous wording

Since our inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in preclinical or early clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have financed our operations primarily from proceeds raised through private placements of preferred units, convertible preferred stock, common stock and prefunded warrants, a debt financing, our IPO, a license agreement and our ATM offering program. Through June 30, 2024, we have received an aggregate of $430.5 million in gross proceeds from such transactions, including $225.5 million in gross proceeds from the sale and issuance of preferred units and convertible preferred stock, $10.0 million in gross proceeds from our debt financing with PacWest, $129.9 million in gross proceeds from our IPO, the $30.0 million upfront payment under our license agreement with Gilead, $28.1 million in gross proceeds from the sale and issuance of common stock and prefunded warrants to certain existing accredited investors and Gilead in private placements and $7.0 million in gross proceeds from the sale and issuance of common stock under our sales agreement with Cowen and Company LLC for our ATM offering program. As of June 30, 2024, we had cash and cash equivalents of $74.9 million.

Current wording

Since our inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in preclinical or early clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have financed our operations primarily from proceeds raised through private placements of preferred units, convertible preferred stock, common stock and prefunded warrants, a debt financing, our IPO, a license agreement and our ATM offering program. Through September 30, 2024, we have received an aggregate of $430.5 million in gross proceeds from such transactions, including $225.5 million in gross proceeds from the sale and issuance of preferred units and convertible preferred stock, $10.0 million in gross proceeds from our debt financing with PacWest, $129.9 million in gross proceeds from our IPO, the $30.0 million upfront payment under our license agreement with Gilead, $28.1 million in gross proceeds from the sale and issuance of common stock and prefunded warrants to certain existing accredited investors and Gilead in private placements and $7.0 million in gross proceeds from the sale and issuance of common stock under our sales agreement with Cowen and Company LLC for our ATM offering program. As of September 30, 2024, we had cash and cash equivalents of $61.3 million.

Previous wording

In November 2022, we filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $250.0 million of our common stock, preferred stock, debt securities, units and warrants, which we may issue and sell from time to time in one or more offerings, which became effective on November 18, 2022 (333-268264). In November 2022, we also entered into the sales agreement with Cowen and Company LLC under which we may issue and sell shares of our common stock under the Form S-3, from time to time, having an aggregate offering price of up to $75.0 million, subject to the terms and conditions of the sales agreement. Through June 30, 2024, we have issued and sold 7,000,000 shares of our common stock pursuant to the sales agreement for aggregate gross proceeds of $7.0 million. However, the extent to which we use the sales agreement as a source of additional funding will depend on a number of factors, including the prevailing market price of our common stock, general market conditions, the extent to which we are able to secure funds from other sources, and whether we are then subject to limitations on our ability to use Form S-3 to sell more than one-third of the aggregate market value of our public float in the trailing 12-month period, which limitations will remain in place until such time as our public float exceeds $75 million. Accordingly, we may not be able to sell additional shares under the sales agreement at prices or in amounts that we deem acceptable, and there can be no assurance that we will sell any additional shares of common stock pursuant to the sales agreement.

Current wording

In November 2022, we filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $250.0 million of our common stock, preferred stock, debt securities, units and warrants, which we may issue and sell from time to time in one or more offerings, which became effective on November 18, 2022 (333-268264). In November 2022, we also entered into the sales agreement with Cowen and Company LLC under which we may issue and sell shares of our common stock under such Form S-3, from time to time, having an aggregate offering price of up to $75.0 million, subject to the terms and conditions of the sales agreement. During the three months ended September 30, 2024, we did not sell any shares of our common stock pursuant to the sales agreement. The extent to which we use the sales agreement as a source of additional funding will depend on a number of factors, including the prevailing market price of our common stock, general market conditions, the extent to which we are able to secure funds from other sources, and whether we are then subject to limitations on our ability to use Form S-3 to sell more than one-third of the aggregate market value of our public float in the trailing 12-month period, which limitations will remain in place until such time as our public float exceeds $75 million. Accordingly, we may not be able to sell additional shares under the sales agreement at prices or in amounts that we deem acceptable, and there can be no assurance that we will sell any additional shares of common stock pursuant to the sales agreement.

Previous wording

During the six months ended June 30, 2024, net cash provided by operating activities of $9.5 million was primarily driven by the $39.1 million received from Gilead under the license agreement and stock purchase agreement that was recorded as deferred revenue at the outset of the arrangement and net non-cash expenses of $4.2 million, partially offset by our net loss of $31.1 million and remaining changes in operating assets and liabilities of $2.8 million.

Current wording

During the nine months ended September 30, 2024, net cash used in operating activities of $4.2 million was primarily driven by our net loss of $45.1 million, partially offset by changes in operating assets and liabilities of $34.8 million, which includes the $39.1 million received from Gilead under the license agreement and stock purchase agreement that was recorded as deferred revenue at the outset of the arrangement, and net non-cash expenses of $6.2 million.

Previous wording

During the six months ended June 30, 2023, net cash used in operating activities of $41.8 million was primarily driven by our net loss of $42.0 million and changes in operating assets and liabilities of $4.5 million, partially offset by net non-cash expenses of $4.7 million.

Current wording

During the nine months ended September 30, 2023, net cash used in operating activities of $55.2 million was primarily driven by our net loss of $58.7 million and changes in operating assets and liabilities of $3.5 million, partially offset by net non-cash expenses of $7.0 million.

Previous wording

During the six months ended June 30, 2024 and 2023, net cash used in investing activities of less than $0.1 million and $0.5 million, respectively, consisted of purchases of property and equipment.

Current wording

During the nine months ended September 30, 2024 and 2023, net cash used in investing activities consisted of purchases of property and equipment.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities of $21.0 million consisted of proceeds from the sale and issuance of common stock and prefunded warrants to certain existing accredited investors and Gilead in private placements and proceeds from the sale and issuance of common stock under our ATM offering program, partially offset by repayments of debt principal under our loan agreement with PacWest and payments on our finance lease for certain lab equipment.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities of $21.0 million consisted of proceeds from the sale and issuance of common stock and prefunded warrants to certain existing accredited investors and Gilead in private placements and proceeds from the sale and issuance of common stock under our ATM offering program, partially offset by repayments of debt principal under our loan agreement with PacWest and payments on our finance lease for certain lab equipment.

Previous wording

During the six months ended June 30, 2023, net cash used in financing activities of $2.7 million consisted of repayments of debt principal under our loan agreement with PacWest and payments on our finance lease for certain lab equipment partially offset by proceeds from the issuance of common stock under our employee stock purchase plan.

Current wording

During the nine months ended September 30, 2023, net cash used in financing activities of $4.9 million consisted of repayments of debt principal and payments on our finance lease for certain lab equipment, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan and the exercise of stock options.

Previous wording

In November 2019, Xilio Development entered into a loan and security agreement with PacWest, as amended and restated in May 2023, with us as a guarantor. In November 2019, we borrowed $10.0 million under a term loan pursuant to the loan agreement. Borrowings under the loan agreement were collateralized by substantially all of the assets of Xilio Development, excluding intellectual property. Interest on amounts outstanding accrued at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 4.75%. We made interest-only payments on the outstanding balance through December 31, 2022. We commenced making equal monthly payments of principal plus interest in January 2023. In the first quarter of 2024, we repaid all amounts outstanding under the loan agreement, and PacWest released all security interests in our and our subsidiaries’ assets.

Current wording

Development, excluding intellectual property. Interest on amounts outstanding accrued at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 4.75%. We made interest-only payments on the outstanding balance through December 31, 2022. We commenced making equal monthly payments of principal plus interest in January 2023. In the first quarter of 2024, we repaid all amounts outstanding under the loan agreement, and PacWest released all security interests in our and our subsidiaries’ assets.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $74.9 million. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of June 30, 2024 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2025. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. In addition, since these amounts may not be sufficient to fund our operations for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. Our management has developed plans to fund our operations, which primarily consist of raising additional capital through one or more of the following: additional equity or debt financings; additional collaborations partnerships or licensing transactions; or other sources. However, there can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise, and we may be unable to obtain sufficient additional capital. If we are not able to secure sufficient additional capital in the near term, we may in the future need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to our operations and research and development programs. The accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business for the foreseeable future. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $61.3 million. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of September 30, 2024 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through the end of the second quarter of 2025. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. In addition, since these amounts are not expected to be sufficient to fund our operations for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. Our management has developed plans to fund our operations, which primarily consist of raising additional capital through one or more of the following: additional equity or debt financings; additional collaborations partnerships or licensing transactions; or other sources. However, there can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise, and we may be unable to obtain sufficient additional capital. If we are not able to secure sufficient additional capital in the near term, we will need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to our operations and research and development programs. In addition, if our efforts to secure sufficient additional capital in the near term are unsuccessful, we may in the future need to seek to engage in one or more other strategic alternatives, including without limitation, the sale or divestiture of some or all of our assets or proprietary technologies. The accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business for the foreseeable future. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Previous wording

Adequate additional capital may not be available to us on acceptable terms, or at all. Market volatility resulting from adverse changes in domestic and international fiscal, monetary and other policies and political relations, regional or global conflicts, uncertainty around global economic conditions, instability in the financial markets, current or future pandemics, or other factors could also adversely impact our ability to access capital as and when needed. To the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest of our existing stockholders may be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Additional debt and preferred equity, if available, may also involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require that we issue additional warrants, which could potentially dilute the ownership interest of our existing stockholders.

Current wording

Adequate additional capital may not be available to us on acceptable terms, or at all. Market volatility resulting from adverse changes in domestic and international fiscal, monetary and other policies and political relations, regional or global conflicts, uncertainty around global economic conditions, instability in the financial markets, current or future pandemics, or other factors could also adversely impact our ability to access capital as and when needed. To the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest