xncr-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________

FORM 10-Q

(Mark One)


			x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


			o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

_______________________________________________

Commission file number: 001-36182

Xencor, Inc.

(Exact name of registrant as specified in its charter)


Delaware			20-1622502
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

465 North Halstead Street, Suite 200, Pasadena, CA			91107
(Address of principal executive offices)			(Zip Code)

(626) 305-5900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

XNCR

The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class						Outstanding at May 1, 2026
Common stock, par value $0.01 per share						74,141,596

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TABLE OF CONTENTS


		Page

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		2

PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations and Comprehensive Loss	4
	Consolidated Statements of Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION	28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Default upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	29
Item 6.	Exhibits	29

SIGNATURE		30

In this report, unless otherwise stated or the context otherwise indicates, references to “Xencor,” the “Company,” “we,” “us,” “our” and similar references refer to Xencor, Inc. The Xencor logo is a registered trademark of Xencor, Inc. This report also contains registered marks, trademarks, and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and we intend that such forward-looking statements be subject to the safe harbors created thereby. Any statements contained in this Quarterly Report on Form 10-Q except for historical information, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “might,” “will,” “expect,” “believe,” “anticipate,” “goal,” “endeavor,” “strive,” “intend,” “plan,” “project,” “could,” “estimate,” “target,” “forecast,” or “continue” or the negative of these words or other variations thereof or comparable terminology are intended to identify forward-looking statements.

These forward-looking statements should, therefore, be considered in light of various important factors, including but not limited to, the following:

•the effects of inflation on our financial condition, results of operations, cash flows and performance;

•our ability to execute on our plans to research, develop and commercialize our product candidates;

•the success of our ongoing and planned clinical trials;

•the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

•our ability to identify additional products or product candidates with significant commercial potential that are consistent with our business objectives;

•our ability to receive research funding and achieve anticipated milestones under our collaborations;

•our partners’ abilities to advance drug candidates into, and successfully complete, clinical trials;

•our ability to attract collaborators with development, regulatory, and commercialization expertise;

•our ability to protect our intellectual property position;

•the rate and degree of market acceptance and clinical utility of our products;

•costs of compliance and our failure to comply with new and existing governmental regulations;

•the capabilities and strategy of our suppliers and vendors including key manufacturers of our clinical drug supplies;

•significant competition in our industry;

•the potential loss or retirement of key members of management;

•our failure to successfully execute our growth strategy including any delays in our planned future growth;

•our failure to maintain effective internal controls, which previously led to the restatement of our financial statements, and the risk that we may experience additional material weaknesses; and

•our ability to accurately estimate expenses, future revenues, capital requirements and needs for additional financing.

The forward-looking statements included herein are based on current expectations of the Company’s management based on available information and involve a number of risks and uncertainties, all of which are difficult or impossible to predict accurately, and many of which are beyond its control. As such, the Company’s actual results and timing of certain events may differ materially from the results discussed, projected, anticipated or indicated in any forward-looking statements. Forward-looking statements are not guarantees of future performance and the Company’s actual results of operations, financial condition and cash flows may differ materially. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in more detail in Item 1A. “Risk Factors” of Part II of this Quarterly Report on Form 10-Q. Readers should carefully review these risks, as well as the additional risks described in other documents the Company files from time to time with the Securities and Exchange Commission (the “SEC”). In light of the significant risks and uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that such results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking information. Statements made herein are as of the date of the filing of this Quarterly Report on Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Except as may be required by law, the Company disclaims any intent to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Xencor, Inc.

Consolidated Balance Sheets

(in thousands, except per share amounts)


	March 31, 2026		December 31, 2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	14,170	$	54,073
Marketable debt securities	370,207		381,158
Marketable equity securities	60,573		112,502
Accounts receivable	12,001		29,299
Prepaid expenses and other current assets	25,904		22,789
Total current assets	482,855		599,821
Restricted cash	191		289
Marketable debt securities - long term	157,393		175,602
Property and equipment, net	51,492		53,308
Right-of-use assets	36,815		37,592
Patents, licenses, and other intangible assets, net	7,602		8,385

Other assets	498		498
Total assets	$	736,846	$	875,495
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,919	$	10,828
Accrued expenses	34,253		34,960
Income tax payable	841		3,589
Lease liabilities	4,034		3,263

Liabilities related to the sales of future royalties	26,410		43,267
Total current liabilities	73,457		95,907
Long-term tax liabilities	2,884		2,784
Lease liabilities, net of current portion	62,596		64,735
Liabilities related to the sales of future royalties, net of current portion	82,124		76,482
Other liabilities	152		—
Total liabilities	221,213		239,908
Commitments and contingencies
Noncontrolling interest and stockholders’ equity

Common stock, $0.01 par value: Authorized 200,000 shares Issued and outstanding 74,064 and 71,872 shares at March 31, 2026 and December 31, 2025, respectively.	741		718
Additional paid-in capital	1,439,740		1,429,252
Accumulated other comprehensive income	27		1,576
Accumulated deficit	(924,875)		(795,959)
Total stockholders’ equity attributable to Xencor, Inc.	515,633		635,587
Noncontrolling interest	—		—
Total noncontrolling interest and stockholders’ equity	515,633		635,587
Total liabilities and stockholders’ equity	$	736,846	$	875,495

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Xencor, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except per share amounts)


	Three Months Ended March 31,
	2026		2025
Revenue
Collaborations, milestones, and royalties	$	4,516	$	32,732
Operating expenses:
Research and development	64,669		58,578
General and administrative	17,709		17,337
Total operating expenses	82,378		75,915
Operating loss	(77,862)		(43,183)

Other income (expense):
Interest income	5,459		7,538
Interest expense	(4,700)		(8,665)
(Losses) gains on equity securities, net	(51,929)		941
Asset impairment charges	—		(4,865)
Other, net	396		(31)
Total other expense	(50,774)		(5,082)

Loss before income tax expense and noncontrolling interest	(128,636)		(48,265)
Income tax expense	280		367
Net loss including noncontrolling interest	(128,916)		(48,632)
Net loss attributable to noncontrolling interest	—		(214)
Net loss attributable to Xencor, Inc.	$	(128,916)	$	(48,418)

Net loss per share attributable to Xencor, Inc. (basic and diluted)	$	(1.71)	$	(0.66)


Weighted-average shares used in calculating net loss per share (basic and diluted)	75,247		73,667


Other comprehensive income (loss), net of tax:
Net unrealized (loss) gain on marketable debt securities	(1,549)		1,018
Comprehensive loss	$	(130,465)	$	(47,614)
Less: comprehensive loss attributable to the noncontrolling interest	—		(214)
Comprehensive loss attributable to Xencor, Inc.	$	(130,465)	$	(47,400)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Xencor, Inc.

Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Noncontrolling Interest		Total
	Shares	Amount
Balance at December 31, 2025	71,872	$	718	$	1,429,252	$	1,576	$	(795,959)	$	—	$	635,587
Stock-based compensation	—	—		9,561		—		—		—		9,561
Exercise of stock options	77	1		949		—		—		—		950
Issuance of restricted stock units	727	7		(7)		—		—		—		—
Exercise of pre-funded warrants	1,388	15		(15)		—		—		—		—
Net unrealized loss on marketable debt securities	—	—		—		(1,549)		—		—		(1,549)
Net loss	—	—		—		—		(128,916)		—		(128,916)
Balance at March 31, 2026	74,064	$	741	$	1,439,740	$	27	$	(924,875)	$	—	$	515,633


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Noncontrolling Interest		Total
	Shares	Amount
Balance at December 31, 2024	70,256	$	703	$	1,381,607	$	(663)	$	(704,036)	$	(3,585)	$	674,026
Stock-based compensation	—	—		12,213		—		—		—		12,213
Exercise of stock options	189	2		2,972		—		—		—		2,974
Issuance of restricted stock units	691	7		(7)		—		—		—		—
Net unrealized gain on marketable debt securities	—	—		—		1,018		—		—		1,018
Purchase of non-controlling interest	—	—		(5,524)		—		—		3,799		(1,725)
Net loss	—	—		—		—		(48,418)		(214)		(48,632)
Balance at March 31, 2025	71,136	$	712	$	1,391,261	$	355	$	(752,454)	$	—	$	639,874

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Xencor, Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities
Net loss	$	(128,916)	$	(48,632)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,567		2,693
Accretion of discount on marketable debt securities, net	(128)		(2,126)
Stock-based compensation	9,561		12,213

Change in fair value of marketable equity securities	51,929		(941)
Asset impairment charges	—		4,865
Non-cash royalty revenue related to the sale of future royalties	(4,416)		(18,232)
Non-cash interest expense on liabilities related to the sale of future royalties	4,700		8,664
Changes in operating assets and liabilities:
Accounts receivable	5,800		23,405
Prepaid expenses and other assets	(2,165)		5,057
Accounts payable	(2,871)		(568)
Accrued expenses	(707)		(3,154)
Operating lease, net	(590)		168

Other assets and liabilities, net	(2,392)		368
Net cash used in operating activities	(67,628)		(16,220)

Cash flows from investing activities
Purchase of marketable debt securities	(72,679)		(103,873)

Purchase of property and equipment	(610)		(1,444)


Proceeds from maturities of marketable debt securities	99,966		118,985
Net cash provided by investing activities	26,677		13,668

Cash flows from financing activities
Proceeds from the exercises of stock options	950		2,974



Cash paid to acquire noncontrolling interest	—		(1,725)
Net cash provided by financing activities	950		1,249

Net decrease in cash, cash equivalents, and restricted cash	(40,001)		(1,303)
Cash, cash equivalents, and restricted cash, beginning of period	54,362		41,262
Cash, cash equivalents, and restricted cash, end of period	$	14,361	$	39,959

Supplemental disclosure of cash flow information
Interest paid	$	1	$	1
Income taxes paid:
Federal	$	51	$	—
State	2,783		—
Foreign	180		—
Total	$	3,014	$	—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Xencor, Inc.

Notes to Consolidated Financial Statements

(unaudited)

1. Organization and Summary of Significant Accounting Policies

Organization

Xencor, Inc. (the “Company”) was incorporated in California in 1997 and reincorporated in Delaware in September 2004. The Company is 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. The Company uses its protein engineering capabilities to design new technologies and XmAb® drug candidates with improved properties. The Company advances these candidates into clinical-stage development, where the Company is conducting Phase 1 and Phase 2 studies for a broad portfolio of programs. Based on the results of these studies, the Company determines which programs to advance into later stages of development and potentially commercialization, which to partner in order to access complementary resources to optimize development, and which to discontinue.

Consolidation and Basis of Presentation

The interim consolidated financial statements of Xencor, Inc. are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applicable to interim periods. In the opinion of management, all material adjustments of a normal recurring nature have been made to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented. All intercompany transactions and balances have been eliminated.

Certain note disclosures that are normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as they are not required for interim reporting purposes. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for more complete descriptions and discussions. Operating results and cash flows for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026.

Gale Therapeutics Inc. (“Gale”)

The interim consolidated financial statements for the three months ended March 31, 2025 included the accounts of Xencor, Inc. and Gale, a variable interest entity for which the Company was the primary beneficiary. Up through January 20, 2025, the Company owned or was exposed to less than 100% of the economics, and accordingly, the Company recorded net loss attributable to noncontrolling interests in its consolidated statements of operations and comprehensive loss equal to the percentage of the economic or ownership interests retained in such entity by the respective noncontrolling party. Effective January 20, 2025, the Company obtained 100% of the economic interests in Gale and no longer recognized a noncontrolling interest in its consolidated financial statements.

Effective April 29, 2025, Gale was merged into the Company in a transaction between entities under common control. The Company completed a common-control transfer of assets and liabilities with Gale. The assets and liabilities were recognized at historical carrying amounts; no fair value measurement was applied. This transaction did not result in a change in reporting entity and was accounted for prospectively, with no adjustments to prior periods.

Income Tax

The Company recorded $0.3 million and $0.4 million of income tax expense for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the Company’s deferred income tax assets, consisting primarily of capitalized R&D under IRC Section 174, net operating loss and research and development tax credit carryforwards, have been fully offset by a valuation allowance.

Summary of Significant Accounting Policies

There have been no changes to the significant accounting policies disclosed in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Recent Accounting Pronouncements

The Company does not expect any recently issued accounting standards, other than those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025, to have a material impact on its financial results.

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2. Collaboration and Licensing Agreements

The following table provides a summary of revenue recognized:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Alexion	$	1,480	$	15,469




Incyte	2,936		15,263




Vir Bio	—		2,000



Other (2)	100		—
Total (1)	$	4,516	$	32,732

(1) As of March 31, 2026, there was no deferred revenue related to the agreements the Company entered into with the parties listed above.

(2) On February 26, 2026, the Company entered into a Fourth Amendment to its License Agreement with INmune Bio, Inc. (“INmune”), under which INmune agreed to pay a one-time, non-refundable, non-creditable fee of $0.1 million for an extension of its diligence obligations. The Company received the fee in the first quarter of 2026.

The following table presents a disaggregation of revenue recognized during the periods indicated:


	Three Months Ended March 31,
	2026		2025
	(in thousands)

License	$	100	$	—
Milestone	—		14,500
Royalties	4,416		18,232
Total	$	4,516	$	32,732

The following table summarizes the balance of receivables and contract liabilities related to the Company’s collaboration and license agreements:


	March 31,
	2026		2025
	(in thousands)
Receivables included in accounts receivable	$	12,001	$	33,853
Contract liabilities included in deferred revenue	$	—	$	—

Alexion Pharmaceuticals, Inc. (“Alexion”)

In January 2013, the Company entered into an Option and License Agreement (the “Alexion Agreement”) with Alexion, which was acquired by AstraZeneca in 2021. 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®.

Under the Alexion Agreement, no further milestone payments are expected. The Company is entitled to receive royalties in the low single digits based on a percentage of net sales of Ultomiris sold by Alexion, its affiliates or its sublicensees. Alexion’s royalty obligations apply on a product-by-product and country-by-country basis and continue until the expiration of the last-to-expire valid licensed patent covering the applicable product in such country.

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 the Company that it had taken the position that it does not owe additional royalties for U.S. sales of Ultomiris and does not intend to make future payments for sales in the U.S. under the parties’ agreement. The Company disputes this position and is evaluating its options.

In the first quarter of 2026, the Company 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. The

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Company concluded that royalties on disputed U.S. sales should be constrained to zero until the uncertainty is resolved. Accordingly, the Company recorded a reduction of $6.6 million to royalty revenue and a corresponding reduction to the related receivable in the quarter ended March 31, 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 Accounting Standards Codification (“ASC”) Topic 606’s sales‑ and usage‑based royalty guidance.

The Company will recognize royalty revenue related to disputed U.S. sales upon resolution of the uncertainty, when it is probable that a significant reversal will not occur, or upon receipt of payments that are not subject to refund. The ultimate outcome and timing of resolution are uncertain, and the Company cannot reasonably estimate the amount or timing of any recovery, if any, as of March 31, 2026.

On November 3, 2023, the Company entered into a royalty sale agreement (the “Ultomiris Royalty Sale Agreement”) with OCM Life Sciences Portfolio LP (“OMERS”), under which OMERS acquired the rights to certain royalties associated with the existing license relating to Ultomiris.

Under the Alexion Agreement, the Company recognized non-cash royalty revenue of $1.5 million and $15.5 million during the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the Company recorded $8.1 million in accounts receivable based on estimated royalties due under the arrangement. Payment of this receivable will be made directly to OMERS. See Note 6.

Incyte Corporation (“Incyte”)

In June 2010, the Company entered into a Collaboration and License Agreement (the “MorphoSys Agreement”) with MorphoSys AG (“MorphoSys”). Under the MorphoSys Agreement, the Company granted MorphoSys an exclusive worldwide license to its 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. In February 2024, Incyte assumed all of MorphoSys’ right, title and interest in the MorphoSys Agreement and acquired exclusive global development and commercialization rights to tafasitamab. If certain developmental, regulatory and sales milestones are achieved, the Company is eligible to receive future milestone payments and royalties from Incyte.

In February 2025, the United States Food and Drug Administration (“FDA”) accepted Incyte’s submission of a supplemental biologics license application (“BLA”), triggering a $12.5 million milestone payment to the Company, and approved the application in June 2025, triggering an additional $25.0 million milestone payment to the Company. Both milestone payments were received by the Company in 2025. In addition, Incyte dosed two patients in a Phase 2 study on December 29, 2025, one patient with immune thrombocytopenia and one patient with autoimmune hemolytic anemia, triggering a $4.0 million milestone payment to the Company, which was recognized as revenue in 2025 and collected in January 2026.

Under the MorphoSys Agreement, the Company is eligible to receive up to $195.0 million in developmental, regulatory and sales milestones, as well as royalties on net sales, subject to the terms and conditions of the agreement.

On November 3, 2023, the Company entered into a royalty sale agreement (the “Monjuvi Royalty Sale Agreement”) with OMERS, under which OMERS acquired the rights to certain royalties associated with the existing license relating to Incyte. The $41.5 million of milestone payments the Company recognized in 2025 is not subject to the Monjuvi Royalty Sale Agreement.

Under the MorphoSys Agreement, the Company recognized non-cash royalty revenue of $2.9 million and $2.8 million during the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the Company recorded $3.9 million in accounts receivable based on estimated royalties due under the arrangement. Payment of this receivable will be made directly to OMERS. See Note 6.

Vir Biotechnology, Inc. (“Vir Bio”)

In 2019, the Company 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 the Company, which was paid in the second quarter of 2025.

In March 2020, the Company entered into a second Patent License Agreement (the “Second Vir Bio Agreement”) with Vir Bio, granting a non-exclusive license to its Xtend technology to extend the half-life of novel antibodies Vir Bio developed as potential treatments for patients with COVID-19, including sotrovimab. Under the terms of the Second Vir Bio Agreement, Vir Bio 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. Vir Bio and its marketing partner, GSK, began recording sales for sotrovimab beginning in June 2021. In

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March 2022, the FDA deauthorized sotrovimab’s use in all U.S. regions due to increases in the proportion of COVID-19 cases caused by the Omicron BA.2 subvariant.

The Company did not recognize royalty revenue for the three months ended March 31, 2026 or 2025. Under the Vir Bio Agreement, the Company is eligible to receive up to $65.0 million in developmental, regulatory and sales milestones, as well as royalties on net sales, subject to the terms and conditions of the agreement.

3. Marketable Debt and Equity Securities

Marketable Debt Securities

The Company’s marketable debt securities consisted of the following:


	As of March 31, 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Money market funds	$	6,837	$	—	$	—	$	6,837

Government securities	527,564		597		(561)		527,600

SEC Form 10-Q filed by Xencor Inc.