Xilio Therapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Xilio is a clinical-stage biotechnology company developing tumor-selective immunotherapies. It has no approved products and has generated no product revenue.
Financial performance and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $14.9 million | $11.6 million |
| General and administrative expense | $6.3 million | $4.9 million |
| Total operating expenses | $21.2 million | $16.5 million |
| Net loss | $21.4 million | $16.7 million |
| Net loss per share, basic and diluted | $0.78 | $23.53 |
| Net cash used in operating activities | $20.8 million | $22.7 million |
Operating expenses rose $4.7 million year over year. R&D increased $3.3 million, chiefly reflecting XTX301 manufacturing and preclinical work, other early programs, and higher staffing; lower XTX202 and XTX101 spending partly offset these increases. G&A increased $1.4 million, primarily from personnel and public-company costs. Net loss widened $4.7 million. Per-share loss comparisons are affected by the substantial change in weighted-average shares following the 2021 IPO and preferred-stock conversion.
At March 31, 2022, cash and cash equivalents were $177.0 million, down from $198.1 million at December 31, 2021; total cash, cash equivalents and restricted cash were $178.5 million. Current assets were $181.1 million and current liabilities $12.2 million. Total assets were $196.4 million; total liabilities were $30.2 million. Notes payable had $10.0 million principal outstanding and a $9.7 million carrying value, with maturity in June 2024. The company reported covenant compliance. Operating cash burn was $20.8 million; capital expenditures were $0.3 million. Margins are not meaningful because the company has no revenue.
Liquidity, outlook and material developments
- Management stated that March 31 cash was expected to fund operating expenses and capital expenditures into the first half of 2024. The financial-statement note separately says cash is expected to cover projected requirements for at least 12 months from issuance. These are differently phrased runway estimates; management cautioned that forecasts depend on assumptions and cash could run out sooner.
- The company expects ongoing losses and negative operating cash flow, with expenses rising as it advances research and development. It expects no product-sales revenue for at least several years, if ever, and will need substantial additional capital. It had no committed external funding sources other than the ability to request up to $10 million in additional term loans.
- XTX101 and XTX202 were in Phase 1 of Phase 1/2 trials. Xilio planned to submit an IND for XTX301 in the second half of 2022. It deprioritized preclinical development of XTX401 to focus resources on other programs.
- The 2021 IPO generated $116.4 million in net proceeds. By March 31, the company estimated it had used approximately $36.8 million; it reported no material change to the planned use of proceeds.
- In May 2022, after quarter-end, Xilio entered a fourth amendment to its PacWest loan agreement, primarily modifying financial-statement and electronic-delivery requirements for its public-company operations.
- Key risks include early-stage clinical and preclinical uncertainty, potential safety issues, reliance on third-party manufacturers and research organizations, dependence on a single manufacturer with significant China operations, financing needs, intellectual-property and licensing risks, and possible COVID-19-related disruption. The company said disclosure controls were effective and reported no material quarterly change in internal control over financial reporting.
Important facts for investors to verify
- Whether the clinical progress and future data for XTX101 and XTX202, and the planned XTX301 IND timing, meet company expectations.
- The assumptions behind the stated cash runway through the first half of 2024, including expected trial, manufacturing, and staffing costs and the separate “at least 12 months” statement.
- Availability and terms of additional financing, including the optional PacWest borrowing, and any effects on dilution, covenants, or development plans.
- Manufacturing capacity, continuity of supply, and exposure to the company’s reliance on a single manufacturer and China-related risks.
- Progress on the deprioritized XTX401 program and the effect of resource prioritization on the broader pipeline.