Business Context and Reporting Period
Company: Xilio Therapeutics, Inc. (XLO)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Xilio is a clinical-stage biotechnology company developing masked immuno-oncology (I-O) therapies designed to activate selectively within the tumor microenvironment. The company operates as a non-accelerated filer, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $43.8 million | $6.3 million |
| Net Loss | $(35.0) million | $(58.2) million |
| Operating Expenses | $85.7 million | $66.9 million |
| Cash and Cash Equivalents (Dec 31, 2025) | $137.5 million | $55.3 million |
| Accumulated Deficit (Dec 31, 2025) | $(418.8) million | $(383.8) million |
| Net Cash Used in Operating Activities | $(5.0) million | $(18.4) million |
Note: Revenue is derived entirely from collaboration and license agreements with AbbVie and Gilead. The company has no product sales revenue.
Material Changes vs. Prior Period
- Revenue Surge: Revenue increased by $37.4 million (590%) year-over-year, driven by the recognition of upfront payments and milestones from the AbbVie collaboration (entered Feb 2025) and a $17.5 million development milestone from Gilead.
- Reduced Net Loss: Net loss narrowed by $23.2 million to $35.0 million, primarily due to the revenue increase and a $5.8 million non-cash gain from the change in fair value of common stock warrant liabilities.
- Increased R&D Spend: Research and development expenses rose by $14.8 million to $56.0 million, reflecting increased clinical activities for efarindodekin alfa and IND-enabling studies for XTX501, partially offset by the discontinuation of the XTX202 program.
- Capital Raise: The company raised significant capital in 2025 through a follow-on offering of prefunded warrants and warrants (net proceeds ~$47.0 million) and a private placement with AbbVie ($10.0 million).
Guidance, Outlook, and Risks
Management Outlook
- Liquidity: As of December 31, 2025, cash was $137.5 million. Including $37.3 million in net proceeds from a February 2026 follow-on offering and a $5.0 million AbbVie milestone, management anticipates funding operations through the end of 2027.
- Pipeline Milestones:
- XTX501 (PD-1/masked IL-2): IND submission planned for mid-2026; Phase 1 initiation in H2 2026.
- Efarindodekin alfa (masked IL-12): Ongoing Phase 2 trial; option data package delivery to Gilead expected in H1 2027.
- Vilastobart (masked anti-CTLA-4): Ongoing Phase 2 trial in combination with atezolizumab.
- Warrant Exercise Potential: Up to $36.2 million in additional gross proceeds could be received in H2 2026 if outstanding Series C warrants are exercised.
Key Risks and Contingencies
- Nasdaq Compliance: The company received deficiency notices regarding minimum bid price and stockholders' equity. It transferred to the Nasdaq Capital Market in October 2025 and implemented a 1-for-14 reverse stock split effective March 13, 2026, to regain compliance. Failure to maintain compliance could result in delisting.
- Capital Requirements: The company expects to incur significant losses for the foreseeable future and will require substantial additional capital to complete development.
- Manufacturing Concentration: Reliance on WuXi Biologics in China for manufacturing exposes the company to geopolitical risks, including the potential impact of the BIOSECURE Act and trade restrictions.
- Collaboration Dependence: Future revenue is heavily dependent on the success of collaborations with AbbVie and Gilead, including the achievement of milestones and option exercises.
Investor Verification Checklist
- Reverse Stock Split Impact: Verify the post-split trading volume and price stability to ensure continued Nasdaq listing compliance.
- Warrant Liability Valuation: Review the fair value assumptions (volatility, risk-free rate) for the Series A and Series C warrant liabilities, which significantly impact net income/loss.
- Deferred Revenue Recognition: Confirm the timeline for recognizing the $60.7 million in deferred revenue from AbbVie and Gilead, as this drives future revenue visibility.
- Manufacturing Supply Chain: Assess the company's contingency plans for manufacturing disruptions related to WuXi Biologics and potential U.S. regulatory restrictions on Chinese biotech firms.
- Cash Burn Rate: Monitor quarterly cash burn against the stated runway to end of 2027, considering the potential dilution from future capital raises.