Xilio Therapeutics, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. The filing was signed April 1, 2024; it also describes significant events announced in March 2024. Xilio is a clinical-stage biotechnology company developing tumor-activated immuno-oncology therapies. It has no approved products and has not generated product-sales revenue.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | No product-sales revenue | No product-sales revenue |
| Research and development expense | $52.1 million | $59.2 million |
| General and administrative expense | $27.0 million | $29.9 million |
| Total operating expenses / operating loss | $79.1 million | $89.1 million |
| Other income, net | $2.7 million | $0.9 million |
| Net loss | $76.4 million | $88.2 million |
| Net loss per share, basic and diluted | $2.78 | $3.22 |
| Cash used in operating activities | $68.6 million | $75.7 million |
| Cash and cash equivalents at year-end | $44.7 million | $120.4 million |
Gross margin and operating margin are not meaningful because the company had no product revenue. Total assets at year-end were $60.9 million, total liabilities $24.1 million, and stockholders’ equity $36.8 million. The accumulated deficit was $325.5 million. Year-end note payable was $3.3 million; the company repaid the outstanding loan in Q1 2024. The filing reports $11.7 million of remaining operating-lease payments at December 31, 2023, excluding the optional extension.
Changes versus FY2022
- Net loss narrowed by $11.8 million, while operating expenses fell $10.0 million. Higher interest income and lower interest expense contributed to the improvement.
- R&D expense decreased $7.1 million overall. XTX101 and XTX301 spending declined, partly offset by higher XTX202 clinical-development spending.
- Cash and cash equivalents fell by $75.7 million year over year. Operating cash use remained substantial despite declining from FY2022.
Outlook, developments and material risks
- Going concern: Management estimates year-end 2023 cash, the $30.0 million Gilead upfront cash payment, approximately $13.5 million from Gilead’s equity investment, expected approximately $11.3 million gross proceeds from a private placement, and restructuring savings will fund operations into Q2 2025. The auditor nevertheless included a going-concern explanatory paragraph: substantial doubt remains because funding may not cover at least twelve months from the financial-statement issuance date. Additional capital may be required, and its availability is uncertain.
- Gilead / XTX301: In March 2024, Xilio licensed XTX301 and specified IL-12 molecules to Gilead globally. Xilio is to conduct the ongoing Phase 1 trial through an initial planned Phase 2 dose expansion. Gilead may take over development and commercialization after receiving a specified data package and paying a $75 million transition fee. Xilio is eligible for up to $604 million in additional contingent payments and tiered royalties from high single digits to mid-teens; these amounts are contingent, not assured.
- Financing and dilution: A March 2024 private placement was expected to close April 2, 2024, for approximately $11.3 million gross, including common shares and prefunded warrants. The Gilead equity investment closed March 28. These financings and potential warrant exercises dilute existing holders.
- Portfolio and workforce: Xilio plans to stop investing in XTX202 as a monotherapy and seek partners for combination development. It plans to reduce headcount by 15 employees, about 21% of its pre-reduction workforce, and estimated approximately $1.0 million of one-time restructuring costs. The company intends to prioritize XTX101, XTX301 and research-stage bispecific and cell-engager programs; advancing XTX501 into IND-enabling studies is subject to sufficient additional capital.
- Clinical outlook: Management planned to select a combination recommended Phase 2 dose for XTX101 in Q2 2024 and, subject to Phase 1 results, begin Phase 2 in MSS colorectal cancer in Q3 2024. Initial Phase 2 data were planned for Q4 2024. XTX301 safety, pharmacokinetic and pharmacodynamic data were anticipated in Q4 2024. These are plans, not guaranteed outcomes.
- Clinical evidence remains early: XTX101’s updated Phase 1 monotherapy data included one confirmed partial response and a 33% disease-control rate among 12 evaluable patients at the recommended dose. XTX301 had nine patients treated across three dose levels as of January 5, 2024, with no dose-limiting toxicities reported by that cutoff. XTX202 Phase 2 monotherapy data showed stable disease as the best response among evaluable patients; the company plans to present the full dataset later. Preliminary and interim findings may change.
- Other key risks: Early-stage development and potential safety or efficacy failures; dependence on a single CDMO with significant operations in China; clinical-trial, manufacturing and third-party collaboration risks; competition and intellectual-property uncertainty; and Nasdaq minimum-bid-price noncompliance. The company received a deficiency notice and had until July 17, 2024 to regain compliance, subject to Nasdaq rules.
Important facts for investors to verify
- Whether the Gilead $30.0 million cash payment and the approximately $11.3 million private placement closed as expected, and the resulting cash runway after debt repayment and restructuring costs.
- Whether the stated runway into Q2 2025 remains achievable, given the explicit going-concern warning and dependence on assumptions and cost savings.
- Progress, safety, enrollment and data quality in the XTX101 combination and XTX301 trials, and whether planned milestones were met.
- Gilead’s development and transition decisions, any contingent payments earned, and the potential impact of royalties and license terms.
- Execution and actual savings from the workforce reduction, XTX202 reprioritization and any further cost reductions or financing.
- Nasdaq listing compliance and the effect of issued or exercisable shares and prefunded warrants on dilution.