Xilio Therapeutics, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This filing reports annual results; it does not provide standalone fourth-quarter financial results.
Business context
Xilio is a clinical-stage biotechnology company developing tumor-activated immuno-oncology therapies using its proprietary GPS platform. Its lead candidates are XTX202 (IL-2), XTX301 (IL-12), and XTX101 (anti-CTLA-4). The company had no approved products and had generated no product revenue.
Key financial metrics
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $59.2 million | $51.2 million |
| General and administrative expense | $29.9 million | $23.9 million |
| Total operating expenses / operating loss | $89.1 million | $75.0 million |
| Net loss | $88.2 million | $75.8 million |
| Net loss per share, basic and diluted | $3.22 | $13.52 |
| Net cash used in operating activities | $75.7 million | $80.8 million |
| Cash and cash equivalents at year-end | $120.4 million | $198.1 million |
Gross margin and operating margin are not meaningful for the company’s reported business, which had no product revenue. Total assets were $139.2 million and stockholders’ equity was $105.6 million at December 31, 2022. Accumulated deficit was $249.1 million.
Debt and liquidity: The $10.0 million PacWest term loan remained outstanding at year-end, with a 7.75% interest rate. Principal-and-interest payments began in January 2023; maturity is June 30, 2024. The company reported $6.7 million current and $3.2 million long-term notes payable, net of discount. Management estimated existing cash would fund operating expenses and capital needs into the second quarter of 2024. A $75 million at-the-market equity facility was available, but no shares had been sold under it by year-end.
Changes versus 2021
- Net loss increased by $12.4 million, while operating expenses rose $14.1 million, or about 19%.
- R&D expense increased $8.0 million. XTX301 spending rose $6.8 million as manufacturing and clinical activities advanced; XTX202 spending declined overall as manufacturing and preclinical costs fell despite higher clinical costs.
- G&A expense increased $6.1 million, reflecting higher personnel, public-company, and facility costs.
- Operating cash use decreased by $5.0 million, but year-end cash and cash equivalents fell by $77.7 million. 2021 cash included substantial preferred-stock and IPO financing proceeds; 2022 financing cash flow was approximately zero.
- Other income improved to $0.9 million from $0.8 million of expense, primarily due to higher interest income.
Outlook, management commentary, and risks
- Management expected rising R&D and operating costs and continuing losses, and stated that additional capital would be needed to support development. The stated cash runway depends on estimates and could be shorter than projected.
- XTX202: Phase 1 dose escalation and expansion were ongoing. The company planned a Phase 2 monotherapy study in melanoma and renal cell carcinoma and expected preliminary Phase 1/2 data in Q3 2023.
- XTX301: FDA had cleared its IND; Phase 1 sites were open and screening patients. Preliminary safety data through at least the third dose level were expected in Q4 2023.
- XTX101: Phase 1 dose escalation was complete, dose expansion was ongoing, and the company had selected a recommended Phase 2 dose of 150 mg every six weeks. Preliminary data were expected in Q2 2023. The company planned to seek a partner for development beyond the ongoing Phase 1 study and did not plan to start a combination cohort or Phase 2 study without one.
- As of March 1, 2023, XTX202 had been administered to 16 patients; no signs of vascular leak syndrome had been observed. Tumor-biopsy pharmacodynamic findings were available for only two patients and were preliminary. These are post-year-end updates, not full-year financial results.
- Key risks include clinical failure or adverse effects, uncertain translation of early or preclinical data, substantial financing needs and potential dilution, reliance on a single contract manufacturer with operations in China, clinical-trial execution and enrollment, competition, and dependence on licensed intellectual property and third parties.
- The financial statements received an unqualified audit opinion. Management concluded disclosure controls and internal control over financial reporting were effective as of year-end; the auditor did not attest to internal-control effectiveness.
Important facts for investors to verify
- Whether actual cash use and subsequent financing preserve or change the projected runway into Q2 2024.
- Current loan balance, interest rate, payment schedule, covenant compliance, and any refinancing or repayment plans.
- Final safety, pharmacokinetic, pharmacodynamic, and antitumor results from the three clinical programs, including patient counts and follow-up for preliminary findings.
- Whether Xilio secures a partner for XTX101 and the financial, development, and rights terms of any collaboration.
- Manufacturing capacity, supply continuity, and the feasibility and cost of qualifying alternative suppliers.
- Potential dilution from the $75 million ATM facility, equity awards, and other financing needs.