Xilio Therapeutics, Inc. — FY 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing; the figures below compare full years 2021 and 2020, not standalone fourth quarters. Xilio is a clinical-stage biotechnology company with no approved products or product revenue.
Business context and pipeline
Xilio’s Geographically Precise Solutions (GPS) platform is designed to activate immunotherapies selectively in the tumor microenvironment, with the aim of reducing systemic toxicity. Its lead candidates are XTX101, a tumor-selective anti-CTLA-4 antibody, and XTX202, a tumor-selective IL-2 therapy. XTX301 (IL-12) and XTX401 (IL-15) remained in preclinical development.
- XTX101 Phase 1/2 began in September 2021; enrollment was ongoing. Xilio expected preliminary monotherapy data in mid-2022 and combination data in the second half of 2022.
- XTX202 Phase 1/2 began in January 2022; enrollment was ongoing. Preliminary Phase 1 data were expected in the second half of 2022. These are post-year-end developments and planned milestones, not reported clinical outcomes.
- Xilio planned to submit an IND for XTX301 in the second half of 2022. XTX401 was in preclinical studies.
Financial performance and liquidity
| Metric | FY 2021 | FY 2020 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $51.2 million | $43.9 million |
| General and administrative expense | $23.9 million | $10.7 million |
| Total operating expenses / operating loss | $75.0 million / $(75.0) million | $54.6 million / $(54.6) million |
| Net loss | $(75.8) million | $(55.2) million |
| Net loss per share, basic and diluted | $(13.52) | $(105.42) |
| Cash used in operating activities | $80.8 million | $36.1 million |
| Cash and cash equivalents at year-end | $198.1 million | $19.2 million |
Gross margin and commercial-product margins are not applicable because the company had no product sales. Xilio reported an accumulated deficit of $160.9 million at year-end. Management estimated that cash and cash equivalents would fund operating expenses and capital expenditures into 2024, while cautioning that this estimate depends on assumptions and that additional funding will be needed to complete product development.
Material changes, financing and debt
- Net loss increased $20.6 million year over year. Operating expenses rose $20.5 million: R&D increased $7.3 million and G&A increased $13.2 million. Higher staffing and equity compensation, early-program research, and public-company costs contributed to the increases.
- Operating cash use rose $44.7 million. Financing provided $260.7 million in 2021, principally from preferred-stock financings and the IPO; investing used $1.1 million, mainly for property and equipment.
- The October 2021 IPO and partial overallotment generated $116.4 million in net proceeds. Xilio also raised $50.2 million net from Series B and $94.7 million net from Series C preferred stock earlier in 2021; preferred shares converted into common stock at the IPO.
- At year-end, notes payable were $9.6 million net of discount, against $10.0 million principal. The amended PacWest facility carries a variable rate (greater of prime plus 0.25% or 4.75%), provides interest-only payments through December 2022, and matures June 30, 2024. Xilio could request up to an additional $10.0 million before December 31, 2022, subject to the agreement.
- Operating lease liabilities totaled approximately $10.9 million on the balance sheet; undiscounted remaining lease payments were approximately $15.0 million through the lease term ending March 2030.
Outlook, risks and unusual items
- Xilio expects substantial ongoing losses and negative operating cash flows as it advances clinical programs and preclinical research. It reported no product revenue and does not expect product sales for several years, if ever; it expects to seek additional capital through financing, collaborations, licensing or other arrangements.
- Key risks include early-stage clinical and preclinical uncertainty; potentially serious immune-related toxicity; dependence on MMP-mediated tumor activation; clinical-trial enrollment, execution and data variability; reliance on a single contract manufacturer with significant operations in China; and the need to secure future funding and commercial capabilities.
- COVID-19 had caused a temporary shortage of a raw material in 2020. The company warned of potential further disruption to supplies, studies, trials, regulatory work and financing.
- IPO-related events resulted in payment of a $0.8 million PacWest success fee and settlement of contingent liabilities. The filing reported no material legal proceedings. Disclosure controls were deemed effective at the reasonable-assurance level; management’s internal-control assessment and auditor attestation were omitted under the transition rules for newly public companies.
Important facts for investors to verify
- Confirm the current cash balance, actual cash burn, and whether the stated runway into 2024 remains achievable.
- Track clinical enrollment, safety, dose selection and results for XTX101 and XTX202; assess whether early findings support the company’s tumor-selectivity thesis.
- Check progress and timing of the XTX301 IND and XTX401 development, including manufacturing readiness.
- Review additional financing needs, debt terms and covenants, and any collaboration or licensing terms that could affect economics or rights.
- Assess concentration and continuity risks in contract manufacturing, particularly the reliance on the current supplier and China-related exposure.