NASDAQ: XNCR

B.XmAb Bispecific Fc Domain and Multi-Specific Antibody Formats

Our modular approach to protein engineering is a distinguishing feature of our Fc technologies. This flexibility enables us to design multiple XmAb drug candidates with distinct and novel mechanisms of action and to explore new applications of the XmAb Bispecific Fc Domain. Our business, research, and clinical efforts focus on developing and advancing a portfolio of XmAb drug candidates in oncology and autoimmune diseases.

•CD3 bispecific antibodies: CD3 T-cell engaging bispecific antibodies are designed to redirect T cells to target cells by engaging an antigen on the target cell and CD3, an activating receptor on T cells.

We have expanded the potential of our CD3 T-cell engagers through the development of the multi-specific XmAb 2+1 bispecific antibody format, which incorporates two identical target-binding domains and one CD3-binding domain. Target-binding affinities are engineered to enable selective engagement and killing of cells with high target expression while minimizing activity against normal cells with low target expression.

In preclinical cancer models, XmAb 2+1 bispecific antibodies preferentially bound to tumor cells over normal cells and effectively recruited T cells to selectively kill tumor cells. These properties may be particularly important for solid tumor targets, where conventional monovalent targeting can result in limited tolerability due to target expression on normal tissues, including critical organs. XmAb819 and XmAb541 are examples of our CD3 candidates in clinical development for solid tumors that were designed using this 2+1 format. Plamotamab and XmAb657, which uses a 2+1 format, are examples of our CD3 candidates in clinical development for autoimmune diseases.

•CD28 bispecific antibodies: T cells in the tumor microenvironment require both T-cell receptor engagement and co-stimulatory signaling to achieve full activation. CD28 is a key co-stimulatory receptor on T cells; however, its natural ligands are often not expressed on tumor cells. Targeted CD28 T-cell engaging bispecific antibodies may enable conditional co-stimulation of T cells, such as in the presence of tumor-associated antigens or in combination with CD3 T-cell engaging bispecific antibodies. XmAb808, our clinical-stage CD28 candidate, has been engineered to provide selective CD28 co-stimulation, activating T cells upon binding to B7-H3 expressed on tumor cells.

•XmAb412 (TL1A x IL23p19): XmAb412 is a bispecific antibody that inhibits both TL1A and IL23p19, two important inflammatory pathways for autoimmune and inflammatory disease, while avoiding the complexities of development, dosing and formulary access for two separate TL1A and IL23 monospecific drugs. In vitro studies show that XmAb412 matches the target inhibition potency of monospecific antibodies to these targets, but in a

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bispecific format. XmAb412 could address significant unmet medical needs for patients with inflammatory bowel diseases, including Crohn’s disease and ulcerative colitis. We anticipate initiating first-in-human studies during 2026.

Additional XmAb Fc domains that we have developed include:

•Immune Inhibitor Fc Domain: Designed to provide selective immune inhibition and rapid target clearance through engagement of the FcγRIIb receptor.

•Cytotoxic Fc Domain: Engineered to enhance cytotoxic activity through engagement of FcγRIIIa receptors on natural killer cells and FcγRIIa receptors on other immune system cells.

•Xtend™ Fc Domain: Designed to extend antibody half-life through engagement of the FcRn receptor on endothelial cells. XmAb942 is an antibody that targets TL1A and is in clinical development for inflammatory bowel diseases that uses our Xtend Fc domain.

C.Our Strategy

Our goal is to become a leading biopharmaceutical company that develops and commercializes engineered biologic medicines to advance the standard of care for patients with severe and life-threatening diseases. Key elements of our strategy include the following:

Advance XmAb antibody programs in oncology and autoimmune diseases

We seek to advance multiple XmAb drug candidates into clinical development by leveraging protein engineering capabilities and our modular bispecific technologies. We have aligned our portfolio to prioritize T cell-engaging bispecific antibody programs in oncology, which we believe represent an important emerging class of drugs that holds significant potential for the treatment of patients beyond current standard of care. We employ a number of XmAb protein engineering technologies for our current portfolio of drug candidates to treat patients with cancer and with autoimmune and inflammatory diseases.

Build and actively manage a pipeline of XmAb drug candidates

We advance multiple XmAb drug candidates into early stages of clinical development and evaluate data generated from ongoing studies to inform further development decisions. Based on emerging clinical data, competitive dynamics, and resource considerations, we may increase investment in certain programs, enter into partnerships with third-party biotechnology or pharmaceutical companies, or discontinue development of certain drug candidates.

Leverage protein engineering capabilities through partnerships and collaborations

We seek to utilize our protein engineering capabilities, XmAb Fc domains, XmAb multi-specific antibodies, and XmAb drug candidates in collaboration, licensing, and partnership arrangements to generate revenue while selectively retaining rights to advance certain prioritized programs internally, create new drug candidates, explore combination therapies, and identify additional indications for our pipeline programs.

Generate revenue through licensing and collaboration arrangements

The modular nature of our Fc technologies and our ability to efficiently generate multiple drug candidates provide opportunities to generate revenue from licensing and collaboration agreements with third parties.

Create new XmAb drug candidates and evaluate combination therapies

We aim to leverage our XmAb Fc domains and protein engineering technologies, independently and with partners, to create novel XmAb drug candidates and, where appropriate, to evaluate our candidates in combination with other therapeutic agents.

Expand the functionality of XmAb technology platforms

We continue to conduct research into the function and application of multi-specific antibodies to broaden the scope of our XmAb technology platforms. Our modular designs allow us to engineer XmAb drug candidates across a range of structural formats and biological functions. We are engineering new molecular formats based on our Fc domains to develop novel molecules for engaging three targets simultaneously, called trispecific antibodies, to create highly specific cancer therapies, while overcoming the inherent structural and stability problems for standard trispecific molecules.

Protect and expand our intellectual property portfolio

We seek to protect our proprietary XmAb technologies and XmAb drug candidates by filing and prosecuting patents in the United States and other jurisdictions. Where appropriate, we pursue the expansion and extension of patent coverage for our proprietary and partnered programs incorporating our XmAb technologies.

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D.XmAb Drug Candidates in Clinical Development

Wholly OwnedDeveloped by PartnersMarketed by Partners

Oncology pipeline:

Xaluritamig

Ultomiris*

XmAb819

Obexelimab
Monjuvi*

XmAb541

Teropavimab and zinlirvimab

XmAb808

Tobevibart

ASP2138

Autoimmune pipeline:

Zaltenibart

XmAb942

Novartis antibody

Plamotamab

JNJ-9401

XmAb657

JNJ-1493

* Alexion and Incyte are conducting additional Phase 3 studies in new indications.

We regularly evaluate our portfolio of candidates and make additional investments in candidates with promising early-stage clinical data, partner out other candidates, and stop development of candidates where early clinical data does not support further investment by us. During 2025:

•We presented initial results from the ongoing Phase 1 dose-escalation study of XmAb819 in advanced clear cell renal cell carcinoma and presented early efficacy data from a cohort in the ongoing Phase 1 dose-escalation study of XmAb541 in advanced gynecologic and germ cell tumors;

•We presented initial data from a Phase 1 study of XmAb942 in healthy volunteers and initiated a global Phase 2b study of XmAb942 in ulcerative colitis (XENITH-UC);

•We initiated a Phase 1b proof-of-concept study of plamotamab for patients with rheumatoid arthritis who have progressed through prior standard-of-care treatment;

•We initiated a Phase 1 proof-of-concept study of XmAb657 for patients with idiopathic inflammatory myopathies;

•We selected XmAb412 as our lead TL1A x IL23p19 bispecific antibody drug candidate;

•We paused further development of vudalimab, a PD-1 x CTLA-4 bispecific antibody, and decided not to initiate expansion cohorts of XmAb808 in combination with pembrolizumab.

Wholly Owned Clinical-Stage XmAb Drug Candidates

Our modular XmAb technologies and protein engineering capabilities enable us to rapidly advance multiple drug candidates into clinical development. We are currently enrolling Phase 1 or Phase 2 studies for five wholly-owned candidates to treat patients with many different types of serious diseases: XmAb819, XmAb541, XmAb942, plamotamab and XmAb657.

Oncology Programs

XmAb819 (ENPP3 x CD3): XmAb819 is a novel, potential first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with clear cell renal cell carcinoma (ccRCC). XmAb819 is designed to engage the immune system and activate T cells for highly potent and targeted lysis of tumor cells expressing ENPP3, an antigen highly expressed on kidney cancers. ENPP3 is a differentially expressed target, with high level expression in RCC and low level expression on normal tissues. With two tumor-antigen binding domains and one T-cell binding domain, our XmAb 2+1 format is designed to enable antibodies to bind more avidly and selectively kill tumor cells with higher antigen density, potentially sparing normal cells. We are conducting a Phase 1 study to evaluate XmAb819 in patients with advanced ccRCC.

At the AACR-NCI-EORTC Conference on Molecular Targets and Cancer Therapeutics in October 2025, we presented initial results from the Phase 1 dose-escalation study. As of the data cut-off, 69 patients had received XmAb819 across 15 dose cohorts; patients were heavily pre-treated, having received a median of 4 prior lines of therapy. All patients received prior anti-PD1 therapy and prior VEGF-TKI therapy, and 36% of patients were previously treated with a HIF2α inhibitor. XmAb819 demonstrated evidence of anti-tumor activity and an acceptable safety profile that was generally well tolerated across dose levels. Of the 20 efficacy-evaluable patients treated at the dose levels that were preclinically predicted to be within the target dose range, 25% achieved a partial response (4 confirmed PR and 1 unconfirmed PR, per RECIST v1.1) as best response with a 70% disease control rate. The most common treatment-emergent adverse events (AEs) were

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cytokine release syndrome, rash and gastrointestinal-related toxicities that were primarily Grade 1 or 2 in severity and predominantly associated with prime-step dosing in the first four weeks of treatment. No cases of treatment-related immune effector cell-associated neurotoxicity syndrome (ICANS) were observed. No Grade 5 events were reported. Four patients (6%) were dose-reduced due to treatment-related AEs, and three patients (4%) discontinued treatment due to treatment-related AEs.

The dose-expansion portion of the current Phase 1 study is enrolling patients and dose-escalation continues in RCC. We have initiated tumor expansion cohorts in colorectal cancer (CRC), non-small cell lung cancer (NSCLC) and papillary renal cell carcinoma (pRCC).

XmAb541 (CLDN6 x CD3): XmAb541 is a novel, potential first-in-class, tumor-targeted, T-cell engaging XmAb 2+1 bispecific antibody in development for patients with CLDN6 expressing tumor types including ovarian cancer. XmAb541 is designed to engage the immune system and activate T cells for highly potent and targeted lysis of tumor cells expressing CLDN6, a tumor-associated antigen in ovarian cancer, germ cell tumors and other solid tumors. The XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for CLDN6 over similar Claudin family members, such as CLDN9, CLDN3 and CLDN4. We are conducting a Phase 1 dose-escalation study to evaluate XmAb541 in patients with advanced gynecologic and germ cell tumors.

In October 2025 we presented early efficacy data from a cohort in the ongoing Phase 1 dose-escalation study. As of the data cut-off, nine patients received XmAb541 in the most recently completed escalation cohort. Confirmed partial responses per RECIST v1.1 were observed in three patients: one patient with ovarian cancer and two patients with germ cell tumors.

XmAb808 (B7-H3 x CD28): XmAb808 is a tumor-selective, co-stimulatory CD28 bispecific antibody that binds to the broadly expressed tumor antigen B7-H3 and is constructed with the XmAb 2+1 multivalent format. Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation of T cells when the antibodies are bound to tumor cells. Data from completed cohorts in a Phase 1 dose-escalation study of XmAb808 in combination with pembrolizumab, an anti-PD1 antibody, are expected to inform future development decisions for the program. Potential combination with CD3 T-cell engaging bispecific antibodies is being evaluated.

Autoimmune Disease Programs

XmAb942 (Xtend TL1A): XmAb942 is a high-potency, extended half-life, investigational anti-TL1A antibody in clinical development for patients with inflammatory bowel disease (IBD), such as ulcerative colitis (UC) and Crohn’s disease (CD). The first generation of anti-TL1A antibodies, designed to block the interaction between the DR3 receptor and its ligand TL1A, have reduced disease activity in patients with UC and CD in multiple clinical studies. We announced interim results from a Phase 1 dose-escalation study in healthy volunteers in April 2025. The results indicate that XmAb942 was well tolerated at single and multiple doses. Pharmacokinetic analysis of the single dose cohorts estimated a human half-life of greater than 71 days, which supports a 12-week dosing interval during maintenance treatment. We initiated a Phase 2b study of XmAb942 in UC, the XENITH-UC Study, in the third quarter of 2025. XENITH-UC is a randomized, double-blind, placebo-controlled trial in patients with moderate-to-severe UC, whose disease has progressed after at least one conventional or advanced therapy.

Plamotamab (CD20 x CD3): Plamotamab is a B-cell depleting bispecific T-cell engager that targets CD20, a target receptor on B cells. In the second quarter of 2025, we received regulatory authorization to initiate a Phase 1b proof-of-concept study for plamotamab in rheumatoid arthritis (RA), and we initiated the study in the third quarter of 2025. The study will select a priming and step-up dose regimen based on the regimen established in oncology, and will assess the initial safety, efficacy and biomarkers of plamotamab in patients with RA.

Results from the previously conducted Phase 1 study in hematologic cancers showed favorable tolerability and comparable preliminary efficacy data, when cross compared to results from studies of a competitor molecule within the class, with similar patient baseline characteristics. Data demonstrating deep peripheral B-cell depletion observed in patients with lymphoma were presented at a medical meeting in December 2024. Based on these clinical outcomes, significant B-cell depletion, and the emergent biology supportive of B-cell targeted T-cell engagers for the treatment of patients with autoimmune diseases, we are evaluating plamotamab in RA, in which patients progressed through prior standard-of-care treatment.

XmAb657 (CD19 x CD3): XmAb657 is a potent, potentially long-acting CD19 x CD3 bispecific antibody, utilizing the XmAb 2+1 bispecific antibody format and Xtend Fc technology. In non-human primate studies, a single dose of XmAb657 deeply reduced B cells by over 99.98% in the peripheral compartment, bone marrow and lymph nodes, which was sustained for at least 42 days. Half-life in non-human primates was estimated to be 15 days, which indicates a potential

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for durable B-cell depletion in human clinical studies. XmAb657 was well tolerated preclinically, with no clinical signs of cytokine release syndrome. XmAb657 is in development for patients with idiopathic inflammatory myopathies (IIM). We initiated a first-in-human, Phase 1 study in the fourth quarter of 2025.

Collaborations, Partnerships and Licensing Arrangements for Approved or Authorized Medicines and Clinical-Stage Programs Engineered with XmAb Fc Domains

A key part of our business strategy is to leverage our protein engineering capabilities, XmAb Fc domains and drug candidates with partnerships, collaborations and licenses. Through these arrangements we generate revenues in the form of upfront payments, milestone payments and royalties. For partnerships for our drug candidates, we aim to retain a major economic interest in the form of keeping major geographic commercial rights; profit-sharing; co-development options; and the right to conduct studies with drug candidates developed in the collaboration. The types of arrangements that we have entered into with partners include product licenses, novel bispecific antibody collaborations, technology licensing agreements and strategic collaborations.

Product Licenses

Product licenses are arrangements in which we have internally developed drug candidates and, based on a strategic review, licensed partial or full rights to third parties to continue development and potential commercialization. We seek partners that can provide infrastructure and resources to successfully develop our drug candidates, have a track record of successfully developing and commercializing medicines, or have a portfolio of development-stage candidates and commercialized medicines that could potentially be developed in rational combinations with our drug candidates.

Incyte: The FDA approved Monjuvi® (tafasitamab-cxix) under accelerated approval in July 2020. Monjuvi is a CD19-directed cytolytic antibody containing an XmAb Fc domain for improved cytotoxic potency and indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL), including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). In December 2024, Incyte announced positive full results from the pivotal study of tafasitamab in combination with lenalidomide and rituximab in relapsed or refractory follicular lymphoma (FL) and submitted a supplemental Biologics License Application, which was accepted in February 2025. In June 2025, the FDA approved Monjuvi in combination with rituximab and lenalidomide for the treatment of adult patients with relapsed or refractory FL. In January 2026, Incyte announced positive topline results from a pivotal study of Monjuvi as a first-line treatment for DLBCL and that they expect to file a supplemental Biologics License Application (sBLA) for the first-line treatment of adults with newly diagnosed DLBCL in the first half of 2026. Tafasitamab was created and initially developed by us. Tafasitamab is marketed by Incyte under the brand name Monjuvi in the U.S. and under the brand name Minjuvi® in Europe and Canada. Incyte has exclusive commercialization rights to tafasitamab outside the U.S. In February 2024, Incyte acquired exclusive global development and commercialization rights to tafasitamab from MorphoSys AG. Monjuvi® and Minjuvi® are registered trademarks of Incyte.

We are eligible to receive up to $195.0 million in future milestone payments and tiered royalties on net sales of Monjuvi that range from high-single-digit to low-double-digit percentages. We earned $10.2 million in estimated non-cash royalties from Incyte for the year ended December 31, 2025.

Zenas: Zenas BioPharma (“Zenas”) is advancing obexelimab, an antibody that targets CD19 with its variable domain, for the treatment of patients with autoimmune diseases. Obexelimab uses an XmAb Fc domain that was designed to inhibit the function of B cells, an important component of the immune system. Obexelimab was created and initially developed by us and was licensed to Zenas in November 2021. Zenas’ partner, Bristol Myers Squibb, holds exclusive development and commercialization rights for obexelimab in Japan, South Korea, Taiwan, Hong Kong, Singapore, and Australia.

In October 2025, Zenas announced positive results from the Phase 2 MoonStone trial of obexelimab in patients with relapsing multiple sclerosis, in which the primary endpoint was met. In January 2026, Zenas announced positive results from the Phase 3 INDIGO trial of obexelimab in patients with immunoglobulin G4-related disease (IgG4-RD), in which the primary endpoint was met. Zenas announced that it anticipates submitting a biologics license application (BLA) to the U.S. Food and Drug Administration for the treatment of IgG4-RD in the second quarter of 2026 and a Marketing Authorization Application (MAA) to the European Medicines Agency in the second half of 2026. Zenas is also conducting a Phase 2 study of obexelimab in patients with systemic lupus erythematosus.

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We are eligible to receive up to $460.0 million in future milestone payments and tiered royalties on net sales of obexelimab that range from mid-single-digit to mid-teen percentages, dependent on geography. As of December 31, 2025, we own 3,098,380 shares of common stock in Zenas.

Novel Bispecific Antibody Collaborations

Novel bispecific antibody collaborations are arrangements in which our partner seeks to create a bispecific antibody using one or more of our XmAb bispecific technologies. Our partners provide an antibody or a tumor-associated antigen, and we conduct limited research and development to create potential bispecific antibody candidates for further development and commercialization by our partners.

Amgen: Xaluritamig is a STEAP1 x CD3 2+1 XmAb bispecific T-cell engager that our partner Amgen is advancing for the treatment of patients with prostate cancer. The XmAb 2+1 multivalent format enables higher binding capability for STEAP1-expressing cells. Results from a Phase 1 study evaluating xaluritamig in patients with metastatic castration-resistant prostate cancer (mCRPC) were presented in September 2024. With a median follow-up of 27.9 months, median overall survival was 17.7 months across all cohorts. A PSA90 response rate of 45.1% was observed in high-dose cohorts, and PSA90 response was associated with improved survival (p = 0.0044), which Amgen believes could potentially serve as an early indicator of clinical benefit in these patients.

In the third quarter of 2025, Amgen initiated the Phase 3 XALience study evaluating xaluritamig in combination with abiraterone versus investigator’s choice therapy in patients with chemotherapy-naïve mCRPC. In addition, the Phase 3 XALute monotherapy study of xaluritamig in patients with mCRPC previously treated with taxane-based chemotherapy is ongoing. Multiple Phase 1 and Phase 1b studies evaluating xaluritamig as a monotherapy or in combination are also enrolling patients with earlier prostate cancer.

We are eligible to receive up to $225.0 million in regulatory and sales milestone payments related to the xaluritamig program and tiered royalties on global net sales of approved products that range from mid- to high-single digit percentages.

Astellas: ASP2138 is a bispecific Claudin 18.2 x CD3 bispecific antibody that Astellas is advancing for the treatment of patients with gastric, gastroesophageal junction or pancreatic cancers. ASP2138 utilizes the XmAb 2+1 multivalent format to enable activation of T cells against CLDN18.2-expressing tumor cells. In October 2025, the first clinical data from ASP2138, both as a monotherapy and in combination with standard-of-care therapies in gastric or gastroesophageal junction adenocarcinomas, were presented during the European Society for Medical Oncology (ESMO) congress in Berlin. We are eligible to receive $232.5 million in future milestone payments and tiered royalties on net sales of ASP2138 that range from high-single to low-double digit percentages.

Janssen Biotech, a Johnson & Johnson Company: JNJ-9401 is a PSMA x CD28 bispecific antibody that J&J is advancing for the treatment of patients with mCRPC. In November 2020, we entered into an agreement with J&J (the J&J Agreement) to develop XmAb bispecific antibodies against CD28 and a prostate tumor target, for the potential treatment of patients with prostate cancer, and from the collaboration, J&J selected JNJ-9401, which is currently in a Phase 1 clinical study. We are eligible to receive a total of $640.0 million in future milestone payments and tiered royalties on net sales that range from high-single-digit to low-double-digit percentages for products developed under the J&J Agreement.

JNJ-1493 is a CD20 x CD28 bispecific antibody that J&J is advancing for the treatment of patients with B-cell malignancies. In October 2021, we entered into a second collaboration agreement with J&J (the Second J&J Agreement) to create and characterize CD28 bispecific antibody candidates against B-cell targets, and from the collaboration, J&J selected JNJ-1493, which is currently in a Phase 1 clinical study. In 2023, J&J also selected two additional CD28 bispecific antibody candidates under the second agreement. We are eligible to receive a total of $636.3 million in future milestone payments and tiered royalties on net sales that range from high-single-digit to low-double-digit percentages for products developed under the Second J&J Agreement.

Technology License Agreements

We enter into technology licensing agreements in which we license access to one or more of our XmAb Fc domains on a restricted basis. Our partners are responsible for all research, development and commercialization activities of the drug candidates. The plug-and-play nature of XmAb technologies allows us to license access to our platforms with limited or no internal research and development activities.

Alexion: Alexion’s Ultomiris® uses Xtend Fc technology to enhance the half-life of Ultomiris to allow for a longer duration of action, less frequent dosing and reduced patient burden of therapy compared to the previous generation therapy, Soliris®. Ultomiris has received marketing authorizations in global markets for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), for certain patients with atypical hemolytic uremic syndrome (aHUS), for certain patients with generalized myasthenia gravis (gMG) and for certain patients with neuromyelitis optica spectrum disorder (NMOSD).

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Alexion is also evaluating Ultomiris in a broad development program across additional hematology, nephrology and neurology indications. Ultomiris and Soliris are registered trademarks of Alexion Pharmaceuticals, Inc.

We are eligible to receive a low-single-digit percentage royalty on net sales of Ultomiris. We earned $70.1 million in estimated non-cash royalties from Alexion for the year ended December 31, 2025.

Vir Bio: Vir Biotechnology, Inc. (“Vir Bio”) is advancing tobevibart, a neutralizing antibody that incorporates an XmAb Fc domain with multiple enhanced features, as a potential treatment for patients with chronic hepatitis Delta (CHD). In August 2019, we entered into an agreement with Vir Bio pursuant to which we granted Vir Bio a non-exclusive license to our Xtend technology for two infectious disease targets. Vir Bio initiated a Phase 3 registrational study of tobevibart in combination with a small interfering ribonucleic acid (siRNA) in people living with CHD in March 2025, triggering a $2.0 million milestone payment to the Company, which was paid in the second quarter of 2025. We are eligible to receive up to $65.0 million in future milestone payments and tiered royalties on net sales of tobevibart that range from low-single-digit to mid-single-digit percentages.

Novo Nordisk: Zaltenibart is an antibody targeting mannan-binding lectin-associated serine protease-3 (MASP-3) that uses our XmAb Xtend Fc Domain. In December 2025, Novo Nordisk acquired exclusive global development and commercialization rights to zaltenibart from Omeros Corporation. Omeros conducted multiple Phase 2 studies evaluating zaltenibart for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH) and other alternative pathway disorders. We are eligible to receive up to $60.0 million in future milestone payments and royalties on net sales of zaltenibart in the mid-single-digit percentage range.

Gilead: Teropavimab and zinlirvimab are broadly neutralizing antibodies that incorporate our XmAb Fc technologies. Gilead Sciences, Inc. is advancing teropavimab and zinlirvimab in combination with lenacapavir as a long-acting treatment for virologically suppressed people living with human immunodeficiency virus (HIV) in a Phase 2 study. For each antibody, we are eligible to receive up to $64.0 million in future milestone payments and tiered royalties on net sales of approved products in the low-single digit percentage range.

Novartis: Novartis is conducting Phase 2 studies evaluating an undisclosed antibody drug candidate that uses one of our XmAb Fc technologies. We are eligible to receive up to $69.0 million in future milestone payments and royalties on net sales in the low-single digit percentage range.

Refer to Part II, Item 8, Note 2, Collaboration and Licensing Agreements of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for a description of the key terms of our arrangements.

E.Our Research and Development Pipeline

We have leveraged our XmAb Fc platforms and protein engineering capabilities to generate a growing pipeline of drug candidates in clinical and preclinical development, including multiple candidates that incorporate our bispecific Fc domain. We continue to advance these candidates as potential programs for internal clinical development or for out-licensing to third parties. From time to time, we also in-license antibody technologies and compounds from other companies that we believe may enable the creation of additional product candidates through the application of our proprietary technologies. These in-licensing arrangements may require upfront payments, development and commercial milestone payments, and, if commercial products are approved, royalties based on net sales.

F.Market Opportunity

Oncology programs (XmAb819, XmAb541 and XmAb808)

We are actively advancing wholly owned T cell–engaging bispecific antibody drug candidates for the treatment of cancer, including XmAb819, XmAb541, and XmAb808. Cancer is a broad group of diseases characterized by uncontrolled cell growth that can invade surrounding tissues and spread to other parts of the body, and it is the second leading cause of death in the United States. According to the American Cancer Society, approximately 2.1 million new cancer cases and approximately 626,140 cancer-related deaths are expected in the United States in 2026. The National Institutes of Health has estimated that, driven by population growth and aging, medical expenditures for cancer in the United States are projected to reach at least $245.6 billion in 2030.

Inflammatory bowel disease program (XmAb942)

XmAb942 is our wholly owned anti-TL1A antibody drug candidate that we are actively advancing in clinical development for the treatment of IBD. According to the U.S. Centers for Disease Control and Prevention, IBD affects an estimated 2.4 million to 3.1 million adults in the United States, with prevalence increasing over time. The Crohn’s & Colitis Foundation estimates that approximately 70,000 new cases are diagnosed annually in the United States. IBD includes ulcerative colitis, which primarily affects the colon, and Crohn’s disease, which can involve any part of the

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gastrointestinal tract. Common symptoms include abdominal pain, diarrhea, bloody stool, weight loss, bowel urgency, fatigue, and systemic complications, and the disease is associated with reduced quality of life, increased rates of hospitalization and surgery, and an elevated risk of colorectal cancer.

Despite the availability of multiple approved therapies, durable remission is achieved in only approximately 10% to 20% of patients, reflecting a substantial unmet medical need. Many patients experience inadequate response, loss of response over time, or treatment-limiting side effects, and adherence can be challenging due to dosing frequency and administration burden. According to GlobalData, the global market for therapies to treat Crohn’s disease and ulcerative colitis is projected to reach approximately $40 billion by 2032.

Rheumatoid arthritis program (Plamotamab)

Plamotamab is our wholly owned bispecific antibody drug candidate that we are advancing for the treatment of rheumatoid arthritis (RA). RA is a chronic autoimmune and inflammatory disease in which the immune system attacks healthy tissues, primarily affecting the joints and leading to pain, swelling, progressive joint damage, and functional impairment. According to the Arthritis Foundation, RA affects approximately 1.5 million adults in the United States.

Beyond joint involvement, RA can result in systemic complications affecting organs such as the heart, lungs, and eyes, and is associated with reduced quality of life, increased disability, and shortened life expectancy. Despite the availability of multiple approved therapies, including biologic agents and targeted small molecules, many patients do not achieve sustained remission or experience loss of response over time, highlighting a continued unmet medical need, particularly among patients with moderate-to-severe or refractory disease.

According to GlobalData, the global market for rheumatoid arthritis therapies is projected to reach approximately $30 billion by 2030, reflecting the large patient population and ongoing demand for therapies that can provide durable disease control.

Idiopathic inflammatory myopathies program (XmAb657)

XmAb657 is our wholly owned bispecific antibody drug candidate that we are advancing for the treatment of idiopathic inflammatory myopathies (IIM). IIM is a heterogeneous group of rare autoimmune disorders, including dermatomyositis, polymyositis, and inclusion body myositis, characterized by chronic muscle inflammation and progressive muscle weakness. Estimates from patient advocacy organizations suggest that IIM affects approximately 75,000 individuals in the United States.

In addition to muscle weakness, patients with IIM may experience skin manifestations, difficulty swallowing, and serious systemic complications, including interstitial lung disease, which can be life-threatening. Current treatment approaches rely primarily on corticosteroids and broad immunosuppressive therapies, which are often associated with significant long-term side effects and may not adequately control disease progression for many patients. As a result, there remains a substantial unmet medical need for more targeted therapies that can improve functional outcomes and long-term disease management.

According to GlobalData, the global market for inflammatory myopathy therapies is projected to reach approximately $2.1 billion by 2031, reflecting the growing recognition of disease burden and the need for novel treatment options in this rare autoimmune indication.

G.Competition

We compete in an industry characterized by rapid technological advancement, intense competition, and a strong emphasis on proprietary products. Our competitors include pharmaceutical and biotechnology companies, academic institutions, and other research organizations. We compete for promising antibody-based therapeutic targets, technologies to optimize antibody design, and the recruitment and retention of highly qualified scientific and clinical personnel. Many of our current and potential competitors have substantially greater scientific, research, and product development capabilities, as well as greater financial, marketing, sales, and human resources than we do. In addition, numerous specialized biotechnology companies have formed collaborations with large, established pharmaceutical companies to support the research, development, and commercialization of competing products. As a result, our competitors may be more successful than we are in developing, commercializing, and achieving market acceptance for products that compete with our drug candidates, which could render our product candidates obsolete or noncompetitive before we recover our development costs.

Competition in the fields of oncology and autoimmune disease drug development is intense, with hundreds of compounds in clinical development. A number of large pharmaceutical companies and biotechnology companies are developing competing bispecific antibody platforms, many of which have advanced multiple drug candidates into clinical trials, including Amgen, Genmab A/S, Regeneron Pharmaceuticals, Inc., and Roche Holding AG.

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We are developing bispecific antibody drug candidates engineered to direct cytotoxic T-cell activity against solid tumor cells by engaging either the CD3 or CD28 receptor on T cells and a target antigen on tumor cells. Other companies conducting clinical trials of CD3- or CD28-based bispecific antibodies directed to solid tumor antigens include Amgen, Astellas, Context Therapeutics Inc., CytomX Therapeutics, Inc., Genmab A/S, Immunocore Holdings plc, Janux Therapeutics, Inc., Johnson & Johnson, Regeneron Pharmaceuticals, Inc., Roche Holding AG, Rondo Therapeutics, Inc., Takeda Pharmaceutical Co. Ltd., Third Arc Bio, Inc., and Vir Biotechnology. In addition, other antibodies, antibody-drug conjugates, and cell-based therapies are in development or approved for the treatment of cancer.

We are also developing bispecific antibody drug candidates designed to direct cytotoxic T-cell activity against B cells by engaging the CD3 receptor on T cells and either the CD20 or CD19 receptor on B cells. Other companies conducting clinical trials of CD3-based bispecific antibodies directed to CD20 or CD19 for autoimmune diseases include Amgen, Candid Therapeutics, Inc., Cullinan Therapeutics, Inc., Novartis AG, and Roche Holding AG. Additional antibodies and cell therapies are in development or approved for the treatment of autoimmune diseases.

We are developing antibody drug candidates that target the cytokine TL1A for the potential treatment of inflammatory bowel disease. Other companies conducting clinical trials of anti-TL1A monospecific or bispecific antibodies include Absci Corp., Caldera Therapeutics, Inc., Merck & Co., Inc., Roche Holding AG, Sanofi S.A., Spyre Therapeutics, Inc., and Teva Pharmaceutical Industries Limited.

In addition, we are aware of other companies with development-stage programs that may compete with our drug candidates or those of our licensees in the future. We expect competition to intensify as new therapies are approved and emerging technologies continue to evolve.

H.Human Capital Management

Our Employees

Our ability to develop XmAb technologies, advance our programs into late-stage development, position our programs for commercialization and identify successful business partnerships is dependent on attracting, retaining, and developing our employees. We seek to attract and support a diverse population of employees without regard to race, gender or sexual orientation. As of December 31, 2025, we had 260 full-time employees, of which 212 were engaged in research and development activities, and 48 were engaged in business development, information systems, facilities, human resources, or administrative support. Of these employees, 67 hold Ph.D. degrees, and 7 hold M.D. degrees. None of our employees are represented by any collective bargaining unit.

We are an equal opportunity employer and maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. We are proud to employ a diverse workforce that, as of December 31, 2025, was 60% non-white and 58% women. In addition, as of December 31, 2025, women made up 25% of our senior leadership team.

Compensation, Benefits, and Development

We provide compensation packages designed to attract, retain, and motivate high-quality employees. All employees are eligible for cash bonuses and grants of equity awards. We regularly evaluate our compensation programs with an independent compensation consultant and utilize industry benchmarking in an effort to ensure that such programs are competitive compared to similar biotechnology and biopharmaceutical companies with which we compete for talent and are intended to be fair and equitable across the workforce with respect to gender, race, and other personal characteristics. All employees are eligible to participate in our Employee Stock Purchase Plan through which they can purchase shares of our common stock at a discounted price. This plan and our other equity compensation plans assist us in building long-term relationships with our employees and align the interests of employees with stockholders. We also provide retirement benefits along with a health and well-being program that is designed to keep our employees and their families healthy and includes paid time off and medical, dental and vision benefits, along with dependent care, mental health, and other wellness benefits.

We value career development for all employees, and offer tuition reimbursement as well as provide opportunities for employees to attend professional development courses ranging from technical training, competency-based workshops, and leadership development programs. Direct managers also take an active role in supporting their employees in realizing their full potential and creating opportunities for promotions and added responsibilities that enhance the engagement and retention of our workforce. We regularly conduct employee surveys to assess employee engagement and identify areas for focus.

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I.Intellectual Property

The foundation of our XmAb technology, product candidates, and partnering strategy is the generation and protection of intellectual property for novel antibody therapeutics. We combine proprietary computational methods for amino acid sequence design with laboratory-based generation and testing of new antibody compositions. Our design and engineering team evaluates the competitive intellectual property landscape in collaboration with patent counsel with the objective of building broad patent protection while minimizing the risk of third-party intellectual property infringement.

As a pioneer in Fc domain engineering, we have systematically analyzed the structure of the Fc domain to identify Fc variants with differentiated properties. We have filed patent applications covering thousands of specific Fc domain variants supported by experimental data demonstrating improvements in immune function, pharmacokinetics, structural stability, and novel structural constructs. As we identify new properties of these Fc variants and pursue additional business opportunities, we continue to file additional patent applications derived from our existing intellectual property. We also invest in the discovery of new Fc domain technologies and antibody product candidates to expand our intellectual property portfolio.

Our worldwide patent estate includes issued patents and pending patent applications with claims directed to XmAb Fc domains, our clinical- and preclinical-stage product candidates, and our computational protein design methods and platforms.

The patent expiration dates or projected patent expiration dates for pending patent applications in the United States and major foreign jurisdictions for our key technologies and drug candidates are set forth below. We also have pending patent applications that, if granted, may extend the exclusivity of certain technologies and products.

Technology
Patent or Projected Patent Expiry*

Cytotoxic
2025 U.S.

Immune Inhibitor2028 U.S.; 2025 Ex-U.S.

Xtend2025 U.S.; 2028 Ex-U.S.

Bispecific2034 U.S. and Ex-U.S.

CD3 T-Cell Engagers

2035 U.S.; 2036 Ex-U.S.

CD28 T-Cell Engagers
2041 U.S. and Ex-U.S.

Company Products
Patent or Projected Patent Expiry*

XmAb808
2041 U.S. and Ex-U.S.

Vudalimab
2037 U.S. and Ex-U.S.

Plamotamab

2035 U.S. and Ex-U.S.

XmAb8192040 U.S. and Ex-U.S.

XmAb541

2042 U.S. and Ex-U.S.

XmAb942

2045 U.S. and Ex-U.S.

Partnered Products
Patent or Projected Patent Expiry*

Monjuvi

2033 U.S.; 2027 Ex-U.S.

Ultomiris
2028 U.S. and Ex-U.S.

Sotrovimab2025 U.S.; 2028 Ex-U.S.

Obexelimab
2029 U.S.; 2028 Ex-U.S.

Xaluritamig

2039 U.S. and Ex-U.S.

* U.S. patent expiry includes any patent term adjustment and/or patent term extension; ex-U.S. patent expiry may be subject to further extension via supplementary protection certificates.

Under the Hatch-Waxman Act, patent term extensions may be available for FDA-approved drugs, including biological products, for up to five years beyond the expiration of a patent. The length of any extension is generally based on the duration of regulatory review, subject to a maximum remaining patent term of 14 years from the date of product approval, and only one patent per approved product may be extended. Similar patent term extension mechanisms exist in Europe and other jurisdictions. If and when our product candidates receive regulatory approval, we expect to seek patent term extensions where available; however, there can be no assurance that such extensions will be granted or, if granted, of their duration.

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The Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Affordability Reconciliation Act (collectively, the ACA), established an abbreviated licensure pathway for biosimilar and interchangeable biological products. Under this framework, a biosimilar application generally may not be submitted to the FDA until four years after the date of first licensure of the reference product, and the FDA may not approve a biosimilar until 12 years after such first licensure. The ACA does not alter the duration of patent protection for biological products. In addition, even if a product qualifies for regulatory exclusivity as a reference product, a competing product could be approved through a full Biologics License Application supported by independent preclinical and clinical data. Legislative proposals have been introduced from time to time to modify or repeal aspects of the ACA, and it is uncertain how any such changes, if enacted, would affect these provisions.

In addition to patents, we rely on trade secrets and proprietary know-how to protect aspects of our technologies and discoveries that are not subject to patent protection. We seek to safeguard these assets through confidentiality agreements with employees, consultants, scientific advisors, clinical investigators, and other third parties, as well as invention assignment agreements that provide us with ownership of certain discoveries and inventions.

We also pursue trademark protection in the United States and selected foreign jurisdictions where appropriate. We hold trademark registrations for Xencor and XmAb in the United States, Australia, Canada, the European Union, the United Kingdom, and Japan, and for Proteins by Design in the United States, Australia, Canada, the European Union, and the United Kingdom.

J.Third-Party Vendors and Suppliers

Our internal research activities are primarily focused on early-stage research and preclinical studies. We rely on third-party vendors, suppliers, and contractors for the majority of our research, development, manufacturing, and clinical activities. We are able to internally manufacture limited quantities of product candidates for short-duration preclinical animal studies, which we believe allows us to accelerate certain aspects of development. For all other manufacturing needs, we rely on third-party manufacturers operating in compliance with current good manufacturing practices (cGMPs).

We use third-party manufacturers for all of our antibody drug candidates, including XmAb819, XmAb541, XmAb808, plamotamab, XmAb942, XmAb657 and XmAb412. Additional contract manufacturers perform fill, finish, labeling, packaging, and distribution of investigational drug products. This outsourced manufacturing strategy allows us to maintain operational flexibility while focusing internal resources on product discovery and development. We do not have long-term manufacturing commitments in place and expect to continue to rely on third-party manufacturers for clinical and commercial supply, as well as for process development.

Master Services Agreement with Alimentiv Inc.

In February 2025, we entered into a master services agreement with Alimentiv Inc. for contract research organizations (“CROs”) services supporting clinical trial management and development (including site selection, study design, site monitoring, management and training, and patient selection). The agreement includes customary termination rights and payment obligations for costs incurred and non-cancellable commitments. Alimentiv conducts clinical study activities for our XmAb942 program.

Master Services Agreement with Kapadi (formerly OncoBay Clinical, Inc.)

In August 2023, we entered into a master services agreement with OncoBay Clinical, Inc., now known as Kapadi, for CROs services supporting clinical trial management and development (including site selection, study design, site monitoring, management and training, and patient selection). The agreement includes customary termination rights and payment obligations for costs incurred and non-cancellable commitments. Kapadi conducts clinical studies for our XmAb541 program.

License Agreement with BIO-TECHNE

In April 2021, we entered into a non-exclusive license agreement with BIO-TECHNE for a recombinant monoclonal antibody reactive with human CLDN6, which is used in our XmAb541 program. The agreement requires an upfront payment, milestone payments upon achievement of development, regulatory, and sales milestones, and royalties of less than 1% on net sales of products derived from the licensed antibody.

Master Services Agreement with WuXi Biologics (Hong Kong) Limited

In February 2021, we entered into a master services agreement with WuXi Biologics (Hong Kong) Limited, under which WuXi and its affiliates provide manufacturing, analytical, and development services in compliance with applicable regulations. The agreement includes customary remedies for non-conforming products and termination rights for breach,

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insolvency, or convenience, subject to notice requirements and cancellation fees. WuXi currently manufactures drug substance and drug product for our XmAb808, XmAb657, XmAb942 and XmAb412 programs.

Master Services Agreement with Vetter Pharma International GmbH

In October 2020, we entered into a master services agreement with Vetter Pharma International GmbH for clinical scale-up, analytical method development, formulation development, and manufacturing of drug product for certain bispecific antibody candidates, including vudalimab and XmAb541. Services are governed by separate program-specific agreements. The agreement is for an eight-year term and renews annually, which includes customary termination provisions for breach or technical inability to perform. Vetter Pharma International GmbH currently manufactures drug products for our XmAb819 and XmAb541 programs.

Master Clinical Services Agreement with ICON Clinical Research Limited

In April 2016, as amended in April 2021, we entered into a master clinical services agreement with ICON Clinical Research Limited for clinical trial services, including site selection, study design, monitoring, and trial management. The agreement may be terminated by either party for breach, insolvency, or convenience, subject to notice provisions, and individual projects may be terminated separately. ICON Clinical Research Limited provides clinical services for our Xencor-sponsored oncology trials.

Cell Line Agreements with Selexis SA

In December 2015, we entered into a master services agreement with Selexis SA for the manufacture of proprietary cell lines. Upon completion of a cell line, we have the option to obtain an unrestricted commercial license. These licenses require milestone payments and royalties on net sales of products derived from the cell line, with royalties of less than 1%. Selexis SA has manufactured cell lines for certain of our bispecific antibody candidates, and we currently have rights to obtain commercial licenses for cell lines used in XmAb819 and plamotamab.

Master Services Agreement with PPD Development, L.P.

In June 2015, we entered into a master services agreement with PPD Development, L.P. for clinical trial management and development services (including site selection, study design, site monitoring, management and training, and patient selection). The agreement includes customary termination rights and requires us to pay costs incurred through termination and certain non-cancellable commitments. PPD Development, L.P. conducts clinical studies for our vudalimab program.

Master Service Agreement with KBI Biopharma, Inc.

In July 2014, we entered into a master services agreement with KBI Biopharma, Inc. for process development, clinical scale-up, analytical method development, formulation development, and related drug substance and drug product services for certain antibody candidates, including XmAb541 and plamotamab. Services and payment terms for each program are governed by separate statements of work. The agreement renews annually unless terminated and may be terminated by either party for uncured breach, specified technical issues, or insolvency. Upon termination other than for material breach by KBI Biopharma, Inc., we are required to pay for services performed and wind-down costs.

Master Service Agreement with PAREXEL International, LLC

We entered into a master services agreement with PAREXEL International, LLC in April 2014, as amended from time to time, most recently in April 2025, for CROs services supporting clinical trial management and development (including site selection, study design, site monitoring, management and training, and patient selection). The agreement includes customary termination rights and payment obligations for costs incurred and non-cancellable commitments. PAREXEL conducts clinical studies for our plamotamab program.

K.Regulatory Overview

Our business and operations are subject to a variety of U.S. federal, state and local and foreign supranational, national, provincial, and municipal laws, regulations and trade practices. The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing, and distribution of drugs and biologics. These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, recordkeeping, approval, advertising and promotion, and export and import of our product candidates.

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U.S. Government Regulation

We are subject to extensive regulation by the U.S. and other countries. Regulation by government authorities is a significant factor in development, manufacture, distribution and ongoing research activities. All our products in development will require regulatory approval by government agencies prior to commercialization. In particular, drugs and biologic products are subject to rigorous preclinical studies and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries. Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the U.S., although there can be important differences. We, along with our contract manufacturing organizations (“CMOs”), CROs, and third-party vendors, will be required to satisfy these requirements in each of the countries in which we wish to conduct studies or seek approval of our product candidates. The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources. Various federal and state statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage, tracking, tracing and record-keeping of drugs and biologic products and their marketing.

U.S. Drug Development Process

In the United States, the FDA regulates drugs and biologic products under the Federal Food, Drug and Cosmetic Act (FDCA), its implementing regulations, and other laws including, in the case of biologics, the Public Health Service Act. These products are also subject to other federal, state and local statutes and regulations. Our product candidates are subject to regulation by the FDA as biologics. Biologics require the submission of a Biologics License Application (BLA) to the FDA and approval of the BLA by the FDA before marketing in the United States. The process of obtaining regulatory approvals for commercial sale and distribution and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative, judicial, civil or criminal sanctions. These sanctions could include the FDA’s refusal to allow us to proceed with clinical testing, approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold on clinical trials, issuance of untitled or warning letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production, or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil and/or criminal penalties or prosecution. The process required by the FDA before a biologic may be marketed in the United States generally involves the following:

1.completion of preclinical laboratory tests, animal studies, and formulation studies performed in accordance with applicable regulations, including the FDA’s current Good Laboratory Practices (GLP) regulations;

2.submission to and acceptance by the FDA of an Investigational New Drug (IND) application which must become effective before human clinical trials in the United States may begin and must be updated annually;

3.approval by an independent institutional review board (IRB) or ethics committee representing each clinical site before each clinical trial may be initiated;

4.performance of adequate and well-controlled human clinical trials in accordance with the FDA’s current Good Clinical Practices (GCP) regulations to establish the safety and efficacy of the product candidate for its proposed indication;

5.submission to and acceptance by the FDA of a BLA;

6.manufacture of the drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practice (cGMP) requirements, along with required analytical and stability testing;

7.preparation of and submission to the FDA of a BLA requesting marketing approval for one or more proposed indications, that includes sufficient evidence to establish the safety, purity, and potency of the proposed biologic product for its intended indication, including from results of nonclinical testing and clinical trials and detailed information on the chemistry, manufacturing and quality controls for the product candidate and proposed labeling;

8.a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

9.satisfactory completion of one or more pre-approval or pre-license inspections by FDA (if the FDA deems it as a requirement) of the manufacturing facility or facilities where the product is produced to assess compliance with the FDA’s cGMP regulations to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality, and purity;

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10.potential audits by the FDA of the nonclinical and clinical trial sites that generated the data in support of the BLA to assure compliance with GLPs and GCPs, as applicable, and the integrity of the data in support of the BLA;

11.potential review of the BLA by an external Advisory Committee to the FDA, whose recommendations are not binding on the FDA;

12.payment of user fees under the Prescription Drug User Fee Act (PDUFA), unless exempted;

13.FDA review and approval of the BLA prior to any commercial marketing or sale; and

14.compliance with any post-approval requirements, including risk evaluation and mitigation strategies (REMS) and post-approval studies required by the FDA.

Before testing any compounds with potential therapeutic value in humans, the product candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, stability, and formulation, as well as animal studies to assess the potential toxicity and activity of the product candidate. The conduct of preclinical studies is subject to federal and state regulation and requirements, including GLP requirements for safety/toxicology studies. The results of the preclinical studies, together with manufacturing information and analytical data, must be submitted to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational biological product to humans in clinical trials in the U.S. The central focus of an IND submission is on the general investigational plan, the protocol(s) for human trials and the safety of trial participants. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to the proposed clinical trials. In such a case, the IND may be placed on a full clinical hold or partial clinical hold. Under a full clinical hold, the IND sponsor must resolve any outstanding concerns before the clinical trial can begin. Under a partial clinical hold, there may be a delay or suspension of only part of the clinical work requested under the IND. Accordingly, submission of an IND may or may not result in the FDA allowing clinical trials to commence.

At any time during the initial 30-day IND review period or while clinical trials are ongoing under the IND, the FDA may impose a partial or complete clinical hold. Clinical holds may be imposed by the FDA when there is concern for patient safety and may be a result of new data, findings, or developments in clinical, nonclinical, and/or chemistry, manufacturing and controls or where there is non-compliance with regulatory requirements. A clinical hold would delay either a proposed clinical trial or cause suspension of an ongoing trial, until all outstanding concerns have been adequately addressed and the FDA has notified the company that investigations may proceed. A separate submission to an existing IND must also be made for each successive clinical trial to be conducted, and the FDA must grant permission, either explicitly or implicitly by not objecting, before each clinical trial can begin. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that could cause the trial to be suspended or terminated.

Clinical trials involve the administration of the product candidate to human patients under the supervision of qualified investigators, generally physicians not employed by or under the clinical trial sponsor’s control, in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety and effectiveness. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND before a trial commences. Additionally, approval must also be obtained from each clinical trial site’s Institutional Review Board (IRB), before the trials may be initiated and the IRB must monitor the trial until completed. The IRB is charged with protecting the welfare and rights of trial participants and will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects and the possible liability of the institution. The FDA or responsible IRB may place a trial on hold at any time related to perceived risks to patient safety. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data and safety monitoring board or committee. This group provides authorization for whether or not a trial may move forward at designated check points based on access to certain data from the trial. We may also suspend or terminate a clinical trial based on evolving business objectives or competitive climate.

A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study is conducted in accordance with GCP, including

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review and approval by an independent ethics committee (IEC) and informed consent from subjects. The GCP requirements are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical trials, as well as the quality and integrity of the resulting data. FDA must also be able to validate the data from the study through an on-site inspection if necessary.

There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries, including on ClinicaTtrials.gov. A sponsor of an investigational biological product for a serious disease or condition is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for individual patient access to such investigational biological product. This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the investigational biological product or, as applicable, 15 days after the biological product receives a designation as a breakthrough therapy or fast track product.

Clinical trials are generally conducted in sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap:

1.Phase 1. The product candidate is initially introduced into a limited population of healthy human subjects, or in some cases, patients with the disease for which the drug candidate is intended, and tested for safety, dosage tolerance, absorption, metabolism, distribution, and excretion. In the case of some products for some diseases, or when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients with the disease or condition for which the product candidate is intended to gain an early indication of its effectiveness.

2.Phase 2. The product candidate is evaluated in a limited, disease-affected patient population (but larger than in Phase 1) to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted indications, and to assess dosage tolerance, optimal dosage, and dosing schedule.

3.Phase 3. Clinical trials are undertaken to further evaluate dosage and provide substantial evidence of clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. Phase 3 clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. Frequently, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a BLA.

4.Post Approval. Clinical trials or other post-approval commitments may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and may be required by the FDA as a condition of approval. Such post-approval trials are sometimes referred to as Phase 4 clinical trials. In the case of drugs approved under Accelerated Approval, post-approval trials are intended to confirm clinical benefit seen with a surrogate endpoint using a long-term clinical outcome endpoint. Failure to exhibit due diligence with regard to conducting such Phase 4 clinical trials could result in withdrawal of approval for products or other consequences.

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA; written IND safety reports must be submitted to the FDA and the investigators for Serious and Unexpected Suspected Adverse Reactions, findings from other studies suggesting a significant risk to humans exposed to the drug, findings from animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the biologic and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

U.S. Review and Approval Processes

The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests, proposed labeling, and other relevant information are submitted to the FDA in the form of a BLA requesting approval to market the product for one or more specified indications. Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of

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alternative sources, including trials initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and effectiveness of the investigational product to the satisfaction of the FDA. Under federal law, the submission of most BLAs is subject to an application user fee, and the sponsor of an approved BLA is also subject to an annual program fee for each approved biological product on the market. Applications for orphan drug products are exempted from the BLA application fee and may be exempted from program fees, unless the application includes an indication for other than a rare disease or condition. The standard time for the FDA to accept a BLA submission is two months. The FDA may request additional information rather than accept an application for filing.

If the FDA determines that the BLA is substantially complete, it will accept the BLA for review.

Once accepted, the FDA reviews the BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality, and purity, and it may inspect the manufacturing facilities to assure cGMP compliance and one or more clinical sites used during the clinical trials to assure GCP compliance. Material changes in manufacturing equipment, location, or process post-approval may result in additional regulatory review and approval. The standard FDA review process is 10 months once a BLA is accepted for review, but it can take longer. During the review process, the FDA also will determine whether a risk evaluation and mitigation strategy (REMS) is necessary to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS prior to approval. A REMS can substantially increase the costs of obtaining approval. In addition, under the Pediatric Research Equity Act, a BLA or supplement to a BLA must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. The FDA conducts its own analysis of the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of a BLA by the FDA is extensive and time-consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.

The FDA is required to refer an application for a novel biological product to an advisory committee or explain why such referral was not made. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

The FDA will issue a Complete Response Letter (CRL) describing deficiencies in the BLA and recommend actions if the agency decides not to approve the BLA. A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form. A CRL describes all deficiencies in the BLA identified by the FDA. The applicant will have to address all of the deficiencies which could take substantial time and resources to address, including development of additional clinical data or an additional Phase 3 clinical trial(s), or other requirements related to nonclinical studies or manufacturing. Even if such additional information is submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria for approval and issue a denial. If a CRL is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, withdraw the application, or engage in a dispute resolution proceeding or request a hearing. Even if additional data and information is submitted, the FDA may ultimately decide that the BLA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data.

If the product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages, or the indications for use may otherwise be limited and may require that certain contraindications, warnings, or precautions be included in the product labeling, which could restrict the commercial value of the product. In addition, the FDA may require development of adequate controls and specifications, or a commitment or requirement to conduct post marketing studies to further assess drug safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The FDA may also place other conditions on approvals including the requirement for a REMS, to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will not approve the BLA without an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe use (ETASU), such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory standards or based on the results of post-market studies or surveillance programs. Additionally, post-approval, many types of changes to the approved product, such as adding new indications, changing manufacturing processes and adding labeling claims, are subject to further testing

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requirements and FDA review and approval. Such post-approval requirements can be costly and time-consuming and can affect the potential market and profitability of the product.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in the U.S. for this type of disease or condition will be recovered from sales of the product. Orphan product designation must be requested before submitting a BLA. After the FDA grants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

Orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. Additionally, if a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.

The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated. The FDA may approve a second application for the same product for a different use or a second application for a clinically superior version of the product for the same use. The FDA cannot, however, approve the same product made by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor, or the sponsor is unable to provide sufficient quantities. If a drug or biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity. Orphan drug status in the European Union has similar, but not identical, benefits.

The FDA has historically taken the position that the scope of orphan exclusivity aligns with the approved indication or use of a product, rather than the disease or condition for which the product received orphan designation. However, in Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021), the court disagreed with this position, holding that orphan-drug exclusivity blocked the FDA’s approval of the same drug for all uses or indications within the same orphan-designated disease. On January 24, 2023, the FDA published a notice in the Federal Register to clarify that the FDA intends to continue to apply its longstanding interpretation of the regulations to all matters outside of the scope of the Catalyst order and will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved. It is unclear how future litigation, legislation, agency decisions, and administrative actions will impact the scope of orphan drug exclusivity.

Expedited Review Programs

The FDA offers a number of expedited development and review programs for qualifying product candidates. New biological products are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new biologic may request that the FDA designate the biologic as a fast track product at any time during the clinical development of the product. The sponsor of a fast track product has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA is submitted, the product candidate may be eligible for priority review. A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review. A product candidate can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.

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Any marketing application for a biologic submitted to the FDA for approval, including a product candidate with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review. An application for a biological product will receive priority review designation if it is for a biological product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA will attempt to direct additional resources to the evaluation of an application for a new biological product designated for priority review in an effort to facilitate the review. For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).

Fast track designation, breakthrough therapy designation, and priority review do not change the standards for approval but may expedite the development or approval process. Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Accelerated Approval

Product candidates studied for their safety and effectiveness in treating serious conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. Under the Food and Drug Omnibus Reform Act of 2022 (FDORA), the FDA may require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval. Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a biologic or indication approved under accelerated approval if, for example, the sponsor fails to conduct the required post-marketing studies or if such studies fail to verify the predicted clinical benefit. In addition, for products being considered for accelerated approval, the FDA generally requires, unless otherwise informed by the FDA, that all advertising and promotional materials intended for dissemination or publication within 120 days of marketing approval be submitted to FDA for review during the pre-approval period. After 120 days following marketing approval, unless otherwise informed by the FDA, advertising and promotional materials must be submitted at least 30 days prior to the intended time of initial dissemination or publication.

Post-Approval Requirements

Any biologic products for which we or our collaborators receive FDA approvals are subject to comprehensive and to continuing regulation by the FDA, including, among other things, cGMP compliance for product manufacture, record-keeping requirements, periodic reporting, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, tracking and tracing requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements, which include, among others, restrictions on direct-to-consumer advertising, promoting biologics for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet. Although physicians may prescribe legally available drugs and biologics for off-label uses, manufacturers may not market or promote such off-label uses. After approval, most changes to the approved product, such as adding new dosage forms, indications or other labeling claims, are subject to prior FDA review and approval.

Biological product manufacturers are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections for compliance with cGMPs. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. Manufacturers and manufacturers’ facilities are also required to comply with applicable product tracking and tracing requirements and notify the FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the U.S. Manufacturers are also subject to record requests from the FDA that demonstrate cGMP compliance through data and other information. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

Until we establish our own cGMP manufacturing facility, we expect to continue to rely on third parties for the production of clinical quantities of our product candidates, and expect to rely in the future on third parties for the production of commercial quantities. Future FDA and state inspections may identify compliance issues at our facilities or at

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the facilities of our contract manufacturers that may disrupt production, or distribution, or may require substantial resources to correct. In addition, discovery of previously unknown problems with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of an approved BLA, including withdrawal or recall of the product from the market or other voluntary, FDA-initiated or judicial action that could delay or prohibit further marketing.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. FDA has authority to require post-market studies, in certain circumstances, on reduced effectiveness of a biological product and FDA may require labeling changes related to new reduced effectiveness information.

Failure to comply with FDA requirements can subject a manufacturer to possible legal or regulatory action, such as product recalls, untitled or warning letters, restrictions on the marketing or manufacturing of the product, issuance of safety alerts/ Dear Healthcare Provider letters / press releases / or other communications containing warnings or other safety information about the product, suspension of manufacturing, imposition of clinical holds on ongoing clinical trials, refusal of FDA to approve pending BLAs or supplements to approved BLAs, product seizure or detention, refusal to permit import or export of product, injunctive action, mandated corrective advertising or communications with healthcare professionals, fines, possible civil or criminal penalties, consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enter into supply contracts, including government contracts, or other negative consequences, including adverse publicity. In addition, even if a firm complies with FDA and other requirements, new information regarding the safety or efficacy of a product could lead the FDA to modify or withdraw product approval. Prohibitions or restrictions on sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.

U.S. Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of the FDA approval of any of our biologic product candidates, we may apply for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years for one patent per product as compensation for patent term lost during product development and the FDA regulatory review process of that product. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications of other companies seeking to reference another company’s BLA. Specifically, the Biologics Price Competition and Innovation Act established an abbreviated pathway for the approval of biosimilar and interchangeable biological products generally not earlier than 12 years after the original BLA approval. The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on their similarity to existing brand product.

Pharmaceutical Coverage, Pricing and Reimbursement

In the United States, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use any product candidates we may develop unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of such product candidates. Even if any product candidates we may develop are approved, sales of such product candidates will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers, and managed care organizations, provide coverage and establish adequate reimbursement levels for such product candidates. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit

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coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

In order to secure coverage and reimbursement for any drug product candidate that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the drug product candidate, in addition to the costs required to obtain FDA or other comparable regulatory approvals. Whether or not we conduct such studies, product candidates may not be considered medically necessary or cost-effective. A decision by a third-party payor not to cover any product candidates we develop could reduce physician utilization of such product candidates once approved and have a material adverse effect on our sales, results of operations and financial condition. Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.

The containment of healthcare costs also has become a priority of federal and state governments, and the prices of pharmaceuticals have been a focus in this effort. The U.S. government and state legislatures have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Pricing and rebate programs must comply with the Medicaid Drug Rebate Program requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Veterans Health Care Act of 1992, as amended. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the MMA) established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will provide coverage of outpatient prescription drugs. Unlike Medicare Part A and B, Part D coverage is not standardized. Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs of prescription drugs may increase demand for products for which we receive regulatory approval. However, any negotiated prices for our products covered by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain through non-government payors. Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-government payors.

The cost of pharmaceuticals continues to generate substantial governmental and third-party payor interest. We expect that the pharmaceutical industry will experience pricing pressures due to the trend toward managed healthcare, the increasing influence of managed care organizations and additional legislative proposals.

Healthcare Reform

In the United States and foreign jurisdictions, there have been and will continue to be a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our product candidates profitably, once they are approved for sale. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

Anti-Kickback, False Claims, and Other Healthcare Laws and Compliance Requirements

In the United States, the research, manufacturing, distribution, sale and promotion of drug products and medical devices are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare & Medicaid Services (CMS), other divisions of Health and Human Services (e.g., the Office of

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Inspector General), the U.S. Department of Justice, the Federal Trade Commission, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Environmental Protection Agency, the Occupational Safety and Health Administration, state Attorneys General, and other state and local government agencies.

Healthcare providers, physicians, and third-party payors will play a primary role in the recommendation and prescription of drug products for which we obtain marketing approval. Arrangements with third-party payors, healthcare providers and physicians, as well as patients and other third parties, in connection with the clinical research, sales, marketing and promotion of products, once approved, and related activities, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. In the U.S., these laws include, without limitation, state and federal anti-kickback, false claims, physicians' sunshine (e.g., transparency), price reporting, consumer protection, and patient data privacy, data breach notification and security laws and regulations.

For example, the federal Anti-Kickback Statute makes it illegal for any person, including a biopharmaceutical company, or a party acting on its behalf, to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce the referral of business, including the purchase, order or prescription of a particular drug, or other good or service for which payment in whole or in part may be made under a federal healthcare program, such as Medicare or Medicaid. Violations of this law are punishable by up to ten years in prison, criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs. While this Statute has a number of exceptions and regulatory safe harbors that safeguard certain common, industry practices from prosecution, these exceptions and safe harbors are narrowly defined, and parties must satisfy all elements of an available exception or safe harbor to avoid scrutiny. Further, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them to have committed a violation.

Many states have adopted laws similar to the federal Anti-Kickback Statute. Some of these state prohibitions apply to the referral of patients for healthcare services reimbursed by any insurer, not just federal healthcare programs such as Medicare and Medicaid. Due to the breadth of these federal and state anti-kickback laws, the evolving guidance in the form of regulations or court decisions and the potential for additional legal or regulatory change in this area, it is possible that our future sales and marketing practices or our future relationships with medical professionals might be challenged under federal and state anti-kickback laws.

Additionally, the federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed or claims for medically unnecessary items or services. Although we would not submit claims directly to payors, biopharmaceutical companies can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information or promoting a product off-label. Penalties for a federal False Claims Act violation include civil penalties for each separate false claim and the potential for exclusion from participation in federal healthcare programs. Although the federal False Claims Act is a civil statute, conduct that results in a federal False Claims Act violation may also implicate various federal criminal statutes, such as the federal Anti-Kickback Statute described above. In addition, private individuals have the ability to bring actions under the federal False Claims Act and certain states have enacted laws modeled after the federal False Claims Act. The federal government has and continues to use the False Claims Act, and the accompanying threat of significant liability, in its investigation and prosecution of pharmaceutical and biotechnology companies in connection with the potential or actual false claims resulting from promotion of products for unapproved uses or other sales and marketing practices. The government has obtained multi-billion dollar settlements under the False Claims Act and individual criminal convictions under applicable criminal statutes. We expect that the government will continue to devote substantial resources to investigating potential or actual violations of the False Claims Act.

The federal Physician Payments Sunshine Act (generally referred to as the Open Payments™ Program) is a provision under the Patient Protection and Affordable Care Act (ACA). The Open Payments Program imposes reporting requirements on covered entities (e.g., drug manufacturers) for payments made or transfers of value provided by them to certain healthcare organizations (e.g., teaching hospitals) and physicians, which is broadly defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and certain non-physician practitioners (e.g., physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists, anesthesiology assistants and certified nurse midwives). Covered entities are also required to report ownership and investment interests held by physicians and their immediate family members (as it relates to the Covered entities). This information is then analyzed and made public, available via searchable databases. Failure to submit required information may result in significant civil monetary penalties for any payments, transfers of value, or ownership or investment interests that are not timely, accurately and completely reported in an annual submission. Similarly, certain states also mandate the tracking and reporting of gifts, compensation and other remuneration to physicians. Some of these states also require the implementation of commercial compliance programs and impose restrictions on drug manufacturer marketing practices.

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The federal criminal statute on false statements makes it a crime to knowingly and willfully (in connection with the delivery of or payment for health care benefits, items, or services): (i) falsify, conceal, or cover up any material fact, (ii) make any materially false, fictitious, or fraudulent statements or representations, or (iii) make or use any materially false writing or document while knowing such writings or documents contain materially false, fictitious, or fraudulent statements.

The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) and their implementing regulations, also imposes requirements relating to the privacy, security and transmission of protected health information on HIPAA covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates who conduct certain activities for or on their behalf involving protected health information on their behalf. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by Health and Human Services may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Further, entities that knowingly receive individually identifiable health information from a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA may be subject to criminal penalties. In addition, certain state laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The failure to comply with these laws and regulatory requirements subjects companies to possible legal or regulatory action. As discussed above, depending on the circumstances, failure to meet applicable laws and regulatory requirements can result in criminal prosecution, fines or other penalties or damages, disgorgement, reputational harm, diminished profits or future earnings, exclusion of products from government-funded healthcare programs, such as Medicare or Medicaid, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. Ensuring business arrangements comply with applicable laws, as well as responding to possible investigations by government authorities can be time- and resource-consuming, and can divert a company’s attention from the business.

Europe / Rest of World Government Regulation

In addition to regulations in the United States, we, and our collaborators, will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales, marketing and distribution of our products, similar or more stringent than the U.S. laws.

Whether or not we, or our collaborators, obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In addition, we and our collaborators may be subject to foreign laws and regulations and other compliance requirements, including, without limitation, anti-kickback laws, false claims laws and other fraud and abuse laws, as well as laws and regulations requiring transparency of pricing and marketing information and laws and regulations governing the privacy and security of health information, such as the European Union’s General Data Protection Regulation, the United Kingdom's General Data Protection Regulation, the European Health Data Space Regulation.

If we, or our collaborators, fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

L.Corporate Information

We were incorporated in California in August 1997 under the name Xencor. In September 2004, we reincorporated in the state of Delaware under the name Xencor, Inc. Our principal offices are located at 465 North Halstead Street, Suite 200, Pasadena, CA 91107, and our telephone number is (626) 305-5900. Our website address is www.xencor.com.

The information contained on, or accessible through, our website is not incorporated by reference into, and does not form a part of, this Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) and 15(d) of the Securities Exchange Act of 1934 are available free of charge on the Investor Relations portion of our website as soon as reasonably practical after we electronically file such material with, or furnish it to, the Securities and Exchange

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Commission (SEC). The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.