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Item 1. Business

2025-03-11 compared with 2024-04-01 · 391 added, 496 removed, 627 unchanged (59% of the section changed)

We are a clinical-stage biotechnology company discovering and developing tumor-activated immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments.

We are leveraging our proprietary platform to build a pipeline of novel, tumor-activated I-O molecules that are designed to optimize the therapeutic index by localizing anti-tumor activity within the tumor microenvironment, including tumor-activated cytokines and antibodies (including bispecifics) and immune cell engagers (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

We are a clinical-stage biotechnology company discovering and developing tumor-activated, or masked, immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments.

We are leveraging our proprietary platform to advance a pipeline of novel, tumor-activated I-O molecules that are designed to optimize the therapeutic index by localizing anti-tumor activity within the tumor microenvironment, including masked antibodies, bispecifics, cytokines and immune cell engagers.

Current I-O therapies have curative potential for patients with cancer.

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Our molecules are engineered to localize activity within the tumor microenvironment with minimal systemic effects, resulting in the potential to achieve enhanced anti-tumor activity and increasing the population of patients who may be eligible to receive our medicines.

Our most advanced tumor-activated, clinical-stage product candidates are XTX101, an Fc-enhanced, anti-CTLA-4 monoclonal antibody, or mAb, XTX301, an interleukin 12, or IL-12, therapy, and XTX202, an interleukin 2, or IL-2, therapy.

In 2023, we presented clinical data across these programs showing initial clinical validation for each of these molecules and our tumor-activated approach.

In addition to our clinical-stage product candidates, we are continuing to leverage our differentiated research platform and expertise in developing tumor-activated I-O therapies to advance preclinical development for tumor-activated bispecific molecules and immune cell engager molecules (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

XTX101 is an investigational tumor-activated, Fc-enhanced, high-affinity binding anti-CTLA-4 mAb designed to block CLTA-4 and deplete regulatory T cells when activated (unmasked) in the tumor microenvironment and improve upon the therapeutic index of existing anti-CTLA-4 therapies.

In the third quarter of 2023, we entered into a co-funded clinical trial collaboration with F.

Hoffmann-La Roche Ltd., or Roche, to evaluate XTX101 in combination with atezolizumab (Tecentriq®) in a multi-center, open-label Phase 1/2 clinical trial.

We are currently evaluating the safety and tolerability of the combination in patients with advanced solid tumors in the Phase 1 dose escalation portion of the clinical trial.

We plan to select a recommended Phase 2 dose, or RP2D, for XTX101 in combination with atezolizumab in the second quarter of 2024, and subject to the results of the Phase 1 combination dose escalation portion of the trial, we plan to initiate the Phase 2 portion of the trial for XTX101 in combination with atezolizumab in patients with microsatellite stable colorectal cancer, or MSS CRC, in the third quarter of 2024.

In addition, we plan to report initial Phase 2 data for XTX101 in combination with atezolizumab in approximately 20 patients with MSS CRC in the fourth quarter of 2024 and in approximately 20 additional patients (40 patients total) in the first quarter of 2025.

XTX301 is an investigational tumor-activated IL-12 designed to potently stimulate anti-tumor immunity and reprogram the tumor microenvironment of poorly immunogenic “cold” tumors towards an inflamed or “hot” state.

In March 2024, our wholly-owned subsidiary Xilio Development, Inc., or Xilio Development, entered into an exclusive license agreement with Gilead Sciences, Inc., or Gilead, pursuant to which it granted Gilead an exclusive global license to develop and commercialize XTX301 and specified other molecules directed at IL-12.

To date, we have presented data across our clinical-stage programs showing clinical validation for our tumor-activation platform.

Our most advanced clinical-stage product candidates are vilastobart (XTX101), an Fc-enhanced, tumor-activated, anti-CTLA-4 monoclonal antibody, or mAb, and XTX301, a tumor-activated, engineered interleukin 12, or IL-12, therapy.

In addition to our clinical-stage product candidates, we are leveraging our proprietary tumor-activation platform to advance multiple preclinical programs for a masked PD-1/IL-2 bispecific and masked T cell engager molecules.

Vilastobart (tumor-activated anti-CTLA-4)

We are currently advancing clinical development for vilastobart in combination with atezolizumab (Tecentriq®) in a Phase 2 clinical trial in patients with microsatellite stable colorectal cancer, or MSS CRC, under a co-funded clinical trial collaboration with F.

Hoffmann-La Roche Ltd., or Roche.

Atezolizumab is a monoclonal antibody that targets and blocks the PD-L1 protein on cancer cells and immune cells.

We reported initial Phase 2 proof-of-concept data for the combination of vilastobart at a dose of 100 mg once every six weeks, or Q6W, and atezolizumab at 1200 mg once every three weeks, or Q3W, in patients with MSS CRC in January 2025, which demonstrated the potential for vilastobart as a combination therapy in patients with MSS CRC and a range of other tumor types, including “cold” tumors historically resistant to immunotherapy.

Based on these data, we plan to seek opportunities for partnering to prioritize and expand further development beyond the initial Phase 2 proof-of-concept trial in MSS CRC.

We expect to report additional Phase 2 data for the combination in patients with MSS CRC in the middle of 2025.

In addition, we continue to enroll patients in Phase 1C dose escalation and evaluate the combination of vilastobart at the 150 mg Q6W dose level and atezolizumab at 1200 mg Q3W.

XTX301 (tumor-activated IL-12)

We are currently advancing clinical development for XTX301 in a Phase 1 clinical trial in patients with advanced solid tumors, and we reported preliminary Phase 1 dose escalation data for XTX301 in the fourth quarter of 2024.

In the first quarter of 2024, we entered into an exclusive license agreement with Gilead Sciences, Inc., or Gilead, related to XTX301 and our IL-12 program.

For more information, please see “—License and Collaboration Agreements—Exclusive License Agreement with Gilead” below.

We are currently evaluating XTX301 in an ongoing Phase 1 first-in-human, multicenter, open-label clinical trial designed to evaluate the safety and tolerability of XTX301 as a monotherapy in patients with advanced solid tumors.

In January 2024, we reported preliminary safety data into the third dose level in the Phase 1 dose escalation and anticipate reporting safety, pharmacokinetic, or PK, and pharmacodynamic, or PD, data for XTX301 in the fourth quarter of 2024.

XTX202 is an investigational tumor-activated, beta-gamma biased IL-2 designed to potently stimulate CD8+ effector T cells and natural killer, or NK, cells without concomitant stimulation of regulatory T cells, or TREGs, when activated (unmasked) in the tumor microenvironment.

In March 2024, we announced updated data from our Phase 2 clinal trial evaluating XTX202 as a monotherapy in patients with unresectable or metastatic melanoma and metastatic renal cell carcinoma, or RCC, who have progressed on standard-of-care treatment.

Together with previously reported data, we believe these additional data further validate our tumor-activated approach and support the broad potential for XTX202 as a combination therapy.

In March 2024, we also announced plans to explore strategic opportunities to continue to develop XTX202 in combination with other agents and, as part of a strategic portfolio reprioritization, plans to discontinue further investment in XTX202 as a monotherapy.

Future Opportunities

In addition to our most advanced product candidates, we believe our proprietary platform technology has the potential to develop additional product candidates using our tumor-activated masking approach, which is designed to achieve tumor-specific molecule activation and derive a clinically meaningful improvement in therapeutic index.

We are currently leveraging our differentiated platform technology, and our unique expertise in masking antibodies and cytokines, to develop a new generation of tumor-activated bispecific molecules and immune cell engager molecules.

Subject to obtaining sufficient additional capital, we plan to advance XTX501, our tumor-activated PD-1/IL-2 bispecific development candidate, into IND-enabling studies.

We also plan to continue to make focused investments in our promising research-stage pipeline for additional tumor-activated bispecific molecules and immune cell engager molecules (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

We will continue to evaluate opportunities for better tolerated and more efficacious combination therapies, using product candidates from across our portfolio with other cancer therapies, to increase the potential for curative regimens in oncology.

March 2024 Private Placement

On March 28, 2024, we entered into a securities purchase agreement with certain existing accredited investors, including Bain Capital Life Sciences and Rock Springs Capital, to issue and sell an aggregate of 1,953,125 shares of our common stock at a price of $0.64 per share and prefunded warrants to purchase up to an aggregate of 15,627,441 shares of our common stock at a purchase price of $0.6399 per prefunded warrant share, through a private investment in public equity financing.

The prefunded warrants will have an exercise price of $0.0001 per share of common stock, be immediately exercisable and remain exercisable until exercised in full.

We anticipate receiving aggregate gross proceeds from the private placement of approximately $11.3 million, before deducting placement agent fees and expenses payable by us.

The private placement is expected to close on April 2, 2024, subject to the satisfaction of customary closing conditions.

We expect to use the proceeds from the private placement to fund working capital and other general corporate purposes.

XTX501 (masked PD-1/IL-2)

XTX501 is a novel masked PD-1/IL-2 bispecific designed to selectively stimulate PD-1 positive, antigen-experienced T cells and enhance their function.

XTX501 incorporates masking designed to overcome IL-2 receptor-mediated clearance and peripheral activity.

In preclinical studies, XTX501 demonstrated robust monotherapy activity (including settings insensitive to PD-1) and tumor-selective pharmacodynamics consistent with its intended mechanism of action.

We are currently advancing XTX501 in investigational new drug application, or IND, enabling studies, and subject to obtaining sufficient additional capital, we plan to submit an IND for XTX501 in the middle of 2026.

Masked T Cell Engagers

We are currently advancing preclinical development for multiple wholly-owned, novel masked T cell engager molecules.

These molecules are designed with conditional half-life modulation to enable potent, localized T cell activation and tumor cell destruction together with an improved therapeutic index.

Our programs for masked T cell engager molecules include bispecific molecules designed using our advanced tumor-activated cell engager, or ATACR, format, which consists of a T cell engager with a masked CD3 targeting domain, and tri-specific molecules designed using our selective effector-enhanced cell engager, or SEECR, format.

The SEECR format adds co-stimulatory signaling designed to further enhance potency and T cell activation.

We are currently advancing three wholly-owned preclinical programs for masked T cell engager molecules targeting the following tumor-associated antigens:

prostate-specific membrane antigen, or PSMA;

claudin 18.2, or CLDN18.2;

and six-transmembrane epithelial antigen of prostate 1, or STEAP1.

● PSMA has demonstrated potential as a T cell engager target for prostate cancer.

We anticipate nominating a development candidate for our PSMA program in the ATACR format in the third quarter of 2025, and subject to obtaining sufficient additional capital and successfully completing IND-enabling studies, submitting an IND in the first quarter of 2027.

● CLDN18.2 has broad potential as a T cell engager target for gastric, pancreatic, esophageal and lung cancers.

We anticipate nominating a development candidate for our CLDN18.2 program in the ATACR format in the fourth quarter of 2025, and subject to obtaining sufficient additional capital and successfully completing IND-enabling studies, submitting an IND in the second quarter of 2027.

● STEAP1 has broad potential as a T cell engager target for prostate, colorectal and lung cancers.

We anticipate nominating a development candidate for our STEAP1 program in the SEECR format in the first half of 2026, and subject to obtaining sufficient additional capital and successfully completing IND-enabling studies, submitting an IND in the second half of 2027.

In addition, in February 2025, through our wholly owned subsidiary Xilio Development, Inc, or Xilio Development, we entered into a collaboration, license and option agreement with AbbVie Group Holdings Limited, or AbbVie, leveraging our proprietary tumor-activation technology and platform to discover and develop novel tumor-activated immunotherapies, including up to three programs for masked T cell engagers and a program for a masked antibody-based immunotherapy.

For more information, please see “—License and Collaboration Agreements—Collaboration, License and Option Agreement with AbbVie” below.

Our Approach—Improving the Therapeutic Index of I-O Therapies

Our focus is to improve upon two of the foundational mechanisms of I-O:

cytokines and checkpoint inhibitors.

Since the 1980s, cytokines have been explored as a cancer therapy due to their ability to carry messages between cells and serve as master regulators of the body’s response to inflammation and immune attack.

Although cytokines have demonstrated compelling clinical efficacy in certain tumors, including the ability to generate sustained complete responses, or CRs, in a subset of patients, their use has been limited by severe systemic toxicity.

Similar to cytokines, checkpoint inhibitors have shown the potential to provide meaningful improvements in survival for patients with cancer, but the utilization of these therapies, beyond those that target the immune proteins PD(L)-1, is also limited largely by toxicity.

Finally, immune cell engagers, including T cell engaging bispecific molecules, have demonstrated encouraging clinical activity, but treatment is typically associated with significant toxicities including cytokine-release syndrome and on-target/off-tumor cytotoxicity.

Cancer immunotherapy has demonstrated compelling anti-tumor activity in certain tumors, including the ability to generate sustained complete responses, or CRs, and the potential to provide meaningful durability of response with improvements in survival for patients with cancer, but their use has been limited by toxicity.

Our goal is to overcome the limitations of current I-O therapies by developing products with an improved efficacy-to-toxicity ratio, or therapeutic index.

The toxicities for cytokines, checkpoint inhibitors and immune cell engagers stem from their activity outside of the tumor microenvironment.

Our proprietary platform is designed to overcome these systemic toxicities by creating tumor-activated molecules and unleashing the activity of tumor-activated cytokines and antibodies

(including bispecifics) and immune cell engagers (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers) in the tumor microenvironment.

These molecules are intended to be inactive until they reach the tumor microenvironment, where they are activated by the unique conditions of the tumor microenvironment, resulting in localized clinical activity with minimal dose-limiting toxicities.

To achieve this tumor selectivity, we apply our platform, which includes engineered features and a proprietary protein masking technology that seeks to minimize interaction with healthy tissue and cells by rendering our molecules inactive until reaching the tumor.

Our platform is also designed to enable optimal PK by preventing undesired binding and elimination outside of the tumor microenvironment, resulting in geographically localized pharmacology.

The engineered features are designed to ensure that our product candidates are stable molecules with well-understood properties and a reproducible manufacturing approach.

The toxicities for current I-O therapies stem from their activity outside of the tumor microenvironment.

Our proprietary platform is designed to overcome these systemic toxicities by creating tumor-activated, or masked, molecules and unleashing the activity of tumor-activated immunotherapies in the tumor microenvironment.

These molecules are intended to be inactive until they reach the tumor microenvironment, where they are activated by tumor-specific proteases, resulting in localized clinical activity with minimal dose-limiting toxicities.

To achieve this tumor selectivity, each of our molecules incorporates our proprietary masking technology and other components designed to minimize interaction with healthy tissue and cells by rendering our molecules inactive until reaching the tumor.

Our molecules are also designed to enable optimal pharmacokinetic, or PK, properties by preventing undesired binding and elimination outside of the tumor microenvironment, resulting in geographically localized pharmacology, and are designed to enable stable molecules with well-understood properties and a reproducible manufacturing approach.

Our vision is to transform the lives of patients with cancer by harnessing the power of highly potent, tumor-selective I-O therapies that deliver deep and durable clinical responses.

By leveraging our proprietary platform for tumor-activated molecules, we aim to discover, develop and, ultimately, commercialize I-O therapies that overcome the known limitations of today’s approaches and provide effective, tolerable and durable therapeutic options for patients and their physicians.

In order to achieve these goals, the key elements of our strategy are to:

● Rapidly advance clinical development for XTX101, our tumor-activated, Fc-enhanced anti-CTLA-4, through our co-funded clinical collaboration with Roche.

In the third quarter of 2023, we entered into a co-funded clinical trial collaboration with Roche to evaluate XTX101 in combination with atezolizumab (Tecentriq®) in a multi-center, open-label Phase 1/2 clinical trial.

We are currently evaluating XTX101 in combination with atezolizumab (Tecentriq®) in Phase 1 combination dose escalation.

We plan to select a RP2D for XTX101 in combination with atezolizumab in the second quarter of 2024, and subject to the results of the Phase 1 combination dose escalation portion of the trial, we plan to initiate the Phase 2 portion of the trial for XTX101 in combination with atezolizumab in patients with MSS CRC in the third quarter of 2024.

● Rapidly advance clinical development for XTX301, our tumor-activated IL-12, through our partnership with Gilead.

In March 2024, we entered into an exclusive license agreement with Gilead to develop and commercialize XTX301, as well as other molecules directed at IL-12.

We are currently evaluating XTX301 in Phase 1 monotherapy dose escalation, and we anticipate reporting safety, PK and PD data for XTX301 in the fourth quarter of 2024.

Under our license agreement with Gilead, we are responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through an initial planned Phase 2 dose expansion, and then following the delivery by us of a specified clinical data package for XTX301, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the license agreement and payment by Gilead of a transition fee.

● Explore opportunities for strategic partnerships to evaluate XTX202, our tumor-activated, beta-gamma biased IL-2, in combination with other agents.

In March 2024, we announced additional data from our Phase 2 clinical trial evaluating XTX202 in patients with metastatic RCC or unresectable or metastatic melanoma.

Together with previously reported data, we believe these additional data further validate our tumor-activated approach and support the broad potential for XTX202 as a combination therapy.

● Leverage our promising research platform to advance differentiated, tumor-activated bispecific molecules and immune cell engager molecules (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

We believe our proprietary platform technology has the potential to develop additional product candidates using our tumor-activated masking approach.

In particular, we are currently leveraging our

differentiated platform technology and our unique expertise in masking antibodies and cytokines to develop a new generation of tumor-activated bispecific molecules and immune cell engager molecules.

Subject to obtaining sufficient additional capital, we plan to advance XTX501, our tumor-activated PD-1/IL-2 bispecific development candidate, into IND-enabling studies.

● Leverage the broad applicability of our proprietary platform for tumor-activated I-O molecules through strategic collaborations and partnerships.

We believe the collective components of our proprietary platform technology and the reproducibility it enables in our drug discovery and development efforts present a meaningful opportunity for us to leverage our platform in combination with other agents in oncology.

We plan to continue to explore strategic collaborations and partnership that would enable us to access capital, accelerate the development of our current product candidates or additional product candidates or programs, evaluate our current or additional product candidates in combination with other agents, and expand our capabilities, pipeline opportunities and product offerings, particularly where a collaborator may have expertise or capabilities that are synergistic or additive to our own.

The discovery of a role for immunotherapy in the treatment of cancer was made more than 100 years ago, when William Coley treated patients with heat-treated bacterial toxins, resulting in a profound anti-tumor effect in some of those patients.

Two of the most important mechanisms within I-O are cytokines and checkpoint inhibitors, with cytokine therapies having been introduced in the 1980s and checkpoint inhibitors in the period after 2011, when the first such product was approved.

Both therapeutic approaches are known to provide efficacy in terms of clinical responses and tumor shrinkage.

However, toxicities have limited the application of these therapies, resulting in the need to dose-reduce, dose-interrupt or discontinue many patients from treatment.

Immune checkpoint inhibitors are associated with immune-related adverse events, or AEs, that may affect any organ system and may be life-threatening or fatal to patients.

Cytokines in particular are associated with broad ranging multi-organ toxicities that can be lethal and have limited the development of this class of potential therapies.

Anti-PD-1/PD-L1 checkpoint inhibitors have been used broadly because they generally achieve efficacy with minimal systemic toxicity, enabling their administration at their maximally effective doses.

Anti-PD-1/PD-L1 treatments have become the most widely utilized immunotherapy agent in oncology, with the U.S.

Food and Drug Administration, or FDA, approvals in more than a dozen separate tumor types and $27 billion in worldwide sales in 2020.

Our mission is to overcome the limitations of cytokine therapies and checkpoint inhibitors, such as anti-CTLA-4, and make immunotherapies beyond anti-PD-1/PD-L1 treatments more accessible, efficacious and safe for patients with cancer.

The promise and limitations of checkpoint inhibitors

Checkpoint inhibitors have become mainstays in cancer therapy since the FDA approved ipilimumab, an anti-CTLA-4 therapy, in 2011.

These toxicities, which can be life-threatening or fatal, have resulted in the need to dose-reduce, dose-interrupt or discontinue many patients from treatment.

To date, anti-PD-1/PD-L1 checkpoint inhibitors have been used broadly due to their ability to achieve efficacy with minimal systemic toxicity, enabling their administration at their maximally effective doses.

In contrast, while the clinical benefit of CTLA-4 blockade to patients with cancer is well-established, the efficacy of current CTLA-4 therapies is impaired by dose-limiting toxicities arising from systemic immune activation.

This has reduced the use of anti-CTLA-4 mAbs both as a monotherapy and in combination therapy.

We believe XTX101, our tumor-activated, Fc-enhanced high affinity binding anti-CTLA-4, has the potential to overcome these limitations and deliver the full clinical benefit of anti-CTLA-4 mechanisms without the dose-limiting toxicities associated with existing CTLA-4 treatments.

The promise and limitations of cytokines

Cytokines are small signaling proteins that serve as master regulators of the body’s response to inflammation and immune attack.

There are multiple cytokines, including IL-2, which are approved in a range of oncology and non-oncology indications.

Aldesleukin, a high-dose IL-2 therapy, was first approved in 1992 as a monotherapy for patients with melanoma and RCC.

Similarly, IL-12 development has been relentlessly pursued due to its unique potential to treat immunologically cold tumors, but currently there are no approved IL-12 therapies.

Cytokines such as IL-2 and IL-12 have not achieved therapeutic success in a broad population of patients because their use has been limited by severe toxicity, including fatal outcomes.

We believe XTX301, our tumor-activated IL-12 product candidate, has the potential to overcome these limitations and deliver a therapeutic dose with low systemic toxicity and the ability to achieve a broad therapeutic index.

We also believe that XTX202, our IL-2 product candidate, has broad potential as a combination therapy based on the safety, PK and PD data reported to date from our Phase 1 and Phase 2 clinical trials.

I-O Combinations

The ability to combine oncology agents has been an important step in developing effective cancer regimens.

Combination chemotherapy can be curative in settings where single agents have had limited efficacy and were not considered curative.

The substantial dose-limiting toxicities associated with I-O agents has prevented these agents from being combined effectively.

The ultimate promise of I-O for patients is dependent upon the ability to develop I-O agents that can be combined at their optimal doses without life-threatening toxicity.

The severe toxicity of IL-2 has limited the ability to combine IL-2 with other cancer treatments without compromising the dose administered.

Similarly, data from third-party clinical trials has demonstrated that the combination of ipilimumab, an anti-CTLA-4 therapy, with nivolumab, which targets the immune checkpoint protein PD-1, was associated with improved clinical outcomes, but it was limited by significantly higher risk of all-grade and high-grade immune-related AEs such as pruritus, rash, diarrhea, colitis, elevation of the liver enzyme alanine transaminase, known as ALT, hyperthyroidism, hypophysitis and pneumonitis.

Importantly, combination therapy generally requires use of low dose ipilimumab at 1 mg/kg rather than the more efficacious dose of 10 mg/kg.

Even at the lower dose, ipilimumab combination therapy is poorly tolerated, with AEs causing up to 80% of patients to discontinue treatment, up to 50% of patients requiring emergency room visits and up to 36% of patients requiring hospitalization.

The potential of our tumor-activated molecules to minimize the systemic toxicity of I-O could allow us to combine I-O agents to meaningfully improve survival in a broader range of tumor types.

We are currently evaluating XTX101, our anti-CTLA-4 product candidate, in combination with atezolizumab, and as discussed above, we plan to explore opportunities to continue to develop XTX202, our IL-2 product candidate, in combination with other agents.

Our Solution:

Key elements of our strategy include:

● Reporting additional Phase 2 proof-of-concept data for vilastobart, our tumor-activated, Fc-enhanced anti-CTLA-4, in combination with atezolizumab in patients with MSS CRC and seeking opportunities for partnering to accelerate and expand further development of vilastobart

● Completing our ongoing Phase 1 clinical trial for XTX301, our tumor-activated IL-12, and rapidly advancing into a planned Phase 2 proof-of-concept trial designed to enable delivery of an option data package to Gilead

● Advancing XTX501, our masked PD-1/IL-2 bispecific, through IND-enabling studies designed to enable an IND submission in the middle of 2026

● Rapidly advancing our masked T cell engager programs to develop potential best-in-class or first-in-class molecules based on our ATACR or SEECR formats, including our wholly-owned programs targeting PSMA, CLDN18.2 and STEAP1 and our collaboration program with AbbVie

● Leveraging the broad applicability of our proprietary tumor-activation platform and our expertise in engineering and developing masked immunotherapies to continue to accelerate the depth and breadth of our pipeline through strategic collaborations and partnerships

Our Proprietary Platform Enables Tumor-Activated I-O Molecules Designed to Optimize Their Therapeutic Index

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We believe that selectively targeting the activity of I-O agents to the tumor microenvironment can overcome these dose-limiting toxicities and enable maximal therapeutic benefit for patients.

Tumor-selective activation could be achieved by harnessing unique characteristics of the tumor microenvironment to activate therapeutic molecules locally that have minimal or non-detectable levels of activity outside of the tumor microenvironment.

Our clinically-validated platform has demonstrated that tumor-selective activation can be achieved by harnessing unique characteristics of the tumor microenvironment to activate therapeutic molecules locally that have minimal or non-detectable levels of activity outside of the tumor microenvironment.

Matrix metalloproteases, or MMPs, are enzymes involved in protein degradation that are essential for tumor growth and metastasis because they regulate key processes within the tumor microenvironment, including tumor growth, angiogenesis, invasion and metastasis.

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As a result, we believe that our platform for tumor-activated molecules, which is designed to harness tumor MMP activity, can design molecules that selectively activate within the tumor microenvironment while maintaining minimal or non-detectable levels of activity outside of the tumor microenvironment.

Our platform enables us to engineer a broad range of immune-modulatory molecules, including tumor-activated cytokines and antibodies (including bispecifics) and immune cell engagers (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers), that contain masking domains designed to minimize their activity outside of

the tumor microenvironment and turn on selectively in the tumor microenvironment where they are preferentially activated by tumor MMPs.

Specifically, MMPs enzymatically cleave a protease cleavage site incorporated in a peptide linker that connects the masking protein domain to the active agent.

Our platform enables us to engineer a broad range of immune-modulatory molecules, including tumor-activated antibodies, bispecifics, cytokines and immune cell engagers, that contain masking domains designed to minimize their activity outside of the tumor microenvironment and turn on selectively in the tumor microenvironment where they are preferentially activated by tumor MMPs.

Specifically, MMPs enzymatically cleave a protease cleavage site incorporated in a peptide linker that connects the masking domain to the active agent.

This separates the mask from the active agent, enabling the unmasked agent to promote an anti-tumor response within the tumor microenvironment.

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The general architecture of each of our tumor-activated molecules is:

a masking domain;

● one or more functional domains;

● one or more masking domains;

● linker sequences;

● a half-life extension domain (other than vilastobart);

● a protease cleavage site.

a cleavable or retained half-life extension domain for cytokine, immune cell engager and bispecific molecules, as appropriate;

the effector domain (i.e., an engineered cytokine, antibody or immune cell engager).

The engineered features are designed to ensure that our product candidates are stable molecules with well-understood properties and a reproducible manufacturing approach.

We have applied our masking approach to cytokines and antibodies that regulate immune checkpoints, and with our earlier stage work, we have expanded the application of our platform to tumor-activated bispecific molecules and immune cell engager molecules (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

Masked T cell engager molecules in our ATACR format are bispecific molecules that consist of a T cell engager and a masked CD3 targeting domain, and masked T cell engager molecules in our SEECR format are tri-specific molecules that build upon the ATACR format by adding co-stimulatory signaling designed to further enhance potency and T cell activation.

Our molecules are designed to contain a masking domain that is released by protease cleavage.

When the linker sequence, which contains a protease cleavage site, is cleaved by MMPs, the masking domain is released, allowing the unmasked molecule to bind to the target receptor, or in the case of an immune cell engager, bind to the immune cell and tumor antigen to facilitate an immune synapse.

The linker sequence contains a protease cleavage site, which is cleaved by tumor-specific MMPs and releases the masking domain allowing the unmasked molecule to bind to the target receptor.

In the case of a masked T cell engager in either the ATACR or SEECR format, the mask on the CD3 targeting domain is designed to release when the protease cleavage site is cleaved by MMPs in the tumor microenvironment, allowing the unmasked molecule to bind to the immune cell and tumor antigen to facilitate an immune synapse.

In the case of a masked T cell engager in the SEECR format, the additional co-stimulatory signaling domain is designed to further enhance potency and T cell activation.

Before cleavage by the MMPs in the tumor microenvironment, the engineered molecule is designed to minimize interaction with healthy tissue and cells outside the tumor microenvironment.

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After cleavage in the tumor microenvironment, the engineered molecule is locally activated and has a relatively short half-life.

This is because the cleavage event simultaneously releases the half-life extension domain and the mask, limiting exposure of the potent active molecule outside of the tumor microenvironment.

For all of our product candidates, our design approach also seeks to ensure we are developing stable molecules with well-understood properties and a reproducible manufacturing approach.

Key Features of Xilio’s Tumor-Activated Molecules

We believe that the characteristics of our proprietary platform for tumor-activated molecules described above will enable the following key advantages:

masking that takes advantage of multiple intra-molecular interactions, minimizing the risk of activity outside of the tumor microenvironment and therefore minimizing the risk of toxicity;

engineering the active molecule such that unmasking in the tumor microenvironment promotes a potent, localized anti-tumor immune response;

● masking that is affinity-optimized and takes advantage of multiple intra-molecular interactions, minimizing the risk of activity outside of the tumor microenvironment and therefore minimizing the risk of toxicity;

● protease cleavage sites optimized for efficient cleavage by multiple families of MMPs present in the tumor microenvironment to ensure broad applicability across a wide range of solid tumor types;

● the ability to engineer the active molecule such that unmasking in the tumor microenvironment promotes a potent, localized anti-tumor immune response;

● early consideration and incorporation of manufacturing and development aspects into the design of molecules to facilitate production of high-quality drug product for clinical use;

● half-life optimized molecules with prolonged half-life in the inactive (masked) state to support administration to patients on a schedule consistent with other biologics agents;

locally activating molecules that have a short half-life in the tumor microenvironment, which minimizes the risk of the activated molecule exhibiting activity outside of the tumor microenvironment and, therefore, further reduces the risk of toxicity.

Leveraging our platform technology, we are building a pipeline of tumor-activated I-O molecules to treat cancer, including tumor-activated cytokines and antibodies (including bispecifics) and immune cell engagers (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

● ability to incorporate conditional half-life modulation into the molecule, which allows for either a short half-life in the tumor microenvironment post-activation or an extended half-life depending on the specific desired property and mechanism of action.

Leveraging our clinically-validated platform technology, we are advancing a pipeline of tumor-activated I-O molecules to treat cancer.

Our goal is to overcome the limitations of current I-O therapies by developing products with an improved therapeutic index.

Consistent with this goal, we selected molecules that have prior clinical validation demonstrating therapeutic benefit, but that have been limited by significant toxicities that we believe can be addressed with our approach.

Mechanism of Action

Stage of Development

XTX101 in combination with atezolizumab (1)

Advanced MSS CRC

anti-CTLA-4 +

Phase 1 combination dose escalation ongoing

Co-funded clinical collaboration with Roche

Advanced Solid Tumors

Phase 1 monotherapy dose escalation ongoing

Exclusive global license with Gilead

Advanced RCC and Melanoma

Phase 2 monotherapy enrollment complete (3)

Plan to explore strategic opportunities to develop in combinations (3)

Advanced Solid Tumors

PD-1/IL-2 bispecific

Development candidate (4)

Additional research-stage programs

Tumor-activated immune cell engagers

Discovery-stage

Evaluating XTX101 in combination with atezolizumab (Tecentriq®) in Phase 1 combination dose escalation trial and planned Phase 2 combination trial in MSS CRC.

Evaluating XTX301 in Phase 1 monotherapy dose escalation for the treatment of advanced solid tumors.

Plan to discontinue further investment in XTX202 as a monotherapy.

Plan to advance in IND-enabling studies, subject to sufficient additional capital.

XTX101, Our Clinical-Stage, Tumor-Activated, Fc-Enhanced, High Affinity Binding Anti-CTLA-4 Product Candidate

XTX101 is an investigational tumor-activated, Fc-enhanced, high-affinity binding anti-CTLA-4 mAb designed to block CLTA-4 and deplete TREGs when activated (unmasked) in the tumor microenvironment and improve upon the therapeutic index of existing anti-CTLA-4 therapies.

In the third quarter of 2023, we entered into a co-funded clinical trial collaboration with Roche to evaluate XTX101 in combination with atezolizumab (Tecentriq®) in a multi-center, open-

label Phase 1/2 clinical trial.

We are currently evaluating the safety and tolerability of the combination in patients with advanced solid tumors in the Phase 1 dose escalation portion of the clinical trial.

Subject to the results of Phase 1 combination dose escalation, we plan to evaluate the safety and efficacy of the combination in the Phase 2 portion of the clinical trial in patients with microsatellite stable colorectal cancer.

Evaluating vilastobart (XTX101) in combination with atezolizumab (Tecentriq®) in patients with metastatic MSS CRC under co-funded clinical collaboration with Roche.

Evaluating XTX301 in Phase 1 monotherapy dose escalation and dose expansion for the treatment of advanced solid tumors under exclusive global option with Gilead.

Advancing an initial masked T cell engager program and an initial masked antibody-based program in collaboration with AbbVie.

Subject to the terms of the collaboration agreement, AbbVie has the right to nominate up to two additional masked T cell engager programs.

Our Clinical-Stage, Tumor-Activated, Fc-Enhanced, High Affinity Binding Anti-CTLA-4

Vilastobart is an investigational tumor-activated, Fc-enhanced, high affinity binding anti-CTLA-4 monoclonal antibody designed to block CTLA-4 and deplete regulatory T cells when activated in the tumor microenvironment.

We are currently advancing clinical development for vilastobart in combination with atezolizumab (Tecentriq®) in a Phase 2 clinical trial in patients with MSS CRC under a co-funded clinical trial collaboration with Roche.

Atezolizumab is a monoclonal antibody that targets and blocks the PD-L1 protein on cancer cells and immune cells.

We reported initial Phase 2 proof-of-concept data for the combination of vilastobart at a dose of 100 mg Q6W and atezolizumab at 1200 mg Q3W in patients with MSS CRC in January 2025, which demonstrated the potential for vilastobart as a combination therapy in patients with MSS CRC and a range of other tumor types, including “cold” tumors historically resistant to immunotherapy.

We believe these initial data support the potential for partnering, and we plan to seek opportunities for partnering to prioritize and expand further development beyond the initial Phase 2 proof-of-concept trial in MSS CRC.

We expect to report additional Phase 2 data for the combination in patients with MSS CRC in the middle of 2025.

In addition, we continue to enroll patients in Phase 1C dose escalation and evaluate the combination of vilastobart at the 150 mg Q6W dose level and atezolizumab at 1200 mg Q3W.

Tumor-Activated Design Components of Vilastobart

Background on CTLA-4

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By removing this brake, T cells were freed to attack cancer.

This work led to the development and FDA approval of ipilimumab, a CTLA-4 mAb, for the treatment of unresectable or metastatic melanoma at a dose of 3 mg/kg in 2011 and in additional indications in subsequent years.

While anti-CTLA-4 therapies such as ipilimumab have demonstrated meaningful efficacy across a range of tumor types, autoimmune toxicities have significantly limited their use to date.

Clinical trials have shown that 20% of ipilimumab-treated melanoma patients survive at least three years, and a subset survive for 10 years or longer.

Ipilimumab remains one of the most impactful drugs for these patients;

however, the number of patients who benefit from treatment with ipilimumab remains limited due to its toxicity.

Investigation of dose-response in two third-party clinical trials of melanoma patients showed that higher doses of ipilimumab are likely to increase the proportion of patients who benefit;

however, the increased dose also resulted in an unacceptable toxicity profile for most patients.

In a Phase 2 trial of ipilimumab conducted by Bristol-Myers Squibb Company, a dose range of 0.3 mg/kg to 10 mg/kg was tested and efficacy was measured both by response rate and by clinical outcome.

Both the response rate and median overall survival, or mOS, were higher at 10 mg/kg than at 3 mg/kg, with the 0.3 mg/kg dose determined as being ineffective.

The rate of severe AEs was 25% at the 10 mg/kg dose, 7% at the 3 mg/kg dose and 0% at the ineffective dose of 0.3 mg/kg.

Similarly, as shown in the table below, in a Phase 3 trial conducted by Bristol-Myers Squibb Company, mOS was higher at the 10 mg/kg dose but resulted in unacceptable toxicity for most patients.

Therefore, we believe that achieving a three-fold increase in therapeutic index would be transformational.

High-Dose Ipilimumab Improved Survival but Resulted in Unacceptable Toxicity

Adverse Events:

Gr 3/4 irAEs / disconts.

Ipilimumab has shown preliminary evidence of promising anti-tumor activity in a range of tumor types outside of its currently approved indications, but successful additional approvals have been limited due to its toxicity.

This led to the development and FDA approval of ipilimumab, a CTLA-4 mAb, for the treatment of unresectable or metastatic melanoma at a dose of 3 mg/kg in 2011 and in additional indications in subsequent years.

While anti-CTLA-4 therapies such as ipilimumab have demonstrated meaningful efficacy across a range of tumor types, toxicities have significantly limited their use to date, including in combination therapy.

For example, ipilimumab has been observed to be more active when combined with the anti-PD-1/PD-L1 antibody nivolumab.

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There remains a critical need to develop safe and effective forms of anti-CTLA-4 mAbs that can achieve efficacious doses within the tumor microenvironment.

Our Solution:

XTX101, a Tumor-Activated, Fc-Enhanced Anti-CTLA-4

XTX101 is a clinical-stage, tumor-activated, Fc-enhanced anti-CTLA-4 mAb that is designed to improve upon the therapeutic index of existing anti-CTLA-4 therapies by overcoming potency and tolerability limitations.

Our goal is to demonstrate an improved safety profile enabling higher anti-CTLA-4 exposure in the tumor that will result in increased efficacy.

In preclinical studies, we observed the following tolerability and activity profile of XTX101:

improved in vivo potency and the intra-tumoral PD effects of XTX101 are consistent with the improved potency being a result of the higher affinity binding to the target CTLA-4 and enhanced IgG1-Fc effector function, which

further improves checkpoint inhibition and enhances antibody-dependent cellular cytotoxicity to deplete immune-suppressive TREGs in the tumor microenvironment;

reduced peripheral immune activity due to masking of the CDR sequences;

activation by protease-dependent release of the masks, which acts selectively in the tumor microenvironment and minimizes toxicity associated with systemic immune activation.

XTX101 is designed to enhance the desirable features of an anti-CTLA-4 antibody while mitigating the known limitations of anti-CTLA-4 antibodies due to toxicity.

We expect this combination of features to result in an increased therapeutic index.

Tumor-Activated Design Components of XTX101

Preliminary Phase 1 Monotherapy Data Presented in May 2023

In May 2023, we announced initial Phase 1 monotherapy dose escalation data for XTX101.

As of a data cutoff date of May 2, 2023, 25 patients had been treated with XTX101, including dose levels ranging from 7 mg to 180 mg administered once every three weeks, or Q3W, and one dose level at 150 mg administered once every six weeks, or Q6W.

Of these patients, 20 patients were dosed in monotherapy dose-escalation and five patients were dosed in monotherapy dose-expansion.

Patients had a wide range of advanced and treatment-refractory solid tumors, including colorectal cancer, or CRC, non-small cell lung cancer, or NSCLC, and pancreatic cancer.

In addition, 76% of patients had been previously treated with at least three prior lines of anti-cancer therapy, and 44% had been previously treated with at least one I-O agent.

As of the data cutoff date, three patients were continuing on treatment with XTX101, and 22 patients had discontinued treatment with XTX101.

Preliminary Safety Data

A recommended Phase 2 dose, or RP2D, and schedule of 150 mg Q6W was determined based on the favorable preliminary safety, PK and PD data for XTX101.

At the RP2D, no dose-limiting toxicities were observed, and there was no reported evidence of immune-related endocrine or skin AEs that are commonly associated with systemically active anti-CTLA-4 agents.

In addition, evidence of effective masking of XTX101 was demonstrated by low levels of unmasked drug detected in peripheral circulation, and XTX101 achieved target PK exposure at the RP2D, reaching the targeted area under the curve, or AUC, and peak concentration, or C max .

As of the data cutoff date of May 2, 2023:

● Across all dosing levels and dosing intervals, no Grade 4 or Grade 5 treatment-related AEs were reported by investigators.

● Among seven patients who received XTX101 administered at the RP2D of 150 mg on a Q6W dosing schedule, the most common treatment-related AEs (≥10% incidence) of any grade reported by investigators were diarrhea (14%), fatigue (14%) and decreased appetite (14%).

In these patients, no treatment-related colitis or infusion related reaction of any grade was observed.

Investigators reported only one Grade 3 treatment-related AE of diarrhea, which occurred after two doses and resolved after five days without steroid use.

This patient tolerated two additional doses of XTX101 after dose reduction to 75 mg Q6W without any symptom recurrence.

At the RP2D of 150 mg Q6W, this was the only patient with a dose reduction due to an AE, and no patients discontinued treatment due to a treatment-related AE.

● Among 18 patients who received XTX101 administered on a Q3W dosing schedule, the most common treatment-related AEs (≥10% incidence) of any grade reported by investigators were diarrhea (28%), colitis (28%), infusion related reaction (28%), nausea (17%), vomiting (17%) and abdominal pain (11%).

Of these, investigators reported the following Grade 3 treatment-related AEs:

diarrhea (6%), colitis (22%) and infusion related reaction (17%).

Infusion related reactions were associated with antidrug antibodies.

Across all dose levels administered Q3W, two patients had dose reductions due to AEs, and four patients discontinued treatment due to an infusion related reaction.

Background on Advanced MSS CRC

The incidence of colorectal cancer has been increasing significantly, particularly in young adults.

In the United States, colorectal cancer is the second leading cause of all cancer-related deaths and the leading cause of cancer-related death in men younger than 50 years old.

Globally, colorectal cancer ranks third in total new cancer cases annually, with approximately 1.9 million new cases and approximately 900,000 deaths per year.

Unfortunately, new cases of colorectal cancer are typically identified at later stages.

The majority of colorectal cancer patients diagnosed with metastatic disease are not eligible for surgery.

The primary treatment options for these patients include chemotherapy or radiation.

In patients with Stage 4 colorectal cancer, approximately 95% of patients have MSS CRC.

Treatment for advanced MSS CRC typically includes chemotherapy alone or in combination with a tyrosine kinase inhibitor, followed by clinical trials or late-line therapies, which have generally demonstrated minimal benefit and overall survival between 6-9 months.

Immune checkpoint inhibitors such as pembrolizumab and nivolumab that are approved for microsatellite instability-high, or MSI-H, colorectal cancer have not demonstrated any meaningful efficacy in patients with MSS CRC (0-3% objective response rate, or ORR).

Third party clinical trials have demonstrated the potential for Fc-enhanced, non-masked anti-CTLA-4 agents in combination with PD-(L)1 inhibitors, but these combinations have generally been limited by toxicity to date.

Initial Phase 2 Combination Proof-of-Concept Data Presented in January 2025

In January 2025, we announced initial data from our ongoing Phase 2 clinical trial evaluating vilastobart in combination with atezolizumab (Tecentriq®) in patients with MSS CRC at the American Society of Clinical Oncology 2025 Gastrointestinal Cancer Symposium.

As of a data cutoff date of January 13, 2025, 40 patients with metastatic MSS CRC had been treated with the combination of vilastobart at a dose of 100 mg Q6W and atezolizumab at 1200 mg Q3W.

The median age was 55 years (ranging from 25 to 82 years), and patients were heavily pre-treated, with 70% of patients having previously received three or more prior lines of anti-cancer therapy.

Preliminary Anti-Tumor Activity Data

A partial response, or PR, was observed at nine weeks in one patient with advanced PD-L1 negative NSCLC with hepatic metastases treated with XTX101 at the 150 mg Q6W dose level and confirmed after the data cutoff date at week 27.

The only treatment-related AE reported for this patient was Grade 1 fatigue.

In addition, PD markers for anti-CTLA-4 reported for this patient showed minimal immune activation in peripheral circulation, demonstrating evidence of tumor-selective activation of XTX101.

Updated Phase 1 Monotherapy Data Presented at the European Society for Medical Oncology (ESMO) Immuno-Oncology Congress in December 2023

In December 2023, we reported updated Phase 1 monotherapy data for XTX101 at the ESMO Immuno-Oncology Congress.

As of a data cutoff date of November 13, 2023, 36 patients with advanced solid tumors had been administered XTX101 monotherapy, including 18 patients at the RP2D and schedule of 150 mg Q6W.

Patients treated at the RP2D of 150 mg Q6W were heavily pre-treated, with 83% of patients receiving three or more lines of anti-cancer therapy and 56% previously treated with an immunotherapy.

As of the data cutoff date, 18 patients had at least one imaging scan reported and were evaluable for response assessment (per Response Evaluation Criteria in Solid Tumors, or RECIST, version 1.1 criteria), including 11 patients without liver metastases and seven patients with liver metastases.

In response-evaluable MSS CRC patients without liver metastases, investigators reported three partial responses, or PRs (two confirmed, one pending confirmation), representing a preliminary ORR of 27%, with each patient ongoing on treatment as of the data cutoff date.

Responses were accompanied by decreases in levels of serum tumor biomarkers (carcinoembryonic antigen, or CEA, and circulating tumor DNA, or ctDNA), as well as improvement in clinical symptoms.

CEA is a serum biomarker that is often elevated in many malignancies, including colorectal cancer, and ctDNA is a biomarker found in the bloodstream of patients with cancer.

● PR (confirmed) with a 47% decrease in the sum of diameters of target lesions at 13 weeks accompanied by a decrease in levels of the serum tumor marker CEA, a multi-log fold decrease in levels of ctDNA and improvement of clinical symptoms, such as cough.

● PR (confirmed) that continued to deepen over time with a 57% reduction in the sum of diameters of target lesions at 18 weeks accompanied by a multi-log fold decrease in ctDNA to undetectable levels and significant decrease in levels of the serum tumor marker CEA to normal values.

● PR (pending confirmation) with a 35% decrease in the sum of diameters of target lesions at nine weeks accompanied by a decrease in levels of the tumor marker CEA to normal values, a substantial decrease in levels of ctDNA and improvement of clinical symptoms, such as cough.

For this patient, the initial response on CT imaging was assessed by the investigator and the radiology assessment is pending.

● In addition, an MSS CRC patient without liver metastases but with a peritoneal metastasis had a 24% decrease in the sum of diameters of target lesions assessed by CT imaging at their initial nine-week scan accompanied by a decrease in levels of the serum tumor marker CEA to normal values.

This patient was ongoing on treatment as of the data cutoff date.

● Investigators reported stable disease in three patients without liver metastases and one patient with liver metastases, representing a preliminary disease control rate of 55% and 14%, respectively, and highlighting additional evidence of anti-tumor activity for the combination.

● As of the data cutoff date, 23 patients were ongoing on treatment, including 13 patients who had not yet had a first response assessment.

Preliminary Safety Data

At the RP2D of 150 mg Q6W, 18 patients (including nine patients previously reported) were evaluable for safety as of the data cutoff date of November 13, 2023:

● Safety data were consistent with previously reported results.

XTX101 monotherapy was generally well-tolerated with treatment-related AEs primarily Grade 1 or 2, and no patients discontinued treatment due to a treatment-related AE.

In addition, as previously reported, only one patient had a dose reduction due to an AE.

● The most common treatment-related AE of any grade (≥10% incidence) reported by investigators was fatigue (11%).

● As previously reported, investigators reported only two Grade 3 treatment-related AEs:

Grade 3 treatment-related AE of diarrhea, which occurred after two doses and resolved after five days without steroid use, and one Grade 3 treatment-related AE of dermatitis.

In addition, no Grade 4 or 5 treatment-related AEs were reported by investigators across all dosing levels and dosing intervals.

Preliminary Anti-Tumor Activity Data

At the RP2D of 150 mg Q6W, 12 patients were evaluable for anti-tumor activity as of the data cutoff date:

● As previously reported, a confirmed PR was observed in a patient with Stage 4 PD-L1 negative NSCLC, including complete resolution of liver metastases.

The confirmed PR continued through 36 weeks of treatment with XTX101, with the patient discontinuing treatment after week 36 due to an unrelated AE.

● Additional data reported demonstrated a disease control rate, or DCR, of 33% in late-line and I-O refractory patients administered XTX101 monotherapy at the RP2D of 150 mg Q6W, consisting of the confirmed PR in the NSCLC patient and stable disease in three patients (triple-negative breast cancer, melanoma and MSS CRC (n=1 each)).

Preliminary Pharmacokinetic Data

As previously reported, consistent with the tumor-selective design for XTX101, preliminary pharmacokinetic analyses demonstrated 96% activation of XTX101 in a melanoma tumor and 73% activation in a metastatic liver lesion in a CRC patient, compared to minimal peripheral activation of XTX101 of 13% in both patients.

Cytokine Programs

The major focus in our cytokine programs is the development of tumor-activated cytokines with exemplary clinical activity and tolerability.

These cytokine programs include our clinical-stage, tumor-activated product candidates, XTX301 (IL-12) and XTX202 (IL-2), as well as discovery-stage programs for oncology.

XTX301, Our Clinical-Stage, Tumor-Activated IL-12 Product Candidate

In March 2024, our wholly-owned subsidiary Xilio Development entered into an exclusive license agreement with Gilead pursuant to which it granted Gilead an exclusive global license to develop and commercialize XTX301 and specified other molecules directed at IL-12.

For more information, please see “—License and Collaboration Agreements—Exclusive License Agreement with Gilead” below.

As of the data cutoff date, 40 patients were evaluable for safety.

Across all patients treated:

● Investigators reported only six patients with Grade 3 or 4 treatment-related adverse events, or AEs, including only two Grade 4 treatment-related AEs (laboratory abnormalities of thrombocytopenia and neutropenia, one patient each), and no Grade 5 treatment-related AEs.

● No patients experienced a dose reduction for vilastobart due to an AE, and only three patients discontinued treatment for the combination of vilastobart and atezolizumab due to a treatment-related AE.

● Investigators reported minimal endocrine immune-related adverse events, or irAEs (5%) and limited skin irAEs (13%), and the incidence of endocrine and skin irAEs was consistent with the incidence reported for atezolizumab alone.

● The most common treatment-related AEs (≥10% incidence) of any grade reported by investigators were the following:

fatigue (30%);

diarrhea (20%);

infusion-related reactions (13%, with 8% deemed related to vilastobart and 5% deemed related to atezolizumab);

pyrexia (10%);

aspartate aminotransferase, or AST, increase (10%);

and alanine aminotransferase, or ALT, increase (10%).

● The only Grade 3 treatment-related AE with ≥5% incidence reported by investigators was colitis (5%).

Non-laboratory Grade 3 treatment-related AEs (<5% incidence) consisted of the following:

maculopapular rash and febrile neutropenia in one patient;

lower gastrointestinal hemorrhage in one patient with thrombocytopenia;

and one patient with Triple M overlap syndrome (myocarditis, myositis and myasthenia gravis).

Our Clinical-Stage, Tumor-Activated IL-12

XTX301 is an investigational tumor-activated, extended half-life IL-12 designed to potently stimulate anti-tumor immunity and reprogram the tumor microenvironment of poorly immunogenic “cold” tumors towards an inflamed or “hot” state.

In the activated, or unmasked, state, XTX301 is designed to be an optimized short half-life IL-12 where the half-life extension domain is not retained.

Preclinical data support the potential for XTX301 to achieve a broad therapeutic index, including ex vivo studies showing efficient activation by human tumors and in vivo studies showing robust anti-tumor activity and tumor-selective PD.

In January 2024, we reported preliminary safety data into the third dose level in the Phase 1 dose escalation and anticipate reporting safety, PK and PD data for XTX301 in the fourth quarter of 2024.

In December 2024, we reported preliminary data from our ongoing Phase 1 clinical trial for XTX301.

A maximum tolerated dose has not yet been established, and we are continuing to enroll patients in Phase 1A monotherapy dose escalation and Phase 1B monotherapy dose expansion.

In March 2024, we entered into an exclusive license agreement with Gilead related to XTX301 and our IL-12 program.

For more information, please see “—License and Collaboration Agreements—Exclusive License Agreement with Gilead” below.

Tumor-Activated Design Components of XTX301

Background on IL-12

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Tumor-selective activation is therefore a desirable therapeutic profile.

Our Solution:

XTX301, a Tumor-Activated IL-12

Our goal for our IL-12 program is to create a tumor-activated, extended half-life IL-12 therapeutic with minimal peripheral effects.

We are using our platform technology and proprietary approach to achieve systemic delivery of tumor-activated IL-12, which we believe would have potential as a monotherapy and in combination with other therapies.

The design of our masked IL-12 cytokine molecule is closely related to that of our masked IL-2 cytokine molecule, described below, which illustrates the flexibility and robustness of our cytokine engineering approach.

The masking domain is designed to prevent binding to the cell-surface IL-12 receptor, unless the linker containing the protease site is cleaved by proteases preferentially active in the tumor microenvironment.

The half-life extension domain is designed to overcome the short circulating half-life of the native cytokine and the overall molecule is designed to enhance the efficiency of manufacturing.

Tumor-Activated Design Components of XTX301

We have undertaken extensive preclinical studies that demonstrated the ability of XTX301 to induce potent anti-tumor activity and PD changes consistent with known IL-12 biology.

Importantly, these effects on the tumor were observed without inducing concomitant systemic toxicity, which provides evidence that the masking design was performing as intended in preclinical studies.

Preliminary Phase 1 Dose Escalation Safety Data Reported in January 2024

In January 2024, we reported preliminary safety data into the third dose level in the Phase 1 clinical trial.

As of a data cutoff date of January 5, 2024, nine patients had been treated with XTX301 in the outpatient setting in Phase 1 dose escalation at three dose levels ranging from 5 ug/kg to 45 ug/kg administered once every three weeks.

XTX301 was generally well-tolerated across all dose levels with no dose-limiting toxicities observed in patients as of the data cutoff date.

We anticipate reporting safety, PK and PD data for XTX301 in the fourth quarter of 2024.

XTX202, Our Clinical-Stage, Tumor-Activated IL-2 Product Candidate

XTX202 is an investigational tumor-activated, beta-gamma biased IL-2 designed to potently stimulate CD8+ effector T cells and NK cells without concomitant stimulation of TREGs when activated (unmasked) in the tumor microenvironment.

In March 2024, we announced updated data from our Phase 2 clinal trial evaluating XTX202 as a monotherapy in patients with unresectable or metastatic melanoma and metastatic RCC who have progressed on standard-of-care treatment.

Together with previously reported data, we believe these additional data further validate our tumor-activated approach and support the broad potential for XTX202 as a combination therapy.

Background on IL-2

Extensive clinical evidence of the promise and limitations of cytokines

As shown in the figure below, high-dose IL-2 has resulted in long-term survival in a subset of patients who had achieved a CR.

We believe that patients who develop a CR when treated with high-dose IL-2 are highly likely to achieve a long-term durable response or cure.

Survival of Patients Who Achieved a CR with High-Dose IL-2

Historical use of IL-2 in cancer has been accompanied by severe toxicity

The power of IL-2 is promising, but it has been greatly reduced due to toxicities.

When administered locally, IL-2 has been shown to be clinically active and well-tolerated, shrinking local cancerous lesions and reducing malignant effusions.

However, when administered systemically, treatment with IL-2 has been shown to induce severe toxicities, including vascular leak syndrome, or VLS, myocardial infarction, or heart attack, acute renal failure and immune-mediated neuropathy.

This toxicity profile greatly limits its current use.

In order to localize IL-2, many groups have tried linking IL-2 to tumor-targeting mAbs, creating fusion proteins.

These fusion proteins can accumulate in a tumor and create locally high IL-2 concentrations.

However, the use of cytokine fusion proteins has not prevented systemic toxicity because the long circulating half-life of antibody fusions and unexpected cleavage of IL-2 from the antibody domain has contributed to high systemic IL-2 levels in some cases.

The toxicities associated with early IL-2 therapies, such as aldesleukin, are hypothesized to be associated in part with binding and signaling through the high affinity αβγ IL-2receptor on immune cells or vascular endothelial cells.

In addition, the αβγ IL-2receptor is expressed at high levels on regulatory T cells, or TREGs, which act to inhibit the immune response, whereas the intermediate affinity βγ IL-2 receptor is expressed on cells that promote immune response including CD8+ effector T cells and NK cells.

Modeling of IL-2 activity in preclinical animal tumor models and evaluation of dosage and dose-frequency data from patients has suggested that IL-2 has a steep dose-activity curve, with reduced exposure impacting both efficacy and toxicity.

IL-2 anti-tumor activity and toxicity are both dependent on the amount of IL-2 administered.

Therefore, in order to provide the greatest benefit to patients, the goal is to engineer a form of IL-2 that can minimize systemic effects while harnessing and directing activity to the tumor microenvironment.

Rationale for non-alpha IL-2

The application of cytokines to treat cancer fits with the role these signaling molecules have evolved to play in the body.

Many key cytokines, including IL-2, regulate the immune system, and it is now recognized that there are immune stimulatory cytokines, immune suppressive cytokines and cytokines that have multiple activities on different target cell types.

IL-2 is a master regulator of immune responses and has been investigated extensively as a potential anti-cancer immunotherapy.

IL-2 supports the function, survival and proliferation of T cells, including the subset of T cells known as CD8+ effector T cells that are most closely linked to anti-tumor immunity.

The activities of IL-2 are driven by two classes of receptor complexes, which are present on different T cell subsets.

The high-affinity αβγ receptor present primarily on TREGs, and the intermediate-affinity βγ receptor present primarily on CD8+ effector T cells and NK cells.

In contrast to wild-type IL-2, XTX202 does not bind the α-subunit of the IL-2 receptor and therefore does not induce the preferential activity on TREGs that limits the immune activating effect of wild type IL-2.

XTX202 is designed to potently stimulate CD8+ effector T cells and NK cells that express the βγ receptor.

Our Solution:

XTX202, a Tumor-Activated IL-2

The critical challenge in the development of IL-2 therapies is to improve patient tolerability without reducing efficacy.

Deploying the key structural components of our platform technology, we have designed XTX202 with three key features designed to overcome this:

(1) avoidance of binding to CD25, the IL-2α receptor subunit, in order to reduce the activation of Treg cells that inhibit immune response, while maintaining effective activation of CD8+ and NK cells that promote an anti-tumor immune response;

(2) overcoming the short circulating half-life of the native cytokine using the half-life extension domain;

and (3) a removable protease-cleavable protein mask that prevents XTX202 from binding and signaling until the mask is removed by the MMPs that are preferentially active within the tumor microenvironment.

Preliminary Phase 1 Data Reported in December 2024

In December 2024, we reported preliminary data from our ongoing Phase 1 trial for XTX301.

As of the data cutoff date of November 25, 2024, 34 patients with advanced solid tumors had been treated with XTX301 at doses ranging from 5 µg/kg to 60 µg/kg administered Q3W or Q6W.

Patients were generally heavily pre-treated, and approximately 68% of patients received three or more prior lines of anti-cancer therapy.

Preliminary results as of the data cutoff date showed:

● Sustained interferon gamma (IFNɣ) signaling without evidence of tachyphylaxis throughout treatment cycles.

Tachyphylaxis has historically limited other IL-12 agents.

● Evidence of dose-dependent pharmacology with T cell, natural killer, or NK, cell and NKT cell proliferation.

● Consistent with the tumor-activated design of XTX301, no measurable activated XTX301 was detected in peripheral circulation across all dose levels and schedules.

● Across all dose levels and schedules, no Grade 4 or Grade 5 treatment-related AEs were reported by investigators and no patients experienced a dose limiting toxicity or a dose reduction due to a treatment-related AE.

● In addition, across all dose levels and schedules, the majority of treatment-related AEs were Grade 1 or 2 and most commonly consisted of flu-like symptoms, cytokine release syndrome, increased AST and ALT and decreased blood cell counts.

Our Development-Stage, Masked PD-1/IL-2 Bispecific

We are leveraging our proprietary tumor-activation platform to advance XTX501, a novel masked PD-1/IL-2 bispecific designed to selectively stimulate PD-1 positive, antigen-experienced T cells and enhance their function.

XTX501 incorporates masking designed to overcome IL-2 receptor-mediated clearance and peripheral activity.

In preclinical studies, XTX501 demonstrated robust monotherapy activity (including settings insensitive to PD-1) and tumor-selective pharmacodynamics consistent with its intended mechanism of action.

We are currently advancing XTX501 in IND-enabling studies, and subject to obtaining sufficient additional capital, we plan to submit an IND for XTX501 in the middle of 2026.

Tumor-Activated Design Components of XTX501

These key features are intended to ensure that XTX202 is released and activated preferentially within the tumor microenvironment, where it has been designed to bind to lymphocytes.

In the tumor microenvironment, XTX202 is designed to be unmasked and to bind to the IL-2 βγ receptors that are abundantly expressed on CD8+ effector T cells and NK cells, activating these cells.

Locally activated T cells and NK cells have potent anti-tumor cytotoxic activity.

The unmasked XTX202 is then rapidly internalized by these lymphocytes, shortening the systemic half-life of the active (unmasked) molecule and localizing its activity to the tumor.

Initial Phase 1/2 Monotherapy Data Presented at Society for Immunotherapy of Cancer (SITC) 38 th Annual Meeting in November 2023

In November 2023, we reported initial Phase 1/2 monotherapy data for XTX202 at the SITC Annual Meeting.

As of a data cutoff date of October 26, 2023, 62 patients with advanced solid tumors had been administered XTX202 in an outpatient setting.

Fifty-four patients were treated in Phase 1 monotherapy dose-escalation and dose-expansion at seven dose levels ranging from 0.27 mg/kg to 4 mg/kg administered on a Q3W dosing schedule.

Eight patients were treated in Phase 2 monotherapy at a dose level of 1.4 mg/kg Q3W.

Patients enrolled in Phase 1 were heavily pre-treated, with 74% of patients previously treated with three or more lines of anti-cancer therapy and 69% of patients previously treated with an immunotherapy.

All patients in Phase 2 had been previously treated with an immunotherapy.

As of the data cutoff date, 20 patients were continuing treatment with XTX202 across the Phase 1/2 trial.

Preliminary Safety Data

Across all dose levels administered in the Phase 1/2 trial, 62 patients were evaluable for safety.

● No signs or symptoms of vascular leak syndrome were reported by investigators through the 4.0 mg/kg dose.

● XTX202 was generally well-tolerated.

Treatment-related adverse events, or TRAE, were primarily Grade 1 or 2, and no patients discontinued treatment due to a TRAE.

Higher grade TRAEs were primarily asymptomatic laboratory abnormalities, and no Grade 5 TRAEs were reported by investigators.

● The most common TRAEs (≥10% incidence) of any grade reported by investigators across all dose levels were:

fatigue (19%, no grade ≥3);

pyrexia (18%, no grade ≥3);

chills (16%, 2% grade 3);

and lymphocyte count decreased (15%, 8% grade 3-4).

Grade 3 TRAEs reported in one patient each (2%) were:

diarrhea/colitis;

and aspartate transferase, or AST/alanine transaminase, or ALT, increased.

Investigators reported two Grade 4 TRAEs of lymphocyte count decreased/lymphopenia, which were both transient (<3 days) and resolved without intervention, with both patients able to continue on treatment.

● Across all dose levels, only two patients (3%) had a dose reduction due to a TRAE, and only one dose-limiting toxicity was observed, which was a reversible and transient (<5 days) Grade 3 elevation of AST and ALT at the 1 mg/kg dose.

Preliminary Anti-Tumor Activity

Across all dose levels administered in the Phase 1/2 trial, 42 patients were evaluable for anti-tumor activity.

Of these response-evaluable patients, 27 patients were treated at dose levels of 1.4 mg/kg or higher, including six patients treated at the 2.8 mg/kg dose level or higher.

● Data demonstrated evidence of a dose-dependent increase in disease control rate, or DCR.

Among the 42 response-evaluable patients treated across all dose levels, investigators reported stable disease, or SD, of at least 9-weeks duration in 13 patients (31% DCR) across a range of solid tumors, including cold tumors:

melanoma (n=3);

and myoepithelial carcinoma, vaginal cancer, testicular cancer and squamous penile cancer (n=1 each).

Among the six response-evaluable patients treated at the 2.8 mg/kg dose level or higher, investigators reported SD of at least 9-weeks duration in three patients (50% DCR).

● In addition, two patients were ongoing on treatment for more than one year as of the data cutoff date, including a treatment-refractory MSS CRC patient and an RCC patient, suggesting XTX202 was well-tolerated with repeated, long-term dosing in these patients.

Preliminary PK and PD Data

Preliminary PK analysis demonstrated limited XTX202 activation in peripheral circulation, including:

● Dose-proportional exposure for XTX202 with minimal levels of unmasked XTX202 detected in peripheral circulation that were consistent across dose levels.

● Approximately 15% activated XTX202 in the tumor based on an analysis of an on-treatment patient biopsy for a patient treated with XTX202 at the 2.8 mg/kg dose level as compared to <1% activated XTX202 in plasma across patients treated with XTX202 at the 2.8 mg/kg dose level for whom PK analysis was available.

These data along with non-clinical pharmacology data suggest 2.8 mg/kg or higher monotherapy doses of XTX202 are approaching the optimal range to activate CD8+ effector T cells and NK cells in the tumor.

Consistent with IL-2 beta-gamma biology, preliminary PD analysis of four available on-treatment tumor samples showed an average increase >200% of CD8+ effector T cells in the tumor as compared to pre-treatment biopsies.

Additional Phase 2 Monotherapy Data Reported in March 2024

In March 2024, we announced additional data from our Phase 2 clinical trial evaluating XTX202 in patients with metastatic RCC or unresectable or metastatic melanoma.

As of a data cutoff date of March 6, 2024:

● A total of 17 RCC patients and 20 melanoma patients were administered XTX202 in the Phase 2 trial in an outpatient setting at dose levels of 1.4 mg/kg Q3W or 4 mg/kg Q3W.

● In 26 patients evaluable for anti-tumor activity in the Phase 2 trial, SD continued to be the best response.

Investigators reported SD of at least nine-weeks duration in seven RCC patients (70% disease control rate) and in nine melanoma patients (56% disease control rate).

In addition, XTX202 continued to be generally well-tolerated with safety data consistent with previously reported results.

We plan to present the full data set at a future medical meeting.

Together with previously reported data, we believe these additional data further validate our tumor-activated approach and support the broad potential for XTX202 as a combination therapy.

We plan to explore strategic opportunities to continue to develop XTX202 in combination with other agents.

As part of a strategic portfolio reprioritization announced in March 2024, we plan to discontinue further investment in XTX202 as a monotherapy.

Future Opportunities Leveraging Our Proprietary Platform for Tumor-Activated Bispecific Molecules and Immune Cell Engager Molecules (Including Tumor-Activated Cell Engagers and Tumor-Activated Effector-Enhanced Cell Engagers)

To date, we have prioritized efforts to develop XTX101 (anti-CTLA-4), XTX301 (IL-12) and XTX202 (IL-2) based on the therapeutic activity established in other clinical trials, while recognizing that the benefits of anti-CTLA-4, IL-12 and IL2 have been historically hampered by issues of significant toxicity, poor bioavailability and, in the case of cytokines like IL-12 and IL-2, a short half-life.

By leveraging the insights and capabilities of our proprietary platform and building on our unique expertise in masking antibodies as well as cytokines, we are focusing our differentiated research platform on developing tumor-activated bispecific molecules and immune cell engager molecules (including tumor-activated cell engagers and tumor-activated effector-enhanced cell engagers).

Subject to obtaining sufficient additional capital, we plan to advance XTX501, our tumor-activated PD-1/IL-2 bispecific development candidate, into IND-enabling studies.

Our Development-Stage Masked T Cell Engager Programs

T cell engagers are designed to redirect immune effector cells against cancer cells by simultaneously binding to a specific tumor-associated antigen expressed on the cancer cells and the T cell receptor complex on T cells, resulting in T cell-mediated killing of tumor cells.

To date, T cell engagers have demonstrated significant promise as cancer immunotherapies in a variety of advanced solid tumors, but their potential has been limited by toxicity.

We are currently advancing preclinical development for multiple wholly-owned, novel masked T cell engager molecules.

These molecules are designed with conditional half-life modulation to enable potent, localized T cell activation and tumor cell destruction together with an improved therapeutic index.

The SEECR format adds co-stimulatory signaling designed to further enhance potency and T cell activation.

Tumor-Activated Design Components of Masked T Cell Engagers

We are currently advancing three wholly-owned preclinical programs for masked T cell engager molecules targeting the following tumor-associated antigens:

● PSMA has demonstrated potential as a T cell engager target for prostate cancer.

● CLDN18.2 has broad potential as a T cell engager target for gastric, pancreatic, esophageal and lung cancers.

● STEAP1 has broad potential as a T cell engager target for prostate, colorectal and lung cancers.

In addition, in February 2025, we entered into a collaboration, license and option agreement with AbbVie Group Holdings Limited, or AbbVie, leveraging our proprietary tumor-activation technology and platform to discover and develop novel tumor-activated immunotherapies, including up to three programs for masked T cell engagers and a program for a masked antibody-based immunotherapy.

For more information, please see “—License and Collaboration Agreements—Collaboration, License and Option Agreement with AbbVie” below.

We believe our novel and proprietary platform technology and masking approach represent a meaningful competitive advantage in seeking to develop novel and highly effective treatments for cancer.

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Merger and acquisition activity in the biotechnology and biopharmaceutical industries may result in resources being concentrated among a smaller number of our competitors.

These companies also compete with

us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials and acquiring technologies complementary to, or necessary for, our programs.

These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials and acquiring technologies complementary to, or necessary for, our programs.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

In addition to competitors specifically targeting anti-CTLA-4, IL-12 and IL-2, we also face competition more broadly across the oncology market.

In addition to competitors specifically targeting anti-CTLA-4, IL-12, PD-1/IL-2 and our current T cell engager targets, we also face competition more broadly across the oncology market.

The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy, biologic therapy, such as monoclonal and bispecific antibodies, immunotherapy, cell-based therapy and targeted therapy, or a combination of any such treatments.

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Our commercial opportunity could be substantially limited if our competitors develop and commercialize products that are more effective, safer, less toxic, more convenient, or less expensive than products we may develop.

In geographies that are critical to our commercial success, competitors may also obtain regulatory approvals before us, resulting in our competitors building a strong market position in advance of the entry of our products.

In geographies that

are critical to our commercial success, competitors may also obtain regulatory approvals before us, resulting in our competitors building a strong market position in advance of the entry of our products.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payers seeking to encourage the use of other drugs.

The key competitive factors affecting the success of any products we may develop are likely to be their efficacy, safety, convenience, price and availability of reimbursement.

Tumor-Activated Anti-CTLA-4 Program

We are aware of a number of companies that are developing anti-CTLA-4 therapies as immunotherapies.

With respect to XTX101, if approved, we may face competition from other anti-CTLA-4 based therapies.

For example, Yervoy (ipilimumab), an anti-CTLA-4, is approved to treat melanoma, RCC, NSCLC and certain cancers of the large intestine, and Imjudo (tremelimumab) is approved as a combination therapy to treat unresectable hepatocellular carcinoma.

Anti-CTLA-4 Program

Vilastobart, if approved, may face competition from other anti-CTLA-4 based therapies.

For example, Yervoy (ipilimumab), an anti-CTLA-4, is approved to treat melanoma, renal cell carcinoma and certain cancers of the large intestine, and Imjudo (tremelimumab) is approved as a combination therapy to treat unresectable hepatocellular carcinoma.

In addition, we are aware that several companies have anti-CTLA-4 programs in development, including Adagene, Inc., Agenus Inc., AstraZeneca plc, BioAtla, Inc., CytomX Therapeutics, Inc., MacroGenics, Inc.

and OncoC4, Inc.

Tumor Activated Cytokine Programs

With respect to XTX301, there are no approved IL-12 therapies currently on the market for the treatment of cancer;

however, we are aware of several other companies that have modified IL-12 or intra-tumoral IL-12 delivery programs for the treatment of cancer in development, including Amunix Pharmaceuticals, Inc., AstraZeneca plc / Moderna, Inc., Cullinan Management Inc., Dragonfly Therapeutics, Inc., ImmunityBio, Inc., PDS Biotechnology Corporation, Philogen S.p.A., Sonnet BioTherapeutics, Werewolf Therapeutics, Inc., Xencor Inc.

IL-12 Program

With respect to XTX301, currently there are no IL-12 therapies approved for the treatment of cancer.

However, we are aware of several other companies that have modified IL-12 delivery programs in development, including Cullinan Management Inc., Dragonfly Therapeutics, Inc., ImmunityBio, Inc., PDS Biotechnology Corporation, Philogen S.p.A., Sonnet BioTherapeutics, Werewolf Therapeutics, Inc., Xencor Inc.

and Zymeworks Inc.

With respect to XTX202, if approved, it may face competition from other IL-2 based cancer therapies.

For example, Proleukin (aldesleukin), a human recombinant interleukin-2 product, is approved and marketed for the treatment of metastatic RCC and melanoma.

In addition, we are aware that a number of other companies have modified or low-dose IL-2 programs in development for the treatment of cancer, including Alkermes plc, Anaveon AG, Ascendis Pharma A/S, Asher Biotherapeutics, Inc., Aulos Bioscience, Inc., Bright Peak Therapeutics, Cue Biopharma, Inc., Cugene Inc., Cullinan Management Inc., Egle Therapeutics SAS, GI Innovation, Iovance Biotherapeutics, Inc., Kymab Ltd., Medicenna Therapeutics Corp., Medikine, Inc., Modulate Therapeutics, Inc., Neoleukin Therapeutics, Inc., Philogen S.p.A., Proviva Therapeutics, Inc., Roche AG, Sanofi, Selecxine, Synthekine, Inc., Trutino Biosciences Inc., Werewolf Therapeutics, Inc., XOMA Corporation and Zydus Cadila.

PD-1/IL-2 Program

With respect to our most advanced research-stage product candidate, XTX501, currently, there are no bispecific PD-1 targeted IL-2 therapies approved for the treatment of cancer.

However, if we continue to advance development of XTX501, we are aware of several other companies that have modified PD-1 targeted IL-2 bispecific antibodies in development, including Anaveon AG, Innovent Biologics, Inc., Regeneron Pharmaceuticals, Inc.

T Cell Engager Programs

With respect to our masked T cell engager programs, currently there are no T cell engager therapies targeting PSMA, CLDN18.2 or STEAP1 approved for the treatment of cancer.

We are aware of several other companies that have masked T cell engager programs in development for PSMA, including Janux Therapeutics, Inc.

and Vir Biotechnology, Inc.

To our knowledge, there are no companies currently developing masked T cell engager programs for CLDN18.2 or STEAP1.

However, we are aware of several companies developing non-masked T cell engager programs for CLDN18.2, including Amgen Inc., Innovent Biologics, Inc., Transcenta Holding Ltd.

and Zai Lab Limited, and for STEAP1, including Amgen Inc., Nutcracker Therapeutics and Xencor Inc.

Intellectual Property

We strive to protect our proprietary technology, inventions, improvements, and platforms, including composition of matter for product candidates, methods of use and processes for their manufacture that we believe are important to our business, including by obtaining, maintaining, defending and enforcing patent and other intellectual property rights for the foregoing in the United States and in certain foreign jurisdictions.

We also rely on trade secrets and confidentiality agreements to

protect our confidential information and know-how and other aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

We also rely on trade secrets and confidentiality agreements to protect our confidential information and know-how and other aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Our success depends in part on our ability to:

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Patent portfolio

As of March 31, 2024, we own, co-own or exclusively license 18 patent application families related to our business, including four pending Patent Cooperation Treaty, or PCT, patent applications, 14 pending U.S.

non-provisional applications, seven issued U.S.

patents, 19 issued patents in Armenia, Azerbaijan, Belarus, China, India, Indonesia, Japan, Kazakhstan, Kyrgyzstan, Malaysia, Mexico, South Korea, Russia, Saudi Arabia, Taiwan, Tajikistan, and Turkmenistan and 169 pending foreign applications in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, the Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

In addition, we own four U.S.

As of February 28, 2025, we own, co-own or exclusively license 18 patent application families related to our business, including three pending Patent Cooperation Treaty, or PCT, patent applications, 16 pending U.S.

non-provisional applications, eight issued U.S.

patents, 25 issued patents in Armenia, Azerbaijan, Belarus, China, India, Indonesia, Israel, Japan, Kazakhstan, Kyrgyzstan, Malaysia, Mexico, Philippines, South Korea, Russia, Saudi Arabia, Taiwan, Tajikistan, and Turkmenistan and 174 pending foreign applications in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, the Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

In addition, we own two U.S.

provisional patent applications within the priority year.

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By masking biological agents such as cytokines, antibodies and multi-functional molecules, our platform technology can be used to decouple therapeutic effects from toxicity for treating different cancers.

As of March 31, 2024, we own four patent families covering the platform in the cytokine space:

As of February 28, 2025, we own four patent families covering the platform in the cytokine space:

a first patent family, including one pending U.S.

patent application and corresponding foreign applications in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, India, South Korea, Mexico, Malaysia, New Zealand, the Philippines, Saudi Arabia, Singapore and South Africa;

and three additional patent families covering our multi-functional, including bispecific, platform technology in the cytokine space, include two pending U.S.

and Taiwan applications, two pending PCT applications, and one provisional application within the priority year.

patent application and corresponding foreign applications in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, Japan, India, South Korea, Mexico, Malaysia, New Zealand, the Philippines, Saudi Arabia, Singapore and South Africa;

and three additional patent families covering our multi-functional, including bispecific, platform technology in the cytokine space, including three pending U.S.

patent applications, two pending PCT applications, and 25 pending foreign applications in Australia, Brazil, Canada, China, Europe, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Singapore, South Africa, and Taiwan.

We own two patent families covering our immune cell engagers platform technology, each of which are at provisional stage within the priority year.

We exclusively license two patent families relating to the platform technology and our cytokine and antibody programs.

One of the two patent families is exclusively in-licensed in the oncology field from AskGene Pharma, Inc., or AskGene, and covers certain aspects of the platform technology for cytokines.

These owned and exclusively licensed patent families will have a statutory expiration date ranging between 2038 and 2045, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.

In addition, we own two patent families covering various linker designs that are used or can be used in our technology, including one pending PCT application, and pending patent applications in the United States, Canada, Europe, Japan, South Korea and Taiwan.

Cytokine Programs

Our cytokine pipeline includes our clinical-stage, tumor-activated product candidates, XTX202 (IL-2) and XTX301 (IL-12), and our preclinical bispecific product candidate XTX501 (PD-1/IL-2).

● IL-12 Program.

As of March 31, 2024, we own two patent families directed to different masked IL-12 constructs and sequences, including XTX301, with composition of matter and methods of use claims.

These patent families include one issued U.S.

patent, one pending U.S.

application, and corresponding foreign applications in Australia, Brazil, Canada, China, Eurasia, Europe, Indonesia, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

These patent families will have a statutory expiration date in 2039 and 2041, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.

● IL-2 Program.

As of March 31, 2024, we own two patent families relating to masked IL-2 cytokines, including XTX202, and seven families related to multi-functional, including bispecific, IL-2 cytokines, including XTX501, with composition of matter and methods of use claims.

The masked IL-2 cytokine patent families include one pending U.S.

application, five issued U.S.

patents, one issued patent in India and corresponding foreign applications pending in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

The multi-functional/bispecific IL-2 cytokine patent families include three pending PCT applications and four provisional applications within the priority year.

The patent family exclusively in-licensed in the oncology field from AskGene also relates to the IL-2 program.

These owned and exclusively in-licensed patent families will have a statutory expiration date ranging between 2039 and 2045, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.

Antibody Program

As of March 31, 2024, we own, co-own or exclusively in-license three patent families relating to masked anti-CTLA-4 antibody constructs and sequences, including XTX101, with composition of matter and methods of use claims.

In addition, we own two patent families covering various linker designs that are used or can be used in our technology, including three pending U.S.

applications, and nine foreign applications in Canada, Europe, Hong Kong, Japan, South Korea, Singapore and Taiwan.

Vilastobart (tumor-activated anti-CTLA-4)

As of February 28, 2025, we own, co-own or exclusively in-license three patent families relating to masked anti-CTLA-4 antibody constructs and sequences, including XTX101, with composition of matter and methods of use claims.

A first patent family is exclusively in-licensed from WuXi Biologics (Shanghai) Co., Ltd.

and directed to anti-CTLA-4 antibodies.

This family includes two issued U.S.

patents covering certain complementarity-determining regions and variable region sequences of anti-CTLA-4 antibodies, including XTX101.

Corresponding foreign applications are issued in Armenia, Azerbaijan, Belarus, China, Indonesia, Japan, Kazakhstan, Kyrgyzstan, Malaysia, Mexico, Russia, South Korea, Saudi Arabia, Taiwan, Tajikistan, and Turkmenistan and pending in Australia, Brazil, Canada, China, European Patent Office, Hong Kong, India, Indonesia, Israel, Japan, South Korea, Mexico, New Zealand, Philippines, Singapore, South Africa and Taiwan.

This family includes three issued U.S.

patents and one pending U.S.

application covering certain complementarity-determining regions and variable region sequences of anti-CTLA-4 antibodies, including XTX101.

foreign applications are issued in Armenia, Azerbaijan, Belarus, China, Indonesia, Israel, Japan, Kazakhstan, Kyrgyzstan, Malaysia, Mexico, Philippines, Russia, South Korea, Saudi Arabia, Taiwan, Tajikistan, and Turkmenistan.

17 foreign applications are pending in Australia, Brazil, Canada, China, European Patent Office, Hong Kong, India, Israel, Japan, South Korea, Mexico, New Zealand, Singapore, South Africa and Taiwan.

A second patent family is owned and directed to anti-CTLA-4 antibodies with modifications that improve antibody-dependent cellular cytotoxicity and includes one pending U.S.

Corresponding foreign applications are pending in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, India, Indonesia, Israel, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, and South Africa.

22 foreign applications are pending in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, India, Indonesia, Israel, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, and South Africa.

A third patent family is co-owned and directed to masked anti-CTLA-4 antibodies, which includes one pending U.S.

Corresponding foreign applications are pending in Australia, Brazil, Canada, Eurasia, Europe, Hong Kong, India, Indonesia, Israel, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

In addition, we own two patent applications directed to combination therapies using masked or unmasked anti-CTLA-4 antibodies, including XTX101 and PD-1/PD-L1 antibodies.

These families include two pending U.S.

applications.

Corresponding foreign applications are pending in Australia, Canada, Eurasia, Europe, Japan, South Africa and Taiwan.

24 foreign applications are pending in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, India, Indonesia, Israel, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

These owned, co-owned and licensed patent families will have a statutory expiration date ranging between 2037 and 2039, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.

XTX301 (tumor-activated IL-12)

As of February 28, 2025, we own three patent families directed to different masked IL-12 constructs and sequences, including XTX301, with composition of matter and methods of use claims.

These patent families include one issued U.S.

patent, four pending U.S.

applications of which one is allowed, and 49 foreign applications in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Indonesia, Israel, India, Japan, South Korea, Mexico, Malaysia, New Zealand, Philippines, Saudi Arabia, Singapore, South Africa and Taiwan.

XTX501 (masked PD-1/IL-2 bispecific)

As of February 28, 2025, we own three families relating to XTX501, a masked, bispecific PD-1/IL-2 cytokine, covering the construct design, key elements and full-length sequences with composition of matter and methods of use claims.

These patent families include three pending U.S.

applications, two pending PCT applications, and 10 foreign applications in Australia, Canada, China, Europe, Japan, South Korea, Mexico, and Taiwan.

These owned patent families will have a statutory expiration date ranging between 2043 and 2045, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.

Masked T Cell Engager Programs

As of February 28, 2025, we own two patent families covering our masked T cell engager programs and platform technology, including one patent family covering various bispecific molecules designed using our ATACR format and the second patent family covering various tri-specific molecules using our SEECR format.

These two patent families are at the provisional application stage within the priority year.

These patent families will have statutory expiration dates in 2045, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, and annuity and other governmental fees.

Trademark portfolio

As of March 15, 2024, we own two federal trademark registrations for XILIO and XILIO THERAPEUTICS (Class 42) in the United States and a pending federal trademark application for XILIO (Class 5) in the United States that has been approved and published for opposition.

As of February 28, 2025, we own two federal trademark registrations for XILIO and XILIO THERAPEUTICS (Class 42) in the United States and a pending federal trademark application for XILIO (Class 5) in the United States that has been approved and published for opposition.

Patent prosecution

A PCT patent application is not eligible to become an issued patent until, among other things, we file one or more national stage patent applications within 30 months, 31 months or 32 months of the PCT application’s priority date, depending on the jurisdiction, in the countries in which we seek patent protection.

the jurisdiction, in the countries in which we seek patent protection.

If we do not timely file any national stage patent applications, we may lose our priority date with respect to our PCT patent application and any potential patent protection on the inventions disclosed in such PCT patent application.

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Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date in the United States.

Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent for which extension is sought.

Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent for which extension

A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals.

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License and Collaboration Agreements

Collaboration, License and Option Agreement with AbbVie

In February 2025, our wholly owned subsidiary, Xilio Development, Inc., or Xilio Development, entered into a collaboration, license and option agreement with AbbVie for up to four programs leveraging our proprietary tumor-activation technology and platform, consisting of (i) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target, or the initial option program, and (b) subject to the terms of the agreement, up to two additional programs to discover, develop, and commercialize masked T cell engager molecules for an initial target and backup target determined at the time of program initiation, each of which we refer to as an additional option program, and (ii) an exclusive license for a program to develop and commercialize a masked antibody-based immunotherapy, which we refer to as the collaboration program.

Under the agreement, Xilio Development granted AbbVie an option to obtain an exclusive global license to exploit products discovered and developed under the initial option program.

During the three-year period following the effective date of the agreement, AbbVie has the right to initiate up to two additional option programs by (a) selecting an initial target and backup target for each such additional option program (excluding the target known as PSMA and any other target for which Xilio Development has completed specified activities prior to lead selection) and (b) paying Xilio Development an additional program nomination fee for each additional option program.

In addition, on an option program-by-option program basis, prior to the initiation of specified activities related to lead optimization and selection for the initial target for such option program, AbbVie has a one-time right to substitute the initial target with the backup target agreed upon by

the parties at the time of option program initiation, subject to the payment by AbbVie of a one-time substitution fee with respect to such substituted target and the other terms of the agreement.

For the initial option program, AbbVie’s option right is exercisable beginning on the effective date of the agreement, and for each additional option program, AbbVie’s option right is exercisable following delivery of written notice of nomination of such additional option program.

For each option program, prior to option exercise, Xilio Development will be responsible for conducting preclinical discovery and development up to the completion of IND enabling studies, subject to AbbVie paying Xilio Development option extension fees upon completion of specified stages of preclinical discovery and development.

Unless AbbVie elects to extend preclinical development through the next stage and pays the applicable option extension fee, AbbVie’s option right terminates within a specified time period following completion of each stage of preclinical development.

Upon exercising its option for an option program, AbbVie will be responsible for any remaining preclinical development, if applicable, and all clinical development, regulatory and commercialization activities with respect to licensed products under the applicable option program.

In connection with the collaboration program, Xilio Development granted AbbVie an exclusive global license to exploit products discovered and developed under the collaboration program.

Xilio Development is responsible for conducting all preclinical development through lead generation, and AbbVie is responsible for all further development and commercialization activities for any licensed products generated under the collaboration program.

Under the agreement, we received $52.0 million in total upfront payments, consisting of a cash payment of $42.0 million and an equity investment of $10.0 million in our common stock at a purchase price of $2.30 per share.

In addition, we will be eligible to receive up to approximately $2.1 billion in additional contingent payments, consisting of (i) up to $305.0 million in aggregate program nomination fees, preclinical development option extension fees and option fees for the option programs and (ii) up to $1.8 billion in aggregate development, regulatory and sales-based milestones for all option programs and the collaboration program.

In addition, we are eligible to receive tiered royalties ranging in the mid to high single digits on annual global net product sales.

Subject to the terms, conditions and specified exceptions set forth in the agreement, until the agreement is terminated or expires with respect to an option program or the collaboration program, Xilio Development has agreed to work exclusively with AbbVie with respect to the target for (i) each option program and (ii) the collaboration program.

In addition, Xilio Development has agreed to work exclusively with AbbVie with respect to the backup target for each option program until the expiration of the applicable target substitution period.

Unless earlier terminated in accordance with its terms, the agreement will expire upon expiration of the last royalty term for the last licensed product.

AbbVie may terminate the agreement for convenience upon specified time periods.

On an option program-by-option program basis, if AbbVie elects not to pay the applicable option extension fee following completion of each stage of preclinical development, or if AbbVie elects not to exercise its option right and pay the option exercise fee for the applicable option program, then the agreement will automatically terminate with respect to such option program.

Subject to the terms and specified exceptions set forth in the agreement, either party may terminate the agreement for the other party’s uncured material breach or insolvency.

In connection with the execution of the agreement, on February 10, 2025, we entered into a stock purchase agreement with AbbVie Inc.

pursuant to which we issued and sold 4,347,826 shares of common stock to AbbVie Inc.

in a private placement at a purchase price of $2.30 per share for an aggregate purchase price of $10.0 million.

The private placement closed on February 11, 2025.

The stock purchase agreement contains customary terms and conditions, including closing conditions, mutual representations, warranties and covenants for each of us and AbbVie Inc.

In addition, pursuant to the terms of an investor rights agreement entered into by and between us and AbbVie Inc.

in connection with the stock purchase agreement, AbbVie Inc.

agreed to certain transfer and standstill restrictions.

In addition, AbbVie Inc.

is entitled to certain registration rights with respect to the shares issued pursuant to the stock purchase agreement following termination of the transfer restrictions.

We and AbbVie Inc.

each granted the other party customary indemnification rights in connection with the registration of the shares issued pursuant to the stock purchase agreement.

Exclusive License Agreement with Gilead

In March 2024, Xilio Development entered into an exclusive license agreement with Gilead pursuant to which it granted Gilead an exclusive global license to develop and commercialize our clinical-stage product candidate XTX301, a tumor-activated IL-12, and specified other molecules directed to IL-12.

Xilio Development will be responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through an initial planned Phase 2 dose expansion.

Following the delivery by Xilio Development of a specified clinical data package for XTX301 related to the Phase 1 clinical trial and planned Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the agreement and payment by Gilead of a $75.0 million transition fee.

Under the license agreement, we are eligible to receive approximately $43.5 million in upfront payments, including a cash payment of $30.0 million and an initial equity investment by Gilead of approximately $13.5 million of our common stock at a purchase price of $1.97 per share.

The initial equity investment closed on March 28, 2024, and the $30.0 million upfront cash payment is payable by Gilead within a specified time period promptly following signing of the license agreement.

We are eligible to receive up to $604.0 million in additional contingent payments, which include (i) the proceeds from up to three additional private placements of common stock, (ii) the $75.0 million transition fee and (iii) specified development, regulatory and sales-based milestones.

Prior to the potential transition fee, up to $29.0 million of the total contingent payments are related to the potential additional private placements of common stock and a near-term development milestone.

Xilio Development is responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through a planned Phase 2 dose expansion clinical trial.

Following the delivery by Xilio Development of a specified clinical data package for XTX301 related to the Phase 1 clinical trial and a planned Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the license agreement and payment by Gilead of a $75.0 million transition fee.

In connection with the execution of the license agreement, in March 2024, we also entered into a stock purchase agreement with Gilead.

Under the stock purchase agreement, Gilead purchased an aggregate of $25.0 million of our common stock and prefunded warrants (in lieu of shares of common stock) in three private placements.

In March 2024, we initially issued and sold 6,860,223 shares of common stock to Gilead at a purchase price of $1.97 per share, and we received approximately $13.5 million in aggregate gross proceeds.

In April 2024, we issued and sold an additional 485,250 shares of common stock to Gilead at a purchase price of $0.76 per share and prefunded warrants to purchase up to an aggregate of 3,882,450 shares of common stock at a purchase price of $0.7599 per share underlying such prefunded warrants, and we received approximately $3.3 million in aggregate gross proceeds.

In December 2024, we issued and sold an additional 1,759,978 shares of common stock at a purchase price of $1.04 per share and prefunded warrants to purchase up to an aggregate of 6,092,816 shares of common stock at a purchase price of $1.0399 per share underlying such prefunded warrants, and we received approximately $8.2 million in aggregate gross proceeds.

The prefunded warrants issued and sold in April 2024 and December 2024 are exercisable at any time at an exercise price of $0.0001 per share, subject to Gilead not being deemed a beneficial owner of greater than 19.9% of our common stock upon the exercise of the prefunded warrants.

As of December 31, 2024, we have received $55.0 million in payments under the Gilead agreements, consisting of the $30.0 million upfront cash payment under the license agreement and $25.0 million in gross proceeds from private placements under the stock purchase agreement.

As of December 31, 2024, we were eligible to receive up to $592.5 million in additional contingent payments under the license agreement, which consist of (i) the $75.0 million transition fee and (ii) up to $517.5 million in development, regulatory and sales-based milestones.

Prior to the potential transition fee, $17.5 million of the total contingent payments is related to a near-term development milestone.

In addition, we are eligible to receive tiered royalties ranging from high single digits to mid-teens on annual global net product sales.

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During the term of the license agreement, Xilio Development and its affiliates have agreed not to directly or indirectly conduct specified development, manufacturing or commercialization activities with respect to any molecule that contains, comprises or incorporates IL-12, except for the performance of Xilio Development’s activities under and in accordance with the license agreement.

In connection with the execution of the license agreement, on March 27, 2024, we entered into a stock purchase agreement with Gilead.

In addition to the initial equity investment by Gilead of approximately $13.5 million of our common stock, through March 27, 2025, we may, at our election and subject to the terms and conditions of the stock purchase agreement, cause Gilead to purchase up to approximately $11.5 million of additional shares of common stock (including, at Gilead’s sole election, prefunded warrants in lieu of shares of common stock) in up to three additional private placements at a predetermined price per share specified therein, at all times subject to Gilead not being deemed the beneficial owner of greater than 19.9% of our common stock upon the closing of the applicable additional private placement with Gilead.

If Gilead elects to purchase prefunded warrants, each prefunded warrant will have an exercise price of $0.0001 per share of common stock, be immediately exercisable and remain exercisable until exercised in full.

Gilead may not exercise its prefunded warrants to the extent that it would beneficially own more than 19.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.

Any prefunded warrants that may be issued to Gilead in an additional private placement with Gilead will be in substantially the same form as the prefunded warrants issued to investors in the March 2024 private placement.

In-License Agreements

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We consider the following license agreements to be material to our business.

Cross-License Agreement with AskGene

In December 2020, Xilio Development entered into a cross-license agreement with AskGene Pharma, Inc., or AskGene, pursuant to which AskGene granted us certain exclusive licenses for AskGene patent rights related to non-antigen binding IL-2 products in the field of oncology and certain co-exclusive licenses for AskGene patent rights related to antigen binding IL-2 products in all fields.

Under the agreement, AskGene retains rights to the AskGene patent rights in Singapore, Thailand, Malaysia, Vietnam, the People’s Republic of China, Taiwan, Macau, Hong Kong, Korea and India, which we refer to as the AskGene territory, and granted licenses to us for the AskGene patent rights worldwide, excluding the AskGene territory, which we refer to as the Xilio territory.

Under the agreement, we paid AskGene an upfront payment of $6.0 million, and for any licensed IL-2 product, we are obligated to pay AskGene up to $13.0 million in the aggregate upon the achievement of specified regulatory milestones.

In addition, subject to specified conditions, for any IL-2 licensed product, we are obligated to pay AskGene percentage royalties in the mid-single digits on aggregate annual net sales of IL-2 licensed products in the Xilio territory during the applicable royalty term.

In addition, we granted a non-exclusive, royalty-free, non-transferable, worldwide license to AskGene for specified Xilio patent rights related to non-antigen binding IL-2 products in the field of immunology and for specified Xilio patent rights related to antigen binding IL-2 products in all fields.

Subject to the terms of the agreement and during the time period specified, we also granted AskGene an option to obtain a license in the AskGene territory to develop and commercialize our IL-2 licensed products.

If AskGene exercises its option to develop and commercialize our IL-2 licensed products in the AskGene territory, then the parties will negotiate and enter into a license agreement for AskGene’s exclusive development and commercialization of such products in the AskGene territory, and AskGene would be obligated to pay us percentage royalties in the mid-single digits on aggregate annual net sales of such licensed products in the AskGene territory.

During the term of the agreement, AskGene has agreed not to exploit any non-antigen binding IL-2 product comprised of specified masking technology in the field of oncology in the Xilio territory.

Subject to the terms of the agreement, each party’s obligation to make royalty payments is subject to adjustment in specified circumstances and extends with respect to a licensed product in a country upon the first commercial sale of such licensed product in such country and ending upon the latest of (i) the expiration of the last valid claim of any licensed patent rights in such country that cover such licensed product, (ii) the expiration of regulatory exclusivity, if any, for such licensed product in such country, and (iii) for a specified time period following first commercial sale of such licensed product in such country.

The agreement continues on a product-by-product and country-by-country basis until the expiration of the applicable royalty term in each country, at which time the agreement expires with respect to such product in such country, and the licensed party receives a perpetual, irrevocable, fully-paid and royalty-free license to the licensed patent rights in such country.

Either party has the right to terminate the agreement if the other party materially breaches the agreement and fails to cure such breach within specified cure periods or in the event the other party becomes insolvent or files for bankruptcy.

Upon any termination, other than the expiration of the agreement with respect to a particular product in a particular country, the licenses granted by each party will terminate and neither party will have the right to practice the other party’s patent rights.

Amended and Restated Exclusive License Agreement with City of Hope

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For the first three licensed products or licensed services to achieve specified development and regulatory milestones, we are obligated to pay City of Hope up to $10.3 million in the aggregate per licensed product or licensed service.

Subject to specified conditions, we are obligated to pay City of Hope tiered royalties in the low single digits on aggregate annual net

sales of licensed products or licensed services on a country-by-country basis until the expiration of the last-to-expire patent or patent application licensed from City of Hope covering the applicable licensed product or licensed service in such country.

We are also obligated to pay City of Hope a portion of any consideration we receive for the grant of sublicenses under the agreement ranging from a low to mid double-digit percentage of such consideration, subject to specified conditions under that agreement at the time that we grant any such sublicense.

To date, we have made an aggregate of $0.8 million in specified development and regulatory milestone payments to City of Hope related to our anti-CTLA-4 monoclonal antibody program.

Subject to specified conditions, we are obligated to pay City of Hope tiered royalties in the low single digits on aggregate annual net sales of licensed products or licensed services on a country-by-country basis until the expiration of the last-to-expire patent or patent application licensed from City of Hope covering the applicable licensed product or licensed service in such country.

We are also obligated to pay City of Hope a portion of any consideration we receive for the grant of sublicenses under the agreement in an amount equal to a low double-digit percentage of such consideration, subject to specified conditions under that agreement at the time that we grant any such sublicense.

In addition, we paid $0.5 million to City of Hope in connection with the closing of our initial public offering.

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For each product that incorporates a licensed antibody that has been modified using the rights licensed under the agreement, we are obligated to pay WuXi Biologics up to approximately $25.8 million in the aggregate for specified development and regulatory milestones.

To date, we have made an aggregate of $5.8 million in specified development and regulatory milestones payments to WuXi Biologics related to our anti-CTLA-4 monoclonal antibody program.

In addition, subject to specified conditions, we are obligated to pay WuXi Biologics tiered royalties in the low to mid-single digits on aggregate annual worldwide net sales of licensed products during the applicable royalty term and subject to early expiration or adjustment in specified circumstances.

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Although we expect to rely on one or more third-party contract manufacturers for the production of our current and future product candidates, we have personnel with extensive technical, manufacturing, analytical and quality experience in biotherapeutic protein manufacturing to oversee our contract manufacturer relationships.

In collaboration with our third-party manufacturer, we have manufactured cGMP clinical supply for our clinical trials for our tumor-activated, clinical-stage product candidates, XTX101 (anti-CTLA-4), XTX301 (IL-12), and XTX202 (IL-2).

As we scale clinical and develop commercial manufacturing capability for each of our product candidates, we intend to develop the network of contract manufacturing sites operated by our CDMO to include EU- or U.S.-based sites.

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Government authorities in the United States, at the federal, state and local level, and in other countries and foreign jurisdictions, including the European Union, or EU, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, sales, pricing, reimbursement, post-approval monitoring and reporting, and import and export of pharmaceutical products.

The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

Review and Approval of Drugs and Biologics in the United States

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● performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCPs, to establish the safety and efficacy of the proposed drug product, and with respect to biologics, the purity, potency and safety of such drug product, for each proposed indication;

● submission to the FDA of a new drug application, or NDA, for a drug candidate product and a biologics license application, or BLA, for a biological product requesting marketing for one or more proposed indications;

● submission to the FDA of a biologics license application, or BLA, for a biological product requesting marketing for one or more proposed indications;

● review of the request for approval by an FDA advisory committee, where appropriate or if applicable;

● completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current good manufacturing practices, or cGMPs, to assure the product’s identity, strength, quality and purity;

● completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMP to assure the product’s identity, strength, quality and purity;

● completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

● payment of user fees and securing FDA approval of the NDA or BLA;

● payment of user application and program fees pursuant to the Prescription Drug User Fee Act, or PDUFA;

● securing FDA approval of the BLA, authorizing marketing of the product in the United States for one or more indications;

● compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.

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An IND is a request for FDA authorization to administer an investigational product candidate to humans.

Such authorization must be secured prior to interstate shipment and administration of any new drug or biologic that is not the subject of an approved NDA or BLA.

Such authorization must be secured prior to interstate shipment and administration of any new drug or biologic that is not the subject of an approved BLA.

In support of a request for an IND, sponsors must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

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A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND.

For example, a specific protocol or part of a protocol is not allowed to proceed, while other protocols may do so.

For example, a specific protocol or part of

a protocol is not allowed to proceed, while other protocols may do so.

No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.

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They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct

continuing review and reapprove the trial at least annually.

The IRB must review and approve, among other things, the trial protocol and informed consent information to be provided to trial subjects.

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Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk or for other reasons, including evolving business objectives and/or competitive climate.

Human Clinical Studies in Support of an NDA or BLA

Human Clinical Studies in Support of a BLA

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial.

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Generally, pivotal trials are Phase 3 trials, but they may be Phase 1 or Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.

In December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

In December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.

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In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.

In January 2024, the FDA issued draft guidance setting out its policies for the collection of race and ethnicity data in clinical trials.

In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs.

Unlike most guidance documents issued by the FDA, the DAP guidance when finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance.

In March 2022, the FDA released a final guidance entitled “Expansion Cohorts:

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In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

The NIH’s Final Rule on registration and reporting requirements for clinical trials became effective in 2017.

Although the FDA has historically not enforced these reporting requirements due to the long delay by the Department of Health and Human Services, or HHS, in issuing final implementing regulations, the FDA has issued several pre-notices for voluntary corrective action and several notices of non-compliance during the past two years.

The NIH’s Final Rule on registration and reporting requirements

for clinical trials became effective in 2017.

Although the FDA has historically not enforced these reporting requirements due to the long delay by the Department of Health and Human Services, or HHS, in issuing final implementing regulations, the FDA has, as of December 19, 2024, issued six notices of non-compliance, thereby signaling the FDA’s willingness to begin enforcing these requirements against non-compliant clinical trial sponsors.

While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.

Violations may also result in injunctions and/or criminal prosecution or disqualification from federal grants.

Interactions with FDA During the Clinical Development Program

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In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program.

Specifically, sponsors may meet with the FDA prior to the submission of an IND, or Pre-IND meeting, at the end of Phase 1 clinical trial, or EOP1 meeting, at the end of Phase 2 clinical trial, or EOP2 meeting, and before an NDA or BLA is submitted, or Pre-NDA or Pre-BLA meeting.

Meetings at other times may also be requested.

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Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an important safety issue.

Type B meetings include pre-IND and pre-NDA/pre-BLA meetings, as well as end of phase meetings such as EOP2 meetings.

Type B meetings include Pre-IND and Pre-BLA meetings, as well as end of phase meetings such as EOP2 meetings.

A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a product, including, for example, meetings to facilitate early consultations on the use of a biomarker as a new surrogate endpoint that has never been previously used as the primary basis for product approval in the proposed context of use.

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Finally, INTERACT meetings are intended for novel products and development programs that present unique challenges in the early development of an investigational product.

At the conclusion of these meetings, the FDA will typically provide its responses to questions posed by the sponsor regarding the clinical development program.

The FDA will not indicate whether a BLA will be approved, but it will provide guidance to the sponsor on various questions, including whether an application should be submitted in the first place on the basis of the studies and data proposed by the sponsor.

The agency may also generally express support for the sponsor’s approach in the clinical development program, but also indicate that questions concerning whether the data support approval will be subject to review by the agency following its acceptance for filing of the BLA.

The FDA has indicated that its responses, as conveyed in meeting minutes and advice letters, only constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations and/or advice.

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In 2017, with the passage of the FDA Reauthorization Act of 2017, or FDARA, Congress established new requirements to govern certain molecularly targeted cancer indications.

Section 505B of the FDCA, as amended by FDARA, requires that any original NDA or BLA submitted on or after August 18, 2020, for a new active ingredient, must contain reports on the molecularly targeted pediatric cancer investigation, unless the requirement is waived or deferred, if the drug that is the subject of the application is:

Section 505B of the FDCA, as amended by FDARA, requires that any original BLA submitted on or after August 18, 2020, for a new active ingredient, must contain reports on the molecularly targeted pediatric cancer investigation, unless the requirement is waived or deferred, if the drug that is the subject of the application is:

(i) intended for the treatment of an adult cancer, and (ii) directed at a molecular target that the Secretary of HHS determines to be substantially relevant to the growth or progression of a pediatric cancer in accordance with FDA guidance.

The FDA maintains a list of diseases that are exempt from PREA requirements due to low prevalence of disease in the pediatric population.

Submission and Review of an NDA or BLA by the FDA

Submission and Review of a BLA by the FDA

In order to obtain approval to market a drug or biological product in the United States, a marketing application must be submitted to the FDA that provides data establishing the safety and effectiveness of the proposed drug product for the proposed indication, and the safety, purity and potency of the biological product for its intended indication.

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The application is the vehicle through which sponsors formally propose that the FDA approve a new product for marketing and sale in the United States for one or more indications.

Every new product candidate must be the subject of an approved

NDA or BLA before it may be commercialized in the United States.

Every new product candidate must be the subject of an approved BLA before it may be commercialized in the United States.

Under federal law, the submission of most applications is subject to an application user fee.

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The resubmitted application is also subject to review before the FDA accepts it for filing.

The FDA has agreed to specified performance goals in the review process of NDAs and BLAs.

Under that agreement, 90% of applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which FDA accepts the NDA for filing, and 90% of applications for NMEs that have been designated for “priority review” are meant to be reviewed within six months of the filing date.

The FDA has agreed to specified performance goals in the review process of BLAs.

Under that agreement, 90% of applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which FDA accepts the BLA for filing, and 90% of applications for NMEs that have been designated for “priority review” are meant to be reviewed within six months of the filing date.

The review process and the Prescription Drug User Fee Act goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission.

The FDA seeks to meet these timelines for review of an application but its ability to do so may be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and statutory,

regulatory and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

For example, during the past decade, the U.S.

government has shut down several times and certain regulatory agencies, including the FDA, have had to furlough critical employees and stop critical activities, including the review of BLAs.

In connection with its review of an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured.

These pre-approval inspections may cover all facilities associated with an NDA or BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.

These pre-approval inspections may cover all facilities associated with a BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.

The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted to the FDA.

Moreover, the FDA will review a sponsor’s financial relationship with the principal investigators who conducted the clinical trials in support of the BLA.

Depending on the level of that compensation and any other financial interest a principal investigator may have in a sponsor, the sponsor may be required to report these relationships to the FDA.

The FDA will then evaluate that financial relationship and determine whether it creates a conflict of interest or otherwise affects the interpretation of the trial or the integrity of the data generated at the principal investigator’s clinical trial site.

If so, the FDA may exclude data from the clinical trial site in connection with its determination of the approvability of the application for the investigational product.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted to the FDA.

With the passage of FDORA, Congress clarified the FDA’s authority to conduct inspections by expressly permitting inspection of facilities involved in the preparation, conduct, or analysis of clinical and non-clinical studies submitted to the FDA as well as other persons holding study records or involved in the study process.

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The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

The FDA’s Decision on an NDA or BLA

The FDA’s Decision on a BLA

The FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended use(s), with the latter determination being made on the basis of substantial evidence.

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To issue an approval letter, the FDA must determine that the drug is effective and that its expected benefits outweigh its potential risks to patients.

This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA or BLA.

This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the BLA.

This assessment is also informed by other factors, including:

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An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM.

effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.

The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.

The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.

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All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

With the passage of FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.

Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded, require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to the FDA every six months (until the study is completed), and use expedited procedures to withdraw accelerated approval of an NDA or BLA after the confirmatory trial fails to verify the product’s clinical benefit.

Further, FDORA requires the agency to publish on its website “the rationale for why a post-approval study is not appropriate or necessary” whenever it decides not to require such a study upon granting accelerated approval.

With the passage of FDORA, Congress modified certain provisions governing accelerated approval of drug and biologic products.

Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded, and to submit progress reports on its post-approval studies to the FDA every six months until the study is completed.

Moreover, FDORA established expedited procedures authorizing the FDA to withdraw an accelerated approval if certain conditions are met, including where a required confirmatory trial fails to verify and describe the predicted clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.

The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any required post-approval study of the product with due diligence, including with respect to “conditions specified by the Secretary.” The new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the FDA Commissioner or the FDA Commissioner’s designee and a written appeal, among other things.

In March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval.

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To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics.

Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidance relating to accelerated approval.

This guidance describe the FDA’s views on what it means to conduct a confirmatory trial with due diligence and how the agency plans to interpret whether such a study needs to be underway at the time of approval.

While this guidance is currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.

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Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements

upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

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● fines, warning letters or holds on post-approval clinical trials;

● refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;

● refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product license approvals;

● product seizure or detention, or refusal to permit the import or export of products;

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Previously, such communications were permitted under FDA guidance, but the new legislation explicitly provides protection to sponsors who convey certain information about products in development to payors, including unapproved uses of approved products.

In addition, in October 2023, the FDA published draft guidance outlining the agency’s non-binding policies governing the distribution of scientific information on unapproved uses to healthcare providers.

This draft guidance calls for such communications to be truthful, non-misleading, factual, and unbiased and include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use.

In addition, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products.

The final guidance calls for such communications to be truthful, non-misleading and scientifically sound and to include all information necessary for healthcare providers to interpret the strengths and weaknesses, validity and utility of the information about the unapproved use of the approved product.

If a company engages in such communications as consistent with the guidance’s recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of a new intended use for the approved product.

In addition, the distribution of prescription pharmaceutical products is subject to a variety of federal and state laws.

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In November 2013, the federal Drug Supply Chain Security Act, or DSCSA, became effective in the United States, mandating an industry-wide, electronic, interoperable system to trace prescription drugs through the pharmaceutical distribution supply chain with a ten-year phase-in process.

Manufacturers were required by November 2023 to have such systems and processes in place but, in August 2023, the FDA set a one-year period in which it would exercise its enforcement discretion with respect to these requirements.

Manufacturers were required by November 2023 to have such systems and processes in place.

So as not to disrupt supply chains, the FDA has granted certain exemptions from enhanced drug distribution security requirements for eligible trading partners for particular periods of time.

Biosimilars and Regulatory Exclusivity

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The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

There have been recent government proposals to reduce the 12-year reference product exclusivity period, but none has been enacted to date.

The BPCIA also includes provisions to protect reference products that have patent protection.

The biosimilar product sponsor and reference product sponsor may exchange certain patent and product information for the purpose of determining whether there should be a legal patent challenge.

Based on the outcome of negotiations surrounding the exchanged information, the reference product sponsor may bring a patent infringement suit and injunction proceedings against the biosimilar product sponsor.

The biosimilar applicant may also be able to bring an action for declaratory judgment concerning the patent.

The FDA maintains a publicly-available online database of licensed biological products, which is commonly referred to as the “Purple Book.” The Purple Book lists product names, dates of licensure, and applicable periods of exclusivity.

Further, the reference product sponsor must provide patent information and patent expiration dates to the FDA following the exchange of patent information between biosimilar and reference product sponsors.

This information is then published in the Purple Book.

There have been recent government proposals to reduce the 12-year reference product exclusivity period, but none have been enacted to date.

At the same time, since passage of the BPCIA, many states have passed laws or amendments to laws, which address pharmacy practices involving biosimilar products.

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Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product.

A company must request orphan drug designation before submitting an NDA or BLA for the candidate product.

A company must request orphan drug designation before submitting a BLA for the product candidate.

If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use.

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Orphan exclusivity does not block the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for different indications.

If a drug or biologic designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

If a drug or biologic designated as an orphan

drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

Orphan exclusivity will not bar approval of another product under certain circumstances, including if a company with orphan drug exclusivity is not able to meet market demand and in cases where a subsequent product with the same drug or biologic for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care.

received orphan drug designation before enactment of FDARA in 2017 but have not yet been approved or licensed by FDA.

Under Omnibus legislation signed by President Trump on December 27, 2020, the requirement for a subsequent product to show clinical superiority in order to break the previous product’s orphan drug exclusivity applies to drugs and biologics that received orphan drug designation before enactment of FDARA in 2017 but have not yet been approved or licensed by FDA.

Further, in September 2021, the Court of Appeals for the 11 th Circuit held that, for the purpose of determining the scope of market exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.

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For biologic products, the six-month period may be attached to any existing regulatory exclusivities but not to any patent terms.

This six-month exclusivity may be granted if an NDA or BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

This six-month exclusivity may be granted if a BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

The data do not need to show the product to be effective in the pediatric population studied;

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Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities.

Thus, even if a product candidate is approved, sales of the product 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, the product.

adequate reimbursement levels for, the product.

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.

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and the federal transparency requirements known as the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Effective January 1, 2022, these federal transparency reporting obligations will extend to include transfers of value made during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives.

As of January 1, 2022, these federal transparency reporting obligations have been extended to include transfers of value made during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives.

In addition, HIPAA as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, among other things, imposes limitations on certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business associates and their covered subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information.

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State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

In particular, numerous federal and state laws and regulations, including state data breach notification laws, state health

information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.

In particular, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information.

In addition, we may be subject to laws and regulations prohibiting bribery and corruption such as the Foreign Corrupt Practices Act, or FCPA, which prohibits companies and their intermediaries from making, or offering or promising to make, improper payments to non-U.S.

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In particular, government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services.

Under the former Trump administration, there were efforts to repeal or modify prior health care reform legislation and regulation and also to implement new health care reform measures, including measures related to payment for drugs under government health care programs.

Under the first Trump administration, there were efforts to repeal or modify prior health care reform legislation and regulation and also to implement new health care reform measures, including measures related to payment for drugs under government health care programs.

However, on June 17, 2021 the U.S.

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Thus, the ACA will remain in effect in its current form.

The nature and scope of health care reform in the new Biden administration remains uncertain but early actions including additional health care reform, its expressed intent to pursue certain policy initiatives to reduce drug prices, as well as challenges to actions taken under the Trump administration have been taken and are likely to continue.

The nature and scope of health care reform in the second Trump administration remains uncertain but early actions suggest that efforts to refine the ACA will be renewed and litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

There has been heightened governmental scrutiny in recent years over the manner in which manufacturers set prices for their marketed products, which has resulted in proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing and reform government program reimbursement methodologies for pharmaceutical and biologic products.

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Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace

inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

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Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D.

CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

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The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.

The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023.

On August 15, 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.

The prices of these ten drugs will become effective January 1, 2026.

On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations by February 1, 2025.

While there had been some questions about the Trump Administration’s position on this program, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new U.S.

presidential administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.

The second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.

On June 6, 2023, Merck & Co.

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Chamber of Commerce, Bristol Myers Squibb Company, the Pharmaceutical Research and Manufacturers of America, or PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.

HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.

Certain of these cases are now on appeal, and on October 30, 2024, the Court of Appeals for the Third Circuit heard oral argument in three of these cases.

We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

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These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal

and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

This may be increasingly true with respect to products approved pursuant to the accelerated approval pathway.

State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

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Department of Health and Human Services has issued regulations to protect the privacy and security of protected health information used or disclosed by specific covered entities including certain healthcare providers, health plans and healthcare clearinghouses.

HIPAA also imposes certain obligations on the business associates of covered entities that obtain protected health information in providing services to or on behalf of covered entities.

HIPAA also imposes certain obligations on the business associates of covered entities that obtain protected health information in the course of providing services to or on behalf of covered entities.

HIPAA may apply to us in certain circumstances and may also apply to our business partners in ways that may impact our relationships with them.

Our clinical trials are regulated by the Federal Policy for the Protection of Human Subjects, also known as the Common Rule, which also includes specific privacy-related provisions.

In addition to federal privacy regulations, there are a number

of state laws governing confidentiality and security of health information that may be applicable to our business.

In addition to federal privacy regulations, there are a number of state laws governing confidentiality and security of health information that may be applicable to our business.

In addition to possible federal civil and criminal penalties for HIPAA violations, state attorneys general are authorized to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions.

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The CPRA also created the California Privacy Protection Agency, a new enforcement agency whose sole responsibility is to enforce the CPRA, which will further increase compliance risk.

In addition to California, 11 other states have passed comprehensive privacy laws similar to the CCPA and CPRA.

These laws are either in effect or will go into effect sometime before the end of 2026.

In addition to California, at least 18 other states have passed comprehensive privacy laws similar to the CCPA and CPRA.

These laws are either in effect now or will go into effect in the future.

Like the CCPA and CPRA, these laws create obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data, which includes health data in some cases.

Some of the provisions of these laws may apply to our business activities.

There are also states that are strongly considering or have already passed comprehensive privacy laws during the 2024 legislative sessions that will go into effect in 2025 and beyond.

Other states will be considering similar laws in the future, and Congress has also been debating passing a federal privacy law.

There are also states that are specifically regulating health information that may affect our business.

For example, the State of Washington passed the My Health My Data Act in 2023 which specifically regulated health information that is not otherwise regulated by the HIPAA rules, and the law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation in 2024, including New York and New Jersey.

For example, the

State of Washington passed the My Health My Data Act in 2023 which specifically regulated health information that is not otherwise regulated by the HIPAA rules, and the law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states, including New York, are considering such legislation.

These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against companies for their data-related practices.

In particular, there have been a significant number of cases filed against companies for their use of pixels and other web trackers.

These cases often allege violations of the California Invasion of Privacy Act and other state laws regulating wiretapping, as well as the federal Video Privacy Protection Act.

General data protection regulation

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The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from

violations of the GDPR.

Compliance with the GDPR is a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance.

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The United Kingdom government has already determined that it considers all EU 27 and EEA member states to be adequate for the purposes of data protection, ensuring that data flows from the United Kingdom to the EU/EEA remain unaffected.

In addition, a recent decision from the European Commission appears to deem the United Kingdom as being “essentially adequate” for purposes of data transfer from the EU to the United Kingdom, although this decision may be re-evaluated in the future.

In addition, a recent decision from the European Commission appears to deem the United

Kingdom as being “essentially adequate” for purposes of data transfer from the EU to the United Kingdom, although this decision may be re-evaluated in the future.

The United Kingdom and the United States have also agreed to a U.S.-UK “Data Bridge,” which functions similarly to the EU-U.S.

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These laws will impact our ability to conduct our business activities, including both our clinical trials and any eventual sale and distribution of commercial products.

Review and Approval of Biologics and Drug Products Outside the United States

In addition to regulations in the United States, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products outside of the United States.

Whether or not we obtain FDA approval for a product candidate, we must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the EU, before we may commence clinical trials or market products in those countries or areas.

In the EU, our product candidates also may be subject to extensive regulatory requirements.

As in the United States, medicinal products can be marketed only if a marketing authorization from the competent regulatory agencies has been obtained.

Similar to the United States, the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.

With the exception of the EU and European Economic Area, or EEA, applying the harmonized regulatory rules for medicinal products, the approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly between countries and jurisdictions and can involve additional testing and additional administrative review periods.

The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Employees and Human Capital Resources

As of March 25, 2024, we had 73 full-time employees, including 32 employees with M.D., Pharm.D.

As of February 28, 2025, we had 64 full-time employees, including 21 employees with M.D., Pharm.D.

Of these full-time employees, 43 were engaged in research and development activities and 21 were engaged in general and administrative activities.

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We consider our relationship with our employees to be good.

In March 2024, as part of a strategic portfolio reprioritization, we announced plans to undergo a workforce reduction to further reduce our expenses and streamline our operations, including a reduction in headcount of 15 employees, representing approximately 21% of our workforce prior to the workforce reduction.

We anticipate that the workforce reduction will be substantially completed in the first half of 2024.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and developing our existing and additional employees.

We are committed to diversity, equity and inclusion across all aspects of our organization, including in our recruitment, advancement and development practices.

Each year, we review employee demographic information to evaluate our diversity efforts across all functions and levels of the company.

annual performance and development reviews for each of our employees to discuss the individual’s strengths and development opportunities, career development goals and performance goals.

We are committed to equal opportunity and inclusion across all aspects of our organization, including in our recruitment, advancement and development practices.

We conduct annual performance and development reviews for each of our employees to discuss the individual’s strengths and development opportunities, career development goals and performance goals.

We also regularly survey employees to assess employee engagement and satisfaction.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business