What changed in this filing

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Item 1. Financial Statements

2025-02-24 compared with 2025-02-24 · 158 added, 264 removed, 530 unchanged (44% of the section changed)

29 unchanged sentences

Lease liabilities, net of current portion 66,810 59,025

Deferred income, net of current portion — —

Debt, net of current portion 150,895 161,772

4 unchanged sentences

10,000,000 authorized shares;

- 0 - issued and outstanding shares at June 30, 2024 and December 31, 2023

- 0 - issued and outstanding shares at March 31, 2024 and December 31, 2023

Common stock, $ 0.01 par value:

200,000,000 authorized shares at June 30, 2024 and December 31, 2023;

61,766,054 issued and outstanding at June 30, 2024 and 60,998,191 issued and outstanding at December 31, 2023

200,000,000 authorized shares at March 31, 2024 and December 31, 2023;

61,634,685 issued and outstanding at March 31, 2024 and 60,998,191 issued and outstanding at December 31, 2023

Additional paid-in capital 1,144,468 1,131,266

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(As Restated)

Collaborations, milestones, and royalties $ 15,997 $ 18,962

4 unchanged sentences

Loss from operations ( 54,663 ) ( 60,744 )

Other income (expense)

Other income (expenses)

Interest income 8,548 2,899

7,681 3,771 16,229 6,670

Interest expense ( 9,676 ) ( 7 )

( 9,282 ) ( 7 ) ( 18,958 ) ( 14 )

Other expense, net — ( 13 )

Impairment on equity securities

220 — ( 20,430 ) —

Gain (loss) on equity securities, net 2,325 ( 2,898 )

Total other income (expense), net ( 13,412 ) 4,043 ( 32,865 ) 4,023

Total other expense, net

( 19,453 ) ( 19 )

Net loss ( 74,116 ) ( 60,763 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(As Restated)

Net loss ( 74,116 ) ( 60,763 )

18 unchanged sentences

Issuance of restricted stock units 483,812 5 ( 5 ) — — — —

Comprehensive loss — — — ( 1,445 ) ( 73,440 ) ( 676 ) ( 75,561 )

Stock-based compensation — — 11,421 — — — 11,421

Balance, March 31, 2024 As Restated 61,634,685 $ 617 $ 1,144,468 $ ( 154 ) $ ( 544,858 ) $ ( 339 ) $ 599,734

Issuance of common stock upon exercise of stock awards 10,213 — 140 — — — 140

Issuance of restricted stock units 67,160 1 ( 1 ) — — — —

Issuance of common stock under the Employee Stock Purchase Plan 53,996 1 929 — — — 930

Comprehensive loss as restated — — — ( 1,445 ) ( 73,440 ) ( 676 ) ( 75,561 )

Stock-based compensation — — 11,421 — — — 11,421

Balance, June 30, 2024 As Restated (unaudited) 61,766,054 $ 619 $ 1,162,726 $ ( 652 ) $ ( 612,195 ) $ ( 1,784 ) $ 548,714

Balance, March 31, 2024 As Restated (unaudited) 61,634,685 $ 617 $ 1,144,468 $ ( 154 ) $ ( 544,858 ) $ ( 339 ) $ 599,734

Common Stock Additional

10 unchanged sentences

Stock-based compensation — — 12,599 — — — 12,599

Balance, March 31, 2023 60,381,600 $ 605 $ 1,085,651 $ ( 3,625 ) $ ( 399,048 ) $ — $ 683,583

Issuance of common stock upon exercise of stock awards 145,003 1 676 — — — 677

Issuance of restricted stock units 18,148 — — — — — —

Issuance of common stock under the Employee Stock Purchase Plan 55,309 1 1,241 — — — 1,242

Comprehensive income (loss) — — — 1,765 ( 21,954 ) — ( 20,189 )

Stock-based compensation — — 13,563 — — — 13,563

Balance, June 30, 2023 (unaudited) 60,600,060 $ 607 $ 1,101,131 $ ( 1,860 ) $ ( 421,002 ) $ — $ 678,876

Balance, March 31, 2023 (unaudited) 60,381,600 $ 605 $ 1,085,651 $ ( 3,625 ) $ ( 399,048 ) $ — $ 683,583

See accompanying notes .

1 unchanged sentence

(in thousands)

Six Months Ended

Three Months Ended

(As Restated)

5 unchanged sentences

Stock-based compensation 11,421 12,599

Equity received in connection with license agreements — ( 10,000 )

Abandonment of capitalized intangible assets 415 321

6 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable

( 9,993 ) 8,978

Accounts receivable and contract asset 2,976 9,135

Interest receivable from marketable debt securities ( 1,310 ) 248

2 unchanged sentences

Accrued expenses ( 10,073 ) ( 3,588 )

Income taxes ( 5,899 ) —

Lease liabilities and ROU assets 213 331

3 unchanged sentences

Purchase of marketable securities ( 136,532 ) ( 95,228 )

Sale of equity securities

Purchase of patents, licenses, and other intangible assets

( 1,549 ) ( 1,490 )

Purchase of intangible assets ( 929 ) ( 407 )

Purchase of property and equipment ( 132 ) ( 10,783 )

4 unchanged sentences

Proceeds from issuance of common stock upon exercise of stock awards 1,787 922

Proceeds from issuance of common stock under the Employee Stock Purchase Plan 930 1,242

Net cash provided by financing activities 1,787 922

Net decrease in cash, cash equivalents, and restricted cash

( 23,018 ) ( 19,232 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 22,754 ) 18,452

Cash, cash equivalents, and restricted cash , beginning of period

2 unchanged sentences

$ 31,416 $ 72,394

Six Months Ended

Supplemental disclosure of cash flow information

1 unchanged sentence

Interest $ 11 $ 7

Income taxes $ 6,100 $ —

Supplemental disclosures of non-cash activities

7 unchanged sentences

Notes to Financial Statements

June 30, 2024

March 31, 2024

Summary of Significant Accounting Policies

11 unchanged sentences

(Gale), a variable interest entity (VIE) in which we are the primary beneficiary.

Since we own less than 100% of Gale, the Company records net loss attributable to non-controlling interests in its consolidated statements of loss equal to the percentage of the economic or ownership interests retained in Gale by the non-controlling party.

Since we own less than 100% of Gale, the Company records net loss attributable to non-controlling interests in its consolidated statements of income (loss) equal to the percentage of the economic or ownership interests retained in Gale by the non-controlling party.

In determining whether we are the primary beneficiary of a VIE, we apply a qualitative approach that determines whether we have (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses of, or the right to receive benefits from the VIE that could potentially be significant to the VIE.

7 unchanged sentences

These reclassifications did not affect the prior period's total assets, liabilities, stockholders' equity, net loss or cash flows.

During the six months ended June 30, 2024, we adopted a change in

During the three months ended March 31, 2024, we adopted a change in

presentation on our consolidated statements of loss to include loss from disposal of fixed assets in operating expenses.

5 unchanged sentences

The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist.

There was no impairment charge recorded for the three and six months ended June 30, 2024 and 2023.

There was no impairment charge recorded for the three months ended March 31, 2024 and 2023.

The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities.

We abandoned $ 0.4 million and $ 0.8 million of in-process intangible assets for the three and six months ended June 30, 2024.

We abandoned $ 0.3 million and $ 0.6 million of in-process intangible assets during the three and six months ended June 30, 2023.

We abandoned $ 0.4 million of in-process intangible assets for the three months ended March 31, 2024.

We abandoned $ 0.3 million of in-process intangible assets during the three months ended March 31, 2023.

Marketable Debt and Equity Securities

1 unchanged sentence

The investment policy limits the maturity of any individual security to a maximum of 36 months.

The average maturity of securities in the portfolio as of June 30, 2024 is less than 12 months.

The average maturity of securities in the portfolio as of March 31, 2024 is less than 12 months.

The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions.

1 unchanged sentence

These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss).

There were no impairment losses or recoveries recorded for the three and six months ended June 30, 2024 and 2023.

There were no impairment losses or recoveries recorded for the three months ended March 31, 2024 and 2023.

Accrued interest on marketable debt securities is included in the marketable securities’ carrying value.

Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis.

During the three and six months ended June 30, 2024, the Company recorded an unrealized loss of $ 0.5 million and $ 1.9 million in its portfolio of marketable debt securities.

During the three and six months ended June 30, 2023, the Company recorded an unrealized gain of $ 1.8 million and $ 5.1 million.

During the three months ended March 31, 2024, the Company recorded an unrealized loss of $ 1.4 million in its portfolio of marketable debt securities.

During the three months ended March 31, 2023, the Company recorded an unrealized gain of $ 3.3 million.

The unrealized loss is due to the changing interest rate environment and is not due to changes in the credit quality of the underlying securities.

The unrealized gain (loss) is recorded in other comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023.

The unrealized gain (loss) is recorded in other comprehensive income (loss) for the three months ended March 31, 2024 and 2023.

The Company receives equity securities in connection with certain licensing transactions with its partners.

3 unchanged sentences

The Company also has investments in equity securities without a readily determinable fair value, where the Company elects the measurement alternative to record the investment at its initial cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

There was an impairment charge of $ 20.4 million recorded for the six months ended June 30, 2024 in connection with equity securities without a readily determinable fair value.

There was no impairment charge recorded for the three and six months ended June 30, 2023.

There was an impairment charge of $ 20.6 million recorded for the three months ended March 31, 2024 in connection with equity securities without a readily determinable fair value.

There was no impairment charge recorded for the three months ended March 31, 2023.

Liability Related to the Sale of Future Revenues

We treat the sale of future Ultomiris and Monjuvi royalties as debt, amortized under the effective interest rate method over the estimated life of the Ultomiris and Monjuvi Royalty Sale Agreements, respectively.

The amortization of the liability related to the sale of future Ultomiris and Monjuvi royalties is based on our current estimate of future royalty payments.

The amortization of the liability related to the sale of future Ultomiris and Monjuvi royalties is based on our current estimate of

future royalty payments.

Royalty revenue will be recognized as earned and the payments made will be a reduction of the liability when paid .

7 unchanged sentences

There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2023 Annual Report on Form 10-K.

Restatement of Previously Issued Financial Statements

Restatement of a Previously Issued Financial Statements

In connection with the preparation of the Company’s financial statements for the year ended December 31, 2024, the Company determined that the Ultomiris Royalty Sale Agreement with OMERS entered into in November 2023 was incorrectly accounted for as deferred income and should have been accounted for as debt and that the Company understated the amount of its research and experimental expenses that should have been capitalized under Section 174 of the Code for the year ended December 31, 2023 as well as misstatement related to its state tax obligations, and therefore identified uncertain tax positions for federal and state income tax purposes.

The impact of the restatement on the consolidated balance sheet as of June 30, 2024 is as follows (in thousands):

June 30, 2024

The impact of the restatement on the consolidated balance sheet as of March 31, 2024 is as follows (in thousands):

March 31, 2024

As Reported Adjustment As Restated

5 unchanged sentences

Current liabilities

Income tax payable 5,782 ( 491 ) 5,291

Deferred income 34,088 ( 34,088 ) —

9 unchanged sentences

Total liabilities and stockholders’ equity $ 884,255 $ 12,595 $ 896,850

The impact of the restatement on the consolidated statements of loss for the three months ended June 30, 2024 is as follows (in thousands):

Three Months Ended June 30, 2024

The impact of the restatement on the consolidated statement of loss for the three months ended March 31, 2024 is as follows (in thousands):

Three Months Ended March 31, 2024

As Reported Adjustment As Restated

1 unchanged sentence

Loss from operations ( 57,855 ) 3,192 ( 54,663 )

Other income (expense)

Other income (expenses)

Interest income 7,471 1,077 8,548

Interest expense — ( 9,676 ) ( 9,676 )

( 844 ) ( 8,438 ) ( 9,282 )

Loss before income tax expense ( 67,291 ) ( 1,491 ) ( 68,782 )

Income tax expense 117 ( 117 ) —

Net loss ( 67,408 ) ( 1,374 ) ( 68,782 )

Net loss attributable to non-controlling interest ( 1,445 ) — ( 1,445 )

Net loss attributable to Xencor, Inc.

$ ( 65,963 ) $ ( 1,374 ) $ ( 67,337 )

Basic and diluted net loss per common share attributable to Xencor, Inc.

Total other expense, net

( 10,854 ) ( 8,599 ) ( 19,453 )

The impact of the restatement on the consolidated statement of loss for the six months ended June 30, 2024 is as follows (in thousands):

Six Months Ended June 30, 2024

As Reported Adjustment As Restated

Collaborations, milestones, and royalties $ 29,765 $ 10,139 $ 39,904

Loss from operations ( 120,172 ) 10,139 ( 110,033 )

Other income (expense)

Interest expense ( 1,921 ) ( 17,037 ) ( 18,958 )

Total other income (expense), net ( 15,828 ) ( 17,037 ) ( 32,865 )

Loss before income tax expense ( 68,709 ) ( 5,407 ) ( 74,116 )

6 unchanged sentences

$ ( 1.11 ) $ ( 0.09 ) $ ( 1.20 )

The impact of the restatement on the consolidated statements of comprehensive loss for the three months ended June 30, 2024 is as follows (in thousands):

Three Months Ended June 30, 2024

As Reported Adjustment As Restated

Net loss ( 67,408 ) ( 1,374 ) ( 68,782 )

Other comprehensive loss

Net unrealized loss on marketable debt securities ( 498 ) — ( 498 )

Comprehensive loss ( 67,906 ) ( 1,374 ) ( 69,280 )

Comprehensive loss attributable to non-controlling interest ( 1,445 ) — ( 1,445 )

Comprehensive loss attributable to Xencor, Inc.

$ ( 66,461 ) $ ( 1,374 ) $ ( 67,835 )

The impact of the restatement on the consolidated statement of comprehensive loss for the six months ended June 30, 2024 is as follows (in thousands):

Six Months Ended June 30, 2024

The impact of the restatement on the consolidated statement of comprehensive loss for the three months ended March 31, 2024 is as follows (in thousands):

Three Months Ended March 31, 2024

As Reported Adjustment As Restated

6 unchanged sentences

$ ( 69,478 ) $ ( 5,407 ) $ ( 74,885 )

The impact of the restatement on the consolidated statements of cash flows for the six months ended June 30, 2024 is as follows (in thousands):

Six Months Ended June 30, 2024

The impact of the restatement on the consolidated statement of cash flows for the three months ended March 31, 2024 is as follows (in thousands):

Three Months Ended March 31, 2024

As Reported Adjustment As Restated

5 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable

( 10,783 ) 790 ( 9,993 )

Income taxes ( 5,782 ) ( 117 ) ( 5,899 )

Accounts receivable and contract asset 1,710 1,266 2,976

Deferred income ( 9,410 ) 9,410 —

1 unchanged sentence

Cash flows from financing activities

Reduction of liability for sale of future royalties

( 3,614 ) 3,614 —

Net cash (used in) provided by financing activities ( 757 ) 3,614 2,857

Repayment of liability for sale of future royalties ( 1,601 ) 1,601 —

Net cash provided by financing activities 186 1,601 1,787

Fair Value of Financial Instruments

13 unchanged sentences

The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):

June 30, 2024

March 31, 2024

(unaudited) December 31, 2023

6 unchanged sentences

Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value.

During the three and six months ended June 30, 2024 and 2023, there were no transfers between Level 1 and Level 2.

During the three months ended March 31, 2024 and 2023, there were no transfers between Level 1 and Level 2.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing the net loss attributable to Xencor by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents.

Diluted net loss per common share is computed by dividing the net loss attributable to Xencor by the weighted-average number of common stock equivalents outstanding for the period.

Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to Xencor by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents.

Diluted net income (loss) per common share is computed by dividing the net income (loss) attributable to Xencor by the weighted-average number of common stock equivalents outstanding for the period.

Potentially dilutive securities consisting of stock issuable pursuant to outstanding options and restricted stock units (RSUs), and stock issuable pursuant to the 2013 Employee Stock Purchase Plan (ESPP) are not included in the per common share calculation in periods when the inclusion of such shares would have an anti-dilutive effect.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(in thousands, except share and per share data) (in thousands, except share and per share data)

(As Restated)

(in thousands, except share and per share data)

(As Restated)

4 unchanged sentences

$ ( 1.20 ) $ ( 1.02 )

For the three and six months ended June 30, 2024 and 2023, all outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as the effect of including such securities would have been anti-dilutive.

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income (loss).

For each of the three and six-month periods ended June 30, 2024 and 2023, the only component of other comprehensive income (loss) is net unrealized gain (loss) on marketable debt securities.

There were no material reclassifications out of accumulated other comprehensive loss during each of the three and six-month periods ended June 30, 2024 and 2023.

For the three months ended March 31, 2024 and 2023, all outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as the effect of including such securities would have been anti-dilutive.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss).

For each of the three-month periods ended March 31, 2024 and 2023, the only component of other comprehensive income (loss) is net unrealized gain (loss) on marketable debt securities.

There were no material reclassifications out of accumulated other comprehensive income (loss) during each of the three-month periods ended March 31, 2024 and 2023.

Marketable Debt and Equity Securities

The Company’s marketable debt securities held as of June 30, 2024 and December 31, 2023 are summarized below:

June 30, 2024 Amortized

The Company’s marketable debt securities held as of March 31, 2024 and December 31, 2023 are summarized below:

March 31, 2024 Amortized

Losses Fair Value

17 unchanged sentences

Total investments $ 668,757

The maturities of the Company’s marketable debt securities as of June 30, 2024 are as follows:

June 30, 2024 Amortized

The maturities of the Company’s marketable debt securities as of March 31, 2024 are as follows:

March 31, 2024 Amortized

Cost Estimated

3 unchanged sentences

$ 615,470 $ 615,327

The unrealized losses on available-for-sale investments and their related fair values as of June 30, 2024 and December 31, 2023 are as follows:

The unrealized losses on available-for-sale investments and their related fair values as of March 31, 2024 and December 31, 2023 are as follows:

Less than 12 months 12 months or greater

June 30, 2024 Fair value Unrealized

March 31, 2024 Fair value Unrealized

losses Fair value Unrealized

13 unchanged sentences

These investments are carried at fair value with changes in fair value recognized each period and reported within other income (expense), net.

For the three and six months ended June 30, 2024, net losses of $ 12.0 million and $ 9.7 million were recorded under other income (expense) related to these securities.

For the three and six months ended June 30, 2023, a net gain of $ 0.3 million and a net loss of $ 2.6 million were recorded under other income (expense).

Equity securities with a readily determinable fair value, which are categorized as Level 1 in the fair value hierarchy under ASC 820, and their fair values (in thousands) as of June 30, 2024 and December 31, 2023 are as follows:

For the three months ended March 31, 2024, a gain of $ 2.3 million was recorded under other income (expense) related to these securities.

For the three months ended March 31, 2023, a loss of $ 2.9 million was recorded under other income (expense).

Equity securities with a readily determinable fair value, which are categorized as Level 1 in the fair value hierarchy under ASC 820, and their fair values (in thousands) as of March 31, 2024 and December 31, 2023 are as follows:

Fair Value Fair Value

June 30, 2024 December 31, 2023

March 31, 2024 December 31, 2023

Astria Common Stock $ 9,823 $ 5,360

2 unchanged sentences

$ 44,535 $ 42,210

The Company sold 443,909 shares of common stock of Astria Therapeutics, Inc.

(Astria) and held 253,958 shares of common stock of Astria as of June 30, 2024.

In July 2024, the Company sold the remaining shares of the common stock of Astria.

The common stock has a readily determinable fair value.

For the remaining equity interest in Astria held at June 30, 2024, the Company recorded an unrealized loss of $ 1.3 million and an unrealized gain of $ 0.4 million for the three and six months ended June 30, 2024, respectively.

The Company recorded unrealized losses of $ 3.5 million and $ 3.9 million related to its equity interest in Astria for the three and six months ended June 30, 2023, respectively.

The Company holds 697,867 shares of common stock of Astria as of March 31, 2024.

The common stock has a readily determinable fair value, and the Company recorded a gain in equity securities related to the adjustment in the fair value of Astria common stock for the three months ended March 31, 2024.

The Company currently holds 1,885,533 shares of common stock of INmune Bio, Inc.

The 1,885,533 shares of INmune common stock are classified as equity securities with a readily determinable fair value.

For the three and six months ended June 30, 2024, the Company recorded unrealized losses of $ 5.5 million and $ 4.6 million, respectively, related to its investment in INmune.

For the three and six months ended June 30, 2023, the Company recorded unrealized gains of $ 4.9 million and $ 5.2 million, respectively.

The 1,885,533 shares of INmune common stock are classified as equity securities with a readily determinable fair value, and the adjustment in the fair value of the shares of INmune common stock has been recorded as a gain in equity securities for the three months ended March 31, 2024.

The Company currently holds 717,144 shares of common stock of Viridian Therapeutics, Inc.

The shares of Viridian common stock are classified as equity securities with a readily determinable fair value.

recorded unrealized losses of $ 3.2 million and $ 6.3 million for the three and six months ended June 30, 2024, respectively.

The Company recorded unrealized losses of $ 1.2 million and $ 3.9 million for the three and six months ended June 30, 2023, respectively, related to the shares of Viridian common stock.

Below is a reconciliation of net gain (loss) recorded on equity securities during the three and six months ended June 30, 2024 and 2023:

The shares of Viridian common stock are classified as equity securities with a readily determinable fair value, and the adjustment in the fair value of the shares of Viridian common stock was recorded as a loss in equity securities for the three months ended March 31, 2024.

Unrealized gain (loss) recognized on equity securities during each of the three-month periods ended March 31, 2024 and 2023, consist of the following:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net gain (loss) recorded on equity securities

$ ( 12,027 ) $ 288 $ ( 9,702 ) $ ( 2,610 )

Net gain (loss) recorded on sale of equity securities

( 2,012 ) — 827 —

Unrealized gain (loss) recorded on equity securities held at the reporting date

$ ( 10,015 ) $ 288 $ ( 10,529 ) $ ( 2,610 )

Net and unrealized gain (loss) recognized on equity securities $ 2,325 $ ( 2,898 )

The Company also has investments in equity securities without a readily determinable fair value.

The Company elects the measurement alternative to record these investments at their initial cost and evaluates such investments at each reporting period for evidence of impairment, or observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Equity securities without a readily determinable fair value and their carrying values (in thousands) as of June 30, 2024 and December 31, 2023 are as follows:

Equity securities without a readily determinable fair value and their carrying values (in thousands) as of March 31, 2024 and December 31, 2023 are as follows:

Carrying Value Carrying Value

June 30, 2024 December 31, 2023

March 31, 2024 December 31, 2023

Zenas Preferred Stock $ 43,560 $ 64,210

3 unchanged sentences

The Company elected the measurement alternative to carry the Zenas equity at cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

During the six months ended June 30, 2024, we recorded $ 20.4 million of impairment charge as a result of Zenas closing a Series C financing transaction on May 3, 2024.

During the three months ended March 31, 2024, we recorded a $ 20.6 million impairment charge as a result of Zenas closing a Series C financing transaction on May 3, 2024 as the transaction suggested an indicator of impairment that existed at March 31, 2024.

Stock Based Compensation

5 unchanged sentences

The 2023 Plan does not include a provision for an automatic increase in shares, also known as an evergreen provision.

As of June 30, 2024, the total number of shares of common stock available for issuance under the 2023 Plan is 18,721,104 , which includes shares of common stock that were available for issuance under the prior Plans as of the effective date of the 2023 Plan.

As of June 30, 2024, a total of 2,380,651 options have been granted under the 2023 Plan.

As of March 31, 2024, the total number of shares of common stock available for issuance under the 2023 Plan is 18,798,477 , which includes shares of common stock that were available for issuance under the prior Plans as of the effective date of the 2023 Plan.

As of March 31, 2024, a total of 1,977,176 options have been granted under the 2023 Plan.

In November 2013, the Board and our stockholders approved the ESPP, which became effective as of December 5, 2013.

As of June 30, 2024, the total number of shares of common stock available for issuance under the ESPP is 987,344 .

Unless otherwise determined by the Board, beginning on January 1, 2014, and continuing until January 1, 2023, the total number of shares of common stock available for issuance under the ESPP automatically increased annually on January 1 by the lesser of (i) 1 % of the total number of issued and outstanding shares of common stock as of December 31

of the immediately preceding year, or (ii) 621,814 shares of common stock.

As of March 31, 2024, the total number of shares of common stock available for issuance under the ESPP is 1,041,340 .

The automatic increase has expired, and the number of shares of common stock available for issuance under the ESPP was not increased on January 1, 2024.

As of June 30, 2024, we have issued a total of 787,474 shares of common stock under the ESPP.

During the six months ended June 30, 2024, the Company awarded 959,071 RSUs to certain employees.

As of March 31, 2024, we have issued a total of 733,478 shares of common stock under the ESPP.

During the three months ended March 31, 2024, the Company awarded 796,660 RSUs to certain employees.

The standard vesting of these awards is generally in three equal annual installments and is contingent on an employee’s continued service to the Company.

The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period.

As of June 30, 2024, a total of 1,045,738 RSUs have been granted under the 2023 Plan.

The Company extended vesting periods and expiration dates of equity awards for employees who retired in April 2024.

There is a $ 3.1 million incremental expense as a result of the extension of the expiration dates, and there is a $ 1.2 million expense as a result of the extension of the vesting periods.

Total employee, director and non-employee stock-based compensation expense recognized for the three and six months ended June 30, 2024 and 2023 are as follows (in thousands):

The fair value of these awards is determined based on the intrinsic value of the stock on

the date of grant and will be recognized as stock-based compensation expense over the requisite service period.

As of March 31, 2024, a total of 883,327 RSUs have been granted under the 2023 Plan.

Total employee, director and non-employee stock-based compensation expense recognized for the three months ended March 31, 2024 and 2023 are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

General and administrative $ 4,699 $ 4,276

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Stock options $ 6,873 $ 6,983

ESPP 211 341 417 663

RSUs 4,342 5,294

11 unchanged sentences

Options exercised ( 152,682 ) $ 11.70

Balance at June 30, 2024 12,661,426 $ 28.48 6.18 $ 5,813

Balance at March 31, 2024 12,547,597 $ 28.84 6.22 $ 9,618

Exercisable 8,185,860 $ 29.38 4.76 $ 9,465

We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $ 18.93 per share as of June 30, 2024.

The weighted-average fair value of options granted during the six-month periods ended June 30, 2024 and 2023 were $ 22.43 and $ 30.65 per share, respectively.

There were 1,941,412 options granted during the six-month period ended June 30, 2023.

issuance date, with the following weighted average assumptions for the three and six months ended June 30, 2024 and 2023:

Options Options

We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $ 22.13 per share as of March 31, 2024.

The weighted-average fair value of options granted during the three-month periods ended March 31, 2024 and 2023 were $ 22.81 and $ 31.40 per share, respectively.

There were 1,620,256 options granted during the three-month period ended March 31, 2023.

We estimated the fair value of each equity award, including stock options and shares issued under our ESPP, using the Black-Scholes option-pricing model based on the date of grant of such stock option or ESPP share issuance date, with the following weighted average assumptions for the three months ended March 31, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Expected term (years) 6.4 6.0

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Expected term (years) 0.5 - 2.0

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43.2 % - 55.7 %

43.0 % - 44.6 %

38.2 % - 55.7 %

Risk-free interest rate 4.71 % - 5.39 %

0.13 % - 4.72 %

4.71 % - 5.40 %

0.13 % - 5.39 %

Expected dividend yield — % — %

As of June 30, 2024, the unamortized compensation expense related to unvested stock options was $ 56.9 million.

As of March 31, 2024, the unamortized compensation expense related to unvested stock options was $ 61.5 million.

The remaining unamortized compensation expense will be recognized over the next 2.8 years.

As of June 30, 2024, the unamortized compensation expense under our ESPP was $ 1.3 million.

As of March 31, 2024, the unamortized compensation expense under our ESPP was $ 1.4 million.

The remaining unamortized expense will be recognized over the next 1.7 years.

The following table summarizes the RSU activity for the six-month period ended June 30, 2024:

The following table summarizes the RSU activity for the three-month period ended March 31, 2024:

Units Weighted

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Forfeited ( 91,443 ) 30.76

Unvested RSUs at June 30, 2024 1,778,656 $ 26.02

As of June 30, 2024, the unamortized compensation expense related to unvested RSUs was $ 37.0 million.

Unvested RSUs at March 31, 2024 1,711,445 $ 26.52

As of March 31, 2024, the unamortized compensation expense related to unvested RSUs was $ 40.6 million.

The remaining unamortized expense will be recognized over the next 2.3 years.

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The second phase of the lease agreement will commence no later than September 30, 2026 and includes an additional improvement allowance up to $ 3.3 million.

In August 2022, the Company entered into an amendment, which the Company received an additional $ 5.0 million in tenant improvement allowance in exchange for an

increase in the rental rate of the phase 1 space.

In August 2022, the Company entered into an amendment, which the Company received an additional $ 5.0 million in tenant improvement allowance in exchange for an increase in the rental rate of the phase 1 space.

The Company received delivery of the second phase premises on December 1, 2022.

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The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

The following table reconciles the undiscounted cash flows for the operating leases at June 30, 2024 to the operating lease liabilities recorded on the balance sheet (in thousands):

The following table reconciles the undiscounted cash flows for the operating leases at March 31, 2024 to the operating lease liabilities recorded on the balance sheet (in thousands):

Years ending December 31,

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Total lease liabilities $ 68,889

The following table summarizes lease costs and cash payments for the three and six months ended June 30, 2024 and 2023 (in thousands):

The following table summarizes lease costs and cash payments for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Operating lease cost $ 1,881 $ 2,181

2 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities $ 1,070 $ 724

As of June 30, 2024, the weighted-average remaining lease term for operating leases is 10.7 years, and the weighted-average discount rate for operating leases is 7.0 %.

As of June 30, 2023, the weighted-average remaining lease term for operating leases was 11.7 years, and the weighted-average discount rate for operating leases was 8.9 %.

As of March 31, 2024, the weighted-average remaining lease term for operating leases is 10.9 years, and the weighted-average discount rate for operating leases is 7.0 %.

As of March 31, 2023, the weighted-average remaining lease term for operating leases was 11.8 years, and the weighted-average discount rate for operating leases was 8.9 %.

Commitments and Contingencies

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The Company is obligated to make future payments to third parties pursuant to certain license agreements, including sublicense fees, royalties, and payments that become due and payable on the achievement of certain development and commercialization milestones.

As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on the Company’s balance sheets for the periods ended June 30, 2024 and December 31, 2023.

The Company has also entered into agreements with third-party vendors that will require us to make future payments upon the delivery of goods and services in future periods.

Collaboration and Licensing Agreements

The following is a summary description of the material collaboration arrangements in the three and six months ended June 30, 2024 and 2023.

The following is a summary description of the material collaboration arrangements in the three months ended March 31, 2024 and 2023.

Alexion Pharmaceuticals, Inc.

4 unchanged sentences

Alexion’s royalty obligations continue on a product-by-product and country-by-country basis until the expiration of the last-to-expire valid claim in a licensed patent covering the applicable product in such country.

On November 3, 2023, the Company entered into the Ultomiris Royalty Sale Agreement with OMERS, in which OMERS acquired the rights to certain royalties associated with the existing license relating to Ultomiris in exchange for cash consideration.

For the six months ended June 30, 2024, Company earned and recognized $ 26.4 million in non-cash royalty revenue under the Ultomiris Royalty Sale Agreement.

The Company recognized $ 13.8 million and $ 26.4 million of non-cash royalty revenue during the three and six months ended June 30, 2024, respectively, and $ 11.2 million and $ 21.6 million of royalty revenue under this arrangement for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, there is $ 13.8 million receivable and no deferred revenue related to this agreement.

For the three months ended March 31, 2024, Company earned and recognized $ 12.6 million in non-cash royalty revenue under the Ultomiris Royalty Sale Agreement.

The Company recognized $ 12.6 million of non-cash royalty revenue and $ 10.5 million of royalty revenue under this arrangement for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there is $ 12.6 million receivable and no deferred revenue related to this agreement.

Payment of this receivable will be made directly to OMERS.

Astria Therapeutics, Inc.

In connection with a licensing transaction, the Company received preferred and common stock in Astria.

In January 2023, the Company exchanged its preferred stock for additional common stock in Astria.

The Company recognized an unrealized gain of $ 4.5 million related to its equity interest in Astria for the three months ended March 31, 2024.

The Company recognized an unrealized loss of $ 0.4 million related to its equity interest in Astria for the three months ended March 31, 2023.

There is no deferred revenue as of March 31, 2024 related to this agreement.

Genentech, Inc., and F.

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Hoffmann-La Roche Ltd (collectively, Genentech) for the development and commercialization of novel IL-15 collaboration products (Collaboration Products), including efbalropendekin alfa (also named XmAb306 and RG6323), the Company’s IL-15/IL15Rα-Fc candidate.

Under the terms of the Genentech Agreement, Genentech received an exclusive worldwide license to XmAb306, and we shared in 45 % of development and commercialization costs of Collaboration Products, and we were eligible to share in 45 % of net profits and losses from the sale of approved products.

Under the terms of the Genentech Agreement, Genentech received an exclusive worldwide license to XmAb306 and we share in 45 % of development and commercialization costs of Collaboration Products, and we are eligible to share in 45 % of net profits and losses from the sale of approved products.

However, in the fourth quarter of 2023, we agreed with Genentech to convert our current development cost and profit-sharing arrangement into a royalty and milestone payment-based arrangement.

Pursuant to the terms of the amended agreement with Genentech, effective June 1, 2024, Genentech assumed sole responsibility over all clinical, regulatory and commercial activities.

Pursuant to the terms of the amended agreement with Genentech, effective June 1, 2024, Genentech will assume sole responsibility over all clinical, regulatory and commercial activities.

We are eligible to receive up to $ 600.0 million in milestones, including $ 115.0 million in development milestones, $ 185.0 million in regulatory milestones and $ 300.0 million in sales-based milestones and tiered royalties ranging from low double-digit to mid-teens percentages.

The Company did not recognize revenue related to the Genentech Agreement for the three and six months ended June 30, 2024 or 2023.

As of June 30, 2024, there is a $ 7.6 million payable related to cost-sharing development activities during the first half of 2024 for development studies being conducted under the Genentech Agreement.

There is no deferred revenue as of June 30, 2024, as obligations to perform research activities have expired.

The Company did not recognize revenue related to the Genentech Agreement for the three months ended March 31, 2024 or 2023.

As of March 31, 2024, there is a $ 3.1 million payable related to cost-sharing development activities during the first quarter of 2024 for development studies being conducted under the Genentech Agreement.

There is no deferred revenue as of March 31, 2024, as obligations to perform research activities have expired.

INmune Bio, Inc.

In connection with a licensing transaction, the Company received common stock in INmune.

For the three months ended March 31, 2024 and 2023, the Company recorded unrealized gains of $ 0.9 million and $ 0.2 million, respectively, related to its investment in INmune.

Janssen Biotech, Inc., a Johnson & Johnson company

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J&J will assume full responsibility for development and commercialization of the CD28 bispecific antibody candidate.

The Company did not recognize revenue for the three and six months ended June 30, 2024 and 2023 under the J&J Agreement.

As of June 30, 2024, there is no deferred revenue related to this Agreement.

The Company did not recognize revenue for the three months ended March 31, 2024 and 2023 under the J&J Agreement.

As of March 31, 2024, there is no deferred revenue related to this Agreement.

Second J&J Agreement

2 unchanged sentences

The Agreement became effective on November 5, 2021.

The Company collaborated with J&J on clinical development of plamotamab with J&J and shared development costs with J&J paying 80 % and the Company paying 20 % of certain development costs.

In June 2024, the Company was notified that J&J will terminate its rights to plamotamab.

The Company will collaborate with J&J on further clinical development of plamotamab with J&J and share development costs with J&J paying 80 % and the Company paying 20 % of certain development costs.

The Company is generally responsible for conducting research activities under the Second J&J Agreement, and J&J is generally responsible for all development, manufacturing, and commercialization activities for CD28 Licensed Antibodies that are advanced.

Revenue from the research activities was recognized over a period of time through the end of the research term that services were rendered as we determined that the input method was the appropriate approach to recognize income for such services.

There is a receivable of $ 5.2 million as of June 30, 2024, related to cost-sharing activities for development of plamotamab under the Second J&J Agreement.

No revenue was recognized for the three and six months ended June 30, 2024, and the Company recognized $ 22.2 million and $ 27.5 million of revenue for the three and six months ended June 30, 2023, respectively.

There is no deferred revenue as of June 30, 2024 related to the Second J&J Agreement as obligations to perform research activities have expired.

There is a receivable of $ 1.9 million as of March 31, 2024, related to cost-sharing activities for development of plamotamab under the Second J&J Agreement.

No revenue was recognized for the three months ended March 31, 2024, and the Company recognized $ 5.2 million of revenue for the three months ended March 31, 2023.

There is no deferred revenue as of March 31, 2024 related to the Second J&J Agreement as obligations to perform research activities have expired.

MorphoSys AG/Incyte Corporation

In June 2010, the Company entered into a Collaboration and License Agreement with MorphoSys AG (MorphoSys), which was subsequently amended.

Under the agreement, we granted MorphoSys an exclusive worldwide license to the Company’s patents and know-how to research, develop and commercialize the XmAb5574 product candidate

(subsequently renamed MOR208 and tafasitamab) with the right to sublicense under certain conditions.

Under the agreement, we granted MorphoSys an exclusive worldwide

license to the Company’s patents and know-how to research, develop and commercialize the XmAb5574 product candidate (subsequently renamed MOR208 and tafasitamab) with the right to sublicense under certain conditions.

In February 2024, Incyte Corporation acquired exclusive global development and commercialization rights to tafasitamab.

1 unchanged sentence

On November 3, 2023, the Company entered into the Monjuvi Royalty Sale Agreement with OMERS, pursuant to which OMERS acquired the rights to certain royalties earned after July 1, 2023 associated with the existing license relating to Monjuvi.

The Company recognized $ 1.6 million and $ 4.4 million of non-cash royalty revenue during the three and six months ended June 30, 2024, respectively.

The Company recognized $ 2.0 million and $ 3.9 million of royalty revenue during the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, there is a receivable of $ 2.1 million related to estimated royalties due under the arrangement.

As of June 30, 2024, there is no deferred revenue related to this agreement.

Shanghai Mabgeek Biotech Co., Ltd.

On December 22, 2023, the Company entered into a Technology License Agreement with Shanghai Mabgeek Biotech Co., Ltd.

(Mabgeek), and the Company and Mabgeek entered into Amendment No.

1 on June 21, 2024 (collectively, Mabgeek Agreement).

Under the Mabgeek Agreement, the Company received an upfront payment of $1.5 million and up to $11.9 million of milestones.

In addition, the Company is eligible to receive royalties on the net sales of approved products in the low single digits.

The Company evaluated the Mabgeek Agreement and determined that the single performance obligation was access to a non-exclusive license to certain patents of the Company which were transferred to Mabgeek in June 2024.

The Company recognized $ 1.5 million of license revenue related to the agreement for the three and six months ended June 30, 2024.

There is no deferred revenue as of June 30, 2024 related to this agreement.

For the three months ended March 31, 2024, the Company earned and recognized $ 2.9 million in royalty revenue, all of which was non-cash royalty revenue under the Monjuvi Royalty Sale Agreement.

The Company recognized $ 2.9 million of non-cash royalty revenue and $ 1.8 million of royalty revenue during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there is a receivable of $ 3.4 million related to estimated royalties due under the arrangement.

As of March 31, 2024, there is no deferred revenue related to this agreement.

Vega Therapeutics, Inc.

2 unchanged sentences

In March 2024, Vega notified the Company that it initiated a Phase 1 study, and the Company recorded milestone revenue of $ 0.5 million.

The Company recognized $ 0.5 million of revenue for the six months ended June 30, 2024.

No revenue was recognized for the three months ended June 30, 2024 or the three and six months ended June 30, 2023.

The Company recognized $ 0.5 million of revenue for the three months ended March 31, 2024.

No revenue was recognized for the three months ended March 31, 2023.

Vir Biotechnology, Inc.

4 unchanged sentences

Vir and its marketing partner, GSK, began recording sales for sotrovimab beginning in June 2021.

The Company recognized $ 0.1 million of revenue for the six months ended June 30, 2024, and the Company recognized $ 0.1 million and $ 1.5 million of royalty revenue for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, there is no receivable related to estimated royalty due under this agreement, and there is no deferred revenue related to this agreement.

No revenue was recognized for the three months ended March 31, 2024, and the Company recognized $ 1.5 million of royalty revenue for the three months ended March 31, 2023.

As of March 31, 2024, there is no receivable related to estimated royalty due under this agreement, and there is no deferred revenue related to this agreement.

Viridian Therapeutics, Inc.

In December 2020 and in December 2021, the Company entered two separate license agreements with Viridian and received shares of Viridian common stock for each license.

During 2023, Viridian terminated the initial license agreement, and the research term under the second license expired.

The Company reported unrealized losses of $ 3.1 million and $ 2.7 million for the three months ended March 31, 2024 and 2023, respectively, related to the shares of Viridian common stock.

The Company did not recognize revenue for the three months ended March 31, 2024 or 2023.

There is no deferred revenue as of March 31, 2024 related to this agreement.

Zenas BioPharma, Inc.

9 unchanged sentences

The Company received a development milestone in the form of additional preferred stock in Zenas with a fair value of $ 10.0 million.

The Company recognized an impairment charge of $ 20.4 million in the six months ended June 30, 2024 due to an impairment analysis resulting from the Zenas Series C financing transaction.

The Company did not record an impairment charge or change in the value of the Zenas equity in the three and six months ended June 30, 2023.

The Company did not recognize any revenue for the three and six months ended June 30, 2024.

The Company recognized $ 10.0 million of milestone revenue for the three and six months ended June 30, 2023, and there is no deferred revenue related to this agreement.

Third-Party Licensee

In May 2024, the Company entered into a Patent License Agreement (Third-Party Licensee Agreement) with a third-party licensee.

The Company completed delivery of the performance obligation under the agreement, and the Company will receive a payment of $ 7.0 million.

The Company recognized $ 7.0 million of license revenue for the three and six months ended June 30, 2024, and there is a receivable of $ 7.0 million.

There is no deferred revenue related to this agreement.

The Company recognized an impairment charge of $ 20.6 million in the three months ended March 31, 2024 due to an impairment analysis of the Zenas' Series C financing transaction.

The Company did not record an impairment charge or change in the value of the Zenas equity in the three months ended March 31, 2023.

The Company did not recognize any revenue for the three months ended March 31, 2024 or 2023, and there is no deferred revenue related to this agreement.

Gale Therapeutics Inc.

4 unchanged sentences

In exchange for $ 7.5 million of funding, the Company acquired a majority stake in Gale.

Total charges of $ 4.6 million and $ 8.0 million under the Gale Services Agreement for the three and six months ended June 30, 2024, respectively, were eliminated in consolidation.

In July 2024, the Company entered into a preferred stock purchase agreement to purchase additional shares in Gale for $ 3.0 million.

Total charges of $ 2.7 million under the Services Agreement for the three months ended March 31, 2024 were eliminated in consolidation.

Revenues earned

The revenues recorded for the three and six months ended June 30, 2024 and 2023 were earned principally from the following licensees (in millions):

The revenues recorded for the three months ended March 31, 2024 and 2023 were earned principally from the following licensees (in millions):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(As Restated)

Alexion $ 12.6 $ 10.5

Janssen — 5.2

$ 1.5 $ — $ 1.5 $ —

MorphoSys 2.9 1.8

Vega — — 0.5 —

Vir — 0.1 0.1 1.5

Viridian $ — $ — $ — $ —

Zenas $ — $ 10.0 $ — $ 10.0

Third Party Licensee

$ 7.0 $ — $ 7.0 $ —

Total $ 16.0 $ 19.0

The table below summarizes the disaggregation of revenue recorded for the three and six months ended June 30, 2024 and 2023 (in millions):

The table below summarizes the disaggregation of revenue recorded for the three months ended March 31, 2024 and 2023 (in millions):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(As Restated)

Research collaboration $ — $ 0.2

4 unchanged sentences

Remaining Performance Obligations and Deferred Revenue

The Company does not have any remaining performance obligation as of June 30, 2024.

As of June 30, 2023, the Company had deferred revenue of $ 7.9 million for conducting research activities pursuant to the Second J&J Agreement.

All deferred revenue as of June 30, 2023 was classified as current liabilities as the Company’s obligations to perform services are due on demand when requested by J&J under the Second J&J Agreement.

There is no provision for income tax for the three and six months ended June 30, 2024 or 2023.

As of June 30, 2024, the Company’s deferred income tax assets are primarily comprised of deferred revenue, capitalized research and development expenses, federal and state tax net operating loss (NOL) carryforwards and research and development tax credit carryforwards, and have been fully offset by a valuation allowance.

The Company does not have any remaining performance obligation as of March 31, 2024.

As of March 31, 2023, the Company had deferred revenue of $ 30.1 million for conducting research activities pursuant to the Second J&J Agreement.

All deferred revenue as of March 31, 2023 was classified as current liabilities as the Company’s obligations to perform services are due on demand when requested by J&J under the Second J&J Agreement.

There is no provision for income tax for the three months ended March 31, 2024 or 2023.

As of March 31, 2024, the Company’s deferred income tax assets are primarily comprised of deferred revenue, capitalized research and development expenses, federal and state tax net operating loss (NOL) carryforwards and research and development tax credit carryforwards, and have been fully offset by a valuation allowance.

Sale of Future Royalties

1 unchanged sentence

The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be classified as debt according to ASC 470 Debt .

At June 30, 2024, the estimated effective interest rate remains at 21.1 %.

At March 31, 2024, the estimated effective interest rate remains at 21.1 %.

The Company will continue to reassess the estimate of total future royalty payments and prospectively adjust the imputed interest rate and related amortization if the estimate is materially different.

For the three and six months ended June 30, 2024, the Company recognized $ 13.8 million and $ 26.4 million of non-cash royalty revenue, respectively, and $ 8.4 million and $ 17.0 million of non-cash interest expense, respectively..

For the three months ended March 31, 2024, the Company recognized $ 12.6 million of non-cash royalty revenue and $ 8.6 million of non-cash interest expense.

Monjuvi Royalty Sale Agreement

The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be classified as debt pursuant to ASC 470 Debt .

At June 30, 2024, the Company reassessed the estimate of total future royalty payments and updated the estimated effective interest rate to 17.5 %.

The Company evaluated the arrangement and determined that the proceeds from the sale of future royalties should be classified as debt according to ASC 470 Debt .

As of March 31, 2024, the estimated effective rate under the agreement remains to be 21.1 %.

For the three and six months ended June 30, 2024, the Company recognized $ 1.6 million and $ 4.4 million of non-cash royalty revenue, respectively, and $ 0.8 million and $ 1.9 million of non-cash interest expense, respectively.

The following table shows the activity within debt for the six months ended June 30, 2024 (in thousands):

June 30, 2024

For the three months ended March 31, 2024, the Company recognized $ 2.9 million of non-cash royalty revenue and $ 1.1 million of non-cash interest expense.

The following table shows the activity within debt for the quarter ended March 31, 2024 (in thousands):

March 31, 2024

(As Restated)

8 unchanged sentences

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-Q/A

Item 1. Financial Statements