Earnings

Xencor Turns a Profit on Partner Royalties and Milestones

The Tip Desk · November 11, 2026 · 5 min read

Third-quarter revenue was $116.5 million, and the company reported net income of $39.4 million, or $0.50 a share, versus a year-earlier loss.

Xencor, Inc. (XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies for cancer and autoimmune diseases, reported net income of $39.4 million, or $0.50 a share on a fully diluted basis, for the third quarter ended September 30, 2026, compared with a net loss of $6.0 million, or $(0.08) a share, a year earlier.

Revenue was $116.5 million, compared with $21.0 million in the same period of 2025. The company said the increase was primarily due to royalty revenue from Alexion and Incyte and milestone revenue from Astellas.

Research and development expenses were $84.3 million, compared with $54.4 million a year earlier. Xencor attributed the increase primarily to higher external and internal costs associated with development programs, partially offset by lower stock-based compensation. General and administrative expenses were $9.4 million, compared with $14.2 million a year earlier, primarily due to a non-recurring recovery of legal expenses. Other income, net, was $16.4 million, compared with $41.5 million a year earlier, primarily due to lower unrealized gains on an equity security.

Cash, cash equivalents and marketable debt securities totaled $555.7 million as of September 30, 2026, compared with $610.8 million as of December 31, 2025. Under a settlement with Alexion, Xencor received $52.5 million in August 2026 and is entitled to a final payment of $52.5 million in the third quarter of 2027. It also received $66.9 million in cash proceeds from the sale of an equity security.

Based on current operating plans, Xencor expects to end 2026 with between $480 million and $500 million in cash, cash equivalents and marketable debt securities, and to have sufficient cash resources to fund research and development programs and operations into 2029.

The company selected the 400 mcg/kg intravenous dose as the proposed recommended Phase 3 dose for XmAb819, its ENPP3 x CD3 bispecific antibody, in advanced clear cell renal cell carcinoma. As of the October 1, 2026, data cut, the efficacy-evaluable cohort at that dose (n=11) reported five confirmed partial responses for a confirmed objective response rate of 45.5% per investigator assessment (RECIST v1.1), with one unconfirmed partial response for an unconfirmed rate of 55%. As of the September 1, 2026, data cut, XmAb819 in combined expansion dose cohorts (n=68) had a 5.9% treatment-discontinuation rate due to related treatment-emergent adverse events.

President and chief executive officer Bassil Dahiyat said plans are underway to move XmAb819 into earlier lines of treatment as a monotherapy and in combination with anti-PD(L)1, with evaluation in additional ENPP3-positive tumor types ongoing. He said that by the end of 2027 the company anticipates XmAb819 will be the third XmAb 2+1 bispecific antibody to enter a potential registration-enabling study, following xaluritamig and ASP2138. In the first half of 2027, Xencor plans to engage with the FDA regarding a potential accelerated approval pathway for XmAb819 in subsets of patients with advanced ccRCC who have exhausted standard-of-care options. Subject to regulatory feedback, by the end of 2027 it also plans to initiate a global randomized Phase 3 study evaluating XmAb819 against tivozanib in patients with advanced ccRCC previously treated with one PD-(L)1 inhibitor and at least one VEGFR TKI.

Expansion cohorts evaluating intravenous doses to support selection of a dose for the planned Phase 3 pivotal study have completed enrollment. Proof-of-concept sub-studies are enrolling patients with ENPP3-positive advanced papillary RCC, colorectal cancer and non-small cell lung cancer, as well as IMDC intermediate- to poor-risk advanced ccRCC patients who progressed after first-line nivolumab plus ipilimumab and are naïve to VEGFR TKI therapy. A planned safety study of XmAb819 with nivolumab is intended to potentially enable front-line development. Additional 400 mcg/kg IV results and subcutaneous dose-escalation results are planned for the first half of 2027.

In August 2026, Astellas dosed the first patient in a Phase 3 trial of ASP2138 with chemotherapy and pembrolizumab in first-line CLDN18.2-positive, HER2-negative gastric or gastroesophageal junction adenocarcinoma, triggering a $25.0 million milestone. Xencor is eligible for up to $207.5 million in future milestones and tiered royalties on net sales ranging from high-single to low-double digit percentages. Amgen completed enrollment in the Phase 3 XALute study of xaluritamig monotherapy in taxane-pretreated metastatic castration-resistant prostate cancer in August 2026; Xencor is eligible for up to $225 million in future milestones and mid- to high-single digit royalties. In the third quarter, Bristol Myers Squibb submitted a marketing authorization application for obexelimab in IgG4-related disease in Japan, triggering a $2.5 million milestone; Zenas had submitted a U.S. BLA in May 2026, accepted for review in August 2026.

For the autoimmune portfolio, Xencor said it will present early dose-escalation data for plamotamab (CD20 x CD3) in rheumatoid arthritis at the ACR Convergence conference. Enrollment in XENITH-UC, the global Phase 2b study of XmAb942 in ulcerative colitis, remains on track for a blinded interim analysis around year-end 2026 and a primary endpoint analysis of the 12-week induction period in the second half of 2027. The company plans to present initial healthy-participant data for XmAb412 (TL1A x IL23p19) in the first half of 2027.

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