Hi. Good afternoon, everyone. I'm Tara Bancroft. I'm one of the Senior Biotech Analysts here at TD Cowen. I wanna thank you for coming to TD Cowen's 46th Annual Healthcare Conference. For our next session, we have a presentation and time for Q&A with Xencor. From Xencor, we have Dane Leone, who is the EVP and Chief Strategy Officer of Xencor. Dane, it is wonderful to have you here. Thank you so much for coming. Why don't you go ahead and start your presentation?
Thanks, Tara, thanks to the Cowen team for having us back this year. Always a wonderful conference. I'm here to tell you about Xencor. We're a clinical stage biotech company that is built off of a world-class protein engineering platform that helps us design proteins to solve unique biological problems and advance the standard of care and deliver those medicines to patients. It's a really exciting time for the company.
Forward-looking statement, I suppose. Sorry. It's a really exciting time for the company, as it's been kind of a journey over the last couple of years to really define what our path forward is into the clinic and ultimately bring a drug and drug program to commercial stage ourselves, and that's really the focus.
you know, there's a couple things that go into that to being successful. One, it's really thinking about what our protein engineering platform can do to solve that complex biology and oncology and severe autoimmune disease that can't be addressed by today's medicines. We're uniquely positioned both on T-cell engagers, bispecific antibodies, and a lot of the other protein tools that have been designed by the Xencor team over the last 20-25 years to really help us pick where we can differentiate in the clinic.
You know, building on that, probably starting in 2024, we really set the clinical strategy agenda to be where we think we can really do an excellent job bringing things into Phase 1, bringing them through Phase 2, and then evaluating what we can prosecute and bring to commercial market. We've done a lot to change the clinical capabilities of the Xencor team and really turn it into a world-class clinical development organization.
I sit here still in the early part of 2026, really proud at what we did in 2025, where we had 3 INDs successfully go through and launched a global Phase 2b study in ulcerative colitis called the XENITH-UC program that we'll talk about. It goes to the core point of what we can do.
We're not the biggest organization, but I think we're mighty in our clinical capabilities that we've brought to bear. What that does is allow us to look across the portfolio and then maximize outcomes for all of our stakeholders. Obviously, first and foremost are our patients, and their clinicians, and delivering our medicines, our unique medicines that can advance the standard of care for them.
Also ultimately, our investors and shareholders as well. Luckily, with a lot of support, we were in a really good financial position with over $600 million in cash to turn the data cards over in our existing, internally, wholly owned pipeline to understand what the right decision is for each of these programs. That's our drug development model.
That's kind of what guides us on a daily basis of making these decisions for the totality of the organization. I think it shows well in our current clinical portfolio. We have two lead oncology programs right now, XmAb819 and XmAb541, both T-cell engagers, that harness our long-standing knowledge about CD3 engagement with the T-cell targeting an antigen on tumor cells, and really threading the needle on clinical activity versus toxicity.
We were really excited to show initial data from our dose escalation study of XmAb819 during the Triple Oncology Meeting last October, which got really good reception with investigators and hopefully the world broadly, as it really demonstrated for the first time activity of an IO-like agent, a T-cell engager, in heavily pre-treated patients with clear cell renal cell carcinoma.
We're building on that this year as we continue to progress the program as our lead in clinical program and hopefully set the stage for pivotal development in 2027. Catching up and following that program really quickly in oncology is also our XmAb541 program, which is a Claudin-6 T-cell engager. That's being developed in gynecologic tumors, ovarian endometrial, and also germ cell tumors.
That one we showed a little snippet of data last year. It's still a little bit earlier than the XmAb819 program, but moving along quickly. We'll give an exciting update on that one in the latter part of the year and also hope to evaluate going into pivotal programs during 2027 as well. We have a couple other programs in clinical oncology that we're evaluating where to kinda go with. You'll hear more on that front as we progress through the year. In autoimmune, this was a new build for us in 2024.
We kinda had a strategic update where we unveiled a number of programs that, in my view, kinda brought the totality of the company back to its origins of looking across both oncology and autoimmune disease. It's hard to really pick the lead, but the obvious lead in terms of clinical development is the XmAb942 program, which is a global Phase 2b study in ulcerative colitis that we kicked off around mid 2025, kind of in the third quarter started ramping up.
That's really exciting to potentially differentiate and bring a best-in-class biologic drug therapy to patients living with ulcerative colitis, where there continues to be a really high unmet need, especially after those that have progressed on first-line, frontline biologic therapy.
Following in the footsteps is gonna be a really interesting program. In the first half of this year, we're gonna present preclinical data on XmAb412. That's a bispecific antibody that targets both TL1A and IL23p19, two really well-validated targets at this point in ulcerative colitis and Crohn's disease, among some other autoimmune diseases as well.
This is a cornerstone of what I was talking originally about the power of the XmAb engineering protein platform, where we can look at really interesting antigen targets for a certain disease and make a single molecule that can essentially target both of those antigens in one single drug.
Bring the ease of kind of traditional drug development to cutting-edge protein engineering to something that hopefully really advances the standard of care for patients. First in human studies in healthy volunteers for XmAb4 12 will start in the back half of 2026, and that'll be I think a really, really interesting long-term program for the organization.
There's two programs in autoimmune that I think are kind of paired together. They have similar properties but are in slightly different indications. First one is Plamotamab. It's a CD20 T-cell engager that we started in a dose escalation rheumatoid arthritis study in the back half of 2025. This drug is interesting because it was actually originally developed in lymphoma with a partner.
We regained the rights in 2024 and thought it had good clinical properties to test the thesis of whether a CD20 T-cell engager can do something differentiated versus CD20 monoclonal antibody, like Rituximab, that had been long-stayed in some of these really big, broad autoimmune diseases like rheumatoid arthritis. That study is going well and we're excited to keep the momentum going in 2026. Kind of newer to the clinic is XmAb 657, which is a rationally designed molecule, CD19, CD3 for autoimmune disease.
This one is starting in idiopathic inflammatory myopathies. We will be looking quite broad with this program as what we're looking to do essentially is simulate the efficacy that we've seen with CAR T cellular therapy in some of these severe autoimmune diseases while giving the convenience of a traditional drug that can be presented and dosed in the clinic in a bottle subcutaneously.
We think the properties are just right to kind of mimic that groundbreaking efficacy that we've seen with the CAR T class. I think this first-in-human study will give us some proof of concept as we go along here. We have a lot going on.
That was I think, hopefully a good table setting for you, Tara, but I'll touch on just the catalyst calendar for this year quickly. XmAb819, like I said, first started in clear cell renal cell carcinoma, but we have initiated additional tumor types, colorectal, papillary renal cell carcinoma, and non-small cell lung cohorts. That should ramp in the back half of this year.
As I said before, we're planning for a pivotal program in clear cell renal cell carcinoma in 2027, and we do present, do plan to present the RP3D monotherapy data at a medical meeting for 819 in the back half of this year.
541, we'll give an update, probably a corporate update on the RP3D monotherapy data that we plan in gynecologic tumors in the back half of the year as well. That one's a little bit behind. I don't think we'd be able to get that in at a medical meeting proper, but we'll give a nice update on that program, XmAb541, before year-end as well on the oncology side.
Now turning quickly to the catalysts on the immunology side, XmAb942 will really be focused on clinical execution of the Phase 2bs in its UC study in ulcerative colitis throughout the year.
Around year-end, we should be able to give an update on the progress of that study, and that'll dovetail nicely as we, like I said, initiate the first-in-human study of XmAb412, which has some similarities in the development pathway in the back half of the year. Both B-cell targeted T-cell engager programs, Plamotamab and XmAb657, just kind of are getting ramped up in the clinic. We'll give an update on progress for both of those studies in the back half of the year as well.
We're really excited to kind of go into the clinical inflection point of this year on our 3-year kind of strategic refocus for the totality of the organization, again underscores that new business mentality that we've really put forth over the last couple years of looking at strong clinical execution to drive the future of Xencor and really building on that with really novel first-in-class programs, powered by our XmAb protein engineering platform.
I would be remiss if I stopped my monologue here without crediting a lot of great partnerships that we've had and built and continue to have that have harnessed a lot of the unique and groundbreaking protein engineering that the company has done throughout its 25-year history that culminates into a very efficient capital position for Xencor.
What you can see across a number of these partnerships is they have meaningful royalties, meaningful upfronts, and they harness all different points of our protein engineering technology, but are very concentrated in more recent deals around our bispecific and T-cell engager technology. That's synergistic from us because we learn a lot from these programs.
They help kind of advance our own thinking about the technologies, but also give us more information about the clinical applicability. As we look to ramp up our own clinical development work, it gives us a lot of flexibility of how we think about funding our own wholly owned programs.
We're very excited as a number of these programs have advanced over the last 12 months and will continue to advance through pivotal testing in many cases over the next 2 years. That's a kind of a what's what with Xencor as we're in the early stages of 2026, but hopefully that gives you some questions that I'd be happy to entertain.
Sure does. Okay. Is my mic still on? Good. Okay. We can sit here if you want. Come closer. It's been a long day. Okay. I think a good place to start would be the DDW Phase 1 update that you have for 942. Can you tell us how significant of a catalyst this is to you and then should therefore be to us and what you're hoping to show and/or confirm in that data, you know, to have more conviction in the differentiation of this asset?
Yeah, great question. Digestive Disease Week, DDW, will be early May-
Mm-hmm
I believe.
Mm-hmm.
We'll feature two posters from us, one on XmAb942, which is our anti-TL1A monoclonal antibody that's in the XENITH-UC global study right now. That'll be final results from the healthy volunteer study that we ran mostly over the course of 2025.
The results of that study are good because they kinda confirm the PK/PD and immunogenicity profile of 942 and why we think it's a great molecule. The more important point is, it goes back to our conviction that XENITH-UC as a study will answer the specific question, did we make a potent half-life extended anti-TL1A molecule that can do something better than what we've seen with the biologic class and also colitis to date?
That was our kind of original hypothesis when we started the program in probably late 2023, that a really well-designed biologic drug with the right antigen target, in this case TL1A, in inflammatory bowel disease can do something different than what we've kind of been stuck at for many years of a 20% placebo adjusted remission rate on Modified Mayo Score, because by modeling, a lot of these biologics have been underdosed historically.
What we kind of found in what we were doing is if you really dial in the potency and we're in a picomolar affinity for the TL1A side, and you dial in really good half-life for over 71 days on the half-life side, you can kind of really saturate the target in the gut compartment and potentially do something different.
We saw that across a lot of studies that came out after we started the program, the LUCENT study with mirikizumab, where there was a nice capture of patients that didn't respond to that first 12-week induction period over 50% when they got this in an extended deduction regimen.
You saw the same thing with the Prometheus TL1A study, ARTEMIS-UC, and you saw the same thing with the TUSCANY-2 study of afimkibart, the TL1A that was originally designed by Pfizer, now owned by Roche. No dose response, but exposure response. There's a lot of different data points that have come in IBD that said, biologics are just underdosed.
If you have a safe enough target like TL1A, you can up the exposure, get better target inhibition, especially in that gut compartment in both induction and maintenance period, and deliver better clinical results. That's kind of what we're table setting with this DDW final healthy volunteer study for XmAb942, and then kind of dovetailing that, we'll have the preclinical presentation of XmAb412.
XmAb412, again, novel first in class drug, with a novel format, engineered by the Xencor team, really a tour de force of protein engineering, for our platform. You'll see on paper why we're so excited about this program and molecule and how differentiated it is against our peer groups and kind of any of the other molecules being proposed to be developed in the IBD space.
The question will be, once we start that first in human study in the back half of the year, does the on paper properties of XmAb412 translate in the clinic? Obviously, we hope and we think it will, but you'll be able to see it, and it'll be a very detailed presentation.
Okay. Definitely looking forward to that. I guess on XmAb412, can you elaborate a little bit more on what you think IL-23 adds to TL1A? 'Cause we haven't seen a combined product like this and maybe how it compares to then sequential or co-administered approaches.
Yeah. There's, there's different terms thrown around, orthogonal, synergistic. What we saw from a translational paper put out by the Pfizer team, several years ago, was that in their study, actually exploring Afimkibart, they did see some relative upregulation of IL-23, with, importantly on kind of the p19 subunit, not the IL-12 side, for those patients that were, not really responding as well to the therapy.
Mm-hmm.
I mean, I think everyone has hypotheses on the signaling pathways and why they would be kinda synergistic in the clinic. Really on the easier front, think of it this way, you have really only kind of 20% of patients for these biologics that are getting clinical remission beyond what you get with the placebo in this induction period.
Mm-hmm.
It tells you something's still missing from treatment of ulcerative colitis, treatment of Crohn's disease once they've progressed. A lot of the docs use the analogy unfortunately this IBD is really similar to oncology. Kind of the biology of the disease seems to evolve and change as the patients go through their treatment journey.
Just like we think about oncology, which Xencor's thought about a lot over our history, you look for synergistic targets, and those can be really powerful. What we also like is that TL1A has been proven very safe in the clinic. IL-23, especially with the p19 subunit, has looked very safe in the clinic, and those are the most effective targets we've found for IBD.
Okay, great. With you advancing both TL1A and the TL1A by IL-23, with bringing both of them forward, how can we think about both of them fitting into the paradigm versus just one if it looks better? Especially in such a competitive market. You have all these injectables and all these orals. Where could you see one or both of them?
Yeah, I love that question because it again goes back to what we reset as a business strategy in 2024 and kind of that first, you know, life cycle slide I presented on how Xencor as us as a senior management team thinks about our strategy in the clinic and just kind of overall for where we put our dollars to work. For 942, we view a TL1A monoclonal antibody as kind of in the early innings of discovery, like the TNF class was 2 to 3 decades ago.
Mm-hmm.
There could be a lot of different disease areas and you've seen our peers start exploring those different disease areas beyond IBD. If we really deliver a best in class TL1A molecule with really good dose characterization, which is how we designed the Phase 2b studies, XENITH-UC, we can go into a lot of different areas as it becomes better elucidated what the right applicable areas are, right? Kinda like the TNF class, we think there's gonna be disease areas that TL1A, targeting TL1A works really well. There's gonna be some that are, you know, don't really move the needle much.
Mm-hmm.
What we want to do is really characterize the molecule and come up with a good game plan first before we kind of go to other areas.
Mm-hmm.
XmAb412, you're right, is kind of like that laser shot. It's gonna be, could be groundbreaking, kinda killer app in IBD. It could be a killer app in certain other areas, maybe like psoriatic arthritis. Those two targets are not gonna be totally applicable in a really broad range of diseases.
Mm-hmm.
We kind of view 942 as a flexible program that there could be a lot of things to do with, kind of a lot of utility, and 412 is kind of the killer app program. To that point, as we kinda see those programs converge in IBD, we'll make rational decisions on how we prosecute those.
Mm-hmm
... you know, avoid redundancy.
Okay. Great. Good to hear. All right. You have a lot more drugs that we could talk about. Plamotamab. I think, you know, we were there for the lymphoma data, and when you got the rights back and continued to develop it was very interesting 'cause, you know, you're definitely up to something here.
You know, CD20 and RA, it's extremely well validated. You have this T-cell engager now. Maybe could you go into what the T-cell engagement aspect of it actually adds on top of just CD20 depletion?
Yeah. This is a great case study about how we internally think about developing clinical programs at Xencor. We looked at Plamotamab, were able to regain the rights for it, said, "You know, there could be something about T-cell engagers that do something different than a monoclonal antibody targeting the same B-cell antigen in autoimmune disease."
Okay, does this drug have the right properties? Step one. Good half-life on Plamotamab. Did really well in patients that were refractory to prior treatments in lymphoma. I think we had about 25% of patients had clinical remission that had progressed on CAR T, so kind of on par with the CD20, CD3 drugs that are now commercially available. We knew we had a really effective drug. To your question, what is the clinical hypothesis we needed to test?
We needed to test whether a T-cell engager really would truly differentiate versus what's available on market and relatively cheap these days with rituximab, right? There's many other kind of CD20s, obinutuzumab, and ocrelizumab.
Mm-hmm
... obviously used in MS. RA was the right experiment to go in first. Lots of patients can get the experiment done quickly, you know, relative good capital costs for running the experiment. Specifically to the outcomes, the American College of Rheumatology scoring system based on tender swollen joint count, and those tender swollen joints are really based on the inflammation of the synovial tissue driven by the pathogenic B cells.
A T-cell engager is gonna co-locate naturally with those B cells as your T cells co-locate with those B cells much better than what you get with NK cells. The NK cells are what you need for the monoclonal antibodies.
We thought, okay, well, if this is true, right, we'll see the T-cell engager get into the synovial tissue, target those pathogenic B cells, drive down the inflammation, and that should directly translate to the clinical scoring system if there's a there there.
Kinda what we're looking for is ACR70, we wanna be above that 10%-15% rate that you saw for those refractory patients that received Rituximab across a lot of different studies. If that's true, then hypothesis confirmed. You're getting that differentiation and tissue activation with a T cell than what you can get with a monoclonal antibody and do something quite interesting there while sparing kinda any additional toxicity risk or safety risk, which is paramount to these dox-treated rheumatoid arthritis patients.
As these patients are older, don't really have a tolerance for added infection risk or other things. Could be a really great drug for Plamotamab to think about in that orbit of, you know, the broader autoimmune disease subset that can be driven by pathogenic B cells.
Okay. Would you say the same biologic principles apply to XmAb657?
XmAb657 is different. Like I said, it, you know, in a really simplistic way, we would pitch that as CAR T in a bottle.
Yeah.
Right? CAR T has done great things for probably these really severe autoimmune diseases, like myositis, sclerosis. you know, I think CD19 targeting it can actually affect an immune reset, which will be important for the durable remission of these more severe autoimmune diseases.
Targeting those plasma cell subsets invariably comes at, you know, some degree of price, and we've seen that with inebilizumab. You're gonna have kinda higher infection risk. We think where we go with 657 is probably in the more severe basket study of autoimmune disease. In those patients, I mean, that's a very, very, very high clinical unmet need.
If we can keep patients out of the hospital, deliver real, durable clinical remission, that's gonna be something really exciting, and the investigators we're working with are very excited about the potential of this drug.
Okay, great. I wanna make sure we get to the oncology pipeline and 819 with the Phase 3 dose selection coming up. Can you just go through what the most important factors that you're looking for there?
Yeah, with XmAb819 and clear cell renal cell carcinoma, it's a lot of momentum building for this program. To the point that we had talked about, the landscape's shifting with these HIF-2α inhibitors in the earlier line.
The question remains the same for the docs, or two questions remain the same: How do we get away from the VEGF-TKI axis, which is multiple rounds of therapy with diminishing returns for these patients? Also, how do we think about novel modalities that can work post PD-1 in the front line? The initial data set that we shared at the Triple Meeting last October gave you proof of concept on both of those.
We had responses post HIF-2α inhibitors, all of our patients had been pretreated with a PD-1 inhibitor and 1 to 2 prior VEGF-TKIs. Now the charge to us is get this drug in the hands of patients, right, and their clinicians. We were at ASCO GU obviously talking with our investigators, putting the plan together for the continued evolution of the program into later phase development.
I think like we've publicly said in the past, we have a long wait list for this study. We're trying to accommodate as many patients we have in the continued de-escalation. Y ou know, we wanna do something really impactful here, we think we have a drug that can really help a lot of patients living with clear cell renal cell carcinoma, and that's why we're expanding the program now into additional tumor types that are ENPP3- positive.
There's a lot of opportunity for this type of novel first-in-class drug, while we continue to figure out the totality of the game plan of development in clear cell in earlier lines of therapy.
Okay. one more program I wanna ask a question on, the Claudin-6. What is it that most gives you confidence in, a more tolerable safety profile than we've historically seen with the Claudin class?
Yeah. In, 2 seconds.
Yeah.
Claudin-6 has become a validated target in gynecologic tumors. I think there's non-overlap with the Folate receptor alpha expression. It can serve, definitely, a different patient population, ovarian, and other tumor types that are not currently served with alternative options to chemo. Even in the case of the current studies of Claudin-6 ADCs, Folate receptor alpha ADCs, they're still using a chemo-based warhead.
There's a lot of interest in the T-cell engager. We'll be kinda defining the clinical profile across the three different tumor types we're looking at, ovarian, endometrial and germ cell in the back half of the year, figuring out how to individually split those programs apart and what the best clinical development plan is under each of those scenarios.
A lot of work to do on XmAb541, but good work, and we'll be able to give some more information on the direction of that program in the back half of the year.
Okay. That sounds great. Thank you so much, Dane, for your time. Thanks everyone for listening.
Thank you so much, and thanks for the coverage.