Xencor (XNCR) risk factors, FY2025 10-K

Risks Related to Our Unique and Specific Business Operations as a Small Biotechnology Company

1. 01Our success depends on our ability to use and expand our XmAb technology platform to build a pipeline of product candidates and develop marketable products. We cannot be certain our candidates will receive regulatory approval or be successfully commercialized
2. 02The clinical development stage of our operations may make it difficult for you to evaluate the success of our business to date and to assess our future viability
3. 03Preliminary, interim, and topline data from our clinical trials that we announce or publish may change as more patient data become available that could result in material changes in the final data
4. 04Our business and results of operations could be adversely impacted by inflation
5. 05Our operations are concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by a wildfire and earthquake or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster

Risks Related to Our Financial Position, Capital Requirements and Ownership of Our Common Stock

1. 06We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future23% rewritten
2. 07Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of uncertainty. We may never be profitable40% rewritten
3. 08or decide to deprioritize our programs due to changing priorities which could affect our future potential revenue from such arrangementsNew
4. 09We will require additional financing and may be unable to raise sufficient capital, which could lead us to delay, reduce or abandon research and development programs or commercialization
5. 10The market price of our common stock is likely to be highly volatile, and you could lose all or part of your investment
6. 1116.trading volume of our common stock
7. 12Based on information available to us as of December 31, 2025 our executive officers, directors, 5% stockholders and their affiliates beneficially owned, as a group, approximately 68.1% of our voting stock. The interests of these stockholders may not be the same as or may even conflict with your interests
8. 13Raising additional funds through debt or equity financing may be dilutive and raising funds through licensing may require us to relinquish rights to our technology or product candidates
9. 14Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall53% rewritten
10. 15Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall
11. 16Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
12. 17New federal and state income tax legislation may affect our current and future income tax liabilities
13. 18We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
14. 19Our ability to effectively monitor and respond to the rapid and evolving developments and expectations relating to sustainability, including environmental, social and governance matters, may impose unexpected costs or result in reputational or other harm that could have a material adverse effect on our business52% rewritten

Risks Related to Our Intellectual Property

1. 20If we are unable to obtain, maintain and enforce intellectual property protection covering our products and any future products we may develop, others may be able to make, use or sell products substantially the same as ours, which could adversely affect our ability to compete in the market
2. 21Any of these factors could hurt our ability to gain full patent protection for our products. Registered trademarks and trademark applications in the United States and other countries are subject to similar risks as described above for patents and patent applications, in addition to the risks described below
3. 22We have in-licensed, and may in the future in-license, a portion of our intellectual property, and, if we fail to comply with our obligations under these arrangements, we could lose such intellectual property rights or owe damages to the licensor of such intellectual property
4. 23We may be required to reduce the scope of our intellectual property due to third-party intellectual property claims
5. 24Others may allege that our products infringe their patents and other property rights, which may result in costly litigation and, if we are not successful, could cause us to pay substantial damages or limit our ability to commercialize our products, which could have a material adverse effect on our business40% rewritten
6. 25Any such claims are likely to be expensive to defend, and some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources
7. 26Our intellectual property may be infringed upon by a third party41% rewritten
8. 27We may not be able to protect our intellectual property rights throughout the worldNew
9. 28If we are not able to prevent disclosure of our trade secrets and other proprietary information, the value of our technology and products could be significantly diminished
10. 29If we do not obtain patent term extension and data exclusivity for any therapeutic candidates we develop, our business may be materially harmed

Risks Related to Our Dependence on Third Parties

1. 30Our patent protection and prosecution for some of our product candidates is dependent on third parties
2. 31While we normally seek and gain the right to fully prosecute the patents relating to our product candidates, there may be times when patents relating to our product candidates are controlled by our licensors23% rewritten
3. 32potency of our product candidates, and could adversely affect our clinical development of our product candidates and harm our businessNew
4. 33Our existing partnerships are important to our business, and future partnerships may also be important to us. If we are unable to maintain any of these partnerships, or if these partnerships are not successful, our business could be adversely affected
5. 3413.the number and type of our partnerships could adversely affect our attractiveness to future collaborators or acquirers
6. 35We rely upon third-party contractors, and service providers for the execution of most aspects of our development programs. Failure of these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development programs92% rewritten

Risks Related to Our Industry

1. 36Clinical trials are expensive and take years to conduct, the outcome of such clinical trials is uncertain and results of earlier studies and trials may not be predictive of future trial results. Clinical trials may fail to prove our product candidates are safe and effective59% rewritten
2. 37Adverse side effects or other safety risks associated with our product candidates could delay or preclude approval, cause us to suspend or discontinue clinical trials and abandon product candidates
3. 38If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented
4. 39We have conducted, are currently conducting, and may in the future conduct clinical trials for our product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trialsNew
5. 40Delays in the commencement or completion of clinical trials could result in increased costs to us and delay our ability to establish strategic collaborations
6. 41Our industry is subject to competition for skilled personnel and the challenges we face to identify and retain key personnel could impair our ability to effectively conduct and grow our operations
7. 42The development and commercialization of biologic products is subject to extensive regulation, and we may not obtain regulatory approvals for any of our product candidates76% rewritten
8. 43A variety of risks associated with conducting research and clinical trials abroad and marketing our product candidates internationally could materially adversely affect our businessNew
9. 44Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictionsNew
10. 45We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively
11. 465.successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new products69% rewritten
12. 47Present and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain95% rewritten
13. 48Even if we are able to commercialize any product candidates, our product candidates may be subject to unfavorable pricing regulations, third-party coverage and reimbursement policies or healthcare reform initiatives
14. 49Our business involves the controlled use of hazardous materials and as such we are subject to environmental and occupational safety laws. Continued compliance with these laws may incur substantial costs and failure to maintain compliance could result in liability for damages that may exceed our resources
15. 50We may become subject to the risk of product liability claims78% rewritten
16. 51other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our businessNew
17. 52We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our employees’ former employers
18. 53Our business could be negatively impacted by cybersecurity threats and other disruptions, including the theft of our intellectual property, and could compromise our information and expose us to liability, which would cause our business and reputation to suffer
19. 54Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations62% rewritten
20. 55The increasing use of social media platforms presents new risks and challenges28% rewritten
21. 56We may be vulnerable to disruption, damage and financial obligation as a result of system failures
22. 57Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading