Xencor Announces Pricing of $175 Million Public Offering of Common Stock

Rhea-AI Summary

Xencor (XNCR) has priced its public offering of common stock and pre-funded warrants, aiming to raise $175 million. The offering includes 6,635,112 shares at $18.00 per share and 3,088,888 pre-funded warrants at $17.99 each. Underwriters have a 30-day option to purchase up to 1,458,600 additional shares. The clinical-stage biopharmaceutical company plans to use the proceeds for general corporate purposes, including research and development, capital expenditures, and working capital. The offering is expected to close around September 12, 2024, subject to customary conditions.

Positive

• Successful pricing of a $175 million public offering
• Immediate exercisability of pre-funded warrants with a low exercise price of $0.01 per share
• Potential for additional capital through underwriters' option to purchase extra shares
• Funds to be used for research and development, potentially advancing pipeline

Negative

• Potential dilution of existing shareholders' ownership
• Increase in outstanding shares may put downward pressure on stock price

Financial Analyst

Xencor's $175 million public offering is a significant capital raise that will bolster the company's financial position. The pricing at $18.00 per share represents a slight discount to recent trading levels, which is typical for such offerings to attract investors. The inclusion of pre-funded warrants provides additional flexibility for certain investors. This capital infusion will strengthen Xencor's balance sheet, potentially extending its cash runway for clinical trials and R&D efforts. However, existing shareholders should be aware of the dilutive effect of this offering, which could put short-term pressure on the stock price. The underwriters' option for additional shares could further increase the total raised to about $201 million if fully exercised.

Biotech Research Analyst

This capital raise is important for Xencor's clinical-stage pipeline development. As a biopharmaceutical company focusing on engineered antibodies, Xencor requires substantial funding to advance its candidates through costly clinical trials. The non-specific allocation of proceeds to "general corporate purposes" suggests flexibility in resource allocation across multiple programs. This could accelerate development timelines or expand the scope of existing trials. However, investors should note that clinical-stage biotech companies often require multiple rounds of financing before reaching profitability. The success of Xencor's pipeline remains the key long-term value driver and this funding provides a financial cushion to pursue its research objectives without immediate cash concerns.

Market Strategist

The timing of Xencor's offering amid volatile market conditions for biotech stocks is noteworthy. The company's ability to secure this financing demonstrates investor confidence in its pipeline and strategy. The participation of reputable underwriters like Leerink Partners and RBC Capital Markets lends credibility to the offering. However, the biotech sector has faced headwinds and this dilutive event may lead to short-term stock price volatility. Long-term investors should focus on how effectively Xencor deploys this capital to advance its clinical programs. The market will closely watch for upcoming clinical milestones and data readouts to justify this capital raise. This funding event could potentially attract more institutional investors, improving liquidity and analyst coverage for Xencor.

PASADENA, Calif.--(BUSINESS WIRE)-- Xencor, Inc. (“Xencor”) (Nasdaq: XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies for the treatment of cancer and other serious diseases, today announced the pricing of its underwritten public offering of (i) 6,635,112 shares of its common stock at a price to the public of $18.00 per share and (ii) pre-funded warrants to purchase up to an aggregate of 3,088,888 shares of common stock at a price to the public of $17.99 per pre-funded warrant. The pre-funded warrants will be immediately exercisable and will have an exercise price of $0.01 per share. The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, are expected to be approximately $175 million. Xencor has also granted the underwriters a 30-day option to purchase up to 1,458,600 additional shares of its common stock. All of the shares of common stock and pre-funded warrants in the offering are to be sold by Xencor. The offering is expected to close on or about September 12, 2024, subject to the satisfaction of customary closing conditions.

Leerink Partners, Raymond James and RBC Capital Markets are acting as joint book-running managers for the proposed offering. Wedbush PacGrow is acting as a co-manager for the offering.

Xencor currently intends to use the net proceeds from the offering for general corporate purposes, which may include research and development, capital expenditures, working capital and general and administrative expenses.

The public offering is being made pursuant to an automatic shelf registration statement on Form S-3 (File No. 333-270030), previously filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2023, and which automatically became effective upon filing. The securities may be offered only by means of a prospectus and prospectus supplement that form a part of the registration statement. A preliminary prospectus supplement and the accompanying prospectus relating to and describing the terms of the offering have been filed with the SEC and are available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus, and when available, copies of the final prospectus supplement and accompanying prospectus relating to the offering may also be obtained by contacting Leerink Partners LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, Massachusetts 02109, by telephone at (800) 808-7525, ext. 6105, or by email at syndicate@leerink.com; from Raymond James & Associates, Inc., Attention: Equity Syndicate, 880 Carillon Parkway, St. Petersburg, Florida 33716, by telephone at (800) 248-8863, or by email at prospectus@raymondjames.com; or from RBC Capital Markets, LLC, Attention: Equity Capital Markets, Brookfield Place, 200 Vesey Street, 8th Floor, New York, New York 10281, by telephone at (877) 822-4089 or by email at equityprospectus@rbccm.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Xencor

Xencor is a clinical-stage biopharmaceutical company developing engineered antibodies for the treatment of patients with cancer and other serious diseases. More than 20 candidates engineered with Xencor’s XmAb® technology are in clinical development, and three XmAb medicines are marketed by partners. Xencor’s XmAb engineering technology enables small changes to a proteins structure that result in new mechanisms of therapeutic action.

Forward-Looking Statements

This press release contains forward-looking statements under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding Xencor’s expectations on the timing and completion of the offering and the anticipated use of proceeds therefrom. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: risks and uncertainties associated with market and other conditions and the satisfaction of customary closing conditions related to the proposed public offering and other risks that are described in Xencor’s most recent periodic reports filed with the SEC, including Xencor’s Annual Report on Form 10-K for the year ended December 31, 2023, including the risk factors set forth in those filings. These forward-looking statements speak only as of the date hereof. Xencor disclaims any obligation to update these forward-looking statements, except as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240911395616/en/

Charles Liles

cliles@xencor.com

(626) 737-8118

Source: Xencor, Inc.

FAQ

What is the size of Xencor's (XNCR) public offering?

Xencor (XNCR) has priced a public offering aiming to raise approximately $175 million through the sale of common stock and pre-funded warrants.

How many shares of common stock is Xencor (XNCR) offering?

Xencor (XNCR) is offering 6,635,112 shares of common stock at $18.00 per share in its public offering.

What is the pricing of Xencor's (XNCR) pre-funded warrants?

Xencor (XNCR) is offering pre-funded warrants at $17.99 each, with an exercise price of $0.01 per share.

When is Xencor's (XNCR) public offering expected to close?

Xencor's (XNCR) public offering is expected to close on or about September 12, 2024, subject to customary closing conditions.

How does Xencor (XNCR) plan to use the proceeds from the offering?

Xencor (XNCR) intends to use the net proceeds for general corporate purposes, including research and development, capital expenditures, working capital, and general and administrative expenses.