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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                    

Commission File Number: 001-40925

Xilio Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware

85-1623397

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

828 Winter Street, Suite 300

Waltham, Massachusetts

02451

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (857) 524-2466

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

XLO

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  

Number of shares of the registrants common stock, $0.0001 par value per share, outstanding on August 4, 2023: 27,539,620

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References to Xilio

Unless otherwise stated, all references to “us,” “our,” “we,” “Xilio,” “Xilio Therapeutics,” “the Company” and similar references in this Quarterly Report on Form 10-Q refer to Xilio Therapeutics, Inc. and its consolidated subsidiaries. Xilio Therapeutics and its associated logos are registered trademarks of Xilio Therapeutics, Inc. Other brands, names and trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” or the negative of these words or other comparable terminology, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

the initiation, timing, progress and results of our research and development programs and preclinical studies and clinical trials;
our plans to develop and, if approved, subsequently commercialize any product candidates we may develop;
the timing of and our ability to submit applications for, and obtain and, if approved, maintain regulatory approvals for our product candidates;
our estimates regarding expenses, future revenue, capital requirements and need for additional financing;
our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents;
the potential advantages and benefits of our current and future product candidates;
the rate and degree of market acceptance of our product candidates, if approved;
our estimates regarding the addressable patient population and potential market opportunity for our current and future product candidates;
our commercialization, marketing and manufacturing capabilities and strategy;
our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;
our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
the impact of government laws and regulations;
our competitive position and expectations regarding developments and projections relating to our current or future competitors and any competing therapies that are or become available;
developments relating to our competitors and our industry;
our ability to establish and maintain collaborations or obtain additional funding;

2

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our expectations regarding the time during which we will be an emerging growth company under the JOBS Act;
the impact of general economic conditions, including inflation; and
the impact of public health crises, including epidemics and pandemics such as the COVID-19 pandemic, on our business, operations, strategy, goals and anticipated milestones, as well as our response to such epidemics or pandemics.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly those described in the “Risk Factor Summary” and “Risk Factors” section in Part II, Item 1A of this Quarterly Report on Form 10-Q, that could cause actual results or events to differ materially from the forward-looking statements that we make. Given these uncertainties, you should not place undue reliance on any forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Risk Factor Summary

Our business is subject to numerous risks that, if realized, could materially and adversely affect our business, financial condition, results of operations and future growth prospects. These risks are discussed more fully in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. These risks include, but are not limited to, the following:

Our recurring losses from operations and the early development stage of our lead product candidates raise substantial doubt regarding our ability to continue as a going concern. If we are unable to raise substantial additional capital to finance our operations, we may be forced to delay, reduce or eliminate one or more of our research and development programs or other operations.
Our business is highly dependent on the success of our current product candidates, which are in the early stages of development and will require significant additional preclinical and clinical development before we can seek regulatory approval for and commercially launch a product.
Our approach to the discovery and development of product candidates based on our technological approaches is unproven, and we do not know whether we will be able to develop any products of commercial value.
Preclinical development is uncertain. Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have an adverse effect on our business.
We may encounter substantial delays in the commencement or completion, or termination or suspension, of our clinical trials, which could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
Our product candidates may cause undesirable or unexpectedly severe side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

3

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Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
We expect to develop certain of our product candidates in combination with third-party drugs and we will have limited or no control over the safety, supply, regulatory status or regulatory approval of such third-party drugs.
Manufacturing biologics is complex, and we may experience manufacturing problems that result in delays in our development or commercialization programs.
We face risk related to our reliance on our current and any future third-party contract manufacturers, or CMOs. For example, the CMOs on which we rely may not continue to meet regulatory requirements, may have limited capacity or may experience interruptions in supply, any of which could adversely affect our development and commercialization plans for our product candidates.
We expect to rely on third parties to conduct, supervise and monitor IND-enabling studies and clinical trials, and if these third parties perform in an unsatisfactory manner, it may harm our business, reputation and results of operations.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
If we are unable to obtain and maintain patent protection for any product candidates we develop or for other proprietary technologies we may develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates and technology similar or identical to our product candidates and technology, and our ability to successfully commercialize any product candidates we may develop, and our technology may be adversely affected.
We rely on in-license agreements for patent rights with respect to our product candidates and may in the future acquire or in-license additional third-party intellectual property rights on which we may similarly rely. We face risks with respect to such reliance, including the risk that we could lose these rights that are important to our business if we fail to comply with our obligations under these licenses or that we may be unable to acquire or in-license third-party intellectual property that may be necessary or important to our business operations.

Availability of Other Information About Xilio Therapeutics

Investors and others should note that Xilio Therapeutics communicates with its investors and the public using its company website (www.xiliotx.com), including but not limited to investor presentations and scientific presentations, filings with the U.S. Securities and Exchange Commission, press releases, public conference calls and webcasts. You can also connect with Xilio Therapeutics on Twitter (@xiliotx) or LinkedIn. The information that Xilio Therapeutics posts on these channels and websites could be deemed to be material information. As a result, Xilio Therapeutics encourages investors, the media and others interested in Xilio Therapeutics to review the information that it posts on these channels, including Xilio Therapeutics’ investor relations website, on a regular basis. This list of channels may be updated from time to time on Xilio Therapeutics’ investor relations website (ir.xiliotx.com) and may include other social media channels than the ones described above. The contents of Xilio Therapeutics’ website or these channels, or any other website that may be accessed from its website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

4

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TABLE OF CONTENTS

Page

Part I

Financial Information

Item 1.

Financial Statements (unaudited)

6

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

6

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 and 2022

7

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

8

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

9

Notes to Condensed Consolidated Financial Statements

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

30

Item 4.

Controls and Procedures

30

Part II

Other Information

31

Item 1A.

Risk Factors

31

Item 6.

Exhibits

96

Signatures

5

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

XILIO THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

    

June 30, 

    

December 31, 

2023

2022

ASSETS

 

  

 

  

Current assets

 

  

 

  

Cash and cash equivalents

$

75,383

$

120,385

Prepaid expenses and other current assets

 

3,042

 

4,111

Total current assets

 

78,425

 

124,496

Restricted cash

 

1,574

 

1,562

Property and equipment, net

 

6,798

 

7,255

Operating lease right-of-use asset

 

5,365

 

5,585

Other non-current assets

 

197

 

267

Total assets

$

92,359

$

139,165

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current liabilities

 

  

 

  

Accounts payable

$

945

$

3,125

Accrued expenses

 

7,140

 

10,327

Operating lease liability, current portion

 

981

 

918

Note payable, current portion

 

7,145

 

6,667

Other current liabilities

 

82

 

82

Total current liabilities

 

16,293

 

21,119

Note payable, net of current portion

 

 

3,165

Operating lease liability, net of current portion

 

8,682

 

9,189

Other non-current liabilities

 

7

 

45

Total liabilities

 

24,982

 

33,518

Commitments and contingencies (Note 6)

 

  

 

  

Stockholders’ equity

 

  

 

  

Preferred stock, $0.0001 par value; 5,000,000 shares authorized, no shares issued or outstanding

Common stock, $0.0001 par value; 200,000,000 shares authorized at June 30, 2023 and December 31, 2022; 27,539,620 shares issued and 27,518,895 shares outstanding at June 30, 2023; 27,471,607 shares issued and 27,425,447 shares outstanding at December 31, 2022

 

3

 

3

Additional paid-in capital

 

358,483

 

354,752

Accumulated deficit

 

(291,109)

 

(249,108)

Total stockholders’ equity

 

67,377

 

105,647

Total liabilities and stockholders’ equity

$

92,359

$

139,165

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents

XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2023

    

2022

    

2023

    

2022

Operating expenses

 

  

 

  

 

  

 

  

 

Research and development

$

13,218

$

16,246

$

29,349

$

31,166

General and administrative

 

6,898

 

8,306

 

14,293

 

14,610

Total operating expenses

 

20,116

 

24,552

 

43,642

 

45,776

Loss from operations

 

(20,116)

 

(24,552)

 

(43,642)

 

(45,776)

Other income (expense), net

 

 

  

 

  

 

  

Other income (expense), net

 

761

 

(61)

 

1,641

 

(190)

Total other income (expense), net

 

761

 

(61)

 

1,641

 

(190)

Net loss and comprehensive loss

$

(19,355)

$

(24,613)

$

(42,001)

$

(45,966)

Net loss per share, basic and diluted

$

(0.70)

(0.90)

$

(1.53)

$

(1.68)

Weighted average common shares outstanding, basic and diluted

 

27,468,668

27,384,614

 

27,451,058

 

27,376,043

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Table of Contents

XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)

    

    

    

    

    

    

Total

Common Stock

Additional

Accumulated

Stockholders’

    

Shares

    

Amount

    

Paid-In Capital

    

Deficit

    

Equity

Balance at December 31, 2022

27,425,447

$

3

$

354,752

$

(249,108)

$

105,647

Vesting of restricted common stock

 

14,217

 

 

 

 

Exercise of stock options

 

156

 

 

 

 

Stock-based compensation expense

 

 

 

1,791

 

 

1,791

Net loss

 

 

 

 

(22,646)

 

(22,646)

Balance at March 31, 2023

 

27,439,820

$

3

$

356,543

$

(271,754)

$

84,792

Issuance of common stock under employee stock purchase plan

68,929

140

140

Vesting of restricted common stock

 

9,978

 

 

 

 

Exercise of stock options

 

168

 

 

 

 

Stock-based compensation expense

 

 

 

1,800

 

 

1,800

Net loss

 

 

 

 

(19,355)

 

(19,355)

Balance at June 30, 2023

 

27,518,895

$

3

$

358,483

$

(291,109)

$

67,377

    

    

    

    

    

    

Total

Common Stock

Additional

Accumulated

Stockholders’

    

Shares

    

Amount

    

Paid-In Capital

    

Deficit

    

Equity

Balance at December 31, 2021

27,358,375

$

3

$

346,312

$

(160,886)

$

185,429

Vesting of restricted common stock

 

15,441

 

 

 

 

Exercise of stock options

2,657

 

 

16

 

 

16

Stock-based compensation expense

 

 

 

2,029

 

 

2,029

Net loss

 

 

 

 

(21,353)

 

(21,353)

Balance at March 31, 2022

 

27,376,473

 

$

3

 

$

348,357

 

$

(182,239)

 

$

166,121

Vesting of restricted common stock

 

15,361

 

 

 

 

Stock-based compensation expense

 

 

 

2,709

 

 

2,709

Net loss

 

 

 

 

(24,613)

 

(24,613)

Balance at June 30, 2022

 

27,391,834

$

3

$

351,066

$

(206,852)

$

144,217

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Table of Contents

XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Six Months Ended June 30, 

    

2023

    

2022

Cash flows from operating activities:

Net loss

 

$

(42,001)

 

$

(45,966)

Adjustments to reconcile net loss to net cash used in operating activities:

 

  

 

  

Depreciation and amortization

 

991

 

885

Non-cash interest expense

 

118

 

106

Stock-based compensation expense

 

3,591

 

4,738

Loss on disposal of property and equipment

2

Changes in operating assets and liabilities:

 

 

Prepaid and other assets

 

1,069

 

857

Operating lease right-of-use asset

 

221

 

188

Accounts payable

 

(2,167)

 

(1,217)

Accrued expenses and other liabilities

 

(3,204)

 

3,204

Operating lease liability

 

(444)

 

(386)

Net cash used in operating activities

 

(41,824)

 

(37,591)

Cash flows from investing activities:

 

  

 

  

Purchases of property and equipment

 

(486)

 

(1,025)

Net cash used in investing activities

 

(486)

 

(1,025)

Cash flows from financing activities:

 

  

 

  

Repayments of debt principal

(2,778)

Payments of finance lease

 

(42)

 

(42)

Proceeds from issuance of common stock under employee stock purchase plan

140

Proceeds from exercise of stock options

 

 

16

Net cash used in financing activities

 

(2,680)

 

(26)

Decrease in cash, cash equivalents and restricted cash

 

(44,990)

 

(38,642)

Cash, cash equivalents and restricted cash, beginning of period

 

121,947

 

199,606

Cash, cash equivalents and restricted cash, end of period

 

$

76,957

 

$

160,964

Supplemental cash flow disclosure:

 

  

 

  

Cash paid for interest

 

$

332

 

$

240

Supplemental disclosure of non-cash activities:

 

 

  

Capital expenditures included in accounts payable or accrued expenses

$

$

154

Reconciliation to amounts within the consolidated balance sheets:

Cash and cash equivalents

$

75,383

$

159,410

Restricted cash

1,574

1,554

Cash, cash equivalents and restricted cash, end of period

$

76,957

$

160,964

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XILIO THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Dollars in thousands, unless otherwise stated)

(Unaudited)

1. Description of Business and Liquidity and Going Concern

Description of Business

Xilio Therapeutics, Inc. (“Xilio” or the “Company”) is a clinical-stage biotechnology company dedicated to discovering and developing tumor-activated immuno-oncology (“I-O”) therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. The Company was incorporated in Delaware in June 2020, and its headquarters are located in Waltham, Massachusetts.

Liquidity and Going Concern

Since its inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities. As of June 30, 2023, the Company had an accumulated deficit of $291.1 million and has incurred significant operating losses, including net losses of $42.0 million and $46.0 million for the six months ended June 30, 2023 and 2022, respectively. The Company expects its operating losses and negative operating cash flows to continue for the foreseeable future as it continues to advance its product candidates through clinical trials, maintains the infrastructure necessary to support these activities and continues to incur costs associated with operating as a public company. The Company anticipates its existing cash and cash equivalents of $75.4 million as of June 30, 2023 will not be sufficient to enable the Company to fund its current operating plan and capital expenditure requirements for at least twelve months from the date of issuance of these condensed consolidated financial statements. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

To continue to fund the operations of the Company, management has developed plans, which primarily consist of raising additional capital through one or more of the following: equity or debt financings; collaborations, partnerships or licensing transactions; or other sources. However, there can be no assurance that the Company will be able to complete any such transaction on acceptable terms or otherwise, and the Company may be unable to obtain additional capital. As a result, the Company may need to implement cost reduction strategies, which could include delaying, limiting, reducing or eliminating certain costs related to its operations and research and development programs.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2022 and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2023. The unaudited interim condensed

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consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of June 30, 2023 and the results of its operations for the three and six months ended June 30, 2023 and June 30, 2022 and cash flows for the six months ended June 30, 2023 and June 30, 2022. Such adjustments are of a normal and recurring nature. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any future period.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Xilio Development, Inc., a Delaware corporation and Xilio Securities Corporation, a Massachusetts security corporation. All intercompany accounts and transactions have been eliminated in consolidation.

Significant Accounting Policies

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are described in Note 2, “Summary of Significant Accounting Policies” of the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds all cash and cash equivalents at accredited financial institutions. Bank accounts in the United States are generally insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Substantially all of the Company’s cash and cash equivalents are FDIC insured, including funds held through an insured cash sweep program. The Company has not experienced any losses in its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

3. Property and Equipment, Net

Property and equipment, net consists of the following as of June 30, 2023 and December 31, 2022:

    

June 30, 

    

December 31, 

2023

2022

Laboratory equipment

$

6,087

$

5,587

Computers and software

 

183

 

228

Furniture and fixtures

 

681

 

636

Leasehold improvements

 

5,124

 

5,124

Construction in process

 

5

 

98

Total property and equipment

12,080

11,673

Less: accumulated depreciation

 

(5,282)

 

(4,418)

Property and equipment, net

$

6,798

$

7,255

The Company incurred depreciation and amortization expense related to property and equipment of $0.9 million and $0.8 million for the six months ended June 30, 2023 and 2022, respectively.

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4. Accrued Expenses

Accrued expenses consist of the following as of June 30, 2023 and December 31, 2022:

    

June 30, 

    

December 31, 

2023

2022

External research and development

$

3,105

$

3,178

Personnel-related

 

2,774

 

5,413

Professional and consulting fees

 

1,032

 

1,536

Other

229

200

Total accrued expenses

$

7,140

$

10,327

5. Loan and Security Agreement

In November 2019, the Company’s wholly owned subsidiary, Xilio Development, Inc. (“Borrower”), entered into a loan and security agreement (as amended and restated in May 2023, the “Loan Agreement”) with Pacific Western Bank (“PacWest”), with the Company as a guarantor. Under the Loan Agreement, in November 2019, the Borrower borrowed $10.0 million under a term loan. Interest on amounts outstanding under the Loan Agreement accrues at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 4.75%. As of June 30, 2023, the interest rate on the term loan was 8.50%. The Borrower was required to make interest-only payments on any outstanding balances through December 31, 2022. The Borrower commenced making equal monthly payments of principal plus interest in January 2023, and it will be required to make such payments until the term loan matures on June 30, 2024.

The Loan Agreement contains customary representations, warranties and covenants and also includes customary terms covering events of default, including payment defaults, breaches of covenants, a change of control provision and occurrence of a material adverse effect. As security for its obligations under the Loan Agreement, the Borrower granted PacWest a first priority security interest on substantially all of the Borrower’s assets, excluding intellectual property, subject to certain exceptions.

Upon the occurrence and continuation of an event of default, a default interest rate of an additional 5% per annum may be applied to the outstanding loan balance, and the administrative agent, collateral agent, and lender may declare all outstanding obligations immediately due and payable and exercise all of their rights and remedies as set forth in the Loan Agreement and under applicable law. As of June 30, 2023, the Company and Borrower were in compliance with all covenants under the Loan Agreement.

The Borrower has the following minimum aggregate future loan principal payments under the Loan Agreement as of June 30, 2023:

    

Minimum Loan

Payments

2023 (remaining six months)

$

3,889

2024

 

3,333

Total future principal payments

 

7,222

Less: unamortized discount

 

(77)

Total note payable

$

7,145

The Company recognized $0.4 million and $0.3 million of interest expense related to the Loan Agreement for the six months ended June 30, 2023 and 2022, respectively, which is reflected in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss.

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6. Commitments and Contingencies

The Company has an operating lease for its headquarters and a finance lease for certain lab equipment. In August 2019, the Company entered into a facility lease agreement with a landlord providing funding for tenant improvements and occupancy of approximately 27,830 square feet of office and laboratory space (the “premises”) at 828 Winter Street, Waltham, Massachusetts. The initial term of the lease expires in March 2030, unless terminated earlier in accordance with the terms of the lease. The Company has an option to extend the lease for an additional term of five years at then-market rates. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the leased premises, which it began paying simultaneous with the rent commencement date in March 2020. As of June 30, 2023 and December 31, 2022, the Company had a letter of credit for the benefit of its landlord in the amount of $1.6 million, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets.

7. Preferred Stock and Common Stock

Undesignated Preferred Stock

As of June 30, 2023 and December 31, 2022, the Company’s certificate of incorporation, as amended, authorized the Company to issue up to 5,000,000 shares of undesignated preferred stock at $0.0001 par value per share. As of June 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

Common Stock

As of June 30, 2023 and December 31, 2022, the Company is authorized to issue up to 200,000,000 shares of common stock, $0.0001 par value per share under its certificate of incorporation, as amended.

Shares Reserved for Future Issuance

As of June 30, 2023 and December 31, 2022, the Company had reserved shares of common stock for future issuance under the 2020 Stock Incentive Plan (as amended, the “2020 Plan”), the 2021 Stock Incentive Plan (the “2021 Plan”), the 2022 Inducement Stock Incentive Plan (the “2022 Inducement Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) as follows:

June 30, 

December 31, 

2023

2022

Shares of common stock reserved for exercise of a warrant

 

2,631

 

2,631

Shares of common stock reserved for exercise of outstanding stock options under the 2020 Plan, 2021 Plan and 2022 Inducement Plan

 

5,975,240

 

4,960,553

Shares of common stock reserved for future awards under the 2021 Plan

 

3,263,377

 

2,848,568

Shares of common stock reserved for future awards under the 2022 Inducement Plan

220,000

275,000

Shares of common stock reserved for purchase under the 2021 ESPP

772,507

566,720

Total shares reserved for future issuance

 

10,233,755

 

8,653,472

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8. Stock-Based Compensation

Equity Incentive Plans

2020 Stock Incentive Plan

Under the 2020 Plan, the Company was authorized to issue shares of common stock to the Company’s employees, officers, directors, consultants and advisors in the form of options, restricted stock awards or other stock-based awards.

2021 Stock Incentive Plan

In 2021, the Company’s board of directors and stockholders adopted the 2021 Plan, which became effective immediately prior to the IPO in October 2021. Upon effectiveness of the 2021 Plan, the Company ceased granting awards under the 2020 Plan. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares of the Company’s common stock initially reserved for issuance under the 2021 Plan was the sum of (1) 2,654,828; plus (2) the number of shares (up to 3,967,038 shares) as is equal to the sum of (x) the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan that remained available for grant under the 2020 Plan immediately prior to the effectiveness of the 2021 Plan and (y) the number of shares of the Company’s common stock subject to outstanding awards whether granted under the 2020 Plan or outside of the 2020 Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right and that, prior to the effectiveness of the 2021 Plan, would have become available for issuance under the 2020 Plan; plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year, commencing on January 1, 2022 and continuing until, and including, January 1, 2031, equal to the lesser of (i) 5% of the number of shares of the Company’s common stock outstanding on the first day of such fiscal year and (ii) the number of shares of common stock determined by the Company’s board of directors. On January 1, 2023, the number of shares reserved for issuance under the 2021 Plan automatically increased by 1,373,580 shares.

As of June 30, 2023, there were 3,263,377 shares available for future issuance under the 2021 Plan.

2022 Inducement Plan

In 2022, the Company’s board of directors adopted the 2022 Inducement Plan pursuant to Nasdaq Rule 5635(c)(4). In accordance with Rule 5635(c)(4), stock-based incentive awards under the 2022 Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company as a material inducement to the employee’s entering into employment with the Company. An aggregate of 275,000 shares of the Company’s common stock has been reserved for issuance under the 2022 Inducement Plan.

The exercise price of stock options granted under the 2022 Inducement Plan will not be less than the fair market value of a share of the Company’s common stock on the grant date. Other terms of awards, including vesting requirements, are determined by the Company’s board of directors and are subject to the provisions of the 2022 Inducement Plan.

As of June 30, 2023, there were 220,000 shares available for future issuance under the 2022 Inducement Plan.

2021 Employee Stock Purchase Plan

In 2021, the Company’s board of directors and stockholders adopted the 2021 ESPP, which became effective immediately prior to the IPO in October 2021. The Company initially reserved 292,031 shares of common stock for issuance under the 2021 ESPP. In addition, the 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by the lesser of (i) 584,062 shares of common stock, (ii) 1% of the number of shares of the Company’s common stock outstanding on such date, and (iii) a number of shares of common stock as determined by the Company’s board of directors. On January 1, 2023, the number of shares reserved for issuance under the 2021 ESPP was increased by 274,716 shares. Offering periods under the 2021

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ESPP commence on each June 1 and December 1, and end on the following November 30 and May 31, respectively. During the six months ended June 30, 2023, 68,929 shares were purchased under the 2021 ESPP. During the six months ended June 30, 2022, no shares were purchased under the 2021 ESPP.

As of June 30, 2023, there were 772,507 shares available for future issuance under the 2021 ESPP.

Stock-Based Compensation Expense

During the three and six months ended June 30, 2023 and 2022, the Company recorded compensation expense related to stock options, restricted common stock and ESPP share purchases for employees and non-employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2023

    

2022

    

2023

    

2022

    

Research and development expense

$

549

$

637

$

1,122

$

1,233

General and administrative expense

 

1,251

2,072

 

2,469

 

3,505

Total stock-based compensation expense

$

1,800

$

2,709

$

3,591

$

4,738

Stock Options

A summary of stock option activity under the Company’s 2020 Plan, 2021 Plan and 2022 Inducement Plan is as follows:

    

    

Weighted  

    

Average 

Remaining 

Aggregate 

Weighted  

Contractual

Intrinsic 

Number of 

Average 

  Term 

Value (1)

    

Stock Options

    

Exercise Price

    

(In years)

    

(In thousands)

Outstanding as of December 31, 2022

 

4,960,553

 

$

8.04

 

8.59

$

89

Granted

 

1,677,205

$

2.71

 

  

 

  

Exercised

 

(324)

$

2.69

 

  

 

  

Cancelled/forfeited

 

(662,194)

$

7.35

 

  

 

  

Outstanding as of June 30, 2023

 

5,975,240

$

6.62

 

8.41

$

70

Exercisable as of June 30, 2023

 

2,410,413

$

7.27

 

7.86

$

31

(1)The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock as of the end of the period.

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the six months ended June 30, 2023 and 2022 was $1.96 and $6.56, respectively. The following assumptions were used in determining the fair value of options granted during the six months ended June 30, 2023 and 2022:

Six Months Ended June 30, 

2023

    

2022

Risk-free interest rate

3.57 - 3.98

%  

    

1.47 – 3.39

%  

Expected dividend yield

0

%

 

0

%

Expected term (in years)

5.50 – 6.08

 

5.50 – 6.08

Expected volatility

81.69 - 87.15

%

 

80.75 – 87.42

%

As of June 30, 2023, the Company had unrecognized stock-based compensation expense of $14.4 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted-average period of 2.6 years.

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Restricted Stock

A summary of the Company’s restricted stock activity and related information is as follows:

    

Number

    

Weighted

of Shares

Average

of Restricted

Grant Date

    

Stock

    

Fair Value

Unvested as of December 31, 2022

46,160

$

5.51

Vested

(24,195)

$

5.51

Canceled/Forfeited

 

(1,240)

 

$

5.51

Unvested as of June 30, 2023

 

20,725

 

$

5.51

In June 2020, the Company granted 552,546 shares of common stock underlying restricted stock awards, and the Company has not subsequently granted any additional restricted stock awards. The aggregate fair value of the restricted stock awards that vested during the six months ended June 30, 2023 and 2022 was $0.1 million and $0.2 million, respectively. As of June 30, 2023, total unrecognized stock-based compensation expense related to unvested restricted stock awards was $0.2 million, which is expected to be recognized over a weighted-average period of 0.6 years.

9. Net Loss Per Share

The following table sets forth the outstanding shares of common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share attributable to common stockholders during each period because including them would have been anti-dilutive:

    

Six Months Ended

    

June 30, 

2023

2022

Unvested restricted common stock

 

20,725

 

79,773

 

Outstanding stock options

 

5,975,240

 

5,181,011

 

Warrants

 

2,631

 

2,631

 

Unvested employee stock purchase plan shares

62,988

Total common stock equivalents

 

6,061,584

 

5,263,415

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2022.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biotechnology company discovering and developing tumor-activated immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. We are leveraging our proprietary geographically precise solutions, or GPS, platform to build a pipeline of novel, tumor-activated molecules, including cytokines and other biologics, which are designed to optimize their therapeutic index by localizing anti-tumor activity within the tumor microenvironment. Current I-O therapies have curative potential for patients with cancer; however, their potential is significantly curtailed by systemic toxicity that results from activity of the therapeutic molecule outside the tumor microenvironment. Our molecules are engineered to localize activity within the tumor microenvironment with minimal systemic effects, resulting in the potential to achieve enhanced anti-tumor activity and increasing the population of patients who may be eligible to receive our medicines. Our most advanced tumor-activated, clinical-stage product candidates are XTX101, an Fc-enhanced, anti-CTLA-4 monoclonal antibody, or mAb, XTX202, an interleukin 2, or IL-2, therapy, and XTX301, an interleukin 12, or IL-12, therapy. In addition to our clinical-stage product candidates, we are continuing to leverage our GPS platform and expertise in developing tumor-activated I-O therapies as we seek to expand our pipeline of discovery-stage programs and develop additional tumor-activated immunotherapies, including product candidates with a range of tumor targeting approaches.

To date, we have financed our operations primarily from proceeds raised through private placements of preferred units and convertible preferred stock, a debt financing and our initial public offering, or IPO, of common stock in October 2021. We have not generated any revenue from product sales and do not expect to generate any revenue from product sales for at least the next several years, if at all. All of our programs are in early clinical or preclinical development. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve profitability. Even if we are able to generate revenue from product sales, we may not become profitable.

Since inception, we have incurred significant operating losses, including net losses of $42.0 million and $46.0 million for the six months ended June 30, 2023 and 2022, respectively. Our net loss for the year ended December 31, 2022 was $88.2 million. As of June 30, 2023, we had an accumulated deficit of $291.1 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

continue to advance our current research programs and conduct additional research programs;
advance our current product candidates and any future product candidates we may develop into preclinical and clinical development;
seek marketing approvals for product candidates that successfully complete clinical trials, if any;
obtain, expand, maintain, defend and enforce our intellectual property;

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hire additional clinical, regulatory, quality, manufacturing and general and administrative personnel;
establish a commercial and distribution infrastructure to commercialize products for which we may obtain marketing approval, if any;
continue to discover, validate and develop additional product candidates;
continue to manufacture increasing quantities of our current or future product candidates for use in preclinical studies, clinical trials and for any potential commercialization;
acquire or in-license other product candidates, technologies or intellectual property; and
incur additional costs associated with current and future research, development and commercialization efforts and operations as a public company.

As a result, we will need substantial additional capital to support our continuing operations and pursue our strategy. As of June 30, 2023, we had cash and cash equivalents of $75.4 million. We believe that our existing cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the end of the second quarter of 2024. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. Since our cash and cash equivalents as of June 30, 2023 are not expected to be sufficient to fund our operations for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. To continue to fund our operations, our management has developed plans, which primarily consist of raising additional capital through one or more of the following: equity or debt financings; collaborations, partnerships or licensing transactions; or other sources. However, there can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise, and we may be unable to obtain additional capital. As a result, we may need to implement cost reduction strategies, which could include delaying, limiting, reducing or eliminating certain costs related to our operations and research and development programs. For more information, refer to “—Liquidity and Capital Resources” below and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Financial Operations Overview

Revenue

We have not generated any revenue since inception and do not expect to generate any revenue from the sale of products for at least the next several years, if at all. If our development efforts for our current or future product candidates are successful and result in regulatory approval or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from product sales or payments from third-party collaborators or licensors.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our discovery efforts, research activities and development and testing of our programs and product candidates. These expenses include:

personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expense for employees engaged in research and development functions;
costs incurred with third-party contract development and manufacturing organizations, or CDMOs, to acquire, develop and manufacture materials for both preclinical studies and current or future clinical trials;

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costs of funding research performed by third parties that conduct research and development and preclinical activities on our behalf;
costs incurred with third-party contract research organizations, or CROs, and other third parties in connection with the conduct of our current or future clinical trials;
costs of sponsored research agreements and outside consultants, including their fees and related expenses;
costs incurred to maintain compliance with regulatory requirements;
fees for maintaining licenses and other amounts due under our third-party licensing agreements;
expenses incurred for the procurement of materials, laboratory supplies and non-capital equipment used in the research and development process; and
depreciation, amortization and other direct and allocated expenses, including rent, insurance, maintenance of facilities and other operating costs, incurred as a result of our research and development activities.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific deliverables using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed consolidated balance sheets as prepaid expenses or accrued research and development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are capitalized as assets, even when there is no alternative future use for the research and development. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

We use our personnel and infrastructure resources for our discovery efforts, including the advancement of our GPS platform, developing programs and product candidates and managing external research efforts. A significant portion of our research and development costs have been, and will continue to be, external costs. We track these external costs, such as fees paid to CDMOs, CROs, preclinical study vendors and other third parties in connection with our manufacturing and manufacturing process development, clinical trials, preclinical studies and other research activities by program. Due to the number of ongoing programs and our ability to use resources across several projects, personnel-related expenses and indirect or shared operating costs incurred for our research and development programs are not recorded or maintained on a program-by-program basis.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will remain approximately the same or will continue to increase for the foreseeable future as we advance our programs and our current or future product candidates into and through the development phase. We expect our discovery research efforts and our related personnel costs to remain consistent with historical levels.  In addition, as we progress our most advanced product candidates in clinical development, we may incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into, or may enter into, license, acquisition, option or other agreements to acquire the rights to future products and product candidates. In the event we are unable to raise additional capital to fund our operations, we may be required to adopt cost reduction strategies that seek to maintain our ability to continue the development of our most advanced product candidates in clinical development while otherwise reducing our overall research and development expenses.

At this time, we cannot reasonably estimate or know the nature, timing and projected costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates or programs. This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of:

the scope, timing, costs and progress of preclinical and clinical development activities;

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the number and scope of preclinical and clinical programs we decide to pursue;
our ability to implement and maintain cost reduction strategies, as well as the timing of such cost reductions;
our ability to maintain our current research and development programs;
our ability to establish an appropriate safety profile for our product candidates with IND-enabling studies;
our ability to hire and retain key research and development personnel;
the costs associated with the development of any additional product candidates we develop or acquire through collaborations;
our successful enrollment in and completion of clinical trials;
our ability to successfully complete clinical trials with safety, potency and purity profiles that are satisfactory to the U.S. Food and Drug Administration, or the FDA, or any comparable foreign regulatory authority;
our receipt of regulatory approvals from applicable regulatory authorities;
our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates;
our ability to commercialize products, if and when approved, whether alone or in collaboration with others;
the continued acceptable safety profiles of the product candidates following approval, if any;
our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if any of our product candidates are approved;
the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder, if any;
our ability to obtain and maintain patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates if and when approved;
general economic conditions, including inflation; and
the impact of public health crises, including epidemics and pandemics such as the COVID-19 pandemic, on our business, operations, strategy, goals and anticipated milestones, as well as our response to such epidemics or pandemics.

A change in any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate we may develop.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits, recruiting and stock-based compensation, for personnel in our executive, finance, legal, business development, human resources and other administrative functions. General and administrative expenses also include legal fees relating to corporate matters; professional and consulting fees for accounting, auditing, tax, human resources and administrative

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consulting services; board of directors’ fees; insurance costs; and facility-related expenses, which include depreciation costs and other allocated expenses for rent, maintenance of facilities and other general administrative costs. These costs relate to the operation of the business and are in support of but separate from the research and development function and our individual development programs. Costs to secure and defend our intellectual property are expensed as incurred and are classified as general and administrative expenses.

We anticipate that our general and administrative expenses will remain consistent with historical levels as we maintain our infrastructure to support our research and development activities. We expect to continue to incur significant expenses associated with operating as a public company, including costs for accounting, audit, legal, regulatory and tax-related services attributable to maintaining compliance with exchange listing standards and U.S. Securities and Exchange Commission, or SEC, requirements, directors’ and officers’ liability insurance costs and investor and public relations costs. We also expect to continue to incur additional intellectual property-related expenses as we file patent applications to protect intellectual property arising from our research and development activities. In the event we are unable to raise additional capital, we may implement cost reduction strategies that seek to reduce our general and administrative expenses while maintaining sufficient infrastructure to support our planned research and development activities and operations as a public company.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income earned from our cash and cash equivalents, interest expense principally on the note payable under our debt arrangement with Pacific Western Bank, or PacWest, and amortization of the debt discount related to debt issuance costs.

Results of Operations

Comparison of the three months ended June 30, 2023 and 2022

The following table summarizes our results of operations for the three months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended

    

June 30, 

   

2023

   

2022

   

Change

Operating expenses

  

  

  

Research and development

$

13,218

$

16,246

$

(3,028)

General and administrative

 

6,898

 

8,306

 

(1,408)

Total operating expenses

 

20,116

 

24,552

 

(4,436)

Loss from operations

 

(20,116)

 

(24,552)

 

4,436

Other income (expense), net

 

  

 

  

 

  

Other income (expense), net

 

761

 

(61)

 

822

Total other income (expense), net

 

761

 

(61)

 

822

Net loss

$

(19,355)

$

(24,613)

$

5,258

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Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended

    

June 30, 

  

2023

  

2022

   

Change

XTX101

$

755

$

2,776

$

(2,021)

XTX202

2,757

994

1,763

XTX301

1,202

4,115

(2,913)

Other early programs and indirect research and development

3,330

3,050

280

Personnel-related (including stock-based compensation)

5,174

5,311

(137)

Total research and development expenses

$

13,218

$

16,246

$

(3,028)

Research and development expenses decreased by $3.0 million from $16.2 million for the three months ended June 30, 2022 to $13.2 million for the three months ended June 30, 2023. The changes in research and development expenses were primarily due to the following:

XTX101 costs decreased by $2.0 million, primarily driven by a $1.7 million decrease due to the timing of manufacturing activities in the comparable period and a $0.3 million decrease in clinical development activities related to our ongoing Phase 1 clinical trial;
XTX202 costs increased by $1.8 million, primarily driven by an increase in clinical development activities related to our ongoing Phase 1/2 clinical trial;
XTX301 costs decreased by $2.9 million, primarily driven by a $2.5 million decrease due to the timing of manufacturing activities in the comparable period and a $0.9 million decrease in preclinical activities, partially offset by a $0.5 million increase in clinical development activities related to our Phase 1 clinical trial;
other early programs and indirect research and development expenses increased by $0.3 million, primarily driven by an increase in external expenses related to preclinical research and development activities; and
personnel-related costs were relatively unchanged, primarily driven by consistent research and development headcount.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended

    

June 30, 

  

2023

  

2022

   

Change

Personnel-related (including stock-based compensation)

$

3,950

$

5,169

$

(1,219)

Professional and consulting fees

1,757

1,537

220

Facility-related and other general and administrative expenses

1,191

1,600

(409)

Total general and administrative expenses

$

6,898

$

8,306

$

(1,408)

General and administrative expenses decreased by $1.4 million from $8.3 million for the three months ended June 30, 2022 to $6.9 million for the three months ended June 30, 2023. The changes in general and administrative expenses were primarily due to the following:

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personnel-related costs decreased by $1.2 million, primarily driven by a $0.8 million decrease in stock-based compensation, as the prior year period included $0.6 million in non-recurring compensation expense resulting from the modification of previously issued stock options, and a $0.4 million decrease in salaries, bonuses and benefits;
professional and consulting fees increased by $0.2 million, primarily driven by a $0.4 million increase in legal fees partially offset by a $0.2 million decrease in consulting fees; and
facility-related and other general and administrative expenses decreased by $0.4 million, primarily driven by lower costs related to directors’ and officers’ liability insurance and a reduction in other general and administrative expenses.

Other Income (Expense), Net

Other income (expense), net, was other income of $0.8 million for the three months ended June 30, 2023 and other expense of $0.1 million for the three months ended June 30, 2022. The change in other income (expense), net was primarily due to an increase in interest income earned on our cash and cash equivalents due to higher interest rates.

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Comparison of the six months ended June 30, 2023 and 2022

The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022 (in thousands):

Six Months Ended

    

June 30, 

   

2023

   

2022

   

Change

Operating expenses

  

  

  

Research and development

$

29,349

$

31,166

$

(1,817)

General and administrative

 

14,293

 

14,610

 

(317)

Total operating expenses

 

43,642

 

45,776

 

(2,134)

Loss from operations

 

(43,642)

 

(45,776)

 

2,134

Other income (expense), net

 

  

 

  

 

  

Other income (expense), net

 

1,641

 

(190)

 

1,831

Total other income (expense), net

 

1,641

 

(190)

 

1,831

Net loss

$

(42,001)

$

(45,966)

$

3,965

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2023 and 2022 (in thousands):

Six Months Ended

    

June 30, 

  

2023

  

2022

   

Change

XTX101

$

1,476

$

4,034

$

(2,558)

XTX202

4,501

2,565

1,936

XTX301

4,330

7,280

(2,950)

Other early programs and indirect research and development

7,993

7,374

619

Personnel-related (including stock-based compensation)

11,049

9,913

1,136

Total research and development expenses

$

29,349

$

31,166

$

(1,817)

Research and development expenses decreased by $1.8 million from $31.2 million for the six months ended June 30, 2022 to $29.3 million for the six months ended June 30, 2023. The changes in research and development expenses were primarily due to the following:

XTX101 costs decreased by $2.6 million, primarily driven by a $1.9 million decrease due to the timing of manufacturing activities in the comparable period and a $0.6 million decrease in clinical development activities related to our ongoing Phase 1 clinical trial;
XTX202 costs increased by $1.9 million, primarily driven by a $2.6 million increase in clinical development activities related to our ongoing Phase 1/2 clinical trial, partially offset by a $0.5 million decrease in manufacturing activities;
XTX301 costs decreased by $3.0 million, primarily driven by a $2.3 million decrease in preclinical activities and a $1.9 million decrease due to the timing of manufacturing activities in the comparable period, partially offset by a $1.5 million increase in clinical development activities related to our Phase 1 clinical trial;
other early programs and indirect research and development expenses increased by $0.6 million, primarily driven by an increase in external expenses related to preclinical research and development activities; and
personnel-related costs increased by $1.1 million, primarily driven by an increase in salaries, bonuses and benefits due to higher research and development headcount.

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General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2023 and 2022 (in thousands):

Six Months Ended

    

June 30, 

  

2023

  

2022

   

Change

Personnel-related (including stock-based compensation)

$

8,231

$

8,805

$

(574)

Professional and consulting fees

3,817

2,939

878

Facility-related and other general and administrative expenses

2,245

2,866

(621)

Total general and administrative expenses

$

14,293

$

14,610

$

(317)

General and administrative expenses decreased by $0.3 million from $14.6 million for the six months ended June 30, 2022 to $14.3 million for the six months ended June 30, 2023. The changes in general and administrative expenses were primarily due to the following:

personnel-related costs decreased by $0.6 million, primarily driven by a $1.0 million decrease in stock-based compensation, as the prior year period included $0.6 million in non-recurring compensation expense resulting from the modification of previously issued stock options, partially offset by a $0.4 million increase in salaries, bonuses and benefits due to higher general and administrative headcount;
professional and consulting fees increased by $0.9 million, primarily driven by a $0.6 million increase in legal fees and a $0.3 million increase in accounting and other professional fees; and
facility-related and other general and administrative expenses decreased by $0.6 million, primarily driven by lower costs related to directors’ and officers’ liability insurance and a reduction in other general and administrative expenses.

Other Income (Expense), Net

Other income (expense), net, was other income of $1.6 million for the six months ended June 30, 2023 and other expense of $0.2 million for the six months ended June 30, 2022. The change in other income (expense), net was primarily due to an increase in interest income earned on our cash and cash equivalents due to higher interest rates.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in preclinical or early clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have financed our operations primarily from proceeds raised through private placements of preferred units and convertible preferred stock, a debt financing and our IPO. Through June 30, 2023, we have received an aggregate of $350.9 million in net proceeds from such transactions, including $116.4 million in net proceeds from our IPO, $224.5 million in net proceeds from the sale and issuance of preferred units and convertible preferred stock, and $10.0 million in net proceeds from our debt financing with PacWest. As of June 30, 2023, we had cash and cash equivalents of $75.4 million.

In November 2022, we filed a universal shelf registration statement on Form S-3 with the SEC, or Form S-3, to register for sale up to $250,000,000 of our common stock, preferred stock, debt securities, units and warrants, which we may issue and sell from time to time in one or more offerings, which became effective on November 18, 2022 (333-268264). In November 2022, we also entered into a sales agreement, or the Sales Agreement, with Cowen and Company LLC, under which we may issue and sell shares of our common stock, from time to time, having an aggregate offering price of up to $75.0 million, subject to the terms and conditions of the Sales Agreement. Through the filing date of this Quarterly Report

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on Form 10-Q, we have not issued or sold any shares of our common stock pursuant to the Sales Agreement. Issuances or sales of common stock pursuant to the Sales Agreement, if any, would be made under the Form S-3 and the corresponding prospectus related to the issuance and sale of shares of our common stock pursuant to the Sales Agreement.

Cash Flows

The following table provides information regarding our cash flows for each period presented (in thousands):

Six Months Ended

June 30, 

    

2023

    

2022

Net cash used in:

  

  

Operating activities

$

(41,824)

$

(37,591)

Investing activities

 

(486)

 

(1,025)

Financing activities

 

(2,680)

 

(26)

Net decrease in cash, cash equivalents and restricted cash

$

(44,990)

$

(38,642)

Operating Activities

Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support our business. We have historically experienced negative cash flows from operating activities as we invested in research and development of our product candidates, including preclinical studies, clinical trials, manufacturing and manufacturing process development. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally due to stock-based compensation, depreciation and amortization, as well as changes in components of operating assets and liabilities, which are generally due to increased expenses and timing of vendor payments.

During the six months ended June 30, 2023, net cash used in operating activities of $41.8 million was primarily driven by our net loss of $42.0 million and changes in operating assets and liabilities of $4.5 million, partially offset by net non-cash expenses of $4.7 million.

During the six months ended June 30, 2022, net cash used in operating activities of $37.6 million was primarily driven by our net loss of $46.0 million, partially offset by changes in operating assets and liabilities of $2.6 million and net non-cash expenses of $5.7 million.

Investing Activities

During the six months ended June 30, 2023 and 2022, net cash used in investing activities of $0.5 million and $1.0 million, respectively, consisted of purchases of property and equipment.

Financing Activities

During the six months ended June 30, 2023, net cash used in financing activities of $2.7 million consisted of repayments of debt principal and payments on our finance lease for certain lab equipment, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan.

During the six months ended June 30, 2022, net cash used in financing activities of less than $0.1 million consisted of payments on our finance lease for certain lab equipment partially offset by proceeds received from the exercise of stock options.

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Loan and Security Agreement

In November 2019, our wholly owned subsidiary, Xilio Development, Inc., entered into a loan and security agreement with PacWest, as amended and restated in May 2023, with us as a guarantor, which we refer to as the loan agreement. Under the loan agreement, in November 2019, we borrowed $10.0 million under a term loan. Borrowings under the loan agreement are collateralized by substantially all of the assets of Xilio Development, Inc., excluding intellectual property. Interest on amounts outstanding accrues at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 4.75%. As of June 30, 2023, the interest rate on the term loan was 8.50%. We made interest-only payments on the outstanding balance through December 31, 2022. We commenced making equal monthly payments of principal plus interest in January 2023, and we will be required to make such payments until the term loan matures on June 30, 2024. As of June 30, 2023, the outstanding principal balance under the loan agreement was $7.2 million.

The loan agreement contains customary representations, warranties and covenants and also includes customary events of default, including payment defaults, breaches of covenants, a change of control and occurrence of a material adverse effect.

Capital Requirements and Going Concern

We expect our future capital requirements to increase substantially over time in connection with our ongoing research and development activities, particularly as we advance our current and planned clinical development of our product candidates and expand the research efforts and preclinical activities associated with our other existing programs and discovery platform. In addition, we expect to continue to incur additional costs associated with operating as a public company. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Inflation generally affects us by increasing our cost of labor and certain services. We do not believe that inflation had a material effect on our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. However, the United States has recently experienced historically high levels of inflation. If the inflation rate continues to increase it may affect our expenses, such as employee compensation and research and development charges due to, for example, increases in the costs of labor and supplies. Additionally, the United States is experiencing a workforce shortage, which in turn has created a competitive wage environment that may also increase our operating costs in the future.

As of June 30, 2023, we had cash and cash equivalents of $75.4 million. We believe that our existing cash and cash equivalents will be sufficient to enable us to fund our planned operating expenses and capital expenditure requirements into the end of the second quarter of 2024. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. In addition, since our cash and cash equivalents as of June 30, 2023 are not expected to be sufficient to fund our operating expenses and capital expenditures for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. We will require substantial additional capital to fund our operations as we continue to advance our product candidates through clinical trials and maintain the infrastructure necessary to support these activities. To continue to fund our operations, our management has developed plans, which primarily consist of raising additional capital through one or more of the following: equity or debt financings; partnerships or licensing transactions; or other sources. However, there can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise, and we may be unable to obtain additional capital. As a result, we may need to implement cost reduction strategies, which could include delaying, reducing or eliminating certain costs related to our operations and research and development programs. The accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business for the foreseeable future. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Because of the numerous risks and uncertainties associated with product development, and because the extent to which we may enter into collaborations with third parties for the development of our product candidates is unknown, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with advancing

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the research and development of our product candidates. Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to:

the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our clinical-stage cytokine product candidates, XTX202 and XTX301, and ongoing preclinical development for our current and future product candidates;
our ability to implement and maintain cost reduction strategies, as well as the timing of such cost reductions;
the scope, prioritization and number of our research and development programs;
the scope, costs, timing and outcome of regulatory review of our product candidates;
the costs of securing manufacturing materials for use in preclinical studies, clinical trials and, for any product candidates for which we receive regulatory approval, if any, commercial supply;  
the costs and timing of future commercialization activities for any of our product candidates for which we receive regulatory approval;
the amount and timing of revenue, if any, received from commercial sales of any product candidates for which we receive regulatory approval;
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims;
the extent to which we may acquire or in-license other products, product candidates, technologies or intellectual property, as well as the terms of any such arrangements;
our ability to maintain our clinical collaboration to further develop XTX101, our Fc-enhanced tumor-activated anti-CTLA-4, in combination with atezolizumab, including the cost-sharing arrangements of such collaboration;
the impact of public health crises, including epidemics and pandemics such as the COVID-19 pandemic, on our business, operations, strategy, goals and anticipated milestones, as well as our response to such epidemics or pandemics;
the costs of maintaining or expanding our operations and continuing to operate as a public company; and
our ability to continue as a going concern.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if ever. Accordingly, we will need to obtain substantial additional capital to achieve our business objectives.

Our expectation with respect to our ability to fund our currently planned operations is based on estimates that are subject to various risks and uncertainties. Our operating plan may change as a result of many factors currently unknown to management and there can be no assurance that our current operating plan will be achieved in the time frame anticipated by us, and we may exhaust our available capital resources sooner than we expect.

Adequate additional capital may not be available to us on acceptable terms, or at all. Market volatility resulting from the COVID-19 pandemic, adverse changes in domestic and international fiscal, monetary and other policies and political

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relations, regional or global conflicts, uncertainty around global economic conditions, instability in the financial markets, or other factors could also adversely impact our ability to access capital. To the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest of our existing stockholders may be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Additional debt and preferred equity, if available, may also involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require that we issue warrants, which could potentially dilute the ownership interest of our existing stockholders.

If we raise additional capital through collaborations, partnerships, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or product candidates or products, and we may be required to grant licenses on terms that may not be favorable to us. If we are unable to raise additional capital, we may have to significantly delay, reduce or eliminate some or all of our product development or grant rights to develop and market product candidates or products that we would have otherwise preferred to develop and market ourselves.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience, known trends and events and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ materially from these estimates under different assumptions or conditions. There have been no changes to our critical accounting policies appearing in our Annual Report filed on Form 10-K for the year ended December 31, 2022.

Emerging Growth Company and Smaller Reporting Company Status

As an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited financial statements in a registration statement for an IPO, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements.

In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either (1) irrevocably elect to “opt out” of such extended transition period or (2) no longer qualify as an emerging growth company. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company,” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an EGC, in which case we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our principal executive officer and principal financial and accounting officer evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2023. Based upon such evaluation, our principal executive officer and principal financial and accounting officer have concluded that, as of June 30, 2023, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1A. Risk Factors

The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time. You should carefully consider the risks described below, in addition to the other information contained in this Quarterly Report on Form 10-Q and our other public filings. Our business, financial condition or results of operations could be harmed by any of these risks. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.

Risks Related to Our Limited Operating History, Financial Position and Capital Requirements

Our recurring losses from operations and the early development stage of our lead product candidates raise substantial doubt regarding our ability to continue as a going concern. If we are unable to raise substantial additional capital to finance our operations, we may be forced to delay, reduce or eliminate one or more of our research and development programs or other operations.

As of June 30, 2023, we had cash and cash equivalents of $75.4 million. We believe that our existing cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the end of the second quarter of 2024. However, since our cash and cash equivalents as of June 30, 2023 are not expected to be sufficient to fund our operations for at least twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there is substantial doubt about our ability to continue as a going concern. In addition, our cash forecasts are based on assumptions that may prove to be wrong, and we could use our available capital resources earlier than we currently expect. Changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may exhaust our available capital sooner than planned.

We expect to continue to incur operating losses in connection with our ongoing research and development activities, particularly as we advance our product candidates through clinical trials, maintain the infrastructure necessary to support these activities and incur costs associated with operating as a public company. Our revenue, if any, will be derived from sales of products that we do not expect to be commercially available for a number of years, if at all. If we obtain marketing approval for any current or future product candidates that we develop, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. Some of these expenses may be incurred in advance of marketing approval and could be substantial.

Our future capital requirements, both short-term and long-term, will depend on many factors, including:

our ability to implement and maintain cost reduction strategies, as well as the timing of such cost reductions;
the scope, progress, results and costs of research and development for our current and future product candidates, including our ongoing and planned clinical trials for our clinical-stage product candidates;
the scope, prioritization and number of our research and development programs;
the scope, costs, timing and outcome of regulatory review of our product candidates;
the costs of expanding manufacturing capacity through third-party manufacturers and securing manufacturing materials for use in preclinical studies, clinical trials and, for any product candidates for which we receive regulatory approval, use as commercial supply;

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the costs and timing of future commercialization activities for any of our product candidates for which we receive regulatory approval;
the amount and timing of revenue, if any, received from commercial sales of any product candidates for which we receive regulatory approval;
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims;
the extent to which we may acquire or in-license other products, product candidates, technologies or intellectual property, as well as the terms of any such arrangements;
our ability to maintain our clinical collaborati