WALTHAM, Mass. – Xilio Therapeutics, Inc. (NASDAQ: XLO), a biotechnology company focused on developing immuno-oncology therapies, has announced a private investment of approximately $11.3 million through the sale of common stock and prefunded warrants.
The private placement, involving existing accredited investors such as Bain Capital Life Sciences and Rock Springs Capital, is set to close on April 2, 2024, with the funds earmarked for working capital and other corporate purposes.
The financing aligns with Xilio's strategic realignment, prioritizing the clinical development of XTX301, a tumor-activated IL-12, and XTX101, a tumor-activated, Fc-enhanced anti-CTLA-4.
This shift comes alongside a partnership with Gilead Sciences, Inc. (NASDAQ:GILD) for the XTX301 program, which includes a $43.5 million upfront payment to Xilio and the potential for up to $604.0 million in additional payments based on developmental and sales milestones, along with tiered royalties on global sales.
In conjunction with this strategic focus, Xilio has decided to discontinue monotherapy development of XTX202, a tumor-activated IL-2, and is seeking collaboration opportunities to advance its development as a combination therapy. This decision is informed by additional Phase 2 data that supports its potential in this capacity.
Xilio is also undertaking a workforce reduction, affecting approximately 21% of its employees, as part of its cost-saving measures. This is expected to incur one-time costs of around $1.0 million, mainly for severance and benefits, with the reduction largely completed in the first half of 2024.
The company has also repaid all outstanding amounts under its loan agreement with Pacific Western Bank, which released all security interests in the company's assets.
With cash and cash equivalents of $44.7 million as of December 31, 2023, Xilio anticipates a cash runway into the second quarter of 2025, factoring in the proceeds from the Gilead agreement and the private placement, along with anticipated savings from the strategic realignment.
Xilio will discuss these updates in a live webcast today at 8:00 a.m. ET. The information is based on a press release statement.
InvestingPro Insights
Xilio Therapeutics, Inc. (NASDAQ: XLO) has recently secured additional funding through a private placement, reflecting investor confidence despite challenging market conditions. As the company navigates its strategic realignment, certain financial metrics and InvestingPro Tips can provide a clearer picture of its position in the market.
InvestingPro Data highlights that Xilio holds a market capitalization of approximately $17.59 million, indicating a relatively small size in the biotechnology sector. The company's price to book ratio as of the last twelve months ending Q3 2023 stands at 0.34, suggesting that the stock may be undervalued compared to the company's book value.
Moreover, the 1-year price total return as of the same period shows a significant decline of 79.45%, which aligns with the recent volatility in the biotech industry.
Two InvestingPro Tips shed light on the company's financial health and market performance. Firstly, Xilio holds more cash than debt on its balance sheet, which is a positive sign for financial stability, especially for a company in the capital-intensive field of biotechnology.
Secondly, analysts do not anticipate the company will be profitable this year, reflecting the long-term investment horizon typically required for drug development companies before they can generate sustainable profits.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available that may influence investment decisions, such as the company's cash burn rate and stock price movement relative to the market. With a total of 12 additional InvestingPro Tips listed, interested parties can explore a more comprehensive assessment of Xilio's prospects.
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