Xilio Therapeutics Files 8-K: Material Agreement, Financials, and More

TL;DR

Xilio filed an 8-K detailing a new material agreement, financial results, and other key corporate events.

AI Summary

On March 27, 2024, Xilio Therapeutics, Inc. entered into a Material Definitive Agreement, the details of which are not fully disclosed in this filing. The company also reported on its results of operations and financial condition, and costs associated with exit or disposal activities. Additionally, the filing addresses unregistered sales of equity securities and includes a Regulation FD Disclosure, along with other events and financial statements.

Why It Matters

This 8-K filing provides crucial updates on Xilio Therapeutics' recent business activities, including a significant agreement and financial disclosures, which are important for investors to assess the company's current standing and future prospects.

Risk Assessment

Risk Level: medium — The filing indicates significant corporate activity including a material definitive agreement and potential exit costs, which could signal strategic shifts or financial pressures.

Key Players & Entities

• Xilio Therapeutics, Inc. (company) — Registrant
• March 27, 2024 (date) — Date of earliest event reported
• 001-40925 (other) — SEC File Number
• 828 Winter Street, Suite 300 (location) — Principal Executive Office Address
• Waltham, Massachusetts (location) — Principal Executive Office City and State

FAQ

Key Financial Figures

• $0.0001 — ich registered Common stock, par value $0.0001 per share XLO Nasdaq Global Select
• $75.0 million — he Agreement and payment by Gilead of a $75.0 million transition fee. Under the License Agre
• $43.5 million — the Company will receive approximately $43.5 million in upfront payments, including a cash p
• $30.0 million — t payments, including a cash payment of $30.0 million and an initial equity investment by Gil
• $13.5 million — y investment by Gilead of approximately $13.5 million in the Company's common stock, $0.0001
• $1.97 — "Common Stock"), at a purchase price of $1.97 per share. The Company will be eligible
• $604.0 million — mpany will be eligible to receive up to $604.0 million in additional contingent payments, whic
• $29.0 million — to the potential transition fee, up to $29.0 million of the total contingent payments are re
• $11.5 million — Gilead to purchase up to approximately $11.5 million of additional shares of Common Stock (i
• $0.64 — of Common Stock at a purchase price of $0.64 per share, and to certain Investors in
• $0.6399 — e "Securities"), at a purchase price of $0.6399 per Prefunded Warrant. The Private Pl
• $11.3 m — the Private Placement of approximately $11.3 million, before deducting placement agent
• $44.7 million — h and cash equivalents of approximately $44.7 million as of December 31, 2023. The informati
• $1.0 m — o incur one-time costs of approximately $1.0 million, primarily related to cash expend

Filing Documents

• xlo-20240327x8k.htm (8-K) — 87KB
• xlo-20240327xex4d1.htm (EX-4.1) — 102KB
• xlo-20240327xex10d1.htm (EX-10.1) — 241KB
• xlo-20240327xex10d2.htm (EX-10.2) — 224KB
• xlo-20240327xex99d1.htm (EX-99.1) — 30KB
• xlo-20240327xex99d2.htm (EX-99.2) — 42KB
• 0001558370-24-004165.txt ( ) — 974KB
• xlo-20240327.xsd (EX-101.SCH) — 3KB
• xlo-20240327_lab.xml (EX-101.LAB) — 16KB
• xlo-20240327_pre.xml (EX-101.PRE) — 10KB
• xlo-20240327x8k_htm.xml (XML) — 5KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. License Agreement On March 27, 2024, Xilio Development, Inc. ("Xilio Development"), a wholly-owned subsidiary of Xilio Therapeutics, Inc. (the "Company"), entered into an exclusive license agreement (the "License Agreement") with Gilead Sciences, Inc. ("Gilead") and granted Gilead an exclusive global license to develop and commercialize the Company's clinical-stage product candidate XTX301, a tumor-activated IL-12, and specified other molecules directed to IL-12. Xilio Development will be responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through an initial planned Phase 2 dose expansion. Following the delivery by Xilio Development of a specified clinical data package for XTX301 related to the Phase 1 clinical trial and planned Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the Agreement and payment by Gilead of a $75.0 million transition fee. Under the License Agreement, the Company will receive approximately $43.5 million in upfront payments, including a cash payment of $30.0 million and an initial equity investment by Gilead of approximately $13.5 million in the Company's common stock, $0.0001 par value per share (the "Common Stock"), at a purchase price of $1.97 per share. The Company will be eligible to receive up to $604.0 million in additional contingent payments, which include (i) the proceeds from up to three additional private placements of Common Stock, (ii) the $75.0 million transition fee and (iii) specified development, regulatory and sales-based milestones. Prior to the potential transition fee, up to $29.0 million of the total contingent payments are related to the potential additional private placements of Common Stock and a near-term development milestone. In addition, the Company is eligible to receive tiered royalties ranging from

02. Results of Operations and Financial Condition

Item 2.02. Results of Operations and Financial Condition. On March 28, 2024, the Company announced in a press release that the Company estimates that it had cash and cash equivalents of approximately $44.7 million as of December 31, 2023. The information contained in this Item 2.02 and in Item 8.01 below regarding the Company's estimated cash balance as of December 31, 2023 is preliminary, unaudited, and is subject to the finalization of the Company's full financial results for the fourth quarter and fiscal year ended December 31, 2023 and the completion of the Company's financial statement closing procedures. This estimate also does not present all information necessary for an understanding of the Company's financial condition as of December 31, 2023 and its results of operations for the fourth quarter and year ended December 31, 2023. Accordingly, undue reliance should not be placed on this preliminary estimate. The information in this Item 2.02 is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

05. Costs Associated with Exit or Disposal Activities

Item 2.05. Costs Associated with Exit or Disposal Activities. On March 27, 2024, the board of directors of the Company approved a strategic portfolio reprioritization and restructuring. As part of the strategic portfolio reprioritization and restructuring, the Company plans to: focus on rapidly advancing clinical development for XTX301 and XTX101, a tumor-activated, Fc-enhanced anti-CTLA-4, and leveraging the Company's promising research platform to advance differentiated bispecific and cell-engager molecules; discontinue further investment in XTX202 as a monotherapy and explore strategic opportunities to continue to develop XTX202 in combination with other agents; and undertake efforts to further reduce its expenses and streamline its operations, including a reduction in headcount of 15 employees, representing approximately 21% of the Company's current workforce. In connection with the workforce reduction, the Company expects to incur one-time costs of approximately $1.0 million, primarily related to cash expenditures for severance and benefits continuation. The Company estimates that the workforce reduction will be substantially completed in the first half of 2024. The estimate of costs that the Company expects to incur and the timing thereof are subject to a number of assumptions, and actual results may differ. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the actions described above.

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. Sale of Shares to Gilead The description of the issuance and sale of the shares of Common Stock pursuant to the Stock Purchase Agreement set forth under Item 1.01 above under the caption "Stock Purchase Agreement with Gilead" is incorporated by reference into this Item 3.02. The issuance and sale has not been registered under the Securities Act or any state securities laws. Based in part upon the representations of Gilead in the Stock Purchase Agreement, the Company has relied on the exemption from the registration requirements of the Securities Act under Section 4(a)(2) thereof for a transaction by an issuer not involving any public offering. Sale of Shares to the Investors The description of the issuance and sale of shares of Common Stock (including shares of Common Stock underlying the Prefunded Warrants) pursuant to the Securities Purchase Agreement set forth under Item 1.01 above under the caption "Securities Purchase Agreement with the Investors" is incorporated by reference into this Item 3.02. The issuance and sale has not been registered under the Securities Act or any state securities laws. Based in part upon the representations of the Investors in the Securities Purchase Agreement, the Company has relied on the exemption from the registration requirements of the Securities Act under Section 4(a)(2) thereof for a transaction by an issuer not involving any public offering. Neither this Current Report on Form 8-K (this "Form 8-K") nor any exhibit attached hereto is an offer to sell or a solicitation of an offer to purchase the Securities or other securities of the Company.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On March 28, 2024, the Company issued a press release regarding the transactions contemplated by the License Agreement and the Stock Purchase Agreement. In addition, on March 28, 2024, the Company issued a press release regarding the transactions contemplated by the Private Placement, the additional data from the Company's Phase 2 clinical trial evaluating XTX202 in renal cell carcinoma and melanoma patients with advanced solid tumors, and its plans to reprioritize its resources, including the workforce reduction and plans to discontinue further investment in XTX202 as a monotherapy. Copies of the press releases are furnished as Exhibits 99.1 and 99.2 to this Form 8-K. The information in Item 7.01 of this Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, is intended to be furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

01. Other Events

Item 8.01. Other Events. In the first quarter of 2024, the Company repaid all amounts outstanding under the loan and security agreement (as amended, the "Loan Agreement") with Pacific Western Bank ("PacWest"), and PacWest released all security interests in the Company's and its affiliates' assets. The Company estimates that, as of December 31, 2023, its cash and cash equivalents were $44.7 million. Based on its current operating plans, the Company anticipates that its cash and cash equivalents as of December 31, 2023, together with the upfront payment under the License Agreement, the proceeds from the Initial Gilead Private Placement, the anticipated net proceeds from the Private Placement and after giving effect to one-time costs and anticipated future cost savings associated with the strategic portfolio reprioritization and workforce reduction and the repayment of the outstanding loan balance under the Loan Agreement in the first quarter of 2024, will be sufficient to fund its operating expenses and capital expenditure requirements into the second quarter of 2025. Cautionary Note Regarding Forward Looking Statements This Form 8-K contains forward-looking statements that involve estimates, assumptions, risks and uncertainties. Forward-looking statements include, but are not limited to, statements related to the amount of proceeds expected from the Stock Purchase Agreement and Initial Gilead Private Placement and the Securities Purchase Agreement and Private Placement, the timing and certainty of completion of the Initial Gilead Private Placement and the Private Placement and the transactions contemplated by the Securities Purchase Agreement and the Stock Purchase Agreement, and in each case, the filing of a registration statement to register the resale of the registrable securities being sold in connection therewith, the timing of and costs associated with the strategic portfolio reprioritization, the potential benefits of any of the Company's current or fu

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 4.1 Form of Prefunded Warrant 10.1 Securities Purchase Agreement, dated March 28, 2024, among Xilio Therapeutics, Inc. and the persons party thereto 10.2 Registration Rights Agreement, dated March 28, 2024, among Xilio Therapeutics, Inc. and the persons party thereto 99.1 Press release issued by Xilio Therapeutics, Inc. on March 28, 2024 99.2 Press release issued by Xilio Therapeutics, Inc. on March 28, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document and incorporated as Exhibit 101)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. XILIO THERAPEUTICS, INC. Date: March 28, 2024 By: /s/ Chris Frankenfield Chris Frankenfield Chief Operating Officer

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View this 8-K filing on SEC EDGAR