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Exploring Xencor’s Revenue Trend

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Mar. 26 2018, Updated 12:14 p.m. ET

Top line

In 2017, Xencor (XNCR) generated $35.7 million in revenue compared to $87.5 million in 2016. The company generates revenue from collaboration and licensing agreements. Most of Xencor’s revenue in 2017 came from Amgen (AMGN) and MorphoSys, which contributed $16.2 million and $12.5 million, respectively.

In 2016, Novartis (NVS) was the majority contributor to Xencor’s revenue at $59.7 million. Amgen followed at $18.7 million.

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Operating expenses

Xencor incurred R&D (research and development) expenses of $71.7 million in 2017 compared to $51.8 million in 2016. Of these expenses in 2017, $42 million went toward bispecific programs, and $20.3 million went toward XmAb5871 programs. In comparison, Xencor’s research spending on bispecific programs was $23.7 million in 2016. The company expects its R&D expenses to increase from their current level as its clinical programs advance going forward.

The company’s general and administrative expenses were $17.5 million in 2017 compared to $13.1 million in 2016. This rise was primarily due to increases in facility costs, staffing costs, and stock-based compensation costs.

As a result of the fall in its revenue and the jump in its expenses, Xencor incurred an operating income of -$53.5 million in 2017 compared to $22.5 million in 2016.

Bottom line

While in 2016, Xencor had an income tax expense of $991,000, in 2017, the company enjoyed an income tax benefit of $463,000. The company’s net income was -$49.2 million in 2017 compared to its net income of $22.7 million in 2016. This translated into a net income per share of -$1.05 for Xencor in 2017 compared to its net income per share of $0.56 in 2016.

In the next part of the series, we’ll take a look at Xencor’s cash flows.

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