Xencor (XNCR) 10-Q 5 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 24, 2015
Document and Entity Information
Entity Registrant Name	Xencor Inc
Entity Central Index Key	1326732
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-28
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		40,359,140
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

Balance_Sheets

Balance Sheets (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Current assets
Cash	$119,048	$54,649
Marketable securities	25,187
Accounts receivable	411	2,966
Prepaid expenses and other current assets	422	134
Total current assets	145,068	57,749
Property and equipment
Computers, software and equipment	4,836	4,270
Furniture and fixtures	102	97
Leasehold improvements	3,090	3,086
Less accumulated depreciation and amortization	-6,653	-6,554
Property and equipment, net	1,375	899
Other assets
Patents, licenses, and other intangible assets, net	9,509	9,116
Marketable securities - long term	22,628
Other assets	59	59
Total other assets	32,196	9,175
Total assets	178,639	67,823
Current liabilities
Accounts payable	2,556	1,691
Accrued expenses	1,686	2,251
Current portion of deferred rent	19
Current portion of deferred revenue	2,616	2,254
Total current liabilities	6,877	6,196
Deferred rent, less current portion	576
Deferred revenue, less current portion	1,884	2,337
Total liabilities	9,337	8,533
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value: 200,000,000 authorized shares at March 31, 2015 and December 31, 2014; 40,358,140 issued and outstanding at March 31, 2015 and 31,434,272 issued and outstanding at December 31, 2014	404	314
Additional paid-in capital	419,370	302,969
Accumulated other comprehensive income	-35
Accumulated deficit	-250,437	-243,993
Total stockholders' equity	169,302	59,290
Total liabilities and stockholders' equity	$178,639	$67,823

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Condensed Balance Sheets
Common Stock, par value (in dollars per share)	$0.01	$0.01
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares issued	40,358,140	31,434,272
Common Stock, shares outstanding	40,358,140	31,434,272

Statements_of_Comprehensive_Lo

Statements of Comprehensive Loss (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Revenue
Collaborations, licenses and milestones	$1,491	$2,184
Operating expenses
Research and development	5,205	4,228
General and administrative	2,764	1,723
Total operating expenses	7,969	5,951
Loss from operations	-6,478	-3,767
Other income (expenses)
Interest income	101	18
Interest expense	-4	-2
Other (expense) income	-63
Total other income (expense), net	34	16
Net loss	-6,444	-3,751
Other comprehensive loss
Net unrealized loss on marketable securities	-35
Comprehensive loss	($6,479)	($3,751)
Basic and diluted net loss per common share (in dollars per share)	($0.19)	($0.12)
Weighted-average common shares outstanding used in computing basic and diluted net loss (in shares)	34,297,782	31,360,879

Statement_of_Stockholders_Equi

Statement of Stockholdersb Equity (USD $)	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
In Thousands, except Share data, unless otherwise specified
Balance at Dec. 31, 2014	$314	$302,969		($243,993)	$59,290
Balance (in shares) at Dec. 31, 2014	31,434,272
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance cost of $7.7 million	86	115,118			115,204
Sale of common stock, net of issuance cost of $7.7 million (in shares)	8,625,000
Issuance of common stock upon exercise and vesting of stock awards	4	176			180
Issuance of common stock upon exercise and vesting of stock awards (in shares)	298,868
Comprehensive loss			-35	-6,444	-6,479
Stock-based compensation expense		1,107			1,107
Balance at Mar. 31, 2015	$404	$419,370	($35)	($250,437)	$169,302
Balance (in shares) at Mar. 31, 2015	40,358,140

Statements_of_Cash_Flows

Statements of Cash Flows (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net loss	($6,444)	($3,751)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	240	320
Amortization of premium on marketable securities	63
Stock-based compensation	1,107	278
Abandonment of capitalized intangible assets	37	10
Gain on disposal of assets	-1
Changes in operating assets and liabilities:
Accounts receivable	2,555	-452
Interest receivable	-146
Prepaid expenses and other assets	-142	-99
Other assets		50
Accounts payable	699	-529
Accrued expenses	-523	72
Deferred rent	553
Deferred revenue	-91	-892
Net cash used in operating activities	-2,093	-4,993
Cash flows from investing activities
Purchase of marketable securities	-47,913
Purchase of intangible assets	-571	-382
Purchase of property and equipment	-575	-66
Proceeds from sale of property and equipment	1
Net cash used in investing activities	-49,058	-448
Cash flows from financing activities
Proceeds from issuance of common stock	122,906
Proceeds from issuance of common stock upon exercise of stock awards	180	4
Common stock issuance cost	-7,536
Payments on capital lease obligations		-2
Net cash provided by financing activities	115,550	2
Net increase (decrease) in cash and cash equivalents	64,399	-5,439
Cash, beginning of period	54,649	77,975
Cash, end of period	119,048	72,536
Supplemental disclosures of non-cash investing and financing activities
Net unrealized loss on marketable securities available for sale	35
Common stock issuance costs	$166

Summary_of_Significant_Account

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2015
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies
	Basis of Presentation
	The accompanying unaudited interim financial statements for Xencor, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period.
	The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 23, 2015, as amended.
	Marketable Securities
	The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable securities issued by investment grade institutions. The Company considers its marketable securities to be “available-for-sale”, as defined by authoritative guidance issued by the Financial Accounting Standards Board (“FASB”). These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). If a decline in the value of a marketable security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value and recognizes a loss as a charge against income. The Company reviews its portfolio of marketable securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary.
	There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2014 Annual Report on Form 10-K, as amended.
	Sale of Additional Common Stock
	In March 2015, we completed the sale of 8,625,000 shares of common stock which included shares we issued pursuant to our underwriters’ exercise of their over-allotment option pursuant to a follow on offering. We received net proceeds of $115.2 million, after underwriting discounts, commissions and estimated offering expenses.
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. The new pronouncement is effective for reporting periods beginning after December 15, 2016 and will replace most of the existing revenue recognition guidance within the United States GAAP. The new pronouncement permits the use of either the retroactive or cumulative effect transition method. Early adoption is not permitted.
	The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures.

Fair_Value_of_Financial_Instru

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2015
Fair Value of Financial Instruments
Fair Value of Financial Instruments	2. Fair Value of Financial Instruments
	The fair values of the financial instruments included in the financial statements, which include cash equivalents, money markets, US government and corporate securities approximate their carrying values at March 31, 2015 due to their short term maturities. Our financial instruments also include accounts receivable, accounts payable and accrued expenses. Marketable securities and cash equivalents are carried at fair value.
	The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements.  The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:
	Level 1—Fair Value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities;
	Level 2—Fair Value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.
	Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity –e.g. determining an appropriate discount factor for illiquidity associated with a given security.
	The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):
		31-Mar-15						31-Dec-14
		Total						Total
		Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
	Money Market Funds	$	2,040	$	2,040	$	—	$	—	$	—	$	—
	Corporate Securities		32,007		—		32,007		—		—		—
	Government Securities		15,808		—		15,808		—		—		—
		$	49,855	$	2,040	$	47,815	$	—	$	—	$	—
	Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value.  During the three months ended March 31, 2015, there were no transfers between Level 1 and Level 2. The Company does not have any Level 3 assets or liabilities.

Net_Loss_Per_Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2015
Net Loss Per Share
Net Loss Per Share	3. Net Loss Per Share
	We compute net loss per common share by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Potentially dilutive securities consisting of stock issuable under options and our 2013 Employee Stock Purchase Plan (ESPP) are not included in the diluted net loss per common share calculation where the inclusion of such shares would have had an antidilutive effect.
	Basic and diluted (loss) per common share is computed as follows (in thousands except per share data)
		Three Months Ended
		March 31,
		2015			2014
		(in thousands, except
		per share data)
	Basic and diluted numerator:
	Net loss attributable to common stockholders	$	-6,444		$	-3,751
	Denominator:
	Weighted-average common shares outstanding used in computing basic and diluted net loss		34,297,782			31,360,879
	Basic and diluted net loss per common share	$	-0.19		$	-0.12
	The following shares of outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as the effect of including such securities would have been antidilutive.
		Three Months Ended
		March 31,
		2015		2014
		(in thousands)
	Employee stock purchase plan shares	54		45
	Options to purchase common stock	3,248		2,488
		3,302		2,533
	In March 2015, the Company issued 8,625,000 shares of common stock in a follow-on stock offering. The issuance of these shares resulted in a significant increase in the Company’s weighted average shares outstanding for the three months ended March 31, 2015 when compared to the comparable prior year period and is expected to continue to impact the year-over-year comparability of the Company’s income (loss) per share calculations for the remainder of 2015.

Comprehensive_loss

Comprehensive loss	3 Months Ended
	Mar. 31, 2015
Comprehensive Loss
Comprehensive Loss	4. Comprehensive loss
	Comprehensive loss is comprised of net loss and other comprehensive loss. For the three months ended March 31, 2015, the only component of other comprehensive loss is net unrealized gains and losses on marketable securities. There were no material reclassifications out of accumulated other comprehensive loss during the three months ended March 31, 2015.

Marketable_Securities

Marketable Securities	3 Months Ended
	Mar. 31, 2015
Marketable Securities
Marketable Securities	5. Marketable Securities
	The Company’s marketable securities held as of March 31, 2015 are summarized below:
				Gross		Gross
		Amortized		Unrealized		Unrealized
		Cost		Gains		Losses		Fair Value
	(in thousands)
	Money Market Funds	$	2,040	$	—	$	—	$	2,040
	Corporate Securities		32,040		3		-36		32,007
	Government Securities		15,810		1		-3		15,808
		$	49,890	$	4	$	-39	$	49,855
	Reported as
	Cash and cash equivalents							$	2,040
	Marketable securities								47,815
	Total investments							$	49,855
	The maturities of the Company’s marketable securities are as follows:
		Amortized		Estimated
		Cost		Fair Value
	(in thousands)
	Mature in one year or less	$	25,210	$	25,187
	Mature after one year through five years		22,640		22,628
		$	47,850	$	47,815

StockBased_Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2015
Stock-Based Compensation
Stock-Based Compensation	6.  Stock Based Compensation
	Our Board of Directors and the requisite stockholders previously approved the Amended and Restated 2000 Stock Incentive Plan (the 2000 Plan), and the 2010 Equity Incentive Plan (the 2010 Plan, and collectively with the 2000 Plan the Prior Plans). The 2000 Plan terminated August 2010 and no further awards may be issued under the plan. In October 2013, our Board of Directors approved the 2013 Equity Incentive plan (the 2013 Plan) and in November 2013 our stockholders approved the 2013 Plan. The 2013 Plan became effective as of December 3, 2013, the date of the Company’s IPO.  As of December 2, 2013, we suspended the 2010 Plan and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the Prior Plans that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve.
	As of March 31, 2015, the total number of shares of common stock available for issuance under the 2013 Plan was 6,368,483, which includes 2,662,065 of common stock that were available for issuance under the Prior Plans as of the effective date of the 2013 Plan. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 of each year by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. As of March 31, 2015 a total of 1,783,750 options had been issued under the 2013 Plan.
	In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. We have reserved a total of 517,422 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number of shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. As of March 31, 2015, we have issued a total of 63,864 shares of common stock under the ESPP.
	Total employee, director and non-employee stock-based compensation expense recognized for the three months ended March 31, 2015 and 2014 are as follows (in thousands):
		Three Months Ended
		March 31,
		2015			2014
	General and administrative	$	514		$	128
	Research and development		593			150
		$	1,107		$	278
	The following table summarizes option activity under our stock plans and related information:
				Weighted			Weighted
				Average			Average
		Number of		Exercise			Remaining		Aggregate
		Shares subject		Price			Contractual		Intrinsic
		to outstanding		(Per			Term		Value
		options		Share)			(in years)		(in thousands)
	Balances at December 31, 2014	2,826,794		$	5.12
	Options granted	720,250		$	15.70
	Options exercised	-298,868		$	0.60
	Balance at March 31, 2015	3,248,176		$	7.88			7.55	$	24,429
	Exercisable	1,316,093		$	2.63			5.06	$	16,699
	We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $15.32 per share as of March 31, 2015.
	Weighted average fair value of options granted during the three-month period ended March 31, 2015 and 2014 was $10.54 and $7.44 per share, respectively.  There were 700,500 options granted during the period ended March 31, 2014. We estimated the fair value of each stock option using the Black-Scholes option-pricing model based on the date of grant of such stock option with the following weighted average assumptions for the nine months ended March 31, 2015 and 2014:
		Options
		Three Months Ended
		March 31,
		2015		2014
	Expected term (years)	6.0		6.0
	Expected volatility	76.6	%	75.2	%
	Risk-free interest rate	1.61	%	2.01	%
	Expected dividend yield	—	%	—	%
		ESPP
		Three Months Ended
		March 31,
		2015		2014
	Expected term (years)	0.5 - 2.0		0.5 - 2.0
	Expected volatility	70.6 - 71.8	%	70.6	%
	Risk-free interest rate	.06% - .46	%	.07% - .46	%
	Expected dividend yield	—	%	—	%
	At March 31, 2015, the Company had $11.4 million of total unrecognized compensation expense, net of estimated forfeitures, related to outstanding stock options that will be recognized over the next 3.6 years.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies
Commitments and Contingencies	7. Commitments and Contingencies
	Operating Leases
	The Company leases office and laboratory space in Monrovia, CA. In January 2015, we entered into a new lease agreement for the property. The new lease replaces the previous lease and extends our lease term to June 2020 with an option to renew for an additional five years. The new lease is a non-cancelable operating lease.
	The Company also leases office space in San Diego, CA. In February 2015, we entered into an amended lease agreement for the San Diego property. The amended lease replaces the previous lease and provides for additional space in a building located in the same multi-building development. The amended lease expires in April 2018 and includes an option to renew for a period of one year.
	Future minimum payments under the non-cancelable operating leases consist of the following (in thousands):
		Operating
	Years ending December 31,	Leases
	For the remainder of the fiscal year	$	409
	2016		679
	2017		699
	2018		602
	2019		581
	Thereafter		299
	Total	$	3,269
	Net rent expense for the three months ended March 31, 2015 and 2014 was $129,000 and $137,000 respectively.
	Contingencies
	From time to time, the Company may be subject to various litigation and related matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred.
	On March 3, 2015, a complaint, captioned DePinto v. John S. Stafford, et al., C.A. No. 10742, was filed in the Court of Chancery of the State of Delaware against certain of the Company’s current and former directors on behalf of certain minority holders of the Company’s convertible preferred stock before its initial public offering (“IPO”).  In general, the complaint alleges that the directors breached their fiduciary duties to these minority stockholders in connection with a recapitalization of the Company that took place prior to its IPO.  The complaint also claims that certain director and stockholder written consents connected with the recapitalization are invalid.  The complaint has been brought as a purported class action and seeks unspecified monetary damages and other relief.  The Company believes that the class action lawsuit is without merit and intends to vigorously defend the action. Based on the preliminary nature of the claim, the Company believes that is it not possible to estimate a potential loss related to the claim.

Collaboration_and_Licensing_Ag

Collaboration and Licensing Agreements	3 Months Ended
	Mar. 31, 2015
Collaboration and Licensing Agreements
Collaboration and Licensing Agreements	8. Collaboration and Licensing Agreements
	Following is a summary description of the arrangements that generated revenue in the three-months ended March 31, 2015 and 2014.
	Amgen, Inc.
	In December 2010, we entered into a Collaboration and Option Agreement (Collaboration Agreement) with Amgen, Inc. (Amgen), pursuant to which we agreed to collaborate with Amgen on development of XmAb5871 in rheumatoid arthritis (“RA”) through completion of a Phase 2 proof-of-concept (“POC”) trial. During development and through completion of the POC trial, we would continue to own and would control and pay for all development activities. After completion of the POC trial, we would deliver a data package to Amgen and they would have 90 days to review and decide whether to exercise an option to obtain worldwide rights to XmAb5871. Upon exercise of the option and payment of a $50 million option fee, Amgen would own all rights to the compound and be responsible for further development. In addition to the option fee, upon exercise of the option we would be eligible to receive $437 million in future development, regulatory and sales milestones as Amgen advanced XmAb5871 into later stages of development.
	We received a nonrefundable upfront payment of $11 million upon execution of the Collaboration Agreement and a $2 million milestone in January 2013 upon the initiation of a Phase 1b clinical trial. We were also eligible to receive an additional $12 million in pre-option payments upon continued development of XmAb5871 through completion of the Phase 2 POC trial and delivery of the clinical study reports to Amgen.
	In October 2014, we entered into an agreement with Amgen to terminate the Collaboration Agreement pursuant to which all worldwide rights to develop and commercialize XmAb5871 reverted back to us. Our obligations to continue development of XmAb5871 under the terms of the Collaboration Agreement terminated effective as of the date of the termination agreement. As a result of and effective as of the date of the termination agreement, all of Amgen’s rights to XmAb5871 terminated including the right to exercise an exclusive option to acquire the worldwide rights to XmAb5871. Amgen’s obligations to make any further payments to us are also terminated. In connection with the termination, we granted Amgen a right of first negotiation (ROFN) to obtain an exclusive license to develop and commercialize any XmAb5871 product.
	The Company has evaluated the termination agreement with Amgen and determined that the termination results in a cancellation of all our obligations to Amgen under the Collaboration Agreement. We have evaluated the ROFN and determine that its value is de minimis because Amgen’s rights are limited. As a result of the termination, we recognized the remaining balance in deferred revenue as revenue in the period of the termination, October 2014. There is no remaining revenue or obligations to be reported under this agreement.
	During the three months ended March 31 2015 and 2014 we recognized $0 and $0.6 million of revenue under this arrangement, respectively. As of March 31, 2015, there is no remaining deferred revenue under this agreement.
	Merck Sharp & Dohme Corporation
	In July 2013, we entered into a License Agreement with Merck Sharp & Dohme Corp (Merck). Under the terms of the agreement, we provided Merck with a non-exclusive commercial license to certain patent rights to our Fc domains to apply to one of their compounds. We also provided Merck with contingent options to take additional non-exclusive commercial licenses. The contingent options provide Merck an opportunity to take non-exclusive commercial licenses at an amount less than the amount paid for the original license. The agreement provided for an upfront payment of $1.0 million and annual maintenance fees totaling $0.5 million. We are also eligible to receive future milestones and royalties as Merck advances the compound into clinical development.
	We determined that the deliverables under this agreement were the non-exclusive commercial license and the options. The options are considered substantive and contingent and no amount of the upfront payment was allocated to these options. We also determined that the future milestones and related payments were substantive and contingent and did not allocate any of the upfront payment to the milestones.
	In the first quarter of 2014, Merck initiated a Phase 1 clinical trial which triggered a $0.5 million milestone payment to us. During the three months ended March 31, 2015 and 2014 we recognized $25,000 and $0.5 million of revenue respectively under this arrangement. As of March 31, 2015, there is $0.1 million of deferred revenue related to this arrangement.
	Alexion Pharmaceuticals, Inc.
	In January 2013, we entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds against six different target programs during a five-year research term under the agreement, up to completion of the first multi-dose human clinical trial for each target compound. Alexion may extend the research term for an additional three years upon written notice to us and payment of an extension fee of $2.0 million. Alexion is responsible for conducting all research and development activities under the agreement at its own expense.
	In addition, we granted to Alexion an exclusive option, on a target-by-target basis, to obtain an exclusive commercial, worldwide, royalty-bearing license, with sublicensing rights, under our Xtend technology to develop and commercialize products that contain the target for which the option is exercised. In order to exercise this option, Alexion must pay a $4.0 million option fee with respect to each target for which the option is exercised. Alexion may exercise this option at any time during the research term. An option must be exercised for any compound that is advanced into development after the first multi-ascending dose trial is initiated.
	Under the agreement, we received an upfront payment of $3.0 million. Alexion is also required to pay an annual maintenance fee of $0.5 million during the research term of the agreement and $1.0 million during any extension of the research term. The upfront payment is being recognized into income over the initial research term of five years.
	In the third quarter of 2014, Alexion initiated a Phase 1 clinical trial with an undisclosed molecule to be used against an undisclosed target. It is the first human clinical trial with a molecule incorporating our Xtend Fc Domain technology.  We received a milestone related to this trial in March 2015 upon issuance of certain patents related to our Xtend technology.
	During the three months ended March 31, 2015 and 2014 we recognized $0.8 million and $0.3 million of revenue respectively under this arrangement. As of March 31, 2015, we have deferred revenue related to this arrangement of $1.8 million.
	CSL Limited
	In February 2009, we entered into a Research License and Commercialization Agreement (February 2009 Agreement) with CSL Limited (CSL). Under the agreement, we provided CSL with a research license to one of our technologies and up to five commercial options. The upfront payment of $0.75 million received at inception and the annual research license renewal payments are being recognized as revenue ratably over the five-year term of the research license.
	In May 2013, we entered into an amendment to the February 2009 Agreement with CSL, which eliminated a contingent milestone payment requirement and reduced the royalty rate on net sales for the licensed product CSL362. The amendment provided for a payment upon signing of $2.5 million. We determined that the amendment was a material modification to the original agreement and evaluated the remaining deliverables at the date of the amendment. We determined that the remaining deliverables were the research license which expired in February 2014 and four additional options to take commercial licenses through the term of the research period. The options are considered to be substantive and contingent and we did not allocate any of the proceeds received in the amendment to the options. The amendment proceeds were recognized into income over the remaining period of the research term.
	During the three months ended March 31, 2015 and 2014, we recognized zero and $0.7 million of revenue respectively under this arrangement. As of March 31, 2015, we have no deferred revenue related to this arrangement.
	In March 2013, we entered into a license agreement (March 2013 License Agreement) with CSL. Under the terms of the agreement, we provided CSL with a non-exclusive commercial license to apply our technology to one of their compounds. The agreement provided for an upfront payment of $0.5 million and we were eligible to receive future milestones as CSL advanced the compound into clinical development. We determined that the deliverables under this agreement were the non-exclusive commercial license. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestone.
	In March 2015, CSL notified us that they were terminating the March 2013 License Agreement. We have no remaining obligations under the agreement. For the periods ended March 31, 2015 and 2014, we did not recognize any revenue related to this arrangement. As of March 31, 2015 there is no remaining deferred revenue under this agreement.
	Novo Nordisk A/S
	In December 2014, we entered into a Collaboration and License Agreement with Novo Nordisk A/S (Novo). Under the terms of the agreement we granted Novo a research license to use certain Xencor technologies including our bispecific, Immune Inhibitor, Xtend and other technologies during a two-year research term. We will provide research support for four FTE’s in collaboration with Novo to apply our technologies to Novo provided targets to identify compounds with improved properties. Novo has an option to extend the research term for another twelve months upon written notice to us and payment of another year of research funding. At the end of the research term, Novo will have a commercial license to develop and commercialize any new targets identified during the research term.
	The agreement provided for an upfront payment of $2.5 million and research funding of $1.6 million per year over the research term. We are also eligible to receive $2.0 million in milestone payments upon the successful completion of certain projects during the research term. In addition, if Novo identifies a compound from the collaboration to advance into clinical development, we are eligible to receive future development, regulatory and commercial milestone payments and royalties.
	We determined that the deliverables under the arrangement were the research license to our technologies and the research support. We believe that the research support and the technologies are integral to each other and are not separate units of accounting. The commercial license did not have standalone value at inception of the agreement due to the uncertainty of identifying a commercial target. We are recognizing the $2.5 million upfront payment as income over the two year research term. The research funding is being recognized into income over the period that the services are being provided.
	During the three months ended March 31, 2015, we recognized $0.7 million of revenue related to the arrangement and as of March 31, 2015, we have $2.6 million in deferred revenue related to this arrangement.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Polices)	3 Months Ended
	Mar. 31, 2015
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation
	The accompanying unaudited interim financial statements for Xencor, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period.
	The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 23, 2015, as amended.
Marketable Securities	Marketable Securities
	The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable securities issued by investment grade institutions. The Company considers its marketable securities to be “available-for-sale”, as defined by authoritative guidance issued by the Financial Accounting Standards Board (“FASB”). These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). If a decline in the value of a marketable security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value and recognizes a loss as a charge against income. The Company reviews its portfolio of marketable securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary.
	There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2014 Annual Report on Form 10-K, as amended.
Recent Accounting Pronouncements	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. The new pronouncement is effective for reporting periods beginning after December 15, 2016 and will replace most of the existing revenue recognition guidance within the United States GAAP. The new pronouncement permits the use of either the retroactive or cumulative effect transition method. Early adoption is not permitted.
	The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures.

Fair_Value_of_Financial_Instru1

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2015
Fair Value of Financial Instruments
Schedule of assets recorded at fair value	The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):
		31-Mar-15						31-Dec-14
		Total						Total
		Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2
	Money Market Funds	$	2,040	$	2,040	$	—	$	—	$	—	$	—
	Corporate Securities		32,007		—		32,007		—		—		—
	Government Securities		15,808		—		15,808		—		—		—
		$	49,855	$	2,040	$	47,815	$	—	$	—	$	—

Net_Loss_Per_Share_Tables

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2015
Net Loss Per Share
Schedule of basic and diluted net loss per common share	Basic and diluted (loss) per common share is computed as follows (in thousands except per share data)
		Three Months Ended
		March 31,
		2015			2014
		(in thousands, except
		per share data)
	Basic and diluted numerator:
	Net loss attributable to common stockholders	$	-6,444		$	-3,751
	Denominator:
	Weighted-average common shares outstanding used in computing basic and diluted net loss		34,297,782			31,360,879
	Basic and diluted net loss per common share	$	-0.19		$	-0.12
Schedule of potentially dilutive securites
		Three Months Ended
		March 31,
		2015		2014
		(in thousands)
	Employee stock purchase plan shares	54		45
	Options to purchase common stock	3,248		2,488
		3,302		2,533

Marketable_Securities_Tables

Marketable Securities (Tables)	3 Months Ended
	Mar. 31, 2015
Marketable Securities
Schedule of marketable securities
				Gross		Gross
		Amortized		Unrealized		Unrealized
		Cost		Gains		Losses		Fair Value
	(in thousands)
	Money Market Funds	$	2,040	$	—	$	—	$	2,040
	Corporate Securities		32,040		3		-36		32,007
	Government Securities		15,810		1		-3		15,808
		$	49,890	$	4	$	-39	$	49,855
	Reported as
	Cash and cash equivalents							$	2,040
	Marketable securities								47,815
	Total investments							$	49,855
Schedule of maturities of marketable securities
		Amortized		Estimated
		Cost		Fair Value
	(in thousands)
	Mature in one year or less	$	25,210	$	25,187
	Mature after one year through five years		22,640		22,628
		$	47,850	$	47,815

StockBased_Compensation_Tables

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2015
Stock-Based Compensation
Schedule of total employee, director and non-employee stock-based compensation expense recognized	Total employee, director and non-employee stock-based compensation expense recognized for the three months ended March 31, 2015 and 2014 are as follows (in thousands):
		Three Months Ended
		March 31,
		2015			2014
	General and administrative	$	514		$	128
	Research and development		593			150
		$	1,107		$	278
Summary of stock option activity
				Weighted			Weighted
				Average			Average
		Number of		Exercise			Remaining		Aggregate
		Shares subject		Price			Contractual		Intrinsic
		to outstanding		(Per			Term		Value
		options		Share)			(in years)		(in thousands)
	Balances at December 31, 2014	2,826,794		$	5.12
	Options granted	720,250		$	15.70
	Options exercised	-298,868		$	0.60
	Balance at March 31, 2015	3,248,176		$	7.88			7.55	$	24,429
	Exercisable	1,316,093		$	2.63			5.06	$	16,699
Schedule of weighted average assumptions used for estimation of fair value of stock options
		Options
		Three Months Ended
		March 31,
		2015		2014
	Expected term (years)	6.0		6.0
	Expected volatility	76.6	%	75.2	%
	Risk-free interest rate	1.61	%	2.01	%
	Expected dividend yield	—	%	—	%
Schedule of weighted average assumptions used for estimation of fair value of ESPP
		ESPP
		Three Months Ended
		March 31,
		2015		2014
	Expected term (years)	0.5 - 2.0		0.5 - 2.0
	Expected volatility	70.6 - 71.8	%	70.6	%
	Risk-free interest rate	.06% - .46	%	.07% - .46	%
	Expected dividend yield	—	%	—	%

Commitments_and_Contingencies_

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies
Schedule of future minimum payments under the non-cancelable operating and capital leases	Future minimum payments under the non-cancelable operating leases consist of the following (in thousands):
		Operating
	Years ending December 31,	Leases
	For the remainder of the fiscal year	$	409
	2016		679
	2017		699
	2018		602
	2019		581
	Thereafter		299
	Total	$	3,269

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015
Proceeds from sale of common stock	$115,204
Common Stock
Sale of common stock	8,625,000
Proceeds from sale of common stock	$86

Fair_Value_of_Financial_Instru2

Fair Value of Financial Instruments (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Fair Value of Financial Instruments
Money Market Funds	$119,048	$54,649	$72,536	$77,975
Total Fair Value
Fair Value of Financial Instruments
Total Fair Value	49,855
Total Fair Value | Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	2,040
Total Fair Value | Corporate Securities
Fair Value of Financial Instruments
Securities	32,007
Total Fair Value | Government Securities
Fair Value of Financial Instruments
Securities	15,808
Level 1
Fair Value of Financial Instruments
Total Fair Value	2,040
Level 1 | Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	2,040
Level 2
Fair Value of Financial Instruments
Total Fair Value	47,815
Level 2 | Corporate Securities
Fair Value of Financial Instruments
Securities	32,007
Level 2 | Government Securities
Fair Value of Financial Instruments
Securities	$15,808

Net_Loss_Per_Share_Details

Net Loss Per Share (Details) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Basic and diluted numerator:
Net loss attributable to common stockholders	($6,444)	($3,751)
Denominator:
Weighted-average common shares outstanding used in computing basic and diluted net loss (in shares)	34,297,782	31,360,879
Basic and diluted net loss per common share (in dollars per share)	($0.19)	($0.12)

Net_Loss_Per_Share_Details_2

Net Loss Per Share (Details 2)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net Loss Per Share
Anti-dilutive securities (in shares)	3,302,000	2,533,000
Employee stock options
Net Loss Per Share
Anti-dilutive securities (in shares)	3,248,000	2,488,000
Employee Stock Purchase Plan
Net Loss Per Share
Anti-dilutive securities (in shares)	54,000	45,000
Common Stock
Net Loss Per Share
Sale of common stock	8,625,000

Marketable_Securities_Details

Marketable Securities (Details) (USD $)	Mar. 31, 2015
In Thousands, unless otherwise specified
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	$49,890
Gross unrealized gains	4
Gross unrealized losses	-39
Fair value	49,855
Cash and cash equivalents
Schedule of Available-for-sale Securities [Line Items]
Fair value	2,040
Marketable securities
Schedule of Available-for-sale Securities [Line Items]
Fair value	47,815
Money Market Funds
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	2,040
Fair value	2,040
Corporate Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	32,040
Gross unrealized gains	3
Gross unrealized losses	-36
Fair value	32,007
Government Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	15,810
Gross unrealized gains	1
Gross unrealized losses	-3
Fair value	$15,808

Marketable_Securities_Details_

Marketable Securities (Details 2) (USD $)	Mar. 31, 2015
In Thousands, unless otherwise specified
Amortized Cost
Maturing in one year or less	$25,210
Maturing after one year through five years	22,640
Total amortized cost	47,850
Estimate Fair Value
Maturing in one year or less	25,187
Maturing after one year through five years	22,628
Total estimated fair value	$47,815

Stock_Based_Compensation_Detai

Stock Based Compensation (Details)	0 Months Ended	3 Months Ended
	Jan. 02, 2014	Mar. 31, 2015	Dec. 31, 2014	Aug. 31, 2010	Dec. 02, 2013
Stock-based compensation
Common Stock, shares issued		40,358,140	31,434,272
The 2013 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		6,368,483
Annual percentage increase in shares of common stock available for issuance	4.00%
Awards issued under the plan (in shares)		1,783,750
Prior Plans
Stock-based compensation
Total number of shares of common stock available for issuance		2,662,065		0
Employee Stock Purchase Plan
Stock-based compensation
Total number of shares of common stock available for issuance		517,422
Annual percentage increase in shares of common stock available for issuance	1.00%
Common Stock, shares issued		63,864
Annual increase in shares of common stock available for issuance (in shares)	621,814
The 2010 Plan
Stock-based compensation
Total number of shares of common stock available for issuance					0

StockBased_Compensation_Detail

Stock-Based Compensation (Details 2) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$1,107	$278
General and administrative
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	514	128
Research and development
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$593	$150

StockBased_Compensation_Detail1

Stock-Based Compensation (Details 3) (USD $)	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Weighted Average Exercise Price (Per Share)
Weighted-Average Remaining Contractual Term, Balance outstanding	7 years 6 months 18 days
Weighted-Average Remaining Contractual Term, Exercisable	5 years 22 days
Aggregate Intrinsic Value, Balance outstanding	$24,429
Aggregate Intrinsic Value, Exercisable	$16,699
Employee stock options
Number of Shares subject to outstanding options
Balance at the beginning of the period (in shares)	2,826,794
Options granted (in shares)	720,250	700,500
Options exercised (in shares)	-298,868
Balance at the end of the period (in shares)	3,248,176
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)	$5.12
Options granted (in dollars per share)	$15.70
Options exercised (in dollars per share)	$0.60
Balance at the end of the period (in dollars per share)	$7.88
Exercisable (in shares)	1,316,093
Exercisable (in dollars per share)	$2.63
Closing price of common stock (in dollars per share)	$15.32
Weighted average fair value of options granted (in dollars per share)	$10.54	$7.44

Stock_Based_Compensation_Detai1

Stock Based Compensation (Details 4) (USD $)	3 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Employee stock options
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	6 years	6 years
Expected volatility (as a percent)	76.60%	75.20%
Risk-free interest rate (as a percent)	1.61%	2.01%
Total unrecognized compensation expense, net of estimated forfeitures	$11.40
Period to recognize total unrecognized compensation expense	3 years 7 months 6 days
Employee Stock Purchase Plan
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility (as a percent)		70.60%
Employee Stock Purchase Plan | Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	6 months	6 months
Expected volatility (as a percent)	70.60%
Risk-free interest rate (as a percent)	0.06%	0.07%
Employee Stock Purchase Plan | Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	2 years	2 years
Expected volatility (as a percent)	71.80%
Risk-free interest rate (as a percent)	0.46%	0.46%

Commitments_and_Contingencies_1

Commitments and Contingencies (Details) (USD $)	3 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Feb. 28, 2015	Jan. 31, 2015
Operating Leases
For the remainder of the fiscal year	$409,000
2016	679,000
2017	699,000
2018	602,000
2019	581,000
Thereafter	299,000
Total	3,269,000
Net rent expense	$129,000	$137,000
Office Space
Renewal term			1 year	5 years

Collaboration_and_Licensing_Ag1

Collaboration and Licensing Agreements (Details) (USD $)	3 Months Ended		1 Months Ended	12 Months Ended	1 Months Ended				12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jan. 31, 2013	Dec. 31, 2010	Jul. 31, 2013	Feb. 28, 2009	31-May-13	Mar. 31, 2013	Dec. 31, 2014
						item	item	item	employee
Collaboration research and licensing agreements
Revenue recognized	$1,491,000	$2,184,000
Current portion of deferred revenue	2,616,000								2,254,000
Collaboration and Option Agreement | Amgen, Inc.
Collaboration research and licensing agreements
Option term after delivery of the data from a Phase 2 proof-of-concept (POC) clinical trial				90 days
Nonrefundable upfront payment				11,000,000
Milestone payment received			2,000,000
Additional pre-option payments				12,000,000
Revenue recognized	0	600,000
Deferred revenue	0
Option fee				50,000,000
Milestone payment to be received for first product upon achievement of certain development, regulatory and commercial milestones				437,000,000
License Agreement | Merck Sharp & Dohme Corp.
Collaboration research and licensing agreements
Nonrefundable upfront payment					1,000,000
Annual maintenance fees					500,000
Milestone payment received	500,000
Revenue recognized	25,000	500,000
Deferred revenue	100,000
Option and license agreement | Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Nonrefundable upfront payment			3,000,000
Annual maintenance fees			500,000
Revenue recognized	800,000	300,000
Deferred revenue	1,800,000
Number of different target programs			6
Research license term			5 years
Additional research term			3 years
Extension fee			2,000,000
Annual maintenance fees payable during any extension of research term			1,000,000
Option fee			4,000,000
Research term of revenue recognized			5 years
2009 Research License and Commercialization Agreement | CSL Limited
Collaboration research and licensing agreements
Nonrefundable upfront payment						750,000
Revenue recognized	0	700,000
Deferred revenue	0
Research license term						5 years
Number of technologies to which research license is provided						1
2009 Research License and Commercialization Agreement | CSL Limited | Maximum
Collaboration research and licensing agreements
Number of commercial options						5
May 2013 Research License and Commercialization Agreement | CSL Limited
Collaboration research and licensing agreements
Nonrefundable upfront payment							2,500,000
Number of commercial options							4
March 2013 License Agreement | CSL Limited
Collaboration research and licensing agreements
Nonrefundable upfront payment								500,000
Deferred revenue	0
Number of compounds								1
Collaboration And License Agreement Member | Novo Nordisk
Collaboration research and licensing agreements
Nonrefundable upfront payment									2,500,000
Milestone payment received									2,000,000
Revenue recognized	700,000
Deferred revenue	2,600,000
Research license term									2 years
Additional research term									12 months
Research funding									$1,600,000
Number of full time employees that will be given research support									4
Research term of revenue recognized									2 years