Xencor (XNCR) 10-Q 9 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 02, 2019
Document and Entity Information
Entity Registrant Name	Xencor Inc
Entity Central Index Key	0001326732
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		56,353,287
Entity Small Business	false
Entity Emerging Growth Company	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

Balance Sheets

Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 21,858	$ 26,246
Marketable securities	318,498	268,115
Accounts receivable	137,676	10,187
Income tax receivable	1,206	804
Prepaid expenses and other current assets	9,433	10,375
Total current assets	488,671	315,727
Property and equipment, net	11,456	11,813
Patents, licenses, and other intangible assets, net	12,737	11,969
Marketable securities - long term	172,472	236,108
Income tax receivable	402	804
Other assets	11,265	311
Total assets	697,003	576,732
Current liabilities
Accounts payable	5,485	3,797
Accrued expenses	5,705	9,662
Current portion of deferred rent		315
Current portion of lease liability	1,987
Deferred revenue	59,244	40,079
Income tax liability	900
Total current liabilities	73,321	53,853
Deferred rent, less current portion		1,198
Lease liability, less current portion	10,221
Deferred revenue, less current portion	3,896
Total liabilities	87,438	55,051
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at March 31, 2019 and December 31, 2018
Common stock, $0.01 par value: 200,000,000 authorized shares at March 31, 2019 and December 31, 2018; 56,349,389 issued and outstanding at March 31, 2019 and 56,279,542 issued and outstanding at December 31, 2018	564	563
Additional paid-in capital	851,888	845,366
Accumulated other comprehensive income (loss)	345	(971)
Accumulated deficit	(243,232)	(323,277)
Total stockholders' equity	609,565	521,681
Total liabilities and stockholders' equity	$ 697,003	$ 576,732

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
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	56,349,389	56,279,542
Common stock, shares outstanding	56,349,389	56,279,542

Statements of Comprehensive Inc

Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue
Collaborations, licenses and milestones	$ 111,939
Operating expenses
Research and development	28,183	$ 26,087
General and administrative	5,512	4,562
Total operating expenses	33,695	30,649
Income (loss) from operations	78,244	(30,649)
Other income (expense)
Interest income, net	2,886	1,154
Other income (expense)	(185)	2
Total other income, net	2,701	1,156
Net income (loss) before income tax	80,945	(29,493)
Income tax expense	900
Net income (loss)	80,045	(29,493)
Other comprehensive income (loss)
Net unrealized gain (loss) on marketable securities	1,316	(393)
Comprehensive income (loss)	$ 81,361	$ (29,886)
Basic net income (loss) per common share	$ 1.42	$ (0.62)
Diluted net income (loss) per common share	$ 1.38	$ (0.62)
Basic weighted average common shares outstanding	56,302,967	47,753,922
Diluted weighted average common shares outstanding	58,009,878	47,753,922

Statement of Stockholders' Equi

Statement of Stockholders' Equity - USD ($) $ in Thousands	Scenario, Previously ReportedCommon Stock	Scenario, Previously ReportedAdditional Paid-in Capital	Scenario, Previously ReportedAccumulated Other Comprehensive Loss	Scenario, Previously ReportedAccumulated Deficit	Scenario, Previously Reported	Restatement AdjustmentAccumulated Deficit	Restatement Adjustment	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606						$ 34,418	$ 34,418
Balance, revised								$ 470	$ 570,670	$ (1,808)	$ (252,868)	$ 316,464
Balance at Dec. 31, 2017	$ 470	$ 570,670	$ (1,808)	$ (287,286)	$ 282,046
Balance (in shares) at Dec. 31, 2017	47,002,488							47,002,488
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance cost								$ 84	245,421			245,505
Sale of common stock, net of issuance cost (in shares)								8,395,000
Issuance of common stock upon exercise of stock awards								$ 2	1,108			1,110
Issuance of common stock upon exercise of stock awards (in shares)								219,387
Comprehensive loss										(393)	(29,493)	(29,886)
Stock-based compensation expense									4,471			4,471
Balance at Mar. 31, 2018								$ 556	821,670	(2,201)	(282,361)	537,664
Balance (in shares) at Mar. 31, 2018								55,616,875
Balance at Dec. 31, 2018								$ 563	845,366	(971)	(323,277)	521,681
Balance (in shares) at Dec. 31, 2018								56,279,542
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock awards								$ 1	666			667
Issuance of common stock upon exercise of stock awards (in shares)								58,536
Issuance of restricted stock units (in shares)								11,311
Comprehensive loss										1,316	80,045	81,361
Stock-based compensation expense									5,856			5,856
Balance at Mar. 31, 2019								$ 564	$ 851,888	$ 345	$ (243,232)	$ 609,565
Balance (in shares) at Mar. 31, 2019								56,349,389

Statements of Cash Flows

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net income (loss)	$ 80,045	$ (29,493)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	996	730
Amortization of premium and accretion of discount on marketable securities	(601)	480
Stock-based compensation	5,856	4,471
Abandonment of capitalized intangible assets	58	5
Changes in operating assets and liabilities:
Accounts receivable	(127,489)	44
Interest receivable	31	(309)
Prepaid expenses and other assets	942	(1,043)
Accounts payable	1,689	1,654
Accrued expenses	(3,957)	(869)
Income taxes	900	(157)
Deferred rent	(1,513)	242
Lease liabilities and ROU assets	1,254
Deferred revenue	23,061
Net cash used in operating activities	(18,728)	(24,245)
Cash flows from investing activities
Purchase of marketable securities	(49,856)	(31,697)
Purchase of intangible assets	(1,051)	(389)
Purchase of property and equipment	(415)	(2,346)
Proceeds from maturities of marketable securities	64,995	47,020
Repayment of loan		86
Net cash provided by investing activities	13,673	12,674
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards	667	1,110
Proceeds from issuance of common stock		260,245
Common stock issuance costs		(14,740)
Net cash provided by financing activities	667	246,615
Net increase (decrease) in cash and cash equivalents	(4,388)	235,044
Cash and cash equivalents, beginning of period	26,246	16,528
Cash and cash equivalents, end of period	21,858	251,572
Cash paid during the period for:
Interest	4	3
Income taxes		170
Supplemental disclosures of non-cash investing activities
Unrealized gain (loss) on marketable securities, net of tax	$ 1,316	$ (393)

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
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, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain amounts in the prior period financial statements have been revised to conform to the presentation of the current period financial statements. See “Recent Accounting Pronouncements – Pronouncements Adopted in 2019. ” 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. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. 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 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 26, 2019. Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization, estimated standalone selling price of performance obligations, and recoverability of deferred tax assets. Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impairment charges recorded for the three-months ended March 31, 2019 and 2018. The Company capitalizes certain in-process intangible assets that are abandoned when they are no longer pursued. There was no material abandonment of in-process intangible assets during the three-month periods ended March 31, 2019 or 2018. 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 debt securities issued by investment grade institutions. The Company considers its marketable debt securities to be available-for-sale. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Accrued interest on marketable debt securities is included in marketable securities. If a decline in the value of a marketable debt 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 debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary. Recent Accounting Pronouncements Pronouncements Adopted in 2019 Effective January 1, 2019, the Company adopted Accounting Standards Codification Topic 842 (ASC 842), Leases , which requires lessees to recognize a right-of-use (ROU) asset and a lease liability for leases with terms greater than 12 months and also requires disclosures about the amount, timing and uncertainty of cash flows arising from such leases. The Company adopted ASC 842 using the optional transition method provided under ASU 2018-11, which did not require adjustments to comparative periods nor require modified disclosures in those comparative periods. Under this method, the Company adjusted its financial statements for the cumulative effect of the adoption of ASC 842 at the beginning of January 1, 2019. At inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances. For leases with a term of one year or longer where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The interest rate implicit with such leases is typically not readily determined. The Company has determined the appropriate incremental borrowing rate by reference to an estimate of the current market borrowing rate for a collateralized asset over a similar term as the lease term. The new standard will impact our reporting of the leases to our facilities in Monrovia and San Diego. Under ASC 842, tenant allowances under operating leases are no longer tracked separately as a deferred rent liability; instead, it will be integrated as part of the ROU asset. As a result, we are required to record an adjustment of the cumulative effect to the beginning balance for deferred rent liability and adopt the use of ROU asset and lease liability. We recorded lease liabilities of $12.7 million and ROU assets of $11.4 million for lease agreements in effect as of January 1, 2019. The ROU asset is included in Other assets on the balance sheet as of March 31, 2019. This resulted in an increase to the beginning balance on both assets and liabilities after the adjustment of $11.2 million, with no impact on our retained earnings. Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods and services. The standard requires a modified retrospective transition approach, with a cumulative adjustment to retained earnings as of adoption date, for all liability-classified awards that have not been settled as of the adoption date and equity-classified nonemployee awards for which a measurement date has not been established. The adoption of this standard did not have any impact on the Company’s financial statements.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2019
Fair Value of Financial Instruments
Fair Value of Financial Instruments	2. Fair Value of Financial Instruments Financial instruments included in the financial statements include cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses. Marketable securities and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short-term maturities. 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): March 31, 2019 December 31, 2018 Total Total Fair Value Level 1 Level 2 Fair Value Level 1 Level 2 Money Market Funds $ 15,625 $ 15,625 $ — $ 18,270 $ 18,270 $ — Corporate Securities 105,621 — 105,621 104,967 — 104,967 Government Securities 385,349 — 385,349 399,256 — 399,256 $ 506,595 $ 15,625 $ 490,970 $ 522,493 $ 18,270 $ 504,223 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, 2019 and 2018, there were no transfers between Level 1 and Level 2. The Company does not have any Level 3 assets or liabilities.

Net Income (Loss) Per Share

Net Income (Loss) Per Share	3 Months Ended
	Mar. 31, 2019
Net Income (Loss) Per Share
Net Income (Loss) Per Share	3. Net Income (Loss) Per Share We compute basic net income (loss) per common share by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants, employee stock purchase plan (ESPP), and restricted stock units (RSUs). Potentially dilutive securities consisting of stock issuable under options, ESPP, and RSUs are not included in the per common share calculation in periods where there is a net loss where the inclusion of such shares would have had an antidilutive effect. Basic and diluted net income (loss) per common share is computed as follows (in thousands except share and per share data): Three Months Ended March 31, 2019 2018 (in thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders $ 80,045 $ (29,493) Denominator: Weighted-average common shares outstanding used in computing basic net income (loss) 56,302,967 47,753,922 Weighted-average common shares outstanding used in computing diluted net income (loss) 58,009,878 47,753,922 Basic net income (loss) per common share $ 1.42 $ (0.62) Diluted net income (loss) per common share $ 1.38 $ (0.62) For the three months ended March 31, 2019, potentially dilutive securities consisting of stock options and RSUs were included in the diluted net income per common share calculation. For the three months ended March 31, 2018, all 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. The table below summarizes the number of common stock equivalents that were excluded in the calculation of the weighted-average common shares outstanding used in computing diluted net income (loss) because the inclusion of such shares would have had an antidilutive effect as follows: Three Months Ended March 31, 2019 2018 (in thousands) Options to purchase common stock and RSU grants — 1,573

Comprehensive Income (Loss)

Comprehensive Income (Loss)	3 Months Ended
	Mar. 31, 2019
Comprehensive Income (Loss)
Comprehensive Income (Loss)	4. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). For the three months ended March 31, 2019 and 2018, the only component of other comprehensive income (loss) is net unrealized gain (loss) on marketable securities. There were no material reclassifications out of accumulated other comprehensive income (loss) during the three months ended March 31, 2019 and 2018.

Marketable Securities

Marketable Securities	3 Months Ended
	Mar. 31, 2019
Marketable Securities
Marketable Securities	5. Marketable Securities The Company’s marketable debt securities held as of March 31, 2019 and December 31, 2018 are summarized below: Gross Gross Amortized Unrealized Unrealized March 31, 2019 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 15,625 $ — $ — $ 15,625 Corporate Securities 105,623 69 (71) 105,621 Government Securities 384,993 590 (234) 385,349 $ 506,241 $ 659 $ (305) $ 506,595 Reported as Cash and cash equivalents $ 15,625 Marketable securities 490,970 Total investments $ 506,595 Gross Gross Amortized Unrealized Unrealized December 31, 2018 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 18,270 $ — $ — $ 18,270 Corporate Securities 105,311 1 (345) 104,967 Government Securities 399,873 187 (804) 399,256 $ 523,454 $ 188 $ (1,149) $ 522,493 Reported as Cash and cash equivalents $ 18,270 Marketable securities 504,223 Total investments $ 522,493 The maturities of the Company’s marketable debt securities are as follows: Amortized Estimated March 31, 2019 Cost Fair Value (in thousands) Mature in one year or less $ 318,685 $ 318,498 Mature within two years 171,931 172,472 $ 490,616 $ 490,970 The unrealized losses on available-for-sale investments and their related fair values as of March 31, 2019 and December 31, 2018 are as follows: Less than 12 months 12 months or greater March 31, 2019 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 93,071 $ (54) $ 12,550 $ - Government Securities 225,427 (132) 159,922 - $ 318,498 $ (186) $ 172,472 $ - Less than 12 months 12 months or greater December 31, 2018 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 84,770 $ (310) $ 20,198 $ (34) Government Securities 183,345 (667) 215,910 - $ 268,115 $ (977) $ 236,108 $ (34) The unrealized losses from the listed securities are due to a change in the interest rate environment and not a change in the credit quality of the securities. The Company does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost basis. Therefore, the Company did not consider these securities to be other-than-temporarily impaired as of March 31, 2019 or December 31, 2018.

Sale of Additional Common Stock

Sale of Additional Common Stock	3 Months Ended
	Mar. 31, 2019
Sale of Additional Common Stock
Sale of Additional Common Stock	6. Sale of Additional Common Stock In March 2018, we completed the sale of 8,395,000 shares of common stock which included shares issued pursuant to our underwriters’ exercise of their over-allotment option pursuant to a follow-on financing. We received net proceeds of $245.5 million after underwriting discounts, commissions and offering expenses.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Stock-Based Compensation
Stock-Based Compensation	7. Stock Based Compensation Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan (the 2010 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 which became effective as of December 3, 2013. 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 2010 Plan 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, 2019, the total number of shares of common stock available for issuance under the 2013 Plan is 10,479,256 which includes 2,684,456 shares of common stock that were available for issuance under the 2010 Plan 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. Pursuant to approval by our board on January 1, 2019, the total number of shares of common stock available for issuance under the 2013 Plan was increased by 2,251,181 shares. As of March 31, 2019, a total of 8,093,734 options have 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 581,286 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. Pursuant to approval by our Board of Directors, there was no increase in the number of authorized shares in the ESPP in 2019. As of March 31, 2019, we have issued a total of 349,716 shares of common stock under the ESPP. During the three months ended March 31, 2019, the Company awarded 28,566 Restricted Stock Units (RSUs) to certain employees. Vesting of these awards is in three equal annual installments and is contingent on continued service to the Company. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period. As of March 31, 2019, we have granted a total of 62,499 shares of common stock for RSUs. Total employee, director and non-employee stock-based compensation expense recognized for the three months ended March 31, 2019 and 2018 are as follows (in thousands): Three Months Ended March 31, 2019 2018 General and administrative $ 1,854 $ 1,617 Research and development 4,002 2,854 $ 5,856 $ 4,471 Three Months Ended March 31, 2019 2018 Stock options $ 5,525 $ 4,276 ESPP 217 163 Restricted stock units 114 32 $ 5,856 $ 4,471 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, 2018 5,966,928 $ 19.71 7.51 Options granted 1,342,447 $ 36.25 Options forfeited (51,825) $ 26.28 Options exercised (58,536) $ 11.39 Balances at March 31, 2019 7,199,014 $ 22.81 7.73 $ 69,227 Exercisable 3,585,921 $ 16.40 6.47 $ 52,835 We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $31.06 per share as of March 31, 2019. Weighted average fair value of options granted during the three-month periods ended March 31, 2019 and 2018 were $21.20 and $16.12 per share, respectively. There were 1,393,650 options granted during the three-month period ended March 31, 2018. 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 three months ended March 31, 2019 and 2018: Options Three Months Ended March 31, 2019 2018 Expected term (years) 6.1 6.1 Expected volatility 61.3 % 73.1 % Risk-free interest rate 2.53 % 2.50 % Expected dividend yield — % — % ESPP Three Months Ended March 31, 2019 2018 Expected term (years) 0.5 - 2.0 0.5 - 2.0 Expected volatility 57.0-71.4 % 71.4 % Risk-free interest rate 1.47-2.70 % 1.47-1.80 % Expected dividend yield — % — % As of March 31, 2019, the unamortized compensation expense related to unvested stock options was $64.7 million. The remaining unamortized compensation expense will be recognized over the next 3.1 years. As of March 31, 2019, the unamortized compensation expense under our ESPP was $0.2 million. The remaining unamortized expense will be recognized over the next 0.7 years. The following table summarizes the restricted stock unit activity for the three-month period ended March 31, 2019: Weighted Restricted Average Grant Stock Date Fair Value Units (Per unit) Unvested at December 31, 2018 33,933 $ 27.64 Granted 28,566 36.31 Vested (11,311) 27.64 Forfeited (2,502) 27.64 Unvested at March 31, 2019 48,686 $ 32.73 As of March 31, 2019, the unamortized compensation expense related to unvested restricted stock units was $1.5 million. The remaining unamortized expense will be recognized over the next 2.5 years.

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases
Leases	8. Leases The Company leases office and laboratory space in Monrovia, CA under a lease that continues through June 2020, with an option to renew for an additional five years. In July 2017, the Company entered into an amended lease agreement for additional space in the same building with a lease that continues through September 2022, also with an option to renew for an additional five years. The Company assesses that it is likely to exercise both options of the lease term extensions. The Company also leases office space in San Diego, CA through July 2020 which includes an option to renew for an additional five years. The Company assesses that it is unlikely to exercise the option to extend this lease. The Company leases additional office space in San Diego, CA through August 2022, with an option to extend for an additional five years. The Company assesses that it is unlikely to exercise the option to extend the lease term. Our lease agreements do not contain any residual value guarantees or restrictive covenants. As of March 31, 2019, the Company did not have additional operating leases that have not yet commenced. The following table reconciles the undiscounted cash flows for the operating leases at March 31, 2019 to the operating lease liabilities recorded on the balance sheet (in thousands): Years ending December 31, For the remainder of 2019 $ 1,851 2020 2,723 2021 2,608 2022 2,220 2023 1,351 2024 1,371 Thereafter 2,282 Total undiscounted lease payments 14,406 Less: Imputed interest (2,198) Present value of lease payments $ 12,208 Lease liabilities - short-term $ 1,987 Lease liabilities - long-term 10,221 Total lease liabilities $ 12,208 Our operating lease cost and the cash payments for operating leases for the three months ended March 31, 2019 were $0.7 million. Rent expense for the three months ended March 31, 2018 was $0.6 million. At March 31, 2019, the weighted-average remaining lease term for operating leases was 6.0 years, and the weighted average discount rate for operating leases is 5.5%.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies
Commitments and Contingencies	9. Commitments and 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. We are obligated to make future payments to third parties under in‑license agreements, including sublicense fees, royalties, and payments that become due and payable on the achievement of certain development and commercialization milestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on our balance sheet. We have also entered into agreements with third-party vendors which will require us to make future payments upon the delivery of goods and services in future periods.

Collaboration and Licensing Agr

Collaboration and Licensing Agreements	3 Months Ended
	Mar. 31, 2019
Collaboration and Licensing Agreements
Collaboration and Licensing Agreements	10. Collaboration and Licensing Agreements The following is a summary description of the material revenue arrangements, including arrangements that generated revenue in the three months ended March 31, 2019 and 2018. Genentech In February 2019, the Company entered into a collaboration and license agreement (the Genentech Agreement) with Genentech for the development and commercialization of novel IL-15 collaboration products (Collaboration Products), including XmAb24306, the Company’s IL-15/IL-15Ra candidate. The Genentech Agreement became effective March 8, 2019. Under the terms of the Genentech Agreement, Genentech received an exclusive worldwide license to XmAb24306 and other Collaboration Products, including any new IL-15 programs identified during the joint research collaboration. Genentech and Xencor will jointly collaborate on worldwide development of XmAb24306 and other Collaboration Products with Genentech maintaining all worldwide commercialization rights, subject to Xencor having an option to co-promote in the United States. Xencor has the right to perform clinical studies of Collaboration Products in combination with other therapeutic agents at its own cost, subject to certain requirements. The term of the Genentech Agreement will continue on a program-by-program and country-by-country basis until there are no remaining payment obligations from Genentech to Xencor with respect to Collaboration Products. Genentech may terminate the Genentech Agreement in its entirety or on a Collaboration Product-by- Collaboration Product basis by providing prior written notice. Xencor may terminate the Agreement on a Collaboration Product-by-Collaboration Product basis if Genentech fails to spend a defined minimum amount on research, development or commercialization activities for that Collaboration Product. In the event of a termination of any individual Collaboration Product or the Genentech Agreement in its entirety, the relevant rights revert to Xencor. The Company received a $120 million upfront payment and is eligible to receive up to an aggregate of $160 million in clinical milestone payments for each Collaboration Product that advances to Phase 3 clinical trials. The Company is also eligible to receive 45% share of net profits for sales of XmAb24306 and other Collaboration Products, while also sharing in net losses at the same percentage rate. The parties will jointly share in development and commercialization costs for all programs designated as a development program under the Genentech Agreement at the same percentage rate, while Genentech will bear launch costs entirely. The initial 45% profit-cost share percent is subject to ratchet down at the Company’s discretion and convertible to a royalty under certain circumstances. Pursuant to the Genentech Agreement, XmAb24306 is designated as a development program and all costs incurred for developing XmAb24306 from the effective date of the Genentech Agreement are being shared with Genentech under the initial cost-sharing percentage. Under the Genentech Agreement, the Company and Genentech will conduct joint research activities for a two-year period to identify and discover additional IL-15 candidates developed from the Company’s cytokine and bispecific technologies. The two-year research term may be extended an additional year if both parties agree. The Company and Genentech are each responsible for their own costs in conducting the research activities. The Company will receive a $20 million development milestone for each new Collaboration Product that is identified from the research efforts and advances into a Phase 1 clinical trial. The Company evaluated the Genentech Agreement under the provisions of ASU No. 2014-09, Revenue from Contracts with Customers and all related amendments (collectively ASC, 606) and also ASC 808, Collaborative Arrangements . Certain provisions of the Genentech Agreement including the cost-sharing of development programs are governed by ASC 808. We have determined that Genentech is a customer for purposes of the delivery of specific performance obligations under the Genentech Agreement and applied the provisions of ASC 606 to the transaction. The Company evaluated the Genentech Agreement under ASC 606 and identified the following performance obligations under the Agreement: (i) the license of XmAb24306 and (ii) research services during a two-year period to identify up to potentially nine additional IL-15 candidates, each a separate research program and a separate performance obligation. The Company determined that the license and each of the potential research programs are separate performance obligations because they are capable of being distinct and are distinct in the context of the Genentech Agreement. The license to XmAb24306 has standalone functionality as Genentech has exclusive worldwide rights to the program, including the right to sublicense to third parties. Genentech has significant experience and capabilities in developing and commercializing drug candidates similar to XmAb24306, and Genentech is capable of performing these activities without the Company’s involvement. Upon the transfer of the license of XmAb24306, Genentech could develop and commercialize XmAb24306 without further assistance from the Company. The Company determined that the research services for each potential additional IL-15 candidate and research program were separate standalone performance obligations from the license as the Genentech Agreement provided an outline of an integrated research plan for the programs to be conducted by the two companies and the research activities are separate and distinct from the license to XmAb24306. The Company determined the standalone selling price of the license to be $114.4 million using the adjusted market assessment approach considering similar collaboration and license agreements and transactions. The standalone selling price for the research activities for all nine of the potential IL-15 programs to be performed during the research term was determined to be $8.5 million using the expected cost approach which was derived from the Company’s experience and information from providing similar research activities to other parties. The Company determined that the transaction price of the Genentech Agreement at inception was $120 million consisting of the upfront payment. The potential milestones are not included in the transaction price as these are contingent on future events and the Company would not recognize these in revenue until it is not probable that these would not result in significant reversal of revenue amounts in future periods. The Company will re-assess the transaction price at each reporting period and when events whose outcomes are resolved or changes in circumstances occur. The Company allocated the transaction price to each of the separate performance obligation using the relative standalone selling price with $111.7 million allocated to the license to XmAb24306 and $8.3 million allocated to the research services. The Company recognized the $111.7 million allocated to the license when it satisfied its performance obligation and transferred the license to Genentech in March 2019. The license was transferred upon the effective date of the Genentech Agreement and when the Company subsequently transferred certain data related to the program to Genentech. The $8.3 million allocated to the research activities will be recognized over a period of time through the end of the research term that services are rendered as we determine that the input method is the appropriate approach to recognize income for such services. $0.3 million of revenue related to the research activities was recognized in the period ended March 31, 2019. We recorded a receivable of $120.0 million as of March 31, 2019 for the upfront payment which we had an unconditional right to receive and which was received in April 2019. For the three months ended March 31, 2019, we recognized $112.0 million of income from the Genentech Agreement and there is $8.0 million in deferred revenue as of March 31, 2019 which reflects our obligation to perform research services during the research term. Astellas Effective March 29, 2019, the Company entered into a Research and License Agreement (Astellas Agreement) with Astellas Pharma Inc. (Astellas) pursuant to which the Company and Astellas will conduct a discovery program to characterize compounds and products for development and commercialization. Under the Astellas Agreement, Astellas was granted a worldwide exclusive license, with the right to sublicense products in the field created by the research activities. Pursuant to the Astellas Agreement, the Company will apply its bispecific Fc technology to an antigen pair provided by Astellas to generate bispecific antibody candidates and will return the bispecific candidates to Astellas for development and commercialization. The activities will be conducted under a research plan agreed to by both parties to the Agreement. Astellas will assume full responsibility for development and commercialization of the antibody candidate. Pursuant to the Agreement, the Company received an upfront payment of $15 million and is eligible to receive up to $240 million in milestones which include $32.5 million in development milestones, $57.5 million in regulatory milestones and $150 million in sales milestones. If commercialized, the Company is eligible to receive royalties on net sales that range from the high-single to low-double digit percentages. We evaluated the Astellas Agreement under ASC 606 and identified a single performance obligation under the Agreement - delivery of bispecific antibodies to Astellas from activities outlined in the research plan. The Company determined that the license to the bispecific antibodies is not a separate performance obligation because it is not capable of being distinct, the license to the antibodies cannot be separated from the underlying antibodies. Astellas will control and benefit from the antibodies that are delivered. The Agreement provides Astellas the right to sublicense the antibody to third parties and Astellas has significant experience and capabilities in developing and commercializing clinical candidates and is capable of performing these activities from the delivered antibodies without the Company’s involvement. The Company determined the standalone selling price of the antibody deliverable to be the $15 million upfront payment using the market adjustment method as the Company has experience in providing similar services to other customers. The Company determined that the transaction price of the Astellas Agreement at inception was $15 million consisting of the upfront payment. The potential milestones are not included in the transaction price as these are contingent on future events and the Company would not recognize these in revenue until it is not probable that these would not result in significant reversal of revenue amounts in future periods. The Company will re-assess the transaction price at each reporting period and when events whose outcomes are resolved or changes in circumstances occur. The Company allocated the transaction price to the single performance obligation - delivery of bispecific antibodies to Astellas. The Company will recognize the $15 million upfront payment as revenue when it satisfies its performance obligation and delivers antibody candidates to Astellas. No revenue was recognized under this arrangement for the period ended March 31, 2019. The Company recorded a receivable for the upfront payment of $15.0 million as of March 31, 2019 which we had an unconditional right to receive and which was received in April 2019. No revenue related to the arrangement was recognized in the period ended March 31, 2019 and there is $15.0 million in deferred revenue as of March 31, 2019 related to our obligation to deliver a bispecific antibody to Astellas. Novartis In June 2016, the Company entered into a Collaboration and License Agreement (Novartis Agreement) with Novartis Institutes for BioMedical Research, Inc. (Novartis), to develop and commercialize bispecific and other Fc engineered antibody drug candidates using the Company’s proprietary XmAb technologies and drug candidates. Pursuant to the Novartis Agreement: · The Company granted Novartis certain exclusive rights to research, develop and commercialize XmAb14045 and XmAb13676, two development stage products that incorporate the Company’s bispecific Fc technology; · The Company will apply its bispecific technology in up to four target pair antibodies identified by Novartis (each a Global Discovery Program); and · The Company will provide Novartis with a non-exclusive license to certain of its Fc technologies to apply against up to ten targets identified by Novartis. Under the Novartis Agreement, the Company and Novartis are co-developing XmAb14045 worldwide and sharing development costs. In December 2018, Novartis notified us that they were returning their rights to the XmAb13676 program. Pursuant to the terms of the Agreement, the rights to the XmAb13676 program will revert to us in June 2019 and Novartis’ obligation to fund its share of XmAb13676 development costs will continue through June 2020. We completed delivery of a Global Discovery Program in 2017 and delivery of a second Global Discovery Program in 2018. Under ASC 606, revenue is recognized at the time that the Company’s performance obligation for each Global Discovery is completed upon delivery of each discovery program to Novartis. During each of the three months ended March 31, 2019 and 2018, there was no revenue recognized. As of March 31, 2019, there is a receivable of $2.0 million related to cost-sharing of development activities for the XmAb14045 and XmAb13676 programs and $40.1 million in deferred revenue related to our obligation to deliver two additional Global Discovery Programs to Novartis under the arrangement. Amgen Inc. In September 2015, the Company entered into a research and license agreement (the Amgen Agreement) with Amgen Inc. (Amgen) to develop and commercialize bispecific antibody product candidates using the Company’s proprietary XmAb bispecific Fc technology. Under the Amgen Agreement, the Company granted an exclusive license to Amgen to develop and commercialize bispecific drug candidates from the Company’s preclinical program that bind the CD38 antigen and the cytotoxic T-cell binding domain CD3 (the CD38 Program). The Company also agreed to apply its bispecific technology to five previously identified Amgen provided targets (each a Discovery Program). The Company received a $45 million upfront payment from Amgen and is eligible to receive up to $600 million in future development, regulatory and sales milestones in total for programs in development and is eligible to receive royalties on any global net sales of products. Pursuant to the Amgen Agreement, the Company applied its bispecific technology to five Discovery Programs antibody molecules provided by Amgen that bind Discovery Program targets and returned the bispecific product candidates to Amgen for further testing, development and commercialization. The initial research term was three years from the date of the Amgen Agreement, but Amgen, at its option, could request an extension of one year. In May 2018, Amgen notified the Company that it was electing to extend the term of the research term for one year. Pursuant to the Amgen Agreement, Amgen and the Company agreed upon a detailed plan for services to be provided by the Company during the extended research term. The Company will receive research funding for the additional services provided during the extended research term. Amgen assumed full responsibility for development and commercialization of product candidates under each of the Discovery Programs. During the three months ended March 31, 2019 and 2018, no revenue was recognized under this arrangement. As of March 31, 2019, there was no deferred revenue related to the arrangement. MorphoSys Ag In June 2010, the Company entered into a Collaboration and License Agreement with MorphoSys AG (MorphoSys) for a worldwide license to the Company’s patents and know‑how to research, develop and commercialize our drug candidate XmAb5574 (subsequently renamed MOR208) with the right to sublicense under certain conditions. Under the agreement, the Company agreed to collaborate with MorphoSys to develop and commercialize XmAb5574/MOR208. If certain developmental, regulatory and sales milestones are achieved, the Company is eligible to receive future milestone payments and royalties. In June 2017, MorphoSys initiated a Phase III clinical trial under the arrangement for which the Company received a milestone payment of $12.5 million. The Company recognized the payment as revenue in the period that the milestone event occurred. There were no revenues recognized under this arrangement for the three months ended March 31, 2019 and 2018. As of March 31, 2019, the Company has no deferred revenue related to this agreement. Alexion Pharmaceuticals, Inc. In January 2013, the Company entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, the Company 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. Alexion exercised its option to take a commercial license for our technology against a target that was developed as ALXN1210. The Company is eligible to receive contractual milestones for certain regulatory and commercial achievements for ALXN1210 and is also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sub licensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product‑by‑product and country‑by‑country basis until the expiration of the last‑to‑expire valid claim in a licensed patent covering the applicable product in such country. In the third quarter of 2018, Alexion completed certain regulatory submission filings for ALXN1210, and the Company received $9.0 million in milestone payments. In the fourth quarter of 2018, Alexion completed certain regulatory submission filings for ALXN 1210 and received FDA marketing approval for ALXN 1210, now Ultomiris®, and the Company received $11.0 million in milestone payments. There was no revenue recognized under this arrangement for the three months ended March 31, 2019 and 2018. As of March 31, 2019, there is no deferred revenue related to this agreement. Boehringer Ingelheim International GmbH In 2007 the Company entered into a Research Licensee and Collaboration Agreement with Boehringer Ingelheim International GmbH (BI). Under the agreement, the Company provided BI with a three-year research license to one of the Company’s technologies and commercial options. BI elected to exercise two commercial licenses from the compounds identified during the research term and one compound is currently in clinical development. No revenue related to this arrangement was recognized in the three months ended March 31, 2019 and 2018. There is no deferred revenue related to this agreement at March 31, 2019. INmune Bio, Inc. In October 2017, the Company entered into a License Agreement with INmune Bio, Inc. (INmune). Under the terms of the agreement, the Company provided INmune with an exclusive license to certain rights to a proprietary protein, XPRO1595. Under the agreement the Company received an upfront payment of $100,000, an equity interest in INmune and an option to acquire additional shares of INmune. The Company is eligible to receive a percentage of sublicensing revenue received for XPRO1595 and also royalties in the mid-single digit percent on the sale of approved products. The equity interest in INmune constituted of 1,585,000 shares of common stock and the option is to purchase up to an additional 10% of the fully diluted outstanding share of INmune for $10 million. We have recorded our equity interest in INmune at cost pursuant to ASC 323. We did not record our share of the net loss from INmune during the three months ended March 31, 2019 or 2018, respectively, as the carrying value has been reduced to zero. In 2018, INmune filed a registration statement on Form S-1 with the Securities and Exchange Commission (SEC) which was declared effective by the SEC as of December 19, 2018. The Company did not recognize any revenue related to the agreement for the three months ended March 31, 2019 and 2018. There is no deferred revenue as of March 31, 2019 related to this agreement. Revenue earned The $112.0 million of revenue recorded for the three months ended March 31, 2019 was earned principally from the Genentech Agreement, of which $111.7 was licensing revenue and $0.3 was revenue from research collaboration. Remaining Performance Obligations and Deferred Revenue Our remaining performance obligations are delivery of two Global Discovery Programs under the Novartis Agreement, the conduct of research activities pursuant to research plans under the Genentech Agreement, and delivery of bispecific antibodies under the Astellas Agreement. As of March 31, 2019 and 2018, we have deferred revenue of $63.1 million and $40.1 million, respectively. As of March 31, 2019, $59.2 million was classified as current liabilities as our obligations to perform services are due on demand when requested by Novartis and by Astellas under the Novartis Agreement and Astellas Agreements, respectively, and $3.9 million of the deferred revenue liability was classified as long-term for the portion of obligations to perform research services to Genentech after one year.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Taxes
Income Taxes	11. Income taxes The provision for income taxes of $0.9 million for the three months ended March 31, 2019 represents the interim period tax allocation of the state alternative minimum tax based on the Company’s projected year-end effective income tax rates which cannot be offset by the Company’s net operating loss carryforwards. The Company has a federal income tax receivable of $1.6 million at March 31, 2019 related to refundable alternative minimum tax credits. As of March 31, 2019, the Company’s deferred income tax assets, consisting primarily of net operating loss and tax credit carryforwards, have been fully offset by a valuation allowance.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Polices)	3 Months Ended
	Mar. 31, 2019
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain amounts in the prior period financial statements have been revised to conform to the presentation of the current period financial statements. See “Recent Accounting Pronouncements – Pronouncements Adopted in 2019. ” 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. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. 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 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 26, 2019.
Use of Estimates	Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization, estimated standalone selling price of performance obligations, and recoverability of deferred tax assets.
Intangible Assets	Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impairment charges recorded for the three-months ended March 31, 2019 and 2018. The Company capitalizes certain in-process intangible assets that are abandoned when they are no longer pursued. There was no material abandonment of in-process intangible assets during the three-month periods ended March 31, 2019 or 2018.
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 debt securities issued by investment grade institutions. The Company considers its marketable debt securities to be available-for-sale. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Accrued interest on marketable debt securities is included in marketable securities. If a decline in the value of a marketable debt 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 debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Pronouncements Adopted in 2019 Effective January 1, 2019, the Company adopted Accounting Standards Codification Topic 842 (ASC 842), Leases , which requires lessees to recognize a right-of-use (ROU) asset and a lease liability for leases with terms greater than 12 months and also requires disclosures about the amount, timing and uncertainty of cash flows arising from such leases. The Company adopted ASC 842 using the optional transition method provided under ASU 2018-11, which did not require adjustments to comparative periods nor require modified disclosures in those comparative periods. Under this method, the Company adjusted its financial statements for the cumulative effect of the adoption of ASC 842 at the beginning of January 1, 2019. At inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances. For leases with a term of one year or longer where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The interest rate implicit with such leases is typically not readily determined. The Company has determined the appropriate incremental borrowing rate by reference to an estimate of the current market borrowing rate for a collateralized asset over a similar term as the lease term. The new standard will impact our reporting of the leases to our facilities in Monrovia and San Diego. Under ASC 842, tenant allowances under operating leases are no longer tracked separately as a deferred rent liability; instead, it will be integrated as part of the ROU asset. As a result, we are required to record an adjustment of the cumulative effect to the beginning balance for deferred rent liability and adopt the use of ROU asset and lease liability. We recorded lease liabilities of $12.7 million and ROU assets of $11.4 million for lease agreements in effect as of January 1, 2019. The ROU asset is included in Other assets on the balance sheet as of March 31, 2019. This resulted in an increase to the beginning balance on both assets and liabilities after the adjustment of $11.2 million, with no impact on our retained earnings. Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods and services. The standard requires a modified retrospective transition approach, with a cumulative adjustment to retained earnings as of adoption date, for all liability-classified awards that have not been settled as of the adoption date and equity-classified nonemployee awards for which a measurement date has not been established. The adoption of this standard did not have any impact on the Company’s financial statements.

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2019
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): March 31, 2019 December 31, 2018 Total Total Fair Value Level 1 Level 2 Fair Value Level 1 Level 2 Money Market Funds $ 15,625 $ 15,625 $ — $ 18,270 $ 18,270 $ — Corporate Securities 105,621 — 105,621 104,967 — 104,967 Government Securities 385,349 — 385,349 399,256 — 399,256 $ 506,595 $ 15,625 $ 490,970 $ 522,493 $ 18,270 $ 504,223

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Net Income (Loss) Per Share
Schedule of basic and diluted net income (loss) per common share	Basic and diluted net income (loss) per common share is computed as follows (in thousands except share and per share data): Three Months Ended March 31, 2019 2018 (in thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders $ 80,045 $ (29,493) Denominator: Weighted-average common shares outstanding used in computing basic net income (loss) 56,302,967 47,753,922 Weighted-average common shares outstanding used in computing diluted net income (loss) 58,009,878 47,753,922 Basic net income (loss) per common share $ 1.42 $ (0.62) Diluted net income (loss) per common share $ 1.38 $ (0.62)
Schedule of potentially dilutive securities	Three Months Ended March 31, 2019 2018 (in thousands) Options to purchase common stock and RSU grants — 1,573

Marketable Securities (Tables)

Marketable Securities (Tables)	3 Months Ended
	Mar. 31, 2019
Marketable Securities
Schedule of marketable securities	Gross Gross Amortized Unrealized Unrealized March 31, 2019 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 15,625 $ — $ — $ 15,625 Corporate Securities 105,623 69 (71) 105,621 Government Securities 384,993 590 (234) 385,349 $ 506,241 $ 659 $ (305) $ 506,595 Reported as Cash and cash equivalents $ 15,625 Marketable securities 490,970 Total investments $ 506,595 Gross Gross Amortized Unrealized Unrealized December 31, 2018 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 18,270 $ — $ — $ 18,270 Corporate Securities 105,311 1 (345) 104,967 Government Securities 399,873 187 (804) 399,256 $ 523,454 $ 188 $ (1,149) $ 522,493 Reported as Cash and cash equivalents $ 18,270 Marketable securities 504,223 Total investments $ 522,493
Schedule of maturities of marketable securities	Amortized Estimated March 31, 2019 Cost Fair Value (in thousands) Mature in one year or less $ 318,685 $ 318,498 Mature within two years 171,931 172,472 $ 490,616 $ 490,970
Schedule of unrealized losses on available-for-sale investments	The unrealized losses on available-for-sale investments and their related fair values as of March 31, 2019 and December 31, 2018 are as follows: Less than 12 months 12 months or greater March 31, 2019 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 93,071 $ (54) $ 12,550 $ - Government Securities 225,427 (132) 159,922 - $ 318,498 $ (186) $ 172,472 $ - Less than 12 months 12 months or greater December 31, 2018 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 84,770 $ (310) $ 20,198 $ (34) Government Securities 183,345 (667) 215,910 - $ 268,115 $ (977) $ 236,108 $ (34)

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Stock-Based Compensation
Schedule of total employee, director and non-employee stock-based compensation expense recognized	Three Months Ended March 31, 2019 2018 General and administrative $ 1,854 $ 1,617 Research and development 4,002 2,854 $ 5,856 $ 4,471 Three Months Ended March 31, 2019 2018 Stock options $ 5,525 $ 4,276 ESPP 217 163 Restricted stock units 114 32 $ 5,856 $ 4,471
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, 2018 5,966,928 $ 19.71 7.51 Options granted 1,342,447 $ 36.25 Options forfeited (51,825) $ 26.28 Options exercised (58,536) $ 11.39 Balances at March 31, 2019 7,199,014 $ 22.81 7.73 $ 69,227 Exercisable 3,585,921 $ 16.40 6.47 $ 52,835
Schedule of weighted average assumptions used for estimation of fair value of stock options	Options Three Months Ended March 31, 2019 2018 Expected term (years) 6.1 6.1 Expected volatility 61.3 % 73.1 % Risk-free interest rate 2.53 % 2.50 % Expected dividend yield — % — %
Schedule of weighted average assumptions used for estimation of fair value of ESPP	ESPP Three Months Ended March 31, 2019 2018 Expected term (years) 0.5 - 2.0 0.5 - 2.0 Expected volatility 57.0-71.4 % 71.4 % Risk-free interest rate 1.47-2.70 % 1.47-1.80 % Expected dividend yield — % — %
Summary of restricted stock unity activity	Weighted Restricted Average Grant Stock Date Fair Value Units (Per unit) Unvested at December 31, 2018 33,933 $ 27.64 Granted 28,566 36.31 Vested (11,311) 27.64 Forfeited (2,502) 27.64 Unvested at March 31, 2019 48,686 $ 32.73

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases
Schedule of operating lease liabilities maturities	The following table reconciles the undiscounted cash flows for the operating leases at March 31, 2019 to the operating lease liabilities recorded on the balance sheet (in thousands): Years ending December 31, For the remainder of 2019 $ 1,851 2020 2,723 2021 2,608 2022 2,220 2023 1,351 2024 1,371 Thereafter 2,282 Total undiscounted lease payments 14,406 Less: Imputed interest (2,198) Present value of lease payments $ 12,208 Lease liabilities - short-term $ 1,987 Lease liabilities - long-term 10,221 Total lease liabilities $ 12,208

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Intangibles (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Summary of Significant Accounting Policies
Impairment of intangible assets	$ 0	$ 0
Abandonment of capitalized intangible assets	$ 58,000	$ 5,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($)	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Lease liability	$ 12,208,000
Increase in assets	697,003,000		$ 576,732,000
Increase in liabilities	87,438,000		55,051,000
Impact on retained earnings (accumulated deficit)	$ (243,232,000)		$ (323,277,000)
ASU 2016-02 | Restatement Adjustment
Right-of-Use Asset		$ 11,400,000
Lease liability		12,700,000
Increase in assets		11,200,000
Increase in liabilities		11,200,000
Impact on retained earnings (accumulated deficit)		$ 0

Fair Value of Financial Instr_3

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Fair Value of Financial Instruments
Money Market Funds	$ 21,858	$ 26,246
Securities	490,970
Total Fair Value	506,595	522,493
Transfers from level 1 to level 2	0		$ 0
Transfers from level 2 to level 1	0		$ 0
Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	15,625	18,270
Corporate Securities
Fair Value of Financial Instruments
Securities	105,621	104,967
Government Securities
Fair Value of Financial Instruments
Securities	385,349	399,256
Level 1
Fair Value of Financial Instruments
Total Fair Value	15,625	18,270
Level 1 | Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	15,625	18,270
Level 2
Fair Value of Financial Instruments
Total Fair Value	490,970	504,223
Level 2 | Corporate Securities
Fair Value of Financial Instruments
Securities	105,621	104,967
Level 2 | Government Securities
Fair Value of Financial Instruments
Securities	$ 385,349	$ 399,256

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator:
Net income (loss) attributable to common stockholders	$ 80,045	$ (29,493)
Denominator:
Weighted average common shares outstanding, basic	56,302,967	47,753,922
Weighted average common shares outstanding, diluted	58,009,878	47,753,922
Basic net income (loss) per common share	$ 1.42	$ (0.62)
Diluted net income (loss) per common share	$ 1.38	$ (0.62)

Net Income (Loss) Per Share - A

Net Income (Loss) Per Share - Anti-dilutive securities (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2018shares
Net Income (Loss) Per Share
Anti-dilutive securities (in shares)	1,573

Marketable Securities (Details)

Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 21,858	$ 26,246
Investments, amortized cost	506,241	523,454
Investments	506,595	522,493
Total amortized cost	490,616
Gross unrealized gains	659	188
Gross unrealized losses	(305)	(1,149)
Securities	490,970
Marketable securities
Schedule of Available-for-sale Securities
Securities	490,970	504,223
Money Market Funds
Schedule of Available-for-sale Securities
Cash and cash equivalents	15,625	18,270
Corporate Securities
Schedule of Available-for-sale Securities
Total amortized cost	105,623	105,311
Gross unrealized gains	69	1
Gross unrealized losses	(71)	(345)
Securities	105,621	104,967
Government Securities
Schedule of Available-for-sale Securities
Total amortized cost	384,993	399,873
Gross unrealized gains	590	187
Gross unrealized losses	(234)	(804)
Securities	385,349	399,256
Cash and Cash Equivalents
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 15,625	$ 18,270

Marketable Securities - Maturit

Marketable Securities - Maturities (Details) $ in Thousands	Mar. 31, 2019USD ($)
Amortized Cost
Maturing in one year or less	$ 318,685
Maturing within two years	171,931
Total amortized cost	490,616
Estimate Fair Value
Maturing in one year or less	318,498
Maturing within two years	172,472
Total estimated fair value	$ 490,970

Marketable Securities - Unreali

Marketable Securities - Unrealized losses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair value
Fair value, less than 12 months	$ 318,498	$ 268,115
Fair value, 12 months or greater	172,472	236,108
Unrealized losses
Unrealized losses, Less than 12 months	(186)	(977)
Unrealized losses, 12 months or greater		(34)
Corporate Securities
Fair value
Fair value, less than 12 months	93,071	84,770
Fair value, 12 months or greater	12,550	20,198
Unrealized losses
Unrealized losses, Less than 12 months	(54)	(310)
Unrealized losses, 12 months or greater		(34)
Government Securities
Fair value
Fair value, less than 12 months	225,427	183,345
Fair value, 12 months or greater	159,922	215,910
Unrealized losses
Unrealized losses, Less than 12 months	$ (132)	$ (667)

Sale of Additional Common Sto_2

Sale of Additional Common Stock (Details) - Common Stock - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2018
Sale of common stock	8,395,000	8,395,000
Net proceeds	$ 245.5

Stock Based Compensation (Detai

Stock Based Compensation (Details)	Dec. 02, 2013shares	Mar. 31, 2019itemshares	Mar. 31, 2018shares	Dec. 31, 2018shares
Stock-based compensation
Common stock, shares issued		56,349,389		56,279,542
Employee stock options
Stock-based compensation
Options granted (in shares)		1,342,447	1,393,650
ESPP
Stock-based compensation
Total number of shares of common stock available for issuance		581,286
Awards issued under the plan (in shares)		349,716
Increase in shares of common stock available for issuance (in shares)		0
ESPP | Maximum
Stock-based compensation
Annual percentage increase in shares of common stock available for issuance		1.00%
Annual increase in shares of common stock available for issuance (in shares)		621,814
Restricted stock units
Stock-based compensation
Awards issued under the plan (in shares)		62,499
Annual installment vesting periods | item		3
The 2013 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		10,479,256
Annual percentage increase in shares of common stock available for issuance		4.00%
Awards issued under the plan (in shares)		8,093,734
Increase in shares of common stock available for issuance (in shares)		2,251,181
The 2010 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		2,684,456
Options granted (in shares)	0

Stock-Based Compensation - Empl

Stock-Based Compensation - Employee expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$ 5,856	$ 4,471
Employee stock options
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	5,525	4,276
ESPP
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	217	163
Restricted stock units
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	114	32
General and administrative
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	1,854	1,617
Research and development
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$ 4,002	$ 2,854

Stock-Based Compensation - Opti

Stock-Based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 02, 2013	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Employee stock options
Number of Shares subject to outstanding options
Balance at the beginning of the period (in shares)		5,966,928
Options granted (in shares)		1,342,447	1,393,650
Options forfeited (in shares)		(51,825)
Options exercised (in shares)		(58,536)
Balance at the end of the period (in shares)		7,199,014		5,966,928
Exercisable options (in shares)		3,585,921
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)		$ 19.71
Options granted (in dollars per share)		36.25
Options forfeited (in dollars per share)		26.28
Options exercised (in dollars per share)		11.39
Balance at the end of the period (in dollars per share)		22.81		$ 19.71
Exercisable (in dollars per share)		$ 16.40
Weighted-average remaining contractual life		7 years 8 months 23 days		7 years 6 months 4 days
Weighted-average remaining contractual life of awards exercisable		6 years 5 months 19 days
Aggregate intrinsic value of options outstanding		$ 69,227
Aggregate intrinsic value of options exercisable		$ 52,835
Closing price of common stock (in dollars per share)		$ 31.06
Weighted average fair value of options granted (in dollars per share)		$ 21.20	$ 16.12
The 2010 Plan
Number of Shares subject to outstanding options
Options granted (in shares)	0

Stock-Based Compensation - FV o

Stock-Based Compensation - FV of employee stock options (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Employee stock options
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility (as a percent)	61.30%	73.10%
Risk-free interest rate (as a percent)	2.53%	2.50%
Expected term (years)	6 years 1 month 6 days	6 years 1 month 6 days
Compensation expense
Unamortized compensation expense related to unvested options	$ 64.7
Period to recognize unamortized compensation expense	3 years 1 month 6 days
ESPP
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, low end of range (as a percent)	57.00%
Expected volatility, high end of range (as a percent)	71.40%
Expected volatility (as a percent)		71.40%
Risk-free interest rate, low end of range (as a percent)	1.47%	1.47%
Risk-free interest rate, high end of range (as a percent)	2.70%	1.80%
Compensation expense
Unamortized compensation expense related to unvested options	$ 0.2
Period to recognize unamortized compensation expense	8 months 12 days
ESPP | Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	6 months	6 months
ESPP | Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	2 years	2 years

Stock Based Compensation - Rest

Stock Based Compensation - Restricted stock units (Details) - Restricted stock units $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Stock-based compensation
Beginning balance | shares	33,933
Granted | shares	28,566
Vested | shares	(11,311)
Forfeited | shares	(2,502)
Ending balance | shares	48,686
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 27.64
Weighted Average Grant Date Fair Value, Granted | $ / shares	36.31
Weighted Average Grant Date Fair Value, Vested | $ / shares	27.64
Weighted Average Grant Date Fair Value, Forfeited | $ / shares	27.64
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 32.73
Compensation expense
Unamortized compensation expense related to unvested restricted stock units | $	$ 1,500
Period to recognize unamortized compensation expense	2 years 6 months

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jul. 31, 2017	Jun. 30, 2017
Lessee, Lease, Description [Line Items]
Option to extend	true
For the remainder of 2019	$ 1,851
2020	2,723
2021	2,608
2022	2,220
2023	1,351
2024	1,371
Thereafter	2,282
Total undiscounted lease payments	14,406
Less: Imputed interest	(2,198)
Present value of lease payments	$ 12,208
Monrovia, CA - office and laboratory space
Lessee, Lease, Description [Line Items]
Renewal term			5 years
Monrovia, CA - office and laboratory space with additional space
Lessee, Lease, Description [Line Items]
Renewal term		5 years
San Diego, CA - office space
Lessee, Lease, Description [Line Items]
Renewal term			5 years
San Diego, CA - second office space
Lessee, Lease, Description [Line Items]
Renewal term	5 years

Leases - Operating lease liabil

Leases - Operating lease liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Leases
Operating lease liability - ST	$ 1,987
Operating lease liability - LT	10,221
Operating lease liabilities	12,208
Operating lease cost	700
Cash paid for operating leases	$ 700
Net rent expense		$ 600
Remaining lease term	6 years
Discount rate	5.50%

Collaboration and Licensing A_2

Collaboration and Licensing Agreements (Details)

Mar. 29, 2019USD ($)

Mar. 31, 2019USD ($)

Feb. 28, 2019USD ($)companyitem

Oct. 31, 2017USD ($)shares

Jun. 30, 2017USD ($)

Jun. 30, 2016item

Sep. 30, 2015USD ($)item

Jan. 31, 2013item

Mar. 31, 2019USD ($)item

Dec. 31, 2018USD ($)

Sep. 30, 2018USD ($)

Mar. 31, 2018USD ($)

Dec. 31, 2007item

Collaboration research and licensing agreements

Revenue recorded

$ 111,939,000

Deferred revenue

$ 63,100,000

63,100,000

$ 40,100,000

Current portion of deferred revenue

59,244,000

59,244,000

$ 40,079,000

Deferred revenue, noncurrent portion

3,896,000

3,896,000

Genentech

Collaboration research and licensing agreements

Revenue recorded

112,000,000

Genentech | Research service

Collaboration research and licensing agreements

Revenue recorded

300,000

Genentech | Licensing

Collaboration research and licensing agreements

Revenue recorded

111,700,000

Collaboration and License Agreement | Genentech

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 120,000,000

Research license term

2 years

Additional research term

2 years

Revenue recognized

112,000,000

Number of companies that conduct integrated research plan | company

2

Standalone selling price of the license

$ 114,400,000

Contract receivable

120,000,000

$ 120,000,000

Number of programs | item

9

Term of revenue recognized

1 year

Collaboration and License Agreement | Genentech | XmAb24306

Collaboration research and licensing agreements

Percentage of profits on net sales of the product

45.00%

Standalone selling price of the license

$ 111,700,000

Collaboration and License Agreement | Genentech | Research service

Collaboration research and licensing agreements

Revenue recognized

$ 300,000

Standalone selling price of the license

8,300,000

Deferred revenue

8,000,000

8,000,000

Collaboration and License Agreement | Genentech | Licensing

Collaboration research and licensing agreements

Revenue recognized

111,700,000

Collaboration and License Agreement | Genentech | Maximum

Collaboration research and licensing agreements

Potential milestone payment

160,000,000

Collaboration and License Agreement | Genentech | Cost approach | Research service

Collaboration research and licensing agreements

Standalone selling price of the license

8,500,000

Collaboration and License Agreement | Novartis

Collaboration research and licensing agreements

Revenue recognized

0

0

Deferred revenue

40,100,000

40,100,000

Contract receivable

2,000,000

$ 2,000,000

Number of additional discovery programs | item

2

Collaboration and License Agreement | Novartis | Discovery Program

Collaboration research and licensing agreements

Number of performance obligations | item

2

Collaboration and License Agreement | Novartis | Bispecific FC Technologies

Collaboration research and licensing agreements

Number of development stage products | item

2

Collaboration and License Agreement | Novartis | Bispecific FC Technologies | Maximum

Collaboration research and licensing agreements

Number of antibody targets for which bispecific technology applied | item

4

Collaboration and License Agreement | Novartis | FC Licenses | Maximum

Collaboration research and licensing agreements

Number of targets against which non-exclusive license is provided | item

10

Collaboration and License Agreement | MorphoSys

Collaboration research and licensing agreements

Revenue recognized

$ 0

0

Deferred revenue

0

0

Milestone payment received

$ 12,500,000

Research and License Agreement | Astellas

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 15,000,000

Potential milestone payment

240,000,000

Revenue recognized

0

Deferred revenue

15,000,000

15,000,000

Contract receivable

15,000,000

15,000,000

Research and License Agreement | Astellas | Adjustment method

Collaboration research and licensing agreements

Standalone selling price of the license

15,000,000

Research and License Agreement | Amgen, Inc.

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 45,000,000

Potential milestone payment

$ 600,000,000

Revenue recognized

0

0

Deferred revenue

0

0

Research and License Agreement | Amgen, Inc. | Discovery Program

Collaboration research and licensing agreements

Research license term

3 years

Additional research term

1 year

Number of programs | item

5

Research Licensee and Collaboration Agreement | Boehringer Ingelheim International GmbH

Collaboration research and licensing agreements

Research license term

3 years

Revenue recognized

0

0

Deferred revenue

0

$ 0

Number of commercial options | item

1

Number of compounds | item

1

Number of commercial licenses | item

2

Option and license agreement | Alexion Pharmaceuticals, Inc.

Collaboration research and licensing agreements

Research license term

5 years

Revenue recognized

$ 0

0

Deferred revenue

0

0

Milestone payment received

$ 11,000,000

$ 9,000,000

Number of different target programs | item

6

License Agreement | INmune

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 100,000

Revenue recognized

0

$ 0

Deferred revenue

0

0

Additional equity interests (as a percentage)

10.00%

Equity issued in shares | shares

1,585,000

Equity issues, value

$ 10,000,000

Carrying value

$ 0

$ 0

Development-based | Collaboration and License Agreement | Genentech

Collaboration research and licensing agreements

Potential milestone payment

$ 20,000,000

Development-based | Research and License Agreement | Astellas

Collaboration research and licensing agreements

Potential milestone payment

32,500,000

Regulatory-based | Research and License Agreement | Astellas

Collaboration research and licensing agreements

Potential milestone payment

57,500,000

Sales-based | Research and License Agreement | Astellas

Collaboration research and licensing agreements

Potential milestone payment

$ 150,000,000

Income Taxes (Details)

Income Taxes (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Reconciliation of federal statutory income tax to effective income tax
Income tax expense	$ 900
Federal
Reconciliation of federal statutory income tax to effective income tax
Income tax receivable	$ 1,600