Xilio Therapeutics, Inc. (XLO) Bundle
Understanding Xilio Therapeutics, Inc. (XLO) Revenue Streams
Understanding Xilio Therapeutics, Inc.’s Revenue Streams
Primary Revenue Sources
As of September 30, 2024, the total revenue recognized by Xilio Therapeutics amounted to $4.62 million, derived entirely from license revenue. This revenue was recognized under a license agreement and stock purchase agreement with Gilead, initiated in March 2024.
| Revenue Source | Amount (in millions) |
|---|---|
| License Revenue | $4.62 |
| Product Sales | $0.00 |
| Other Income | $0.00 |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, the company reported a revenue increase of 4,620% compared to the same period in 2023, where no revenue was recorded.
Contribution of Different Business Segments to Overall Revenue
In the current reporting period, the entirety of revenue came from license agreements, highlighting the company's reliance on partnerships for revenue generation. There were no contributions from product sales, as the company has not commercialized any products yet.
Significant Changes in Revenue Streams
The notable change in revenue streams is the introduction of license revenue in 2024, which marks the first instance of recognized revenue for the company. This shift indicates a potential turning point in the company’s financial trajectory, as previously, revenue generation was non-existent due to the focus on research and development without product commercialization.
Revenue Overview
The following table summarizes revenue and performance metrics for Xilio Therapeutics for the nine months ended September 30, 2024 and 2023.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Total Revenue | $4.62 million | $0.00 million | $4.62 million |
| Net Loss | $(45.15) million | $(58.75) million | $13.60 million |
| Operating Expenses | $51.57 million | $61.00 million | $(9.43) million |
In summary, Xilio Therapeutics, Inc. has marked a significant milestone with the recognition of license revenue in 2024, establishing its initial revenue streams while still navigating substantial operating losses and high expenses related to ongoing research and development efforts.
A Deep Dive into Xilio Therapeutics, Inc. (XLO) Profitability
A Deep Dive into Xilio Therapeutics, Inc. Profitability
Gross Profit Margin: As of September 30, 2024, the total revenue was $4.62 million with total operating expenses of $51.57 million, resulting in a gross profit margin of -100%.
Operating Profit Margin: The loss from operations for the nine months ended September 30, 2024, was $46.95 million, indicating an operating profit margin of -101.5%.
Net Profit Margin: The net loss for the same period was $45.15 million, leading to a net profit margin of -976.6%.
Trends in Profitability Over Time
For the nine months ended September 30, 2023, the total revenue was $0 with total operating expenses of $61.00 million, resulting in a gross profit margin of -100%. The net loss for this period was $58.75 million.
Comparing the two periods:
- Net loss decreased by $13.60 million from $58.75 million in 2023 to $45.15 million in 2024.
- Operating expenses decreased from $61.00 million in 2023 to $51.57 million in 2024.
Comparison of Profitability Ratios with Industry Averages
The biotechnology industry average for net profit margin is approximately -15%. Comparatively, Xilio's net profit margin of -976.6% is significantly lower.
Analysis of Operational Efficiency
The operational expenses for the nine months ended September 30, 2024, were broken down as follows:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Research and Development | $32,375 | $40,400 | $(8,025) |
| General and Administrative | $18,261 | $20,603 | $(2,342) |
| Restructuring | $937 | $0 | $937 |
| Total Operating Expenses | $51,573 | $61,003 | $(9,430) |
Overall, the company has shown improvement in operational efficiency by decreasing total operating expenses by $9.43 million year-over-year.
Debt vs. Equity: How Xilio Therapeutics, Inc. (XLO) Finances Its Growth
Debt vs. Equity: How Xilio Therapeutics, Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, Xilio Therapeutics, Inc. reported total liabilities of $53.7 million. The breakdown includes:
- Current liabilities: $38.0 million
- Deferred revenue, net of current portion: $8.4 million
- Operating lease liability (non-current): $7.3 million
The company has no long-term debt remaining after repaying all amounts outstanding under a loan agreement with PacWest in the first quarter of 2024.
Debt-to-Equity Ratio
The debt-to-equity ratio for Xilio Therapeutics is calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity
With total liabilities at $53.7 million and total stockholders' equity of $20.974 million, the debt-to-equity ratio is approximately 2.56. This is significantly higher than the industry average, which generally ranges around 0.5 to 1.0 for biotech firms.
Recent Debt Issuances and Credit Ratings
As of September 30, 2024, the company has not issued new debt. Previously, in November 2019, Xilio entered a loan agreement for $10 million, which was fully repaid by March 2024. The company's credit rating remains speculative, reflecting the high-risk nature of its business model and ongoing operating losses.
Balancing Debt Financing and Equity Funding
Xilio Therapeutics has primarily financed its growth through equity funding rather than debt. The company has raised capital through:
- Private placements of common stock and prefunded warrants
- An initial public offering (IPO) in October 2021
- License agreements, including a recent agreement with Gilead that contributed $4.6 million in license revenue for the nine months ended September 30, 2024
The company’s cash and cash equivalents as of September 30, 2024, stood at $61.3 million, which is expected to fund operations through the second quarter of 2025.
| Financial Metric | Value |
|---|---|
| Total Liabilities | $53.7 million |
| Total Stockholders' Equity | $20.974 million |
| Debt-to-Equity Ratio | 2.56 |
| Cash and Cash Equivalents | $61.3 million |
| License Revenue (9 months ended Sept 30, 2024) | $4.6 million |
Assessing Xilio Therapeutics, Inc. (XLO) Liquidity
Assessing Xilio Therapeutics, Inc.'s Liquidity
Current and Quick Ratios (Liquidity Positions)
As of September 30, 2024, the liquidity ratios for Xilio Therapeutics, Inc. are as follows:
- Current Ratio: 1.14
- Quick Ratio: 1.14
Analysis of Working Capital Trends
As of September 30, 2024, the company's working capital is calculated as:
- Current Assets: $63.0 million
- Current Liabilities: $55.1 million
- Working Capital: $7.9 million
Cash Flow Statements Overview
The cash flow statements for the nine months ended September 30, 2024, are summarized as follows (in thousands):
| Category | 2024 | 2023 |
|---|---|---|
| Net cash provided by (used in) operating activities | $(4,221) | $(55,193) |
| Net cash used in investing activities | $(30) | $(486) |
| Net cash provided by (used in) financing activities | $20,994 | $(4,916) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $16,743 | $(60,595) |
| Cash, cash equivalents and restricted cash, end of period | $63,034 | $61,352 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company had cash and cash equivalents of $61.3 million. This amount is anticipated to be sufficient to fund operating expenses and capital expenditure requirements through the end of the second quarter of 2025. However, there is substantial doubt regarding the company's ability to continue as a going concern due to the need for additional capital. The accumulated deficit stands at $370.7 million, with significant operating losses reported for the nine months ended September 30, 2024, amounting to $45.1 million.
Is Xilio Therapeutics, Inc. (XLO) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company involves assessing key financial metrics to determine whether the stock is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is not applicable as the company reported a net loss of $45.1 million for the nine months ended September 30, 2024, resulting in a net loss per share of $0.91.
Price-to-Book (P/B) Ratio
The book value per share as of September 30, 2024, is calculated as follows:
- Total stockholders' equity: $20.974 million
- Outstanding shares: 43,958,074
- Book value per share: $0.48 (calculated as $20.974 million / 43,958,074)
With the stock trading at approximately $4.35, the P/B ratio is approximately 9.06.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As the company has not generated EBITDA due to ongoing losses, the EV/EBITDA ratio cannot be calculated at this time. The focus remains on future earnings potential as product candidates advance through clinical trials.
Stock Price Trends
In the last 12 months, the stock price has shown considerable volatility, with a high of approximately $6.50 and a low of around $2.50. The stock is currently trading at $4.35.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, as all profits are reinvested into research and development. Therefore, the dividend yield is 0%.
Analyst Consensus on Stock Valuation
Analyst consensus suggests a Hold rating, with some analysts indicating potential for future growth contingent on the successful advancement of clinical trials.
Summary of Key Financial Metrics
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | 9.06 |
| EV/EBITDA Ratio | N/A |
| Stock Price (Current) | $4.35 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Xilio Therapeutics, Inc. (XLO)
Key Risks Facing Xilio Therapeutics, Inc.
The financial health of Xilio Therapeutics, Inc. is influenced by various internal and external risk factors that impact its operations and strategic outlook.
Industry Competition
The biotechnology sector is highly competitive. Numerous companies are engaged in similar research and development activities, potentially leading to others commercializing products before Xilio. The company faces competitive pressures that may hinder its ability to capture market share.
Regulatory Risks
The regulatory approval process for new drugs is both expensive and uncertain. Delays or failures in obtaining necessary approvals can significantly affect the timeline for commercialization, impacting potential revenue streams.
Financial Risks
As of September 30, 2024, Xilio reported a net loss of $45.1 million compared to a net loss of $58.7 million for the same period in 2023. The accumulated deficit reached $370.7 million, and the company anticipates continued operating losses.
Cash Flow and Liquidity
As of September 30, 2024, Xilio had cash and cash equivalents of $61.3 million, which are projected to fund operations through the end of the second quarter of 2025. However, there are doubts about the sufficiency of these resources to support ongoing activities beyond this period, raising concerns about the company's going concern status.
Operational Risks
The company relies heavily on partnerships and in-licensing agreements for its intellectual property. Any failure to comply with obligations under these agreements could result in the loss of critical rights, which would adversely affect its operational capabilities.
Market Conditions
Market volatility can affect stock prices and investor sentiment. As of September 30, 2024, the price of the company’s common stock has been subject to fluctuations that can impact the company’s ability to raise capital through equity financing.
Inflation and Labor Costs
Inflation has the potential to increase costs related to labor and services. For instance, the company noted that inflation could affect expenses such as employee compensation and research and development costs due to rising labor and supply costs.
Mitigation Strategies
Xilio is actively seeking to mitigate these risks through various strategies, including:
- Raising additional capital through equity or debt financing.
- Entering into collaborations and licensing transactions to enhance financial stability.
- Implementing cost reduction strategies to manage operational expenses effectively.
| Risk Factor | Details | Current Impact |
|---|---|---|
| Industry Competition | High competition in biotech sector | Potential loss of market share |
| Regulatory Risks | Uncertain drug approval processes | Delays in commercialization |
| Financial Risks | Net loss of $45.1 million | Increased financial strain |
| Cash Flow and Liquidity | Cash and equivalents of $61.3 million | Funding through Q2 2025 |
| Operational Risks | Reliance on in-licensing agreements | Loss of critical rights if obligations are unmet |
| Market Conditions | Volatility in stock prices | Challenges in raising capital |
| Inflation and Labor Costs | Increasing costs of labor and supplies | Higher operational expenses |
Future Growth Prospects for Xilio Therapeutics, Inc. (XLO)
Future Growth Prospects for Xilio Therapeutics, Inc.
Key Growth Drivers
Product innovations, market expansions, and strategic partnerships are pivotal growth drivers for the company. The company recognized $4.6 million in license revenue for the nine months ended September 30, 2024, under its license agreement and stock purchase agreement with Gilead.
Future Revenue Growth Projections
For the nine months ended September 30, 2024, total revenue reached $4.6 million, compared to $0 in the same period of 2023. The company expects continued revenue growth as it advances clinical trials and develops its product candidates, primarily focusing on tumor-activated immuno-oncology therapies.
Strategic Initiatives and Partnerships
In July 2023, the company entered a clinical trial collaboration with F. Hoffmann-La Roche Ltd. to evaluate vilastobart (XTX101) in combination with atezolizumab (Tecentriq®). This collaboration is expected to enhance the company’s research capabilities and market reach.
Competitive Advantages
The company has several competitive advantages, including a robust pipeline of innovative therapies and strategic collaborations. As of September 30, 2024, the company had cash and cash equivalents of $61.3 million, which is anticipated to fund operations through the end of the second quarter of 2025.
| Growth Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| License Revenue | $2.3 million | $0 | +100% |
| Total Revenue | $4.6 million | $0 | +100% |
| Operating Expenses | $51.6 million | $61.0 million | -15.5% |
| Net Loss | ($45.1 million) | ($58.7 million) | Improvement: +23.2% |
Conclusion on Financial Health
The company's strategic initiatives, product innovations, and partnerships position it well for future growth. Continued focus on clinical development and effective cash management will be crucial as it navigates the competitive landscape of biotechnology.
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Updated on 16 Nov 2024
Resources:
- Xilio Therapeutics, Inc. (XLO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Xilio Therapeutics, Inc. (XLO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Xilio Therapeutics, Inc. (XLO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.