Xilio Therapeutics sets up $50,000,000 at-the-market stock program with Leerink

The sales agreement

Xilio Therapeutics, Inc. (Nasdaq: XLO) entered into a sales agreement with Leerink Partners LLC dated March 11, 2025. Under it, Xilio may sell up to $50,000,000 of common stock from time to time through Leerink as its agent, in at-the-market offerings on the Nasdaq Global Select Market. Leerink is not required to sell any specific amount and will use commercially reasonable efforts.

Leerink's compensation is 3.0% of the gross proceeds of any shares sold. The prospectus supplement says Leerink will be deemed an underwriter under the Securities Act, and that the company's pay to the firm is treated as underwriting commissions or discounts. Xilio has agreed to indemnify Leerink for certain liabilities. Either party may end the agreement on written notice, as the 8-K filed the same day describes.

The shares are sold under a shelf registration statement on Form S-3, Registration No. 333-268264, and the supplement refers to a base prospectus dated November 18, 2022. The 8-K says no assurance can be given that Xilio will sell any shares, or about the price, amount or timing of any sales.

Who is involved

Leerink Partners LLC is the sole sales agent named in the filings. Its counsel is Cooley LLP of New York. Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, is Xilio's counsel and issued the legal opinion on the shares. The 8-K gives the company's Waltham, Massachusetts address and its Delaware incorporation.

The price and the overhang

The last reported sale price on the Nasdaq Global Select Market was $0.8449 per share on March 10, 2025, the day before the agreement. The supplement's list of forward-looking topics includes Xilio's ability to secure sufficient additional capital in the near term to "alleviate our current doubt about our ability to continue as a going concern."

The supplement's share count is large. It is based on 45,756,773 shares outstanding on December 31, 2024. It also lists 8,333,932 shares issuable on options at a weighted-average exercise price of $4.15, 445,500 shares of unvested restricted stock units, and 25,602,707 shares issuable on prefunded warrants with an exercise price of $0.0001. Those options sit far above the recent sale price, and the warrants are nearly exercisable at nothing. Any ATM sales would add to a base that already carries those claims.

The supplement says the net proceeds will go to working capital, capital expenditures and other general corporate purposes. It gives no specific project. It warns that management will have broad discretion over the money.

The pipeline behind the program

Xilio describes itself as a clinical-stage biotechnology company building tumor-activated, or masked, immuno-oncology therapies. Its most advanced candidate is vilastobart, a tumor-activated anti-CTLA-4 antibody, tested with atezolizumab in a Phase 2 trial in microsatellite stable colorectal cancer. The trial is a co-funded collaboration with F. Hoffmann-La Roche Ltd.

The company says the January 2025 Phase 2 data are initial proof-of-concept results for that combination, at a 100 mg dose every six weeks with atezolizumab at 1200 mg every three weeks. It expects more Phase 2 data in the middle of 2025, and it is enrolling a Phase 1C dose-escalation cohort at 150 mg every six weeks. The 10-K says Xilio plans to seek partners to expand development beyond the initial Phase 2 trial.

The company's second clinical program is XTX301, a tumor-activated IL-12 therapy in a Phase 1 trial in advanced solid tumors. Its preliminary Phase 1 dose-escalation data came in the fourth quarter of 2024. The 10-K says Xilio licensed XTX301 to Gilead Sciences, Inc. in the first quarter of 2024. A third program, XTX501, a masked PD-1/IL-2 bispecific, remains preclinical.

What the filings leave open

The supplement gives no current cash balance and no runway estimate. The 10-K calls the Phase 2 result initial proof-of-concept data, and the company expects further Phase 2 data in the middle of 2025. The sales agreement sets no minimum amount and no deadline. In February 2025 Xilio also signed a collaboration, license and option agreement with AbbVie Group Holdings Limited covering masked T cell engagers and a masked antibody-based immunotherapy, and the 10-K says Xilio's preclinical IND dates depend on obtaining sufficient additional capital.

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