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Cover - shares | 6 Months Ended |
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Jun. 30, 2024 | Jul. 30, 2024
Cover [Abstract] |  |
Document Type | 10-Q/A |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2024 |
Document Transition Report | false |
Entity File Number | 001-36182 |
Entity Registrant Name | Xencor, Inc |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 20-1622502 |
Entity Address, Address Line One | 465 North Halstead Street |
Entity Address, Address Line Two | Suite 200 |
Entity Address, City or Town | Pasadena |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 91107 |
City Area Code | 626 |
Local Phone Number | 305-5900 |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | XNCR |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding |  | 61,833,530
Entity Central Index Key | 0001326732 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | true |
Amendment Description | On February 13, 2025, Xencor, Inc. (the Company) filed a Current Report on Form 8-K disclosing that the Audit Committee (the Audit Committee) of the Board of Directors of the Company, after consultation with the Company’s management and RSM US LLP, the Company’s independent registered public accounting firm (RSM), concluded that the following financial statements should no longer be relied upon because of errors in such financials as addressed in FASB ASC Topic 250, Accounting and Error Corrections, (i) the Company's audited consolidated financial statements for the fiscal year ended December 31, 2023, contained in its Annual Report on Form 10-K for the year ended December 31, 2023, originally filed with the Securities and Exchange Commission (SEC) on February 29, 2024, (ii) the Company's unaudited consolidated financial statements for the three months ended March 31, 2024, contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, originally filed with the SEC on May 9, 2024, (iii) the Company's unaudited consolidated financial statements for the three and six months ended June 30, 2024, contained in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, originally filed with the SEC on August 8, 2024 (the Original Form 10-Q), and (iv) the Company's unaudited consolidated financial statements for the three and nine months ended September 30, 2024, contained in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, originally filed with the SEC on November 6, 2024. In addition, the Audit Committee concluded that management’s report on the effectiveness of internal control over financial reporting as of December 31, 2023, and RSM’s report on the consolidated balance sheets as of December 31, 2023, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity and cash flows for the year ended December 31, 2023, and the related notes to the consolidated financial statements, as well as RSM’s report on the effectiveness of internal control over financial reporting as of December 31, 2023, should no longer be relied upon. On February 7, 2025, RSM informed us that disclosure should be made and action should be taken to prevent future reliance on RSM’s audit report filed with the Annual Report on Form 10-K for the year ended December 31, 2023 and completed interim review related to previously issued financial statements included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024. For additional information, please refer to our Current Report on Form 8-K filed with the SEC on February 13, 2025.This Amendment No. 1 to our Original Form 10-Q (the Form 10-Q/A) amends and restates certain items noted below in the Original Form 10-Q. This Form 10-Q/A amends the Original Form 10-Q to restate its unaudited financial statements, financial data and related disclosures for the three and six months ended June 30, 2024 to correct errors related to the accounting treatment of a royalty transaction with OMERS Life Sciences entered into in November 2023, the unrecorded tax benefit related to the Company’s treatment of research and development expenses that should have been capitalized under Section 174 of the Internal Revenue Code of 1986, as amended (the Code), as well as an understatement of the Company's state tax obligations, as more fully described below.Background of RestatementIn November 2023, the Company entered into an agreement for the sale of future royalties due to it under the Alexion Agreement (as defined in this report) with OMERS Life Sciences (the Ultomiris Royalty Sale Agreement). In connection with the preparation of the Company’s financial statements for the year ended December 31, 2024, the Company determined that the royalty transaction under the Ultomiris Royalty Sale Agreement was incorrectly accounted for as deferred income and should have been accounted for as debt. The impact of this error on the consolidated balance sheet as of June 30, 2024 was that accounts receivable was understated by $13.8 million, deferred income was overstated by $140.6 million, debt was understated by $160.5 million and stockholders’ equity was overstated by $6.1 million; the impact on the consolidated statement of income (loss) for the six months ended June 30, 2024 was that revenue was understated by $10.1 million and interest expense was understated by $17.0 million; and the impact on the consolidated statement of cash flows for the six months ended June 30, 2024 was that the cash used in operating activities was understated by $3.6 million and cash provided by financing activities were understated by the same amount. The Company has decided to correct these errors for the year ended December 31, 2023, concluding that the reclassification of the royalty transaction as debt was material to the audited consolidated statement of cash flows for the year ended December 31, 2023 and the unaudited consolidated statements of cash flows for the six months ended June 30, 2024.In addition, the Company’s management became aware of a misstatement related to the Company’s treatment of research and development expenses under Section 174 of the Code, whereby the Company understated the amount of its research and experimental expenses that should have been capitalized for tax purposes, as reported in the Original Form 10-Q, and therefore identified an uncertain tax position of $6.2 million owed for the fiscal year ended December 31, 2023. In addition, the Company became aware of a misstatement related to its state tax obligations. The Company evaluated its taxable presence and concluded that it understated its state income tax expense by approximately $2.1 million, net of federal benefit, for the year ended December 31, 2023. These amounts exclude any interest and penalties. The impact on the consolidated balance sheet as of June 30, 2024 was that uncertain tax position payable was understated by $8.3 million, prepaid income tax was understated by $0.6 million and stockholders’ equity was overstated by $7.7 million. The Company has decided to correct these errors for the year ended December 31, 2023, concluding that the additional tax liability was material to the audited consolidated balance sheet and consolidated statement of loss for the year ended December 31, 2023 and the unaudited consolidated balance sheet as of June 30, 2024. The Company has begun recording interest and penalties related to the understated capitalized research and experimental expense and on the understated state income tax obligations, and the total is immaterial to each quarter in 2024 as well as in aggregate for 2024.Internal Control ConsiderationsIn connection with the restatement, management has re-evaluated the effectiveness of the Company’s internal controls over financial reporting as of June 30, 2024. The Audit Committee of the Company’s Board of Directors, with concurrence of management, has concluded that, in light of the errors described above, additional material weaknesses exist in the Company’s internal control over financial reporting as of June 30, 2024. Management plans to (i) implement a more rigorous analysis of non-routine transactions, (ii) on highly technical and complex accounting transactions, we will improve our process to identify and select qualified third-party advisors, (iii) enhance our review of capabilities and work performed by the third-party advisors specifically related to the review of accounting guidance for complex non-routine transactions and ,(iv) enhance our review of capabilities and work performed by third-party advisors related to the review of tax advice and (v) on a quarterly basis, review income tax legislative changes and their impact to our financial statements with our tax expert. For a discussion of management’s consideration of the Company's disclosure controls and procedures, internal control over financial reporting, and the material weaknesses identified, see Part I, Item 4 Controls and Procedures of this Form 10-Q/A.Items Impacted by this Form 10-Q/AThe following sections in the Original Form 10-Q have been amended and restated in this Form 10-Q/A to reflect the restatement:1.Part I, Item 1 - Financial Statements 2.Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations3.Part I, Item 4 - Controls and Procedures 4.Part II, Item 1A - Risk Factors5.Part II, Item 6 - ExhibitsExcept as described above, no other information included in the Original Form 10-Q is being amended or updated by this Form 10-Q/A, and this Form 10-Q/A does not purport to reflect any information or events subsequent to the Original Form 10-Q. This Form 10-Q/A continues to describe the conditions as of the date of the Original Form 10-Q and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Form 10-Q. Accordingly, this Form 10-Q/A should be read in conjunction with the Original Form 10-Q and with our filings with the SEC subsequent to the Original Form 10-Q. See Note 2 to the accompanying unaudited financial statements, set forth in Part I of this Form 10-Q/A, for details of the restatement and its impact on the unaudited financial statements as of, and for the three and six months ended, June 30, 2024.In accordance with applicable SEC rules, this Form 10-Q/A includes updated certifications from our Chief Executive Officer and Chief Financial Officer as Exhibits 31.1, 31.2 and 32.1. |

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