Item 1.01
Entry Into a Material Definitive Agreement.
On March 20, 2018, we entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners LLC and Piper Jaffray & Co. as representatives of the several underwriters named therein (the “Underwriters”), relating to the issuance and sale of 7,300,000 shares of our common stock, par value $0.01 per share. The price to the public in this offering was $31.00 per share. The offering is expected to close on or about March 23, 2018, subject to customary closing conditions. In addition, under the terms of the Underwriting Agreement, we granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 1,095,000 shares of common stock. We estimate that the gross proceeds we will receive from the offering will be approximately $226.3 million, before deducting the Underwriters’ discounts and estimated offering expenses payable by us, and assuming no exercise of the option to purchase additional shares.
The Underwriting Agreement contains customary representations, warranties and agreements by us, customary conditions to closing, indemnification obligations of Xencor, Inc. and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The offering is being made pursuant to our effective registration statement on Form S-3 (Registration Statement No. 333-223766) previously filed with the Securities and Exchange Commission (“SEC”) and a related prospectus supplement and accompanying prospectus. The foregoing is only a brief description of the terms of the Underwriting Agreement, does not purport to be a complete statement of the rights and obligations of the parties under the Underwriting Agreement and the transactions contemplated thereby, and is qualified in its entirety by reference to the Underwriting Agreement that is filed as Exhibit 1.1 hereto. A copy of the opinion of Cooley LLP relating to the legality of the issuance and sale of the shares in the offering is attached as Exhibit 5.1 hereto.
On March 19, 2018, we issued a press release announcing that we had commenced the offering. On March 20, 2018, we issued a press release announcing that we had priced the offering. Copies of these press releases are attached as Exhibits 99.1 and 99.2 hereto, respectively.
Forward-Looking Statements
Certain statements contained in this report, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking information and forward-looking statements (collectively “forward-looking statements” within the meaning of applicable securities laws). Such statements, based as they are on the current expectations of management of Xencor and upon what management believes to be reasonable assumptions based on information currently available to it, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond Xencor’s control. Such statements can usually be identified by the use of words such as “may”, “would”, “believe”, “intend”, “plan”, “anticipate”, “estimate”, “expected” and other similar terminology, or state that certain actions, events or results “may” or “would” be taken, occur or be achieved. Forward-looking statements in this report include, but are not limited to, statements related to Xencor’s expectations regarding the completion, timing and size of its public offering of common stock, and the expected net proceeds from the offering.
Whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict. These risks include those associated with market risks and uncertainties and the satisfaction of customary closing conditions for an offering of securities, as well as those inherent in drug development, whether Xencor will be able to obtain financing when needed or on favorable terms, and other risks described in Xencor’s filings with the SEC. In evaluating any forward-looking statements in this report, Xencor cautions readers not to place undue reliance on any forward-looking statements. Unless otherwise required by applicable securities laws, Xencor does not intend, nor does it undertake any obligation, to update or revise any forward-looking statements contained in this report to reflect subsequent information, events, results or circumstances or otherwise.