Good afternoon, ladies and gentlemen, and thank you for standing by, and welcome to the Q2 2021 Xencor conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that this call is being recorded at the company's request. Now, I would like to turn the call over to your speaker for today, Charles Liles, Head of Corporate Communications and Investor Relations. Thank you and good afternoon. Earlier today, we issued a press release which outlines the topics we plan to discuss today. It's available at www.xencor.com. Today on our call, Bassil Dahiyat, President and Chief Executive Officer, will review recent business news and pipeline updates. John Desjarlais, Chief Scientific Officer, will discuss our cytokine and CD28 programs. John Kuch, Chief Financial Officer, will review financial results. Then we'll open up the call for your questions. Allen Yang, Chief Medical Officer, will join us then. Before we begin, I would like to remind you that during the course of this conference call, Xencor management may make forward-looking statements, including statements regarding the company's future financial and operating results, future market conditions, the plans and objectives of management, future operations, the company's partnering efforts, capital requirements, future product offerings, and research and development programs. These forward-looking statements are not historical facts, rather are based on our current expectations and beliefs and are based on information currently available to us. The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties, and, Other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including but not limited to those factors contained in the Risk Factors section of our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. With that, let me pass the call over to Bassil. Thanks, Charles, and good afternoon, everyone. Xencor's approach to creating antibody and cytokine therapeutics uses our extensive protein engineering tools centered on our plug-and-play XmAb Fc domains to create novel molecular structures, improve natural protein and antibody functions, and create new mechanisms of therapeutic action. This approach enables us to rapidly explore different targets and biologies so we can select the most promising programs to take forward. We've been focusing our work on the expansion and use of our XmAb bispecific platform to create antibodies that bind two or more different antigens simultaneously, and also to engineer cytokines with structures and binding affinities optimized for therapeutic use. These plug-and-play tools are highlighted in our partnerships. Currently, we have 16 ongoing partnerships for XmAb technology, which have resulted now in three marketed products, the most recent being Vir and GlaxoSmithKline's anti-SARS-CoV-2 antibody sotrovimab, which recently received emergency use authorization for patients with mild to moderate COVID-19. Our extended Fc technology was integrated into the antibody for the purpose of reducing the dose administered and potentially enhancing its lung tissue bioavailability. This partnership exemplifies our commitment to enabling the broad use of XmAb FC technologies outside our core focus of oncology and autoimmune disease and demonstrates its applicability in vastly underserved areas like serious infectious diseases. In May, we also entered a similar licensing transaction with Bristol Myers Squibb to incorporate extended anti-COVID antibodies that's currently in phase II testing. Switching back to our internal programs, we're running nine phase I or phase II studies evaluating our own XmAb bispecific antibodies and cytokines. This way, we're taking multiple simultaneous shots on goal in the clinic, and the proof of concept data we're generating is guiding which programs we independently advance, which we partner, and which we will terminate. Further, we're continually feeding new molecules that we believe are differentiated into the clinic to keep our pipeline robust. Now I'll touch on the programs with recent updates. Very recently, we initiated a phase II study for XmAb717, our PD-1 by CTLA-4 dual checkpoint bispecific antibody. It's in patients with metastatic castration-resistant prostate cancer that we classify by molecular subtype as a monotherapy or in combination, depending on the subtype. We expect to present mature data from the ongoing phase I study's expansion cohorts later this year, specifically in prostate cancer, renal cell carcinoma, and a basket cohort of tumors without approved checkpoint therapies. We believe that metastatic prostate cancer is an indication with high unmet need and that currently is without much checkpoint inhibitor use. We think it could benefit from a checkpoint inhibitor, particularly one with XmAb717's dual targeting of PD-1 and CTLA-4 and potentially differentiated tolerability profile. We're also planning new studies of XmAb717 in additional tumor types that we'll guide on later. Shifting to plamotamab, our CD20 by CD3 bispecific antibody. Under our strategic clinical collaboration with MorphoSys and Incyte, we'll be investigating the chemotherapy-free triple combination of plamotamab with tafasitamab and lenalidomide in patients with certain lymphomas. Plamotamab's T cell redirection to tumors and tafasitamab's enhanced ADCC tumor killing combine distinct immune pathways for antitumor effect, and we think the combination is a differentiated approach for treating patients with lymphoma. We plan to initiate the first of these studies in patients with relapse to refractory diffuse large B-cell lymphoma, an aggressive type of NHL, in late 2021 or early 2022, once we finalize our recommended dose in our ongoing phase I study and complete operational preparation for the multinational trial. We plan to present updated data from the ongoing phase I study later this year. For tidutamab, our CD3 bispecific antibody that targets SSTR2, we've initiated a phase II clinical study in patients with Merkel cell carcinoma and small cell lung cancer, which are SSTR2-expressing tumor types known to be responsive to immunotherapies. Later this year, the company plans to present updated data from the phase I expansion cohort in patients with neuroendocrine tumors, including longer clinical follow-up and updated biomarker data. Last, I'll touch on XmAb819. Later this year, we anticipate submitting an IND for 819, our ENPP3 by CD3 bispecific for renal cell cancer. We're planning on initiating a phase I study in early 2022. XmAb819 is engineered with reduced potency CD3 binding, as well as a multivalent 2+1 bispecific antibody format, which has two antigen binding domains to the tumor target, providing for more selective binding to the high ENPP3 density expression on tumor cells compared to the lower density on normal cells. This binding selectivity of the XmAb 2+1 format extends the range of targets amenable to CD3 bispecifics, especially solid tumor targets. Recall our partner Amgen's AMG 509 program targeting STEAP1 in prostate cancer also uses this format. Now I'll turn it over to John Desjarlais, our CSO, to discuss our rapidly expanding cytokine drug portfolio and CD28 programs. Thanks, Bassil. We've been very busy using the full range of our protein engineering tools to turn native cytokines into therapeutics. We currently have our first two cytokines in the clinic, expect that two more will advance in the coming year, one internally and one at our partner Genentech. There are, of course, several other interesting cytokines. Additional programs are likely to follow those. Now, native cytokines have evolved to create powerful immune responses by acting potently, locally, and rapidly, but when used as systemic drugs, these properties make them short-acting and often toxic. Our cytokine engineering seeks to create longer duration therapeutic activity and remain under the threshold for toxicity that has limited their clinical use historically. First, we design small changes in the cytokine to lower its potency, often by 100-fold or more, by reducing affinity to its receptors. This has created better tolerated, slower acting, and far more sustained immune stimulating activity for multiple cytokines in preclinical models. We further enhance the stability and pharmacokinetics by fusing them to XmAb bispecific Fc domains that incorporate our Xtend technology to further enhance persistence. Our first clinical program, XmAb306, is our engineered IL-15 for oncology that is partnered with Genentech. We engineer it for these properties. one, NK cell and T cell activation for cancer therapy that potentiates a broad range of other cancer therapies. two, unlike IL-2, IL-15 avoids the intrinsic bias for Treg activation, which is undesirable, of course, for a cancer therapy. XmAb306 is currently in phase I dose escalation in advanced solid tumor patients, both in monotherapy and combination with atezolizumab. We are currently assessing additional combination studies for the future. Our first immune receptor targeted IL-15, is currently in IND enabling studies with our partner Genentech. Our second cytokine in the clinic is XmAb564, our wholly owned IL-2 Fc fusion engineered to selectively activate regulatory T cells, or Tregs, for the treatment of autoimmune disease. We're conducting a phase I single ascending dose study to characterize the safety, tolerability, and pharmacokinetics of subcutaneously delivered XmAb564 in healthy volunteers. The study will include an analysis of key biomarkers, including measures of Treg expansion. The goal of an IL-2 therapy for autoimmune disease is to provide sustained low intensity activation of Tregs while avoiding the pro-inflammatory systemic activation of effector T cells. A Tregs selective IL-2 therapy with an expanded therapeutic window compared to historic IL-2 approaches would have broad potential across many different autoimmune diseases, and preclinical studies indicate this may be the case for XmAb564. As with our other engineered cytokines, we reduce its potency to improve tolerability and duration of action and used our XmAb heterodimeric Fc domain and Xtend technology to enhance its half-life. Our newest cytokine program is a preclinical IL-12 program. Our IL-12 cytokine program builds on our prior work with XmAb306 and XmAb564. IL-12 is a potent pro-inflammatory cytokine that promotes high levels of interferon gamma secretion, thereby increasing the immunogenicity of the tumor microenvironment, and making tumor antigens more visible to the immune system. It can also promote proliferation of T cells and NK cells and can increase cytotoxicity of both those cell types. IL-12 can have strong anti-tumor activity, but as seen in prior clinical studies with IL-12 and other cytokines, it was demonstrated to have a narrow therapeutic window, limiting its utility. We applied our cytokine engineering methods to IL-12 to generate, again, potency reduced, longer acting, and more tolerable drug candidates, and we anticipate submitting an IND for the lead in 2022. I'd like to take a moment to review our targeted CD28 platform, which is a new class of T cell engager designed to complement other mechanisms of T cell activation, such as checkpoint inhibition or CD3 engagement. CD28 is a key immune costimulatory receptor on T cells that has been difficult in the past to safely and effectively engage therapeutically. By targeting a CD28 binding domain to a tumor by using a bispecific antibody, we can boost the activity of T cells in a tumor-selective way to enhance T cell-directed therapies. Our most advanced wholly owned lead CD28 candidate is XmAb808, a B7-H3 by CD28 bispecific antibody for potentially broad solid tumor use, including in prostate cancer, where B7-H3 is highly expressed. That molecule is advancing through preclinical development, and we plan to file an IND in 2022. A second CD28 program is the focus of our research collaboration well underway with Janssen, where we have partnered to discover a CD28 bispecific antibody against a prostate tumor target. Finally, we remain interested in PD-L1 as another target for this platform. All these programs show the power of Xencor's platform to create candidates that access new biologies and to continually supply our clinical pipeline with differentiating molecules. Now with that, I'll hand the call over to John Kuch, our Chief Financial Officer, who will review key highlights from our Q2 financials. John? Thank you, John. As we have previously discussed, a critical part of Xencor's business is leveraging its protein engineering capabilities through partnerships and collaborations for its XmAb technologies and drug candidates to generate non-dilutive sources of revenue. We receive upfront payments, milestones, royalties, and also equity interests in connection with certain partnerships. Proceeds from these partnerships and collaborations allow Xencor to maintain a strong financial position as we continue to advance our portfolio of clinical stage and research stage bispecific antibody and cytokine programs. Cash, cash equivalents, and marketable investment securities totaled $603.7 million as of June 30, 2021, compared to $604 million at December 31, 2020. Total proceeds from royalties, milestones, sale of an investment equity security, and a net increase in the value of marketable equity securities offset net spending of approximately $90.5 million on operations for the first six months of 2021. Based on current operating plans, we expect to have cash to fund research and development programs and operations into 2024 and estimate we will end 2021 with between $475 million to $500 million in cash equivalents, and marketable securities. I'll review our three- and six-month financials. Total revenue for the Q2 ending June 30, 2021, is $67.4 million, compared to $13.1 million for the same period in 2020. Revenues in the Q2 include revenue from our Janssen, Novartis, Genentech collaborations and royalty revenue from Alexion, Vir, and MorphoSys. Revenue for the Q2 in 2020 was primarily licensing revenue from Gilead and royalty revenue from Alexion. Total revenue for the six months ended June 30th, 2021, was $101.4 million, compared to $45.5 million for the same period in 2020. Revenue for the six months ended June 30th, 2021, included revenue from our Janssen, Novartis, Genentech collaborations, milestone revenue from MorphoSys, Vir, and Novartis, and royalty revenue from Alexion, Vir, and MorphoSys, compared to revenues from the same period in 2020, which were primarily licensing revenue from Gilead, ImmunoGen, milestone revenue from MorphoSys, and royalty revenue from Alexion. Research and development expenditures for the Q2 were $49.5 million, compared to $43.5 million at the same period in 2020. Total R&D expenses for the six months ended June 30th, 2021, are $90.9 million, compared to $77.4 million for the same period in 2020. Increased R&D expenses for the three and six months ended June 30th, 2021, over the same periods in 2020 were due to additional spending on certain development programs, including XmAb104, our PD-1 by ICOS program, XmAb819, our ENPP3-CD3, and other early-stage development programs. Additional spending on XmAb306, our IL-15 program partnered with Genentech, also contributed to increased R&D expenses during the first six months of 2021. General administrative expenses for the Q2 ended June 30th, 2021, were $8.9 million, compared to $7.2 million in the same period in 2020. Total G&A expenses for the six months ended June 30, 2021, were $17.1 million, compared to $14.4 million for the same period in 2020. Increased G&A expenses for the Q2 and the first six months 2021 over amounts for the same periods of 2020 were primarily due to increased G&A staffing and spending on professional fees. Other income for the Q2 ended June 30TH, 2021, was $43.2 million, compared to $2.6 million in the same period in 2020. Other income for the six months ended June 30th, 2021, was $56.3 million, compared to $3.3 million in the same period in 2020. Other income for the Q2 and the first six months of 2021 includes a realized gain of $18.3 million on the sale of an investment equity security and a net increase in unrealized gains on the company's marketable equity securities. Net income for the Q2 ended June 30th, 2021, was $52.2 million or $0.87 on a fully diluted per share basis, compared to a net loss of $35 million or $0.61 on a fully diluted share basis for the same period in 2020. For the six months ended June 30th, 2021, net income was $49.8 million or $0.82 on a fully diluted share basis, compared to a net loss $43.1 million or $0.76 on a fully diluted per share basis for the same period in 2020. Net income reported for the three and six months ended June 30th, 2021, compared to the net loss report for the comparable periods in 2020 were primarily due to higher collaboration milestone royalty revenues and an increase in other income in 2021. Non-cash share-based compensation expense for the six-month period was $17.6 million, compared to $14.7 million for the same period in 2020. Total shares outstanding were $58.3 million as of June 30th, 2021, compared to $57.2 million as of June 30th, 2020. With that, we now would like to open the call for your questions. Operator? Ladies and gentlemen, just as a reminder, if you would like to ask a question, please press star and then one on your telephone keypad. Your first question comes from the line of Edward Tenthoff with Piper Sandler. Great. Thanks, guys. Love the quick, concise, and meaty update. A lot going on here. two questions, if I may. Just checking in on the Roche program, IL-15. Any potential for updates there? I think you said that you would file the IND for 819 this year and then potentially 2 INDs next year for IL-12 and 808. Is that all correct? Thanks, Tenthoff. Yes, on the IND timing, you're exactly right. XmAb819 this year, the IL-12 and XmAb808, our B7-H3 by CD28, those go into 2022, those latter two. With regard to the IL-15 program XmAb306, we're currently collaborating with Genentech on. We're hopeful we can have some data to share with that program relatively soon. We're obviously still working with Genentech on the timing of that. The program is advancing. We're, as you know, dose escalating both mono and combo, and we're exploring combination studies that we can start planning for, both with Genentech and ourselves as well. Stay tuned. Awesome. Really excited to hear more about that and also from XmAb717 in the back half. Thanks, guys. Thank you. Your next question comes from the line of Jonathan Chang with SVB Leerink. Hi, guys. Thanks for taking my questions. First question on 717, how do you see this program positioned in the competitive landscape versus other PD-1/CTLA-4 bispecifics in development? I guess there's two aspects to how we answer that question. First is the details of the mechanism of action. Our molecule is designed to have binding preferentially to those cells that have both antigens, that is PD-1 and CTLA-4, because of the way we tune the affinity to each antigen. In particular, the CTLA-4 affinity is rather modest, you need that cooperativity of binding to hook on to double positive cells. The goal was to have something that's more selective for the relevant T cells and potentially has a differentiated tolerability profile. We think from around 100 patients or so in our safety database so far, we might be seeing a somewhat differentiated tolerability profile that doesn't have some of the very characteristic and profound ipi-related irAEs along the colitis and pneumonitis line. Of course, more data will have to be gathered to really nail that down. The only other program we know of with that same MOA approach of a selective for double positive cells bispecific would be a program that AstraZeneca has that we've not seen any data from yet, but I believe that's somewhere between phase I and II right now. The second way we want to position it is to see if, in particular, having a molecule that has the kind of profile that we've seen so far and is binding both antigens and offers that CTLA-4 bump up along with the PD-1, to try that in the indications where PD-1s are not already dominant. That's why we're focusing our efforts initially in castration-resistant prostate cancer, and we'll be able to flesh out the details of that strategy very shortly now that we're up and running and the trial's initiated. The goal there is to go into indications where the MOA has some scientific basis as well as support from data in our phase I, but where there's not a swamped commercial landscape and an already dense thicket in development. I think prostate cancer offers that kind of opportunity, and that's why we're aggressively pursuing it. We think we need to go where others haven't already heavily trodden the path. Got it. Thank you. Second question for XmAb819, can you elaborate on the reduced potency CD3 binding and compare this to other similar efforts in the competitive landscape? I'll pass that one on to John Desjarlais, our CSO, who can comment more specifically on the kind of affinity ranges and our logic on that. Yeah. Thanks, Bassil, and thanks for the question, Jonathan. Basically, I'd say Xencor is not the only company actually moving in this direction. I think a lot of companies kind of simultaneously started exploring this idea of reducing CD3 potency as a way to mitigate cytokine release syndrome and all the symptoms that go with that. We found, importantly, we can show this either in vitro but also in various preclinical models, that by reducing the CD3 binding potency, we can actually preserve all the cytotoxicity conferred by the bispecific antibodies but greatly reduce the cytokines that are produced. We see several orders of magnitude reduced IL-6 production in the monkeys when we put these molecules in. They're tolerated at higher doses, so you could think about mg per kg versus microgram per kilogram, something as widely different as that. Of course, there are other benefits to being able to dose higher. You tend to get longer PK, less target-mediated drug disposition. We think there's a lot of benefits to that. Got it. Thank you. Your next question comes from the line of Peter Lawson with Barclays. Great. Thank you so much. Thanks for taking the questions. On the CD28 constructs, when could we see the initial data around those and kind of the reason for picking CD28 over, I guess CD3 and even the reduced potency CD3 and other T-cell engagers? Yeah. I'll take a stab at that. In terms of data, well, we're just guiding that we're going to have the clinical trial started next year, for data, it'll be beyond that. We can't speak specifically to something that's so far out. Just I'll make sure to emphasize that this CD28 as a T-cell binding bispecific is not as an alternative to CD3 engagement or other kinds of T-cell targets. It's a pathway called the Signal 2 that is used to bump up T-cell activity, whether that's activity that might be being driven by T-cell receptor binding and signaling, which is really how PD-1s work. Think of this as an agent that could, in a tumor-selective way, boost potentially PD-1 checkpoint inhibitor activity. It's also a way to augment CD3 bispecific activity, but again, in a tumor-selective way. It's a way to bump up things for other agents, as well as potentially having its own monotherapy activity. We don't view it as an alternative, really. Got you. Thank you. Do you think the B7-H3 construct you have with CD28 could actually drive responses by itself, or do you think it has to be combined with other prostate antigens you have? Hey, John, do you want to tackle that? Yeah answered the question. Yeah. It's certainly a possibility. Obviously, we would hope to see single agent activity. On the other hand, it's important to emphasize that PD-1, it's been shown by numerous publications over the last couple of years that PD-1's main mechanism of action is actually to interfere with CD28 signaling. A very obvious combination therefore would be combining the XmAb808 with PD-1 blockade, just to make sure that that brand new CD28 signaling you started doesn't get shut off by the PD-1 signaling. Yeah, we're quite enthusiastic about attacking CD28 because it's a challenging target to make work in this context, where you really truly have selective activation, not overactivation or superagonism. John's team has done an amazing job finding the right epitopes and building the right constructs with the right affinities. It's quite an engineering feat. We're really only aware of one company that's ahead of us here, and that would be Regeneron, and they seem to be putting a lot of effort into this pathway as well. We think this could be an exciting axis, and we're really happy to be exploring it next year. Perfect. Thank you so much. Thanks for taking the question. Your next question comes from the line of Yatin Suneja with Guggenheim. Great. Thanks for taking the question. This is Paul Jeng on for Yatin Suneja. Just wondering, do you have any guidance currently on initial dose escalation data for your two earlier stage tumor microenvironment programs, XmAb841 and XmAb104? I think you sort of mentioned being about a year behind 717, so just hoping to see if there's an update coming. We don't have an update planned for this year. We'll guide more on that later. Okay. Well, in that case, I was hoping to get maybe your updated views on opportunity for XmAb841, especially coming out of ASCO this year with some data for omalizumab that sort of validated the mechanism in melanoma. Maybe your thoughts on expectations for initial readout, anything incremental we can learn about the mechanism, and overall thoughts there. Thanks. Right. Remember, this is a CTLA-4 by LAG-3, so we're trying to combine both activities. We've been exploring it in dose escalation and plan expansion cohorts that are actually I think starting imminently. I think the goal there is to see whether in either, we've disclosed this before, either in monotherapy setting or in combination with a PD-1 inhibitor, and we're using pembrolizumab in a clinical collaboration with Merck, whether those settings of the post PD-1 patient, because that's the monotherapy cohort, those patients are going to all be post PD-1 in the indications we're going after for the most part, As well as we're looking there and we're looking in combo with pembro because we think this could be hopefully the agent of choice giving you the most bang for the buck in one molecule of two checkpoints you can inhibit, and hopefully in a way that, again, uses our selectivity design to hone to the right cell populations and reduce the irAE profiles that people see a lot with ipilimumab. We don't know the setting. We're going to let the data guide us, but that's how we've set up the phase I, and we're getting to the point where we're starting to really explore the efficacy in expansion cohorts. Great. Thanks a lot. Your next question comes from the line of Arlinda Lee with Canaccord Genuity. Hi, guys. Thanks for taking my questions. I had one maybe for John. You talked about the CD28 strategy. Can you maybe talk a little bit about in the context of the competitive landscape, how you guys are addressing CD28 versus others? I guess more broadly, Bassil Dahiyat, you alluded to complementary mechanisms. How do you think about the collaboration with Janssen or J&J, and how that might play into your other efforts in prostate cancer? Thank you. Yeah, maybe I'll take the one on Janssen first, and then John, you can jump in on our strategy, how we fit and how we think we differentiate. The Janssen collaboration is for a prostate cancer target that is undisclosed to be used to target this CD28 moiety in a bispecific antibody that we're creating with them, and that they'll develop, and we have attractive deal terms. We can take a 20% stake in the cost of the program after clinical proof of concept and get a substantially enhanced royalty into the double digits and teens. The logic there for Janssen is they have a robust portfolio of prostate cancer agents, including CD3 bispecifics they've talked about, including checkpoint efforts, and they think a CD28 signal too could be a hugely important and consequential part of that. We're delighted to be working with somebody who shares our vision for the science. Note, that is a tumor-specific antigen, this prostate-specific antigen, for prostate cancer. I think maybe John can jump into how we're using both antigen selection as well as our platform's developments for the CD28 to separate ourselves from others. Thanks for the question, Arlinda. By others, mostly I'm assuming you mean our colleagues at Regeneron, who, as Bassil mentioned, are a little bit ahead of us. I'd say 1 key aspect is we've again built, like we always do, a plug-and-play platform. We have a highly stable anti-CD28 single-chain Fv that came out of our phage libraries. It's been heavily vetted. We have a whole affinity suite for those, and that's something that we can plug in the whole affinity suite with any particular tumor antigen. I think the other key distinction is just looking at the targets that we've selected. From the outset, I always wanted something that would be sort of a one-size-fits-all across a lot of histologies, and that led us pretty quickly to B7-H3, knowing its properties of broad and very bright expression across a lot of different histologies. Turns out it's also very bright on almost every epithelial tumor cell line that we work with, so it was very convenient in terms of proof of concept. I think it comes down to that, and other targets we're looking at include PD-L1 that I mentioned, again, another broadly expressed tumor antigen. It comes down to that. I think the plug-and-play platform and the selection of broad targets versus very indication-specific targets like some of our competitors are exploring. Okay, great. Thank you. Your next question comes from the line of Thomas Shrader with BTIG. Hi, this is Kaveri for Thomas. Thanks for the update and thanks for taking our questions. Maybe one on the IL-12 and IL-15 programs. Is the biology different for these two molecules? They both seem to activate NK and CD8 T cells. Does any recent data change the way you think about the opportunity? I guess you mentioned it previously. We've also seen direct delivery of IL-12 is powerful in melanoma, you can't deliver it systemically. Does that intrigue you? I'll let John take that one. Those issues are the ones that literally drove his entire design philosophy. Let me start in terms of the different biologies. It could certainly be confusing, because they all activate NK cells and T cells. The way I think of it is cytokines like IL-2 and IL-15, their day job is to lead to expansion of those cell populations. You're making more T cells, making more NK cells. At the same time, they can actually promote higher cytotoxicity levels. In contrast, IL-12's day job is basically to make those cells not so much proliferate them as much, although we've seen that, but really to make them more cytotoxic and, in particular, make them secrete a lot of interferon gamma, which, of course, pays all kinds of dividends in terms of immuno-oncology, including direct anti-tumor effects that interferon gamma is famous for, but also famously for upregulating class one MHC and increasing the overall immunogenicity in the tumor setting. Got it. With respect to the opportunity, one of the holy grails of IO is to actually have a systemic IL-12, right? Doing intratumoral injection always has its limitations. As one of my colleagues has pointed out to me, intratumoral injection is basically a subcutaneous injection near the tumor. You can still, when you're putting a highly potent IL-12 into a tumor, you're still getting systemic exposure ultimately. We've taken the approach, which seems to have worked out well pre-clinically and with our IL-15 program, of reducing the potency, and that allows you to have a much more slower onset of these activities that you want to promote, like the interferon gamma and the other aspects of IL-12. We believe we can actually get away with systemic administration. At least that seems to be the case pre-clinically, but obviously, humans could be a different story, and we have to develop a very careful dose escalation plan in humans. Got it. Yeah, that makes sense. For the IL-2 program, can you tell us how differentiated it is from the other approaches those are being evaluated in the clinic, either suppression of CD8 T cells, specific CD8 T cells, or differentiation of induced Treg through TGF-beta and IL-2? Thank you. Bassil, do you want me to take that one? Yeah. You can go ahead, I think. Yeah, sure. You're the expert. Yeah. The key differentiation is a lot of it comes in the design of the molecule. Our format is a monovalent IL-2 versus several competitors have bivalent IL-2. We avoided the bivalent IL-2 because that would almost interfere with our whole potency reduction concept. One of the main reasons to reduce potency is to reduce internalization, and that can actually be increased when you have a bivalent modality. Xtend technology. Yeah. That's right. It has the Xtend technology, and I think we're a little more careful, at least, looking at our own in vitro selectivity data. We're more careful on the selectivity, and we think we have one of the best. Tregs selectivity profiles. Your next question comes from the line of Gregory Renza with RBC Capital Markets. Hi, this is Ying Wang for Gregory. Thank you for taking my question. I was wondering, as you had multiple commercial success with your partner programs, at what point would you consider further monetizing pipeline success again? How do you think about accessing royalty to further investing your pipeline? Thank you. Yeah. We're always assessing the markets, that is the royalty market view on the value of our revenue streams and comparing that against how we look at it. We think it's always an option and an opportunity. We think it's a great part of the flexibility we've built in our business plan, versus the steady income stream and then our assessment of how that income stream might grow, might misalign at times with the royalty companies. If it does one day, maybe there's an opportunity that we see we can do better that way. I don't think of it as sort of an imperative. I think it's just a ready opportunity there. Great. Thank you very much. Your next question comes from the line of Zhiqiang Shu with Berenberg. Hi. Thank you very much for taking my question. I have two. The first one I want to ask about plamotamab, the CD3/CD20 bispecific antibody. You mentioned about sharing more phase I data later this year. Could you remind us what the design of phase I trial, and I guess what we should be looking for in terms of de-risking the phase II trial you're going to start? The second question is around the cytokine portfolio. I think now it seems that you are putting more resources in developing more modifying cytokines. I guess, what would you like to do in terms of developing more cytokines, particularly in the autoimmune indications, given cytokines are quite important in that area? Thanks very much. Yeah. I'll answer the second question about our cytokine portfolio sort of strategy overall. I'll let Allen Yang, our Chief Medical Officer, take the one about plamotamab. On the cytokine portfolio, we are applying more resources because we've seen from the data that we've gathered so far on our earliest programs there, Our IL-15 and our IL-2 for Tregs, that this general strategy of reducing potency to the appropriate level, and you've got to really do the experiments to find out what that might be to get that therapeutic profile that you want, the duration of action, the increase in cell populations that you want, and the tolerability profile. That strategy seemed to have general legs. Pre-clinically now we've seen it again and again and again with different programs like IL-12. We're exploring IL-18 now. We've looked at some other cytokines. I think there's an enormous playground there, and I think for now, we're going to focus on buttressing our portfolio in the oncology space. We thought that the outlier there was the Treg hypothesis for IL-2 was just too good and clear and direct of an opportunity for our platform to pass up for now. I think we're going to continue focusing on oncology while we do scientific and research exploration all over the place, and for now just have the IL-2 be the one that we're planning for now in the autoimmune side. That's in the clinic now. We're excited about it. The next clinical program, and probably the one after that would be oncology. Allen, do you want to address the question about the phase I and how that plays into phase II for plamotamab? Sure, Bassil. Thanks. Thanks, Zhiqiang Shu for the question. The question was what to expect from our phase I data. I think the last time we publicly released data on our phase I program was at ASH 2 years ago, actually two previous ASHs, and we were still in dose escalation. The team has spent a lot of time really optimizing the dose and schedule. More recently, we've been sort of developing a more convenient dose and schedule for patients. At the time we released data, we released data on something like responses at over 80 micrograms per kilogram, and the response rate was roughly over 40%. We've now moved well beyond that in our dose escalation, we'll be looking at data at much higher doses, and that was in diffuse large B-cell lymphoma. We'll have continued data in diffuse large B-cell lymphoma and probably some indolent lymphomas as well. That will be the phase I data. I think the second question was what to expect in the phase II study. We've announced that we're committed to a phase II study. We think it's very exciting. It's a chemo-free study where we'll be combining plamotamab with tafasitamab and lenalidomide. We think that there's two complementary mechanism of actions and targets of CD19 with ADCC and CD20 with the T-cell engagement. Excuse me. We believe that is actually a very exciting and novel mechanism of action and will differentiate us from the competitors. Great. Thank you very much. Ladies and gentlemen, that concludes our Q&A session. I'd like to turn the call over to Bassil Dahiyat for any quick closing remarks. Thanks very much. A big thank you to the team at Xencor that's been tireless in keeping our whole suite of programs moving forward. Finally, I'd like to thank everybody very much for joining us today. We look forward to updating you again over the coming months, and have a terrific evening. Thank you for your participation in today's call. This does conclude today's conference call. You may now disconnect.