UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36182

Xencor, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		20-1622502
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

111 West Lemon Avenue, Monrovia, CA		91016
(Address of Principal Executive Offices)		(Zip Code)

(626) 305-5900

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, par value $0.01 per share	XNCR	NASDAQ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ⌧ Accelerated filer ◻ Non-accelerated filer ◻ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

Indicate the number of shares of each of the issuer’s classes of common stock, as of the latest practicable date:


Class		Outstanding at July 30, 2020
Common stock, $0.01 par value		57,242,886

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Xencor, Inc.

Quarterly Report on FORM 10-Q for the Quarter Ended June 30, 2020

Table of Contents


		Page

	SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS	3
PART I.	FINANCIAL INFORMATION	5
Item 1.	Financial Statements	5
	Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019	5
	Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2020 and 2019 (unaudited)	6
	Statement of Stockholders’ Equity for the Three and Six Months Ended June 30, 2020 and 2019 (unaudited)	7
	Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 (unaudited)	8
	Notes to Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38

PART II.	OTHER INFORMATION	39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 6.	Exhibits	41

Signatures		42

In this report, unless otherwise stated or the context otherwise indicates, references to “Xencor,” “the Company,” “we,” “us,” “our” and similar references refer to Xencor, Inc. The Xencor logo is a registered trademark of Xencor, Inc. This report also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of federal securities laws. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under Part II, Item 1A, “Risk Factors” in this Quarterly Report. These statements, which represent our current expectations or beliefs concerning various future events, may contain words such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate” or other words indicating future results. Such statements may include, but are not limited to, statements concerning the following:

These forward-looking statements should, therefore, be considered in light of various important factors, including but not limited to, the following:

●

the effects of the ongoing COVID-19 pandemic on our financial condition, results of operations, cash flows and performance;

●

our plans to research, develop and commercialize our product candidates;

●

our ongoing and planned clinical trials;

●

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

●

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

●

our ability to identify additional products or product candidates with significant commercial potential that are consistent with our business objectives;

●

the rate and degree of market acceptance and clinical utility of our products;

●

the capabilities and strategy of our suppliers and vendors including key manufacturers of our clinical drug supplies;

●

significant competition in our industry;

●

costs of litigation and the failure to successfully defend lawsuits and other claims against us;

●

our partners’ ability to advance drug candidates into, and successfully complete, clinical trials;

●

our ability to receive research funding and achieve anticipated milestones under our collaborations;

●

our intellectual property position;

●

loss or retirement of key members of management;

●

costs of compliance and our failure to comply with new and existing governmental regulations;

●

failure to successfully execute our growth strategy, including any delays in our planned future growth; and

●

our failure to maintain effective internal controls.

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The factors, risks and uncertainties referred to above and others are more fully described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and this Quarterly Report on Form 10-Q. Forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We cannot guarantee future results, events, levels of activity, performance or achievements. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

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PART I — FINANCIAL INFORMATION

Item1. Financial Statements

Xencor, Inc.

Balance Sheets

(In thousands, except share amounts)


	June 30,		December 31,
	2020		2019
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	109,534	$	50,312
Marketable securities		474,114		479,470
Equity securities		2,611		—
Accounts receivable		8,925		21,574
Income tax receivable		804		502
Prepaid expenses and other current assets		7,398		6,547
Total current assets		603,386		558,405
Property and equipment, net		16,239		15,805
Patents, licenses, and other intangible assets, net		15,162		14,421
Marketable securities - long term		1,145		71,526
Income tax receivable		—		402
Other assets		8,788		9,691
Total assets	$	644,720	$	670,250
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	10,513	$	10,189
Accrued expenses		9,157		8,995
Lease liabilities		2,094		2,169
Deferred revenue		44,685		45,205
Total current liabilities		66,449		66,558
Lease liabilities, net of current portion		7,626		8,565
Deferred revenue, net of current portion		—		1,926
Total liabilities		74,075		77,049
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at June 30, 2020 and December 31, 2019		—		—
Common stock, $0.01 par value: 200,000,000 authorized shares at June 30, 2020 and December 31, 2019; 57,214,253 issued and outstanding at June 30, 2020 and 56,902,301 issued and outstanding at December 31, 2019		572		569
Additional paid-in capital		908,084		887,873
Accumulated other comprehensive income		1,483		1,161
Accumulated deficit		(339,494)		(296,402)
Total stockholders’ equity		570,645		593,201
Total liabilities and stockholders’ equity	$	644,720	$	670,250

See accompanying notes.

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Xencor, Inc.

Statements of Comprehensive Income (Loss)

(unaudited)

(In thousands, except share and per share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019

Revenue
Collaborations, licenses, milestones, and royalties	$	13,089	$	19,485	$	45,474	$	131,424
Operating expenses
Research and development		43,458		33,299		77,401		61,481
General and administrative		7,231		5,758		14,449		11,270
Total operating expenses		50,689		39,057		91,850		72,751
Income (loss) from operations		(37,600)		(19,572)		(46,376)		58,673
Other income (expenses)
Interest income, net		2,090		3,615		5,129		6,501
Other income (expense), net		492		(27)		(1,845)		(212)
Total other income, net		2,582		3,588		3,284		6,289

Net income (loss) before income tax expense		(35,018)		(15,984)		(43,092)		64,962
Income tax expense		—		50		—		950
Net income (loss)		(35,018)		(16,034)		(43,092)		64,012

Other comprehensive income
Net unrealized gain on marketable securities		427		1,284		322		2,600
Comprehensive income (loss)	$	(34,591)	$	(14,750)	$	(42,770)	$	66,612

Basic net income (loss) per common share	$	(0.61)	$	(0.28)	$	(0.76)	$	1.14
Diluted net income (loss) per common share	$	(0.61)	$	(0.28)	$	(0.76)	$	1.10

Basic weighted average common shares outstanding		57,059,610		56,399,255		57,003,162		56,351,377

Diluted weighted average common shares outstanding		57,059,610		56,399,255		57,003,162		58,042,819

See accompanying notes.

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Xencor, Inc.

Statement of Stockholders’ Equity

(in thousands, except share data)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
Stockholders’ Equity	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2019	56,902,301		569		887,873		1,161		(296,402)		593,201
Issuance of common stock upon exercise of stock awards	79,930		1		1,470		—		—		1,471
Issuance of restricted stock units	19,022		—		—		—		—		—
Comprehensive loss	—		—		—		(105)		(8,074)		(8,179)
Stock-based compensation	—		—		6,512		—		—		6,512
Balance, March 31, 2020	57,001,253	$	570	$	895,855	$	1,056	$	(304,476)	$	593,005

Issuance of common stock upon exercise of stock awards	181,856		2		3,273		—		—		3,275
Issuance of restricted stock units	2,800		—		—		—		—		—
Issuance of common stock under the Employee Stock Purchase Plan	28,344		—		725		—		—		725
Comprehensive income (loss)	—		—				427		(35,018)		(34,591)
Stock-based compensation	—		—		8,231		—		—		8,231
Balance, June 30, 2020	57,214,253	$	572	$	908,084	$	1,483	$	(339,494)	$	570,645

						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
Stockholders’ Equity	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2018	56,279,542		563		845,366		(971)		(323,277)		521,681
Issuance of common stock upon exercise of stock awards	58,536		1		666		—		—		667
Issuance of restricted stock units	11,311		—		—		—		—		—
Comprehensive income	—		—		—		1,316		80,045		81,361
Stock-based compensation	—		—		5,856		—		—		5,856
Balance, March 31, 2019	56,349,389	$	564	$	851,888	$	345	$	(243,232)	$	609,565

Issuance of common stock upon exercise of stock awards	143,504		1		3,238		—		—		3,239
Issuance of common stock under the Employee Stock Purchase Plan	36,505		—		734		—		—		734
Comprehensive income (loss)	—		—		—		1,284		(16,034)		(14,750)
Stock-based compensation	—		—		9,303		—		—		9,303
Balance, June 30, 2019	56,529,398	$	565	$	865,163	$	1,629	$	(259,266)	$	608,091

See accompanying notes.

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Xencor, Inc.

Statements of Cash Flows

(unaudited)

(in thousands)


	Six Months Ended
	June 30,
	2020		2019
Cash flows from operating activities
Net income (loss)	$	(43,092)	$	64,012
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		2,816		2,003
Accretion of discount on marketable securities		(838)		(1,876)
Stock-based compensation		14,743		15,159
Abandonment of capitalized intangible assets		167		90
Equity received in connection with license agreement		(4,589)		—
Change in fair value of equity security		1,978		—
Loss on disposal of assets		5		5
Gain on sale of marketable securities available for sale		(153)		—
Changes in operating assets and liabilities:
Accounts receivable		12,649		122
Interest receivable		914		(154)
Prepaid expenses and other assets		(843)		(932)
Accounts payable		324		5,197
Accrued expenses		162		(3,436)
Income taxes		91		1,604
Lease liabilities and right of use (ROU) assets		(110)		(65)
Deferred revenue		(2,446)		8,699
Net cash provided by (used in) operating activities		(18,222)		90,428
Cash flows from investing activities
Purchase of marketable securities		(302,319)		(244,499)
Purchase of intangible assets		(1,467)		(2,164)
Purchase of property and equipment		(2,695)		(1,867)
Proceeds from maturities of marketable securities		378,454		159,773
Net cash provided by (used in) investing activities		71,973		(88,757)
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards		4,746		3,906
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		725		734
Net cash provided by financing activities		5,471		4,640
Net increase in cash and cash equivalents		59,222		6,311
Cash and cash equivalents, beginning of period		50,312		26,246
Cash and cash equivalents, end of period	$	109,534	$	32,557

Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	11	$	7
Income taxes	$	—	$	150
Supplemental disclosures of non-cash investing activities
Unrealized gain on marketable securities	$	322	$	2,600

See accompanying notes.

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Xencor, Inc.

Notes to Financial Statements

(unaudited)

June 30, 2020

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period.

The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 25, 2020.

Use of Estimates

The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for royalties and accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization, estimated standalone selling price of performance obligations, the likelihood of recognizing variable consideration, and recoverability of deferred tax assets.

Intangible Assets

The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impairment charges recorded for the three and six months ended June 30, 2020 and 2019.

The Company capitalizes certain in-process intangible assets that are then abandoned when they are no longer pursued or used in current research activities. There was no material abandonment of in-process intangible assets during the three and six months ended June 30, 2020 and 2019.

Marketable and Equity Securities

The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters, and concentration and diversification. The Company invests its excess cash primarily in marketable debt securities issued by investment grade institutions.

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The Company considers its marketable debt securities to be available-for-sale and does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost basis. These assets are carried at fair value and any impairment losses and recoveries related to the underlying issuer’s credit standing are recognized within other income (expense), while non-credit related impairment losses and recoveries are recognized within accumulated other comprehensive income (loss). There were no impairment losses or recoveries recorded for the three and six months ended June 30, 2020 and 2019. Accrued interest on marketable debt securities is included in marketable securities’ carrying value. Each reporting period, the Company reviews its portfolio of marketable debt securities, using both quantitative and qualitative factors, to determine if each security’s fair value has declined below its amortized cost basis.

The Company also has an investment in an equity security that is carried at fair value with changes in fair value recognized within other income (expense). For equity securities with a readily determinable fair value, the Company remeasures these equity investments at each reporting period until such time that the investment is sold or disposed. If the Company sells an investment, any realized gains and losses on the sale of the securities will be recognized within other income (expense) in the Statement of Comprehensive Income (Loss) in the period of sale.

Recent Accounting Pronouncements

Pronouncements Adopted in 2020

Effective January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as ASU No, 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The standard amends guidance on reporting credit losses for assets held at amortized cost basis and also provides an available-for-sale (AFS) debt security impairment model that is a modified version of the other-than-temporary-impairment (OTTI) model. The AFS debt security impairment model no longer allows consideration of the length of time during which the fair value has been less than its amortized cost when determining whether a credit loss exists. The adoption of this standard did not have any impact on the Company’s financial statements.

Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosures for transfers between Level 1 and Level 2 of the fair value hierarchy, modifies the Level 3 disclosure requirements for non-public entities and requires additional disclosure for Level 3 fair value hierarchy. The adoption of this standard did not have any impact on the Company’s financial statements.

Effective January 1, 2020, the Company adopted ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which provides guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard. The adoption of this standard did not have any impact on the Company’s financial statements.

Pronouncements Not Yet Effective

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is effective for fiscal years beginning on and after December 15, 2020, and interim periods within those fiscal years. The standard removes specific exceptions to the general principles in Topic 740 and simplifies the accounting for income taxes. The Company does not anticipate that the standard will have a significant impact on its financial statements.

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In January 2020, the FASB issued ASU No. 2020-01, which clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investment – Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendment is effective for fiscal years beginning after December 15, 2020. The Company does not anticipate that the standard will have a significant impact on its financial statements.

There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2019 Annual Report on Form 10-K.

2. Fair Value of Financial Instruments

Financial instruments included in the financial statements include cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses. Marketable securities and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short-term maturities.

The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification ASC 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements. The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities.

Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity – e.g. determining an appropriate discount factor for illiquidity associated with a given security.

The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):


	June 30, 2020						December 31, 2019
	Total						Total
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2

Money Market Funds	$	103,231	$	103,231	$	—	$	32,009	$	32,009	$	—
Corporate Securities		267,542		—		267,542		281,751		—		281,751
Government Securities		207,717		—		207,717		269,245		—		269,245
Equity Securities with Readily Determinable Fair Value		2,611		2,611		—		—		—		—
	$	581,101	$	105,842	$	475,259	$	583,005	$	32,009	$	550,996

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Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. During the three and six months ended June 30, 2020 and 2019, there were no transfers between Level 1 and Level 2. The Company does not have any Level 3 assets or liabilities.

3. Net Income (Loss) Per Share

We compute basic net income (loss) per common share by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants, employee stock purchase plan (ESPP) and restricted stock units (RSUs). Potentially dilutive securities consisting of stock issuable under options, ESPP and RSUs are not included in the per common share calculation in periods when the inclusion of such shares would have an antidilutive effect.

Basic and diluted net income (loss) per common share is computed as follows (in thousands except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019

	(in thousands, except share and per share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(35,018)	$	(16,034)	$	(43,092)	$	64,012
Denominator:
Weighted-average common shares outstanding used in computing basic net income (loss)		57,059,610		56,399,255		57,003,162		56,351,377
Effect of dilutive securities		—		—		—		1,691,442
Weighted-average common shares outstanding used in computing diluted net income (loss)		57,059,610		56,399,255		57,003,162		58,042,819
Basic net income (loss) per common share	$	(0.61)	$	(0.28)	$	(0.76)	$	1.14
Diluted net income (loss) per common share	$	(0.61)	$	(0.28)	$	(0.76)	$	1.10

For the three and six months ended June 30, 2020, and the three months ended June 30, 2019, all outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as the effect of including such securities would have been antidilutive. For the six months ended June 30, 2019, potentially dilutive securities consisting of 1,173,829 shares of stock awards are excluded from the calculation for the same period because the inclusion of such shares would have had an antidilutive effect.

4. Comprehensive Income

Comprehensive income is comprised of net income (loss) and other comprehensive income (loss). For the three and six months ended June 30, 2020 and 2019, the only component of other comprehensive income is net unrealized gain on marketable securities. There were no material reclassifications out of accumulated other comprehensive income (loss) during the three and six months ended June 30, 2020 and 2019.

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5. Marketable and Equity Securities

The Company’s marketable debt securities held as of June 30, 2020 and December 31, 2019 are summarized below:


			Gross		Gross
	Amortized		Unrealized		Unrealized
June 30, 2020	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	103,231	$	—	$	—	$	103,231
Corporate Securities		266,756		786		—		267,542
Government Securities		207,010		710		(3)		207,717
	$	576,997	$	1,496	$	(3)	$	578,490

Reported as
Cash and cash equivalents							$	103,231
Marketable securities								475,259
Total investments							$	578,490



			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2019	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	32,009	$	—	$	—	$	32,009
Corporate Securities		281,586		195		(30)		281,751
Government Securities		268,239		1,006		—		269,245
	$	581,834	$	1,201	$	(30)	$	583,005

Reported as
Cash and cash equivalents							$	32,009
Marketable securities								550,996
Total investments							$	583,005

The maturities of the Company’s marketable debt securities are as follows:


	Amortized		Estimated
June 30, 2020	Cost		Fair Value
(in thousands)
Mature in one year or less	$	472,639	$	474,114
Mature within two years		1,127		1,145
	$	473,766	$	475,259

Table of Contents

The unrealized losses on available-for-sale investments and their related fair values as of June 30, 2020 and December 31, 2019 are as follows:

Less than 12 months

12 months or greater

Unrealized

June 30, 2020

Fair value

losses

Fair value

losses

(in thousands)

Government Securities

49,973

(3)

—

Less than 12 months

12 months or greater

Unrealized

December 31, 2019

Fair value

losses

Fair value

losses

(in thousands)

Corporate Securities