Xilio Therapeutics Secures $36M, Advances Masked Cancer Therapy Pipeline

WALTHAM, Mass. – January 08, 2026 – Xilio Therapeutics, a clinical-stage biotechnology company, today announced a series of significant corporate and clinical advancements, reinforcing its financial stability and validating the progress of its novel immuno-oncology platform. The company secured $35.8 million through warrant exercises from key investors, including Gilead Sciences, and highlighted key milestones, including progress in its collaboration with AbbVie and the nomination of a new cancer-fighting drug candidate.

The updates, which also include the appointment of a new board chair, paint a picture of a company with a strengthened balance sheet and growing momentum behind its proprietary “masking” technology, which is designed to unleash potent cancer therapies directly within a tumor, sparing healthy tissue and reducing severe side effects.

“2025 was marked by robust execution at Xilio as we delivered on key priorities across our deep portfolio of differentiated I-O therapies, demonstrated additional clinical validation of our masking technology and further strengthened our financial position through strategic partnerships and our recent equity financing,” said René Russo, Pharm.D., president and chief executive officer of Xilio. “In the year ahead, we have a strong foundation to advance our potential best-in-class bispecific PD-1/IL-2 and T cell engager programs toward the clinic.”

Bolstering the Balance Sheet

A critical component of the announcement is the injection of $35.8 million in gross proceeds from the exercise of Series B warrants. This move was significantly bolstered by the full participation of major investors Coastlands Capital, Frazier Life Sciences, and strategic partner Gilead Sciences, Inc., signaling strong confidence in Xilio's long-term strategy and scientific platform.

This capital infusion is crucial for a clinical-stage company, as it extends Xilio’s anticipated cash runway into the second quarter of 2027. The company estimates it held cash and cash equivalents of $137.5 million as of December 31, 2025. This financial fortification provides the necessary resources to advance its pipeline through key clinical and regulatory milestones over the next few years without the immediate pressure of seeking additional financing in a potentially volatile market. The stability allows the company to focus on executing its research and development plans for its tumor-activated therapies.

Pipeline Progress Validates Masking Technology

Beyond the financial news, Xilio reported significant progress in its development pipeline, providing further validation for its innovative approach. The company’s technology centers on creating “masked” immuno-oncology molecules that remain inert in the bloodstream but are selectively activated by enzymes prevalent in the tumor microenvironment. This strategy aims to solve a long-standing challenge in cancer therapy: delivering a powerful anti-tumor attack without causing debilitating systemic toxicity.

A key achievement is a development milestone reached under its collaboration with pharmaceutical giant AbbVie. The partnership, initiated in February 2025 with $52 million in upfront payments to Xilio, is focused on developing novel masked T-cell engagers and other antibody-based immunotherapies. Hitting this milestone signifies tangible progress and triggers an undisclosed payment, further validating the potential of Xilio's platform in the eyes of a major industry player.

Internally, Xilio has nominated a development candidate for its wholly-owned masked T-cell engager program targeting CLDN18.2. This protein is a highly sought-after target in oncology, as it is heavily expressed on several hard-to-treat cancers—including gastric, pancreatic, and esophageal tumors—but has limited presence in healthy tissues. While the CLDN18.2 space is competitive, with companies like Astellas advancing monoclonal antibodies, Xilio’s masked T-cell engager could offer a key advantage. Standard T-cell engagers, while potent, can cause severe side effects by activating the immune system throughout the body. By designing a therapy that is only activated at the tumor site, Xilio hopes to deliver a more powerful and safer treatment.

Xilio also outlined an ambitious timeline for its portfolio, including:

• Submitting an Investigational New Drug (IND) application for XTX501, a tumor-activated bispecific PD-1/IL-2 molecule, in mid-2026.
• Reporting initial Phase 1 data for XTX501 in the second half of 2027, pending regulatory clearance.
• Nominating a development candidate for its STEAP1-targeted masked T-cell engager in the first half of 2026.
• Advancing at least two masked T-cell engager programs into IND-enabling studies in 2027.

New Leadership to Guide Strategic Vision

Supporting this period of growth and clinical advancement is a strategic leadership transition. The company appointed Sara Bonstein as the new chair of its board of directors, succeeding the retiring Paul Clancy. Ms. Bonstein, who has served on Xilio's board since August 2021, brings a wealth of financial and strategic expertise from her more than two-decade career in the biotechnology industry.

Currently the Chief Financial Officer of Insmed, Inc., Ms. Bonstein has extensive experience guiding public biotech companies through critical phases of growth, from discovery to commercialization. Her background includes senior finance roles at Eli Lilly & Company and Johnson & Johnson. Her elevation to chair signals a strategic focus on disciplined financial stewardship and corporate strategy as Xilio's programs mature and advance deeper into the clinic.

“Sara has been an invaluable member of our board since 2021 and brings more than two decades of executive leadership in finance, corporate strategy and business operations in the biotechnology industry,” Dr. Russo stated. “I look forward to continuing to partner with Sara as we advance our pipeline of masked immuno-oncology therapies through development.”

Ms. Bonstein added, “During my tenure, Xilio has made significant progress demonstrating validation for its novel masking technology through strategic partnerships with Gilead and AbbVie as well as promising clinical data for its most advanced programs. I am excited to chair the board and look forward to working closely with the management team to advance the company’s deep portfolio of differentiated I-O therapies.”

With a fortified balance sheet, validated technology, a maturing pipeline aimed at high-value cancer targets, and experienced leadership, Xilio is positioned to execute on its vision. The coming years will be pivotal as the company works to translate the promise of its tumor-activated platform into tangible clinical data and, ultimately, new therapies for people living with cancer.