Xilio Therapeutics (XLO) Rallies 7.81% on Phase 2 Trial Progress and $17.5M Gilead Milestone Payment

Xilio Therapeutics (XLO) surged 14.29% intraday, reaching its highest level since September 2025, driven by positive momentum in its clinical pipeline and financial developments. The stock closed up 7.81%, reflecting renewed investor confidence in the biotech firm’s strategic progress.

The company’s lead candidate, efarindodekin alfa (XTX301), advanced to Phase 2 trials for advanced solid tumors, marking a critical milestone in its development. Phase 1 data revealed two partial responses in late-line patients, alongside a favorable safety profile with minimal Grade 1 or 2 adverse events. The therapy’s ability to sustain interferon gamma signaling without tachyphylaxis underscores its potential to reprogram “cold” tumors, enhancing immunotherapy efficacy while mitigating systemic toxicity risks.

A $17.5 million milestone payment from Gilead Sciences further bolstered Xilio’s financial position, extending its cash runway through Q1 2027. This non-dilutive funding strengthens the company’s balance sheet and validates its tumor-activated IL-12 platform. Gilead retains an option to transition development of XTX301, with potential future milestones totaling $500 million and tiered royalties, adding long-term value for shareholders.

Positive analyst sentiment and leadership changes, including the appointment of oncology expert Dr. Akintunde Bello to the board, reinforced investor optimism. With $121.6 million in cash as of June 2025 and a current ratio of 2.32, Xilio’s liquidity position reduces near-term fundraising pressures. Analysts at Leerink Partners highlighted the program’s potential, assigning a $2.00 price target (186% upside) based on XTX301’s clinical and partnership prospects.

Collectively, these developments position Xilio as a high-conviction biotech play. Continued progress in Phase 2 trials, successful execution of the Gilead collaboration, and sustained financial discipline will be key drivers for the stock’s trajectory. Investors are advised to monitor upcoming data readouts and strategic updates to gauge long-term momentum.