6. Collaboration, License and Option Agreements

Collaboration, License and Option Agreement with AbbVie

In February 2025, Xilio Development entered into a collaboration, license and option agreement (the “Collaboration Agreement”) with AbbVie Group Holdings Limited ("AbbVie") for up to four programs leveraging the Company’s proprietary masking technology and platform, consisting of (i) an exclusive license for a program to develop and commercialize a masked antibody-based immunotherapy (the “Collaboration Program”) and (ii) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target (“Initial Option Program”), and (b) subject to the terms of the Collaboration Agreement, up to two additional programs (each, an “Additional Option Program” and together with the Initial Option Program, the “Option Programs”).

In connection with the Collaboration Program, Xilio Development is responsible for conducting all preclinical development through lead generation (“Collaboration Program Services”). For the Initial Option Program, AbbVie’s option right is exercisable beginning on the effective date of the Collaboration Agreement, and for each Additional Option Program, AbbVie’s option right is exercisable following delivery of written notice of nomination of such Additional Option Program. During the three-year period following the effective date of the Collaboration Agreement, AbbVie has the right to initiate up to two Additional Option Programs by (a) selecting an initial target and backup target for each such Additional Option Program (excluding the target known as prostate-specific membrane antigen and any other target for which Xilio Development has completed specified activities prior to lead selection) and (b) paying Xilio Development an additional program nomination fee for each Additional Option Program. For each Option Program, prior to option exercise, Xilio Development is responsible for conducting preclinical discovery and development up to the completion of investigational new drug application (“IND”) enabling studies, subject to AbbVie paying Xilio Development option extension fees upon completion of specified stages of preclinical discovery and development (“Option Program Services”). Unless AbbVie elects to extend preclinical development through the next stage and pays the applicable option extension fee, AbbVie’s option right terminates within a specified time period following completion of each stage of preclinical development. Upon exercising its option for an Option Program, AbbVie will be responsible for any remaining preclinical development, if applicable, and all clinical development, regulatory and commercialization activities with respect to licensed products under the applicable Option Program.

In addition, on an Option Program-by-Option Program basis, prior to the initiation of specified activities related to lead optimization and selection for the initial target for such Option Program, AbbVie has a one-time right to substitute the initial target with the backup target agreed upon by the parties at the time of Option Program initiation, subject to the payment by AbbVie of a one-time substitution fee with respect to such substituted target and the other terms of the Collaboration Agreement.

In connection with the execution of the Collaboration Agreement, in February 2025, the Company also entered into a stock purchase agreement with AbbVie Inc. pursuant to which the Company issued and sold 310,559 shares of its common stock to AbbVie Inc. in a private placement at a purchase price of $32.20 per share for an aggregate purchase price of $10.0 million.

As of March 31, 2026, the Company has received $57.0 million in payments under the AbbVie agreements, consisting of a $42.0 million upfront cash payment under the Collaboration Agreement, $10.0 million in gross proceeds from the private placement under the stock purchase agreement and a $5.0 million development milestone related to the Collaboration Program, which was recorded as a receivable on the condensed consolidated balance sheet as of December 31, 2025 and was received in the first quarter of 2026. In the second quarter of 2026, the Company achieved an additional $6.0 million development milestone. The Company is eligible to receive up to approximately $2.1 billion in additional contingent payments under the Collaboration Agreement, consisting of (i) up to $305.0 million in aggregate program nomination fees, preclinical development option extension fees and option fees for the Option Programs and (ii) up to $1.8 billion in aggregate development, regulatory and sales-based milestones for all Option Programs and the Collaboration Program. In addition, the Company is eligible to receive tiered royalties ranging in the high single digits on annual global net product sales for the Option Program and is eligible to receive tiered royalties ranging in the mid-single digits on annual global net product sales for the Collaboration Program.

The Company considered the criteria of ASC 606, Revenue from Contracts with Customers (“ASC 606”) for combining contracts and determined the Collaboration Agreement and the stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company accounted for the common stock issued to AbbVie Inc. based on the fair market value of the common stock on the date of issuance. The fair market value of the common stock issued to AbbVie

Inc. was $2.9 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $7.1 million premium. The Company determined that the premium paid by AbbVie Inc. for the common stock purchased should be attributed to the transaction price of the Collaboration Agreement.

The Company determined that the Collaboration Agreement represents a contract with a customer within the scope of ASC 606 and identified the following promises under the Collaboration Agreement: (i) the exclusive license granted to AbbVie related to the Collaboration Program, (ii) the Collaboration Program Services and (iii) the Option Program Services for the Initial Option Program. In addition, the Company identified several customer options that were evaluated to determine if such options represented material rights, each of which would be considered a performance obligation at contract inception only if the option provides a material right to AbbVie that it would not receive without entering into that contract.

The Company determined that the exclusive license and development services related to the Collaboration Program Services were not capable of being distinct on the basis that the services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise in developing masked antibody-based immunotherapies and the Company’s proprietary platform for masked biologics. Accordingly, the Company concluded that these promises should be a combined performance obligation consisting of the exclusive license and the development services for the Collaboration Program Services. As such, the Company identified the following performance obligations at contract inception: (i) the performance obligation consisting of the exclusive license and the Collaboration Program Services (the “Collaboration Program Performance Obligation”); (ii) the Option Program Services for the Initial Option Program (the “Initial Option Program Performance Obligation”); (iii) a material right to receive an exclusive license to the Initial Option Program; (iv) a material right to receive additional services related to the Initial Option Program; and (v) a material right related to AbbVie’s one-time right to substitute the initial target with the backup target for the Initial Option Program.

For purposes of ASC 606, the transaction price at the outset of the arrangement was determined to be $49.1 million, which consisted of the upfront cash payment of $42.0 million under the Collaboration Agreement and the $7.1 million premium on the sale of common stock to AbbVie Inc. The Company used the most likely amount method to estimate variable consideration. During the year ended December 31, 2025, the overall transaction price was adjusted to include the achievement of the $5.0 million development milestone related to the Collaboration Program in the fourth quarter of 2025. All additional contingent payments are fully constrained as of March 31, 2026, as the achievement of the milestones underlying such contingent payments is based on either the Company or AbbVie’s ability to execute under the development plan which is not certain at contact inception. Accordingly, all such contingent payments are excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary. Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company plans to recognize such revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

The Company allocated the transaction price at the outset of the arrangements to the performance obligations on a relative selling price basis as follows: (i) $32.4 million related to the Collaboration Program Performance Obligation; (ii) $6.9 million related to the Initial Option Program Performance Obligation; (iii) $8.2 million related to the material right to receive an exclusive license to the Initial Option Program; (iv) $1.1 million related to the material right to receive additional services related to the Initial Option Program; and (v) $0.5 million related to the material right for AbbVie’s one-time right to substitute the initial target with the backup target for the Initial Option Program. The Company determined the estimated standalone selling price for the licenses using an adjusted market assessment approach, whereby the Company adjusted a comparable transaction previously entered into by the Company and comparable third-party transactions to reflect the stage of development of the Company’s assets under the Collaboration Agreement. The Company determined the estimated standalone selling price for services based on estimated costs to be incurred plus a reasonable margin. The Company determined the estimated standalone selling price for material rights by estimating the standalone selling price of the underlying performance obligations included in the material right and estimating the probability that AbbVie will exercise such material right.

Revenue associated with the Collaboration Program Performance Obligation and the Initial Option Program Performance Obligation is recognized as the underlying services are provided as control is transferred over time. The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation. In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services. Revenue associated with the material rights will be recognized upon expiry if the option is not

exercised. If the material right is exercised, the Company will evaluate the performance obligations underlying the option exercised and recognize the amount allocated to the material right and any additional consideration over the appropriate recognition period associated with the underlying performance obligations.

During the three months ended March 31, 2026 and 2025, the Company recognized collaboration and license revenue of $8.0 million and $0.7 million, respectively, under the Collaboration Agreement and the stock purchase agreement. As of March 31, 2026, the Company recorded deferred revenue of $26.0 million, of which $16.1 million was recorded as a current liability on the Company’s condensed consolidated balance sheet. The deferred revenue is expected to be recognized as collaboration and license revenue through at least 2026 depending on (i) the timing of services being provided for the Collaboration Program and the Initial Option Program and (ii) the timing of AbbVie’s exercise or expiration of the material rights.

License Agreement with Gilead Sciences, Inc.

In March 2024, Xilio Development entered into a license agreement (the "License Agreement") with Gilead Sciences, Inc. ("Gilead"), pursuant to which it granted Gilead an exclusive global license to develop and commercialize efarindodekin alfa, the Company’s masked IL-12 product candidate, and specified other molecules directed to IL-12. Xilio Development is responsible for conducting clinical development for efarindodekin alfa through an initial Phase 2 clinical trial. Following the delivery by Xilio Development of a specified clinical data package for efarindodekin alfa related to the Phase 1 clinical trial and the initial Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of efarindodekin alfa to Gilead, subject to the terms of the License Agreement and payment by Gilead of a $75.0 million transition fee.

In connection with the execution of the License Agreement, in March 2024, the Company also entered into a stock purchase agreement with Gilead. Under the stock purchase agreement, Gilead purchased $25.0 million of the Company’s common stock and prefunded warrants in three private placements, consisting of an aggregate of 650,387 shares of common stock and prefunded warrants to purchase up to an aggregate of 712,514 shares of its common stock. The prefunded warrants are exercisable any time at an exercise price of $0.0014 per share, subject to Gilead not being deemed a beneficial owner of greater than 19.9% of the Company’s common stock upon the exercise of the prefunded warrants.

The Company has received $72.5 million in payments under the Gilead agreements, consisting of the $30.0 million upfront cash payment under the License Agreement, $25.0 million in gross proceeds from private placements under the stock purchase agreement and a $17.5 million development milestone. As of March 31, 2026, the Company is eligible to receive up to $575.0 million in additional contingent payments, which consist of a $75.0 million transition fee if Gilead exercises its option for the IL-12 program and up to $500.0 million in specified development, regulatory and sales-based milestones after opt-in. In addition, the Company is eligible to receive tiered royalties ranging from high single digits to mid-teens on annual global net product sales.

The Company considered the ASC 606 criteria for combining contracts and determined the License Agreement and the stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company concluded the initial private placement and the additional private placements do not represent freestanding financial instruments as such instruments are not legally detachable due to contractual transfer restrictions. The Company accounted for the common stock issued to Gilead in the initial private placement based on the fair market value of the common stock on the date of issuance. The fair market value of the common stock issued to Gilead in the initial private placement was $4.4 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $9.1 million premium. The Company determined that the premium paid by Gilead for the common stock purchased in the initial private placement should be attributed to the transaction price of the License Agreement.

The Company determined that the License Agreement represents a contract with a customer within the scope of ASC 606 and identified two promises under the License Agreement: (i) the exclusive licenses granted to Gilead related to the Company’s IL-12 program and (ii) the provision by Xilio Development and its affiliates of development services related to ongoing and planned clinical trials for efarindodekin alfa through an initial Phase 2 clinical trial. The Company determined that the exclusive license and development services were not capable of being distinct on the basis that the development services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise related to efarindodekin alfa, the IL-12 program and the Company’s proprietary platform for masked biologics. Accordingly, the Company concluded that there is a single identified combined performance obligation consisting of the exclusive license and the development services.

For purposes of ASC 606, the transaction price of the License Agreement at the outset of the arrangement was determined to be $39.1 million, which consisted of the upfront cash payment of $30.0 million under the License Agreement and the $9.1 million premium on the sale of common stock to Gilead in the initial private placement, which was allocated to the single combined performance obligation. The Company used the most likely amount method to estimate variable consideration. During the year ended December 31, 2025, the overall transaction price was adjusted to include the achievement of the $17.5 million development milestone in the third quarter of 2025. All additional contingent payments are fully constrained as of March 31, 2026, as the achievement of the milestones underlying such contingent payments are uncertain and highly susceptible to factors outside of the Company’s control. Accordingly, all such additional contingent payments are excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary. Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company plans to recognize such revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Revenue associated with the combined performance obligation is recognized as services are provided as control is transferred over time. The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation. In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services.

During the three months ended March 31, 2026 and 2025, the Company recognized collaboration and license revenue of $4.7 million and $2.2 million, respectively, under the License Agreement and the stock purchase agreement with Gilead. As of March 31, 2026, the Company recorded deferred revenue under the License Agreement and the stock purchase agreement of $22.0 million, of which $15.5 million was recorded as a current liability on the Company’s condensed consolidated balance sheet. The deferred revenue is expected to be recognized as collaboration and license revenue through at least 2027 depending on the timing of certain clinical development activities.

Summary of Contract Assets and Liabilities

Clinical Trial Collaboration with F. Hoffmann-La Roche Ltd

In July 2023, the Company and F. Hoffmann-La Roche Ltd (“Roche”) entered into a clinical trial collaboration pursuant to a clinical supply agreement to evaluate vilastobart in combination with atezolizumab (Tecentriq®) in a Phase 1/2 clinical trial in patients with microsatellite stable metastatic colorectal cancer.

Under the clinical supply agreement, the Company is eligible to receive specified cost-sharing payments from Roche. As of March 31, 2026, the Company has received $8.0 million in total cost-sharing payments from Roche. The Company is responsible for conducting the Phase 1/2 clinical trial and retains global development and commercialization rights to vilastobart.

The Company concluded that the cost-sharing payments under the clinical supply agreement are not in the scope of ASC 606 because the Company does not consider performing research and development services for reimbursement to be part of its ongoing major or central operations. Therefore, the Company applied a reasonable, rational, and consistently applied accounting policy election to record the cost-sharing payments under the clinical supply agreement as a reduction of research and development expenses in the condensed consolidated statements of operations and comprehensive loss for the period in which a study development event is achieved. During the three months ended March 31, 2026, the Company did not recognize a reduction of research and development expense and during the three months ended March 31, 2025, the Company recognized a reduction of research and development expense of $2.0 million.