Nurix Therapeutics, Inc. — Form 10-Q Summary
Period note: The request metadata says 2022 Q1, but the filing is for the three months ended February 28, 2023, Nurix’s fiscal 2023 first quarter. Comparative results are for the three months ended February 28, 2022. Amounts below are in U.S. dollars; financial statement amounts are generally in millions unless noted.
Business context and reporting period
Nurix is a clinical-stage biopharmaceutical company developing small-molecule and cell therapies using its DELigase protein-modulation platform. Its wholly owned clinical programs include BTK degraders NX-2127 and NX-5948 and the CBL-B inhibitor NX-1607; DeTIL-0255 is an early cell-therapy program. The company also has ten partnered discovery programs with Sanofi and Gilead. It has no approved products and has not generated product-sales revenue; reported revenue comes from collaborations.
Financial performance and position
| Metric | Q1 FY2023 | Q1 FY2022 | Change / context |
|---|---|---|---|
| Collaboration revenue | $12.7 million | $9.6 million | Up $3.1 million, or about 32% |
| Research and development expense | $45.8 million | $43.1 million | Up $2.7 million |
| General and administrative expense | $9.8 million | $9.2 million | Up $0.6 million |
| Operating loss | $43.0 million | $42.7 million | Loss increased $0.2 million |
| Net loss | $40.7 million | $42.5 million | Loss narrowed $1.8 million |
| Net loss per share, basic and diluted | $0.75 | $0.95 | Loss per share narrowed |
| Net cash used in operating activities | $48.5 million | $42.6 million | Cash use increased $5.8 million |
Higher collaboration revenue reflected increased performance under the Sanofi and Gilead agreements, including cumulative revenue effects from research milestones. The net loss improvement was driven principally by interest and other income of $2.2 million, compared with $0.2 million a year earlier; operating loss was slightly larger. R&D expense growth mainly reflected higher personnel and stock-based compensation and facility costs, partly offset by lower research, preclinical and contract-manufacturing costs. Stock-based compensation totaled $8.5 million for the quarter.
At February 28, 2023, cash and cash equivalents were $33.6 million, current marketable securities $243.6 million, and non-current marketable securities $48.4 million. Together these totaled $325.6 million in cash, cash equivalents and marketable securities. Total assets were $370.2 million, total liabilities $96.1 million, and stockholders’ equity $274.1 million; accumulated deficit was $442.0 million. The balance sheet reports no borrowings; it does report operating lease liabilities. Lease commitments totaled approximately $45.3 million, including $7.5 million due within twelve months.
Cash, cash equivalents and restricted cash declined $30.9 million during the quarter to $34.5 million. Investing activities provided $16.1 million, primarily from marketable-security maturities; financing activities provided $1.5 million. Management said existing cash, cash equivalents and marketable securities should fund operations for at least 12 months after issuance of the financial statements, but will not fund completion of clinical development through commercialization; substantial additional capital will be needed.
Material changes and developments
- Collaboration revenue rose to $12.7 million from $9.6 million: Gilead contributed $7.4 million versus $6.2 million, and Sanofi $5.3 million versus $3.4 million.
- R&D expense increased as clinical programs and patient enrollment continued and headcount grew; lower research and manufacturing costs partially offset the increase.
- After quarter-end, Gilead exercised its option to exclusively license a development candidate, NX-0479 (designated GS-6791). Nurix received a $20.0 million option payment in April 2023 and reported a further $5.0 million April payment related to a research milestone recognized in February. The Gilead program may also generate additional milestone payments and royalties under the agreement.
- At February 28, 2023, all 6.8 million pre-funded warrants issued in July 2022 remained outstanding and available for exercise at a nominal exercise price, creating potential dilution.
Outlook, commentary and risks
Management expects expenses to rise as clinical trials, discovery work, manufacturing needs and infrastructure expand. It expects ongoing losses until, if ever, product sales become significant. No specific financial guidance beyond the stated cash runway was provided in the supplied filing text.
- NX-2127 was enrolling in Phase 1 dose escalation, with a Phase 1b expansion cohort initiated for relapsed chronic lymphocytic leukemia. NX-5948 and NX-1607 were also enrolling in Phase 1 studies. DeTIL-0255 completed its safety run-in; timing of expansion remained under consideration.
- Key risks include early-stage clinical failure or safety issues, uncertain patient enrollment and regulatory outcomes, reliance on single-source suppliers and contract manufacturers, competition, and the possibility of needing additional capital on unfavorable terms or not obtaining it.
- Nurix reported that its SVB operating account held less than 1% of total cash, cash equivalents and marketable securities and said it did not believe the bank’s receivership would cause a loss.
- The filing says disclosure controls were effective at quarter-end and that previously identified internal-control material weaknesses had been remediated by November 30, 2022. Management cautions that future weaknesses may arise.
- No material legal proceedings were reported. The filing identifies a third-party patent that may be asserted against targeted protein degrader candidates, including NX-2127 and NX-5948; Nurix says it believes it has valid defenses, but litigation outcomes are uncertain.
Important facts for investors to verify
- Confirm the applicable reporting period: this filing covers Q1 FY2023, not 2022 Q1.
- Track quarterly operating cash use and the assumptions behind management’s at-least-12-month runway; assess financing needs and potential dilution.
- Verify clinical enrollment, safety, efficacy and timing updates for NX-2127, NX-5948, NX-1607 and DeTIL-0255; early results may not predict later-stage outcomes.
- Monitor Gilead and Sanofi collaboration progress, milestone conditions, payment timing, and Nurix’s retained U.S. co-development and co-commercialization options.
- Assess the potential share dilution from outstanding pre-funded warrants, equity awards and any future ATM or other securities offerings.
- Follow manufacturing and supply continuity, the identified intellectual-property risk, and whether remediated internal controls remain effective.