NextCure, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. NextCure is a clinical-stage biopharmaceutical company developing cancer therapies. It reported no product revenue and expects no product revenue in the foreseeable future.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense | $11.4 million | $11.6 million |
| General and administrative expense | $4.4 million | $5.4 million |
| Restructuring and impairment charges | $2.5 million | None |
| Net loss | $17.1 million | $16.1 million |
| Basic and diluted loss per share | $0.61 | $0.58 |
| Net cash used in operating activities | $12.6 million | $14.8 million |
- Cash, cash equivalents and marketable securities totaled $96.0 million at March 31, 2024, down from $108.3 million at December 31, 2023. Cash and cash equivalents alone were $18.4 million, versus $13.1 million at year-end.
- Total assets were $115.2 million; stockholders’ equity was $99.0 million. Current liabilities were $9.6 million.
- The balance sheet reports no borrowings; lease liabilities were $6.5 million, including current and long-term portions. The filing does not present operating margins as a meaningful measure because the company has no revenue.
- Other income, primarily interest income, was $1.2 million. Investing activities provided $17.9 million, mainly from net sales and maturities of marketable securities; financing activities provided $1,000.
Material changes and operating developments
- R&D expense declined $0.2 million year over year: higher NC410 and LNCB74 external costs were offset by lower internal costs. G&A declined $1.1 million, primarily from lower payroll, stock compensation and insurance costs.
- Net loss increased $1.0 million, largely reflecting $2.5 million of restructuring and impairment charges, partly offset by lower G&A and higher other income. Charges included about $0.8 million for severance and $1.8 million for asset impairment and accelerated depreciation.
- In March, the company prioritized NC410 and LNCB74, paused internal manufacturing and reduced its workforce by approximately 37%. It recorded $0.6 million of accrued severance at quarter-end.
- NC410 is in a Phase 1b/2 trial with pembrolizumab. The company completed enrollment of 20 additional colorectal cancer patients in January and began enrolling 18 additional ovarian cancer patients in March. It expected colorectal data at ASCO in June 2024 and ovarian data in the second half of 2024.
- LNCB74, a B7-H4 antibody-drug conjugate being co-developed with LigaChem, was in early development. The company planned to file an IND in Q4 2024. Under the collaboration, costs and potential commercial profits are shared equally; the company recorded a $0.8 million Q1 cost reduction and an additional $1.6 million adjustment relating to Q4 2023.
- The company is seeking partners for NC525, NC318 and preclinical programs NC605 and NC181.
Outlook, risks and contingencies
- The filing’s liquidity statements differ: the financial-statement note says existing cash and investments are expected to fund planned operations for at least the next 12 months, while MD&A says into the second half of 2026. Management cautions that its estimate relies on assumptions that may prove incorrect.
- NextCure expects continuing operating losses and negative operating cash flows and says it will need substantial additional funding. If funding or partnerships are unavailable on acceptable terms, it may delay, reduce or discontinue development programs.
- Key risks include clinical and regulatory uncertainty, patient enrollment and trial timing, product safety and efficacy, manufacturing and reliance on third parties, competition, intellectual property, and retaining key personnel. The company also identifies risks related to the restructuring.
- The company reported no pending or threatened legal proceeding that management believes is likely to materially affect its business or financial results. It reported no material updates to the risk factors in its 2023 Form 10-K.
Important facts for investors to verify
- Reconcile the stated cash runway: at least 12 months in the financial-statement note versus into the second half of 2026 in MD&A.
- Track actual cash burn, spending after the workforce reduction, and whether additional financing or partnerships become necessary.
- Verify NC410 trial progress and data timing, and whether LNCB74 remains on schedule for its planned Q4 2024 IND filing.
- Assess the effects of the manufacturing pause and 37% workforce reduction on development timelines, costs and execution.
- Consider potential equity dilution: 9.2 million options were outstanding at March 31, 2024; the company also had a $75 million at-the-market sales agreement, with no shares sold under it as of that date.