NextCure, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. NextCure is a clinical-stage biopharmaceutical company developing immunotherapies for cancer and immune-related diseases using its FIND-IO platform. It has no product sales and remains dependent on external financing.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $22.4 million |
| Research and development | $13.6 million | $12.7 million | $37.9 million | $34.4 million |
| General and administrative | $4.9 million | $4.7 million | $15.8 million | $12.9 million |
| Net loss | $17.9 million | $16.4 million | $52.5 million | $21.1 million |
| Loss per share, basic and diluted | $0.65 | $0.59 | $1.90 | $0.77 |
At September 30, 2021, cash and cash equivalents were $36.7 million and marketable securities were $198.7 million, totaling $235.3 million excluding restricted cash. Total assets were $257.8 million; total liabilities were $9.6 million. The $5.0 million term loan was fully repaid in August 2021, leaving no outstanding term-loan balance. No meaningful operating margin is reported; the company is pre-commercial and loss-making.
For the first nine months of 2021, operating cash use was $43.8 million, investing activities provided $47.6 million, and financing activities used $3.4 million. Cash, cash equivalents and restricted cash increased by $0.4 million to $36.7 million. The filing reports no income tax provision or benefit.
Material changes versus the prior comparable periods
- Q3 net loss increased $1.6 million year over year; nine-month net loss increased $31.3 million. The nine-month comparison reflects $22.4 million of revenue recognized in 2020 under the terminated Lilly collaboration, with no corresponding revenue in 2021.
- Nine-month operating expenses rose $6.3 million, including a $3.5 million increase in R&D and a $2.8 million increase in G&A. Management attributed R&D growth primarily to personnel costs and advancing development programs, and G&A growth mainly to personnel-related costs, including stock compensation.
- Other income, net fell to $1.2 million for the first nine months from $3.8 million, which management attributed to lower investment balances and interest rates.
- The company repaid its remaining term-loan principal and released the related restricted cash. The marketable-securities portfolio declined from $250.7 million at year-end 2020 to $198.7 million at September 30, 2021.
Outlook, programs and risks
- Management estimates existing cash, cash equivalents and marketable securities will fund planned operations into the second half of 2023. It expects substantial ongoing R&D and public-company expenses and says additional capital will be needed; financing may not be available on acceptable terms or at all. The company had not sold shares under its $75 million at-the-market sales agreement as of September 30, 2021.
- NC318 Phase 2 enrollment resumed in an NSCLC adenocarcinoma cohort in Q2 2021, with a revised 800 mg weekly dosing regimen and screening intended to select S15-positive patients. The company planned a monotherapy data update at the November 2021 SITC meeting. Prior trial findings and selection issues may increase costs, delay development or affect prospects.
- NC410 is in a Phase 1/2 trial; management planned a Phase 1 update at the November 2021 SITC meeting. A Yale-led Phase 2 combination trial of NC318 and pembrolizumab began in April 2021, with initial data anticipated in the first half of 2022.
- NC762 entered a Phase 1/2 trial in July 2021 after IND clearance; initial Phase 1 data were expected in mid-2022. These are management expectations, not guarantees.
- COVID-19 has strained trial sites, slowed enrollment and delayed trial activities; further disruption to enrollment, patient safety monitoring, supply chains or operations remains possible. Clinical, regulatory, manufacturing, financing and competition risks remain significant.
- The company disclosed a securities class action and a shareholder derivative action alleging, among other things, misstatements related to NC318 and FIND-IO. Motions to dismiss or other proceedings were pending; discovery in the class action was stayed. NextCure intends to defend the cases, but stated it could not estimate a reasonably possible loss or range of loss.
Important facts for investors to verify
- Whether actual cash burn and clinical-trial spending remain consistent with the stated runway into the second half of 2023, and whether additional financing is required.
- NC318 enrollment, S15 patient-selection approach, dosing and forthcoming clinical data, including the implications of earlier cohort results.
- Progress and timing of NC410 and NC762 trials and whether management’s anticipated data dates are achieved.
- Developments in the securities and derivative litigation, including potential costs or outcomes not currently estimable.
- Whether COVID-19 or other trial-site, manufacturing or regulatory constraints materially affect program timelines.