Nurix Therapeutics, Inc. annual report, FY2023

Nurix Therapeutics, Inc. — FY2023 Form 10-K

Reporting period: Fiscal year ended November 30, 2023, compared with fiscal 2022. Although the request metadata says “2022 Q4,” this filing is an annual report for FY2023, not a quarterly report. Nurix is a clinical-stage biopharmaceutical company (Nasdaq: NRIX) developing protein-degradation and protein-elevation medicines; it has no products approved for sale and has not generated product-sales revenue.

Financial performance and position

Metric	FY2023	FY2022
Total revenue	$77.0 million	$38.6 million
Operating expenses	$232.1 million	$222.5 million
Operating loss	$(155.1) million	$(183.9) million
Net loss	$(143.9) million	$(180.4) million
Net loss per share, basic and diluted	$(2.65)	$(3.71)
Cash used in operating activities	$(81.4) million	$(159.8) million

Revenue rose about 99%, reflecting higher collaboration revenue and a $20.0 million Gilead license-option payment. Collaboration revenue was $57.0 million, including $29.9 million from Gilead, $25.4 million from Sanofi and $1.7 million from Pfizer.
Despite increased operating expenses, net loss narrowed by $36.4 million. Higher collaboration and license revenue and a $7.6 million increase in interest and other income helped offset the expense increase. Approximate operating-loss and net-loss margins improved to negative 201% and negative 187%, respectively, from negative 476% and negative 467% in FY2022.
R&D expense was $189.1 million, up $4.7 million; G&A was $42.9 million, up $4.9 million. Stock-based compensation totaled $33.7 million.
At year-end, cash, cash equivalents and marketable securities totaled $295.3 million; working capital was $208.5 million; accumulated deficit was $545.2 million. Management said available cash and short-term investments were expected to fund operations for at least 12 months after the financial statements were issued, but not through completion of development and commercialization.
Operating cash use decreased substantially year over year. Investing activities provided $68.3 million, primarily from maturities of marketable securities; financing activities provided $3.2 million. Cash, cash equivalents and restricted cash declined by $9.8 million.
No material borrowings are reported. Total liabilities were $155.1 million, including $93.1 million of deferred revenue and $30.6 million of operating lease liabilities. Operating lease commitments totaled $42.4 million, including $7.6 million due within 12 months.

Material changes and business developments

Revenue increased $38.4 million year over year, primarily from greater progress recognized under the Gilead and Sanofi collaborations, research milestones and the Gilead license-option exercise. FY2023 included the new Pfizer collaboration; $60.0 million upfront was received, with $1.7 million recognized as revenue and $58.3 million deferred at year-end.
Operating cash use fell by $78.4 million, partly because deferred revenue increased $19.5 million, largely following the Pfizer upfront payment. In FY2022, financing cash included $94.8 million from pre-funded warrants and $19.4 million from an at-the-market offering; FY2023 financing cash was mainly employee stock-plan proceeds.
Nurix reported $413.0 million in cumulative non-dilutive collaboration funding and up to $8.1 billion in potential future fees and milestones across its collaborations, plus potential royalties. These contingent amounts depend on research, development, regulatory and commercial achievements and are not assured revenue.

Outlook, risks and unusual items

Management’s 2024 priorities included advancing three Phase 1 programs, presenting further NX-5948 data, defining NX-1607 expansion doses, resolving the NX-2127 clinical hold, and advancing at least one program to development-candidate stage.
In October 2023, FDA imposed a partial clinical hold on NX-2127 after Nurix communicated plans to transition to an improved manufacturing process. New patient enrollment is paused; existing patients benefiting from treatment may continue. Resolution timing is uncertain.
NX-5948’s first disclosed Phase 1a results were preliminary: among 26 patients dosed, the company reported no dose-limiting toxicities or treatment-related discontinuations. At the October 17, 2023 cutoff, six of seven CLL patients had clinical benefit, including three partial responses; larger, longer-duration data were expected in 2024. FDA granted Fast Track designation in January 2024 for specified relapsed or refractory CLL/SLL patients. Designation does not ensure approval or faster development.
NX-2127 data presented in December 2023 included a reported 40.7% objective response rate in CLL; interpret these early, limited-patient results alongside the enrollment hold and the need for confirmatory follow-up. NX-1607 remains in Phase 1; its potential benefits and safety are unproven.
Nurix expects continuing losses and substantial additional funding needs. It may need to delay or scale back programs, issue dilutive securities, take on debt, or license rights if financing is unavailable on acceptable terms. The filing states current resources cover at least 12 months, not the full development plan.
Key risks include clinical failure or adverse effects, manufacturing and single-source supplier reliance, competition, intellectual-property claims, collaboration-partner decisions, reimbursement and drug-pricing changes, and macroeconomic or cybersecurity disruptions. The company disclosed no material legal proceedings. The auditor’s financial-statement opinion was unqualified; the auditor highlighted collaboration revenue estimation as a critical audit matter. Management reported effective disclosure controls and internal control over financial reporting.

Important facts for investors to verify

Progress and FDA requirements for lifting the NX-2127 partial clinical hold, including whether new manufacturing supply is accepted.
Updated NX-5948, NX-2127 and NX-1607 trial data, patient counts, duration of response, safety findings and enrollment status.
Cash burn, collaboration receipts and updated runway assumptions against the pace and cost of clinical development.
Whether collaboration programs achieve milestones; distinguish potential milestone and royalty totals from earned or contracted revenue.
Potential dilution from equity financing and the 6,097,560 pre-funded warrants outstanding at year-end, exercisable for nominal consideration.
Patent coverage and any developments involving third-party intellectual-property claims relevant to the BTK degraders.