Nurix Therapeutics, Inc. — Form 10-Q Summary
Reporting-period note: The request identifies “2023 Q1,” but this filing reports the three months ended February 29, 2024 (Nurix fiscal Q1 2024), compared with the three months ended February 28, 2023. The filing was signed April 10, 2024.
Business context
Nurix is a clinical-stage biopharmaceutical company developing therapies based on modulation of cellular protein levels, using its DELigase platform. Its wholly owned clinical programs include BTK degraders NX-5948 and NX-2127 and the CBL-B inhibitor NX-1607. Partnered discovery programs are conducted with Gilead, Sanofi and Pfizer (formerly Seagen). Nurix has no approved products and has not generated product-sale revenue; reported revenue is from collaborations.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Collaboration revenue | $16.6 million | $12.7 million | +$3.9 million (30.7%) |
| Research and development expense | $50.0 million | $45.8 million | +$4.2 million (9.1%) |
| General and administrative expense | $11.8 million | $9.8 million | +$2.0 million (20.1%) |
| Operating loss | $(45.2) million | $(43.0) million | Loss widened $2.3 million |
| Net loss | $(41.5) million | $(40.7) million | Loss widened $0.8 million |
| Net loss per share, basic and diluted | $(0.76) | $(0.75) | |
| Net cash used in operations | $(42.0) million | $(48.5) million | Cash use improved $6.5 million |
Interest and other income was $3.8 million, up from $2.2 million. The filing does not report a conventional gross margin; collaboration revenue is recognized over performance periods, generally using a cost-based input method.
At February 29, 2024, cash and cash equivalents were $49.8 million, current marketable securities $194.2 million, and non-current marketable securities $10.3 million: approximately $254.3 million in total cash, cash equivalents and marketable securities. Management separately cites $244.0 million of cash, cash equivalents and short-term marketable securities, excluding the non-current securities, and says this is expected to fund operations for at least 12 months after issuance of the statements. Current assets were $251.0 million and current liabilities $87.6 million (working capital approximately $163.3 million; current ratio approximately 2.9x). The filing reports no debt. Total liabilities were $143.9 million, including deferred revenue and operating lease liabilities; total stockholders’ equity was $168.7 million.
Cash, cash equivalents and restricted cash declined $4.8 million during the quarter to $50.7 million. Investing activities provided $35.5 million, principally from marketable-security maturities net of purchases; financing activities provided $1.6 million. Accumulated deficit was $586.7 million. Total operating lease commitments were approximately $40.5 million, including $7.5 million expected within 12 months.
Material changes versus the prior period
- Revenue increased mainly because Pfizer collaboration revenue began following the 2023 agreement and Sanofi revenue rose with increased effort and a research milestone catch-up. Gilead revenue declined as activity approached the end of its initial five-year research term.
- R&D expense rose with clinical trial and manufacturing costs, supplies supporting the Pfizer collaboration, and facility costs associated with the Texas lease. Lower stock-based compensation partly offset the increases.
- G&A expense increased primarily from higher stock-based compensation and professional-service costs.
- Operating cash use was lower than in the prior-year quarter, although the company continued to incur substantial losses and negative operating cash flow.
- Common shares issued and outstanding increased to 49.1 million from 48.7 million at November 30, 2023. The filing also reports 6.1 million outstanding pre-funded warrants, exercisable for nominal consideration.
Outlook, developments and risks
- Runway and funding: Management expects available cash and investments to cover at least 12 months of operations, but says substantial additional funding will be needed to complete development and commercialization. If financing is unavailable, Nurix may delay or scale back R&D; equity financing could dilute shareholders, while other arrangements could require surrendering rights.
- Collaborations: Gilead’s February/March 2024 extension of research terms for certain targets triggered a $15.0 million payment expected in fiscal Q2 2024. Sanofi achieved a $2.0 million research milestone in February, with payment received in Q2. A March 2024 Sanofi amendment extended the STAT6 research term by two years; Nurix expects increased costs and a revenue-recognition catch-up. These events are subsequent to the reported quarter.
- Clinical programs: NX-5948 is in Phase 1a/1b and received FDA Fast Track designation in January 2024 for certain relapsed/refractory CLL/SLL patients. The FDA lifted the partial clinical hold on NX-2127 in March 2024; Nurix planned to resume enrollment using a chirally controlled drug substance. NX-1607 is in Phase 1a/1b and has a UK Innovative Passport designation. Designations do not guarantee approval or faster development.
- Primary risks: Early-stage clinical and regulatory failure, safety or efficacy issues, patient-enrollment delays, reliance on single-source manufacturers and CROs, competition, intellectual-property challenges, and the need for further financing. The filing notes a third-party patent that may be asserted against targeted protein degraders including NX-5948 and NX-2127. Macroeconomic, banking, cybersecurity and supply-chain disruptions are also identified risks.
- Other items: Nurix reported no material legal proceedings. In March 2024, it extended a San Francisco office lease by about ten months at approximately $0.1 million monthly minimum rent, plus operating expenses. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
- Guidance: No specific revenue, earnings or cash-burn forecast is provided; management expects continued losses and increased expenses as clinical development advances.
Important facts for investors to verify
- Confirm that the intended period is fiscal Q1 2024, not 2023 Q1, and reconcile the filing’s $254.3 million total liquid resources with the $244.0 million short-term liquidity figure used for runway.
- Track quarterly operating cash use, collaboration receipts, deferred revenue and whether management’s at-least-12-month runway assessment remains valid.
- Monitor NX-5948, NX-2127 and NX-1607 trial enrollment, safety and data updates, including the resumption and progress of NX-2127 enrollment after the clinical hold.
- Verify receipt and accounting treatment of the $15.0 million Gilead extension payment, the Sanofi milestone, and the financial effects of the STAT6 term extension.
- Assess potential dilution from outstanding pre-funded warrants, equity awards and any use of the remaining $130.0 million ATM capacity.
- Follow manufacturing continuity and intellectual-property developments, including any third-party patent claims relevant to Nurix’s degraders.