Nurix Therapeutics, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended November 30, 2022, compared with fiscal 2021. The filing is an annual report, not a report for “2021 Q4” as indicated in the request metadata.
Business context
Nurix is a clinical-stage biopharmaceutical company developing small-molecule and cell therapies that modulate cellular protein levels. Its wholly owned clinical programs include BTK degraders NX-2127 and NX-5948, and CBL-B inhibitors NX-1607 and NX-0255, used ex vivo in the DeTIL-0255 cell therapy program. The company also has ten partnered discovery programs with Sanofi and Gilead. It has no approved products and has never generated product-sales revenue.
Financial results and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Collaboration revenue | $38.6 million | $29.8 million |
| Research and development expense | $184.5 million | $116.4 million |
| General and administrative expense | $38.0 million | $31.2 million |
| Operating loss | $183.9 million | $117.9 million |
| Net loss | $180.4 million | $117.2 million |
| Net loss per share, basic and diluted | $3.71 | $2.73 |
| Cash used in operating activities | $159.8 million | $84.4 million |
At November 30, 2022, cash, cash equivalents and marketable securities totaled $373.0 million, versus $432.9 million a year earlier. Current assets were $318.4 million and current liabilities $70.7 million; working capital was $247.8 million. Total liabilities were $113.1 million, including deferred collaboration revenue and lease liabilities. The filing reports no borrowings or debt balance. Contractual operating lease obligations totaled $46.7 million, including future obligations for the Texas facility.
Collaboration revenue rose 29.8%, while R&D expense increased 58.5%; net loss widened by $63.2 million. Higher collaboration revenue reflected increased work performed and research milestones, partly offset by higher forecast costs on certain Sanofi targets. Higher R&D costs reflected headcount, clinical-trial activity, manufacturing, research supplies and facility expansion. Interest income increased to $3.5 million from $0.8 million as interest rates rose. Unrealized losses on available-for-sale securities were $3.7 million and were recorded in other comprehensive loss, not net income.
Management said existing cash and marketable securities were expected to fund operations for at least 12 months after the financial statements were issued. The filing also states that substantial additional funding will be needed for the company’s longer-term plan and that available financing on acceptable terms is not assured. No conventional product gross margin is reported; collaboration revenue is recognized over research performance obligations.
Pipeline, outlook and material items
- NX-2127: Phase 1 enrollment continued, including a CLL expansion cohort. Preliminary data presented at ASH 2022 showed an objective response rate of 33% (5 of 15 patients); the trial was ongoing and the data were early.
- NX-5948 and NX-1607: Phase 1 enrollment was ongoing. Management anticipated initial NX-5948 data and clinical data for NX-1607 in the second half of 2023, and expected to define expansion doses for both programs.
- DeTIL-0255: The Phase 1 safety run-in had dosed three patients with advanced epithelial ovarian cancer, who had cleared the initial safety evaluation. Timing of trial expansion depended on a decision about including NX-1607 in future cohorts.
- Management expected to select a new targeted protein degrader development candidate in 2023. These are plans and expectations, not assurances of results or timelines.
- Sanofi and Gilead collaborations covered ten targets/programs in total. Nurix reported up to approximately $4.8 billion in potential future fees and milestone payments, plus royalties; these amounts are contingent and are not committed funding. Nurix retains U.S. co-development and commercialization options for up to four candidates, subject to contract terms.
- The company relies on third parties for clinical research and manufacturing and had no long-term supply arrangements in place. Risks include clinical failure or safety issues, enrollment and regulatory delays, manufacturing disruption, competition, intellectual-property disputes, funding needs and uncertain reimbursement and drug-pricing rules. Management also cited macroeconomic volatility, inflation, higher rates, the Ukraine war and COVID-19-related uncertainty.
- The independent auditor gave an unqualified opinion on the financial statements and highlighted revenue recognition estimates for internal employee costs as a critical audit matter. Management said previously reported weaknesses in IT controls and segregation of duties were remediated, and concluded internal control over financial reporting was effective at November 30, 2022. The auditor did not audit internal controls.
- The company reported no material pending legal proceedings. It recorded no income-tax provision in FY2022 and maintained a full valuation allowance against deferred tax assets.
Important facts for investors to verify
- Review the full, updated clinical-trial results, patient counts, follow-up, safety profile and trial status; the NX-2127 response figure is preliminary and based on 15 patients.
- Assess the pace of cash use and financing needs against the stated 12-month runway; the company explicitly anticipates needing substantial longer-term funding.
- Check dilution exposure: 6,814,920 pre-funded warrants remained outstanding at year-end and were exercisable for nominal consideration; the filing includes their underlying shares in its weighted-average share count.
- Evaluate how contingent collaboration milestones, target changes, costs and partner decisions affect future revenue; potential milestone totals are not assured receipts.
- Monitor clinical, manufacturing and intellectual-property risks, including the disclosed third-party patent that Nurix said could be alleged to cover some targeted protein degraders.