NextCure, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022; the filing is an annual report, not a standalone Q4 report. NextCure is a clinical-stage biopharmaceutical company developing immunotherapies for cancer and other immune-related diseases. It reported no product-sales revenue.
Financial and operating performance
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue from product sales | None | None |
| Research and development expense | $54.2 million | $50.2 million |
| General and administrative expense | $21.7 million | $20.6 million |
| Net loss | $74.7 million | $69.4 million |
| Basic and diluted loss per share | $2.69 | $2.51 |
| Net cash used in operating activities | $53.9 million | $57.3 million |
- Operating expenses totaled $75.9 million, up from $70.8 million. The higher loss reflected increased R&D and G&A spending, partly offset by $1.2 million of other income, primarily interest income.
- Cash, cash equivalents and marketable securities were $159.9 million at year-end, versus $219.6 million in 2021. Cash and cash equivalents alone were $26.6 million; marketable securities were $133.3 million.
- Operating cash use improved by $3.4 million year over year. Investing activities provided $68.0 million, mainly from net marketable-security maturities and sales; financing activities provided $0.2 million.
- Total assets were $184.2 million and total liabilities were $16.6 million at year-end. The company had no outstanding term-loan balance; it repaid the remaining $2.4 million in August 2021. Lease liabilities were $7.1 million.
- Margins are not meaningful because the company had no product revenue. Accumulated deficit was $261.8 million.
Material changes and business developments
- R&D expense rose $4.0 million, with clinical-related and personnel costs cited as primary drivers. External R&D spending increased for NC410, NC762 and NC525; spending on other programs and preclinical development declined.
- NC410 entered a Phase 1b/2 combination trial with pembrolizumab in October 2022. Its earlier Phase 1 enrolled 40 patients; the filing reports tolerability up to 200 mg every two weeks and stable disease lasting more than 12 weeks in eight patients.
- NC762 entered expansion cohorts in October 2022, using a validated assay to select patients with B7-H4 expression. The company reported preliminary tolerability in the Phase 1 dose-escalation study; dose selection and efficacy remain under evaluation.
- NC525 began a Phase 1 trial in February 2023, after year-end, for AML and certain related blood disorders.
- In November 2022, NextCure decided to discontinue its NC318 monotherapy Phase 2 development based on efficacy data. It continued supplying NC318 for Yale’s investigator-initiated combination study.
Outlook, risks and contingencies
- Management estimated year-end cash, cash equivalents and marketable securities would fund planned operations into mid-2025. This is an estimate based on assumptions, not a guarantee; the company expects continuing losses and will require additional capital to pursue its plans.
- No specific revenue, earnings or clinical-success guidance was provided. The company expects substantial spending on its clinical trials, research, manufacturing and public-company costs. Additional funding may require equity issuance, debt, partnerships or licensing, and may not be available on acceptable terms.
- Key risks include clinical and regulatory uncertainty, trial enrollment and COVID-19-related disruption, manufacturing scale-up and supply constraints, reliance on third parties, competition, and limited patent protection. No product candidate has marketing approval.
- NextCure disclosed securities class-action and derivative litigation, as well as a trade-secret misappropriation lawsuit brought by Immunaccel. The company said it intends to defend the cases and could not estimate a reasonably possible loss or range of loss.
- Marketable securities had $1.5 million of unrealized losses at year-end; management considered these losses temporary and stated it did not expect to be required to sell the securities before maturity.
- The independent auditor issued an unqualified opinion on the financial statements. Management concluded disclosure controls and internal control over financial reporting were effective; the auditor did not attest to internal-control effectiveness because of the company’s emerging-growth-company exemption.
Important facts for investors to verify
- Whether the reported cash runway to mid-2025 remains valid as trial costs and development plans evolve, and what financing the company may need.
- Subsequent clinical data, enrollment and timelines for NC410 and NC762, and early safety and efficacy results for NC525.
- The rationale and implications of ending NC318 monotherapy development, including the status of Yale’s combination study.
- Developments, potential costs and insurance coverage related to the disclosed lawsuits; the filing provides no clear estimate of possible losses.
- Whether marketable-security values, manufacturing capacity, supply availability and the company’s lease obligations affect available liquidity or development plans.