nrix-20230228

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________________________________________________________

FORM 10-Q

______________________________________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39398

______________________________________________________________________

NURIX THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware			27-0838048
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1700 Owens Street, Suite 205 San Francisco, CA			94158
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (415) 660-5320

______________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

NRIX

Nasdaq Global Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	o

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of March 31, 2023, the Registrant had 47,445,354 shares of common stock, $0.001 par value per share, outstanding.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements concerning our business strategy and plans, future operating results and financial position, as well as our objectives and expectations for our future operations, are forward-looking statements.

In some cases, you can identify forward-looking statements by such terminology as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these words. Forward-looking statements include, but are not limited to, statements about:

•the timing and conduct of our clinical trial programs for our lead drug candidates NX-2127, NX-1607 and NX-5948 and other drug candidates, including statements regarding the timing of data and anticipated announcements, the selection of new development candidates and the initiation of clinical trials;

•the timing of, and our ability to obtain, marketing approvals for our lead drug candidates NX-2127, NX-1607 and NX-5948 and other drug candidates;

•our plans to pursue research and development of other drug candidates;

•the timing of investigational new drug application (IND) submissions for our drug candidates;

•the potential advantages of our DELigase platform and our drug candidates;

•the extent to which our scientific approach and DELigase platform may potentially address a broad range of diseases;

•the potential benefits of our arrangements with Sanofi S.A. and Gilead Sciences, Inc.;

•the timing of and our ability to obtain and maintain regulatory approvals for our drug candidates;

•the potential receipt of revenue from future sales of our drug candidates;

•the rate and degree of market acceptance and clinical utility of our drug candidates;

•our estimates regarding the potential market opportunity for our drug candidates;

•our sales, marketing and distribution capabilities and strategy;

•our ability to establish and maintain arrangements for the manufacturing of our drug candidates;

•the expected impact of macroeconomic conditions, including inflation, increasing interest rates and volatile market conditions, instability in the global banking system, and global events, including the ongoing coronavirus (COVID-19) pandemic and the ongoing war in Ukraine, on our business, clinical trials, financial condition, liquidity and results of operations;

•the potential achievement of milestones and receipt of royalty payments under our collaborations;

•our ability to enter into additional collaborations with third parties;

•our intellectual property position;

•our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;

•the impact of government laws and regulations; and

•our competitive position.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, and financial needs. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements for any reason or to conform such statements to actual results or revised expectations, except as required by law.

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Risk Factors Summary

Our business is subject to a number of risks and uncertainties, including those risks discussed at-length below. These risks include, among others, the following:

•We have incurred significant losses since our inception. We expect to incur losses over at least the next several years and may never achieve or maintain profitability.

•We have never generated revenue from product sales and may never be profitable.

•We will need substantial additional funding. If we are unable to raise capital when needed, we may be required to delay, limit, reduce or terminate our research or product development programs or future commercialization efforts.

•Current and future legislation may increase the difficulty and cost for us, and any collaborators, to obtain marketing approval of and commercialize our drug candidates and affect the prices we, or they, may obtain.

•We are early in our development efforts. Our lead drug candidates, NX-2127, NX-1607 and NX-5948, are in the early stages of clinical development. If we are unable to advance our drug candidates through clinical development, develop, obtain regulatory approval for and commercialize our drug candidates or experience significant delays in doing so, our business may be materially harmed.

•Our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.

•If serious adverse events, undesirable side effects or unexpected characteristics are identified during the development of any drug candidates we may develop, we may need to abandon or limit our further clinical development of those drug candidates.

•The results of preclinical studies and early-stage clinical trials may not be predictive of future results. Initial success in clinical trials may not be indicative of results obtained when these trials are completed or in later-stage trials.

•If we decide to seek Orphan Drug Designation or other designations from regulators for any of our current or future drug candidates, we may be unsuccessful or may be unable to maintain the benefits associated with these designations, including the potential for supplemental market exclusivity associated with an Orphan Drug Designation.

•If any of our drug candidates are not considered to be a new active substance or are deemed to fall within the “global marketing authorization” of an existing medicinal product or if pediatric studies are not adequately completed, this may result in lack of regulatory data protection or failure to obtain an extension to existing regulatory data protection.

•We face substantial competition in an environment of rapid technological change, which may result in others discovering, developing or commercializing products before or more successfully than we do.

•We expect to depend on collaborations with third parties for the research, development and commercialization of certain of the drug candidates we may develop. If any such collaborations are not successful, we may not be able to capitalize on the market potential of those drug candidates.

•We rely on third-party contract manufacturing organizations (CMOs) for the manufacture of both drug substance and finished drug product for our drug candidates for preclinical and clinical testing and expect to continue to do so for any future clinical trials and commercialization. This reliance on third parties may increase the risk that we will not have sufficient quantities of our drug candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

•If we are unable to obtain and maintain patent protection for our technology, our current drug candidates and any future drug candidates that we may develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors and other third parties could develop and commercialize technology and drug candidates similar or identical to ours, and our ability to successfully commercialize our technology and drug candidates may be impaired, and we may not be able to compete effectively in our market.

•Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business.

•Unfavorable global economic conditions could adversely affect our business, financial condition, stock price and results of operations.

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•If we fail to attract and retain management and other key personnel, we may be unable to continue to successfully develop our current and any future drug candidates, commercialize our drug candidates or otherwise implement our business plan.

•Even if we are able to commercialize any drug candidates, the products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business.

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TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION	29

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	83
Item 3.	Defaults Upon Senior Securities	83
Item 4.	Mine Safety Disclosures	83
Item 5.	Other Information	83
Item 6.	Exhibits	84

SIGNATURES		85

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)


	February 28, 2023		November 30, 2022
Assets
Current assets:
Cash and cash equivalents	$	33,571	$	64,474
Marketable securities, current	243,575		244,667
Prepaid expenses and other current assets	11,183		9,308
Total current assets	288,329		318,449
Marketable securities, non‑current	48,449		63,879
Operating lease right-of-use assets	10,917		12,345
Property and equipment, net	17,717		17,163
Restricted cash	901		901
Other assets	3,841		4,022
Total assets	$	370,154	$	416,759
Liabilities and stockholdersʼ equity
Current liabilities:
Accounts payable	$	5,629	$	5,064
Accrued expenses and other current liabilities	15,388		22,428
Operating lease liabilities, current	5,556		5,530
Deferred revenue, current	38,305		37,633
Total current liabilities	64,878		70,655
Operating lease liabilities, net of current portion	5,106		6,434
Deferred revenue, net of current portion	26,118		35,974
Total liabilities	96,102		113,063
Commitments and contingencies (Note 6)
Stockholdersʼ equity:
Preferred stock, $0.001 par value— 10,000,000 shares authorized as of February 28, 2023 and November 30, 2022; no shares issued and outstanding as of February 28, 2023 and November 30, 2022	—		—
Common stock, $0.001 par value— 500,000,000 shares authorized as of February 28, 2023 and November 30, 2022; 47,444,853 and 47,172,299 shares issued and outstanding as of February 28, 2023 and November 30, 2022, respectively	47		47
Additional paid-in capital	719,237		709,220
Accumulated other comprehensive loss	(3,247)		(4,319)
Accumulated deficit	(441,985)		(401,252)
Total stockholdersʼ equity	274,052		303,696
Total liabilities and stockholdersʼ equity	$	370,154	$	416,759

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended February 28,
	2023		2022
Collaboration revenue	$	12,685	$	9,621
Operating expenses:
Research and development	45,816		43,137
General and administrative	9,821		9,228
Total operating expenses	55,637		52,365
Loss from operations	(42,952)		(42,744)
Interest and other income, net	2,219		211
Net loss	$	(40,733)	$	(42,533)
Net loss per share, basic and diluted	$	(0.75)	$	(0.95)
Weighted-average number of shares outstanding, basic and diluted	54,028,238		44,693,812

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended February 28,
	2023		2022
Net loss	$	(40,733)	$	(42,533)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale marketable securities	1,072		(1,458)
Total comprehensive loss	$	(39,661)	$	(43,991)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)


	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balance as of November 30, 2021	44,664,371	$	45	$	563,757	$	(608)	$	(220,892)	$	342,302
Exercise of stock options	117,870	—		424		—		—		424
Vesting of early exercised stock options	—	—		47		—		—		47
Issuance under employee stock purchase plan	71,207	—		1,064		—		—		1,064
Stock-based compensation	—	—		6,071		—		—		6,071
Unrealized loss on available-for-sale marketable securities	—	—		—		(1,458)		—		(1,458)
Net loss	—	—		—		—		(42,533)		(42,533)
Balance as of February 28, 2022	44,853,448	45		571,363		(2,066)		(263,425)		305,917


	Common stock			Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balance as of November 30, 2022	47,172,299	$	47	$	709,220	$	(4,319)	$	(401,252)	$	303,696
Exercise of stock options	8,768	—		28		—		—		28
Vesting of restricted stock units	98,571	—		—		—		—		—
Vesting of early exercised stock options	—	—		31		—		—		31
Issuance under employee stock purchase plan	165,215	—		1,453		—		—		1,453
Stock-based compensation	—	—		8,505		—		—		8,505
Unrealized gain on available-for-sale marketable securities	—	—		—		1,072		—		1,072
Net loss	—	—		—		—		(40,733)		(40,733)
Balance as of February 28, 2023	47,444,853	47		719,237		(3,247)		(441,985)		274,052

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended February 28,
	2023		2022
Cash flows from operating activities
Net loss	$	(40,733)	$	(42,533)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,752		991
Stock-based compensation	8,481		6,071
Net amortization (accretion) of premium (discount) on marketable securities	(818)		542
Loss on disposal of property and equipment	56		—
Amortization of operating lease right-of-use assets	1,428		1,262
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(1,627)		(1,514)
Accounts payable	400		(103)
Deferred revenue	(9,184)		(3,620)
Operating lease liabilities	(1,302)		(408)
Accrued expenses and other liabilities	(6,905)		(3,318)
Net cash used in operating activities	(48,452)		(42,630)
Cash flows from investing activities
Purchases of marketable securities	(22,642)		(15,245)
Maturities of marketable securities	40,987		58,748
Purchases of property and equipment	(2,277)		(3,472)
Net cash provided by investing activities	16,068		40,031
Cash flows from financing activities
Proceeds from exercise of stock options	28		424
Proceeds from issuance under employee stock purchase plan	1,453		1,064
Net cash provided by financing activities	1,481		1,488
Net decrease in cash, cash equivalents and restricted cash	(30,903)		(1,111)
Cash, cash equivalents and restricted cash at beginning of period	65,375		80,792
Cash, cash equivalents and restricted cash at end of period	$	34,472	$	79,681
Supplemental disclosures of non-cash investing and financing activities:
Additions to property and equipment included in accounts payable and accrued expenses and other liabilities	$	1,434	$	2,207
Capitalized stock-based compensation related to internal-use software development	$	24	$	—
Vesting of early exercised stock options	$	31	$	47


	As of February 28,
	2023		2022
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	33,571	$	78,780
Restricted cash	901		901
Total cash, cash equivalents and restricted cash	$	34,472	$	79,681

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NURIX THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

Description of Business <

SEC Form 10-Q filed by Nurix Therapeutics Inc.