nrix-10q_20200831.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended August 31, 2020

OR

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)

 

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  ☐    No  

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  ☒    No  

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

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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. 

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

As of October 7, 2020, the registrant had 38,855,439 shares of common stock, $0.001 par value per share, outstanding.

 

 

 


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical facts, 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 of our planned investigational new drug application submissions for our lead product candidates NX-2127 and NX-1607 and other drug candidates;

 

 

the timing and conduct of our clinical trial programs for our lead product candidates NX-2127 and NX-1607 and other drug candidates, including statements regarding the timing of initiation of the clinical trials;

 

 

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

 

 

our plans to pursue research and development of other product candidates;

 

 

the potential advantages of our DELigase platform and our product 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 product candidates;

 

 

the potential receipt of revenue from future sales of our product candidates;

 

 

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

 

 

our estimates regarding the potential market opportunity for our product candidates;

 

 

our sales, marketing and distribution capabilities and strategy;

 

 

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

 

 

the impact of the ongoing coronavirus (COVID-19) pandemic on our business;

 

 

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. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein until after we distribute this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.


 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial statements (unaudited)

1

 

Condensed consolidated balance sheets (unaudited)

1

 

Condensed consolidated statements of operations (unaudited)

2

 

Condensed consolidated statements of comprehensive loss (unaudited)

3

 

Condensed consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit) (unaudited)

4

 

Condensed consolidated statements of cash flows (unaudited)

6

 

Notes to unaudited condensed consolidated financial statements

7

Item 2.

Management’s discussion and analysis of financial condition and results of operations

25

Item 3.

Quantitative and qualitative disclosures about market risk

34

Item 4.

Controls and procedures

35

PART II.

OTHER INFORMATION

37

Item 1.

Legal proceedings

37

Item 1A.

Risk factors

37

Item 2.

Unregistered sales of equity securities and use of proceeds

80

Item 3.

Defaults upon senior securities

80

Item 4.

Mine safety disclosures

80

Item 5.

Other information

80

Item 6.

Exhibits

81

Signatures

82

 

 

 

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial statements.

Nurix Therapeutics, Inc.

Condensed consolidated balance sheets

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

August 31,

 

 

November 30,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

265,527

 

 

$

34,816

 

Short-term investments

 

 

88,716

 

 

 

2,904

 

Income tax receivable

 

 

3,856

 

 

 

 

Prepaid expenses and other current assets

 

 

5,990

 

 

 

1,634

 

Total current assets

 

 

364,089

 

 

 

39,354

 

Long-term investments

 

 

40,898

 

 

 

506

 

Property and equipment, net

 

 

6,532

 

 

 

3,871

 

Restricted cash

 

 

170

 

 

 

170

 

Other assets

 

 

185

 

 

 

147

 

Total assets

 

$

411,874

 

 

$

44,048

 

Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,611

 

 

$

1,598

 

Accrued and other current liabilities

 

 

7,102

 

 

 

4,927

 

Deferred revenue, current

 

 

30,299

 

 

 

9,612

 

Total current liabilities

 

 

41,012

 

 

 

16,137

 

Deferred revenue, net of current portion

 

 

62,374

 

 

 

35,693

 

Other long-term liabilities

 

 

868

 

 

 

1,737

 

Total liabilities

 

 

104,254

 

 

 

53,567

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

Redeemable convertible preferred stock, $0.001 par value—0 and 48,441,667 shares

   authorized as of August 31, 2020 and November 30, 2019, respectively; 0 and

   12,813,887 shares issued and outstanding (liquidation value—$0 and $48,383)

   as of August 31, 2020 and November 30, 2019, respectively

 

 

 

 

 

48,195

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value—10,000,000 and 0 shares authorized as of

   August 31, 2020 and November 30, 2019, respectively; 0 shares issued and

   outstanding as of August 31, 2020 and November 30, 2019, respectively

 

 

 

 

 

 

Common stock, $0.001 par value—500,000,000 and 65,000,000 shares

   authorized as of August 31, 2020 and November 30, 2019, respectively;

   38,845,196 and 3,595,334 shares issued and outstanding as of August 31, 2020

   and November 30, 2019, respectively

 

 

39

 

 

 

4

 

Additional paid-in-capital

 

 

391,227

 

 

 

2,740

 

Accumulated other comprehensive income (loss)

 

 

138

 

 

 

(2

)

Accumulated deficit

 

 

(83,784

)

 

 

(60,456

)

Total stockholders’ equity (deficit)

 

 

307,620

 

 

 

(57,714

)

Total liabilities, redeemable convertible preferred stock and stockholders’

   equity (deficit)

 

$

411,874

 

 

$

44,048

 

 

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

1


 

Nurix Therapeutics, Inc.

Condensed consolidated statements of operations

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

August 31,

 

 

August 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Collaboration revenue(1)

 

$

4,085

 

 

$

10,580

 

 

$

11,131

 

 

$

29,253

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

18,939

 

 

 

11,008

 

 

 

46,049

 

 

 

32,201

 

General and administrative

 

 

4,338

 

 

 

2,184

 

 

 

10,057

 

 

 

5,724

 

Total operating expenses

 

 

23,277

 

 

 

13,192

 

 

 

56,106

 

 

 

37,925

 

Loss from operations

 

 

(19,192

)

 

 

(2,612

)

 

 

(44,975

)

 

 

(8,672

)

Interest and other income, net

 

 

675

 

 

 

195

 

 

 

1,071

 

 

 

521

 

Loss before provision (benefit) for income taxes

 

 

(18,517

)

 

 

(2,417

)

 

 

(43,904

)

 

 

(8,151

)

Provision (benefit) for income taxes

 

 

 

 

 

10

 

 

 

(20,576

)

 

 

29

 

Net loss

 

$

(18,517

)

 

$

(2,427

)

 

$

(23,328

)

 

$

(8,180

)

Net loss per share attributable to common stockholders, basic and

   diluted

 

$

(0.59

)

 

$

(0.66

)

 

$

(0.84

)

 

$

(2.38

)

Weighted-average number of shares outstanding, basic and diluted

 

 

31,383,936

 

 

 

3,667,335

 

 

 

27,688,972

 

 

 

3,433,809

 

 

(1)

Collaboration revenue for the three months ended August 31, 2020 and 2019 includes related party revenue of $0 and $9.7 million, respectively. Collaboration revenue for the nine months ended August 31, 2020 and 2019 includes related party revenue of $0 and $28.4 million, respectively.

 

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

 

2


 

Nurix Therapeutics, Inc.

Condensed consolidated statements of comprehensive loss

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

August 31,

 

 

August 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(18,517

)

 

$

(2,427

)

 

$

(23,328

)

 

$

(8,180

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on available-for-sale investments

 

 

(1

)

 

 

(1

)

 

 

140

 

 

 

4

 

Total comprehensive loss

 

$

(18,518

)

 

$

(2,428

)

 

$

(23,188

)

 

$

(8,176

)

 

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

 

 

3


 

Nurix Therapeutics, Inc.

Condensed consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit)

(in thousands, except share amounts)

(unaudited)

 

 

 

Redeemable convertible

preferred stock

 

 

Common stock

 

 

Additional

paid-in

 

 

Accumulated

other

comprehensive

 

 

Accumulated

 

 

Total

stockholders’

equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

(deficit)

 

Balance as of November 30, 2019

 

 

12,813,887

 

 

$

48,195

 

 

 

3,595,334

 

 

$

4

 

 

$

2,740

 

 

$

(2

)

 

$

(60,456

)

 

$

(57,714

)

Exercise of stock options

 

 

 

 

 

 

 

 

72,570

 

 

 

 

 

 

37

 

 

 

 

 

 

 

 

 

37

 

Repurchase of unvested early exercised

   stock options

 

 

 

 

 

 

 

 

(867

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

 

31

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

176

 

 

 

 

 

 

 

 

 

176

 

Unrealized gain on available-for-sale

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

59

 

 

 

 

 

 

59

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,391

)

 

 

(12,391

)

Balance as of February 29, 2020

 

 

12,813,887

 

 

 

48,195

 

 

 

3,667,037

 

 

 

4

 

 

 

2,984

 

 

 

57

 

 

 

(72,847

)

 

 

(69,802

)

Issuance of Series D redeemable

   convertible preferred stock at $12.75 per

   share, net of issuance costs of $336

 

 

9,431,364

 

 

 

119,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

125,708

 

 

 

 

 

 

118

 

 

 

 

 

 

 

 

 

118

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

22

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

474

 

 

 

 

 

 

 

 

 

474

 

Unrealized gain on available-for-sale

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

82

 

 

 

 

 

 

82

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,580

 

 

 

7,580

 

Balance as of May 31, 2020

 

 

22,245,251

 

 

 

168,109

 

 

 

3,792,745

 

 

 

4

 

 

 

3,598

 

 

 

139

 

 

 

(65,267

)

 

 

(61,526

)

Conversion of redeemable convertible

   preferred stock into common stock

 

 

(22,245,251

)

 

 

(168,109

)

 

 

22,245,251

 

 

 

22

 

 

 

168,087

 

 

 

 

 

 

 

 

 

168,109

 

Issuance of common stock upon initial

   public offering, net of offering cost of

   $20,308

 

 

 

 

 

 

 

 

12,550,000

 

 

 

13

 

 

 

218,130

 

 

 

 

 

 

 

 

 

218,143

 

Exercise of stock options

 

 

 

 

 

 

 

 

258,182

 

 

 

 

 

 

262

 

 

 

 

 

 

 

 

 

262

 

Repurchase of unvested early exercised

   stock options

 

 

 

 

 

 

 

 

(982

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

 

 

 

35

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,115

 

 

 

 

 

 

 

 

 

1,115

 

Unrealized loss on available-for-sale

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,517

)

 

 

(18,517

)

Balance as of August 31, 2020

 

 

 

 

$

 

 

 

38,845,196

 

 

$

39

 

 

$

391,227

 

 

$

138

 

 

$

(83,784

)

 

$

307,620

 

4


 

 

 

 

Redeemable convertible

preferred stock

 

 

Common stock

 

 

Additional

paid-in

 

 

Accumulated

other

comprehensive

 

 

Accumulated

 

 

Total

stockholders’

equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

(deficit)

 

Balance as of November 30, 2018

 

 

12,813,887

 

 

$

48,195

 

 

 

3,452,653

 

 

$

4

 

 

$

1,910

 

 

$

(4

)

 

$

(38,757

)

 

$

(36,847

)

Exercise of stock options

 

 

 

 

 

 

 

 

15,985

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

8

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

 

53

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

102

 

 

 

 

 

 

 

 

 

102

 

Unrealized gain on available-for-sale

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,685

)

 

 

(2,685

)

Balance as of February 28, 2019

 

 

12,813,887

 

 

 

48,195

 

 

 

3,468,638

 

 

 

4

 

 

 

2,073

 

 

 

1

 

 

 

(41,442

)

 

 

(39,364

)

Exercise of stock options

 

 

 

 

 

 

 

 

67,026

 

 

 

 

 

 

47

 

 

 

 

 

 

 

 

 

47

 

Repurchase of unvested early exercised

   stock options

 

 

 

 

 

 

 

 

(7,882

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83

 

 

 

 

 

 

 

 

 

83

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

105

 

 

 

 

 

 

 

 

 

105

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,068

)

 

 

(3,068

)

Balance as of May 31, 2019

 

 

12,813,887

 

 

 

48,195

 

 

 

3,527,782

 

 

 

4

 

 

 

2,308

 

 

 

1

 

 

 

(44,510

)

 

 

(42,197

)

Exercise of stock options

 

 

 

 

 

 

 

 

1,229

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Repurchase of unvested early exercised

   stock options

 

 

 

 

 

 

 

 

(7,913

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48

 

 

 

 

 

 

 

 

 

48

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

136

 

 

 

 

 

 

 

 

 

136

 

Unrealized loss on available-for-sale

   investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,427

)

 

 

(2,427

)

Balance as of August 31, 2019

 

 

12,813,887

 

 

$

48,195

 

 

 

3,521,098

 

 

$

4

 

 

$

2,493

 

 

$

 

 

$

(46,937

)

 

$

(44,440

)

 

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

 

 

5


 

Nurix Therapeutics, Inc.

Condensed consolidated statements of cash flows

(in thousands)

(unaudited)

 

 

Nine Months Ended

 

 

 

August 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(23,328

)

 

$

(8,180

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,536

 

 

 

1,805

 

Stock-based compensation

 

 

1,765

 

 

 

343

 

Net amortization (accretion) of premium (discount)

 

 

130

 

 

 

(109

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Income tax receivable

 

 

(3,856

)

 

 

 

Prepaid expenses and other current assets

 

 

(4,394

)

 

 

(283

)

Accounts payable

 

 

602

 

 

 

259

 

Deferred revenue

 

 

47,368

 

 

 

18,747

 

Accrued and other liabilities

 

 

579

 

 

 

767

 

Net cash provided by operating activities

 

 

20,402

 

 

 

13,349

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(141,067

)

 

 

(5,939

)

Maturities of investments

 

 

14,873

 

 

 

19,500

 

Purchases of property and equipment

 

 

(3,647

)

 

 

(698

)

Net cash provided by (used in) investing activities

 

 

(129,841

)

 

 

12,863

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon initial public offering, net of offering costs

 

 

219,301

 

 

 

 

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs