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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 May 31, 2022

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)

 

(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      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 June 30, 2022, the Registrant had 47,041,875 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 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 of investigational new drug application (IND) submissions for our drug candidates;

 

the timing and conduct of our clinical trial programs for our lead drug candidates NX-2127, NX-1607, NX-5948, DeTIL‑0255 and other drug candidates, including statements regarding the timing of initiation of clinical trials;

 

the timing of, and our ability to obtain, marketing approvals for our lead drug candidates NX-2127, NX-1607, NX-5948, DeTIL-0255 and other drug candidates;

 

our plans to pursue research and development of other 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 impact of the ongoing coronavirus (COVID-19) pandemic, including the resurgence of cases relating to the spread of new variants, 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.


 


 

 

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

30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

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)

 

 

 

May 31,

2022

 

 

November 30,

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

41,533

 

 

$

80,506

 

Short-term investments

 

 

255,746

 

 

 

215,214

 

Accounts receivable

 

 

 

 

 

6,000

 

Income tax receivable

 

 

 

 

 

204

 

Prepaid expenses and other current assets

 

 

9,510

 

 

 

9,194

 

Total current assets

 

 

306,789

 

 

 

311,118

 

Long-term investments

 

 

51,538

 

 

 

137,189

 

Operating lease right-of-use assets

 

 

15,418

 

 

 

14,005

 

Property and equipment, net

 

 

15,507

 

 

 

11,340

 

Restricted cash

 

 

901

 

 

 

286

 

Other assets

 

 

4,157

 

 

 

2,833

 

Total assets

 

$

394,310

 

 

$

476,771

 

Liabilities and stockholdersʼ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

6,142

 

 

$

6,650

 

Accrued expenses and other current liabilities

 

 

19,734

 

 

 

14,549

 

Operating lease liabilities, current

 

 

5,470

 

 

 

3,847

 

Deferred revenue, current

 

 

41,319

 

 

 

41,212

 

Total current liabilities

 

 

72,665

 

 

 

66,258

 

Operating lease liabilities, net of current portion

 

 

9,043

 

 

 

9,189

 

Deferred revenue, net of current portion

 

 

45,863

 

 

 

59,022

 

Total liabilities

 

 

127,571

 

 

 

134,469

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

Stockholdersʼ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value— 10,000,000 shares

   authorized as of May 31, 2022 and November 30, 2021;

   no shares issued and outstanding

   as of May 31, 2022 and November 30, 2021

 

 

 

 

 

 

Common stock, $0.001 par value— 500,000,000 shares authorized

   as of May 31, 2022 and November 30, 2021;

   45,040,068 and 44,664,371 shares issued and outstanding

  as of May 31, 2022 and November 30, 2021, respectively

 

 

45

 

 

 

45

 

Additional paid-in capital

 

 

578,605

 

 

 

563,757

 

Accumulated other comprehensive loss

 

 

(3,085

)

 

 

(608

)

Accumulated deficit

 

 

(308,826

)

 

 

(220,892

)

Total stockholdersʼ equity

 

 

266,739

 

 

 

342,302

 

Total liabilities and stockholdersʼ equity

 

$

394,310

 

 

$

476,771

 

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

 

 

Six Months Ended

 

 

 

May 31,

 

 

May 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Collaboration revenue

 

$

11,432

 

 

$

7,091

 

 

$

21,053

 

 

$

12,102

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

47,493

 

 

 

25,994

 

 

 

90,630

 

 

 

48,997

 

General and administrative

 

 

9,654

 

 

 

7,511

 

 

 

18,882

 

 

 

14,041

 

Total operating expenses

 

 

57,147

 

 

 

33,505

 

 

 

109,512

 

 

 

63,038

 

Loss from operations

 

 

(45,715

)

 

 

(26,414

)

 

 

(88,459

)

 

 

(50,936

)

Interest and other income, net

 

 

314

 

 

 

171

 

 

 

525

 

 

 

489

 

Loss before income taxes

 

 

(45,401

)

 

 

(26,243

)

 

 

(87,934

)

 

 

(50,447

)

Provision for income taxes

 

 

 

 

 

139

 

 

 

 

 

 

210

 

Net loss

 

$

(45,401

)

 

$

(26,382

)

 

$

(87,934

)

 

$

(50,657

)

Net loss per share, basic and diluted

 

$

(1.01

)

 

$

(0.60

)

 

$

(1.96

)

 

$

(1.23

)

Weighted-average number of shares outstanding, basic and diluted

 

 

44,898,409

 

 

 

43,804,066

 

 

 

44,797,235

 

 

 

41,318,281

 

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

 

 

Six Months Ended

 

 

 

May 31,

 

 

May 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(45,401

)

 

$

(26,382

)

 

$

(87,934

)

 

$

(50,657

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale investments

 

 

(1,019

)

 

 

(19

)

 

 

(2,477

)

 

 

(57

)

Total comprehensive loss

 

$

(46,420

)

 

$

(26,401

)

 

$

(90,411

)

 

$

(50,714

)

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

 

 

3


 

 

NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)

 

 

 

Common stock

 

 

Additional

paid-in

 

 

Accumulated

other

comprehensive

 

 

Accumulated

 

 

Total

stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

equity

 

Balance as of November 30, 2020

 

 

38,864,872

 

 

$

39

 

 

$

393,841

 

 

$

87

 

 

$

(103,698

)

 

$

290,269

 

Exercise of stock options

 

 

190,825

 

 

 

 

 

 

394

 

 

 

 

 

 

 

 

 

394

 

Repurchase of unvested early exercised stock options

 

 

(971

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

40

 

 

 

 

 

 

 

 

 

40

 

Issuance under employee stock purchase plan

 

 

64,589

 

 

 

 

 

 

1,043

 

 

 

 

 

 

 

 

 

1,043

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,700

 

 

 

 

 

 

 

 

 

2,700

 

Unrealized loss on available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

(38

)

 

 

 

 

 

(38

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,275

)

 

 

(24,275

)

Balance as of February 28, 2021

 

 

39,119,315

 

 

 

39

 

 

 

398,018

 

 

 

49

 

 

 

(127,973

)

 

 

270,133

 

Issuance of common stock in connection with equity

  offering, net of offering costs of $643

 

 

5,175,000

 

 

 

5

 

 

 

150,152

 

 

 

 

 

 

 

 

 

150,157

 

Exercise of stock options

 

 

109,232

 

 

 

 

 

 

241

 

 

 

 

 

 

 

 

 

241

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

104

 

 

 

 

 

 

 

 

 

104

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,944

 

 

 

 

 

 

 

 

 

3,944

 

Unrealized loss on available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

(19

)

 

 

 

 

 

(19

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,382

)

 

 

(26,382

)

Balance as of May 31, 2021

 

 

44,403,547

 

 

$

44

 

 

$

552,459

 

 

$

30

 

 

$

(154,355

)

 

$

398,178

 

 

 

 

Common stock

 

 

Additional

paid-in

 

 

Accumulated

other

comprehensive

 

 

Accumulated

 

 

Total

stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

equity

 

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 investments

 

 

 

 

 

 

 

 

 

 

 

(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

 

Exercise of stock options

 

 

173,155

 

 

 

 

 

 

432

 

 

 

 

 

 

 

 

 

432

 

Vesting of restricted stock units

 

 

13,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of early-exercised stock options

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

 

 

 

35

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,775

 

 

 

 

 

 

 

 

 

6,775

 

Unrealized loss on available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

(1,019

)

 

 

 

 

 

(1,019

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(45,401

)

 

 

(45,401

)

Balance as of May 31, 2022

 

 

45,040,068

 

 

$

45

 

 

$

578,605

 

 

$

(3,085

)

 

$

(308,826

)

 

$

266,739

 

 

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

 

4


 

 

NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Six Months Ended May 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(87,934

)

 

$

(50,657

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,273

 

 

 

1,288

 

Stock-based compensation

 

 

12,846

 

 

 

6,644

 

Net amortization (accretion) of premium (discount) on investments

 

 

993

 

 

 

566

 

Loss on disposal of property and equipment

 

 

9

 

 

 

 

Amortization of operating lease right-of-use assets

 

 

2,612

 

 

 

1,576

 

Other

 

 

201

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6,000

 

 

 

(2,537

)

Income tax receivable

 

 

 

 

 

704

 

Prepaid expenses and other assets

 

 

(1,515

)

 

 

(837

)

Accounts payable

 

 

1,747

 

 

 

2,119

 

Deferred revenue

 

 

(13,052

)

 

 

19,899

 

Operating lease liabilities

 

 

(2,548

)

 

 

(1,555

)

Accrued expenses and other liabilities

 

 

2,824

 

 

 

(692

)

Net cash used in operating activities

 

 

(75,544

)

 

 

(23,482

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(80,031

)

 

 

(183,238

)

Sales of investments

 

 

 

 

 

6,994

 

Maturities of investments

 

 

121,558

 

 

 

119,681

 

Purchases of property and equipment

 

 

(6,261

)

 

 

(2,934

)

Net cash (used in) provided by investing activities

 

 

35,266

 

 

 

(59,497

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock, net of underwriting discounts and commissions and offering costs

 

 

 

 

 

150,157

 

Proceeds from exercise of stock options

 

 

856

 

 

 

631

 

Proceeds from issuance under employee stock purchase plan

 

 

1,064

 

 

 

1,043

 

Repurchase of unvested early exercised stock options

 

 

 

 

 

(1

)

Net cash provided by financing activities

 

 

1,920

 

 

 

151,830

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(38,358

)

 

 

68,851

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

80,792

 

 

 

119,526

 

Cash, cash equivalents and restricted cash at end of period

 

$

42,434

 

 

$

188,377

 

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Additions to property and equipment included in accounts payable and accrued expenses and other liabilities

 

$

2,693

 

 

$

607

 

Vesting of early exercised stock options

 

$

82

 

 

$

144

 

 

 

 

As of May 31,

 

 

 

2022

 

 

2021

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

41,533

 

 

$

188,207

 

Restricted cash

 

 

901

 

 

 

170

 

Total cash, cash equivalents and restricted cash

 

$

42,434

 

 

$

188,377

 

 

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

 

5


 

 

NURIX THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization