NextCure, Inc. (NASDAQ:NXTC) is a clinical-stage biopharmaceutical company dedicated to advancing innovative cancer therapies that address the needs of patients who do not respond to or experience disease progression on current treatments. The company's focus on differentiated mechanisms of action, including antibody-drug conjugates (ADCs), antibodies, and proteins, has positioned it as a promising player in the rapidly evolving cancer immunotherapy landscape.
Established in 2015 and headquartered in Beltsville, Maryland, NextCure has steadily built a diverse pipeline of product candidates, leveraging its deep understanding of biological pathways, cell interactions, and the role they play in eliciting a biologic response. The company's commitment to scientific innovation and its collaborative approach have been instrumental in its development. Since its inception, NextCure has devoted substantially all of its efforts and financial resources to discovery, research and development activities for its product candidates, identifying business development opportunities, raising capital, and securing intellectual property rights.
The company has funded its operations primarily through proceeds from public offerings of its common stock, private placements of its preferred stock, and an upfront fee received under a former research and development collaboration agreement. In November 2018, NextCure received a $25 million upfront payment in cash from Eli Lilly and Company pursuant to a collaboration agreement, which was terminated in March 2020. In May 2019, the company closed its initial public offering, selling 5.75 million shares of common stock at a public offering price of $15 per share for net proceeds of approximately $77 million. Later that year in November 2019, NextCure completed an underwritten public offering, selling 4.08 million shares of common stock at a public offering price of $36.75 per share, with the underwriters exercising their full option to purchase an additional 611,580 shares. The net proceeds from this offering were approximately $160.9 million.
To date, NextCure has not generated any revenue from product sales and has incurred significant operating losses since its inception. As of December 31, 2023, the company had an accumulated deficit of $324.5 million, primarily as a result of research and development and general and administrative expenses.
Financial Overview and Liquidity
As of September 30, 2024, NextCure reported a cash, cash equivalents, and marketable securities balance of $75.3 million. This strong financial position, combined with the company's recent restructuring efforts, is expected to fund its operations into the second half of 2026. The company's net loss for the nine months ended September 30, 2024, was $44.1 million, a decrease from the $48.3 million net loss reported for the same period in 2023.
For the fiscal year 2023, NextCure reported no revenue, a net loss of $62,723,000, operating cash flow of -$52,974,000, and free cash flow of -$53,794,000. In the most recent quarter (Q3 2024), the company again reported no revenue, with a net loss of $11,540,000, operating cash flow of -$11,454,000, and free cash flow of -$11,624,000. This represents a 12.00% year-over-year decrease in net loss, primarily due to lower research and development and general and administrative expenses.
NextCure's financial position remains solid, with a debt-to-equity ratio of 0.0596. The company has a credit facility with Bank of America that provides up to $25 million in available credit. As of September 30, 2024, NextCure's current ratio and quick ratio both stand at 9.07, indicating strong short-term liquidity.
Prioritizing the Pipeline
In March 2024, NextCure announced a prioritization and restructuring of its operations to align with its focused pipeline. The company paused its internal manufacturing operations and reduced its workforce by approximately 37%, primarily affecting drug manufacturing roles, as well as other areas of the organization, including research and development.
This strategic decision allowed NextCure to concentrate its resources on its highest-value opportunities, including the development of LNCB74, a B7-H4-targeting ADC, and the ongoing clinical evaluation of NC410, a LAIR-2 fusion protein, in combination with pembrolizumab.
LNCB74: Advancing a Promising B7-H4 ADC
LNCB74, NextCure's B7-H4-targeting ADC, is being developed in collaboration with LigaChem Biosciences (KOSDAQ: 141080). Preclinical data presented at the 2024 American Association for Cancer Research (AACR) Annual Meeting highlighted LNCB74's strong safety and pharmacokinetic profiles, as well as its potent tumor-killing activity in disease models.
Following the completion of good laboratory practice (GLP) toxicology studies, NextCure is targeting the filing of an Investigational New Drug (IND) application for LNCB74 by the end of 2024. The company plans to advance LNCB74 into Phase 1 clinical trials shortly after receiving an FDA safe-to-proceed letter, leveraging the differentiated mechanism of action and potential therapeutic advantages of this B7-H4-targeted ADC.
NC410: Combination Therapy in Ovarian and Colorectal Cancers
NextCure's NC410, a LAIR-2 fusion protein, is being evaluated in a Phase 1b/2 study in combination with pembrolizumab in patients with ovarian cancer and immune checkpoint inhibitor (ICI)-naïve microsatellite stable (MSS)/microsatellite instability-low (MSI-L) colorectal cancer (CRC).
At the 2024 European Society for Medical Oncology (ESMO) Congress, the company presented clinical data from the Phase 1b portion of the study, which demonstrated encouraging results. Of the 20 evaluable ovarian cancer patients, there were 5 partial responses (PRs), and of the 43 evaluable ICI-naïve MSS/MSI-L CRC patients without liver metastasis, there were 3 PRs. The biomarker data from the study supported the proposed mechanism of action of NC410.
Based on the promising data, NextCure has completed enrollment of additional ovarian cancer patients and plans to provide further updates on the expanded ovarian cancer and CRC cohorts in 2024. As of October 2024, there are four active ovarian cancer patients and seven active colorectal cancer patients remaining in the study. The company is seeking a partner or third-party financing to advance NC410 in further clinical development.
Additional Pipeline Programs
NextCure's pipeline also includes NC525 and NC318, two clinical-stage oncology programs for which the company is seeking partners. In the non-oncology space, NextCure is developing NC181, a humanized antibody targeting ApoE4 for the treatment of Alzheimer's disease, and NC605, an antibody targeting Siglic-15 for the treatment of osteogenesis imperfecta. The company believes these programs have the potential to file INDs within 12-18 months if it secures partners or third-party financing.
Partnerships and Collaborations
NextCure's commitment to scientific innovation is reflected in its collaborations with industry partners. In November 2022, the company entered into a Research Collaboration and Co-Development Agreement with LigaChem Biosciences to develop up to three ADCs, including LNCB74.
Additionally, NextCure maintains a longstanding relationship with Yale University, leveraging the institution's expertise in understanding biological pathways and the role of cell interactions in the tumor microenvironment.
Risks and Challenges
As a clinical-stage biopharmaceutical company, NextCure faces several inherent risks, including the uncertainty of clinical trial outcomes, regulatory approvals, and the competitive landscape in the rapidly evolving cancer immunotherapy field. The company's reliance on partnerships and collaborations also exposes it to potential risks associated with the success and strategies of its partners.
Furthermore, the company's recent restructuring and workforce reduction, while necessary to align with its prioritized pipeline, introduce execution and operational risks that must be carefully managed. NextCure faces significant challenges common to early-stage biopharmaceutical companies, including the need for substantial additional funding, the uncertainty of clinical trial results, and the risk of never successfully developing or commercializing any products.
Outlook and Conclusion
NextCure's laser-focus on its highest-value opportunities, exemplified by the development of LNCB74 and the continued evaluation of NC410, positions the company as a promising player in the cancer immunotherapy space. The company's strong financial position, combined with its commitment to scientific innovation and strategic partnerships, provides a solid foundation for the advancement of its pipeline and the continued pursuit of differentiated cancer therapies.
As NextCure navigates the challenges of the biopharmaceutical industry, its unwavering dedication to addressing the unmet needs of cancer patients who do not respond to or progress on current treatments remains a key driver of its efforts. The company's recent restructuring and prioritization of its pipeline demonstrate its adaptability and focus on maximizing the potential of its most promising assets.
While NextCure has yet to generate revenue from product sales, its strategic decisions and pipeline advancements have positioned it for potential future success. The company's ability to secure partnerships or third-party financing for its non-core programs will be crucial in maximizing the value of its diverse pipeline.
Investors will closely monitor the company's progress as it seeks to unlock the full potential of its differentiated approaches and deliver meaningful outcomes for patients in need. With a cash runway extending into the second half of 2026 and a focused strategy centered on its lead programs, NextCure is well-positioned to continue its pursuit of innovative cancer therapies and potentially transform the treatment landscape for patients with difficult-to-treat cancers.