IPO Preview: Nurix Therapeutics Starts IPO Process

IPOStreet

Nurix Therapeutics (NRIX) aims to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The company is developing small molecule-based treatments for blood cancers and immune system conditions.

NRIX is a promising biopharma with substantial major pharma partnerships, but has yet to enter Phase 1 safety trials for its lead candidate, so the firm and IPO is ultra high risk.

San Francisco, California-based Nurix was founded to create a portfolio of chimeric targeting molecule-based drug candidates that serve to 'degrade the BTK protein' as well as a ligase inhibitor that 'inhibits CBL-B ligase to raise substrate protein levels.'

Management is led by president and Chief Executive Officer Mr. Arthur T. Sands, M.D., Ph.D, who has been with the firm since 2014 and was previously founder of Lexicon Pharmaceuticals (LXRX).

Below is a brief overview video of non-Hodgkin Lymphoma:

Source: Osmosis

The firm's lead candidate is NX-2127, a BTK degrader molecule that aims to treat non-Hodgkin lymphoma and chronic lymphocytic leukemia.

In preclinical studies, Nurix has shown the ability of the drug to 'degrade BTK in both wild type tumor cell lines and those that have the C481S mutation that confers resistance to currently marketed BTK inhibitors.'

Below is the current status of the company’s drug development pipeline:

nurixpipe

Source: Company S-1 Filing

Investors in the firm have invested at least $170 million and include The Column Group, Third Rock Ventures, Foresite Capital and Bristol-Myers Squibb (BMY).

According to a 2019 market research report by Grand View Research, the global market for lymphoma treatment was an estimated $11.7 billion in 2018.

The report indicates a forecast CAGR (Compound Annual Growth Rate) of 9.5% from 2019 to 2026.

If that growth rate is achieved, the total global market size would exceed $24 billion at the end of the analysis period.

Key elements driving this expected growth are an expected increase in application of premium-priced immune checkpoint inhibitor products, such as Keytruda and Opdivo and an increase in the number of lymphoma and Hodgkin and non-hodgkin lymphoma cases.

Also, the U.S. lymphoma market's historical and projected future growth prospects are shown in the chart below:

nurixmarket

Major competitive vendors that provide or are developing treatments include:

  • Arvinas (ARVN)
  • C4 Therapeutics
  • Cullgen
  • Kymera Therapeutics
  • Also, major pharma firm are making many investments in the field
  • Merck (MRK)

Nurix’s recent financial results are atypical of life science biopharma companies at IPO in the sense that the firm has recognized significant collaboration revenue along with its substantial R&D and G&A expenses associated with its development efforts.

Below are the company’s financial results for the past two and ½ years (Audited PCAOB for full years):

nurixpl

Source: Company registration statement

As of May 31, 2020, the company had $182.6 million in cash and $106.7 million in total liabilities. (Unaudited, interim)

Nurix intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may be different.

No existing shareholders have indicated an interest to purchase shares at the IPO price, although this element may become a feature of the IPO if disclosed in a future filing.

Management says it will use the net proceeds from the IPO ‘to fund the development of NX-2127, to fund the development of NX-1607, to fund the development of other preclinical programs; and any remaining amounts to conduct research, fund the further development of our technology platform, broaden our pipeline of product candidates and for working capital and general corporate purposes.’

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are J.P. Morgan, Piper Sandler, Stifel and Needham & Company.

Commentary

Nurix is seeking public capital market funding to advance its preclinical candidates into Phase 1 safety trials.

The firm’s lead candidate, NX-2127, has shown promising preclinical results in degrading the BTK protein that has shown some resistance to other BTK inhibitors.

The market opportunity for B-cell treatments is large and expected to grow at a substantial rate of growth through at least 2026 as the global population ages and the incidence of blood cancers increases due to reduced immune system function and other causes.

The firm has developed collaborations with leading pharma firms Sanofi (SNY), Gilead (GILD) and Celgene (CELG).

Having three collaboration partners is unusual for an IPO-stage biopharma and is quite impressive.

The company’s investor syndicate includes Third Rock Ventures, a successful life science venture capital firm.

J.P. Morgan is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 80.1% since their IPO. This is a top-tier performance for all major underwriters during the period.

When we learn more about the IPO’s pricing and valuation assumptions, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.

Glossary Of Terms

(I have no position in any stocks mentioned as of the article date, no plans to initiate any positions within the next 48 hours, and no business relationship with any company whose stock is mentioned in this article. IPO stocks can be very volatile in the days immediately after an IPO. Information provided is for educational purposes only, may be in error, incomplete or out of date, and does not constitute financial, legal, or investment advice.)

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