Nurix Therapeutics Capitalizes on Innovative Protein Degraders
Nurix Therapeutics (NASDAQ:NRIX) just raised $175 million in an upsized offering on the heels of a 168% stock return in the past six months. This development-stage biotech is advancing a pipeline of protein degraders.
NX-2127 and NX-5948 are the lead, wholly-owned protein degraders targeting B-cell malignancies. Their target is BTK, which plays an integral role in B-cell malignancies. Johnson & Johnson's (JNJ) Imbruvica (ibrutinib), a BTK inhibitor, is a multibillion-dollar drug utilized for B-cell malignancies.
Like every drug, Imbruvica has its limitations. Mainly, patients can develop resistance to Imbruvica due to mutations in BTK.
Nurix's approach is unique in that it can utilize many different E3 ligases (enzymes that mark proteins for degradation) to either increase or reduce protein levels. This approach is flexible and can potentially address a wide range of diseases (i.e., autoimmune disorders). To contrast, PROTACs are designed to connect disease-causing proteins with an E3 ubiquitin ligase to remove them from the cell. PROTACs are highly specific but not as flexible.
Compared to traditional BTK inhibitors like Imbruvica, protein degraders could potentially overcome resistance by targeting the protein for degradation, regardless of mutation status. Protein degraders may also be more selective and avoid some of the side effects associated with traditional BTK inhibitors.
On the flip side, protein degraders are a new class of drugs. They are larger molecules compared to small-molecule BTK inhibitors. This may impact its delivery and stability. Moreover, unforeseen side effects or toxicities may arise.
FDA Fast Tracks Nurix's NX-5948 for B-cell Malignancies
Earlier this year, the FDA granted Fast Track designation for NX-5948 for the "treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL) after at least two lines of therapy." This protein degrader is undergoing a Phase 1 study in patients with relapsed or refractory B-cell malignancies. This large study (292 estimated participants) involves multiple conditions, like chronic lymphocytic leukemia (CLL), small lymphocytic lymphoma (SLL), and diffuse large B cell lymphoma (DLBCL). The company plans to present data at higher dose levels later this year.
The preliminary data presented late last year in CLL appears encouraging, with 3/7 patients demonstrating partial responses.
On the safety front, Nurix notes (page 13):
Out of 26 patients dosed, there were no dose limiting toxicities and no treatment emergent adverse events (TEAEs) resulting in drug discontinuation. There were four NX-5948-related grade ≥3 TEAEs and no related serious adverse events (SAEs).
Financial Overview of Nurix
As of February 29, Nurix reported $254.3 million in cash, cash equivalents and marketable securities. The $175 million raise boosts this figure to $429.3 million. The company's balance sheet appears solid, with a current ratio of nearly 3. Nurix does not have any major debt obligations. In the last quarter, operating expenses totaled $61.8 million. Nurix did receive collaboration revenue of $16.5 million for the three months ending February 29. The net loss for the quarter was $41.5 million. Assuming Nurix's operating expenses and revenues remain steady, they appear to have at least 40 months of cash runway.
Nurix's Market Position and Investor Sentiment
Nurix sports a market capitalization of $822 million. Per Seeking Alpha, analysts anticipate between $66 million and $79 million in revenue for the next three years. Nurix's stock has outperformed the broader market in the past year, up 85% versus 25% for the SP500.
Short interest is considerable at 18%, indicating substantial doubt among market players. Insiders have sold 38,000+ shares in the past twelve months with zero buys. Top institutional investors include BlackRock, Baker Bros., and Ark Investment Management. They have all added shares.
All in all, Nurix's market sentiment can be classified as "mixed."
My Analysis and Recommendation
There's a lot to like about Nurix's approach. BTK is a proven target in B-cell malignancies and protein degradation may provide differentiation. There's also reason for caution. This is a new approach and Nurix has considerable competition with existing drugs (like Imbruvica) and other protein degrader developers. Demonstrating differentiation will not be an easy task.
So, an investment in Nurix is quite speculative. This is a high risk/high reward proposition. For investors with a higher appetite for risk and seeking alpha within their portfolio, this may be a good one to add to their diversified and balanced portfolio. For now, I'm going to give Nurix a Hold rating. I'm curious to see how the efficacy/safety profile will evolve with higher doses of their lead protein degrader, NX-5948. Until then, it feels right to remain cautiously optimistic.
Stephen Ayers
As an RN with a BSN and an MBA student, I bring a unique blend of healthcare and business acumen to biotech and tech investment analysis. My strategies, influenced by concepts from "Superforecasting" and "Antifragile," focus on probabilistic forecasting and market resilience. My work, extending beyond biotech to broader tech trends, aims to provide deep, insightful analysis in these evolving industries. My role at Seeking Alpha centers on unveiling complex investment opportunities, leveraging my continuous learning in healthcare and business.
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