UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 March 31, 2023


☐	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: 001-38905

NextCure, Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-5231247
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9000 Virginia Manor Road, Suite 200 Beltsville, Maryland	20705
(Address of principal executive offices)	(Zip Code)

(240) 399-4900

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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, $0.001 par value per share	NXTC	Nasdaq Global Select 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, a 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 May 1, 2023, the registrant had 27,834,911 shares of common stock, par value $0.001 per share, issued and outstanding.

Table of Contents

NextCure, Inc.

Form 10-Q

For the Quarter Ended March 31, 2023

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	1
	Unaudited Condensed Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022	2
	Unaudited Condensed Statements of Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022	3
	Unaudited Condensed Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	4
	Notes to Unaudited Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	21
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
SIGNATURES		24

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NEXTCURE, INC.

CONDENSED BALANCE SHEETS

(unaudited, in thousands, except share and per share amounts)


	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	29,973	$	26,630
Marketable securities		115,520		133,281
Prepaid expenses and other current assets		3,425		4,072
Total current assets		148,918		163,983
Property and equipment, net		11,185		11,897
Right of use assets		4,865		5,016
Other assets		2,823		3,265
Total assets	$	167,791	$	184,161
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,919	$	4,270
Accrued liabilities and other liabilities		4,347		4,857
Total current liabilities		6,266		9,127
Lease liabilities, long term		6,450		6,605
Other long-term liabilities		872		899
Total liabilities		13,588		16,631
Stockholders’ equity:
Preferred stock, par value of $0.001 per share; 10,000,000 shares authorized at March 31, 2023 and December 31, 2022; No shares issued and outstanding at March 31, 2023 and December 31, 2022		—		—
Common stock, par value of $0.001 per share; 100,000,000 shares authorized at March 31, 2023 and December 31, 2022; 27,774,536 and 27,774,536 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		28		28
Additional paid-in capital		432,833		430,755
Accumulated other comprehensive loss		(803)		(1,494)
Accumulated deficit		(277,855)		(261,759)
Total stockholders’ equity		154,203		167,530
Total liabilities and stockholders’ equity	$	167,791	$	184,161

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

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NEXTCURE, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited, in thousands, except share and per share amounts)


	Three Months Ended
	March 31,
	2023		2022
Operating expenses:
Research and development	$	11,647	$	15,024
General and administrative		5,424		5,747
Total operating expenses		17,071		20,771
Loss from operations		(17,071)		(20,771)
Other income, net		975		169
Net loss	$	(16,096)	$	(20,602)
Net loss per common share - basic and diluted	$	(0.58)	$	(0.74)
Weighted-average shares outstanding - basic and diluted		27,774,536		27,708,768
Comprehensive loss:
Net loss	$	(16,096)	$	(20,602)
Unrealized gain (loss) on marketable securities		691		(1,536)
Total comprehensive loss	$	(15,405)	$	(22,138)

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

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NEXTCURE, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands, except share data)


	Three Months Ended March 31, 2023

	Stockholders’ Equity
				Additional		Accumulated Other
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Loss		Deficit		Equity
Balance as of December 31, 2022	27,774,536	$	28	$	430,755	$	(1,494)	$	(261,759)	$	167,530
Stock-based compensation	—		—		2,078		—		—		2,078
Unrealized gain on marketable securities, net of tax $0	—		—		—		691		—		691
Net loss	—		—		—		—		(16,096)		(16,096)
Balance as of March 31, 2023	27,774,536	$	28	$	432,833	$	(803)	$	(277,855)	$	154,203


	Three Months Ended March 31, 2022

	Stockholders’ Equity
				Additional		Accumulated Other
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Loss		Deficit		Equity
Balance as of December 31, 2021	27,680,997	$	28	$	421,047	$	(663)	$	(187,026)	$	233,386
Stock-based compensation	—		—		2,628		—		—		2,628
Exercise of stock options	44,165		—		60		—		—		60
Unrealized loss on marketable securities, net of tax $0	—		—		—		(1,536)		—		(1,536)
Net loss	—		—		—		—		(20,602)		(20,602)
Balance as of March 31, 2022	27,725,162	$	28	$	423,735	$	(2,199)	$	(207,628)	$	213,936

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

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NEXTCURE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Three Months Ended
	March 31,
	2023		2022
Cash flows from operating activities:
Net loss	$	(16,096)	$	(20,602)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		960		1,058
Amortization of premiums and discounts on marketable securities		82		1,039
Stock-based compensation		2,078		2,628
Noncash operating lease expense		150		—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,089		620
Accounts payable		(2,351)		859
Accrued liabilities and other liabilities		(551)		(1,049)
Lease liabilities		(113)		—
Other long-term liabilities		(27)		—
Net cash used in operating activities		(14,779)		(15,447)
Cash flows from investing activities:
Sales and maturities of marketable securities		49,773		14,007
Purchases of marketable securities		(31,403)		—
Purchases of property and equipment		(248)		(305)
Net cash provided by investing activities		18,122		13,702
Cash flows from financing activities:
Proceeds from exercise of stock options		—		60
Net cash provided by (used in) financing activities		—		60
Net increase (decrease) in cash and cash equivalents		3,343		(1,685)
Cash and cash equivalents – beginning of period		26,630		12,376
Cash and cash equivalents – end of period	$	29,973	$	10,691
Supplemental disclosures of cash flow information:
Cash paid for interest	$	21	$	23

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

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NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. Nature of the Business

Organization

NextCure, Inc. (“NextCure” or the “Company”) was incorporated in Delaware in September 2015 and is headquartered in Beltsville, Maryland. The Company is a clinical-stage biopharmaceutical company committed to discovering and developing novel, first-in-class immunomedicines to treat cancer and other immune-related diseases by restoring normal immune function. Through its proprietary Functional, Integrated, NextCure Discovery in Immuno-Oncology (“FIND-IO”) platform, the Company studies various immune cells in order to discover and understand targets and structural components of immune cells and their functional impact in order to develop immunomedicines. Since inception, the Company has devoted substantially all its efforts and financial resources to organizing and staffing the Company, identifying business development opportunities, raising capital, securing intellectual property rights related to the Company’s product candidates, building and optimizing the Company’s manufacturing capabilities and conducting discovery, research and development activities for the Company’s product candidates, discovery programs and its FIND-IO platform.

Liquidity

The Company has not generated any revenue to date from product sales and does not expect to generate any revenues from product sales in the foreseeable future. Through March 31, 2023, the Company has funded its operations primarily with proceeds from public offerings of its common stock, private placements of its preferred stock and upfront fees received under the Company’s former agreement with Eli Lilly and Company, which was terminated in March 2020. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future.

As of March 31, 2023, we had cash, cash equivalents and marketable securities of $145.5 million. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations for at least the next twelve months from the issuance of these financial statements. Management intends to fund future operations through additional public or private equity or debt offerings and may seek additional capital through arrangements with strategic partners or from other sources, the securing of which cannot be assured.

2. Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”).

Basis of Presentation

The unaudited condensed financial statements include the accounts of the Company and have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto in the Annual Report.

Unaudited Financial Information

In the opinion of management, the information furnished reflects certain adjustments, all which are of a normal and recurring nature and are necessary for a fair presentation of the Company’s financial position as of the reported balance sheet date and of the Company’s results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative

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NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities as of the date of the condensed financial statements, and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ from those estimates, management does not believe that such differences would be material.

Recently Issued Accounting Pronouncements

The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act provided to EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until it is required to comply with such standards, which is generally consistent with required adoption dates of private companies.

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). All other ASUs issued subsequent to the filing of the Company’s Annual Report were assessed and determined to be either inapplicable or not expected to have a material impact on the Company’s financial position or results of operations.

3. Marketable Securities

Marketable securities consist of the following:


	March 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
Corporate bonds	$	104,701	$	10	$	(781)	$	103,930
U.S. Government agencies		11,622		2		(34)		11,590
Total	$	116,323	$	12	$	(815)	$	115,520


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
Corporate bonds	$	133,163	$	—	$	(1,457)	$	131,706
U.S. Government agencies		1,612		—		(37)		1,575
Total	$	134,775	$	—	$	(1,494)	$	133,281

The Company uses the specific identification method when calculating realized gains and losses. For the three months ended March 31, 2023 and 2022, respectively, the Company recorded $0 and $2,000 in realized gains on available-for-sale securities, which is included in other income, net on the condensed statements of operations.

The Company reviewed all investments which were in a loss position at the respective balance sheet dates, as well as the remainder of the portfolio. As of March 31, 2023, the Company had investments with a total fair market value

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NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

of $99.2 million in an unrealized loss position, of which $52.0 million were in a continuous unrealized loss position for more than twelve months. The Company analyzed the unrealized losses and determined that the prevailing high interest rates were the primary factor driving these changes, and such unrealized losses are temporary as the Company anticipates a full recovery of the amortized cost basis of these securities at maturity. After analyzing the securities in an unrealized loss position, the portion of these losses that relate to changes in credit quality is insignificant. The Company does not intend to sell these securities, nor is it more likely than not that the Company will be required to sell them prior to the end of their contractual terms. Furthermore, the Company does not believe that these securities expose the Company to undue market risk or counterparty credit risk.

The following table summarizes maturities of the Company’s investments available-for-sale as of March 31, 2023:


	March 31, 2023
			Fair
(in thousands)	Cost		Value
Maturities:
Within 1 year	$	81,747	$	81,051
Between 1 to 2 years		34,576		34,469
Total investments available-for-sale	$	116,323	$	115,520

The Company has classified all of its available-for-sale investments, including those with maturities beyond one year, as current assets on the accompanying condensed balance sheets based on the highly liquid nature of these investment securities and because these investment securities are considered available for use in current operations.

4. Fair Value Measurements

The Company has certain financial assets recorded at fair value, which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

Level 1—Quoted market prices in active markets for identical assets or liabilities.

Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.

Level 3—Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use.

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

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NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022:

March 31, 2023

Significant

Quoted Prices in

Other

Active Markets or

Observable

Significant

Identical Assets

Inputs

Unobservable

(in thousands)

Total

(Level 1)

(Level 2)

SEC Form 10-Q filed by NextCure Inc.