What Investors Should Know about Nurix’s New Risk Factors

Headquartered in San Francisco, California, Nurix Therapeutics (NRIX) seeks to develop targeted protein modulation drugs for a broad range of diseases, including cancer. It has collaborated with pharmaceutical giants Sanofi (SNY) and Gilead (GILD) on certain programs.

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On July 13, Nurix reported its Fiscal 2021 second-quarter financial results for the period ended May 31. The company also provided corporate updates, including information on executive hires and clinical programs.

Nurix’s Q2 Financial Results

Revenue of $7.1 million increased sharply from $4.2 million a year ago. Nurix attributed the revenue growth in part to increased spending by partners Sanofi and Gilead. The company suffered a net loss of $26.4 million, compared to a profit of $7.6 million a year ago. It closed the quarter with $496.5 million in cash, boosted by a March follow-on offering that raised more than $150 million. (See Nurix stock charts on TipRanks).

“The second half of 2021 promises to be an exciting time for Nurix as we prepare to deliver on our ambitious goal of initiating Phase 1 trials for three additional wholly owned and internally developed drug candidates,” commented Nurix CEO Arthur T. Sands.

Nurix’s Corporate Updates

Nurix said it hired Stefani A. Wolff as chief operating officer to expand its leadership team. Wolff, who most recently served as chief development officer at Principia Biopharma, brings decades of leadership experience in areas such as oncology and immunology to Nurix.

The company also said it appointed Seagen CEO Clay Siegall to its board. It said the executive has a successful track record. For example, Siegall has steered Seagen to the point that it now has several FDA-approved medicines having started as a drug discovery platform.

On the drug development side, Nurix revealed it has initiated a Phase 1 clinical trial of its lead candidate NX-2127. It is on track to begin Phase 1 trials of three other candidates in the second half of 2021.

Nurix’s Risk Factors

According to the new Tipranks Risk Factors tool, 79 risk factors have been identified for Nurix. Tech and Innovation is the major risk category, representing 32% of total risks. The next major risk categories are Finance and Corporate and Legal and Regulatory at 30% and 22%, respectively.

Since May 2021, Nurix has revised its risk profile to remove one risk and add four new risks. A newly added risk factor under Tech and Innovation cautions that if the company is unable to obtain approval for its drug candidates under the accelerated approval program, its expenses could increase. Such a situation could also reduce the company’s chances of obtaining marketing approval.

Another key new risk the company has highlighted under Legal and Regulatory regards generic competition. It cautions that if the FDA or a similar foreign regulator approves generic versions of its drugs, sales of its drugs could be negatively affected.

The Tech and Innovation risk factor’s sector average is 24%, compared to Nurix’s 32%. The company’s shares are down 30% since the beginning of 2021.

Analysts’ Take

In June, Baird analyst Joel Beatty initiated coverage on Nurix stock with a Buy rating and a price target of $46. Beatty’s price target suggests 102.55% upside potential.

“We rate NRIX Outperform because we view protein modulation as a promising new drug development approach, and we view Nurix as a key pioneer and leader in this space…multiple collaborations (Gilead and Sanofi) highlight the potential of protein modulation and provide platform validation,” commented Beatty.

Consensus among analysts is a Strong Buy based on 4 Buys. The average Nurix price target of $49 implies 115.76% upside potential to current levels.