NextCure(NXTC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The company's Q2 2025 financial statements reveal a significant net loss, reduced liquidity, and substantial doubt about its ability to continue as a going concern Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,892 | $27,727 | | Marketable securities | $30,416 | $40,894 | | Total current assets | $40,015 | $71,807 | | Total assets | $47,689 | $80,860 | | Total liabilities | $16,043 | $15,388 | | Total stockholders' equity | $29,646 | $65,472 | Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $24,091 | $12,418 | $31,987 | $23,816 | | General and administrative | $3,201 | $4,076 | $6,927 | $8,440 | | Loss from operations | ($27,292) | ($16,494) | ($38,914) | ($34,798) | | Net loss | ($26,808) | ($15,404) | ($37,784) | ($32,511) | | Net loss per share | ($11.29) | ($6.61) | ($16.05) | ($13.96) | Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($35,707) | ($22,382) | | Net cash provided by investing activities | $10,853 | $30,041 | | Net cash provided by financing activities | $2,019 | $107 | | Net (decrease) increase in cash | ($22,835) | $7,766 | - The company has concluded there is substantial doubt about its ability to continue as a going concern within one year, given its history of net losses, negative cash flows, and an accumulated deficit of $417.9 million as of June 30, 2025[23] - On July 14, 2025, the company effectuated a 1-for-12 reverse stock split to regain compliance with Nasdaq's minimum bid price requirement[16][81][83] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strategic pipeline advancements, notably the SIM0505 license, which significantly increased R&D expenses, further weakening the company's financial position and raising going concern doubts - The company is focused on advancing its ADC product candidates, LNCB74 and SIM0505; Phase 1 dose escalation for LNCB74 is in cohort 4 with an update expected by Q4 2025, while the first patient for SIM0505 is expected to be dosed in Q3 2025[91][95] - In June 2025, the company entered into a license agreement with Zaiming to develop SIM0505, involving an upfront payment of $12 million and an additional $5 million due by year-end 2025, both expensed as R&D in Q2 2025[53][55][56] Comparison of Operating Expenses (in thousands) | Expense Category | Q2 2025 | Q2 2024 | Change | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Research and development | $24,091 | $12,418 | $11,673 | $31,987 | $23,816 | $8,171 | | General and administrative | $3,201 | $4,076 | ($875) | $6,927 | $8,440 | ($1,513) | - The increase in R&D expenses for the three and six months ended June 30, 2025, was primarily due to $17.0 million in fees for the Zaiming license agreement, partially offset by lower costs on other deprioritized programs[114][115] - With $35.3 million in cash, cash equivalents, and marketable securities as of June 30, 2025, the company believes it can fund operations into mid-2026 but has concluded there is substantial doubt about its ability to continue as a going concern[99][123] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a "smaller reporting company," NextCure, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is exempt from providing information on market risk as it qualifies as a "smaller reporting company" under SEC rules[141] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[142] - No changes occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[143][144] Part II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material litigation or legal proceedings and is not aware of any pending or threatened litigation that would materially affect its business or financial results - The company reports no material legal proceedings that are likely to have a significant impact on its business[79][145] Item 1A. Risk Factors A primary risk factor is the substantial doubt about the company's ability to continue as a going concern, potentially hindering future financing and operations - A key risk factor is the substantial doubt about the company's ability to continue as a going concern, which could negatively impact its ability to raise additional capital[146][147] - The company's cash and marketable securities of $35.3 million are expected to fund operations into mid-2026, but failure to secure additional financing could force it to delay, reduce, or terminate product development[146][147] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no sales of unregistered equity securities during the period that were not previously disclosed in a Form 8-K - There were no unregistered sales of equity securities during the quarter that have not been previously reported[149] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[150] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[151] Item 5. Other Information During the quarter, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or any non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the fiscal quarter[152] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report, including amendments to the Certificate of Incorporation, the License Agreement with Hainan Simcere, the Subscription Agreement, and officer certifications - Exhibits filed include the License Agreement with Hainan Simcere Zaiming Pharmaceutical Co., Ltd. and the associated Subscription and Registration Rights Agreements[155]