NextCure (NXTC) risk factors, FY2025 10-K

Risks Related to Our Financial Position and Need for Additional Capital

1. 01We have a limited operating history and no products approved for commercial sale. We have a history of significant losses, expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability
2. 02We have never generated revenue from product sales and may never be profitable

Risks Related to the Discovery and Development of Our Product Candidates

1. 03Our business is dependent on our ability to advance our current and future product candidates through clinical trials, obtain marketing approval and ultimately commercialize them
2. 04The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be materially harmed
3. 05Clinical development involves a lengthy and expensive process with uncertain outcomes. We may incur additional costs and experience delays in developing and commercializing or be unable to develop or commercialize our current and future product candidates
4. 06Preclinical development is uncertain. Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all
5. 07Interim and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit, validation and verification procedures that could result in material changes in the final data
6. 08Because the numbers of subjects in our Phase 1/2 and Phase 1 clinical trials are small, the results from each of these trials, once completed, may be less reliable than results achieved in larger clinical trials
7. 09Our approach to the discovery and development of product candidates using our FIND platform is unproven and may not result in marketable products
8. 10If we uncover any previously unknown risks related to our FIND platform, or if we experience unanticipated problems or delays in developing our FIND product candidates, we may be unable to achieve our strategy of building an oncology pipeline of novel targets for new therapies focused on non-responders32% rewritten
9. 11If there are difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise be adversely affected
10. 12We may be required to suspend, repeat or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the trials are not well designed
11. 13We have chosen to prioritize development of SIM0505 and LNCB74. We may expend our limited resources on product candidates or indications that do not yield a successful product and fail to capitalize on other candidates or indications for which there may be a greater likelihood of success or may be more profitable

Risks Related to the Regulatory Approval and Commercialization of Product Candidates and Other Legal Compliance Matters

1. 14We may be unable to obtain FDA approval of our product candidates under applicable regulatory requirements. The denial or delay of any such approval would prevent or delay commercialization of our product candidates and adversely impact our potential to generate revenue, our business and our results of operations
2. 15Even if a current or future product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success
3. 16The market opportunities for any current or future product candidate we develop, if approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small88% rewritten
4. 17We may study SIM0505 and LNCB74 in combination with other therapies and future product candidates in combination with other therapies, which exposes us to additional regulatory risks
5. 18policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitabilityNew
6. 19Obtaining and maintaining marketing approval of our current and future product candidates in one jurisdiction does not mean that we will be successful in obtaining and maintaining marketing approval of our current and future product candidates in other jurisdictions
7. 20The pharmaceutical industry is subject to extensive regulatory obligations and policies that may be subject to significant and abrupt change, including due to judicial challenges, election cycles, and resulting regulatory updates and changes in policy priorities40% rewritten
8. 21Any resulting changes in regulation may result in unexpected delays, increased costs, or other negative impacts on our business that are difficult to predict
9. 22If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business

Risks Related to Manufacturing

1. 23Given our limited operating history, our manufacturing experience as an organization and with our manufacturing facility is limited, particularly following a recent restructuring that paused manufacturing operations92% rewritten
2. 24We may be unable to successfully scale-up manufacturing of our product candidates in sufficient quality and quantity, which would delay or prevent us from developing and, if approved, commercializing our product candidates
3. 25The loss of our third-party manufacturing partners or our, or our partners’, failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, or at all, would materially and adversely affect our business
4. 26We are subject to multiple manufacturing risks, any of which could substantially increase our costs and limit supply of our product candidates
5. 27We depend on third-party suppliers for key materials used in our manufacturing processes, and the loss of these third-party suppliers or their inability to supply us with adequate materials, or rising prices due to inflation, could harm our business24% rewritten
6. 28Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay

Risks Related to Intellectual Property

1. 29We are party to a license agreement with Yale University under which we acquired rights to intellectual property related to certain of our product candidates. If we breach our obligations under this agreement, the agreement could be terminated, which would adversely affect our business and prospects
2. 30Our intellectual property agreements with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors
3. 31Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
4. 32We may not be able to protect our intellectual property rights throughout the world48% rewritten
5. 33Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
6. 34We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful
7. 35Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court. We may not be able to protect our trade secrets in court
8. 36Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business and financial condition50% rewritten
9. 37Others may claim an ownership interest in our intellectual property and our product candidates, which could expose us to litigation and have a significant adverse effect on our prospects
10. 38If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected
11. 39We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers
12. 40If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
13. 41Intellectual property rights do not necessarily address all potential threats

Risks Related to Reliance on Third Parties

1. 42We may depend on third-party collaborators for the discovery, development and commercialization of certain of our current and future product candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates
2. 43In the future, we may form or seek other strategic alliances, joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to product candidates we develop
3. 44We may seek to establish additional collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans

Risks Related to Our Business

1. 45There is substantial doubt as to our ability to continue as a going concern, which may affect our ability to obtain future financing and may require us to curtail or cease our operations. We will require substantial additional funding in the immediate term to continue operations as plannedNew
2. 46We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy83% rewritten
3. 47our employees are “at-will” employees, and we do not have “key person” insurance on them. The loss of the services of one or more of our executive officers or of certain members of our SAB could impede the achievement of our research, development and commercialization objectivesNew
4. 48We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
5. 49We may need to grow the size of our organization, and we may experience difficulties in managing future growth
6. 50If we are unable to establish marketing, sales and distribution capabilities for SIM0505, LNCB74 or any other product candidate that may receive regulatory approval, we may not be successful in commercializing those product candidates if and when they are approved
7. 51Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product candidates
8. 52Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
9. 53Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations
10. 54Natural disasters or other unexpected events may disrupt our operations, adversely affect our results of operations and financial condition, and may not be covered by insurance

Risks Related to Our Common Stock

1. 55The price of our common stock has been and may continue to be volatile and fluctuate substantially
2. 56If securities analysts do not publish research or reports about our business or if they publish inaccurate or unfavorable research about our business, the price of our stock could decline
3. 57If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline significantly
4. 58Our executive officers, directors and current beneficial owners of 5% or more of our common stock and their respective affiliates exercise significant influence over our company, which limits your ability to influence corporate matters and could delay or prevent a change in corporate control
5. 59Litigation is often expensive and can divert management’s attention and resources from other business concerns, which could adversely affect our business. If we are ultimately required to pay significant defense costs, damages or settlement amounts, such payments could adversely affect our operations
6. 60Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
7. 61If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline
8. 62We have incurred and will continue to incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives