10-Q

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 September 30, 2023

or

☐ 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 October 30, 2023, the registrant had 27,903,027 shares of common stock, par value $0.001 per share, issued and outstanding.

NextCure, Inc.

Form 10-Q

For the Quarter Ended September 30, 2023

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	1
	Unaudited Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022	2
	Unaudited Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	3
	Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 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	22
Item 4.	Controls and Procedures	22
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
SIGNATURES		25

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NEXTCURE, INC.

CONDENSED BALANCE SHEETS

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

	September 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	19,519	$	26,630
Marketable securities		98,687		133,281
Prepaid expenses and other current assets		4,478		4,072
Total current assets		122,684		163,983
Property and equipment, net		9,844		11,897
Right of use assets		4,557		5,016
Other assets		2,854		3,265
Total assets	$	139,939	$	184,161
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,602	$	4,270
Accrued liabilities and other liabilities		3,950		4,857
Total current liabilities		6,552		9,127
Lease liabilities, long term		6,120		6,605
Other long-term liabilities		815		899
Total liabilities		13,487		16,631
Stockholders’ equity:
Preferred stock, par value of $0.001 per share; 10,000,000 shares authorized at September 30, 2023 and December 31, 2022; No shares issued and outstanding at September 30, 2023 and December 31, 2022		—		—
Common stock, par value of $0.001 per share; 100,000,000 shares authorized at September 30, 2023 and December 31, 2022; 27,839,968 and 27,774,536 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		28		28
Additional paid-in capital		437,042		430,755
Accumulated other comprehensive loss		(603)		(1,494)
Accumulated deficit		(310,015)		(261,759)
Total stockholders’ equity		126,452		167,530
Total liabilities and stockholders’ equity	$	139,939	$	184,161

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

1

NEXTCURE, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating expenses:
Research and development	$	11,010	$	13,528	$	36,104	$	41,377
General and administrative		4,608		5,711		15,743		16,761
Total operating expenses		15,618		19,239		51,847		58,138
Loss from operations		(15,618)		(19,239)		(51,847)		(58,138)
Other income, net		1,317		328		3,591		705
Net loss	$	(14,301)	$	(18,911)	$	(48,256)	$	(57,433)
Net loss per common share - basic and diluted	$	(0.51)	$	(0.68)	$	(1.73)	$	(2.07)
Weighted-average shares outstanding - basic and diluted		27,839,968		27,748,844		27,814,655		27,734,271
Comprehensive loss:						.
Net loss	$	(14,301)	$	(18,911)	$	(48,256)	$	(57,433)
Unrealized gain (loss) on marketable securities		322		(56)		891		(1,733)
Total comprehensive loss	$	(13,979)	$	(18,967)	$	(47,365)	$	(59,166)

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

2

NEXTCURE, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands, except share data)

	Nine Months Ended September 30, 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
Stock-based compensation	—		—		2,125		—		—		2,125
Exercise of stock options	5,057		—		5		—		—		5
Issuance of shares under ESPP	60,375		—		78		—		—		78
Unrealized loss on marketable securities, net of tax $0	—		—		—		(122)		—		(122)
Net loss	—		—		—		—		(17,859)		(17,859)
Balance as of June 30, 2023	27,839,968	$	28	$	435,041	$	(925)	$	(295,714)	$	138,430
Stock-based compensation	—		—		2,001		—		—		2,001
Unrealized gain on marketable securities, net of tax $0	—		—		—		322		—		322
Net loss	—		—		—		—		(14,301)		(14,301)
Balance as of September 30, 2023	27,839,968	$	28	$	437,042	$	(603)	$	(310,015)	$	126,452
	Nine Months Ended September 30, 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
Stock-based compensation	—		—		2,242		—		—		2,242
Exercise of stock options	6,255		—		6		—		—		6
Issuance of shares under ESPP	17,427		—		73		—		—		73
Unrealized loss on marketable securities, net of tax $0	—		—		—		(141)		—		(141)
Net loss	—		—		—		—		(17,920)		(17,920)
Balance as of June 30, 2022	27,748,844	$	28	$	426,056	$	(2,340)	$	(225,548)	$	198,196
Stock-based compensation	—		—		2,312		—		—		2,312
Unrealized loss on marketable securities, net of tax $0	—		—		—		(56)		—		(56)
Net loss	—		—		—		—		(18,911)		(18,911)
Balance as of September 30, 2022	27,748,844	$	28	$	428,368	$	(2,396)	$	(244,459)	$	181,541

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

3

NEXTCURE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine Months Ended
	September 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(48,256)	$	(57,433)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,860		3,117
Amortization of premiums and discounts on marketable securities		(432)		2,594
Stock-based compensation		6,204		7,182
Noncash operating lease expense		426		—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		38		234
Accounts payable		(1,668)		(95)
Accrued liabilities and other liabilities		(907)		(536)
Lease liabilities		(485)		—
Other long-term liabilities		(84)		—
Net cash used in operating activities		(42,304)		(44,937)
Cash flows from investing activities:
Sales and maturities of marketable securities		97,605		78,029
Purchases of marketable securities		(61,688)		(13,267)
Purchases of property and equipment		(807)		(1,251)
Net cash provided by investing activities		35,110		63,511
Cash flows from financing activities:
Proceeds from exercise of stock options		5		66
Proceeds from shares issued under ESPP		78		73
Net cash provided by financing activities		83		139
Net increase (decrease) in cash and cash equivalents		(7,111)		18,713
Cash and cash equivalents – beginning of period		26,630		12,376
Cash and cash equivalents – end of period	$	19,519	$	31,089
Supplemental disclosures of cash flow information:
Cash paid for interest	$	62	$	68

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

4

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 September 30, 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 September 30, 2023, the Company had cash, cash equivalents and marketable securities of $118.2 million. The Company believes that its existing cash, cash equivalents and marketable securities will be sufficient to fund its planned operations for at least the next twelve months from the issuance of these financial statements.

2. Summary of Significant Accounting Policies

The following significant accounting policy is in addition 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”).

Collaboration Arrangements

The Company assesses whether collaboration agreements are subject to Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements ("ASC 808"), based on whether they involve joint operating activities involving two or more parties that are active participants in the activity and are exposed to significant risks and rewards dependent on the commercial success of the activities.

A collaborative arrangement within the scope of ASC 808 may be partially (or entirely) within the scope of other guidance (including ASC 606). The Company evaluates the individual units of account (e.g., components) within a collaborative arrangement to assess the appropriate recognition and measurement. The Company accounts for components of a collaborative arrangement that are within the scope of other ASC guidance following the relevant provisions of that guidance rather than the guidance provided in ASC 808.

ASC 808 states that a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer for a distinct good or service (i.e., a unit of account). That is, the Company is required to apply the unit-of-account guidance in ASC 606 to determine the distinct components of a collaborative arrangement. If the counterparty is a customer for that distinct good or service (or bundle of goods and/or services), it is accounted for under ASC 606. For

5

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

units of account that are in the scope of ASC 606, all of the guidance in ASC 606 applies, including the guidance on recognition, measurement, presentation and disclosure.

The Company accounts for collaborative arrangements or components of collaborative arrangements that are outside the scope of other guidance by analogy to the authoritative accounting literature or, if there is no appropriate analogy, by using a reasonable, rational and consistently applied accounting policy election.  When evaluating an appropriate analogy to other accounting guidance or an accounting policy for a collaborative arrangement, the Company assesses the nature of the arrangement, the nature of its business operations and the contractual terms of the arrangement.  The Company recognizes the shared costs incurred that are not within the scope of other accounting literature as a component of the related expense in the period incurred by analogy to ASC 730, Research and Development, and records reimbursements from counterparties as an offset to the related research and development costs.

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 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.

6

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

3. Marketable Securities

Marketable securities consist of the following:

	September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
Corporate bonds	$	72,232	$	—	$	(473)	$	71,759
U.S. Treasury and Government agencies		27,058		—		(130)		26,928
Total	$	99,290	$	—	$	(603)	$	98,687

	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. Treasury and 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 September 30, 2023 and 2022, respectively, the Company recorded $0 and $7,000 in realized gains on available-for-sale securities, which is included in other income, net on the condensed statements of operations.  For the nine months ended September 30, 2023 and 2022, respectively, the Company recorded $0 and $9,000 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 September 30, 2023, the Company had investments with a total fair market value of $98.7 million in an unrealized loss position, of which $18.4 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 relates 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 September 30, 2023:

	September 30, 2023
			Fair
(in thousands)	Cost		Value
Maturities:
Within 1 year	$	97,274	$	96,695
Between 1 to 2 years		2,016		1,992
Total investments available-for-sale	$	99,290	$	98,687

7

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

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.

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of September 30, 2023 and December 31, 2022:

	September 30, 2023
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	19,332	$	19,332	$	—	$	—
Marketable securities:
Corporate bonds		71,759		—		71,759		—
U.S. Treasury and Government agencies		26,928		—		26,928		—
Total	$	118,019	$	19,332	$	98,687	$	—

	December 31, 2022
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	6,782	$	6,782	$	—	$	—
Marketable securities:
Corporate bonds		131,706		—		131,706		—
U.S. Treasury and Government agencies		1,575		—		1,575		—
Total	$	140,063	$	6,782	$	133,281	$	—

8

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

The Company did not transfer any assets measured at fair value on a recurring basis between levels during the nine months ended September 30, 2023.

5. Leases

The Company's lease portfolio consists of office space and laboratory facilities. All of the Company's leases are classified as operating leases. The terms of the Company's lease agreements currently extend through March 2030 and provide the Company with an option for a five-year extension. Under the terms of the leases, the Company pays base annual rent subject to fixed dollar increases each year and other normal operating expenses such as taxes, repairs, and maintenance. The Company evaluates renewal options at lease inception and on an ongoing basis and considers renewal options that the Company is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities in accordance with ASC 842. The leases do not require variable lease payments or residual value guarantees and do not contain restrictive covenants.

The leases do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate as the discount rate when measuring the operating lease liability. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease.

Operating lease expense was $272,000 and $816,000 for the three and nine months ended September 30, 2023, respectively. Operating cash flows used for operating leases during the three and nine months ended September 30, 2023 were $245,000 and $757,000, respectively. As of September 30, 2023, the weighted-average remaining lease term was 6.50 years, and the weighted average discount rate was 7.46%.

Rent expense under operating leases was $248,000 and $739,000 for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, the maturities of the Company’s operating lease liabilities were as follows (in thousands), which are included in Accrued liabilities and other liabilities and Lease liabilities, long term in the accompanying balance sheet: 

2023	$	276
2024		1,127
2025		1,214
2026		1,355
2027		1,396
Thereafter		3,295
Total future minimum payments		8,663
Less: present value discount		(1,907)
Present value of lease liabilities	$	6,756

9

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

6. Stock-Based Compensation

Employee Equity Plans

The NextCure, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) was adopted in December 2015 and provides for the grant of awards of stock options, restricted stock awards, unrestricted stock awards and restricted stock units to employees, consultants, and directors of the Company.

The NextCure, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”) became effective on May 8, 2019, the date on which the Company’s Registration Statement on Form S-1 filed in connection with the IPO was declared effective (the “Effective Date”). The Company’s board of directors (the “Board”) determined not to make additional awards under the 2015 Plan following the effectiveness of the 2019 Plan. The 2019 Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards to the Company’s officers, employees, non-employee directors and other key persons (including consultants).

The number of shares of common stock reserved for issuance under the 2019 Plan is 2,900,000 plus the number of shares of stock related to awards outstanding under the 2015 Plan that subsequently terminate by expiration or forfeiture, cancellation or otherwise without the issuance of such shares. The number of shares reserved for issuance under the 2019 Plan automatically increase each January 1st during the term of the 2019 Plan by 4% of the number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or such lesser number of shares determined by the Board.

As of September 30, 2023, 2,108,622 shares were reserved for future grant under the 2019 Plan.

Stock options granted under the 2015 Plan and 2019 Plan (together, the “Plans”) to employees generally vest over four years and expire after ten years.

A summary of stock option activity for awards under the Plans is presented below:

	Options Outstanding and Exercisable
				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value(1)
	Shares	Price		Life (Years)	(in thousands)
Outstanding as of December 31, 2022	5,262,179	$	11.44	7.6	$	115
Granted	2,059,250	$	1.55	—		—
Exercised	(5,057)	$	0.99	—		—
Forfeited	(403,024)	$	5.23	—		—
Outstanding as of September 30, 2023	6,913,348	$	8.86	7.5	$	79
Exercisable as of September 30, 2023	3,720,545	$	12.43	6.3	$	79

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at September 30, 2023 and December 31, 2022.

The weighted average grant date fair value of stock options granted to employees for the nine months ended September 30, 2023 was $1.12 using the Black-Scholes option pricing model. There were 5,057 stock options exercised during the nine months ended September 30, 2023. As of September 30, 2023, there was $9.7 million of total unrecognized

10

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

compensation expense related to unvested options under the Plans that will be recognized over a weighted-average period of approximately 1.9 years.

The aggregate grant date fair value of stock options vested during the nine months ended September 30, 2023 and 2022 was approximately $7.2 million and $9.0 million, respectively.

Stock-based compensation expense was classified on the statements of operations as follows for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	721	$	779	$	2,184	$	2,274
General and administrative		1,280		1,533		4,020		4,908
Total stock-based compensation expense	$	2,001	$	2,312	$	6,204	$	7,182

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the following table for options issued during the period indicated:

	Nine Months Ended
	September 30,
	2023		2022
Expected term	6.1	years	5.5 - 6.1	years
Expected volatility	81.4	%	79.7	%
Risk free interest rate	3.5 - 4.1	%	1.8 - 3.1	%
Expected dividend yield	—	%	—	%

Employee Stock Purchase Plan

The NextCure, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”) was approved in May 2019 and provides for eligible employees of the Company to purchase shares of Company stock at a discounted price. As of September 30, 2023, 109,958 shares of common stock had been issued pursuant to the ESPP and 680,722 shares were reserved for future issuance thereunder.

7. Collaboration Agreements

Collaboration Agreement with LegoChem Biosciences, Inc. (“LegoChem”)

In November 2022, the Company entered into a Research Collaboration and Co-Development Agreement (“Agreement”) with LegoChem to develop up to three antibody drug conjugates.  Under the terms of the Agreement, both parties equally share the costs of developing the molecules and profits on commercialized products.  The collaboration consists of up to three research programs for which a research plan will be developed.  With respect to a research plan, each party shall use reasonable efforts to execute and perform the activities assigned to it.  Each party shall be solely responsible for costs associated with its assigned activities as outlined in the research plan.  Upon successful completion of a research plan, or as otherwise agreed, the parties may designate a research product as a co-development product.  Upon designation of a co-development product, cost sharing on a 50-50 basis between the Company and LegoChem would begin.  The activities associated with the research plan and co-development products will be coordinated by a joint steering committee, which is comprised of an equal number of representatives from the Company and LegoChem.  If and when a co-development product becomes commercialized, the Company and LegoChem would equally share in the profits.  There are no implied licenses or other rights created under this Agreement after designation of a co-development product.  

11

NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Effective April 1, 2023, the parties designated the initial co-development product under the Agreement.  As such, cost sharing on a 50-50 basis commenced for the first co-development product under the Agreement.  

Given the involvement by both parties under this Agreement, management assessed the criteria under ASC 808 to determine if such agreement is within the scope of ASC 808. Based on the terms of the Agreement, the Company concluded that the Agreement meets the requirements of a collaboration within the guidance of ASC 808.  The Company and LegoChem are active participants in the activities associated with the Agreement and are exposed to significant risks and rewards dependent on the commercial success of the activity.  The Agreement is not reflective of a vendor-customer relationship and therefore not within the scope of ASC 606.  Accordingly, the net costs associated with the co-development are expensed as incurred and recognized within research and development expenses on the statement of operations.

As of September 30, 2023, there is only one co-development product that is in the early stages of development and costs incurred have not been material.

8. Net Loss Per Share Attributable to Common Stockholders

The computation of basic loss per share is based on the weighted-average number of common shares outstanding, without consideration for dilutive common stock equivalents. The computation of diluted loss per share is based on the weighted-average number of common shares outstanding and dilutive potential common shares, which include shares that may be issued under the 2015 Plan and 2019 Plan, as determined using the treasury stock method.

The computation for basic and diluted loss per share were as follows (in thousands, except share and per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net loss (Numerator):
Net loss - basic and diluted	$	(14,301)	$	(18,911)	$	(48,256)	$	(57,433)
Shares (Denominator):
Weighted-average shares outstanding - basic and diluted		27,839,968		27,748,844		27,814,655		27,734,271
Loss per share - basic and diluted	$	(0.51)	$	(0.68)	$	(1.73)	$	(2.07)

For the three and nine months ended September 30, 2023 and 2022, all options to purchase shares of the Company’s common stock were excluded from the computation of diluted net loss per share as the effect would have been anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti-dilutive effect:

	September 30,
	2023	2022
Outstanding options to purchase common stock	6,913,348	5,276,833

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NEXTCURE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

9. Income Taxes

The Company did not record a provision or benefit for income taxes during the three and nine month periods ended September 30, 2023 and 2022. The Company continues to maintain a full valuation allowance against its deferred tax assets.

The Company has evaluated the positive and negative evidence involving its ability to realize its deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of any commercially ready products. It has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Management reevaluates the positive and negative evidence at each reporting period.

Under the provisions of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”), certain substantial changes in the Company’s ownership may have limited, or may limit in the future, the amount of net operating loss and research and development credit carryforwards that can be used to reduce future income taxes. We have not performed a detailed analysis to determine whether an ownership change under Section 382 of the IRC occurred. The effect of an ownership change would be the imposition of an annual limitation on the use of losses and credits attributable to periods before the change and could result in a reduction in the total losses and credits available.

10. Commitments and Contingencies

Legal Proceedings

On September 21, 2020, a putative stockholder class action was filed in the U.S. District Court for the Southern District of New York styled Ye Zhou v. NextCure, Inc., et. al., Case 1:20-cv-0772 (S.D.N.Y.) (the “Ye Zhou Action”). On February 26, 2021, the Lead Plaintiff filed a consolidated amended complaint that asserts claims against us, certain of our officers and members of our board of directors, and the underwriters in our May 2019 initial public offering and November 2019 underwritten secondary public offering. The complaint alleges that the defendants violated provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Securities Act of 1933, as amended (the “Securities Act”), with respect to statements made regarding the Company’s NC318 product candidate and the FIND-IO platform. The complaint seeks unspecified damages on behalf of a purported class of purchasers of our securities between May 8, 2019 and July 14, 2020. Defendants filed a motion to dismiss the consolidated amended complaint on April 27, 2021, and on July 12, 2023 the court issued a memorandum opinion and order granting defendants’ motion to dismiss against all counts of the consolidated amended complaint.  On July 13, 2023, judgement on behalf of Company and the other named defendants was entered and the case for the Ye Zhou Action was closed by the court. No appeals were filed by plaintiffs in the Ye Zhou to contest the district court’s order dismissing all claims in favor of Company.

On March 24, 2021, a purported shareholder derivative lawsuit was filed in the U.S. District Court for the District of Maryland, Southern Division, styled Zach Liu v. Richman et. al., Case:21-cv-00754 (the “Liu Action”), alleging breaches of fiduciary duty by officers and/or directors, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of the Exchange Act and the Securities Act. The complaint seeks unspecified damages, attorneys’ fees and costs, declaratory relief, corporate governance changes, and restitution. On May 17, 2021, the Court granted the parties’ joint motion to stay the Liu Action pending resolution of the defendants’ motion to dismiss filed in respect of the Ye Zhou Action. On August 1, 2023, Company filed a notice with the court in the Liu Action advising of the result of the motion to dismiss an entry of judgement in the Ye Zhou Action.  On August 22, 2023, the Liu Action plaintiff filed a stipulation with the court to dismiss voluntarily all claims against Company, and the court in response closed the case for the Liu Action.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Quarterly Report and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or our “2022 Annual Report.” Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “should,” “due,” “estimate,” “expect,” “intend,” “hope,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “target,” “towards,” “forward,” “later,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or similar language. Forward-looking statements include, but are not limited to, statements about:

● our expectations regarding the timing, progress and results of preclinical studies and clinical trials for NC410, NC525, NC762 and any other product candidates we develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

● the timing or likelihood of regulatory filings for NC410, NC525, NC762 and any other product candidates we develop and our ability to obtain and maintain regulatory approvals for such product candidates for any indication;

● the identification, analysis and use of biomarkers and biomarker data;

● development of patient selection assays and companion or complementary diagnostics for NC410, NC525, NC762 and any other product candidates we develop;

● our manufacturing capabilities and strategy, including the scalability of our manufacturing methods and processes;

● our expectations regarding the potential benefits, activity, effectiveness and safety of NC410, NC525, NC762 and any other product candidates we develop;

● our intentions and ability to successfully commercialize our product candidates;

● our expectations regarding the nature of the biological pathways we are targeting;

● our expectations for our Functional, Integrated, NextCure Discovery in Immuno-Oncology (“FIND-IO”) platform, including our ability to discover and advance product candidates using our FIND-IO platform;

● the potential benefits of and our ability to maintain our relationship and collaboration with Yale University;

● our estimates regarding our expenses, future revenues, capital requirements, our needs for or ability to obtain additional financing and the period over which we expect our current cash, cash equivalents and marketable securities to be sufficient to fund our operations;

● our intended reliance on and the performance of third parties, including collaborators, contract research organizations and third-party manufacturers;

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● our ability to protect and enforce our intellectual property protection and the scope and duration of such protection;

● any failure of our information technology systems such as security breaches, loss of data and other disruptions;

● developments and projections relating to our competitors and our industry, including competing therapies; and

● the impact of current and future laws and regulations.

Forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those projected in any forward-looking statement. Such risks and uncertainties include, among others: positive results in preclinical studies may not be predictive of the results of clinical trials; our limited operating history and not having any products approved for commercial sale; our history of significant losses; our need and ability to obtain additional financing on acceptable terms or at all; risks related to clinical development, marketing approval and commercialization; the unproven approach to the discovery and development of product candidates based on our FIND-IO platform; and our dependence on key personnel. More detailed information on these and additional factors that could affect our actual results are described under the heading “Risk Factors” in our 2022 Annual Report and in our other filings with the Securities and Exchange Commission (“SEC”). You should not place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date of this report, and we assume no obligation to update any forward-looking statements, even if expectations change.

Overview

We are 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. We view the immune system holistically and, rather than target one specific immune cell type, we focus on understanding biological pathways, the interactions of cells and the role each interaction plays in an immune response. Through our proprietary FIND-IO, platform, we study various immune cells to discover and understand targets and structural components of immune cells and their functional impact in order to develop immunomedicines. We are focused on patients who do not respond to current therapies, patients whose cancer progresses despite treatment and patients with cancer types not adequately addressed by available therapies. We are committed to discovering and developing first-in-class immunomedicines, which are immunomedicines that use new or unique mechanisms of action to treat a medical condition.

Our product candidate NC410 is a fusion protein of LAIR-2, a naturally occurring soluble version of and decoy protein for LAIR-1 and is designed to block immune suppression mediated by LAIR-1.  In June 2020, we initiated a Phase 1/2 clinical trial of NC410 in patients with advanced or metastatic solid tumors. The Phase 1 dose-escalation portion of this open-label trial was designed to evaluate the safety and tolerability of NC410 and determine its pharmacologically active and/or maximum tolerated dose. In October 2022, we announced the initiation of a Phase 1b/2 clinical trial to evaluate NC410 in combination with KEYTRUDA® (pembrolizumab), Merck’s anti-PD-1 therapy, in immune checkpoint refractory patients (colorectal, esophageal, endometrial and head and neck cancers) or immune checkpoint naïve solid tumor patients (colorectal and ovarian cancers). We plan to provide an update on the Phase 1b portion of the trial by year end.  

Our product candidate NC762 is a monoclonal antibody that binds specifically to human B7 homolog 4 protein, or “B7-H4”, a protein expressed on multiple tumor types. In July 2021, we initiated a Phase 1/2 clinical trial of NC762 in patients with lung cancer, breast cancer, ovarian cancer or potentially other tumor types. The Phase 1 dose-escalation portion of this open-label trial was designed to evaluate the safety and tolerability of NC762 and determine its pharmacologically active and/or maximum tolerated dose. In November 2022, we announced initial data from the Phase 1 portion of this trial which indicate that NC762 appears to be well tolerated. Safety expansion studies are ongoing with the intent of selecting a recommended Phase 2 dose.  We plan to provide an update on the Phase 1b portion of the trial by year end.

Our product candidate NC525 is a novel LAIR-1 antibody that selectively targets Acute Myeloid Leukemia, or “AML”, blast cells and leukemic stem cells, or “LSCs”. Preclinical data show that NC525 kills AML blast cells and LSCs

15

while sparing hematopoietic stem and progenitor cells, or “HSPCs”. In February 2023 we initiated a Phase 1 trial for NC525 to evaluate the safety and preliminary efficacy of NC525 in AML, high-risk myelodysplastic syndrome, and chronic myelomonocytic leukemia (CMML).  We plan to provide an operational update on the Phase 1a portion of the trial by year end.

In November 2022, the Company entered into a Research Collaboration and Co-Development Agreement (“Agreement”) with LegoChem to develop up to three antibody drug conjugates.  Under the terms of the Agreement, both parties equally share the costs of developing the molecules and profits on commercialized products. In April 2023, the parties designated the initial co-development candidate under the Agreement will target B7-H4.  LNCB74, our first candidate, will utilize a NextCure B7-H4 antibody and LegoChem’s ConjuAll ^TM ADC technology.  Early Phase 1 data presented in October 2023 by other companies at the European Society for Medical Oncology (ESMO) 2023 Congress demonstrated the efficacy of attacking this target in selected tumor types.

We recently announced two novel preclinical programs, NC605 and NC181.   NC605, an anti-Siglec-15 antibody, preclinical data reported reduced bone loss and enhanced bone quality in mice with osteogenesis imperfecta (OI).  OI is a rare disorder that results in high bone turnover, abnormal bone formation, bone fragility and recurrent fractures. We are evaluating the future development path for this candidate which may include seeking a partner for further development. The second preclinical program, NC181, is a humanized antibody targeting ApoE4 for the treatment of Alzheimer’s disease (AD).   In preclinical AD animal models, NC181 has demonstrated amyloid clearance, prevention of amyloid deposition, plaque clearance and other important findings.  We are seeking a partner for further development of this candidate.

Financial Overview

Since commencing operations in 2015, we have devoted substantially all our efforts and financial resources to organizing and staffing our company, identifying business development opportunities, raising capital, securing intellectual property rights related to our product candidates, building and optimizing our manufacturing capabilities, and conducting discovery, research and development activities for our product candidates, discovery programs and FIND-IO platform.

To date, we have not generated any revenue from product sales and have financed our operations primarily through proceeds from public offerings of our common stock, with private placements of our preferred stock and with upfront fees received under our former research and development collaboration agreement. Since inception through September 30, 2023, we raised approximately $423 million in gross proceeds from the sale of equity instruments and had received a $25 million upfront payment from our former collaboration partner.  Our net loss for the three months ended September 30, 2023 and 2022, was $14.3 million and $18.9 million, respectively. Our net loss for the nine months ended September 30, 2023 and 2022, was $48.3 million and $57.4 million, respectively. As of September 30, 2023, we had an accumulated deficit of $310.0 million, primarily as a result of research and development and general and administrative expenses. We do not expect to generate product revenue unless and until we obtain marketing approval and commercialize a product candidate, and we cannot assure you that we will ever generate significant revenue or profits.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $118.2 million. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations into mid-2025. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

We expect to incur substantial expenditures in the foreseeable future as we advance our product candidates through clinical development, the regulatory approval process and, if approved, commercialization. Specifically, in the near term, we expect to incur substantial expenses relating to our Phase 1b/2 clinical trial of NC410 in combination with pembrolizumab, our ongoing Phase 1/2 clinical trial for NC762, our Phase 1 clinical trial for NC525, and other research and development activities. We expect to continue to incur significantly increased costs as a result of operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company.

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We will need substantial additional funding to support our continuing operations and to pursue our development strategy. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our operations through a combination of public and private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials, or other research and development activities or one or more of our development programs.

Components of Our Results of Operations

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our clinical trials, discovery efforts, research activities, and development and testing of our product candidates:

● expenses incurred under agreements with third parties, including agreements with third parties that conduct research, preclinical activities or clinical trials on our behalf;

● costs of outside consultants, including their fees, stock-based compensation and related travel expenses;

● the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;

● salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in research and development functions; and

● facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expense research and development costs as incurred. Our expenses related to clinical trials are based on actual costs incurred and estimates of other incurred costs. These estimated costs are based on several factors, including patient enrollment and related expenses at clinical investigator sites, contract services received, consulting agreement costs and efforts expended under contracts with research institutions and third-party contract research organizations that conduct and manage clinical trials on our behalf. We generally accrue estimated costs related to clinical trials based on contracted amounts applied to the level of patient enrollment and other activity according to the protocol. If future timelines or contracts are modified based on changes in the clinical trial protocol or scope of work to be performed, we would modify our estimates of accrued expenses accordingly on a prospective basis. Historically, any such modifications have not been material.

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we advance our product candidates through development and expand the number of trials we are conducting and the patients enrolled in those trials, as we utilize our current good manufacturing practice, or “cGMP”, manufacturing capacity, including to provide drug supply of NC410, NC762 and NC525 for future clinical trials.

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We cannot determine with certainty the duration and costs of future clinical trials of NC410, NC762, NC525 or any other product candidate we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we may obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of NC410, NC762, NC525 and any other product candidate we may develop will depend on a variety of factors, including:

● the scope, progress, results and costs of clinical trials of NC410, NC762 and NC525, as well as of any future clinical trials of other product candidates and other research and development activities that we may conduct;

● uncertainties in selection of indications, clinical trial design and patient enrollment rates;

● the probability of success for our product candidates, including safety and efficacy, early clinical data, competition, ease and ability of manufacturing and commercial viability;

● significant and changing government regulation and regulatory guidance;

● the timing and receipt of any development or marketing approvals; and

● the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

A change in the outcome of any of these variables with respect to the development of a product candidate could lead to a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time to complete clinical development for any such product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel related costs, including payroll and stock- based compensation, for personnel in executive, finance, human resources, business and corporate development and other administrative functions, professional fees for legal, intellectual property, consulting and accounting services, rent and other facility-related costs, depreciation and other general operating expenses not otherwise classified as research and development expenses. General and administrative expenses also include all patent-related costs incurred in connection with filing and prosecuting patent applications, which are expensed as incurred.

We anticipate that our general and administrative expenses will increase during the next few years as a result of staff costs, additional occupancy costs, higher legal and accounting fees, investor relations costs, higher insurance premiums and other compliance costs.

Other Income, Net

Other income, net consists primarily of interest income earned on marketable securities.

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Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the periods indicated (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023		2022		Change		2023		2022		Change
Operating expenses:
Research and development	$	11,010	$	13,528	$	(2,518)	$	36,104	$	41,377	$	(5,273)
General and administrative		4,608		5,711		(1,103)		15,743		16,761		(1,018)
Loss from operations		(15,618)		(19,239)		3,621		(51,847)		(58,138)		6,291
Other income, net		1,317		328		989		3,591		705		2,886
Net loss	$	(14,301)	$	(18,911)	$	4,610	$	(48,256)	$	(57,433)	$	9,177

Research and Development Expenses

The following table summarizes our research and development expenses by product candidate for the periods indicated (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2023		2022		Change		2023		2022		Change
External research and development expenses:
NC410	$	1,526	$	1,465	$	61	$	5,336	$	4,785	$	551
NC762		740		1,448		(708)		2,834		3,593		(759)
NC525		1,085		1,124		(39)		2,429		3,475		(1,046)
Other programs and preclinical development		2,035		3,373		(1,338)		7,612		11,944		(4,332)
Total external research and development expenses		5,386		7,410		(2,024)		18,211		23,797		(5,586)
Total internal research and development expenses		5,624		6,118		(494)		17,893		17,580		313
Total research and development expenses	$	11,010	$	13,528	$	(2,518)	$	36,104	$	41,377	$	(5,273)

We do not allocate personnel-related costs, including stock-based compensation costs, or other indirect costs to specific programs, as they are deployed across multiple projects under development and discovery and, as such, are separately classified as internal research and development expenses in the table above.

Research and development expenses for the three months ended September 30, 2023 decreased $2.5 million, or 19% compared to the three months ended September 30, 2022, primarily due to lower costs associated with our Phase 1/2 clinical trial of NC762 in patients with lung cancer, breast cancer, ovarian cancer or potentially other tumor types, as well as lower costs on other programs and preclinical development.

Research and development expenses for the nine months ended September 30, 2023 decreased $5.3 million, or 13% compared to the nine months ended September 30, 2022, primarily due to the decision to discontinue clinical development of NC318 announced in the fourth quarter of 2022 and lower costs associated with NC525, as this program initiated a phase 1 trial in February 2023, and lower costs on other programs and preclinical development.

General and Administrative Expenses

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General and administrative expenses for the three months ended September 30, 2023 decreased by $1.1 million compared to the three months ended September 30, 2022. The increase was primarily due to lower payroll, lower stock compensation expense, lower insurance costs and lower legal costs.

General and administrative expenses for the nine months ended September 30, 2023 decreased by $1.0 million compared to the nine months ended September 30, 2022. The decrease was primarily due to lower stock compensation costs, lower insurance costs and lower professional fees partially offset by higher legal costs.

Other Income, Net

Other income, net for the three months ended September 30, 2023 increased by $1.0 million compared to the three months ended September 30, 2022, due to higher interest income as a result of higher interest rates and lower amortization on our investments.

Other income, net for the nine months ended September 30, 2023 increased by $2.9 million compared to the nine months ended September 30, 2022, due to higher interest income as a result of higher interest rates and lower amortization on our investments.

Liquidity and Capital Resources

We have financed our operations primarily with proceeds from public offerings of our common stock, private placements of our preferred stock and upfront fees received under the Company’s former agreement with Eli Lilly and Company, which was terminated in March 2020 (the “Lilly Agreement”). On May 13, 2019, we closed our IPO, in which we sold 5,750,000 shares of common stock at a public offering price of $15.00 per share, for net offering proceeds to us of approximately $77.0 million after deducting underwriting discounts and commissions and offering expenses. On November 19, 2019, we completed an underwritten public offering in which we sold 4,077,192 shares of common stock at a public offering price of $36.75 per share. On December 2, 2019, the underwriters exercised in full their option to purchase an additional 611,578 shares of common stock at a public offering price of $36.75. Net offering proceeds to us were approximately $160.9 million after deducting underwriting discounts and commissions and offering expenses. Since inception, we have received aggregate gross proceeds of $164.4 million from the sale and issuance of shares of our preferred stock. In addition, in November 2018, we received an upfront payment of $25.0 million in cash from Lilly pursuant to the Lilly Agreement. Our cash and cash equivalents are held in money market funds.

On August 4, 2023, the Company entered into a sales agreement (the “Sales Agreement”) with Leerink Partners LLC (the “Agent”), pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $75 million of its common stock through the Agent in negotiated transactions that are deemed to be an “at the market offering.” The Agent will be entitled to compensation equal to 3.0% of the gross proceeds from the sale of all shares of common stock sold through it as Agent under the Sales Agreement. Actual sales will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. We have not yet sold any shares of our common stock pursuant to the Sales Agreement.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $118.2 million. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations into mid-2025.

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through sale of equity, debt financings, strategic alliances and licensing arrangements. Adequate additional funding may not be available to us on acceptable terms or at all. If we fail to raise capital or enter into such arrangements as and when needed, we may have to significantly delay, scale back or discontinue the development of our product candidates or delay our efforts to expand our pipeline of product candidates.

20

Cash Flows

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below (in thousands):

	Nine Months Ended
	September 30,
	2023		2022
Net cash (used in) provided by:
Operating activities	$	(42,304)	$	(44,937)
Investing activities		35,110		63,511
Financing activities		83		139
Net increase (decrease) in cash and cash equivalents	$	(7,111)	$	18,713

Net Cash Used in Operating Activities

Net cash used in operating activities was $42.3 million for the nine months ended September 30, 2023, which was primarily the result of our net loss of $48.3 million and a $3.1 million net use of operating assets and liabilities, partially offset by non-cash charges for depreciation and amortization of $2.9 million and stock-based compensation of $6.2 million. Net cash used in operating activities was $44.9 million for the nine months ended September 30, 2022, which was primarily due to our net loss of $57.4 million, partially offset by non-cash charges for depreciation and amortization of $3.1 million, amortization of premiums and discounts on marketable securities of $2.6 million, and stock-based compensation of $7.2 million.

Net Cash Provided by Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2023 was $35.1 million, which was primarily due to net proceeds from sales and maturities of marketable securities of $35.9 million, partially offset by purchases of property and equipment of $0.8 million. Net cash provided by investing activities for the nine months ended September 30, 2022 was $63.5 million, which was primarily due to net proceeds from marketable securities of $64.8 million, partially offset by purchases of property and equipment of $1.3 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $0.1 million for the nine months ended September 30, 2023 representing sales of our stock under the Employee Stock Purchase Plan (ESPP) and the exercise of stock options. Net cash provided by financing activities was $0.1 million for the nine months ended September 30, 2022, representing sales of our stock under the Employee Stock Purchase Plan (ESPP) and the exercise of stock options.

Contractual Obligations and Commitments

There have been no material changes to our contractual obligations during the nine months ended September 30, 2023, as compared to those disclosed in our 2022 Annual Report.

Critical Accounting Policies, Significant Judgments and Use of Estimates

Our condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP”. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. The most significant assumptions used in the financial statements are the underlying assumptions used in revenue recognition and valuing share-based compensation, including the fair value of our common stock in periods before our IPO. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent

21

from other sources. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

During the nine months ended September 30, 2023, there were no material changes to our critical accounting policies reported in our 2022 Annual Report.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements

See Note 2 to our unaudited condensed financial statements included elsewhere in this Quarterly Report for a discussion of recent accounting pronouncements that may impact our financial position and results of operations.

Emerging Growth Company Status

As an emerging growth company, or “EGC”, under the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act”, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. We have elected to take advantage of the extended transition period for adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the “Exchange Act”, we are not required to provide the information requested by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of September 30, 2023. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended September 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

22

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The information set forth under the heading “Legal Proceedings” in Note 9, Commitments and Contingencies, in Notes to Condensed Financial Statements in Item 1 of Part I of this Quarterly Report, is incorporated herein by reference. In addition, from time to time, we are involved in litigation or other legal proceedings as part of our ordinary course of business. In the opinion of our management, the ultimate disposition of these legal proceedings in the ordinary course of business is not likely to have a material adverse effect on our business.

Item 1A. Risk Factors.

There have been no material updates to the risk factors set forth in our 2022 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the fiscal quarter ended September 30, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1 or any non-Rule 10b5-1 trading arrangement.

23

Item 6. Exhibits.

The exhibits filed or furnished as part of this Quarterly Report are set forth on the Exhibit Index, below.

Exhibit No.	Exhibit Description
31.1	Certification of Michael Richman pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Steven P. Cobourn pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Michael Richman and Steven P. Cobourn pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EX-101.INS	Inline XBRL Instance Document
EX-101.SCH	Inline XBRL Taxonomy Extension Schema Document
EX-101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
EX-101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
EX-101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
EX-101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Coverage Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NEXTCURE, INC.
Date: November 2, 2023	By:	/s/ Michael Richman
	Name:	Michael Richman
		President and Chief Executive Officer
Date: November 2, 2023	By:	/s/ Steven P. Cobourn
	Name:	Steven P. Cobourn
		Chief Financial Officer

25

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael Richman, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of NextCure, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2023
/s/ Michael Richman
Name:	Michael Richman
Title:	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven P. Cobourn, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of NextCure, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2023
/s/ Steven P. Cobourn
Name:	Steven P. Cobourn
Title:	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of NextCure, Inc. (the “Company”) for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge, on the date hereof:

(1)   the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 2, 2023
	/s/ Michael Richman
	Name:	Michael Richman
	Title:	President and Chief Executive Officer
Dated: November 2, 2023
	/s/ Steven P. Cobourn
	Name:	Steven P. Cobourn
	Title:	Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 30, 2023
Cover Abstract
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-38905
Entity Registrant Name	NextCure, Inc.
Entity Central Index Key	0001661059
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-5231247
Entity Address, Address Line One	9000 Virginia Manor Road
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Beltsville
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20705
City Area Code	240
Local Phone Number	399-4900
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	NXTC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,903,027
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 19,519	$ 26,630
Marketable securities	98,687	133,281
Prepaid expenses and other current assets	4,478	4,072
Total current assets	122,684	163,983
Property and equipment, net	9,844	11,897
Right of use assets	4,557	5,016
Other assets	2,854	3,265
Total assets	139,939	184,161
Current liabilities:
Accounts payable	2,602	4,270
Accrued liabilities and other liabilities	3,950	4,857
Total current liabilities	6,552	9,127
Lease liabilities, long term	6,120	6,605
Other long-term liabilities	815	899
Total liabilities	13,487	16,631
Stockholders' equity
Preferred stock; par value of $0.001 per share; 10,000,000 shares authorized at September 30, 2023 and December 31, 2022, No shares issued and outstanding at September 30, 2023 and December 31, 2022
Common stock, par value of $0.001 per share; 100,000,000 shares authorized at September 30, 2023 and December 31, 2022. 27,839,968 and 27,774,536 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	28	28
Additional paid-in capital	437,042	430,755
Accumulated other comprehensive loss	(603)	(1,494)
Accumulated deficit	(310,015)	(261,759)
Total stockholders' equity	126,452	167,530
Total liabilities and stockholders' equity	$ 139,939	$ 184,161

XML

CONDENSED BALANCE SHEETS - (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
CONDENSED BALANCE SHEETS
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, number of shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, number of shares authorized	100,000,000	100,000,000
Common stock, shares issued	27,839,968	27,774,536
Common stock, shares outstanding	27,839,968	27,774,536

XML

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 11,010	$ 13,528	$ 36,104	$ 41,377
General and administrative	4,608	5,711	15,743	16,761
Total operating expenses	15,618	19,239	51,847	58,138
Loss from operations	(15,618)	(19,239)	(51,847)	(58,138)
Other income, net	1,317	328	3,591	705
Net loss	$ (14,301)	$ (18,911)	$ (48,256)	$ (57,433)
Net loss per common share
Basic (in dollars per share)	$ (0.51)	$ (0.68)	$ (1.73)	$ (2.07)
Diluted (in dollars per share)	$ (0.51)	$ (0.68)	$ (1.73)	$ (2.07)
Weighted average shares outstanding
Basic (in shares)	27,839,968	27,748,844	27,814,655	27,734,271
Diluted (in shares)	27,839,968	27,748,844	27,814,655	27,734,271
Comprehensive loss:
Net loss	$ (14,301)	$ (18,911)	$ (48,256)	$ (57,433)
Unrealized gain (loss) on marketable securities	322	(56)	891	(1,733)
Total comprehensive loss	$ (13,979)	$ (18,967)	$ (47,365)	$ (59,166)

XML

CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at the beginning at Dec. 31, 2021	$ 28	$ 421,047	$ (663)	$ (187,026)	$ 233,386
Balance at the beginning (in shares) at Dec. 31, 2021	27,680,997
Increase (Decrease) in Stockholders' Deficit
Stock based compensation		2,628			2,628
Exercise of stock options		60			60
Exercise of stock options (in shares)	44,165
Unrealized gain (loss) on marketable securities, net of tax $0			(1,536)		(1,536)
Net loss				(20,602)	(20,602)
Balance at the end at Mar. 31, 2022	$ 28	423,735	(2,199)	(207,628)	213,936
Balance at the end (in shares) at Mar. 31, 2022	27,725,162
Balance at the beginning at Dec. 31, 2021	$ 28	421,047	(663)	(187,026)	233,386
Balance at the beginning (in shares) at Dec. 31, 2021	27,680,997
Increase (Decrease) in Stockholders' Deficit
Net loss					(57,433)
Balance at the end at Sep. 30, 2022	$ 28	428,368	(2,396)	(244,459)	181,541
Balance at the end (in shares) at Sep. 30, 2022	27,748,844
Balance at the beginning at Mar. 31, 2022	$ 28	423,735	(2,199)	(207,628)	213,936
Balance at the beginning (in shares) at Mar. 31, 2022	27,725,162
Increase (Decrease) in Stockholders' Deficit
Stock based compensation		2,242			2,242
Exercise of stock options		6			6
Exercise of stock options (in shares)	6,255
Issuance of shares under ESPP		73			73
Issuance of shares under ESPP (in shares)	17,427
Unrealized gain (loss) on marketable securities, net of tax $0			(141)		(141)
Net loss				(17,920)	(17,920)
Balance at the end at Jun. 30, 2022	$ 28	426,056	(2,340)	(225,548)	198,196
Balance at the end (in shares) at Jun. 30, 2022	27,748,844
Increase (Decrease) in Stockholders' Deficit
Stock based compensation		2,312			2,312
Unrealized gain (loss) on marketable securities, net of tax $0			(56)		(56)
Net loss				(18,911)	(18,911)
Balance at the end at Sep. 30, 2022	$ 28	428,368	(2,396)	(244,459)	181,541
Balance at the end (in shares) at Sep. 30, 2022	27,748,844
Balance at the beginning at Dec. 31, 2022	$ 28	430,755	(1,494)	(261,759)	$ 167,530
Balance at the beginning (in shares) at Dec. 31, 2022	27,774,536				27,774,536
Increase (Decrease) in Stockholders' Deficit
Stock based compensation		2,078			$ 2,078
Unrealized gain (loss) on marketable securities, net of tax $0			691		691
Net loss				(16,096)	(16,096)
Balance at the end at Mar. 31, 2023	$ 28	432,833	(803)	(277,855)	154,203
Balance at the end (in shares) at Mar. 31, 2023	27,774,536
Balance at the beginning at Dec. 31, 2022	$ 28	430,755	(1,494)	(261,759)	$ 167,530
Balance at the beginning (in shares) at Dec. 31, 2022	27,774,536				27,774,536
Increase (Decrease) in Stockholders' Deficit
Net loss					$ (48,256)
Balance at the end at Sep. 30, 2023	$ 28	437,042	(603)	(310,015)	$ 126,452
Balance at the end (in shares) at Sep. 30, 2023	27,839,968				27,839,968
Balance at the beginning at Mar. 31, 2023	$ 28	432,833	(803)	(277,855)	$ 154,203
Balance at the beginning (in shares) at Mar. 31, 2023	27,774,536
Increase (Decrease) in Stockholders' Deficit
Stock based compensation		2,125			2,125
Exercise of stock options		5			5
Exercise of stock options (in shares)	5,057
Issuance of shares under ESPP		78			78
Issuance of shares under ESPP (in shares)	60,375
Unrealized gain (loss) on marketable securities, net of tax $0			(122)		(122)
Net loss				(17,859)	(17,859)
Balance at the end at Jun. 30, 2023	$ 28	435,041	(925)	(295,714)	138,430
Balance at the end (in shares) at Jun. 30, 2023	27,839,968
Increase (Decrease) in Stockholders' Deficit
Stock based compensation		2,001			2,001
Unrealized gain (loss) on marketable securities, net of tax $0			322		322
Net loss				(14,301)	(14,301)
Balance at the end at Sep. 30, 2023	$ 28	$ 437,042	$ (603)	$ (310,015)	$ 126,452
Balance at the end (in shares) at Sep. 30, 2023	27,839,968				27,839,968

XML

CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022
CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY
Unrealized gain (loss) on marketable securities, tax expense (benefit)	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0

XML

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (48,256)	$ (57,433)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,860	3,117
Amortization of premiums and discounts on marketable securities	(432)	2,594
Stock-based compensation	6,204	7,182
Noncash operating lease expense	426
Changes in operating assets and liabilities:
Prepaid expenses and other assets	38	234
Accounts payable	(1,668)	(95)
Accrued liabilities and other liabilities	(907)	(536)
Lease liabilities	(485)
Other long-term liabilities	(84)
Net cash used in operating activities	(42,304)	(44,937)
Cash flows from investing activities:
Sales and maturities of marketable securities	97,605	78,029
Purchases of marketable securities	(61,688)	(13,267)
Purchases of property and equipment	(807)	(1,251)
Net cash provided by investing activities	35,110	63,511
Cash flows from financing activities:
Proceeds from exercise of stock options	5	66
Proceeds from shares issued under ESPP	78	73
Net cash provided by financing activities	83	139
Net increase (decrease) in cash and cash equivalents	(7,111)	18,713
Cash and cash equivalents - beginning of period	26,630	12,376
Cash and cash equivalents - end of period	19,519	31,089
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 62	$ 68

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Nature of the Business

9 Months Ended

Sep. 30, 2023

Nature of the Business

Nature of the Business

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 September 30, 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 September 30, 2023, the Company had cash, cash equivalents and marketable securities of $118.2 million. The Company believes that its existing cash, cash equivalents and marketable securities will be sufficient to fund its planned operations for at least the next twelve months from the issuance of these financial statements.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The following significant accounting policy is in addition 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”).

Collaboration Arrangements

The Company assesses whether collaboration agreements are subject to Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements ("ASC 808"), based on whether they involve joint operating activities involving two or more parties that are active participants in the activity and are exposed to significant risks and rewards dependent on the commercial success of the activities.

A collaborative arrangement within the scope of ASC 808 may be partially (or entirely) within the scope of other guidance (including ASC 606). The Company evaluates the individual units of account (e.g., components) within a collaborative arrangement to assess the appropriate recognition and measurement. The Company accounts for components of a collaborative arrangement that are within the scope of other ASC guidance following the relevant provisions of that guidance rather than the guidance provided in ASC 808.

ASC 808 states that a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer for a distinct good or service (i.e., a unit of account). That is, the Company is required to apply the unit-of-account guidance in ASC 606 to determine the distinct components of a collaborative arrangement. If the counterparty is a customer for that distinct good or service (or bundle of goods and/or services), it is accounted for under ASC 606. For

units of account that are in the scope of ASC 606, all of the guidance in ASC 606 applies, including the guidance on recognition, measurement, presentation and disclosure.

The Company accounts for collaborative arrangements or components of collaborative arrangements that are outside the scope of other guidance by analogy to the authoritative accounting literature or, if there is no appropriate analogy, by using a reasonable, rational and consistently applied accounting policy election.  When evaluating an appropriate analogy to other accounting guidance or an accounting policy for a collaborative arrangement, the Company assesses the nature of the arrangement, the nature of its business operations and the contractual terms of the arrangement.  The Company recognizes the shared costs incurred that are not within the scope of other accounting literature as a component of the related expense in the period incurred by analogy to ASC 730, Research and Development, and records reimbursements from counterparties as an offset to the related research and development costs.

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 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.

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Marketable Securities

9 Months Ended

Sep. 30, 2023

Marketable Securities

Marketable Securities

3. Marketable Securities

Marketable securities consist of the following:

	September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
Corporate bonds	$	72,232	$	—	$	(473)	$	71,759
U.S. Treasury and Government agencies		27,058		—		(130)		26,928
Total	$	99,290	$	—	$	(603)	$	98,687

	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. Treasury and 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 September 30, 2023 and 2022, respectively, the Company recorded $0 and $7,000 in realized gains on available-for-sale securities, which is included in other income, net on the condensed statements of operations.  For the nine months ended September 30, 2023 and 2022, respectively, the Company recorded $0 and $9,000 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 September 30, 2023, the Company had investments with a total fair market value of $98.7 million in an unrealized loss position, of which $18.4 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 relates 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 September 30, 2023:

	September 30, 2023
			Fair
(in thousands)	Cost		Value
Maturities:
Within 1 year	$	97,274	$	96,695
Between 1 to 2 years		2,016		1,992
Total investments available-for-sale	$	99,290	$	98,687

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.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Measurements

Fair Value Measurements

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.

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of September 30, 2023 and December 31, 2022:

	September 30, 2023
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	19,332	$	19,332	$	—	$	—
Marketable securities:
Corporate bonds		71,759		—		71,759		—
U.S. Treasury and Government agencies		26,928		—		26,928		—
Total	$	118,019	$	19,332	$	98,687	$	—

	December 31, 2022
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	6,782	$	6,782	$	—	$	—
Marketable securities:
Corporate bonds		131,706		—		131,706		—
U.S. Treasury and Government agencies		1,575		—		1,575		—
Total	$	140,063	$	6,782	$	133,281	$	—

The Company did not transfer any assets measured at fair value on a recurring basis between levels during the nine months ended September 30, 2023.

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Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

5. Leases

The Company's lease portfolio consists of office space and laboratory facilities. All of the Company's leases are classified as operating leases. The terms of the Company's lease agreements currently extend through March 2030 and provide the Company with an option for a five-year extension. Under the terms of the leases, the Company pays base annual rent subject to fixed dollar increases each year and other normal operating expenses such as taxes, repairs, and maintenance. The Company evaluates renewal options at lease inception and on an ongoing basis and considers renewal options that the Company is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities in accordance with ASC 842. The leases do not require variable lease payments or residual value guarantees and do not contain restrictive covenants.

The leases do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate as the discount rate when measuring the operating lease liability. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease.

Operating lease expense was $272,000 and $816,000 for the three and nine months ended September 30, 2023, respectively. Operating cash flows used for operating leases during the three and nine months ended September 30, 2023 were $245,000 and $757,000, respectively. As of September 30, 2023, the weighted-average remaining lease term was 6.50 years, and the weighted average discount rate was 7.46%.

Rent expense under operating leases was $248,000 and $739,000 for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, the maturities of the Company’s operating lease liabilities were as follows (in thousands), which are included in Accrued liabilities and other liabilities and Lease liabilities, long term in the accompanying balance sheet: 

2023	$	276
2024		1,127
2025		1,214
2026		1,355
2027		1,396
Thereafter		3,295
Total future minimum payments		8,663
Less: present value discount		(1,907)
Present value of lease liabilities	$	6,756

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation

Stock-Based Compensation

6. Stock-Based Compensation

Employee Equity Plans

The NextCure, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) was adopted in December 2015 and provides for the grant of awards of stock options, restricted stock awards, unrestricted stock awards and restricted stock units to employees, consultants, and directors of the Company.

The NextCure, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”) became effective on May 8, 2019, the date on which the Company’s Registration Statement on Form S-1 filed in connection with the IPO was declared effective (the “Effective Date”). The Company’s board of directors (the “Board”) determined not to make additional awards under the 2015 Plan following the effectiveness of the 2019 Plan. The 2019 Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards to the Company’s officers, employees, non-employee directors and other key persons (including consultants).

The number of shares of common stock reserved for issuance under the 2019 Plan is 2,900,000 plus the number of shares of stock related to awards outstanding under the 2015 Plan that subsequently terminate by expiration or forfeiture, cancellation or otherwise without the issuance of such shares. The number of shares reserved for issuance under the 2019 Plan automatically increase each January 1st during the term of the 2019 Plan by 4% of the number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or such lesser number of shares determined by the Board.

As of September 30, 2023, 2,108,622 shares were reserved for future grant under the 2019 Plan.

Stock options granted under the 2015 Plan and 2019 Plan (together, the “Plans”) to employees generally vest over four years and expire after ten years.

A summary of stock option activity for awards under the Plans is presented below:

	Options Outstanding and Exercisable
				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value(1)
	Shares	Price		Life (Years)	(in thousands)
Outstanding as of December 31, 2022	5,262,179	$	11.44	7.6	$	115
Granted	2,059,250	$	1.55	—		—
Exercised	(5,057)	$	0.99	—		—
Forfeited	(403,024)	$	5.23	—		—
Outstanding as of September 30, 2023	6,913,348	$	8.86	7.5	$	79
Exercisable as of September 30, 2023	3,720,545	$	12.43	6.3	$	79

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at September 30, 2023 and December 31, 2022.

The weighted average grant date fair value of stock options granted to employees for the nine months ended September 30, 2023 was $1.12 using the Black-Scholes option pricing model. There were 5,057 stock options exercised during the nine months ended September 30, 2023. As of September 30, 2023, there was $9.7 million of total unrecognized

compensation expense related to unvested options under the Plans that will be recognized over a weighted-average period of approximately 1.9 years.

The aggregate grant date fair value of stock options vested during the nine months ended September 30, 2023 and 2022 was approximately $7.2 million and $9.0 million, respectively.

Stock-based compensation expense was classified on the statements of operations as follows for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	721	$	779	$	2,184	$	2,274
General and administrative		1,280		1,533		4,020		4,908
Total stock-based compensation expense	$	2,001	$	2,312	$	6,204	$	7,182

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the following table for options issued during the period indicated:

	Nine Months Ended
	September 30,
	2023		2022
Expected term	6.1	years	5.5 - 6.1	years
Expected volatility	81.4	%	79.7	%
Risk free interest rate	3.5 - 4.1	%	1.8 - 3.1	%
Expected dividend yield	—	%	—	%

Employee Stock Purchase Plan

The NextCure, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”) was approved in May 2019 and provides for eligible employees of the Company to purchase shares of Company stock at a discounted price. As of September 30, 2023, 109,958 shares of common stock had been issued pursuant to the ESPP and 680,722 shares were reserved for future issuance thereunder.

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Collaboration Agreements

9 Months Ended

Sep. 30, 2023

Collaboration Agreements

Collaboration Agreements

7. Collaboration Agreements

Collaboration Agreement with LegoChem Biosciences, Inc. (“LegoChem”)

In November 2022, the Company entered into a Research Collaboration and Co-Development Agreement (“Agreement”) with LegoChem to develop up to three antibody drug conjugates.  Under the terms of the Agreement, both parties equally share the costs of developing the molecules and profits on commercialized products.  The collaboration consists of up to three research programs for which a research plan will be developed.  With respect to a research plan, each party shall use reasonable efforts to execute and perform the activities assigned to it.  Each party shall be solely responsible for costs associated with its assigned activities as outlined in the research plan.  Upon successful completion of a research plan, or as otherwise agreed, the parties may designate a research product as a co-development product.  Upon designation of a co-development product, cost sharing on a 50-50 basis between the Company and LegoChem would begin.  The activities associated with the research plan and co-development products will be coordinated by a joint steering committee, which is comprised of an equal number of representatives from the Company and LegoChem.  If and when a co-development product becomes commercialized, the Company and LegoChem would equally share in the profits.  There are no implied licenses or other rights created under this Agreement after designation of a co-development product.  

Effective April 1, 2023, the parties designated the initial co-development product under the Agreement.  As such, cost sharing on a 50-50 basis commenced for the first co-development product under the Agreement.  

Given the involvement by both parties under this Agreement, management assessed the criteria under ASC 808 to determine if such agreement is within the scope of ASC 808. Based on the terms of the Agreement, the Company concluded that the Agreement meets the requirements of a collaboration within the guidance of ASC 808.  The Company and LegoChem are active participants in the activities associated with the Agreement and are exposed to significant risks and rewards dependent on the commercial success of the activity.  The Agreement is not reflective of a vendor-customer relationship and therefore not within the scope of ASC 606.  Accordingly, the net costs associated with the co-development are expensed as incurred and recognized within research and development expenses on the statement of operations.

As of September 30, 2023, there is only one co-development product that is in the early stages of development and costs incurred have not been material.

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Net Loss per Share Attributable to Common Stockholders

9 Months Ended

Sep. 30, 2023

Net Loss per Share Attributable to Common Stockholders

Net Loss per Share Attributable to Common Stockholders

8. Net Loss Per Share Attributable to Common Stockholders

The computation of basic loss per share is based on the weighted-average number of common shares outstanding, without consideration for dilutive common stock equivalents. The computation of diluted loss per share is based on the weighted-average number of common shares outstanding and dilutive potential common shares, which include shares that may be issued under the 2015 Plan and 2019 Plan, as determined using the treasury stock method.

The computation for basic and diluted loss per share were as follows (in thousands, except share and per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net loss (Numerator):
Net loss - basic and diluted	$	(14,301)	$	(18,911)	$	(48,256)	$	(57,433)
Shares (Denominator):
Weighted-average shares outstanding - basic and diluted		27,839,968		27,748,844		27,814,655		27,734,271
Loss per share - basic and diluted	$	(0.51)	$	(0.68)	$	(1.73)	$	(2.07)

For the three and nine months ended September 30, 2023 and 2022, all options to purchase shares of the Company’s common stock were excluded from the computation of diluted net loss per share as the effect would have been anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti-dilutive effect:

	September 30,
	2023	2022
Outstanding options to purchase common stock	6,913,348	5,276,833

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Income Taxes

9 Months Ended

Sep. 30, 2023

Income Taxes

Income Taxes

9. Income Taxes

The Company did not record a provision or benefit for income taxes during the three and nine month periods ended September 30, 2023 and 2022. The Company continues to maintain a full valuation allowance against its deferred tax assets.

The Company has evaluated the positive and negative evidence involving its ability to realize its deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of any commercially ready products. It has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Management reevaluates the positive and negative evidence at each reporting period.

Under the provisions of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”), certain substantial changes in the Company’s ownership may have limited, or may limit in the future, the amount of net operating loss and research and development credit carryforwards that can be used to reduce future income taxes. We have not performed a detailed analysis to determine whether an ownership change under Section 382 of the IRC occurred. The effect of an ownership change would be the imposition of an annual limitation on the use of losses and credits attributable to periods before the change and could result in a reduction in the total losses and credits available.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

Legal Proceedings

On September 21, 2020, a putative stockholder class action was filed in the U.S. District Court for the Southern District of New York styled Ye Zhou v. NextCure, Inc., et. al., Case 1:20-cv-0772 (S.D.N.Y.) (the “Ye Zhou Action”). On February 26, 2021, the Lead Plaintiff filed a consolidated amended complaint that asserts claims against us, certain of our officers and members of our board of directors, and the underwriters in our May 2019 initial public offering and November 2019 underwritten secondary public offering. The complaint alleges that the defendants violated provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Securities Act of 1933, as amended (the “Securities Act”), with respect to statements made regarding the Company’s NC318 product candidate and the FIND-IO platform. The complaint seeks unspecified damages on behalf of a purported class of purchasers of our securities between May 8, 2019 and July 14, 2020. Defendants filed a motion to dismiss the consolidated amended complaint on April 27, 2021, and on July 12, 2023 the court issued a memorandum opinion and order granting defendants’ motion to dismiss against all counts of the consolidated amended complaint.  On July 13, 2023, judgement on behalf of Company and the other named defendants was entered and the case for the Ye Zhou Action was closed by the court. No appeals were filed by plaintiffs in the Ye Zhou to contest the district court’s order dismissing all claims in favor of Company.

On March 24, 2021, a purported shareholder derivative lawsuit was filed in the U.S. District Court for the District of Maryland, Southern Division, styled Zach Liu v. Richman et. al., Case:21-cv-00754 (the “Liu Action”), alleging breaches of fiduciary duty by officers and/or directors, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of the Exchange Act and the Securities Act. The complaint seeks unspecified damages, attorneys’ fees and costs, declaratory relief, corporate governance changes, and restitution. On May 17, 2021, the Court granted the parties’ joint motion to stay the Liu Action pending resolution of the defendants’ motion to dismiss filed in respect of the Ye Zhou Action. On August 1, 2023, Company filed a notice with the court in the Liu Action advising of the result of the motion to dismiss an entry of judgement in the Ye Zhou Action.  On August 22, 2023, the Liu Action plaintiff filed a stipulation with the court to dismiss voluntarily all claims against Company, and the court in response closed the case for the Liu Action.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies

Collaboration Arrangements

Collaboration Arrangements

The Company assesses whether collaboration agreements are subject to Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements ("ASC 808"), based on whether they involve joint operating activities involving two or more parties that are active participants in the activity and are exposed to significant risks and rewards dependent on the commercial success of the activities.

A collaborative arrangement within the scope of ASC 808 may be partially (or entirely) within the scope of other guidance (including ASC 606). The Company evaluates the individual units of account (e.g., components) within a collaborative arrangement to assess the appropriate recognition and measurement. The Company accounts for components of a collaborative arrangement that are within the scope of other ASC guidance following the relevant provisions of that guidance rather than the guidance provided in ASC 808.

ASC 808 states that a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer for a distinct good or service (i.e., a unit of account). That is, the Company is required to apply the unit-of-account guidance in ASC 606 to determine the distinct components of a collaborative arrangement. If the counterparty is a customer for that distinct good or service (or bundle of goods and/or services), it is accounted for under ASC 606. For

units of account that are in the scope of ASC 606, all of the guidance in ASC 606 applies, including the guidance on recognition, measurement, presentation and disclosure.

The Company accounts for collaborative arrangements or components of collaborative arrangements that are outside the scope of other guidance by analogy to the authoritative accounting literature or, if there is no appropriate analogy, by using a reasonable, rational and consistently applied accounting policy election.  When evaluating an appropriate analogy to other accounting guidance or an accounting policy for a collaborative arrangement, the Company assesses the nature of the arrangement, the nature of its business operations and the contractual terms of the arrangement.  The Company recognizes the shared costs incurred that are not within the scope of other accounting literature as a component of the related expense in the period incurred by analogy to ASC 730, Research and Development, and records reimbursements from counterparties as an offset to the related research and development costs.

Basis of Presentation and Unaudited Financial Information

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 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

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

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.

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Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Marketable Securities

Schedule of marketable securities

Marketable securities consist of the following:

	September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
Corporate bonds	$	72,232	$	—	$	(473)	$	71,759
U.S. Treasury and Government agencies		27,058		—		(130)		26,928
Total	$	99,290	$	—	$	(603)	$	98,687

	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. Treasury and Government agencies		1,612		—		(37)		1,575
Total	$	134,775	$	—	$	(1,494)	$	133,281

Schedule of available-for-sale maturities

The following table summarizes maturities of the Company’s investments available-for-sale as of September 30, 2023:

	September 30, 2023
			Fair
(in thousands)	Cost		Value
Maturities:
Within 1 year	$	97,274	$	96,695
Between 1 to 2 years		2,016		1,992
Total investments available-for-sale	$	99,290	$	98,687

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Measurements

Summary of fair value of the Company's financial assets

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of September 30, 2023 and December 31, 2022:

	September 30, 2023
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	19,332	$	19,332	$	—	$	—
Marketable securities:
Corporate bonds		71,759		—		71,759		—
U.S. Treasury and Government agencies		26,928		—		26,928		—
Total	$	118,019	$	19,332	$	98,687	$	—

	December 31, 2022
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	6,782	$	6,782	$	—	$	—
Marketable securities:
Corporate bonds		131,706		—		131,706		—
U.S. Treasury and Government agencies		1,575		—		1,575		—
Total	$	140,063	$	6,782	$	133,281	$	—

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases

Schedule of future minimum lease payments under non-cancellable leases

As of September 30, 2023, the maturities of the Company’s operating lease liabilities were as follows (in thousands), which are included in Accrued liabilities and other liabilities and Lease liabilities, long term in the accompanying balance sheet: 

2023	$	276
2024		1,127
2025		1,214
2026		1,355
2027		1,396
Thereafter		3,295
Total future minimum payments		8,663
Less: present value discount		(1,907)
Present value of lease liabilities	$	6,756

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation

Summary of stock option activity

	Options Outstanding and Exercisable
				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value(1)
	Shares	Price		Life (Years)	(in thousands)
Outstanding as of December 31, 2022	5,262,179	$	11.44	7.6	$	115
Granted	2,059,250	$	1.55	—		—
Exercised	(5,057)	$	0.99	—		—
Forfeited	(403,024)	$	5.23	—		—
Outstanding as of September 30, 2023	6,913,348	$	8.86	7.5	$	79
Exercisable as of September 30, 2023	3,720,545	$	12.43	6.3	$	79

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at September 30, 2023 and December 31, 2022.

Summary of stock based compensation expense recorded

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	721	$	779	$	2,184	$	2,274
General and administrative		1,280		1,533		4,020		4,908
Total stock-based compensation expense	$	2,001	$	2,312	$	6,204	$	7,182

Summary of assumptions used in the Black Scholes option pricing model for stock options granted

	Nine Months Ended
	September 30,
	2023		2022
Expected term	6.1	years	5.5 - 6.1	years
Expected volatility	81.4	%	79.7	%
Risk free interest rate	3.5 - 4.1	%	1.8 - 3.1	%
Expected dividend yield	—	%	—	%

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Net Loss per Share Attributable to Common Stockholders (Tables)

9 Months Ended

Sep. 30, 2023

Net Loss per Share Attributable to Common Stockholders

Summary of computation of basic and diluted net loss per share attributable to common stockholders

The computation for basic and diluted loss per share were as follows (in thousands, except share and per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net loss (Numerator):
Net loss - basic and diluted	$	(14,301)	$	(18,911)	$	(48,256)	$	(57,433)
Shares (Denominator):
Weighted-average shares outstanding - basic and diluted		27,839,968		27,748,844		27,814,655		27,734,271
Loss per share - basic and diluted	$	(0.51)	$	(0.68)	$	(1.73)	$	(2.07)

Summary of shares excluded from the computation of diluted net loss per share

	September 30,
	2023	2022
Outstanding options to purchase common stock	6,913,348	5,276,833

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Nature of the Business - Liquidity (Details) $ in Millions	Sep. 30, 2023 USD ($)
Nature of the Business
Cash, cash equivalents and marketable securities	$ 118.2

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Marketable Securities - (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Investments
Amortized Cost	$ 99,290,000		$ 99,290,000		$ 134,775,000
Gross Unrealized Loss	(603,000)		(603,000)		(1,494,000)
Estimated Fair Value	98,687,000		98,687,000		133,281,000
Unrealized losses in a continuous loss position for more than twelve consecutive months	18,400,000		18,400,000
Gross realized gains	0	$ 7,000	0	$ 9,000
Fair market value of investments in unrealized loss position	98,700,000		98,700,000
Cost Maturities:
Within 1 year	97,274,000		97,274,000
Between 1 to 2 years	2,016,000		2,016,000
Total investments available for sale	99,290,000		99,290,000
Fair Value Maturities:
Within 1 year	96,695,000		96,695,000
Between 1 to 2 years	1,992,000		1,992,000
Total investments available for sale	98,687,000		98,687,000
Corporate bonds
Investments
Amortized Cost	72,232,000		72,232,000		133,163,000
Gross Unrealized Loss	(473,000)		(473,000)		(1,457,000)
Estimated Fair Value	71,759,000		71,759,000		131,706,000
U.S. Treasury and Government agencies
Investments
Amortized Cost	27,058,000		27,058,000		1,612,000
Gross Unrealized Loss	(130,000)		(130,000)		(37,000)
Estimated Fair Value	$ 26,928,000		$ 26,928,000		$ 1,575,000

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Fair Value Measurements - (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Fair value of the Company's financial assets
Marketable Securities	$ 98,687,000	$ 133,281,000
Assets transferred into level 3	0
Assets transferred out of level 3	0
Corporate bonds
Fair value of the Company's financial assets
Marketable Securities	71,759,000	131,706,000
U.S. Treasury and Government agencies
Fair value of the Company's financial assets
Marketable Securities	26,928,000	1,575,000
Fair Value
Fair value of the Company's financial assets
Total financial assets	118,019,000	140,063,000
Fair Value | Money market funds (cash equivalents)
Fair value of the Company's financial assets
Money market funds (cash equivalents)	19,332,000	6,782,000
Fair Value | Corporate bonds
Fair value of the Company's financial assets
Marketable Securities	71,759,000	131,706,000
Fair Value | U.S. Government agencies
Fair value of the Company's financial assets
Marketable Securities		1,575,000
Fair Value | U.S. Treasury and Government agencies
Fair value of the Company's financial assets
Marketable Securities	26,928,000
Fair Value | Quoted Prices in Active Markets (Level 1)
Fair value of the Company's financial assets
Total financial assets	19,332,000	6,782,000
Fair Value | Quoted Prices in Active Markets (Level 1) | Money market funds (cash equivalents)
Fair value of the Company's financial assets
Money market funds (cash equivalents)	19,332,000	6,782,000
Fair Value | Significant Other Observable Inputs (Level 2)
Fair value of the Company's financial assets
Total financial assets	98,687,000	133,281,000
Fair Value | Significant Other Observable Inputs (Level 2) | Corporate bonds
Fair value of the Company's financial assets
Marketable Securities	71,759,000	131,706,000
Fair Value | Significant Other Observable Inputs (Level 2) | U.S. Government agencies
Fair value of the Company's financial assets
Marketable Securities		$ 1,575,000
Fair Value | Significant Other Observable Inputs (Level 2) | U.S. Treasury and Government agencies
Fair value of the Company's financial assets
Marketable Securities	$ 26,928,000

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Leases - Other Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases
Lease extension period	5 years		5 years
Lessee, Operating Lease, Existence of Option to Extend [true false]			true
Operating lease expense	$ 272,000		$ 816,000
Operating cash flows used for operating leases	$ 245,000		$ 757,000
Weighted=average remaining lease term	6 years 6 months		6 years 6 months
Weighted average discount rate (as a percent)	7.46%		7.46%
Rent expenses operating leases		$ 248,000		$ 739,000

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Leases - Maturities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Future minimum lease payments
2023	$ 276
2024	1,127
2025	1,214
2026	1,355
2027	1,396
Thereafter	3,295
Total future minimum payments	8,663
Less: present value discount	(1,907)
Present value of lease liabilities	$ 6,756

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Stock-Based Compensation - Stock options (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended		12 Months Ended	50 Months Ended
	May 03, 2019	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Jun. 30, 2023
2015 Plan
Number of Shares
Outstanding at the beginning (in shares)		5,262,179
Granted (in shares)		2,059,250
Exercised (in shares)		(5,057)
Forfeitures (in shares)		(403,024)
Outstanding at the end (in shares)		6,913,348		5,262,179
Exercisable at the end (in shares)		3,720,545
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)		$ 11.44
Granted (in dollars per share)		1.55
Exercised (in dollars per share)		0.99
Forfeited (in dollars per share)		5.23
Outstanding at the end (in dollars per share)		8.86		$ 11.44
Exercisable at the end (in dollars per share)		$ 12.43
Weighted Average Remaining Contractual Life (Years) And Aggregate Intrinsic Value
Outstanding (in years)		7 years 6 months		7 years 7 months 6 days
Exercisable at the end (in years)		6 years 3 months 18 days
Outstanding at the beginning (in dollars)		$ 115
Outstanding at the end (in dollars)		79		$ 115
Exercisable at the end (in dollars)		$ 79
Weighted average grant date fair value per share of stock options granted		$ 1.12
Aggregate grant date fair value		$ 7,200	$ 9,000
Share Based Compensation Expense Not Recognized
Unrecognized compensation cost		$ 9,700
Compensation expense recognition period		1 year 10 months 24 days
Omnibus Incentive Plan
Stock Based Compensation
Total number of shares of common stock that may be issued		2,900,000
Annual increase in number of share reserved for issuance (as percent)	4.00%
2015 Plan and 2019 Employee Stock Purchase Plan
Stock Based Compensation
Vesting period		4 years
Expiration period		10 years
Number of shares reserved for issuance under the plan		2,108,622
2019 Employee Stock Purchase Plan
Stock Based Compensation
Number of shares issued					109,958
Number of shares reserved for issuance under the plan		680,722

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Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock based compensation expense
Total stock-based compensation expense	$ 2,001	$ 2,312	$ 6,204	$ 7,182
Research and development
Stock based compensation expense
Total stock-based compensation expense	721	779	2,184	2,274
General and administrative
Stock based compensation expense
Total stock-based compensation expense	$ 1,280	$ 1,533	$ 4,020	$ 4,908

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Stock-Based Compensation - Assumptions (Details)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Fair value assumptions
Expected term	6 years 1 month 6 days
Expected volatility	81.40%	79.70%
Minimum
Fair value assumptions
Expected term		5 years 6 months
Risk free interest rate	3.50%	1.80%
Maximum
Fair value assumptions
Expected term		6 years 1 month 6 days
Risk free interest rate	4.10%	3.10%

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Collaboration Agreements (Details) - Research Collaboration and Co-Development Agreement - LegoChem Biosciences - item	1 Months Ended
	Nov. 30, 2022	Sep. 30, 2023
Collaboration Agreements
Maximum number of antibody drug conjugates to be developed	3
Collaboration agreements cost sharing percentage (as a percent)	50.00%
Number of co-developed product in early stage of development		1

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Net Loss Per Share Attributable to Common Stockholders - Other (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Income loss (Numerator):
Net loss - basic and diluted	$ (14,301)	$ (17,859)	$ (16,096)	$ (18,911)	$ (17,920)	$ (20,602)	$ (48,256)	$ (57,433)
Shares (Denominator):
Weighted-average shares for basic EPS (in shares)	27,839,968			27,748,844			27,814,655	27,734,271
Weighted-average shares for diluted EPS (in shares)	27,839,968			27,748,844			27,814,655	27,734,271
Basic EPS (in dollars per share)	$ (0.51)			$ (0.68)			$ (1.73)	$ (2.07)
Diluted EPS (in dollars per share)	$ (0.51)			$ (0.68)			$ (1.73)	$ (2.07)

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Net Loss per Share Attributable to Common Stockholders - Anti-dilutive effect (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Option to purchase common stock
Antidilutive Securities
Antidilutive securities excluded from computation of diluted net loss per share	6,913,348	5,276,833

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Income Taxes - (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Taxes
Provision or benefit from income taxes	$ 0	$ 0	$ 0	$ 0