NRIX Slumps 35% After-Hours — What’s Driving The Selloff?

• The decision eliminates any further development, regulatory, or commercial milestone payments and royalties that Nurix had been eligible to receive specifically for this program.
• Nurix noted that it remains eligible for milestones and royalties on other previously licensed programs under the same collaboration, should Sanofi choose to advance those.
• The company’s revenue comes almost entirely from collaboration payments, including with Roche and Sanofi.

Shares of Nurix Therapeutics, Inc. (NRIX) slumped 35% after hours on Tuesday after the company said that its partner Sanofi (SNY) has discontinued development of the experimental oral drug called SAR448272 that it licensed from Nurix.

Paris-headquartered Sanofi notified Nurix that it is ending the early-stage first-in-human trial of SAR448272 and terminating the program entirely. The compound was being explored for type 2 inflammatory and autoimmune conditions such as atopic dermatitis and asthma.

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The decision eliminates any further development, regulatory, or commercial milestone payments and royalties that Nurix had been eligible to receive specifically for this program. Nurix was eligible for roughly $455 million in additional development, regulatory, and commercial milestones on the program alone, plus potential royalties on future sales.

Nurix noted that it remains eligible for milestones and royalties on other previously licensed programs under the same collaboration, should Sanofi choose to advance those. The company also stated that the announcement does not alter its cash runway guidance. As of August 31, Nurix held $1.1 billion in cash, cash equivalents, and marketable securities, which it expects will fund operations into the second half of 2029.

“While today’s news is disappointing, Nurix remains in a strong position, with a substantial cash runway, three clinical-stage programs across our wholly owned and partnered portfolio, and an exciting preclinical pipeline,” CEO Arthur T. Sands said.

How Does This Impact NRIX's Balance Sheet?

Nurix has no approved drugs; all its drugs are in various stages of development. The company’s revenue comes almost entirely from collaboration payments as a result. The company has partnerships in place with Roche, Gilead, and Pfizer in addition to Sanofi. 

The company has received approximately $139 million from Sanofi under their 2019 collaboration deal, including $10 million when Sanofi kicked off early-stage trials for SAR448272 earlier this year.

How Did NRIX Retail Traders React?

On Stocktwits, retail sentiment around NRIX stock jumped from 'neutral' to 'bullish' territory over the past 24 hours, while message volume rose from 'normal' to 'high' levels.

A Stocktwits user said that the selloff is not proportional to the financial impact of the news.

Another user highlighted that the drug was insignificant and only in early-stage trials. The user expects bexobrutideg, co-developed by the company with Roche for chronic lymphocytic leukemia, to be the major moneymaker for Nurix.

NRIX stock has dropped 36% year-to-date. 

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