Business Overview and History
Quince Therapeutics is a late-stage biotechnology company dedicated to developing innovative therapies that harness the power of a patient's own biology to treat rare and debilitating diseases. With a focus on rare neurodegenerative and autoimmune conditions, Quince is leveraging its proprietary AIDE technology platform to create novel drug-device combinations that have the potential to significantly improve patient outcomes.
Quince Therapeutics was founded in 2014 with a focus on developing novel therapeutic approaches for Alzheimer's and other degenerative diseases. In 2022, the company shifted its operational focus to the development of a bone-targeting drug platform and lead compound NOV004 for rare skeletal diseases, bone fractures, and injury. However, this direction was short-lived, as Quince made a strategic decision in January 2023 to out-license its bone-targeting drug platform and prioritize capital resources toward expanding its development pipeline.
The company's journey has been marked by several challenges. In January 2022, the FDA placed a full clinical hold on the IND for Quince's asset atuzaginstat COR388. Additionally, the Phase 2/3 study with COR388 in Alzheimer's disease failed to meet its primary endpoint. These setbacks, along with the impact of the COVID-19 pandemic, led to a significant restructuring of the company's focus and strategy.
A transformative moment came in October 2023 when Quince completed the acquisition of EryDel, a late-stage biotechnology company. This acquisition brought EryDex, now Quince's lead asset, into the company's portfolio. EryDex is a novel drug-device combination product that utilizes the AIDE (Autologous Intracellular Drug Encapsulation) technology to encapsulate the corticosteroid dexamethasone sodium phosphate (DSP) within a patient's own red blood cells.
The acquisition of EryDel not only expanded Quince's focus to rare disease drug development but also provided the company with the proprietary AIDE technology platform. This platform, which has its roots in over 20 years of research and development into the use of autologous red blood cells as a drug delivery vehicle, now forms the foundation of Quince's drug candidate pipeline.
Quince's lead indication for EryDex is Ataxia-Telangiectasia (A-T), a rare and devastating neurodegenerative disorder that typically manifests in early childhood. A-T is characterized by progressive neurological deterioration, immune dysfunction, and an increased risk of cancer. Currently, there are no approved treatments for A-T, and the global market for a potential therapy is estimated to exceed $1 billion.
Quince's strategy is to leverage the EryDex program as a foundation for further expanding its pipeline into other rare disease indications where chronic corticosteroid treatment is a standard of care, but safety concerns limit its widespread use. The company has identified a number of prioritized target indications, including autoimmune hepatitis, dermatomyositis, and Duchenne muscular dystrophy, among others.
Financial Snapshot
As of September 30, 2024, Quince Therapeutics reported $47.8 million in cash, cash equivalents, and short-term investments, which the company believes will be sufficient to fund its planned operations into the first quarter of 2026. This includes the anticipated costs associated with the ongoing Phase 3 NEAT clinical trial for EryDex in A-T.
For the nine months ended September 30, 2024, Quince reported a net loss of $44.4 million, compared to a net loss of $22.5 million for the same period in 2023. The increase in net loss was primarily driven by the ramp-up of clinical development activities for EryDex, as well as a $17.1 million non-cash goodwill impairment charge related to the EryDel acquisition.
Quince does not currently generate any revenue, as the company's drug candidates, including EryDex, are still in the clinical development stage. The company's operating expenses for the nine-month period ended September 30, 2024 totaled $45.3 million, with research and development costs accounting for $12.8 million and general and administrative expenses reaching $13.3 million.
In the most recent quarter (Q3 2024), Quince reported a net loss of $5,492,000, with negative operating cash flow of $7,260,000 and negative free cash flow of $7,306,000. These figures reflect the ongoing investment in research and development for EryDex and other pipeline programs.
As of September 30, 2024, Quince's liquidity position showed a debt-to-equity ratio of 0.1625, with $2.67 million in cash and cash equivalents and $45.17 million in short-term investments. The company's current ratio and quick ratio both stand at 9.53, indicating a strong short-term liquidity position.
In October 2023, Quince assumed an unsecured €30 million line of credit facility from EryDel as part of the acquisition. As of September 30, 2024, the principal outstanding on this facility was €10 million ($11.2 million).
Operational Highlights and Milestones
The primary focus for Quince Therapeutics in 2024 has been the advancement of its pivotal Phase 3 NEAT (Neurologic Effects of EryDex on Subjects with A-T) clinical trial for EryDex in patients with Ataxia-Telangiectasia. As of November 13, 2024, the company has enrolled 32 patients across clinical sites in the U.S., U.K., and European Union, with the majority of planned sites now actively screening and enrolling participants.
The NEAT trial is being conducted under a Special Protocol Assessment (SPA) agreement with the U.S. Food and Drug Administration (FDA), which provides a clear regulatory pathway for the potential submission of a New Drug Application (NDA) upon successful completion of the study. Additionally, the FDA has granted Fast Track designation for the EryDex System, recognizing the significant unmet medical need for patients with A-T.
Quince expects to complete enrollment in the NEAT trial in the first half of 2025 and report topline results in the fourth quarter of 2025. Assuming positive data, the company plans to submit an NDA for EryDex in 2026.
In parallel with the A-T program, Quince is actively evaluating the potential of the EryDex platform in other rare disease indications where chronic corticosteroid use is a standard of care, such as Duchenne muscular dystrophy. The company intends to initiate a Phase 2 clinical trial for EryDex in Duchenne in 2025, leveraging a capital-efficient study design.
Product Segments and Pipeline
Quince Therapeutics has two main product segments:
1. EryDex System The EryDex System is Quince's lead drug candidate and the first product to leverage the company's proprietary AIDE technology platform. This innovative drug-device combination uses an automated process to encapsulate dexamethasone sodium phosphate (DSP) into a patient's own red blood cells. The system comprises specialized automated equipment, including the Red Cell Loader (RCL) device, a sterile single-use consumable treatment kit called EryKit, and other proprietary process solutions. The automated AIDE process is designed to be completed at the point-of-care and takes approximately two hours from start to finish.
EryDex has received Orphan Drug Designation from both the FDA and EU for the treatment of Ataxia-Telangiectasia. The ongoing Phase 3 NEAT trial is evaluating the safety and efficacy of EryDex in A-T patients, with topline results expected in the fourth quarter of 2025.
2. Other Pipeline Programs Quince is exploring the potential of its AIDE technology platform for other rare disease indications where chronic corticosteroid treatment is or could become standard of care but is limited by safety and tolerability issues. The company has identified Duchenne muscular dystrophy (DMD) as a second development program for EryDex and plans to initiate a Phase 2 study in DMD in 2025.
Additionally, Quince has completed an initial assessment of other potential rare disease indications for the AIDE platform beyond A-T and DMD. These include autoimmune hepatitis, dermatomyositis, pemphigus vulgaris, and Hashimoto's encephalopathy, among others. The company may pursue an investigator-initiated clinical trial approach to evaluate EryDex in some of these additional rare disease targets.
Risks and Challenges
As a clinical-stage biotechnology company, Quince Therapeutics faces a number of risks and challenges that are common in the industry. The success of the company's lead asset, EryDex, is heavily dependent on the outcome of the ongoing Phase 3 NEAT trial in Ataxia-Telangiectasia. Failure to demonstrate the safety and efficacy of EryDex in this pivotal study would significantly impact Quince's ability to obtain regulatory approval and commercialize the product.
Additionally, the rare disease patient populations that Quince is targeting, such as A-T and Duchenne muscular dystrophy, are inherently small, which could make it challenging to enroll sufficient numbers of patients in clinical trials. The company's ability to successfully identify and reach these patient populations will be crucial to the advancement of its development programs.
Quince also faces risks related to its reliance on third-party manufacturers and suppliers for the production of its drug candidates and medical devices, as well as potential intellectual property disputes and the need to obtain and maintain regulatory approvals in multiple jurisdictions.
Furthermore, the company's recent acquisition of EryDel presents integration risks, as Quince works to align the operations, personnel, and systems of the two organizations. Effective execution of this integration will be critical to realizing the anticipated benefits of the transaction.
Outlook and Conclusion
Quince Therapeutics is well-positioned to make significant strides in the rare disease treatment landscape with its innovative AIDE technology platform and lead asset, EryDex. The company's laser-focus on advancing EryDex through the pivotal Phase 3 NEAT trial in Ataxia-Telangiectasia, coupled with its plans to expand into other rare disease indications, presents a compelling growth opportunity.
While Quince faces the inherent risks and challenges common to clinical-stage biotechnology companies, the potential for EryDex to address significant unmet medical needs, combined with the company's experienced management team and strong cash position, suggest that Quince Therapeutics is well on its way to unlocking the power of patient biology for the benefit of those living with rare and debilitating diseases.
The company's financial position, with $47.8 million in cash and investments as of September 30, 2024, provides runway into the first quarter of 2026, covering the anticipated completion of the NEAT trial. However, Quince may need to raise additional capital in the future to support continued development and potential commercialization of EryDex and other pipeline programs.
As Quince Therapeutics progresses its clinical programs and expands its pipeline, investors should closely monitor the company's cash burn rate, clinical trial progress, and any potential strategic partnerships or financing activities that could impact its long-term growth prospects in the competitive rare disease drug development landscape.