Quince Therapeutics(QNCX) - 2024 Q2 - Quarterly Report

Product Development - Quince Therapeutics is focused on developing EryDex, a treatment for A-T, with the first patient enrolled in the Phase 3 NEAT clinical trial in Q2 2024, expecting topline results in Q4 2025 and potential NDA submission in 2026[129][142]. - EryDex has received Fast Track designation from the FDA, highlighting its potential to address a high unmet medical need for A-T patients[130][144]. - The Phase 3 NEAT trial aims to enroll about 86 patients aged 6-9 and 20 patients aged 10 and older, with a primary efficacy endpoint based on changes in RmICARS scores[143][144]. - The NEAT trial is conducted under an SPA agreement with the FDA, facilitating NDA submission upon positive results[144]. - EryDex's development is supported by insights gained from the prior ATTeST Phase 3 trial, which involved 176 patients and highlighted the importance of early treatment in A-T[146]. - EryDex is classified as a drug/device combination product by the FDA, with plans to submit a 505(b)(2) NDA in 2026, leveraging prior findings of safety and effectiveness for the active ingredient, DSP[145]. - Quince Therapeutics plans to initiate a proof-of-concept study for EryDex in Duchenne muscular dystrophy (DMD) in 2025, targeting corticosteroid intolerance in this population[138]. - The company intends to explore additional indications for EryDex in various rare diseases where chronic corticosteroid treatment is standard but limited by safety concerns[139]. Market Opportunity - The updated patient sizing project indicates approximately 4,600 diagnosed A-T patients in the U.S. as of July 2024, up from previous estimates of 3,400, with a global market opportunity exceeding $1 billion[131]. - The AIDE technology platform, which encapsulates drugs in patients' red blood cells, has been developed over 20 years with an investment of approximately $100 million, creating high barriers to entry for competitors[140]. Financial Performance - Research and development expenses increased by 207% to $4.2 million for the three months ended June 30, 2024, compared to $1.4 million for the same period in 2023[160]. - Total operating expenses rose by 405% to $28.2 million for the three months ended June 30, 2024, compared to $5.6 million for the same period in 2023[160]. - The net loss for the three months ended June 30, 2024, was $27.7 million, a 468% increase compared to a net loss of $4.9 million for the same period in 2023[160]. - Research and development expenses increased by $3.3 million, reaching $7.8 million for the six months ended June 30, 2024, compared to $4.6 million for the same period in 2023, representing a 71% increase[173]. - The net loss for the six months ended June 30, 2024, was $38.9 million, compared to a net loss of $17.1 million for the same period in 2023, marking a 127% increase in losses[185]. - The company recorded a non-cash goodwill impairment charge of $17.1 million for the six months ended June 30, 2024, due to deteriorating macro-economic conditions and a decline in market capitalization[179]. - General and administrative expenses rose by $1.6 million to $9.7 million for the six months ended June 30, 2024, primarily driven by increased personnel-related expenses[176]. - Cash used in operating activities was $17.1 million for the six months ended June 30, 2024, compared to $7.4 million for the same period in 2023, reflecting a significant increase in operational losses[195][196]. - The company had an accumulated deficit of $358.5 million as of June 30, 2024, reflecting ongoing financial challenges since inception[185]. Cash Flow and Capital Resources - Cash, cash equivalents, and short-term investments totaled $59.4 million as of June 30, 2024, down from $75.1 million at the end of 2023[188]. - The company expects existing capital resources to be sufficient to fund projected operating requirements for at least the next twelve months[188]. - The company anticipates needing to raise substantial additional capital following the acquisition of EryDel, influenced by various factors including clinical trial progress and regulatory approvals[191]. - The company’s existing cash, cash equivalents, and investments are expected to fund planned operations, including clinical activities related to EryDex, through 2026[193]. - The EIB Loan, assumed during the acquisition of EryDel, has a maximum borrowing capacity of €30 million, with only tranches A and B drawn as of June 30, 2024[186]. - Cash provided by investing activities was $3.9 million for the six months ended June 30, 2024, primarily from the maturities of short-term investments[197]. - Cash provided by financing activities was $0.2 million for the six months ended June 30, 2024, from the exercise of stock options[197]. - The net increase in cash and cash equivalents for the six months ended June 30, 2024, was $(12.9) million, compared to $(21.9) million for the same period in 2023[194]. - The company has approximately $29.6 million in cancellable future operating expense commitments based on existing contracts as of June 30, 2024[200]. Clinical Trial Results - EryDex high dose missed the primary efficacy endpoint with a p-value of 0.077, but showed statistical significance in the per protocol analysis with a p-value of 0.019[148]. - Patients with any treatment-emergent adverse events (TEAE) in the EryDex high dose group were 82%, compared to 73% in the placebo group[152].