Quince Therapeutics(QNCX) - 2024 Q3 - Quarterly Report

Clinical Trials and Development - As of November 13, 2024, 32 patients have been enrolled in the Phase 3 NEAT clinical trial of EryDex for A-T, with topline results expected in Q4 2025 and a potential NDA submission in 2026[156]. - The Phase 3 NEAT clinical trial is conducted under an SPA agreement with the U.S. FDA, allowing for NDA submission upon positive results[174]. - EryDex has received Fast Track designation from the FDA, facilitating frequent interactions with review staff and eligibility for priority review[174]. - The company plans to initiate a Phase 2 clinical trial for EryDex targeting Duchenne muscular dystrophy (DMD) in 2025, focusing on patients with corticosteroid intolerance[165]. - The number of patients with any treatment-emergent adverse events (TEAEs) was 82% in the high dose EryDex group compared to 73% in the placebo group[183]. - The primary efficacy endpoint of the ATTeST trial was missed by the high dose EryDex group with a p-value of 0.077, but statistical significance was observed in the per protocol analysis with a p-value of 0.019[179]. Financial Performance - Research and development expenses increased by 244% to $4.9 million for the three months ended September 30, 2024, compared to $1.4 million for the same period in 2023[194]. - EryDex development costs rose by $3.2 million in the three months ended September 30, 2024, primarily due to clinical trial costs of $2.9 million and $0.3 million in manufacturing costs[196]. - General and administrative expenses decreased by $1.03 million to $3.63 million for the three months ended September 30, 2024, from $4.66 million for the same period in 2023[199]. - A fair value adjustment for contingent consideration resulted in a $2.7 million charge for the three months ended September 30, 2024, related to the EryDel Acquisition[200]. - Interest income decreased by $276,000 for the three months ended September 30, 2024, due to decreased yields on the investment portfolio[202]. - The net loss for the three months ended September 30, 2024, was $5.49 million, compared to a net loss of $5.35 million for the same period in 2023, representing a 3% increase in loss[194]. - Total operating expenses decreased by 4% to $5.86 million for the three months ended September 30, 2024, from $6.09 million for the same period in 2023[194]. - The company incurred a net loss of $44.4 million for the nine months ended September 30, 2024, compared to a net loss of $22.5 million for the same period in 2023, representing a 97% increase in losses[220]. - As of September 30, 2024, the company had an accumulated deficit of $364.0 million[220]. - The company has not generated any revenue to date and does not expect to do so until it obtains marketing approval for a drug candidate[220]. Cash Flow and Capital Needs - Cash, cash equivalents, and short-term investments totaled $47.8 million as of September 30, 2024, down from $75.1 million at the end of 2023[227]. - The company believes its existing cash and investments will be sufficient to fund operations into the first quarter of 2026, excluding costs for additional programs[228]. - Cash used in operating activities for the nine months ended September 30, 2024, was $24.4 million, compared to $12.2 million for the same period in 2023, reflecting a net loss of $44.4 million in 2024[236][237]. - Cash provided by investing activities was $11.0 million for the nine months ended September 30, 2024, primarily from maturities of short-term investments of $100.7 million[238]. - Cash used in financing activities was $4.8 million for the nine months ended September 30, 2024, which included a cash milestone payment of $5 million[239]. - The company anticipates needing to raise substantial additional capital following the acquisition of EryDel, influenced by the progress and costs of the Phase 3 NEAT clinical trial[231]. - The company may face challenges in raising additional capital due to potential worsening global economic conditions and market volatility[234]. Technology and Market Potential - The global market for A-T treatments is estimated to exceed $1 billion, with approximately 4,600 diagnosed patients in the U.S. and no approved treatments currently available[158]. - The AIDE technology platform has been developed over 20 years with an investment of approximately $100 million, creating high barriers to competitive entry[167]. - EryDex is designed to alter the pharmacokinetics and biodistribution of DSP, a corticosteroid, to provide effective and safe treatment for A-T[155][167]. - The AIDE technology platform may be applied to a broad range of drugs, with potential indications including autoimmune hepatitis, dermatomyositis, and pediatric lupus among others[166]. - The RCL and EryKit are CE marked medical devices, ensuring compliance with EU regulations for the AIDE technology[160][176]. Expenses and Impairments - Research and development expenses increased by 112% to $12.8 million for the nine months ended September 30, 2024, compared to $6.0 million for the same period in 2023[205]. - The increase in research and development expenses was primarily driven by EryDex development costs, which rose by $8.9 million due to Phase 3 NEAT clinical trial costs of $8.1 million[207]. - General and administrative expenses rose by $0.5 million to $13.3 million for the nine months ended September 30, 2024, mainly due to a $1.9 million increase in personnel-related expenses[211]. - A non-cash goodwill impairment charge of $17.1 million was recorded for the nine months ended September 30, 2024, due to deteriorating macro-economic conditions and a decline in market capitalization[214]. - Cash used in operating activities was primarily due to non-cash items totaling $22.4 million, including a $17.1 million goodwill impairment charge[236].