Quince Therapeutics(QNCX) - 2023 Q3 - Quarterly Report

Acquisition and Strategic Focus - The company completed the acquisition of EryDel on October 20, 2023, issuing 6,525,315 shares, resulting in EryDel shareholders owning approximately 15.2% of the company[146]. - The company has shifted its strategic focus to rare diseases following the acquisition of EryDel, aiming to develop innovative therapeutics[143]. Financial Performance - The company incurred a net loss of $5.4 million and $22.5 million for the three and nine months ended September 30, 2023, respectively, with an accumulated deficit of $310.8 million[155]. - The net loss for the three months ended September 30, 2023, was $5.4 million, a reduction of 32.4% from a net loss of $7.9 million in the same period of 2022[173]. - The loss from operations for the nine months ended September 30, 2023, was $24.7 million, a decrease of 45.9% from a loss of $45.7 million in the same period of 2022[186]. - The company does not expect any additional expenses related to legacy assets COR388 and COR588 following their sale to Lighthouse in January 2023[189]. Cash and Investments - As of September 30, 2023, the company had cash, cash equivalents, and short-term investments totaling $83.2 million, which is expected to fund operations into at least 2026[153]. - The company anticipates that existing cash will be sufficient to fund operations through at least 2026, assuming positive results from the Phase 3 NEAT trial[199]. - Net cash used in operating activities was $12.2 million for the nine months ended September 30, 2023, primarily due to a net loss of $22.5 million[208]. - Net cash used by investing activities was $11.1 million, primarily related to the purchase of investments of $95.1 million[210]. Research and Development - The company plans to initiate a pivotal Phase 3 NEAT trial for EryDex in the second quarter of 2024, targeting approximately 86 A-T patients aged six to nine years and 20 additional patients aged 10 years or older[143]. - Research and development expenses decreased to $1.4 million for the three months ended September 30, 2023, down from $2.4 million in the same period of 2022, representing a decrease of 41.6%[175]. - Total research and development expenses for the nine months ended September 30, 2023, were $6.0 million, a decrease of 73.2% from $22.4 million in the same period of 2022[186]. - The costs for atuzaginstat (COR388) development decreased by $1.2 million for the nine months ended September 30, 2023, primarily due to reduced drug manufacturing and consulting costs[187]. - For the nine months ended September 30, 2023, costs for NOV004 increased by $0.9 million due to drug manufacturing costs in preparation for Phase 1 clinical trials, but will be minimal for the remainder of 2023[190]. - Other direct research costs decreased by $1.5 million primarily due to the winddown of pipeline development of legacy assets sold to Lighthouse in January 2023[191]. Cost Management - A cost reduction program was implemented in January 2023, resulting in a 47% reduction in workforce, with associated expenses of approximately $0.4 million[151]. - Personnel-related expenses decreased by $9.5 million, including a $4.9 million decrease in stock-based compensation and a $3.0 million reduction in headcount year over year[192]. - General and administrative expenses decreased approximately $9.7 million to $12.8 million, primarily due to a decrease in personnel-related expenses and legal fees[193]. - General and administrative expenses increased by $0.3 million to $4.7 million for the three months ended September 30, 2023, compared to $4.3 million for the same period in 2022, an increase of 7.3%[182]. Impairment and Charges - The company recorded a non-cash impairment charge of $5.9 million for intangible assets during the nine months ended September 30, 2023[186]. - An impairment charge of $5.9 million was recorded for the IPR&D intangible asset due to a significant decrease in fair value[194]. Interest Income - Interest income increased significantly by 204.4% to $959,000 for the three months ended September 30, 2023, compared to $315,000 in the same period of 2022[173]. - Interest income increased to $2.5 million for the nine months ended September 30, 2023, compared to $0.5 million for the same period in 2022, due to increased yields on the investment portfolio[195].