Key Takeaways
A strategic acquisition and promising clinical data have given Quince Therapeutics a new lease on life, backed by a significant financing deal that secures its operations for the next four years.
Quince Therapeutics Inc. (Nasdaq: QNCX) will acquire clinical-stage biotech Orphai Therapeutics Inc. in a stock-for-stock deal, bringing Orphai's lead asset, LAM-001, into its pipeline. The move is supported by a private placement of up to $187 million, announced alongside new Phase 2a data showing the drug yielded clinically meaningful improvements in patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD).
"We believe the new LAM-001 clinical data, combined with the caliber of the Orphai management team and high quality syndicate of investors in the PIPE, all reinforce the value of this transaction," Dirk Thye, CEO and CMO of Quince, said. He added that the deal highlights the company's strategy "to build a focused, high-impact biotechnology company.”
The financing, led by Balyasny Asset Management, provides $115 million in upfront proceeds. This, combined with existing cash, is expected to fund Quince through the end of 2028. The news marks a sharp reversal of fortune for the company, which in a May 11 filing flagged "substantial doubt about its ability to continue as a going concern" after a separate Phase 3 trial for a different drug candidate failed earlier in the year.
The acquisition and funding provide a critical lifeline, shifting focus to LAM-001, an inhaled formulation of sirolimus. The drug is an mTOR inhibitor, a mechanism that has been shown to reverse smooth muscle cell hyperproliferation and reduce fibrosis in lung tissue. This dual action is particularly relevant for PH-ILD, a progressive disease with high unmet need affecting an estimated 86,000 patients in the U.S. and 120,000 in Europe.
Data from a Phase 2a study, presented at the American Thoracic Society conference, showed that in a subgroup of four PH-ILD patients, treatment with LAM-001 resulted in a 67.4-meter mean improvement in the six-minute walk distance (6MWD) at 24 weeks. Patients also showed a 33.9% mean reduction in pulmonary vascular resistance, a key measure of disease severity. All evaluable patients in the study improved from World Health Organization Functional Class III to Class II.
“What is particularly notable in these early data is the consistency of improvement observed across several important markers of disease burden,” said Aaron B. Waxman, Director of the Pulmonary Vascular Disease Program at Brigham and Women’s Hospital and Associate Professor at Harvard Medical School. “Improvements in measures such as 6MWD and PVR are especially encouraging given their clinical relevance in pulmonary hypertension."
The new funding is earmarked to advance LAM-001 through several clinical milestones. Quince plans to initiate a larger Phase 2b trial in PH-ILD in mid-2026, with data expected in the first quarter of 2028. Data from an ongoing Phase 2 study in bronchiolitis obliterans syndrome (BOS), a rare lung transplant complication, is anticipated in the first quarter of 2027.
For investors, the transaction transforms Quince from a company with a failed asset and dwindling cash into a late-stage developer with a de-risked lead candidate and a multi-year runway. While shares were priced at just $1.15 before the announcement, the new developments could force a re-rating as the market digests the potential of LAM-001, which now has a clear path to multiple clinical readouts. The company's ability to execute on these trials will be the key determinant of value for both existing and new shareholders.
This article is for informational purposes only and does not constitute investment advice.
