Quince Therapeutics, Inc. — 10-Q Summary
Filing identity: The supplied filing is for Cortexyme, Inc. (Nasdaq: CRTX), not Quince Therapeutics, Inc. The summary below reflects the filing as provided. It reports the quarter and nine months ended September 30, 2021; the filing was signed October 29, 2021.
Business context and reporting period
Cortexyme was a clinical-stage biopharmaceutical company developing treatments for Alzheimer’s disease and other disorders. It reported no product revenue and had not been profitable. Its lead candidate was atuzaginstat (COR388); COR588 had entered Phase 1 in September 2021.
On October 26, 2021, after quarter-end, the company announced GAIN Phase 2/3 results: the 643-participant trial did not meet its co-primary cognitive and functional endpoints in the overall cohort. The company reported a cognitive dose-response signal in a prespecified subgroup with detectable P. gingivalis DNA in saliva, but not significant benefit on the other co-primary endpoint.
Financial results and liquidity
Amounts below are in millions of dollars except per-share data.
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $14.0 | $17.0 | $45.6 | $45.5 |
| General and administrative expense | $7.6 | $4.9 | $21.2 | $12.6 |
| Total operating expenses | $21.7 | $21.9 | $66.8 | $58.0 |
| Net loss | $21.7 | $21.5 | $66.5 | $56.3 |
| Net loss per share | $0.73 | $0.73 | $2.25 | $1.94 |
| Operating cash used | Not stated for quarter | Not stated for quarter | $48.5 | $37.5 |
At September 30, 2021, cash and cash equivalents were $62.2 million, short-term investments $52.2 million, and long-term investments $26.1 million. Total cash, cash equivalents, and investments were $140.6 million; current assets were $119.4 million and current liabilities $14.2 million. Total liabilities were $14.8 million, including operating lease liabilities; the filing reports no material debt balance. Accumulated deficit was $213.2 million.
Nine-month investing cash flow was a $38.0 million source, mainly reflecting investment maturities exceeding purchases; financing cash flow was $5.8 million, from option exercises. Cash and cash equivalents declined $4.6 million over the period. No gross margin is applicable because the company had no revenue.
Material changes versus prior comparable periods
- Q3 net loss was broadly level year over year, while nine-month net loss increased $10.3 million, or 18.2%.
- Nine-month R&D expense was nearly unchanged. Lower atuzaginstat trial and manufacturing costs were largely offset by higher COR588, personnel, stock-based compensation, and other development costs.
- Nine-month G&A expense increased $8.6 million, chiefly from personnel costs and stock-based compensation. Total stock-based compensation rose to $21.4 million from $9.5 million.
- Nine-month operating cash use increased $11.0 million year over year. The company received no new financing proceeds from a private placement in 2021; the comparable 2020 period included $117.6 million in net private-placement proceeds.
- Cash, cash equivalents, and investments declined from $183.8 million at December 31, 2020 to $140.6 million at September 30, 2021.
Outlook, commentary, risks, and unusual items
- Management said available cash, cash equivalents, and investments were expected to fund planned operations through at least 2023, while warning that assumptions could prove wrong and additional capital may be needed. The liquidity note separately states cash, cash equivalents, and short-term investments of $114.4 million were expected to cover at least 12 months from issuance of the statements.
- Following the GAIN results, management said it was discussing further development of atuzaginstat with regulators and stakeholders and reviewing plans; further information was expected in coming quarters. The filing does not provide firm financial guidance.
- The FDA had placed a partial clinical hold on the GAIN open-label extension in February 2021 after review of hepatic adverse events. The double-blind trial continued. GAIN results showed dose-related liver enzyme elevations above three times the upper limit of normal: 2% placebo, 7% at 40 mg twice daily, and 15% at 80 mg twice daily; two participants at the higher dose also had bilirubin elevations without an alternative explanation.
- The company cited clinical and regulatory uncertainty, the unsuccessful overall GAIN primary endpoints, possible difficulty raising capital, and potential delays or changes to development programs. It also noted risks from competition, third-party manufacturing and trials, intellectual-property protection, and COVID-19, though it had not experienced material COVID-related financial impact or significant supply disruption at the time.
- The company reported $34.0 million of cancellable future commitments under existing contracts and approximately $7.7 million of accrued vendor expenditures. It reported no material legal proceedings and no off-balance-sheet arrangements.
Most important facts for investors to verify
- Confirm the issuer: this source is Cortexyme, Inc., not Quince Therapeutics, Inc.
- Review complete GAIN trial data, subgroup definitions and analyses, safety findings, and subsequent regulatory discussions; the overall co-primary endpoints were not met.
- Reconcile the stated cash runway: the filing gives both a 12-month statement based on $114.4 million of cash, equivalents, and short-term investments and a through-2023 estimate based on $140.6 million including long-term investments.
- Assess the FDA partial clinical hold and liver-safety findings, and the implications for further atuzaginstat development and financing access.
- Monitor operating cash burn, available liquid resources, and potential dilution or other financing needs.