D. Boral Capital has downgraded Quince Therapeutics Inc. (NASDAQ: QNCX) from Buy to Hold following the company’s report that its pivotal Phase 3 NEAT clinical trial did not meet statistical significance on both the primary and key secondary endpoints. The announcement was followed by a dramatic decline in the company’s share price, which fell 91% over the last week to $0.27 from $3.18 prior to the trial outcome.
The NEAT trial evaluated dexamethasone sodium phosphate encapsulated in autologous erythrocytes, or eDSP, as a treatment for patients with Ataxia-Telangiectasia (A-T). The study enrolled 105 participants. Reported results showed a mean change of 0.94 in the treatment arm compared with 2.24 in the placebo arm for the primary endpoint, producing a p-value of 0.0851 and failing to reach statistical significance.
In direct response to the trial outcome, Quince Therapeutics stated it will discontinue clinical development of eDSP. Management also indicated a shift in near-term priorities toward cash preservation and the evaluation of strategic alternatives, effectively altering the company’s immediate clinical and corporate roadmap.
Financial indicators cited alongside the operational update raise further concerns about the company’s runway. The company recorded negative EBITDA of $41.68 million and an Altman Z-Score of -5.64, metrics that were highlighted as signaling financial distress. Market capitalization has contracted to approximately $15.04 million, and the company’s overall financial health is described as "weak" by InvestingPro. Analysts tracked by InvestingPro do not expect Quince Therapeutics to be profitable this year and forecast EPS of -$0.83 for fiscal year 2025.
Market participants and research providers reacted to the trial news as well. D. Boral Capital justified its downgrade by stating that the company’s main development program - the core value driver - has been effectively removed, leaving the equity appearing fully impaired at this stage. Separately, Citizens lowered its rating on Quince from Market Outperform to Market Perform after the NEAT results were disclosed. Citizens had previously retained a Market Outperform rating and an $8.00 price target based on conversations with Dr. Susan Perlman, who had shared favorable impressions of eDSP’s safety and efficacy from an earlier trial.
The competitive and clinical context also shifted as IntraBio reported positive Phase 3 data for levacetylleucine in treating A-T, a development that occurred prior to Quince’s decision to cease eDSP development. Following these industry developments and the NEAT results, Quince’s management concluded it would discontinue the program.
As Quince transitions to capital conservation and exploration of strategic alternatives, the company faces multiple operational and financial challenges. Its market value has contracted substantially, and analysts and some research firms have adjusted their ratings and outlooks in response to the failed pivotal trial and the company’s decision to halt its lead program.