Novosteo, Inc.

Quince has adopted a "poison pill" plan days after an investor disclosed a 9.98% stake. Quince Therapeutics is trying to make itself a less appetizing bite for potential buyers to fend off an unsolicited buyout bid from Echo Lake Capital. The “poison pill” is intended to deter investors from accumulating stock on the open market and will kick in once they buy a set percentage of the shares. Last month, Echo Lake offered $1.60 a share in cash to buy Quince. The stock was trading at 84 cents before the buyout bid, reflecting the fact that Quince, formerly known as Cortexyme, has struggled to regain ground after its Alzheimer’s disease plans unraveled early in 2022. Management responded by buying Novosteo and changing its name, only to later seek to outlicense the recently acquired assets. Quince wants to rebuild by using the $94 million it had at the end of last year to pick up new clinical-stage assets. Echo Lake has another plan, arguing that the uncertainty created by Quince’s lack of a pipeline is causing investors to undervalue its cash, Novosteo asset and federal net operating loss carryforwards. After receiving the Echo Lake offer, Quince said it would “carefully review and evaluate the proposal to determine the course of action it believes is in the best interests of the company and its stockholders.” Now, Quince is erecting barriers to a deal. The biotech, which takes its name from a hard, tart and astringent fruit that is rarely eaten raw, has put a stockholder rights plan in place for one year. While the plan is active, the acquisition of 10% or more of Quince’s stock, or 15% under certain circumstances, will trigger certain changes that could put a buyer off hoovering up shares on the open market.  Quince adopted the plan days after another investor, Tang Capital Partners, said it had built up a 9.98% stake in the company. Tang, a life science-focused investment group, has a history of taking positions in struggling biotechs, with recent financial disclosures revealing stakes in Jounce Therapeutics, Elevation Oncology and Tcr2 Therapeutics. A day after announcing the corporate defense mechanism, Quince said it had hired MTS Health Partners to review and explore strategic alternatives. The priority, Quince says, will be to focus on in-licensing and acquisition opportunities, in addition to "alternative options and proposals."  Editor's note: This story was updated after Quince announced it had hired MTS Health Partners to help review strategic alternatives.  

When troubled public biotech Cortexyme bought a private startup named Novosteo and handed the keys to its executive team, the company — which changed its name to Quince Therapeutics — said it would shift its focus from an unorthodox Alzheimer’s approach to Novosteo’s bone-targeting drug platform. Less than a year later, Quince is pivoting again. The biotech has decided to out-license its bone-targeting drug platform and its lead drug, NOV004, and instead look for clinical-stage programs to in-license or acquire, according to a press release . As a result, Quince will let go of about 47% of its staff, the company quietly disclosed in an SEC filing . The revamp is expected to save about $9.5 million in 2023; excluding the impact of corporate restructuring and any business development that takes place, the company is budgeting about $11 million in spending for the year. Just a few days ago, Quince put out word about its sale of Cortexyme’s legacy small molecule protease inhibitor portfolio. Lighthouse Pharmaceuticals, a company co-founded by a former Cortexyme CEO, bought the compounds to continue testing an out-of-the-box hypothesis that you can slow the cognitive decline in Alzheimer’s patients by blocking a bacteria known as P. gingivalis . With $94 million in cash, equivalents and marketable securities in the bank, Quince noted in its press release that it has enough cash runway to fund pipeline expansion deals as well as other expenditures into at least 2028. Dirk Thye, the Novosteo chief who took over as Quince CEO, said he believes directing capital, drug development and corporate resources toward clinical-stage assets constitutes the “optimal growth plan.” While the company had previously worked on rare skeletal diseases, bone cancer and injury, his team is now looking for “commercially viable” programs across a broad range of therapeutic areas, primarily targeting “debilitating and rare disease therapeutic areas.” “Potential asset targets must have compelling data, a well-defined commercial opportunity, and efficient clinical and regulatory development pathway,” Quince wrote. As for its former lead drug, it emphasized that NOV004, while still preclinical, has completed all IND-enabling studies. The company has also held a pre-IND meeting with the FDA.