Quince Therapeutics (Nasdaq: QNCX), based in South San Francisco, has acquired Orphai Therapeutics Inc., a private clinical-stage company, in a stock-for-stock merger that adds LAM-001, an inhaled mTOR inhibitor, to its pipeline across three rare pulmonary indications. Concurrent with the acquisition, Quince entered a private placement financing of up to USD 187 million to fund LAM-001's development through multiple Phase 2 readouts.
The acquisition was structured as a stock-for-stock merger with no disclosed cash consideration to Orphai shareholders. Orphai equity holders received approximately 67.1 million shares on an as-converted basis — and options to purchase 26,332,798 shares of common stock. Orphai's outstanding warrants were exchanged for warrants to purchase up to approximately 10,964,505 shares on an as-converted basis at an exercise price of USD 0.9969 per share, representing up to approximately USD 10.9 million in additional proceeds upon exercise. Post-closing, pre-existing Quince equity holders will own approximately 6.9% of the company on a fully diluted basis, former Orphai equity holders approximately 31.9%, and private placement investors approximately 61.2%.
The concurrent private placement raised USD 115 million upfront through the issuance of approximately 144.2 million shares of Series C non-voting convertible preferred stock at USD 0.7975 per share on an as-converted basis, with up to an additional USD 72 million available upon exercise of accompanying warrants at USD 0.9969 per share. The warrants become exercisable beginning the trading day following Quince's public announcement of topline results from the ongoing LAM-001 Phase 2 trial in bronchiolitis obliterans syndrome, or the announcement of that trial's termination or suspension, and remain exercisable for 30 days thereafter. The financing was led by Balyasny Asset Management and included Cormorant Asset Management, Foresite Capital, Perceptive Advisors, and Logos Capital, among others. Combined with existing cash, the proceeds are expected to fund operations through the end of 2028.
LAM-001 is a proprietary once-daily inhaled formulation of sirolimus, the generic name for rapamycin, designed to maximize pulmonary delivery while limiting systemic exposure. Its mechanism centers on inhibition of the mTOR pathway, which has been shown to be activated in pulmonary arterial smooth muscle cells in patients with pulmonary hypertension. Preclinical data indicate that mTOR inhibition reverses smooth muscle cell hyperproliferation and attenuates pulmonary vascular remodeling. The inhaled route is intended to concentrate drug activity at the site of disease while reducing the immunosuppressive and metabolic adverse effects associated with systemic rapamycin use.