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On Tuesday, Boral (OTC:BOALY) Capital maintained a Buy rating on Quince Therapeutics Inc. (NASDAQ: QNCX) but lowered its price target from $12.00 to $4.00. The adjustment followed the company’s announcement of its fiscal year 2024 financial results and a business update. According to InvestingPro analysis, the company’s stock appears undervalued at its current market capitalization of $61.6 million, despite showing strong momentum with a 75% price gain over the past six months. Quince Therapeutics reported over 50% enrollment in its Phase 3 NEAT trial for Ataxia-Telangiectasia (A-T), with expectations for new study sites to expedite recruitment and a topline readout anticipated in Q4-25.
The company’s financial status remains solid with a cash position of $40.8 million, which is projected to fund operations until the NEAT trial data is released. InvestingPro data reveals a strong liquidity position with a current ratio of 9.53, indicating the company’s ability to meet short-term obligations. However, Quince Therapeutics also revised its at-the-market (ATM) sales facility, permitting up to $21.9 million in potential proceeds, which could exert downward pressure on the stock price, currently trading at $1.40 on limited volume. InvestingPro subscribers have access to 8 additional key insights about QNCX’s financial health and market position.
The fiscal year 2024 saw Quince investing heavily in its clinical pipeline, with research and development expenses amounting to $18.6 million. These costs were primarily associated with the Phase 3 trial and manufacturing expenses. General and administrative expenses were reported at $17.6 million, inclusive of commercial planning and stock-based compensation. The net loss for the company stood at $56.8 million, or $1.31 per share, with net cash used in operating activities at $31.9 million.
Despite the losses, Quince Therapeutics anticipates its current cash reserves will suffice through the Phase 3 topline results. However, the company may seek opportunistic financing to extend its operations beyond this milestone. The recent news about the ATM facility is expected to maintain near-term pressure on the stock. Additionally, Quince has $57 million in contingent liabilities on its balance sheet.
Boral Capital’s analysis reflects a careful consideration of the potential outcomes of the NEAT study balanced against financing concerns, including ATM risk and the possibility of dilutive financing before the data is available. InvestingPro analysis shows the company’s rapid cash burn rate and negative EBITDA of -$31.43 million in the last twelve months, key factors in the decision to lower the price target while maintaining a cautiously optimistic outlook on the stock.
In other recent news, Quince Therapeutics has reported significant developments that could impact its future trajectory. The company is preparing for the results of a Phase 3 trial for its lead candidate, EryDex, which targets ataxia-telangiectasia (A-T), a rare pediatric neurodegenerative disorder. Oppenheimer has initiated coverage on Quince Therapeutics with an Outperform rating and a price target of $10, projecting $200 million in U.S. sales for EryDex by 2031. The company’s financial stability is highlighted as a key factor in supporting its continued development and commercialization efforts.
Additionally, Quince Therapeutics has received a Notice of Allowance from the U.S. Patent and Trademark Office for its EryDex technology, extending patent claims until 2036. This advancement is expected to provide market exclusivity and strengthen the company’s intellectual property portfolio. The anticipated patent protection, along with Orphan Drug Designation in the U.S. and Europe, enhances Quince’s competitive position in the market for rare diseases. Quince Therapeutics also plans to pursue similar patent claims in Europe, underscoring its commitment to securing international intellectual property rights. These recent developments indicate a robust outlook for Quince Therapeutics as it advances its innovative treatments.
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