Quince Therapeutics Just Sold Itself for 7 Cents on the Dollar
Quince Therapeutics just handed 93% of its company to a private biotech most people have never heard of. After a failed Phase 3 trial left it with no drugs, no pipeline, and not enough cash to survive a year, the reverse merger with Orphai Therapeutics might be the best bad option available.
The Biotech Equivalent of Selling Your House in a Fire Sale
Imagine your dream house just burned down. The foundation is cracked, the insurance check bounced, and your mortgage is still due. A stranger walks up and offers to buy the empty lot for pennies. You'd probably take the deal, right?
That's essentially what just happened to Quince Therapeutics.
On May 18, the struggling biotech announced it would acquire Orphai Therapeutics in an all-stock deal that functions as a reverse merger. Translation: Quince keeps its Nasdaq ticker, but almost everything else changes. New management. New pipeline. New owners. And Quince's existing shareholders? They'll own just 6.9% of the combined company.
Let that sink in. Current investors are keeping less than seven cents of every dollar of ownership.
How Did Quince End Up Here?
Rewind to January 2026. Quince had one shot left: a pivotal Phase 3 trial called NEAT, testing a drug called eDSP for ataxia-telangiectasia (a rare neurodegenerative disease with zero approved treatments). The company had bet everything on this trial. It even ran the study under an FDA Special Protocol Assessment, which is basically the agency saying, "We agree this trial design could support approval."
The trial enrolled 105 patients. Quince projected 90% statistical power. Investors held their breath.
Then the results dropped. eDSP missed the primary endpoint. It also missed the key secondary endpoints. The drug simply didn't work.
Quince killed the program immediately. It also shut down every other pipeline project, because eDSP was the pipeline. The company's drug-delivery platform, called AIDE (which stuffed steroids inside patients' own red blood cells), went from "novel technology" to "expensive science experiment" overnight.
With no drugs in development and cash dwindling, Quince became what biotech investors dread most: a shell company with a ticking clock.
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By the end of Q1 2026, Quince had roughly $18.2 million in cash. That sounds like real money until you consider the context. The company's own SEC filing said it didn't have enough to survive 12 months. Its auditors slapped on the dreaded "substantial doubt about the ability to continue as a going concern" language.
The stock had been trading below $1.00 since late January, putting Quince in danger of getting booted from Nasdaq entirely. Losing the listing would have been catastrophic; the Nasdaq ticker was arguably the company's most valuable remaining asset. Think of it like selling a vacant lot in Manhattan: the dirt isn't worth much, but the address is.
Meanwhile, the European Investment Bank loan of about $16.4 million loomed overhead with a Material Adverse Change clause that could trigger acceleration. In plain English: the lender could demand all its money back at the worst possible time.
Quince hired LifeSci Capital to explore "strategic alternatives," which is corporate-speak for "please, someone, anyone, buy us."
Enter Orphai
Orphai Therapeutics is a private, clinical-stage biotech focused on rare lung diseases. Its lead candidate, LAM-001, is an inhaled version of rapamycin (a well-known drug that suppresses immune activity). Orphai is testing it in a Phase 2 trial for a condition called bronchiolitis obliterans syndrome, a serious complication after lung transplants.
For Orphai, the appeal of this deal is obvious: a public listing without the hassle and expense of a traditional IPO. Quince's Nasdaq shell gives Orphai instant access to public markets.
The transaction also comes with up to $187 million in private financing: $115 million upfront and another $72 million potentially available through warrant exercise. That's a war chest Orphai could never have assembled as a private company in this market.
Brigette Roberts, M.D., Orphai's CEO, will join the combined company and take a board seat.
Why 6.9% Is Actually Generous
It might seem brutal that Quince shareholders are getting diluted to 6.9%. And it is. But consider what they're getting 6.9% of: a company with an actual drug in clinical trials, real financing, and a reason to exist.
The alternative was worse. One analyst had Quince pegged as a "Sell" with a price target of $0.26. Commentary from multiple sources framed this as a "last-resort exit," not a strategic masterstroke. Without the deal, the most likely outcomes were Nasdaq delisting, potential bankruptcy, or a slow wind-down that would have returned even less.
The Jade Biosciences reverse merger in 2024 offers a useful comparison. When Jade merged into the shell of Aerovate Therapeutics, Jade's stakeholders walked away with 98.4% ownership. That's the norm in these deals: the private company with the actual drugs takes nearly everything, and the empty shell gets whatever's left.
At 6.9%, Quince shareholders are actually doing better than some recent precedents, especially given the company had no pipeline, shrinking cash, and a stock trading below a dollar.
The Bigger Picture: Biotech's Reverse Merger Boom
Quince isn't alone. The biotech industry is awash in reverse mergers right now, and the trend shows no signs of slowing.
In 2024 and 2025, deals like Damora Therapeutics ($285 million concurrent financing) and Yarrow Bioscience ($200 million in financing) used reverse mergers to reach public markets. The playbook is remarkably consistent: a cash-strapped public company provides the listing, a well-funded private company provides the pipeline, and a big PIPE (private investment in public equity) provides the rocket fuel.
The math behind the trend is stark. Early-stage biotech funding has tightened significantly. When the front door to capital markets is locked, companies climb through the window.
For private biotechs like Orphai, reverse mergers offer a faster, cheaper path to public listing with less valuation uncertainty than a traditional IPO. For shells like Quince, they offer something even more basic: survival.
What Happens Next
The deal still needs to close. That means shareholder votes, regulatory approvals, and the financing actually coming through. If any of those dominoes fail to fall, Quince is right back where it started: broke, pipeline-less, and running out of time.
But if it works, Orphai gets its public listing, Quince shareholders get a small piece of something real, and the biotech industry adds another data point to its growing collection of last-resort love stories.
Sometimes in biotech, the best outcome isn't a blockbuster drug. It's just staying alive long enough for someone else to try.
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