Qualigen Therapeutics, Inc. Reports Financial Results and Corporate Update for Quarter Ending March 31, 2023

Company Reports 123% Increase in Year-Over-Year Revenue

CARLSBAD, Calif., May 16, 2023 (GLOBE NEWSWIRE) -- Qualigen Therapeutics, Inc. (Nasdaq: QLGN), a diversified life sciences company focused on developing treatments for adult and pediatric cancers with potential for Orphan Drug Designation, while also commercializing diagnostics, today announces financial results for the first quarter ending March 31, 2023, and provides a corporate update.

Highlights For First Quarter and To Date 2023:

Therapeutics Highlights:

QN-302

• Orphan Drug Designation granted by FDA for the intended indication of pancreatic cancer
• Good laboratory practice (GLP) toxicology studies initiated
• Composition of Matter patent for QN-302 technology granted to University College London Business, as exclusively licensed to Qualigen
• Scientific Posters, Abstracts, and Publications:
  • Peer Reviewed Journal Publication – Molecules, March 2023
    • “The Potent G-Quadruplex-Binding Compound QN-302 Downregulates S100P Gene Expression in Cells and in an In Vivo Model of Pancreatic Cancer”
  • American Association for Cancer Research (AACR) Annual Meeting, April 2023 – four posters
    

Pan-RAS

• Scientific Posters, Abstracts, and Publications:
  • American Association for Cancer Research (AACR) Special Conference: Targeting RAS, March 2023 – two abstracts
  • American Society of Clinical Oncology (ASCO) 2023 Annual Meeting, June 2-6, 2023: one poster, one abstract
    

QN-247

• Scientific Posters, Abstracts, Publications:
  • American Association for Cancer Research (AACR) Annual Meeting, April 2023 – one poster

Diagnostics Highlights:

FastPack

• Reported 123% year-over-year increase in FastPack product sales following the expiration of the Sekisui Distribution Agreement on March 31, 2022 and the Company now recognizing 100% of the revenue from sales of FastPack diagnostic test kits and instruments
• Promoted Benedict Abugan to Vice President to lead the FastPack business and corporate communications

Michael Poirier, Qualigen’s Chairman and CEO commented, “We had a successful first quarter with a significant revenue increase year-over-year from our FastPack business. We are pleased to see an increase in our sales since taking back the commercial activities associated with FastPack, as further illustrated by a quarter-over-quarter increase of nearly 16% from Q4 2022.

“Within our cancer therapeutics pipeline, we are making continued progress both on the development side, and through recognition within the scientific community. We continue to advance the development of our lead therapeutics program, QN-302, our G-quadruplex (G4) transcription inhibitor, for G4-targeted solid tumors, including pancreatic cancer, for which we are diligently working toward the submission of an Investigational New Drug (IND) application around mid-year with the goal of commencing clinical trials later this year. Concurrently, our discovery-stage pan-RAS platform continues to be of high interest to the scientific community and pharmaceutical industry, as evidenced by its acceptance in high-profile scientific conferences, including a poster at the upcoming ASCO meeting, and we are making continued progress in developing our pan-RAS platform toward identification of a lead pan-RAS candidate.

“Additionally, the austerity measures we implemented in January 2023 to prudently manage capital appear to be yielding the intended results, as we have managed to maximize the efficiency of our operations without sacrificing either key operational requirements or development priorities. In the meantime, we continue to assess new strategic opportunities for collaboration, monetization, and other ways to capitalize on our current assets.

“We remain steadfast in our strategic plan to transition Qualigen Therapeutics to a clinical stage cancer therapeutics company, and to continue to develop our pan RAS-driven platform,” concluded Mr. Poirier.

Financial Highlights

Revenues for the quarter ended March 31, 2023 were approximately $1.6 million compared to approximately $0.7 million for the same period of 2022, an increase of approximately $0.8 million or 123%, which is attributed to the Company’s resuming sales, marketing and distribution activities and, accordingly, recognizing 100% of the revenue from sales of FastPack diagnostic test kits and instruments as of April 1, 2022.

General and administrative expenses decreased from $2.9 million, during the three months ended March 31, 2022, to $1.7 million during the three months ended March 31, 2023. This decrease was primarily due to a decrease in stock-based compensation expense of $0.9 million, a decrease in insurance expenses of $0.2 million, and a decrease in legal expenses of $0.3 million, offset by increases in consulting expenses of $0.1 million and other payroll related expenses totaling $0.1 million.

Research and development costs increased from $1.9 million for the three months ended March 31, 2022 to $2.1 million for the three months ended March 31, 2023. Of the $2.1 million of research and development costs for the three months ended March 31, 2023, $1.3 million (60%) was attributable to therapeutics and $0.8 million (40%) was attributable to diagnostics. Of the $1.9 million of research and development costs for the three months ended March 31, 2022, $1.6 million (84%) was attributable to therapeutics and $0.3 million (16%) was attributable to diagnostics.

The increase in diagnostic research and development costs was primarily due to $0.6 million in research and development expenses assumed in connection with the acquisition of NanoSynex, offset by a reduction of $0.1 million in FastPack research and development expenses. The decrease in therapeutics research and development costs was primarily due to a decrease of pre-clinical research and development costs of $0.6 million in QN-247 expenses, a decrease of $0.2 million in stock-based compensation expenses, a decrease in pan-RAS expenses of $0.1 million, offset by an increase in QN-302 pre-clinical research and development costs of $0.5 million.

For the quarter ended March 31, 2023, the Company reported a net loss attributable to Qualigen Therapeutics, Inc. of approximately $3.8 million, or $0.78 per common share basic and diluted, compared to a net loss of approximately $4.3 million, or $1.22 per common share basic and diluted, for the corresponding period in 2022.

Net cash used in operating activities was $2.6 million for the quarter ended March 31, 2023, as compared to $3.9 million for the corresponding period in 2022. As of March 31, 2023, the Company had approximately $4.4 million in cash.

About Qualigen Therapeutics, Inc.

Qualigen Therapeutics, Inc. is a diversified life sciences company focused on developing treatments for adult and pediatric cancer, as well as maintaining and expanding its core FDA-cleared FastPack^® System, which has been used successfully in diagnostics for over 20 years. Our investigational QN-302 compound is a small molecule selective transcription inhibitor with strong binding affinity to G4s prevalent in cancer cells; such binding could, by stabilizing the G4s against “unwinding,” help inhibit cancer cell proliferation. The investigational compounds within our RAS family of RAS oncogene protein-protein interaction inhibitor small molecules are believed to inhibit or block the binding of mutated RAS genes’ proteins to their effector proteins, thereby leaving the proteins from the mutated RAS unable to cause further harm. In theory, such mechanism of action may be effective in the treatment of about one quarter of all cancers, including certain forms of pancreatic, colorectal, and lung cancers. Our investigational QN-247 compound inhibits nucleolin, a key multi-functional regulatory protein that is overexpressed in cancer cells; QN-247 may thereby be able to inhibit the cells’ proliferation. QN-247 has shown promise in preclinical studies for the treatment of acute myeloid leukemia (AML). In addition to our oncology drug pipeline, we have an established diagnostics business which manufactures and distributes proprietary and highly accurate rapid blood testing systems to physician offices and small hospitals for the management of prostate cancer and other diseases and health conditions.

For more information about Qualigen Therapeutics, Inc., please visit www.qualigeninc.com.

Forward-Looking Statements

This news release contains forward-looking statements by Qualigen that involve risks and uncertainties and reflect the Company's judgment as of the date of this release. These statements include those related to the Company's prospects and strategy for its diagnostics business and development of its therapeutic drug candidates. Actual events or results may differ from the Company's expectations. For example, there can be no assurance that the Company will be able to continue to maintain its diagnostic sales and marketing engine without interruption after resuming worldwide sales, marketing and distribution responsibilities associated with FastPack from Sekisui Diagnostics, compete with others in this industry or expand market demand and/or market share for its diagnostics products, nor can there be any assurance that the Company will be able to bring the NanoSynex diagnostics technology to market or successfully develop any drugs (including QN-302, pan-RAS and QN-247); that preclinical development of the Company's drugs (including QN-302, pan-RAS and QN-247, and the deprioritized infectious-disease drug candidate QN-165) will be completed on any projected timeline or will be successful; that any clinical trials will be approved to begin by or will proceed as contemplated by any projected timeline, or at all; that any future clinical trial data will be favorable or that such trials will confirm any improvements over other products or lack negative impacts; that any drugs will receive required regulatory approvals (or Fast Track designation or Orphan Drug status) or that they will be commercially successful; that patents will issue on the Company's owned and in-licensed patent applications; that such patents, if any, and the Company's currently owned and in-licensed patents would prevent competition; or that the Company will be able to procure or earn sufficient working capital to complete the development, testing and launch of the Company's prospective therapeutic products (including QN-302, RAS and QN-247, and QN-165). The Company's stock price could be harmed if any of the events or trends contemplated by the forward-looking statements fail to occur or is delayed or if any actual future event otherwise differs from expectations. Additional information concerning these and other risk factors affecting the Company's business can be found in the Company's prior filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K, all of which are available at www.sec.gov. 

The Company disclaims any intent or obligation to update these forward-looking statements beyond the date of this news release, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact:

Jules Abraham
JQA Partners, Inc.
917-885-7378
jabraham@jqapartners.com

Source: Qualigen Therapeutics, Inc.

QUALIGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended March 31,
	2023			2022
REVENUES
Net product sales	$	1,607,170		$	722,029
Total revenues		1,607,170			722,029
EXPENSES
Cost of product sales		1,264,828			828,848
General and administrative		1,714,434			2,898,751
Research and development		2,121,551			1,864,745
Sales and marketing		199,114			138,323
Total expenses		5,299,927			5,730,667
LOSS FROM OPERATIONS		(3,692,757	)		(5,008,638	)
OTHER EXPENSE (INCOME), NET
Gain on change in fair value of warrant liabilities		(1,038,673	)		(683,242	)
Interest expense (income), net		544,236			(6,309	)
Loss on voluntary conversion of convertible debt		1,077,287			—
Other income, net		(4,881	)		(36	)
Loss on fixed asset disposal		300			—
Total other expense (income), net		578,269			(689,587	)
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		(4,271,026	)		(4,319,051	)
(BENEFIT) PROVISION FOR INCOME TAXES		(163,777	)		736
NET LOSS		(4,107,249	)		(4,319,787	)
Net loss attributable to noncontrolling interest		(261,028	)		—
Net loss attributable to Qualigen Therapeutics, Inc.	$	(3,846,221	)	$	(4,319,787	)
Net loss per common share, basic and diluted	$	(0.78	)	$	(1.22	)
Weighted—average number of shares outstanding, basic and diluted		4,959,122			3,529,405
Other comprehensive loss, net of tax
Net loss	$	(4,107,249	)	$	(4,319,787	)
Foreign currency translation adjustment		119,723			—
Other comprehensive loss		(3,987,526	)		(4,319,787	)
Comprehensive loss attributable to noncontrolling interest		(261,028	)		—
Comprehensive loss attributable to Qualigen Therapeutics, Inc.	$	(3,726,498	)	$	(4,319,787	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

QUALIGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
	2023			2022
ASSETS
Current assets
Cash	$	4,362,757		$	7,034,434
Accounts receivable, net		411,104			538,587
Inventory, net		1,480,755			1,586,297
Prepaid expenses and other current assets		1,283,358			1,661,220
Total current assets		7,537,974			10,820,538
Restricted cash		5,586			5,690
Right-of-use assets		1,364,901			1,422,538
Property and equipment, net		522,408			345,087
Intangible assets, net		5,839,330			5,845,702
Goodwill		625,602			625,602
Other assets		18,334			18,334
Total Assets	$	15,914,135		$	19,083,491
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	899,948		$	857,311
Accrued vacation		353,557			467,948
Accrued expenses and other current liabilities		1,893,733			1,511,856
R&D grant liability		634,330			780,682
Deferred revenue, current portion		112,902			116,161
Operating lease liability, current portion		248,809			240,645
Short term debt-related party		958,952			950,722
Warrant liabilities		400,800			788,100
Warrant liabilities - related party		2,183,174			2,834,547
Convertible debt - related party		558,238			60,197
Total current liabilities		8,244,442			8,608,170
Operating lease liability, net of current portion		1,236,024			1,301,919
Deferred revenue, net of current portion		40,712			49,056
Deferred tax liability		192,587			357,757
Total liabilities		9,713,766			10,316,902
Commitments and Contingencies (Note 13)
Stockholders’ equity
Qualigen Therapeutics, Inc. stockholders' equity:
Common stock, $0.001 par value; 225,000,000 shares authorized; 5,052,463 and 4,210,737 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		42,952			42,110
Additional paid-in capital		111,887,447			110,528,050
Accumulated other comprehensive income		170,444			50,721
Accumulated deficit		(107,231,393	)		(103,385,172	)
Total Qualigen Therapeutics, Inc. stockholders' equity		4,869,450			7,235,709
Noncontrolling interest		1,330,919			1,530,881
Total Stockholders' Equity		6,200,369			8,766,590
Total Liabilities & Stockholders' Equity	$	15,914,135		$	19,083,491

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.