Qualigen Therapeutics, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results and Provides Corporate Update

CARLSBAD, Calif., May 02, 2023 (GLOBE NEWSWIRE) -- Qualigen Therapeutics, Inc. (Nasdaq: QLGN Qualigen Therapeutics, Inc.), 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 fourth quarter and fiscal year ended December 31, 2022, and provides an update on the company’s therapeutics pipeline and other corporate developments.

Highlights For 2022 and to Date:

Therapeutics Highlights:

QN-302

• Secured worldwide rights to G4-selective transcription inhibitors from University College London to develop as cancer therapeutics
• Engaged QN-302 inventor, Professor Stephen Neidle as a consultant
• Commenced Investigational New Drug (IND) enabling studies
• Engaged international contract development and manufacturing organization (CDMO) Hande Sciences to conduct manufacturing scale-up for IND-enabling studies
• Formed World Class Scientific Advisory Board (SAB)
• Pre-IND application feedback received from FDA for potential treatment of advanced or metastatic solid tumors
• FDA granted Orphan Drug Designation for the intended indication of pancreatic cancer
• Initiated GLP toxicology studies
• Composition of Matter patent for QN-302 technology granted to University College London Business, as exclusively licensed to Qualigen
• Multitude of Scientific Posters, Abstracts, and Publications:
  • American Association for Cancer Research (AACR) Annual Meeting, April 2022 – 3 posters
  • American Association for Cancer Research (AACR) Special Conference, September 2022 – 2 posters
  • 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 – 4 posters
    

RAS

• Extended research collaboration with University of Louisville Research Foundation
• Scientific Posters, Abstracts, and Publications:
  • American Society of Clinical Oncology (ASCO) Annual Meeting, June 2022 – 2 posters
  • The Fourth RAS Initiative Symposium, October 2022 – 2 posters
  • American Association for Cancer Research (AACR) Special Conference: Targeting RAS, March 2023 – 2 abstracts
    

QN-247

• In vivo readout demonstrated robust efficacy and no safety signal in triple negative breast cancer model
• Scientific Posters, Abstracts, Publications:
  • American Association for Cancer Research (AACR) Annual Meeting, April 2023 – 1 poster
    

Diagnostics Highlights:

FastPack

• Resumed sales, marketing, and distribution rights to FastPack following expiration of distribution agreement with former partner Sekisui
• Promoted Benedict Abugan to Vice President to lead the FastPack business and Corporate Communications

NanoSynex

• Completed the acquisition of a majority stake in NanoSynex Ltd., an Israeli-based developer of next generation diagnostics technology. NanoSynex development is on track to achieve milestones in 2023
  

Michael Poirier, Qualigen’s Chairman and CEO commented, “Throughout 2022 we made significant progress within therapeutics and diagnostics, achieving our development timeline objectives while also gaining substantial scientific traction with our cancer therapeutics programs amid a challenging macroenvironment.

“Most importantly within therapeutics, we continue to advance the preclinical development of our lead therapeutics program, QN-302, our G-quadruplex (G4) transcription inhibitor for G4-targeted solid tumors, including pancreatic cancer. Following a pre-IND, type-C interaction with the FDA at our request, we expect to submit an Investigational New Drug (IND) application around mid-year with the goal of commencing clinical trials this year. We are confident that achievement of this milestone can be transformative, as it will mark the transition of Qualigen into a clinical stage cancer therapeutics company. Meanwhile, we are progressing our discovery-stage pan RAS-targeted platform. The RAS pathway continues to be of very high interest to the scientific community and pharmaceutical industry, and we are making progress in developing our RAS platform toward identification of a lead pan-RAS candidate.

“Also in 2022, we successfully resumed full responsibility for sales and marketing of our legacy FastPack business. Meanwhile, NanoSynex continues to advance its product development. We are looking forward to their completion of key milestones toward regulatory filing and commercialization of their rapid, personalized antimicrobial susceptibility test (AST).

“While we continue to feel the pressure from an uncertain economic environment, in January of this year we implemented austerity measures that we believe will wisely preserve cash, while maximizing the efficiency of our operations without sacrificing either key operational requirements or development priorities. In addition to a headcount reduction of 14% of our workforce, we have also de-prioritized resourcing our QN-247 program at this time and are seeking a partner to further the development of this promising asset. We continually assess new strategic opportunities for collaboration, monetization, or other ways to capitalize on our current assets.

“We remain steadfast in our vision to transition Qualigen Therapeutics to a clinical stage cancer therapeutics company in the near term with our goal to bring QN-302 into Phase 1, and to continue to develop our pan RAS-targeted platform. In the meantime, our focus is on executing our strategic plan and advancing these encouraging oncology programs toward achieving key milestones.

“Thus far in 2023, we have seen validation from the scientific community regarding our cancer therapeutic pipeline programs, and we look forward to reporting future developments that we believe are catalysts to add value to our stockholders,” concluded Mr. Poirier.

Financial Highlights

Revenues for the year ended December 31, 2022 were approximately $5.0 million compared to approximately $5.7 million for the previous year, a decrease of $0.7 million. This decrease was primarily due to the recognition of approximately $0.6 million in license revenue from Yi Xin under the Technology Transfer Agreement for the year ended December 31, 2021, compared with no license revenue for the year ended December 31, 2022. All revenues generated during the current year were from product sales of Fast Pack diagnostics and were approximately the same as the prior year. Gross profit on product sales also remained largely unchanged from the prior year.

General and administrative expenses decreased to $10.8 million the year ended December 31, 2022, as compared to $11.7 million for the prior year, primarily due to a $0.3 million decrease in professional fees, a $0.3 million decrease in payroll-related expenses, a $0.3 million decrease in insurance expenses, and a $0.3 million decrease in investor relations expenses, offset by increases of $0.2 million in legal expenses and $0.1 million in rent. Sales and marketing expenses for the year ended December 31, 2022 increased to approximately $1.0 million as compared to $0.5 million for the prior year, primarily due to an increase in payroll-related expenses as a result of the termination of the Sekisui distribution agreement.

Research and development costs include therapeutic and diagnostic research and product development costs. Research and development costs decreased from approximately $11.7 million for the year ended December 31, 2021 to approximately $6.8 million for the year ended December 31, 2022. Of the $6.8 million of research and development costs for year ended December 31, 2022, $4.5 million (66%) was attributable to therapeutics and $2.3 million (34%) was attributable to diagnostics. Of the $11.7 million of research and development costs for the year ended December 31, 2021, $10.3 million (88%) was attributable to therapeutics and $1.4 million (12%) was attributable to diagnostics.

The increase in diagnostic research and development costs was primarily due to $0.9 million in R&D expenses assumed in connection with the acquisition of NanoSynex. The decrease in therapeutics research and development costs was primarily due to a decrease of $6.4 million in expenses related to the potential application of QN-165 for the treatment of COVID-19, as well as pre-clinical research and development cost decreases of $0.2 million for QN-247, a decrease in legal expenses of $0.3 million, a decrease of $0.3 million in payroll-related expenses, offset by an increase in QN-302 spending of $1.1 million and an increase in RAS expenses of $0.3 million.

For the year ended December 31, 2022, the Company reported a net loss attributable to Qualigen Therapeutics, Inc. of approximately $18.6 million, or $4.85 per common share basic and diluted, compared to a net loss of approximately $17.9 million, or $6.10 per common share basic and diluted, for the corresponding period in 2021.

Net cash used in operating activities was $13.2 million for the year ended December 31, 2022, as compared to $14.7 million for the corresponding period in 2021. As of December 31, 2022 the Company had approximately $7.0 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 rights to 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, RAS and QN-247); that preclinical development of the Company's drugs (including QN-302, 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.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Years Ended December 31,
	2022			2021
REVENUES
Net product sales	$	4,983,556		$	5,021,721
License revenue		—			632,004
Total revenues		4,983,556			5,653,725
EXPENSES
Cost of product sales		4,302,755			4,332,485
General and administrative		10,835,647			11,724,964
Research and development		6,837,133			11,716,718
Sales and marketing		950,420			542,594
Goodwill and fixed asset impairment		4,239,000			—
Total expenses		27,164,955			28,316,761
LOSS FROM OPERATIONS		(22,181,399	)		(22,663,036	)
OTHER EXPENSE (INCOME), NET
Gain on change in fair value of warrant liabilities		(907,203	)		(4,723,187	)
Interest (income) expense, net		26,646			(42,693	)
Other income, net		(1,125	)		(5,446	)
Total other expense (income), net		(881,682	)		(4,771,326	)
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		(21,299,717	)		(17,891,710	)
(BENEFIT) PROVISION FOR INCOME TAXES		(265,074	)		5,427
NET LOSS		(21,034,643	)		(17,897,137	)
Net loss attributable to noncontrolling interest		(2,394,100	)		—
Net loss attributable to Qualigen Therapeutics, Inc.	$	(18,640,543	)	$	(17,897,137	)
Net loss per common share, basic and diluted	$	(4.85	)	$	(6.10	)
Weighted—average number of shares outstanding, basic and diluted		3,840,340			2,933,487
Other comprehensive loss, net of tax
Net loss	$	(21,034,643	)	$	(17,897,137	)
Foreign currency translation adjustment		50,721			—
Other comprehensive loss		(20,983,922	)		(17,897,137	)
Comprehensive loss attributable to noncontrolling interest		(2,394,100	)		—
Comprehensive loss attributable to Qualigen Therapeutics, Inc.	$	(18,589,822	)	$	(17,897,137	)

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

QUALIGEN THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2022			2021
ASSETS
Current assets
Cash	$	7,034,434		$	17,538,272
Accounts receivable, net		538,587			822,351
Inventory, net		1,586,297			1,055,878
Prepaid expenses and other current assets		1,661,220			1,379,896
Total current assets		10,820,538			20,796,397
Restricted cash		5,690			—
Right-of-use assets		1,422,538			1,645,568
Property and equipment, net		345,087			204,217
Intangible assets, net		5,845,702			171,190
Goodwill		625,602			—
Other assets		18,334			18,334
Total Assets	$	19,083,491		$	22,835,705
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	857,311		$	886,224
Accrued vacation		467,948			282,910
Accrued expenses and other current liabilities		1,511,856			1,510,990
R&D grant liability		780,682			—
Deferred revenue, current portion		116,161			135,063
Operating lease liability, current portion		240,645			134,091
Short term debt - related party		950,722			—
Warrant liabilities		788,100			1,686,200
Warrant liabilities - related party		2,834,547			—
Convertible debt - related party		60,197			—
Total current liabilities		8,608,169			4,635,479
Operating lease liability, net of current portion		1,301,919			1,542,564
Deferred revenue, net of current portion		49,056			92,928
Deferred tax liability		357,757			—
Total liabilities		10,316,901			6,270,971
Commitments and Contingencies (Note 13)
Stockholders’ equity
Qualigen Therapeutics, Inc. stockholders' equity:
Common stock, $0.001 par value; 225,000,000 shares authorized; 4,210,737 and 3,529,018 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively		42,110			35,290
Additional paid-in capital		110,528,050			101,274,073
Accumulated other comprehensive income		50,721			—
Accumulated deficit		(103,385,172	)		(84,744,629	)
Total Qualigen Therapeutics, Inc. stockholders' equity		7,235,709			16,564,734
Noncontrolling interest		1,530,881			—
Total Stockholders' Equity		8,766,590			16,564,734
Total Liabilities & Stockholders' Equity	$	19,083,491		$	22,835,705

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