Qualigen Therapeutics, Inc. Provides Update on Product Development Priorities and Reports Second Quarter and Six Month 2021 Financial Results

CARLSBAD, Calif.,, Aug. 17, 2021 (GLOBE NEWSWIRE) -- Qualigen Therapeutics, Inc. (Nasdaq: QLGN) today announces its intention to prioritize its focus to its oncology pipeline that includes QN-247 and RAS-F. These plans follow feedback the Company received from the United States Food and Drug Administration regarding Qualigen’s investigational new drug (IND) application for one of its other compounds, QN-165, for the treatment of COVID-19 in hospitalized patients.

“Although the FDA requested that we perform additional pre-clinical toxicity and safety pharmacology studies before proceeding with clinical trials in COVID-19 patients, we believe that, given the time horizon which these suggested studies would require, coupled with the already very crowded COVID-19 vaccine and therapeutic landscape, the best and most prudent strategy for us at this time is to pivot to focusing primarily on our oncology pipeline that includes QN-247 and RAS-F assets for which we have already seen encouraging preclinical data,” commented Michael Poirier, Qualigen’s Chairman and Chief Executive Officer. “We appreciate the FDA’s guidance regarding our approach to QN-165, which helps us to solidify our priority to address unmet medical needs in treating cancer patients. We look forward to sharing ongoing progress with our shareholders.”

Qualigen also today announces its second quarter and six-months 2021 financial results and provides a recap of the highlights of the 2021 second quarter.

Highlights from the Quarter Ended June 30, 2021:

  • Q2 revenues increased 24 percent to $1.1 million, compared to $0.9 million in the same quarter of the previous year
  • First-half revenues increased 28 percent to $3.0 million, compared to $2.4 million in the same six month period of the previous year
  • Cash equivalents of approximately $15.2 million at June 30, 2021
  • Continued our license and sponsored research agreements with the University of Louisville to evaluate the use of QN-247 with G-quadruplex binders.

    • Qualigen plans to seek to obtain Orphan Drug status for QN-247 (with or without such binders) for one or more indications, such as pancreatic cancer, acute myeloid leukemia and pediatric neuroblastoma. Orphan Drug status, if obtained, would be expected to confer several advantages including faster review and increased market protection.
  • In May 2021, Qualigen announced that it had named Tariq Arshad, MD, MBA, to the newly-created position of Senior Vice President, Chief Medical Officer. Dr. Arshad brings more than 20 years of biotech and pharmaceutical experience to Qualigen.
  • In June 2021, Qualigen announced that it was added to the Russell Microcap® Index. Membership in the Russell Microcap Index means automatic inclusion in certain growth and value indexes. FTSE Russell determines membership for its indexes primarily by objective, market-capitalization rankings as well as style attributes.

Second Quarter and Six Month Financial Highlights and Analysis

Revenues for the three months ended June 30, 2021 were $1.1 million compared to approximately $0.9 million in the same quarter of the previous year. Our 2021 second quarter revenues were all generated from sales of diagnostic tests. This product sales improvement was due to a recovery from the effects of the COVID-19 pandemic.

Revenues for the six month period ended June 30, 2021 were $3.0 million compared to $2.4 million in the same six month period of the previous year. This increase primarily resulted from the recognition during the first quarter of license revenue from Yi Xin Zhen Duan Jishu (Suzhou) Ltd. under a Technology Transfer Agreement, an item which had no counterpart during the prior year, as well as an increase in diagnostic product sales reflecting recovery from the effects of the COVID-19 pandemic.

For the three months ended June 30, 2021, we reported a net loss of $5.3 million, or $0.18 per share, compared to a net loss of $18.6 million, or $2.12 per share, for the corresponding period in 2020. Net loss for the three month 2020 period included non-cash charges of $16.2 million related to a change in fair value of warrant liabilities, compared to a non-cash gain of $2.1 million from change in fair value of warrant liabilities in the current three month period.

For the six months ended June 30, 2021, the Company reported a net loss of $9.0 million, or $0.31 per share, compared to a net loss of $19.5 million, or $2.71 per share, in the corresponding six month period in 2020. Net loss for the six month 2020 period included non-cash charges of $16.2 million related to a change in fair value of warrant liabilities, compared to a non-cash gain of $4.2 million from change in fair value of warrant liabilities in the current six month period.

License revenue during the six months ended June 30, 2021 was approximately $0.5 million, because of the recognition of license revenue from the Yi Xin transaction.

Research and development expenses increased to $4.5 million for the three months ended June 30, 2021, from $0.6 million for the three months ended June 30, 2020. This increase was primarily attributable to $3.4 million in expenses related to the potential application of QN-165 to treatment of COVID-19 during the quarter. Research and development expenses increased to $8.0 million for the six months ended June 30, 2021 from $0.8 million for the six months ended June 30, 2020. This increase was primarily due to $5.9 million in expenses related to the potential application of QN-165 to treatment of COVID-19, in addition to increased pre-clinical research and development costs for QN-247 and RAS as well as wind-down costs related to the withdrawn COVID-19 antibody diagnostic test and stock-based compensation expense related to our public-company status.

General and administrative expenses increased to $3.0 million during the three months ended June 30, 2021, from $2.0 million during the three months ended June 30, 2020. General and administrative expenses increased to $5.8 million for the six months ended June 30, 2021, compared to $2.9 million during the six months ended June 30, 2020. The increases for both periods were primarily a result of overhead expenses related to our public-company status in contrast to our private-company status during most of the 2020 periods.

As of June 30, 2021, we had $15.2 million of cash and cash equivalents.

About Qualigen Therapeutics, Inc.

Qualigen Therapeutics, Inc.’s cancer therapeutics pipeline includes QN-247, RAS-F, and STARS. QN-247 (formerly referred to as ALAN) is a DNA coated gold nanoparticle cancer drug candidate that has the potential to target various types of cancer with minimal side effects; the nanoparticle coating technology is similar to the core nanoparticle coating technology used in our blood-testing diagnostic products. The foundational aptamer of QN-247, QN-165, is also a drug candidate for viral-based infectious diseases. (QN-165 was formerly referred to as AS1411.) RAS-F is a family of RAS oncogene protein-protein interaction inhibitor small molecules for preventing mutated RAS genes' proteins from binding to their effector proteins; preventing this binding could stop tumor growth, especially in pancreatic, colorectal, and lung cancers. STARS is a DNA/RNA-based treatment device candidate for removal from circulating blood of precisely targeted tumor-produced and viral compounds.

Forward-Looking Statements

This news release contains forward-looking statements by the Company 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 the development of therapeutic drug candidates. Actual events or results may differ from the Company's expectations. For example, there can be no assurance that preclinical or clinical development of the Company's drugs (including QN-247 and RAS-F, and deprioritized infectious-disease programs such as QN-165) or therapeutic devices will be completed on any projected timeline or will be successful; that the FDA will approve any of the Company’s IND applications; that any clinical trials will be approved to begin by or will proceed as contemplated by any projected timeline; that the Company will successfully develop any drugs (including QN-247 and RAS-F) or therapeutic devices; that 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 or therapeutic devices will receive required regulatory approvals (including 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 current owned and inlicensed patents would prevent competition; 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-247 and RAS-F, and any repositioning of QN-165); or that the Company will be able to maintain or expand market demand and/or market share for the Company's diagnostic products. The Company's stock price could be harmed if any of the events or trends contemplated by the forward-looking statements fails 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 Form 10-K, all of which 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.

Investor Relations:
For further information: David Kugelman
Atlanta Capital Partners, LLC
(404) 856-9157 or (866) 692-6847 Toll Free - U.S. & Canada
dk@atlcp.com

Tony Schor
Investor Awareness, Inc.
(847) 971-0922
tony@investorawareness.com

QUALIGEN THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

    For the Three Months
Ended June 30,
    For the Six Months
Ended June 30,
 
    2021     2020     2021     2020  
REVENUES                                
Net product sales   $ 1,117,935     $ 904,067     $ 2,538,776     $ 2,315,823  
License revenue                 478,654        
Collaborative research revenue                       45,000  
Total revenues     1,117,935       904,067       3,017,430       2,360,823  
                                 
EXPENSES                                
Cost of product sales     916,624       807,922       2,119,103       1,799,574  
General and administrative     2,952,100       1,979,614       5,826,038       2,897,993  
Research and development     4,508,466       597,345       8,007,840       835,403  
Sales and marketing     135,543       88,844       272,129       181,106  
Total expenses     8,512,733       3,473,725       16,225,110       5,714,076  
                                 
LOSS FROM OPERATIONS     (7,394,798 )     (2,569,658 )     (13,207,680 )     (3,353,253 )
                                 
OTHER (INCOME) EXPENSE, NET                                
Loss (gain) on change in fair value of warrant liabilities     (2,075,100 )     16,201,400       (4,198,000 )     16,201,400  
Interest (income) expense, net     (12,718 )     57,364       (30,061 )     148,121  
Other (income), net     (2,352 )     (250,114 )     (2,894 )     (251,272 )
Total other (income) expense, net     (2,090,170 )     16,008,650       (4,230,955 )     16,098,249  
                                 
LOSS BEFORE PROVISION FOR INCOME TAXES     (5,304,628 )     (18,578,308 )     (8,976,725 )     (19,451,502 )
                                 
PROVISION (BENEFIT) FOR INCOME TAXES     605       597       1,135       (22 )
                                 
NET LOSS   $ (5,305,233 )   $ (18,578,905 )   $ (8,977,860 )   $ (19,451,480 )
                                 
Net loss per common share, basic and diluted   $ (0.18 )   $ (2.12 )   $ (0.31 )   $ (2.71 )
Weighted—average number of shares outstanding, basic and diluted     28,850,451       8,746,250       28,510,014       7,174,233  
 

QUALIGEN THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

    June 30, 2021     December 31, 2020  
ASSETS                
Current assets                
Cash and cash equivalents   $ 15,232,402     $ 23,976,570  
Accounts receivable, net     766,911       615,757  
Inventory, net     1,073,335       953,458  
Prepaid expenses and other current assets     2,033,857       2,678,894  
Total current assets     19,106,505       28,224,679  
Right-of-use assets     321,076       430,795  
Property and equipment, net     253,261       247,323  
Equipment held for lease, net     5,821       17,947  
Intangible assets, net     183,933       187,694  
Other assets     18,334       18,334  
Total Assets   $ 19,888,930     $ 29,126,772  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities                
Accounts payable   $ 784,474     $ 500,768  
Accrued expenses and other current liabilities     1,923,708       746,738  
Notes payable, current portion           131,766  
Deferred revenue, current portion     325,988       486,031  
Operating lease liability, current portion     270,640       254,739  
Warrant liabilities     4,112,100       8,310,100  
Total current liabilities     7,416,910       10,430,142  
Notes payable, net of current portion           6,973  
Operating lease liability, net of current portion     98,145       236,826  
Deferred revenue, net of current portion     112,057       158,271  
Total liabilities     7,627,112       10,832,212  
                 
Stockholders’ equity                
Series Alpha convertible preferred stock, $0.001 par value; 7,000 shares authorized; 180 shares issued and outstanding as of June 30, 2021 and December 31, 2020     1       1  
Common stock, $0.001 par value; 225,000,000 shares authorized; 28,902,188 and 27,296,061 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively     28,902       27,296  
Additional paid-in capital     88,058,267       85,114,755  
Accumulated deficit     (75,825,352 )     (66,847,492 )
Total stockholders’ equity     12,261,818       18,294,560  
Total Liabilities and Stockholders’ Equity   $ 19,888,930     $ 29,126,772  


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Source: Qualigen Therapeutics, Inc.