Qualigen Therapeutics, Inc. Reports Third Quarter 2022 Financial Results and Provides Corporate ...

Therapeutics Pipeline

Corporate

Michael Poirier, Qualigen’s Chairman and CEO commented, “We continue to execute on our business plan as we advance both our therapeutics pipeline and diagnostics business. We are pleased that our revenue from FastPack has increased substantially since we resumed full responsibility for the sales and marketing of FastPack from our former sales and marketing partner, Sekisui Diagnostics. In this sluggish market, these sales results year-over-year show the strength of our flagship diagnostics business, and we are looking forward to continued successful results.

“Within therapeutics, our preparations for an IND submission for our lead therapeutics program QN-302 are all on-track. Additionally, we are working diligently to advance our discovery program in RAS. A close look at the oncology market shows that RAS is garnering increased investment and attention as it now appears to be a viable approach to potentially treating various cancers. We have been making steady progress with our RAS program and believe it to be a vital component of our therapeutics pipeline. The validation we have received by both the National Cancer Institute and the American Association for Cancer Research (AACR) are early indicators of that progress and we look forward to providing further updates at the appropriate time. We are also encouraged by the positive QN-247 readout results and believe there are opportunities to assess which indications merit further development.

“Finally, we are pleased that our shareholders have authorized the reverse stock split to secure our continued listing on Nasdaq. In the meantime, we maintain our focus on execution of upcoming milestones and look forward to providing scientific and business updates as appropriate,” concluded Mr. Poirier.

Third Quarter Financial Highlights

Revenues for the three months ended September 30, 2022, were $1.4 million compared to approximately $1.2 million in the same quarter of the previous year. All revenues generated during the quarter were from product sales of diagnostics. Importantly, since assuming full responsibility for sales and marketing from Sekisui, year over year FastPack sales increased approximately 25%.

For the three months ended September 30, 2022, Qualigen reported a net loss of approximately $4.1 million, or $0.10 per share, compared to a net loss of approximately $3.0 million, or $0.10 per share, for the corresponding period in 2021.

Research and development costs include therapeutic and diagnostic research and product development costs. Research and development costs decreased from $2.1 million for the three months ended September 30, 2021 to $1.7 million for the three months ended September 30, 2022. Of the $1.7 million of research and development costs for the three months ended September 30, 2022, $0.9 million (56%) was attributable to therapeutics and $0.8 million (44%) was attributable to diagnostics. Of the $2.1 million of research and development costs for the three months ended September 30, 2021, $1.7 million (83%) was attributable to therapeutics and $0.4 million (17%) was attributable to diagnostics.

The decrease in therapeutics research and development costs during the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily due to an increase of $0.4 million in pre-clinical research costs for QN-302, which we acquired in January 2022, offset by a $0.5 million decrease in pre-clinical research costs related to the potential application of QN-165 for the treatment of COVID-19 (which has since been deprioritized to a non-core program), a decrease of $0.4 million in pre-clinical research costs for QN-247, a $0.1 million decrease in legal expenses and a $0.1 decrease in preclinical research costs for RAS.

The increase in diagnostics research and developments costs during the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was due primarily to an increase of $0.5 million of research and development expenses related to NanoSynex, offset by a $0.1 million reduction in research and development expenses related to the supply agreement with Prediction Biosciences.

As of September 30, 2022, Qualigen Therapeutics had $6.6 million in cash. The Company believes its cash is sufficient to fund its anticipated operations into the third quarter of 2023.

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 following the expiration of its distribution agreement with 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.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

(Unaudited) For the Three Months Ended
September 30, For the Nine Months Ended
September 30, 2022 2021 2022 2021 REVENUES Net product sales $1,441,065 $1,155,065 $3,593,628 $3,693,842 License revenue — — — 478,654 Total revenues 1,441,065 1,155,065 3,593,628 4,172,496 EXPENSES Cost of product sales 1,278,029 993,120 3,206,553 3,112,224 General and administrative 2,618,021 2,756,323 8,177,627 8,582,361 Research and development 1,688,096 2,083,315 5,059,067 10,091,155 Sales and marketing 239,865 130,217 683,291 402,347 Total expenses 5,824,011 5,962,975 17,126,538 22,188,087 LOSS FROM OPERATIONS (4,382,946) (4,807,910) (13,532,910) (18,015,591) OTHER INCOME, NET Gain on change in fair value of warrant liabilities 321,300 1,763,936 1,019,342 4,299,000 Interest income, net 4,631 6,801 15,763 36,863 Other income, net 1,139 702 795 3,596 Total other income, net 327,070 1,771,439 1,035,900 4,339,459 LOSS BEFORE PROVISION FOR INCOME TAXES (4,055,876) (3,036,471) (12,497,010) (13,676,132) PROVISION FOR INCOME TAXES — 1,011 6,173 2,146 NET LOSS (4,055,876) (3,037,482) (12,503,183) (13,678,278) Net loss attributable to noncontrolling interest (230,767) — (234,883) — Net loss attributable to Qualigen Therapeutics, Inc. $(3,825,109) $(3,037,482) $(12,268,300) $(13,678,278) Net loss per common share, basic and diluted $(0.10) $(0.10) $(0.33) $(0.48)Weighted—average number of shares outstanding, basic and diluted 39,444,058 29,026,211 37,154,623 28,683,972 Other comprehensive loss, net of tax Net loss $(4,055,876) $(3,037,482) $(12,503,183) $(13,678,278)Foreign currency translation adjustment 88,523 — 154,063 - Other comprehensive loss (3,967,353) (3,037,482) (12,349,120) (13,678,278)Comprehensive loss attributable to noncontrolling interest (230,767) — (234,883) — Comprehensive loss attributable to Qualigen Therapeutics, Inc. $(3,736,586) $(3,037,482) $(12,114,237) $(13,678,278)

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

QUALIGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) September 30, December 31, 2022 2021ASSETS Current assets Cash $6,618,141 $17,538,272 Accounts receivable, net 603,291 822,351 Inventory, net 1,481,524 1,055,878 Prepaid expenses and other current assets 1,692,472 1,379,896 Total current assets 10,395,428 20,796,397 Restricted cash 5,624 — Right-of-use assets 1,479,618 1,645,568 Property and equipment, net 311,531 204,216 Intangible assets, net 5,852,074 171,190 Goodwill 4,896,223 — Other assets 18,334 18,334 Total Assets $22,958,832 $22,835,705 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $596,039 $886,224 Accrued expenses and other current liabilities 1,471,327 1,793,901 R&D grant liability 905,603 — Deferred revenue, current portion 102,640 135,063 Operating lease liability, current portion 198,373 134,091 Short term debt-related party 941,261 — Warrant liabilities 666,000 1,686,200 Total current liabilities 4,881,243 4,635,479 Operating lease liability, net of current portion 1,365,459 1,542,564 Deferred revenue, net of current portion 60,521 92,928 Deferred tax liability 736,000 - Total liabilities 7,043,223 6,270,971 Stockholders’ equity Qualigen Therapeutics, Inc. stockholders’ equity: Common stock, $0.001 par value; 225,000,000 shares authorized; 42,110,182 and 35,290,178 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 42,110 35,290 Additional paid-in capital 108,967,248 101,274,073 Accumulated other comprehensive income 154,063 — Accumulated deficit (97,012,929) (84,744,629)Total Qualigen Therapeutics, Inc. stockholders’ equity 12,150,492 16,564,734 Noncontrolling interest 3,765,117 — Total Stockholders’ Equity 15,915,609 16,564,734 Total Liabilities & Stockholders’ Equity $22,958,832 $22,835,705 

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