Qualigen Therapeutics Announces Business Highlights and First Quarter Fiscal Year 2021 Financial Results; Has $16 Million in Cash on Hand as of Today

CARLSBAD, Calif., Aug. 14, 2020 /PRNewswire/ -- Qualigen Therapeutics, Inc. (NASDAQ: QLGN) (Qualigen or the Company) today announced business highlights and financial results for the fiscal year 2021 first quarter, ended June 30, 2020.

Business highlights for the fiscal first quarter and recent weeks include the following:

    --  Raised a total of $18 million in new equity financing. Under separate
        purchase agreements in July and August 2020, the Company raised a total
        of $18 million in cash (before expenses) from registered-direct
        placements of common stock and warrants with a single institutional
        investor. As of today, the Company has $16 million in cash and cash
        equivalents. The Company believes its cash and cash equivalents are
        sufficient to fund its operations into calendar 2022.
    --  Signed exclusive license agreement with the University of Louisville for
        RAS interaction inhibitor drug candidates. In July 2020, Qualigen signed
        an exclusive worldwide license agreement with the University of
        Louisville (UofL) for the intellectual property covering the RAS-F
        family of RAS oncogene protein-protein interaction inhibitor small
        molecule drug candidates. The Company will evaluate these patent-pending
        compounds in order to identify a lead drug candidate for further
        development against one or more cancers.
    --  Signed exclusive license agreement with the University of Louisville,
        with plans to develop AS1411 for the treatment of COVID-19. In June
        2020, the Company signed an exclusive license agreement with the UofL to
        facilitate development of Qualigen's AS1411 DNA aptamer as a drug
        candidate for the treatment of COVID-19, the disease caused by the novel
        coronavirus SARS-CoV-2.
    --  Engaged NFL Hall of Famer Mike Haynes as advisor to the Company and
        spokesperson for the FastPack® rapid diagnostic system. In July 2020,
        the Company engaged Pro Football Hall of Fame and College Football Hall
        of Fame inductee Mike Haynes as an advisor to the Company and as
        spokesperson for Qualigen's FastPack rapid diagnostic system. Since
        receiving an elevated PSA test result using a FastPack immunoassay test
        at a 2008 Hall of Fame event sponsored by Qualigen and the American
        Urological Association, Mr. Haynes has been a prominent advocate for
        prostate cancer testing.
    --  Commenced commercial shipments of its FastPack COVID-19 antibody test.
        In July 2020, Qualigen announced it began commercial shipments of its
        FastPack SARS-CoV-2 IgG diagnostic test for COVID-19 antibodies. This
        test has been submitted to the U.S. Food and Drug Administration (FDA)
        for Emergency Use Authorization (EUA), and previously the Company
        submitted an official notification to the FDA of its plans to exercise
        its right to commence sales while the EUA is pending.
    --  Received U.S. patent Notice of Allowance for its STARS(TM) technology.
        In June 2020, the United States Patent and Trademark Office issued
        Qualigen a Notice of Allowance for a U.S. patent titled "Devices and
        Methods for On-Line Whole Blood Treatment" regarding the Company's
        Selective Target Antigen Removal System (STARS) technology. STARS is a
        DNA/RNA-based treatment product candidate for the removal of viral and
        tumor-produced compounds from a patient's blood.

Management Commentary

"I am pleased with the significant progress Qualigen has made since our May 2020 reverse recapitalization transaction to expand and advance our development programs," stated Michael Poirier, President and Chief Executive Officer of Qualigen. "We recently raised $18 million in capital, which we will use to advance our therapeutic pipeline of promising cancer and infectious disease drug candidates, including AS1411, ALAN and RAS-F, as well as to further our FastPack diagnostics platform."

First Quarter Financial Results

Total revenues for the three months ended June 30, 2020 were $0.9 million compared with $1.5 million for the same period in 2019. The decrease was primarily due to the COVID-19 pandemic resulting in a decrease in patient visits to physician offices, clinics and small hospitals, which reduced the number of FastPack tests performed. All revenues in both periods were derived from diagnostic products.

General and administrative expense was $2.0 million for the three months ended June 30, 2020 compared with $0.3 million for the prior-year period. The increase is largely attributable to one-time expenses related to the reverse recapitalization transaction and other public company expenses not incurred in the prior-year period.

Total R&D expense was $0.6 million for the three months ended June 30, 2020 compared with $0.7 million for the prior-year period. Higher expenses related to sponsored therapeutics research at the University of Louisville and COVID-19 antibody diagnostic test development were offset by the absence in the 2020 period of related-party research and development costs associated with a diagnostics development project with Sekisui Diagnostics, LLC which was terminated in May 2019.

Loss from operations for the three months ended June 30, 2020 increased to $2.6 million from a $0.5 million loss from operations for the prior-year period. Net loss for the three months ended June 30, 2020 was $18.6 million, or $2.12 per share, compared with a net loss of $0.6 million, or $0.11 per share, for the same period of 2019. Net loss for the three months ended June 30, 2020 included a non-cash charge of $16.2 million for the fair value of warrant liabilities.

Qualigen had cash and cash equivalents of $2.3 million as of June 30, 2020. Subsequent to the close of the quarter, in July and August 2020 the Company raised an additional $18 million in gross proceeds from registered-direct equity offerings.

Conference Call

Qualigen senior management will host a business update conference call and live audio webcast beginning at 4:30 p.m. Eastern time on August 18, 2020. Participants are encouraged to pre-register for the conference call using this link. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may register at any time, including up to and after the call start time. A webcast of the call may also be accessed at Qualigen's Investor Relations page at Qualigen Business Update Conference Call. Those without internet access or unable to pre-register may dial in by calling 1-866-777-2509 (U.S.) or 1-412-317-5413 (International).

A replay of the webcast will be available beginning approximately one hour after the completion of the live conference call at Qualigen Business Update Conference Call. A dial-in replay of the call will be available until August 25, 2020 by calling 1-877-344-7529 (U.S.) or 1-412-317-0088 (International) and providing the passcode 10147089.

About Qualigen Therapeutics, Inc.

Qualigen Therapeutics, Inc. is a biotechnology company focused on developing novel therapeutics for the treatment of cancer and infectious diseases, as well as maintaining and expanding its core FDA-approved FastPack System, which has been used successfully in diagnostics for almost 20 years. The Company's cancer therapeutics pipeline includes ALAN (AS1411-GNP), RAS-F and STARS. ALAN (AS1411-GNP) is a DNA coated gold nanoparticle cancer drug candidate that has the potential to target various types of cancer with minimal side effects. The foundational aptamer of ALAN, AS1411, is also being studied for use in treating viral-based infectious diseases, including COVID-19. 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. Because Qualigen's therapeutic candidates are still in the development stage, Qualigen's only products that are currently commercially available are FastPack System diagnostic instruments and test kits, used in physician offices, clinics and small hospitals around the world. The FastPack System menu includes rapid point-of-care diagnostic tests for cancer, men's health, hormone function, vitamin D status and antibodies against SARS-CoV-2. Qualigen's facility in Carlsbad, California is FDA and ISO Certified and its FastPack product line is sold worldwide by its commercial partner Sekisui Diagnostics, LLC. For more information on Qualigen Therapeutics, Inc., please visit https://www.qualigeninc.com/.

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 cash burn estimates and potential future development, testing and launch of product candidates. Actual events or results may differ from the Company's expectations. For example, there can be no assurance that the Company will successfully develop any drugs or therapeutic devices; that preclinical or clinical development of the Company's drugs or therapeutic devices will be successful; that clinical trials will be approved to begin by or will proceed as contemplated by any projected timeline; 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 or that they will be commercially successful; that patents will issue on the Company's in-licensed patent applications; that such patents, if any, and the Company's current owned and in-licensed 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; that the Company will be able to maintain or expand market demand and/or market share for the Company's diagnostic products generally, particularly in view of COVID-19-related deferral of patients' physician-office visits and FastPack reimbursement pricing challenges; that adoption and placement of FastPack PRO System instruments (which are the only FastPack instruments on which the Company's SARS-CoV-2 IgG test kits can be run) will be widespread; that the Company will be able to manufacture the FastPack PRO System instruments and SARS-CoV-2 IgG test kits successfully; that any commercialization of the FastPack PRO System instruments and SARS-CoV-2 IgG test kits will be profitable; or that the FDA will ultimately approve an EUA for the Company's SARS-CoV-2 IgG test. 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 (including events beyond the Company's control, such as epidemics and resulting changes) can be found in the Company's prior filings with the Securities and Exchange Commission, 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.

[Tables to Follow]




              Three Months Ended
                                                                                                                   June 30,

                                                                                                                                      2020                     2019


     Net product sales                                                                                                                       $
           484,423         $

     Net product sales-related party                                                                                                                  419,644               950,184

     Total revenues                                                                                                                                   904,067             1,510,835


     Cost of product sales                                                                                                                            355,427               316,513

     Cost of product sales-related party                                                                                                              452,495               661,267

     General and administrative                                                                                                                     1,979,614               269,017

     Research and development                                                                                                                         597,345               147,641

     Research and development-related party                                                                                                                                539,425

     Sales and marketing                                                                                                                               88,844               102,394

     Total expenses                                                                                                                                 3,473,725             2,036,257

              LOSS FROM OPERATIONS                                                                                                              (2,569,658)            (525,422)


     Change in fair value of warrant liabilities                                                                                                   16,201,400

     Interest expense, net                                                                                                                             57,364                69,985

     Other income, net                                                                                                                              (250,114)                (992)

     Total other expense (income), net                                                                                                             16,008,650                68,993

              LOSS BEFORE PROVISION FOR INCOME TAXES                                                                                           (18,578,308)            (594,415)

              PROVISION FOR INCOME TAXES                                                                                                                597                   150

              NET LOSS                                                                                                                  $
         (18,578,905)      $

     Net loss per common share, basic and diluted                                                                                             $
           (2.12)         $

     Weighted-average number of shares outstanding, basic and diluted                                                                               8,746,250             5,602,214




                                                                             June 30, 2020                                  March 31, 2020


     Current assets

     Cash and cash equivalents                                                                         $
            2,306,422                  $

     Restricted cash                                                                                                75,696

     Accounts receivable, net                                                                                      282,170                          417,122

     Accounts receivable - related party, net                                                                       55,292                          290,180

     Inventory, net                                                                                                640,260                          660,138

     Prepaid expenses and other current assets                                                                   2,318,057                           98,385

     Total current assets                                                                                        5,677,897                        1,618,946

     Right-of-use asset                                                                                            535,194

     Property and equipment, net                                                                                 1,547,380                        1,447,514

     Equipment held for lease, net                                                                                  45,411                           64,005

     Intangible assets, net                                                                                        855,132                          571,270

     Other assets                                                                                                   18,279                           18,279

                Total Assets                                                                         $
            8,679,293                $


     Current liabilities

     Accounts payable                                                                                    $
            892,182                  $

     Accrued expenses and other current liabilities                                                              1,315,899                        1,243,764

     Notes payable, current portion                                                                              1,106,518                        1,913,255

     Deferred revenue, current portion                                                                              69,571                          105,416

     Deferred revenue - related party                                                                              271,206                          271,206

     Due to related party                                                                                        1,144,513                          926,385

     Lease liability                                                                                               239,549

     Warrant liabilities                                                                                        16,201,400

     Total current liabilities                                                                                  21,240,838                        5,339,290

     Notes payable, net of current portion                                                                         218,832                          305,805

     Lease liability, net of current portion                                                                       368,785

     Deferred revenue, net of current portion                                                                        3,594                            2,689

     Total liabilities                                                                                          21,832,049                        5,647,784

                Total stockholders' deficit                                                                 (13,152,756)                     (1,927,770)

                Total Liabilities and Stockholders' Deficit                                          $
            8,679,293                $

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SOURCE Qualigen, Inc.