Qualigen Therapeutics Issues CEO Letter to Stockholders, Reports on Significant Progress and Fiscal Second Quarter Financial Results
CARLSBAD, Calif., Nov. 13, 2020 /PRNewswire/ -- Qualigen Therapeutics, Inc. (Nasdaq: QLGN) announces that Michael Poirier, President, Chief Executive Officer and Chairman, has issued a letter to Qualigen's stockholders. The full text is as follows:
To My Fellow Stockholders,
Since our last business update in August, Qualigen Therapeutics has made significant progress in advancing our strategic plan, including the following highlights:
AS1411. We are excited to be moving forward with our lead compound AS1411, a nucleolin-targeting DNA aptamer drug candidate for the treatment of COVID-19 and other viruses. Preclinical research conducted at the University of Louisville (UofL) has demonstrated that AS1411 has potent antiviral activity against SARS-CoV-2, the coronavirus responsible for COVID-19. Importantly, we believe AS1411 holds potential as a broad antiviral therapeutic agent, which could significantly expand its applications and commercial potential.
In October 2020, we received a positive response to our Pre-Investigational New Drug (Pre-IND) application meeting request from the U.S. Food and Drug Administration (FDA) that is in general agreement with our planned clinical development of AS1411 for the treatment of COVID-19. We are pleased with the FDA's response and plan to move forward with filing the IND application in order to initiate a Phase 2a clinical trial in the first half of calendar year 2021.
Like everyone else, we are heartened by news of recent advancements with COVID-19 vaccines; however, we believe there will still be a long-term and significant market opportunity for innovative therapies such as AS1411 to treat COVID-19 and other viral-based respiratory diseases. Furthermore, we believe that the urgency placed on regulators to advance potential therapies for COVID-19, in addition to vaccines, may provide us an accelerated path to potential approval of our first drug candidate. The data and infrastructure resulting from this may, in turn, serve to streamline subsequent clinical trials for additional indications for AS1411 to combat other viruses, both currently known and those that might affect us in the future.
In this regard, we entered into manufacturing agreements with STA Pharmaceutical Co., Ltd., a subsidiary of WuXi AppTec, and with IRISYS LLC in order to ensure adequate supply of AS1411 for our anticipated clinical trials. We believe that if AS1411 is approved by the FDA for commercial usage, these manufacturing agreements will help assure an efficient and large-scale rollout of this product.
Finally, to further enhance our AS1411 intellectual property portfolio, we jointly filed a U.S. provisional patent application entitled "Methods of inhibiting or treating coronavirus infection, and methods for delivering an anti-nucleolin agent" with UofL. If AS1411 can successfully serve as a protective defense (or prophylaxis) against, as well as treat, COVID-19 or other viral-based diseases, such as seasonal influenza, this would be a very exciting usage for our technology. We believe that for use as a prophylaxis, AS1411 could be administered by means of inhalers, nose spray or eye drops to individuals who have recently come in contact with SARS-CoV-2, or are at high risk of contracting the virus.
ALAN, RAS-F and STARS™. The balance of our therapeutic pipeline primarily focuses on fighting cancer, and we continue to make progress with each of our drug and device candidates.
FastPack® diagnostic products. As of the date of this letter, communications with the FDA concerning the requested Emergency Use Authorization for our FastPack COVID-19 antibody test indicate that our regulatory review is still in queue. We are confident that the data we have provided to the FDA show that our test meets or exceeds the efficacy guidelines for approval of an EUA, and we are frustrated by the unusually long delay. We still believe that a rapid, accurate, point-of-care testing system like FastPack would be beneficial as vaccines for COVID-19 – which generate antibodies for limited periods of time – begin release in 2021.
Furthermore, we have made important strategic moves recently to advance distribution and next-generation versions of our core FastPack "laboratory in a pouch" technology. In October 2020, we entered into a commercialization agreement with China's Yi Xin Zhen Duan Jishu (Suzhou) Ltd. for them to develop, manufacture and sell new generations of diagnostic test systems based on FastPack. In addition, Yi Xin Zhen Duan Jishu will have rights to manufacture and sell our current generations of FastPack products in China. We were pleased to enter this agreement as it provides non-dilutive upfront funding plus potential future royalties, and China is a region we would not otherwise have entered with FastPack.
Corporate updates. In August 2020, we welcomed Amy Broidrick to our Board of Directors. Ms. Broidrick's background includes key roles in the successful worldwide launches and marketing of such notable drugs as VYTORIN®, Zetia® and Celebrex®. It is already evident she will be a valuable asset to Qualigen given her expertise in corporate development, marketing and business innovation with global organizations, as well as with small-cap companies.
Lastly, to fund the continued development of our pipeline, we raised $18 million in two registered-direct offerings under separate purchase agreements in July and August 2020. With a cash balance of $14.5 million as of September 30, 2020, we believe Qualigen has the necessary capital to fund our clinical trial for AS1411 and to advance our pipeline through calendar year 2021. Additionally, we continue to be opportunistic and evaluate strategic relationships that provide potential to enhance our pipeline in oncology and build long-term shareholder value.
As I mentioned, we are delighted with our progress to date and are very excited about our momentum and Qualigen's future prospects. I would like to thank our employees for their outstanding efforts and commitment, and our investors for their continued support.
Financial Results for the Fiscal Second Quarter Ended September 30, 2020
Total revenues for the three months ended September 30, 2020 were $0.8 million compared with $1.2 million for the same period in 2019, with all revenues in both periods derived from the sale of diagnostic products. The decrease was primarily due to fewer tests performed as the COVID-19 pandemic resulted in a decrease in patient non-emergency visits to physician offices, clinics and small hospitals.
General and administrative expense was $2.7 million for the three months ended September 30, 2020 compared with $0.2 million for the prior-year period. The difference is largely attributable to the addition of expenses associated with operating as a publicly traded company in the current period.
Research and development expense was $0.9 million for the three months ended September 30, 2020 compared with $0.2 million for the prior-year period. The increase is related to advancing Qualigen's therapeutic pipeline and work on its COVID-19 antibody diagnostic test and FastPack PRO instrument.
Loss from operations for the three months ended September 30, 2020 increased to $3.7 million from $0.3 million for the prior-year period. Net loss for the three months ended September 30, 2020 was $8.1 million, or $0.41 per share, compared with a net loss of $0.4 million, or $0.06 per share, for the same period of 2019. Net loss for the 2020 period included non-cash charges of $4.4 million related to the change in fair value of warrant liabilities, as well as additional non-cash charges totaling $1.2 million for stock-based compensation expense.
Financial Results for the Six Months Ended September 30, 2020
Total revenues for the six months ended September 30, 2020 were $1.7 million compared with $2.7 million for the same period in 2019, with all revenues in both periods derived from the sale of diagnostic products. The decrease was primarily due to fewer tests performed as the COVID-19 pandemic resulted in a decrease in patient non-emergency visits to physician offices, clinics and small hospitals.
General and administrative expense was $4.6 million for the six months ended September 30, 2020 compared with $0.5 million for the prior-year period. The increase is largely attributable to the addition of expenses associated with operating as a publicly traded company in the current period.
Research and development expense was $1.5 million for the six months ended September 30, 2020 compared with $0.9 million for the prior-year period. The difference is primarily related to increased spending for the therapeutic pipeline.
Loss from operations for the six months ended September 30, 2020 increased to $6.3 million from $0.8 million for the prior-year period. Net loss for the six months ended September 30, 2020 was $26.7 million, or $1.87 per share, compared with a net loss of $1.0 million, or $0.17 per share, for the same period of 2019. Net loss for the 2020 period included non-cash charges of $20.6 million related to the change in fair value of warrant liabilities, as well as additional non-cash charges totaling $1.6 million for stock-based compensation expense.
Qualigen had cash and cash equivalents of $14.5 million as of September 30, 2020, as a result of the $18 million in gross proceeds raised during the second quarter of fiscal year 2021. The Company believes its cash and cash equivalents are sufficient to fund its anticipated operations through calendar year 2021.
About Qualigen Therapeutics, Inc.
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 potential future development, testing, efficacy, approval, manufacturing and commercialization of product candidates, including the possible effectiveness of AS1411 against COVID-19 or other viral infections. Actual events or results may differ from the Company's expectations. For example, there can be no assurance that 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 or therapeutic devices; that preclinical or clinical development of the Company's drugs or therapeutic devices will be successful; 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 owned and 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 Emergency Use Authorization 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.
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SOURCE Qualigen, Inc.
Company Codes: NASDAQ-NMS:QLGN, ISIN:US74754R1032