By David Bautz, PhD

NASDAQ:QLGN

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We are initiating coverage of Qualigen Therapeutics, Inc. (NASDAQ:QLGN) with a valuation of $10.00. Qualigen is a biopharmaceutical company developing novel treatments for cancer and infectious diseases while continuing and expanding its FDA approved FastPack® System. The company’s development pipeline includes ALAN, featuring a DNA aptamer (AS1411) linked to a gold nanoparticle, RAS-F, a family of small molecule RAS protein-protein interaction inhibitors, and STARS™, a treatment device product designed to remove various compounds from circulating blood. AS1411 is also being developed as a potential treatment for SARS-CoV-2 infection. The company also markets the FDA approved FastPack System, which includes diagnostic instruments and test kits. Qualigen recently began shipment of a SARS-CoV-2 IgG diagnostic test for COVID-19 antibodies. The FastPack product line is sold worldwide by its commercial partner Sekisui Diagnostics, LLC.

Valuation

We value Qualigen using a probability adjusted discounted cash flow model that takes into account potential future revenues for AS1411, ALAN, RAS-F, and FastPack.

For AS1411 as an antiviral, we model for the company to initiate a clinical trial in COVID-19 in the first half of 2021 and to receive emergency use authorization and begin selling the drug in 2022 (fiscal year 2023). We also anticipate the company testing AS1411 as an antiviral for other indications such as influenza. We model for peak sales of AS1411 as an antiviral of $100 million. Using a 15% discount rate and a 25% probability of approval leads to a net present value for AS1411 as an antiviral of $10 million.

For ALAN, we model for a Phase 1 trial to initiate in 2021, an NDA filing in 2026, and approval in 2027. We model for peak worldwide sales of approximately $2 billion and for the company to receive 15% royalties on net sales. Using a 15% discount rate and a 33% probability of approval leads to a net present value for ALAN in AML of approximately $68 million. In addition, we value additional potential indications for ALAN at $100 million.

For RAS-F, we model for the company to first develop a drug for pancreatic cancer. We estimate a Phase 1 clinical trial will initiate in 2022 with an NDA filing in 2027 and approval in 2028. We model for worldwide peak sales in pancreatic cancer of approximately $2 billion and for the company to receive 15% royalties on net sales. Using a 15% discount rate and a 20% probability of approval leads to a net present value for RAS-F in pancreatic cancer of $38 million. In addition, we value additional indications for RAS-F at $100 million.

Combining the net present value for the company’s development pipeline along with the company’s current cash position, the cash from warrant exercises, and a $50 million valuation for FastPak leads to a combined value of approximately $400 million. Dividing by the fully diluted share count of approximately 40.7 million leads to a valuation of approximately $10 per share.

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