Overview

Quoin Pharmaceuticals is a late-stage clinical specialty pharmaceutical company focused on developing and commercializing therapeutic products to treat rare and orphan diseases. The company’s lead product candidate is QRX003, which is in clinical development as a potential treatment for Netherton Syndrome, a rare hereditary genetic disease.

Key Events

Quoin Pharmaceuticals completed several public offerings in 2023 and 2024 to raise capital, including:

• In February 2023, the company raised $7 million in gross proceeds from the sale of ordinary shares represented by ADSs and pre-funded warrants.
• In March 2024, the company raised $6.5 million in gross proceeds from the sale of ordinary shares represented by ADSs, Series D and E warrants, and pre-funded warrants.
• In December 2024, the company raised $6.8 million in gross proceeds from the sale of ordinary shares represented by ADSs, Series F and G warrants, and pre-funded warrants.

The company also entered into an equity line of credit agreement with Alumni Capital LP in January 2024, providing up to $8 million in potential funding, but has not yet utilized this facility.

Quoin Pharmaceuticals faced challenges in meeting the Nasdaq minimum bid price requirement, receiving a delisting notice in April 2024. The company was granted an additional 180-day grace period to regain compliance, which it plans to address through a potential reverse stock split if necessary.

Components of Results of Operations

Quoin Pharmaceuticals’ operating expenses consist primarily of research and development (R&D) costs and general and administrative (G&A) expenses. R&D expenses include personnel, third-party contractor, and manufacturing costs related to the development of the company’s product candidates. G&A expenses cover personnel, professional fees, and other corporate costs.

The company does not expect to generate revenue from product sales until it successfully completes development and obtains marketing approval for one or more of its product candidates, which is expected to take several years.

Results of Operations - 2024 vs. 2023

In 2024, Quoin Pharmaceuticals reported a net loss of $8.96 million, compared to a net loss of $8.69 million in 2023. This increase in net loss was driven by:

• G&A expenses decreased slightly from $6.07 million in 2023 to $5.93 million in 2024, primarily due to lower travel and insurance costs, offset by higher payroll, legal, and stock-based compensation expenses.
• R&D expenses increased from $3.31 million in 2023 to $3.60 million in 2024, mainly due to higher spending on the company’s development programs, including the QRX003 clinical studies, as well as increased non-cash stock-based compensation.
• Other income, consisting of interest income and unrealized gains/losses, decreased from $692,000 in 2023 to $566,000 in 2024 due to lower average cash and investment balances and decreasing interest rates.

Liquidity and Capital Resources

As of December 31, 2024, Quoin Pharmaceuticals had approximately $14.06 million in cash and investments. The company believes it has sufficient resources to fund its operations for at least one year from the issuance of the financial statements, but may need to raise additional capital sooner than planned to complete the development of its product candidates.

The company will require significant additional funding in the future to advance its pipeline, with future funding needs dependent on the scope, timing, and costs of its clinical trials and other R&D activities, as well as commercialization efforts. Quoin Pharmaceuticals may seek to raise capital through public or private offerings, debt financing, collaborations, or other sources, but there is no guarantee it will be able to obtain additional funding on favorable terms, if at all.

Critical Accounting Estimates

Quoin Pharmaceuticals’ critical accounting estimates include:

• Accounting for research and development expenses, including accruals for costs incurred by external service providers.
• Valuation of stock-based compensation, using the Black-Scholes option pricing model.
• Impairment assessment of long-lived assets, such as acquired technology and licensed rights.

These estimates require significant judgment and could have a material impact on the company’s financial statements.