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QLGN: Acquires Majority Stake in Israeli Diagnostics Technology Company NanoSynex…

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·5 min read
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By David Bautz, PhD



Business Update

Acquires Majority Stake in NanoSynex

On May 3, 2022, Qualigen Therapeutics, Inc. (NASDAQ:QLGN) entered into a definitive agreement to acquire a majority stake in NanoSynex Ltd., an Israeli-based diagnostics company developing the Antimicrobial Susceptibility Testing (AST) platform. The goal of AST is to provide clinical laboratories with a rapid, accurate, and personalized test for bacterial infections such that the correct antibiotic treatment can be identified quickly to treat a patient’s particular infection. The company closed on the transaction in June 2022.

Antibiotic resistance is one of the top ten global public health problems (World Health Organization). The rise of antibiotic resistant organisms is tied to the misuse and overuse of antibiotics through selection of organisms that harbor mechanisms for self-preservation. A 2019 study estimated that approximately 1.2 million deaths worldwide that year were due to antibiotic resistant organisms, with another approximately 5.0 million deaths worldwide associated with antibiotic resistance (Antimicrobial Resistance Collaborators, 2022). Unfortunately, at the current trajectory, the problem of antibiotic resistant bacteria is only going to get worse. The CDC estimates that at least 2.8 million individuals in the U.S. contract a bacterial infection that is resistant to one or more antibiotics each year (CDC).

For patients with life-threatening bacterial infections, urgent treatment is of the utmost importance, as it is estimated that for every hour that effective antibiotic treatment is delayed, survival rates drop approximately 7% for patients with septic shock (Science Daily). To counteract this, many doctors will prescribe a broad-spectrum antibiotic before knowing the identity of the causative organism. This both facilitates the rise of antibiotic resistant organisms while at the same time negatively affecting the body’s microbiota, or “good bacteria”. Thus, a technology that can rapidly identify the responsible pathogen and determine its level of resistance to different antibiotics would be an important advancement.

NanoSynex’s technology was reported on in 2017 (Avesar et al., 2017). Using a very small amount of sample, the company was able to rapidly identify antibiotic susceptibilities for 12 bacteria-antibiotic combinations in one day. In addition, the team was able to perform a similar analysis with five clinical urine samples that resulted in same-day results, versus the current methodology that requires up to two days to positively identify the correct pathogen.

Qualigen will provide up to $10.4 million in milestone-based funding over the next three years for the development and ultimate commercialization of the NanoSynex technology. This additional funding will be treated as senior debt, repayable to Qualigen in five years or sooner upon the occurrence of certain events, which may include an IPO or sale of NanoSynex.

We view the investment in NanoSynex as a nice strategic fit for Qualigen as it looks to leverage its expertise in diagnostic development to expand into an important and rapidly growing sector of the diagnostic market.

Update on FastPack System

The company’s FastPack diagnostic system is a proprietary platform that provides rapid and accurate immunoassay testing results. It consists of the FastPack Analyzer and FastPack test pouches that includes a single-use, disposable foil packet containing the FastPack reagent chemistry. The company currently markets nine assays, including tests for prostate cancer, thyroid function, metabolic disorders, and research applications. FastPack products have been placed in well over 1,000 physician offices worldwide. Since launching in 2001, cumulative sales of FastPack products has exceeded $120 million.

In April 2022, Qualigen announced the resumption as of April 1, 2022 of worldwide distribution and commercial control of FastPack from the previous marketing partner Sekisui Diagnostics. The company will now realize 100% of the revenue from FastPack sales. It is preparing for increased demand now that most COVID-19 restrictions have been lifted and patients are increasingly going to see their healthcare providers, which may lead to increased revenues.

While Qualigen will continue to sell FastPack products, the main focus of the company will be on developing therapeutic candidates that address high unmet medical needs in cancer and infectious diseases.

Financial Update

On May 13, 2022, Qualigen Therapeutics, Inc. announced financial results for the first quarter of 2022. The company reported $0.7 million in revenues for the first quarter of 2022, compared to $1.4 million for the three months ending March 31, 2021. The decrease was primarily due to the termination of the distribution agreement with Sekisui Diagnostics resulting in reduced sales to Sekisui as it sold off its remaining inventory prior to termination of the agreement.

R&D expenses were $1.9 million for the first quarter of 2022 compared to $3.5 million for the three months ending March 31, 2021. The decrease was primarily due decreased preclinical costs associated with the potential application of QN-165 for the treatment of COVID-19. G&A expenses were $2.9 million for both the first quarter of 2022 and 2021.

As of March 31, 2022, Qualigen had approximately $13.6 million in cash and cash equivalents. We estimate the company has sufficient capital to fund operations into mid-2023. As of May 10, 2022, Qualigen had approximately 35.3 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 50.0 million.


Qualigen is looking to expand its reach in diagnostics with the investment in NanoSynex and we look forward to updates from the company as the AST technology is advanced toward commercialization. The company is also advancing its therapeutics pipeline, with an IND anticipated for its lead compound QN-302 in the first half of 2023. After incorporating the investment in NanoSynex into our model, our valuation has decreased to $5.00 per share.

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