aibioQuoin Pharmaceuticals prices $6.8 million offering of ADSs and warrants at $0.45
Tickers QNRX
Quoin Pharmaceuticals priced a $6.8 million offering at $0.45 per ADS, below the $0.647 close on December 19. Older warrants were repriced to the same level, and the prospectus sets no minimum amount for the deal to close.
Key facts
- Company
- Quoin Pharmaceuticals, Ltd. (NASDAQ: QNRX)
- News type
- Financings
- Primary source
- Quoin Pharmaceuticals, Ltd. 424B4 (2024-12-23)
The offering
Quoin Pharmaceuticals Ltd. priced a "reasonable best efforts" public offering on December 20, 2024. Investors buy American Depositary Shares, or pre-funded warrants in their place, at a combined price of $0.45 per ADS. Each one comes with a Series F warrant and a Series G warrant. The company said gross proceeds, before placement agent fees and offering expenses, are expected to be approximately $6.8 million.
The deal covers 15,111,110 ADSs or pre-funded warrants. The prospectus lists 3,137,778 ADSs and 11,973,332 pre-funded warrants. Officers and directors have agreed to buy 1,333,333 ADSs and accompanying warrants for about $600,000.
Maxim Group LLC is the exclusive placement agent, and the press release calls it the sole placement agent. The company agreed to reimburse Maxim's expenses, including background checks and the fees of Maxim's counsel, up to $125,000. The company pays Maxim a cash fee of 7.0% of gross proceeds, except on purchases by its officers and directors, and the prospectus estimates net proceeds at approximately $5.8 million. Blank Rome LLP advises Quoin on U.S. law, Meitar | Law Offices of Ramat Gan, Israel, on Israeli law, and Ellenoff Grossman & Schole LLP acts for Maxim.
The prospectus says the offering has no minimum. Quoin may sell fewer securities than offered, which "may significantly reduce the amount of proceeds," and buyers get no refund in that case. The proceeds are for general corporate purposes, including research and development.
The warrants and the cost to existing holders
The Series F warrants are exercisable at $0.45 upon issuance and expire two years later. The Series G warrants also carry a $0.45 exercise price and expire five years after issuance. Pre-funded warrants exercise at $0.0001 per ADS.
The prospectus registers 42,195,552 ADSs issuable on exercise of the pre-funded warrants and the two warrant series. The prospectus counts 5,049,720 ADSs outstanding as of December 19, 2024 and 8,187,498 after the offering, assuming no exercise of the pre-funded warrants or the new warrants. It leaves out 1,943,787 ADSs issuable on options at a weighted-average exercise price of $4.29 and 8,988,346 ADSs issuable on warrants at $2.10.
The company also agreed with holders of existing warrants to cut the exercise price on up to 7,002,500 ADSs from $1.60 to $0.45 per ADS. It extended those warrants' expiration to December 23, 2029.
Product and trial data
Its lead product, QRX003, is a once-daily topical lotion with a broad-spectrum serine protease inhibitor, formulated with the in-licensed Invisicare technology. It is under development for Netherton Syndrome, a rare hereditary genetic disease. QRX003 is in two clinical studies at five clinical sites in the United States under an open Investigational New Drug application with the FDA. A pediatric Netherton patient is in an investigator study in Ireland.
The prospectus includes two results the company released on December 18, 2024. The first describes one subject in an open-label study who was dosed twice daily with QRX003. After six weeks, the subject's Modified Ichthyosis Area of Severity Index score fell from 18 to 4, the investigator's global assessment moved from moderate to mild, and the itch score fell from 7 to 4 on a scale whose maximum is 11. The company reports no safety concerns for that subject. The second describes one subject in the 12-week investigator pediatric study. After 12 days of dosing, the skin rating in the treated area improved from severe to mild-moderate, and the company reports no adverse events to date.
Those are single-subject results from an open-label study and an investigator study, and the prospectus gives no statistical test. The adult studies were amended to raise the blinded study from 18 to 30 subjects and the open-label study from 10 to 20, so the full data are still ahead. The prospectus does not say when the company expects a regulatory filing.
The prospectus says Quoin receives additional proceeds from the pre-funded warrants and warrants only if they are exercised for cash.
What comes next
The company expects delivery on or about December 23, 2024. The filing sets no dates for the Netherton studies or for any filing with the FDA.