Quoin Pharmaceuticals, Ltd. (QNRX) Bundle
Understanding Quoin Pharmaceuticals, Ltd. (QNRX) Revenue Streams
Understanding Quoin Pharmaceuticals, Ltd.’s Revenue Streams
The company reported net revenue of $0 for the nine months ended September 30, 2024, consistent with the same period in 2023. The company has not yet generated any revenue from product sales.
Year-over-Year Revenue Growth Rate
As of September 30, 2024, the year-over-year revenue growth rate remains 0% due to the absence of revenue generation. This trend has persisted since the company's inception, reflecting its status as a clinical-stage biopharmaceutical entity focused on research and development rather than immediate sales.
Contribution of Different Business Segments to Overall Revenue
Since the company has not generated revenue from product sales, the contribution from various business segments is also 0%. The primary focus remains on research and development activities, which are funded through equity and debt financing.
Analysis of Significant Changes in Revenue Streams
There have been no significant changes in revenue streams, as the company continues to operate without generating product revenue. The financial results illustrate ongoing investments in R&D, with total operating expenses for the nine months ended September 30, 2024, amounting to $7,123,404, slightly down from $7,160,837 in the same period of 2023.
| Period | Net Revenue ($) | Total Operating Expenses ($) | Net Loss ($) |
|---|---|---|---|
| September 30, 2024 | 0 | 7,123,404 | (6,651,198) |
| September 30, 2023 | 0 | 7,160,837 | (6,636,695) |
Despite the lack of revenue, the company continues to invest in its development programs, which are critical for future revenue streams.
A Deep Dive into Quoin Pharmaceuticals, Ltd. (QNRX) Profitability
Profitability Metrics
Gross Profit for the nine months ended September 30, 2024, was approximately $7,123,404, compared to $7,160,837 for the same period in 2023, reflecting a decrease of $37,433.
Operating Profit for the three months ended September 30, 2024, was reported as a net loss of $2,349,885, compared to a net loss of $1,926,679 for the same period in 2023, indicating a decline of $423,206.
Net Profit Margin for the nine months ended September 30, 2024, stood at a net loss of $6,651,198, with total revenues of $0, leading to a net profit margin of -100%. For the same period in 2023, the net loss was $6,636,695, also with total revenues of $0.
Trends in Profitability Over Time
Over the past year, the company has consistently reported net losses. For the three months ended September 30, 2024, the net loss increased to $2,349,885 from $1,926,679 in the same quarter of the previous year. The nine-month figures show a slight increase in net loss from $6,636,695 in 2023 to $6,651,198 in 2024.
| Period | Net Loss | Operating Expenses | Gross Profit |
|---|---|---|---|
| Q3 2024 | $2,349,885 | $2,528,002 | $7,123,404 |
| Q3 2023 | $1,926,679 | $2,125,223 | $7,160,837 |
| 9M 2024 | $6,651,198 | $7,123,404 | $0 |
| 9M 2023 | $6,636,695 | $7,160,837 | $0 |
Comparison of Profitability Ratios with Industry Averages
The company reported a net loss margin of -100% for the nine months ended September 30, 2024. Industry averages for biopharmaceutical companies typically range from -20% to -30%, indicating a significantly poorer performance compared to industry peers.
Analysis of Operational Efficiency
General and administrative expenses for the nine months ended September 30, 2024, were approximately $4,590,936, down from $4,685,241 in 2023, indicating a decrease of $94,305, or approximately 2%. Research and development expenses rose slightly to $2,532,468 from $2,475,596, an increase of $56,872.
| Expense Type | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|
| General and Administrative | $4,590,936 | $4,685,241 | -$94,305 |
| Research and Development | $2,532,468 | $2,475,596 | $56,872 |
| Total Operating Expenses | $7,123,404 | $7,160,837 | -$37,433 |
Debt vs. Equity: How Quoin Pharmaceuticals, Ltd. (QNRX) Finances Its Growth
Debt vs. Equity: How Quoin Pharmaceuticals Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, Quoin Pharmaceuticals reported total liabilities of $5,947,472, which includes both short-term and long-term debt components. The company's short-term liabilities amount to $3,473,739, while long-term liabilities total $2,473,733.
Debt-to-Equity Ratio
The debt-to-equity ratio stands at approximately 1.09, calculated from the total liabilities of $5,947,472 and total shareholders' equity of $5,441,681 as of September 30, 2024. This ratio is slightly above the industry average of around 1.00, indicating a higher reliance on debt financing compared to equity.
Recent Debt Issuances and Credit Ratings
In recent financing activities, the company secured $5,496,305 in net proceeds from the sale of equity securities during the nine months ended September 30, 2024. The company has no significant long-term debt obligations outside of amounts due to officers, which consists of $2,473,733. The outstanding 2020 Notes, with an estimated liability of $1,146,000, were mandatorily converted in 2021.
Balancing Debt Financing and Equity Funding
The company has managed its financing primarily through a combination of equity and debt. For the nine months ending September 30, 2024, total cash flows provided by financing activities were approximately $5,046,305, indicating a strategic approach to leverage both equity sales and existing liabilities. The company expects to require additional funding to support ongoing research and development efforts, indicating a potential future reliance on both debt and equity markets to finance its growth.
| Financial Metric | Amount |
|---|---|
| Total Liabilities | $5,947,472 |
| Short-term Liabilities | $3,473,739 |
| Long-term Liabilities | $2,473,733 |
| Total Shareholders' Equity | $5,441,681 |
| Debt-to-Equity Ratio | 1.09 |
| Net Proceeds from Equity Sales (2024) | $5,496,305 |
| Outstanding 2020 Notes Liability | $1,146,000 |
As of September 30, 2024, the company's cash and cash equivalents totaled $3,116,750, while investments were reported at $7,190,138. This financial positioning illustrates a balanced approach to funding operations while preparing for future growth through strategic financing mechanisms.
Assessing Quoin Pharmaceuticals, Ltd. (QNRX) Liquidity
Assessing Quoin Pharmaceuticals, Ltd. Liquidity
Current and Quick Ratios
The current ratio for Quoin Pharmaceuticals as of September 30, 2024, is approximately 1.58, indicating a relatively strong liquidity position. The quick ratio is approximately 1.43, suggesting that the company can cover its short-term liabilities without relying on inventory sales.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital stands at approximately $3,116,750. This is an increase from $2,860,628 at the beginning of the period, reflecting improved operational management and cash flow management.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, reveals the following:
| Cash Flow Activity | 2024 (in $) | 2023 (in $) |
|---|---|---|
| Net Cash Used in Operating Activities | (5,620,790) | (4,640,784) |
| Net Cash Provided (Used) in Investing Activities | 1,290,037 | (455,684) |
| Net Cash Provided by Financing Activities | 5,046,305 | 5,399,266 |
| Net Change in Cash and Cash Equivalents | 715,552 | 302,798 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, Quoin Pharmaceuticals holds approximately $10,307,000 in cash and cash equivalents along with investments in marketable securities. The accumulated deficit is $(52,854,518), indicating ongoing operational losses. The company has incurred net losses of approximately $(6,651,198) for the nine months ended September 30, 2024, but has sufficient resources to support its business plan for at least one year from the issuance of its financial statements .
Is Quoin Pharmaceuticals, Ltd. (QNRX) Overvalued or Undervalued?
Valuation Analysis
The valuation of Quoin Pharmaceuticals, Ltd. (QNRX) can be assessed through various financial ratios and stock performance metrics.
Price-to-Earnings (P/E) Ratio
As of the latest financial reports, the P/E ratio is not applicable as the company has reported a net loss. The loss per American Depositary Share (ADS) for the nine months ended September 30, 2024, was $1.63.
Price-to-Book (P/B) Ratio
The price-to-book ratio is calculated using the book value per share. As of September 30, 2024, the total shareholders' equity was $5,441,681 with 5,049,720 ADS outstanding, resulting in a book value per ADS of approximately $1.08. The stock price as of the latest trading day was approximately $0.70, yielding a P/B ratio of approximately 0.65.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is also not applicable as the company is currently not generating earnings before interest, taxes, depreciation, and amortization (EBITDA) due to continuous net losses.
Stock Price Trends
Over the last 12 months, the stock price has experienced significant volatility. The stock opened at approximately $1.50 a year ago and has fluctuated, reaching a high of about $2.00 before declining to the current price of $0.70.
Dividend Yield and Payout Ratios
Quoin Pharmaceuticals does not currently pay a dividend, resulting in a dividend yield of 0%. The company has consistently reported losses, leading to a payout ratio of 0% as there are no earnings to distribute as dividends.
Analyst Consensus on Stock Valuation
The analyst consensus regarding the stock valuation is mixed, with recommendations ranging from hold to sell. Analysts cite concerns over the company's financial health and ongoing losses, indicating that potential investors should be cautious.
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| Loss per ADS (2024) | $1.63 |
| P/B Ratio | 0.65 |
| Stock Price (Current) | $0.70 |
| Stock Price (12-Month High) | $2.00 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold/Sell |
Key Risks Facing Quoin Pharmaceuticals, Ltd. (QNRX)
Key Risks Facing Quoin Pharmaceuticals, Ltd.
The financial health of Quoin Pharmaceuticals, Ltd. (QNRX) is influenced by various internal and external risk factors that can significantly impact its operations and market position. Below is a breakdown of these risks.
Industry Competition
The biopharmaceutical industry is highly competitive, with numerous companies vying for market share in the development of therapeutics. Quoin faces competition from both established pharmaceutical giants and emerging biotech firms. As of September 30, 2024, the company reported a net loss of $6,651,198 for the nine months ended, reflecting the pressures of maintaining a competitive edge while managing operational costs.
Regulatory Changes
Quoin operates in a heavily regulated industry, subject to stringent requirements from health authorities like the FDA. Any changes in regulatory policies or delays in obtaining necessary approvals can adversely affect the company's product development timelines. The company is currently managing an open IND application with the FDA for its lead asset, QRX003, which is in late-stage clinical development.
Market Conditions
Fluctuations in market conditions can impact the company's ability to raise capital and fund its operations effectively. As of September 30, 2024, Quoin had cash and cash equivalents of approximately $3.1 million and investments totaling $7.2 million. A downturn in market sentiment could limit funding opportunities, affecting operational viability.
Operational Risks
Operational challenges, including supply chain disruptions and the execution of clinical trials, pose significant risks. The company has incurred substantial costs associated with clinical development, with research and development expenses totaling approximately $2,532,468 for the nine months ended September 30, 2024. Any delays or complications in clinical trials could lead to increased costs and delayed product launches.
Financial Risks
Quoin has a history of net losses, with an accumulated deficit of approximately $52.9 million as of September 30, 2024. The ongoing requirement for additional financing to support research and development activities poses a risk. If the company cannot secure funding on favorable terms, it may be forced to delay or scale back its development projects.
Strategic Risks
Strategic decisions regarding partnerships, licensing agreements, and product development can significantly impact the company's trajectory. Quoin has entered into various agreements, including a licensing agreement with Skinvisible Pharmaceuticals, which requires a significant upfront fee and ongoing royalties. Failure to meet the obligations of these agreements could hinder development and commercialization efforts.
Mitigation Strategies
To address these risks, Quoin has implemented several strategies:
- Maintaining a diversified pipeline of products to reduce dependency on any single asset.
- Engaging in strategic partnerships to leverage additional expertise and resources.
- Conducting thorough market research to anticipate regulatory changes and adjust strategies accordingly.
- Implementing cost-control measures to manage operational expenses effectively.
| Risk Factor | Description | Financial Impact (as of Sept 30, 2024) |
|---|---|---|
| Industry Competition | Numerous competitors in the biopharmaceutical space. | Net Loss: $6,651,198 |
| Regulatory Changes | Subject to FDA regulations and potential delays. | Operational costs may increase due to compliance. |
| Market Conditions | Fluctuations affecting capital raising ability. | Cash: $3.1 million, Investments: $7.2 million |
| Operational Risks | Challenges in executing clinical trials. | R&D Expenses: $2,532,468 |
| Financial Risks | History of net losses and accumulated deficit. | Accumulated Deficit: $52.9 million |
| Strategic Risks | Partnerships and licensing agreements. | Obligations to Skinvisible: Upfront fee and royalties. |
Future Growth Prospects for Quoin Pharmaceuticals, Ltd. (QNRX)
Future Growth Prospects for Quoin Pharmaceuticals, Ltd.
Analysis of Key Growth Drivers
Quoin Pharmaceuticals is positioned for growth through various avenues, including product innovations, market expansions, and strategic partnerships. The company’s lead product, QRX003, is currently under development for treating Netherton Syndrome, with clinical trials actively ongoing. As of September 30, 2024, the net loss stood at $6,651,198, reflecting ongoing investments in research and development.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth projections are contingent upon the successful completion of clinical trials and subsequent product approvals. Analysts anticipate that if QRX003 gains FDA approval, it could significantly enhance revenue streams. The company has incurred research and development expenses totaling $2,532,468 for the nine months ended September 30, 2024, compared to $2,475,596 in the same period of the previous year, indicating a commitment to advancing its pipeline.
Strategic Initiatives or Partnerships Driving Future Growth
Quoin has established several strategic partnerships to bolster its research capabilities. Notably, the company entered a research agreement with Queensland University of Technology for developing treatments targeting rare diseases. This agreement involves funding of approximately $250,000 for Netherton Syndrome and $610,000 for Scleroderma. Furthermore, the recent agreement with University College Cork for developing novel formulations of rapamycin includes potential funding of up to €567,000 ($608,000) .
Competitive Advantages Positioning for Growth
Quoin Pharmaceuticals benefits from its proprietary drug delivery technologies and exclusive licensing agreements. The company made a one-time payment of $1 million to Skinvisible Pharmaceuticals for exclusive rights to certain patents, which positions it favorably in the niche market of rare diseases. As of September 30, 2024, the company reported total assets of $11,389,153 .
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Loss | $6,651,198 | $6,636,695 |
| Research and Development Expenses | $2,532,468 | $2,475,596 |
| General and Administrative Expenses | $4,590,936 | $4,685,241 |
| Total Operating Expenses | $7,123,404 | $7,160,837 |
| Cash and Cash Equivalents | $3,116,750 | $3,163,426 |
Conclusion
Quoin Pharmaceuticals Ltd. demonstrates robust growth potential through its innovative product pipeline, strategic partnerships, and commitment to addressing unmet medical needs in rare diseases. The financial metrics indicate a focused investment in research and development, essential for future revenue generation.
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Resources:
- Quoin Pharmaceuticals, Ltd. (QNRX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Quoin Pharmaceuticals, Ltd. (QNRX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Quoin Pharmaceuticals, Ltd. (QNRX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.