Quoin Pharmaceuticals (QNRX) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Capital Requirements

1. 01We have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company
2. 02We have incurred significant losses since our inception and have limited cash available for our operations
3. 03We have never generated any revenue from product sales or any other sources since inception, and may never be profitable
4. 04We expect that we will need to raise additional capital, which may not be available on acceptable terms, or at all

Risks Related to the Discovery and Development of Product Candidates

1. 05Preclinical and clinical studies of our product candidates may not be successful. If we are unable to generate successful results from preclinical and clinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed
2. 06We may not be successful in our efforts to identify or develop potential product candidates
3. 07Accordingly, we cannot be sure that we will submit INDs on our expected timelines and we cannot be certain the FDA or foreign regulatory agencies such as the EMA, will allow us to progress into clinical trials based on the submission of any IND
4. 08Any of our product candidates may cause undesirable side effects or have other properties impacting safety that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance
5. 09Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval to commercialize a product candidate and we cannot, therefore, predict the timing of any revenue from a future product
6. 10Even if we obtain regulatory approval for a product candidate, we will still face extensive regulatory requirements and our products may face future development and regulatory challenges
7. 11We may not be able to obtain or maintain orphan drug designation or exclusivity for our product candidates
8. 12We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success
9. 13We expect competition in the marketplace for our product candidates, should any of them receive regulatory approval
10. 14We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively
11. 15The commercial success of our product candidates will depend upon the acceptance of these product candidates by the medical community, including physicians, patients and healthcare payors
12. 16If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues
13. 17If we obtain approval to commercialize any approved products outside of the United States and Europe, a variety of risks associated with international operations could materially adversely affect our business
14. 18Coverage and adequate reimbursement may not be available for our product candidates, if approved, which could make it difficult for us to sell products profitably

Risks Related to Our Reliance on Third Parties

1. 19We rely on third parties to conduct some aspects of our compound formulation, research and preclinical studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such formulation, research or testing
2. 20We do not expect to independently conduct all aspects of our drug development activities, compound formulation research or preclinical studies of product candidates. We currently rely and expect to continue to rely on third parties to conduct some or all aspects of our preclinical studies and formulation development
3. 21Reliance on third-party manufacturers entails risks, including risks that we would not be subject to if we manufactured the product candidates ourselves
4. 22We rely on limited sources of supply for the drug substance of product candidates and any disruption in the chain of supply may cause a delay in developing and commercializing these product candidates
5. 23Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization
6. 24We intend to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business
7. 25commercial prospects for such products and any product candidates that we develop would be harmed, our costs could increase, and our ability to generate revenues could be delayed

Risks Related to Our Intellectual Property

1. 26If we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to compete effectively in our markets
2. 27Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts
3. 28We are a party to intellectual property license agreements that are important to our business and expect to enter into additional license agreements in the future. Our existing license agreements impose, and we expect that future license agreements will impose, various obligations on us
4. 29We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming and unsuccessful
5. 30We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties
6. 31Our future success depends on our ability to attract and retain key executives and to attract, retain and motivate qualified personnel
7. 32We may need to expand our organization and may experience difficulties in managing our growth, which could disrupt our operations
8. 33Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
9. 34Our operations may be impacted from changes to current regulations and future legislation
10. 35We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs
11. 36Cyber security risks and the failure to maintain the confidentiality, integrity, and availability of our computer hardware, software, and Internet applications and related tools and functions could result in damage to our reputation and/or subject us to costs, fines or lawsuits
12. 37We have been, and may in the future be, adversely affected by health epidemics and pandemics which may significantly harm our business, prospects, financial condition and operating results
13. 38Business interruptions could delay us in the process of developing our future products

Risks Related to Us Being an Israeli Company

1. 39The rights and responsibilities of our shareholders are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations
2. 40Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders

Risks Related to Ownership of Our ADSs and Ordinary Shares

1. 41We do not know whether a market for our securities will be sustained and as a result it may be difficult for shareholders to sell our securities
2. 42The requirements of being a publicly traded company may strain our resources and divert management’s attention
3. 43Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our ADSs
4. 44The market price for our ADSs may be volatile
5. 45We may be at risk of securities class action litigation
6. 46Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs decline
7. 47Our shareholders may experience substantial dilution as a result of future issuances of our equity securities
8. 48We have not paid, and do not intend to pay, dividends on our ordinary shares and, therefore, unless our traded securities appreciate in value, our investors may not benefit from holding our securities
9. 49Holders of ADSs must act through the depositary to exercise their rights
10. 50Holders of ADSs may be subject to limitations on the transfer of their ADSs