$QNRX

Note no discussion for ex-US potential in this note or the rest of the pipeline (beyond Netherton)

(1) Summary:

• By far the most advanced in clinical development Netherton treatment. Well-funded after private placement announcement in October

• Pivotal readouts in 2H 2026. Good data so far. I expect trials to be successful

• NDA in late 2026 (or most likely early 2027)

• Upon approval —> PRV which is worth up to $150-200M lately

• Cash runway into 2027 (not accounting for exercise of outstanding warrants from recent deal- see later below)

• Large warrants overhang not reflected in current market cap. But I still think big upside potential is justified. E.g. exercise of Series H-K warrants from October private placement can add up to 8,036,364 shares (=dilution) and up to $88M cash. + add 1,993,939 ADSs in pre-funded warrants from the private placement

• Considering premium pricing (ultra-rare indication) of orphan designation products + PRV value I believe there is plenty upside left for QNRX even accounting for oustanding warrants.

(2) Major regulatory FDA designations:

• Orphan Drug Designation (provides incentives like fee waivers, tax credits, and 7-year market exclusivity upon approval) (also means premium pricing). Orphan designation also by EMA and Japan.

• Rare Pediatric Disease (RPD) Designation. This means QNRX is elligible for a PRV upon approval. These have been lately sold for up to $150-200M (will probably get cheaper again now that the program has been renewed). Good news is that extention of the PVR program was just announced up to Sep 2029 (previous deadline was Sep 2026, which mean QNRX wouldn’t have approval in time)

(3) Regulatory pathway:

2 ongoing pivotal trials:

1. Vehicle-controlled study. 4% formulation bid (prior 2% arm elliminated). no systemic therapy allowed. n=30. The aim of this study is to show the product works vs placebo.

2. Open-label, baseline-controlled study. 4% formulation bid on top of continuing systemic therapy. n=20. The aim of this study is to prove the product can be beneficial as add-on to current standard of care.

Both designs (and ammendments to protocol) have been approved by FDA and both trials have US sites involved. However, official confirmation that these trials can lead to an NDA (especially confirmation that the openl label baseline-controlled study design is acceptable) is pending. I don’t see why not though.

(4) Milestones important for oustanding warrants:

• Series H warrants to purchase up to 2,009,091 ADSs at an exercise price of $9.075 per ADS for an aggregate exercise price of up to $18.1 million. The Series H warrants are immediately exercisable and will expire on the earlier of (i) 30 days after the Company’s public announcement that the Company has received Type C meeting minutes from the FDA indicating openness to baseline-controlled pivotal studies for QRX003 for the treatment of Netherton Syndrome and (ii) five years from the date of issuance. I assume this meeting will happen after QNRX has data from ongoing pivotal trials

• Series I warrants to purchase up to 2,009,091 ADSs at an exercise price of $10.3125 per ADS for an aggregate exercise price of up to $20.6 million. The Series I warrants are immediately exercisable and expire as follows: 50% of the Series I warrants will expire on the earlier of (i) 30 days after the Company’s public announcement that the primary endpoint has been met in the monotherapy pivotal trial of QRX003 for the treatment of Netherton Syndrome and (ii) five years from the date of issuance; and the remaining 50% of Series I warrants will expire on the earlier of (i) 30 days after the Company’s public announcement that the primary endpoint has been met in the adjuvant pivotal trial of QRX003 for the treatment of Netherton Syndrome and (ii) five years from the date of issuance.

• Series J warrants to purchase up to 2,009,091 ADSs at an exercise price of $12.375 per ADS for an aggregate exercise price of up to $24.7million. The Series J warrants are immediately exercisable and will expire on the earlier of (i) 30 days after the public announcement of the receipt of either accelerated or traditional approval by the FDA of QRX003 for the treatment of Netherton Syndrome and (ii) five years from the date of issuance.

• Series K warrants to purchase up to 2,009,091 ADSs at an exercise price of $12.375 per ADS for an aggregate exercise price of up to $24.7million. The Series K warrants are immediately exercisable and will expire on the earlier of (i) 30 days after the public announcement of the Company’s sale of a Priority Review Voucher (PRV) and (ii) five years from the date of issuance.

(5) Equity structure and implications of above warrants:

• As of November 3, 2025, there were 838,976 ADSs outstanding.

• Warrants from Oct private placement (up to around 10,030,303 ADSs): If all goes well exercise of all these warrants is possible (unless capped by ownership limits), which unfortunately somewhat limit the future upside. Exercise of all these warrants would add up to around 10M ADSs, which at e.g. $10/share would add up to $100M to market cap. At the same time this would add up to $88M cash. These warrants include:

  • pre-funded warrants to purchase ordinary shares represented by 1,993,939 ADSs

  • Up to 8,036,364 warrants from private placement (see above section)

• Warrants outstanding before Oct placement: According to last 10Q “Outstanding and exercisable at September 30, 2025” 1,108,159 ADSs, at Weighted ADSs Underlying Warrants Average Exercise Price Per ADS of $21.92 (expiring in 2026, 2027, 2029). However, there are some notable warrants from Dec 2024 that seem largely outstanding (?) at a relatively low price:

  • Series F 422,600 ADSs at $15.75

  • Series G 428,700 ADSs at $15.75

Assuming exercise of ALL these warrants could add up to 11,138,462 ADSs (and could add up to a bit more around $100M cash)