Soligenix Inc. (Nasdaq: SNGX) Eyes $500 Million Prize With Late Stage Phase III Trials Targeting Oral Mucositis And Cutaneous T Cell Lymphoma

Soligenix Inc. (Nasdaq: SNGX) Eyes $500 Million Prize With Late Stage Phase III Trials Targeting Oral Mucositis And Cutaneous T Cell Lymphoma
Soligenix Inc. is advancing two late-stage Phase III trials, its SGX942 DOM-INNATE study targeting oral mucositis, and its SGX301 study targeting Cutaneous T Cell Lymphoma. The combined market opportunity exceeds $500 million according to a Zacks small-cap research report. Results from both studies are expected within the next six months.

Late-stage biopharmaceutical company, Soligenix, Inc. (NasdaqCM: SNGX), may be offering investors a compelling value opportunity as the company gets set to release at least two significant Phase III clinical trial updates before the end of 2019. In fact, Zacks Small Cap Research put out a note on July 9th that reiterates its 12-month price target on the stock at $8.00 per share, roughly 900% higher from current levels, citing potential catalysts from the company’s SGX942 DOM-INNATE and SGX301 FLASH clinical trials.

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Moreover, along with these two Phase III trials, SNGX has more than five other active drug and vaccine development programs that have earned fast-track and/or orphan drug designations targeting treatment markets where there is an unmet medical need. Following the bullish note from analysts, SNGX stock has appreciated by more than 21%, showing that the trend is decidedly bullish.

Also, to move the trials forward, SNGX will have access to approximately $7 million in cash as of their last quarterly filing, and access to significant government funding which includes an NIH contract of up to $24.7 million for its ricin vaccine development program. However, beyond the company’s financial ability to advance the studies, the company’s real strength lay in the depth of its emerging rare disease drug pipeline, the ability of its management team to deliver results, and the growing set of potential near-term catalysts that can create significant shareholder value.

Interest Building As SNGX Nears Phase III Data Release

With the stock price trending higher in recent weeks, it’s an indication that interest is building ahead of the completion and release of top-line data for two pivotal clinical trials. And, beyond the two phase III trials, the team at Soligenix is demonstrating their ability to advance multiple products and development programs forward to seize more than five lucrative market opportunities from its various drug and vaccine programs already in development. Hence, with the company maturing from clinical phase to a potential drug marketer with FDA-approved drugs, SNGX is arguably in its best shape ever to capitalize from decades of research that can create substantial value for its investors during the remainder of 2019 and into the first half of 2020.

Furthermore, in addition to its expected Phase III updates, SNGX is also expected to pursue fast-track approval for at least two bio-defense vaccines born out of its public health solutions segment. And, at least two products are developing quickly from the company’s late-stage bio-defense vaccine program, one that has successfully demonstrated compelling vaccine protection with its heat stable ricin toxin vaccine technology, and the other showing promising treatments that offer therapeutic benefit to specialized markets including acute radiation syndrome, and antibiotic-resistant infectious disease.

And, it’s important to note that from a regulatory standpoint, that each of the SNGX pipeline products has earned either fast-track designation, orphan drug designation or a combination of the two.

SNGX Is Targeting Unmet Medical Needs With An Advancing Product Pipeline

As noted above, two of the SNGX trials are close to finalizing their Phase III clinical studies. And, analysts are taking notice. In July of 2019, a Zacks Small-Cap Research analyst published a report highlighting the potential of the SNGX pipeline and affirming an $8.00 price target in the next 12-months. This, of course, is based on continued positive data from the SGX942 and SGX301 Phase III trials. Notably, to achieve that approximate 900% increase in share price, SNGX will need to confirm the positive clinical data already generated from its prior phases of the trials. So, in this case, SNGX wants to demonstrate that history does repeat itself by providing supporting interim analysis from its Phase III DOM-INNATE clinical trial expected in September 2019. The data will come from a study design that calls for the enrollment of approximately 190 patients in a randomized, multinational, double-blind, placebo-controlled study to evaluate SGX942 for the treatment of severe oral mucositis in patients with squamous cell carcinoma of the oral cavity that are undergoing chemo-radiation therapy. The cost of the trials is getting offset by partial funding from the NIH with a $1.5 million SBIR grant. In addition to the NIH grant, SGX942 was selected for the Commercialization Transition Track, which is a valuable tool to create product awareness and funding to get the products to market.

It’s a good omen that SNGX is getting these grants, as the race for money is competitive. However, the SGX942 program is likely attracting the attention of these agencies because oral mucositis is an area of high unmet medical need, and SGX942 generated encouraging data in its Phase II clinical trial. In that instance, during its Phase II proof-of-concept trial in 2015, SGX942 was administered to 111 head and neck cancer patients, and the results showed that the drug provided a 67% reduction in the duration of severe oral mucositis compared to the placebo group, reducing the median duration of severe oral mucositis from 30 days (one month) in the placebo group to just 10 days in the treated group. In addition to the 67% reduction in duration, the Phase II SGX942 study met its pre-specified secondary endpoint that demonstrated a reduction in the median duration of ulcerative oral mucositis with an associated “P-value” of <0.1, proving statistical significance. In addition to the drug being found to be safe, well-tolerated, and having an ability to increase the efficacy of treatment, a critical advantage of the therapy showed that a higher percentage of those treated with SGX942 during their chemo-radiation procedure experienced a complete resolution of symptoms compared to those in the placebo group, which ultimately correlated to a positive trend in overall survival for SGX942 treated patients at one year follow-up.

Soligenix is expected to provide its Phase III SGX942 trial interim data in September of this year. If positive, it can be the first of two hoped for catalysts.

SGX301 For Cutaneous T-Cell Lymphoma

Soligenix is also on track to seek FDA approval from its Phase III FLASH clinical trial that is evaluating the benefits of SGX301 in patients with cutaneous T-cell lymphoma (CTCL). The late-stage study has already published encouraging news in October of 2018 and led to the positive recommendation from the independent Data Monitoring Committee to enroll an additional 40 patients into the trial design to maintain 90% statistical power for the trial’s primary endpoint.

The innovative approach to treatment by SGX301 utilizes synthetic hypericin as its active ingredient combined with a photodynamic therapy that is activated by safe, visible light. The mechanism of action includes a topically applied dose of synthetic hypericin to lesions on the skin, where results show a much higher uptake by malignant cells in comparison to healthy, normal cells. After a period between 16-24 hours, the treated area is then exposed to visible fluorescent light, where studies have confirmed that the exposure to light results in the production of singlet oxygen. That reaction is shown to have a unique ability to stimulate the initiation of apoptosis (cell death), which can impact the balance of cells in the human body that contribute to a healthy immune system.

The FLASH clinical trial is expected to enroll a total of 160 patients, and as of their last update, more than 120 patients have already been treated. The study is a randomized, double-blind, placebo-controlled study that is evaluating SGX301 in patients with either Stage 1A, 1B, or 2A mycosis fungoides, the most common type of CTCL, in approximately 30 treatment centers across the United States. The primary endpoints of the trial are the percentage of patients achieving either a partial or complete response of treated lesions, defined clinically as a > 50% reduction in the total Composite Assessment of Index Lesion Disease Severity (CAILS) score at the end of the first eight-week cycle compared to the baseline. Secondary endpoints include the duration of response, the degree of lesion improvement, and treatment safety.

The FLASH trial is expected to be completed by the end of 2019, followed with final top-line data during the first quarter of 2020. If positive, the second catalyst will be achieved.

ThermoVax® For Bio-defense Vaccine Programs

In addition to the late-stage Phase III drug trials, Soligenix is advancing its bio-defense programs that are getting financial support through non-dilutive government grants and contracts. Two products are currently being evaluated, ThermoVax®, and RiVax®. Each can provide significant returns.

ThermoVax® is a proprietary stabilizing platform technology that allows vaccines comprised of an aluminum salt adjutant to be kept out of cold storage without affecting the potency of the drug. The technique can be a breakthrough to eliminate the need for cold storage, and its applications can provide game-changing treatment in the battlefield, during extreme power-outage situations, and during large scale triage situations. Additional benefits include ease of storage and for the ability to allow for a national and strategic stockpile of essential vaccines. The ThermoVax® technology has already shown demonstrably positive results with RiVax®, the company’s ricin vaccine. Independent studies showed that ThermoVax® is capable of providing potency protection for the RiVax® vaccine for up to one year at 104° Fahrenheit. Additionally, ThermoVax® demonstrated its ability to protect the potency of vaccine candidates to treat anthrax, HPV, and Ebola for up to twelve weeks at the same high temperatures.

RiVax® is a second product in the company’s bio-defense vaccine program. This vaccine is being developed to protect against exposure to ricin, a lethal toxin used in chemical warfare. In a Phase Ia study, Soligenix demonstrated that its vaccine antigen, an abbreviated version of ricin toxin A chain with no biological activity, is non-toxic and able to induce an immunogenic response. Also, the antibodies induced through immunization with RiVax® have demonstrated complete protection from a lethal dose of aerosolized ricin in a rhesus macaques vaccine trial conducted in 2015. Importantly, alum-adjuvanted RiVax® was also shown to be safe and well tolerated in a Phase Ib study in human volunteers. SNGX is expected to seek expedited FDA approval for the vaccine under the “animal rule” that relies on studies successfully conducted in non-primates.

The compelling therapeutic benefits of the vaccine were presented at the Fourth International Conference on Vaccines Research and Development Development in 2018. To date, RiVax® has been funded by non-dilutive grants awarded from the NIH (approximately $25 million thus far) and through a $24.7 million contract entered into with the NIH in 2014. SNGX is also evaluating the opportunity to apply for a priority review voucher (PRV), which can be a valuable asset to the RiVax® program. These PRV’s are transferable, and recent PRV’s have sold for well above $100 million in the biotech and pharma sector.

Multiple Shots At Success In 2019-2020

The next nine months are setting up to be a potential breakthrough period for SNGX. Peak revenues for the combined approval of both SGX942 and SGX301 can contribute more than $500 million in revenue. But, the SNGX opportunity goes beyond just those two drugs.

Trading at a sharp discount to analyst pricing models, SNGX appears to be ideally positioned to further its growth by capitalizing on its government grants, its potential cash from warrants, and its current cash position of $7 million as of its latest filing. Moreover, with at least five programs targeting markets that can each generate hundreds of millions in potential peak revenues, the company’s market cap deserves a push higher even with risk discounts applied to its clinical programs. Furthermore, with at least two potential catalysts expected within six months, that value may start to build ahead of the results, following its recent trend higher.

Keep in mind, too, that as big pharma pipelines continue to show signs of stress, they become more aggressive in finding partnership and collaboration opportunities with late-stage companies that can offer multiple drug approval possibilities. And, with Soligenix sitting on seven potential winners, SNGX may become a popular candidate to others that need to add some depth and innovation to their pipelines.

*share price taken as of 7/15/19

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