Soligenix (NASDAQ: SNGX) is completing a milestone filled 2020 that position at least three pipeline assets to drive shareholder value higher in the coming year. Each is a potential catalyst for near and long-term growth, leading Zacks SCR analysts to prescribe a $15 price target for the company stock.
A trifecta of programs is in focus. First, its CiVax™ for Covid-19 vaccine shows promise as a potentially impactful heat-stable coronavirus vaccine. Second, value-creating opportunities may be in-play from its positive SGX301 Phase 3 (FLASH) trial targeting Cutaneous T-cell lymphoma. And third, topline data from its Phase 3 SGX942 trial (DOM-INNATE) targeting oral mucositis in patients with head and neck cancer is expected to be released by the end of this year. Positive results beyond its success in the SGX301 trial can be lucrative to Soligenix- positive results from all can have an exponential effect on valuations.
The combined market opportunities for its Phase 3 drugs alone are estimated to exceed $500 million in market potential. Moreover, both of its late-stage drugs could become a first-line treatment for their respective indications. Its CiVax™ for Covid-19 platform can also deliver substantial rewards. That vaccine candidate is in focus for three important reasons:
1. It uses a safe protein subunit adjuvant platform that is considered the gold-standard in vaccine creation.
2. Because it is a heat-stable vaccine that can clear logistical hurdles to meet global distribution challenges.
3. In preclinical studies, the vaccine candidate shows an ability to create a broad immune response.
Vital to the progress of each, Soligenix’s recent financial report shows cash on hand of more than $11 million, which the company says should be sufficient to achieve multiple inflection points across its rare disease pipeline, including final topline results from its SGX942 Phase 3 clinical trial in oral mucositis.
Three Potential Catalysts On The Horizon- CiVax™ Is One
As coronavirus cases continue to spike across the globe, a fresh look at the CiVax™ vaccine platform is timely. The platform could prove extremely valuable after showing potentially compelling advantages over other vaccine candidates in late-stage trials.
In September, the company highlighted the benefits of CiVax™, which distinguishes itself as a thermostabilized glycoprotein vaccine platform to treat COVID-19. Already published data is encouraging and supports that the candidate is not only a safer alternative to competing live-virus vaccine candidates but is also amenable for rapid scale-up of production.
Notably, CiVax™ differs by utilizing a protein subunit antigen with a novel adjuvant that has long been considered the gold standard for vaccine safety. Valuable to the equation is that CiVax™ has demonstrated the ability to stimulate Th1 antibody responses, a key metric against the standard subunit vaccine adjuvant. Moreover, these preferred Th1 antibody responses have already been generated for Soligenix sponsored vaccines to treat SARS and MERS- results that researchers believe bodes well for CiVax™. In fact, it’s been suggested that if current studies can replicate those results, the immune-boosting effects would be similar, and potentially safer, than the Pfizer applicant.
Another critical advantage is that CiVax™ demonstrated the ability to generate both neutralizing antibodies AND cell-mediated immunity – both of which are considered critical to inducing a potent immune response. Better still is that robust responses were measured even after one vaccination, a stark differentiation from the likelihood that multiple vaccinations may be needed to generate equal responses from leading vaccine candidates. Thus, a single and effective dose of a CiVax™ vaccine can be a determining factor in considering its value to treat the coronavirus.
Furthermore, the heat-stabilization advantage can be a game-changer in favor of CiVax™. The “why” is quickly explainable. Considering that delivering and dosing a -94 Fahrenheit drug (Pfizer’s candidate) is already challenging, the subsequent effort to re-dose the same population can present insurmountable challenges even in perfect conditions. It also complicates manufacturing estimates with the quantities needed amounting to more than double the population size. Complicating that situation even more is that storage and distribution challenges for a -94 F drug are unrealistic on a grand scale, leaving populations in remote countries, villages, and large regions of the world potentially exposed and untreatable. Moderna’s applicant, too, requires constant refrigeration and/or freezing.
Perhaps the most compelling argument in favor of the CiVax™ platform is that it differs from competing efforts that are based on inactivated coronavirus, which eliminates the need for significant stocks of the virus to produce the product. Also, to date, no vaccines have been approved using DNA or RNA technologies, and even a successful formula can have limited use or be entirely contraindicated in some populations. Pfizer and Moderna both use an mRNA construct.
Through further study, CiVax™ may prove its ability to meet and beat production and dosing challenges. It may also be one of the only vaccine candidates showing the potential to become a thermostabilized vaccine – meaning no cold chain distribution is required. In other words, it can be produced and sent to many millions of patients quickly and efficiently without the fear of losing its potency.
Updates on this vaccine candidate could have a significant effect on the company’s valuation. Announcements could come at any time.
Second Catalyst From SGX301 FLASH Phase 3 Trial
A second near-term catalyst may come from potential NDA filings based on the positive topline results from its Phase 3 FLASH trial. The successful completion of the pivotal Phase 3 FLASH (Fluorescent Light Activated Synthetic Hypericin) trial demonstrated the drug’s potential to be an important new treatment for early-stage cutaneous T-cell lymphoma (CTCL).
Results in its double-blind, placebo-controlled Cycle 1 portion of the study demonstrated a statistically significant treatment response (p=0.04), reaching its primary endpoint after just 6 weeks of therapy. Positive response to the treatment continued to significantly improve with extended SGX301 treatment in the open-label treatment cycles at 12 weeks (Cycle 2) and 18 weeks (Cycle 3), which reinforce the positive SGX301 primary endpoint treatment response demonstrated in Cycle 1.
Now that the trial is concluded, and with results compellingly positive, Soligenix is afforded multiple options, including preparing and submitting its new drug application to the FDA. Also in play could be licensing agreements or partnerships to advance the drug toward FDA approval. Notably, the drug could be a first-line treatment against CTCL. Thus the value may be attractive to several large pharmaceuticals who are already seated in the sector.
Catalyst Three From SGX942 Targeting Oral Mucositis
The third catalyst (not in any specific order) could come from the company’s second pivotal Phase 3 clinical trial of SGX942 (dusquetide) as a potential first-line treatment of oral mucositis in patients with head and neck cancer (HNC) also receiving chemoradiation therapy. That trial is making progress following the positive recommendation from the independent Data Monitoring Committee and has successfully achieved its target enrollment.
The study is blinded, so there is no data reported as yet.. However, successful results from this DOM-INNATE (Dusquetide treatment in Oral Mucositis – by modulating INNATE immunity) study could present a market that exceeds a $250 million opportunity in the U.S. markets alone. The DMC recommendation to continue the trial has some speculating the data must be positive; otherwise, the DMC would have most likely stopped the trial for futility reasons. That didn’t happen. In fact, the company increased patient enrollment to meet its 90% statistical power. Further, the trial is using the same successful approach used in its CTCL Phase 3 trial, which produced positive topline results.
The company completed enrollment of 268 subjects, and topline final results are expected before the end of the year.
Trifecta Of Opportunity In Q4 And 2021
For Soligenix, the past ten months of the year may have produced the most important data in its history. It certainly helped them solidify its stature as a late-stage biopharmaceutical company on the heels of developing and commercializing products to treat rare diseases where there is an unmet medical need.
Analysts at Zacks are undoubtedly bullish. They set a price target of $15 per share in October after highlighting the company’s Cycle 3 Data for SGX301. Positive topline results from the SGX942 trial or updates about its CiVax™ program could drive those targets higher.
Further, the positive final topline results from its Phase 3 SGX301 trial help minimize risk, and that drug alone is an estimated $250 million market opportunity. All told, there appears to be a disconnect between pipeline assets and current valuations.
But, if Soligenix continues to post positive data, that gap may close quickly.
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