Soligenix (NASDAQ: SNGX) is earning Zacks SCR analysts’ confidence, who prescribe a 12-month price target of $15 per share. A rise in that magnitude represents a more than 580% increase from its current trading price*. Several reasons combine to justify the lofty valuation. (*share price and percentage calculation as of 11:00ET 11/23/20)
First, a near-term catalyst is expected from its ongoing Phase 3 DOM-INNATE trial of SGX942 for the treatment of oral mucositis (OM) in patients with squamous cell carcinoma of the oral cavity and oropharynx undergoing chemoradiation therapy. In Q2, the company announced that the trial was fully enrolled with 268 patients and on target to complete its study after receiving a positive recommendation from the Independent Data Monitoring Committee (DMC) in Aug. 2019. That recommendation was to continue the trial and increase enrollment, which helped quiet futility concerns.
The request to add approximately 70 additional subjects into the randomized trial was recommended to maintain the 90% statistical power for the primary outcome. Topline results from the trial are expected by year end.
Notably, the trial uses the same Independent DMC designed platform that generated statistically significant endpoint results in its Phase 3 SGX301 trial, potentially minimizing the risk of topline disappointment. Because the study is blinded, no data has been presented as yet.
Two more programs contribute to the analysts’ optimism.
Positive Topline Results From Its Phase 3 CTCL Trial
Soligenix already reported statistically significant topline results from its Phase 3 SGX301 (FLASH) trial. This randomized, double-blind, placebo-controlled study enrolled 169 patients with either Stage IA, IB, or IIA mycosis fungoides (the most common type of CTCL). The drug targets the treatment of patients with cutaneous T-cell lymphoma (CTCL) and reached its primary endpoint with its Cycle 1 cohort of randomized 2:1 patients (n=116 for SGX301; n=50 for placebo) receiving twice-weekly treatment of either 0.25% SGX301 or placebo, an ointment with the same light exposure as for SGX301 for six weeks, with treatment response determined at the end of the eighth week. Results showed a reduction in the combined CAILS (Composite Assessment of Index Lesion Score). Results in two additional SGX301 Cycle studies demonstrated continued efficacy on treated areas.
Cycle 1 results were essentially duplicated in its Cycle 2 cohort, which dosed 155 patients receiving either 0.25% SGX301 on their target lesions. Of that group, 110 received 12 weeks of SGX301, and 45 were dosed with six weeks of placebo treatment followed by six weeks of SGX301 treatment. Continued analysis of Cycle 1 and 2 data shows that following 12 weeks of therapy with SGX301, responses on both patch (37% response; P=0.0009) and plaque (42% response; P<0.001) lesions showed improvement compared to Cycle 1 placebo lesion responses. That outcome is likely produced due to the deeper penetration of wavelength light used for SGX301 compared to UV light.
Cycle 2 data was compelling. Its Cycle 3 group, though, showed even better response rates and confirmed the impressive results.
Cycle 3 Responses Improved
Response rates showed continued improvement in Cycle 3 for the 49% of patients electing to receive SGX301 for 18 weeks, showing a 50% or greater reduction in the combined CAILS. That result compares exceptionally well to 40% of patients showing a similar decrease after completing 12 weeks of treatment (P=0.046) in Cycle 2. It also follows the previous data that reported a statistically significant treatment response in the CAILS primary endpoint assessed at 8 weeks for Cycle 1, with 16% of patients receiving SGX301 responding compared to only 4% receiving placebo responding (P=0.04). Thus, the argument that a robust increase in treatment response over time is hard to refute.
But, while the efficacy data is compelling, a critical consideration beyond the statistically significant results is that SGX301 is a safe and well-tolerated CTCL treatment that shows positive effects in a short period of time. Better still, the positive impact continued over time.
Also, because CTCL is a long-lasting condition, safety and tolerability are of considerable importance to prescribing physicians when treating patients. It’s known that competing CTCL therapies have several potentially serious side effects, particularly with extended use. Because SGX301 is proven safe and effective, with minimal to no side effects reported, the drug may ultimately be well-positioned to become a front-line treatment for the disease.
Another positive for the program is that with the trial completed, Soligenix is in an enviable position to evaluate its strategic opportunities for SGX301. Those options may include working with a suitable commercialization partner, and/or preparing and submitting a New Drug Application (NDA), which is anticipated to occur in the first half of 2021.
Either option could put upward pressure on the stock.
CiVax™ For Covid-19 Shows Promise As A Heat-Stable Vaccine Candidate
While recent news highlights Pfizer’s and Moderna’s potential breakthroughs for their Covid-19 vaccine candidates, Soligenixs’ CiVax platform may be a better long-term choice.
To broad fanfare, Pfizer, Inc. (PFE) and BioNTech SE (BNTX), and Moderna (MRNA), announced their mRNA-based SARS-CoV-2 vaccine candidates. Pfizer’s (BNT162b2) showed efficacy against COVID-19 based on the first interim efficacy analysis conducted on Nov. 8, 2020. The data was published after the evaluable case count reached 94. The group split between vaccinated and placebo-controlled doses showed a vaccine efficacy rate of roughly 90% at seven days after the first dose. According to Pfizer, there have been no serious safety concerns, and the trial is continuing to collect additional safety and efficacy data before filing for a EUA from the FDA.
Moderna followed Pfizer by announcing positives results of up to 94% effectiveness with its mRNA platform vaccine. That data also showed the vaccine safe and well-tolerated, with the principal side effect being soreness at the injection site. However, there are severe limitations to each from a logistics perspective.
While the data presented by Pfizer (PFE) and Moderna (MRNA) is encouraging, the vaccine’s storage requirements will present a potentially insurmountable obstacle for widespread distribution, especially in the near-term (6-12 months). The problem is that each vaccine requires storage at either -70ºC for Pfizer’s applicant and below -20ºC for Moderna’s. Also, Pfizer’s can only be kept at 4ºC for up to five days, and Moderna’s must be, at a minimum, refrigerated at all times for up to 30 days. Accommodating storage facilities are currently not widespread, even at leading medical institutions in the U.S., let alone lesser developed countries.
In contrast to Pfizer’s, Moderna’s, and other late-stage vaccine candidates, CiVax™ can be shipped at ambient temperature and stored at temperatures as high as 40ºC (104ºF). Also, CiVax consists of a recombinant spike protein from the SARS-CoV-2 virus expressed in an insect cell expression system to ensure stable glycosylation patterns. Protein vaccines, which are considered the gold standards for vaccine production, has been used successfully for a long time and have a strong safety record.
Also different is that CiVax includes the CoVaccine HT™ adjuvant, which Soligenix licensed from BTG-Boston Scientific. The CoVaccine HT has previously shown its ability to induce both humoral (antibody) and cell-mediated immunity. Perhaps most important to the discussion is that Soligenix’s thermostabilization platform, ThermoVax®, allows for individually lyophilized samples to be prepared that can be reconstituted by only needing sterile water immediately before administration.
Those advantages can be compelling as second generations of drugs show themselves to be potentially better alternatives. Despite the progress of the two mRNA vaccines announced, additional and more user-friendly vaccine platforms will be needed. There is no dispute to that argument.
The CiVax platform can be a cure to the logistical challenges. And, because of the known limitations of initial vaccine candidates, particularly with storage, distribution logistics, and unknown long-term effects, CiVax can be a particularly strong contender to meet next-generation vaccine challenges for proven safety as well as for its ease of distribution. Keep in mind, too, that no RNA or DNA platform drug has been approved to date. Thus, a rush to vaccinate may have long-term consequences in an unknown quantity.
Catalysts Ahead- Near and Long-Term
Soligenix has helped prepare a guidebook for when investors can expect its next potential catalysts. They reiterate that topline results from its Phase 3 clinical data for SGX942 in oral mucositis (OM) are expected to be released before the end of 2020. Notably, a clue to its outcome may exist since it uses the same platform as its already successful SGX301 statistically significant drug candidate.
Further, although the market is neglecting to price in a potential $250 million market opportunity from SGX301 to treat CTCL, that matter may be quickly remedied after data gets released from the SGX942 study. If successful, the platform may be shown to have tremendous potential in targeting other hard to treat indications and open the door to other potentially lucrative drug development opportunities.
Still, at this point, after combining the known positives of SGX301, the potential from a DMC recommended SGX942 trial continuance, and the prospects from its heat-stable CiVax for Covid-19 candidate, the $15 price target from Zacks is reasonable. In fact, they note that the current target price valuation may be justified on the CTCL drug alone.
Maybe that means, in the worst case, Soligenix should have a valuation of $15 now. With multiple statistically significant readouts in hand, that target can be multiplied higher in a better case scenario, which will likely be announced within 45 days.
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