Soligenix (OTCQB:SNGX), a clinical stage biopharmaceutical company focused on advancing drugs with multi-million dollar market potential, revealed Monday in its quarterly filings that it believes its current cash will be sufficient to meet its anticipated needs for working capital and capital expenditures into the first quarter of 2015.
As of June 30, the end of its second quarter, the company had cash and equivalents of $8.1 million, more than double the position at the end of calendar 2012. Working capital amounted to $6.9 million at the end of the latest period, also more than doubling as a result of proceeds from the company's registered public offering worth a little over $7.1 million with renowned billionaire life sciences investor Randal J Kirk having a role to play, in that a chunk of the funds originated with a firm linked to Kirk himself.
Soligenix, which has already seen its stock rise 138 per cent in the calendar year so far, caught the life sciences billionaire's eye earlier this year with its development of a treatment for high priority government biothreat melioidosis, a contagion which has the potential for widespread dissemination through aerosol. The infectious disease is caused by a bacterium that is highly resistant to antibiotic regimens, with mortality rates as high as 40 per cent in parts of Southeast Asia. In May, the company signed an exclusive worldwide collaboration agreement with Kirk's Intrexon, which last week completed a hugely successful IPO, for the development of a treatment for the disease.
Soligenix is advancing numerous drug candidates, with a portfolio of multiple programs targeting indications that each have at least $200 million plus of worldwide market potential. The company had about $2.3 million in active grant funding still available at quarter-end to support its associated research programs through 2014, and has plans to submit additional grant applications.
"During this quarter we made significant progress in both our business segments, enhanced our cash position with completion of a common stock offering and attracted new institutional investors including an affiliated fund of Third Security, LLC [a VC firm associated with Kirk]," said president and CEO Dr. Christopher J. Schaber, in a statement Monday.
"Our strengthened cash runway allows us to initiate a Phase 2 clinical study in oral mucositis as well as a Phase 2/3 study in pediatric Crohn's disease by the end of this year."
Indeed, Soligenix's first drug under the spotlight is the company's lead candidate SGX942, a drug designed to treat oral mucositis, a debilitating side effect of cancer therapies such as radiation or chemo, in head and neck cancer patients. The drug is coming upon its phase II trial, expected to start by the end of the year, after recently receiving investigational new drug (NYSE:IND) clearance from the U.S. FDA. It also has fast track designation, a status which is designed to expedite the review of new drugs. The phase II study, which will take place only in the U.S., will enroll approximately 75 head and neck cancer subjects with oral mucositis.
Oral mucositis, grades II-IV, affects over 180,000 head and neck cancer patients worldwide, and it is estimated that the condition affects around 90,000 of these patients per year in the U.S. alone. As recently as earlier July, the company inked a commercial collaboration deal with SciClone Pharmaceuticals to develop its SGX942 candidate. SciClone completed two phase II clinical studies in 2010 and 2012 on drug SCV-07, which was also targeted for the treatment of oral mucositis in head and neck cancer patients, before deciding to terminate the program.
Its pediatric Crohn's candidate is another area of significant market potential, as there are some 160,000 children and adolescents with Crohn's worldwide. The drug, a two-tablet proprietary formulation of immediate- and delayed-release oral BDP (beclomethasone 17, 21-dipropionate), is anticipated to be tested in a 150-subject phase 2/3 study in North America, as well as potential sites in Europe. The drug, which has both orphan drug and fast track designations, is designed to work against inflammation in both the upper and lower gastrointestinal (NYSE:GI) tract, and is positioned as a corticosteroid, with less toxicity than the current standard therapy of systemic steroid, prednisone.
For the quarter that ended June 30, its revenues dropped to $0.6 million from $0.8 million a year ago, while net loss increased to $3.4 million, or 28 cents per share, from $1.0 million, or 9 cents per share, in the year earlier period. The latest period included non-cash charges of $2.1 million, relating to expenses tied to the collaboration with Intrexon and a $0.6 million charge related to the change in the fair value of its warrants.
Research and development expenses climbed to $2.1 million from $0.5 million due to the Intrexon deal, while general and admin expenses also edged up to $0.7 million. The company said that excluding the $1.5 million non-cash charge, operating expenses for the quarter increased by just $0.2 million related to its pediatric Crohn's phase I clinical study.
"We also remain active and opportunistic in positioning ourselves to obtain non-dilutive capital through government grants and contracts," said Dr. Schaber in the release.
"Most notably, we are awaiting response from the Biomedical Advanced Research and Development Authority (BARDA) on our contract proposal to support the development of OrbeShield™ for the treatment of gastrointestinal acute radiation syndrome (GI ARS), which if awarded, has the potential to be a multi-million dollar contract."
Real buzz is being drawn around some of the company's biodefense drugs, which could be an important area for Soligenix in times of national security threats. Included in this unit is the potential multi-million dollar contract with BARDA to develop its radiation therapy, OrbeShield, whose main ingredient is also oral BDP. OrbeShield is being developed - with orphan drug and fast track status - for the treatment of GI ARS, which occurs after potential lethal dose radiation exposure. The company also has vaccine candidates against the ricin toxin, and anthrax.
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