Soligenix: A Huge Win for Two Contracts within One Week

Zacks Small Cap Research

By Grant Zeng, CFA

Another Government Contract Award for Soligenix

On Sept. 25, 2013, Soligenix, Inc. (OTC BB:SNGX) announced that it has been awarded a contract valued at up to $6.4 million by the US Department of Health and Human Service's National Institutes of Health (NIH) (specifically funded by the National Institute of Allergy and Infectious Diseases or NIAID).

The NIAID contract is awarded for the advanced preclinical development of OrbeShield™ (oral beclomethasone 17,21-dipropionate or oral BDP) as a biodefense medical countermeasure (MCM) for the treatment of gastrointestinal acute radiation syndrome (GI ARS).

This is a contract for three years which contains a one year base period, with two contract options that would extend the contract an additional year each. The total award will support the development activities necessary to evaluate OrbeShield™ as a potential MCM to treat GI ARS.

This is the second government contract Soligenix secured within one week. Last week, Soligenix was awarded a $26.3 million contract by the US Department of Health and Human Service’s Biomedical Advanced Research and Development Authority (BARDA). Both contracts are awarded for the advanced preclinical and manufacturing development of OrbeShield™ as a biodefense medical countermeasures (MCMs) for the treatment of gastrointestinal acute radiation syndrome (GI ARS).

The contracts are a huge win for Soligenix in our view. It not only provides non-dilutive funding for the development of the OrbeShield program for GI ARS, but more importantly validates the technology the company has developed over the years related to OrbeShield. Securing a highly competitive government contract provides important recognition as to the innovative quality and potential therapeutic impact of OrbeShield.

The total award will support the preclinical and manufacturing development activities necessary to successfully navigate and complete the FDA approval process for use of OrbeShield™ to treat GI ARS.

OrbeShield Advantages

OrbeShield™
is an oral immediate and delayed release BDP formulation that is being developed for the treatment of GI ARS (gastrointestinal acute radiation syndrome). OrbeShield in GI ARS has FDA Fast Track and Orphan Drug designations.

The GI tract is highly sensitive to ionizing radiation and the destruction of epithelial tissue is one of the first effects of radiation exposure. The rapid loss of epithelial cells leads to inflammation and infection that are often the primary cause of death in acute radiation injury. This is the same type of toxicity that occurs in Soligenix’s acute radiation enteritis clinical program with SGX201. As a result, there is a dual avenue of development for Soligenix, and OrbeShield™ is potentially a “dual use” compound, a desirable characteristic which is a specific priority of Biomedical Advanced Research and Development Authority (BARDA) for ARS and other medical countermeasure indications.

In preclinical studies, OrbeShield™ has demonstrated positive results in a canine GI ARS model which indicate that dogs treated with OrbeShield™ demonstrated statistically significant (p=0.04) improvement in survival with dosing at either 2 hours or 24 hours after exposure to lethal doses of total body irradiation (TBI) when compared to control dogs. The median survival was 100 days (p=0.04) when canines were treated 2 hours post exposure, 87 days (p=0.048) when canines were treated 24 hours post exposure. OrbeShield™ appears to significantly mitigate the damage to the GI epithelium caused by exposure to high doses of radiation.

Soligenix plans to conduct a follow-on replication dog study in 1H14 with results available also in 1H14. The FDA has cleared the IND application for OrbeShield™ for the mitigation of morbidity and mortality associated with GI ARS.

OrbeShield has other advantages beyond the efficacy seen in the canine model to date:

 
·         OrbeShield is an oral formulation, as opposed to injectable like many of the other biodefense vaccines and therapeutics; therefore, if a catastrophic event was to occur, the general population could dose themselves without the need for medical personnel to administer;

·         OrbeShield has demonstrated excellent safety profile in about 350 human subjects with the company’s oral BDP formulation;

·         cGMP Manufacturing process already at large commercial scale to produce sufficient quantities of OrbeShield, as needed.

 Furthermore, Soligenix’s OrbeShield is being developed under specific FDA regulatory guidelines called the “Animal Rule.” The Animal Rule provides that under certain circumstances, where it is unethical or not feasible to conduct human efficacy studies, the FDA may grant marketing approval based on adequate and well-controlled animal studies when the results of those studies establish that the drug is reasonably likely to produce clinical benefit in humans. Demonstration of the product's safety in humans is still required.

We think the “Animal Rule” means a lot for Soligenix, because this can accelerate the development of OrbeShield and other vaccines. Once approved by the FDA, Soligenix will have the opportunity to negotiate a stock-pile contract with the US government.  These stock-pile or procurement contracts have been very lucrative for other companies supplying similar drugs to the US government. 

A copy of the latest research report can be downloaded here >> 
 Soligenix Report

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