SNGX: HyBryte™ Conditionally Accepted as Proprietary Name for SGX301…
NASDAQ:SNGX
Business Update
NDA Submission for SGX301 in 1H22
Soligenix, Inc. (NASDAQ:SNGX) is developing SGX301 for the treatment of cutaneous T cell lymphoma (CTCL). The company has successfully completed the Phase 3 FLASH (Fluorescent Light Activated Synthetic Hypericin) trial, which was a randomized, double blind, placebo controlled study that enrolled 169 patients with either Stage IA, IB, or IIA mycosis fungoides (the most common type of CTCL) (NCT02448381). Results from the trial showed that administration of SGX301 results in a rapid treatment effect, with efficacy seen as soon as six weeks following initiation of treatment (Cycle 1; P=0.04), a continued improvement in patient response following 12 weeks of treatment (Cycle 2; P<0.0001 compared to Cycle 1), and approximately 50% of patients receiving treatment for 18 weeks reported a 50% or greater reduction in response rates (Cycle 3; P<0.0001 compared to Cycle 1).
While we had expected a rolling NDA submission for SGX301 to begin in the second quarter of 2021, the company recently announced that following discussions with the FDA, and given delays in manufacturing caused in part by the ongoing pandemic, it will not pursue a rolling NDA submission for SGX301 at this time. Previously released guidance by the company had indicated that even with a rolling NDA submission the final module would not be submitted until the first half of 2022 with FDA approval in late 2022, thus there ultimately may not be much of a delay with FDA approval now expected in the first half of 2023.
Soligenix has decided to commercialize SGX301 on its own with a relatively small sales team of approximately 20 representatives. The following map shows the location of CTCL treatment centers in the U.S. The blue circles represent potential sales representative coverage areas, which cover the vast majority (>80%) of centers. The company estimates that there will be approximately $7 million in pre-launch expenses and <$10 million in sales and marketing expenses each year.
Based on current estimates, Soligenix forecasts peak sales of SGX301 in the U.S. of approximately $90 million. Competing products have generated similar sales revenues despite having inferior clinical profiles compared to SGX301. For example, VALCHOR® (mechlorethamine), which the company believes is a reasonable benchmark for what SGX301 may cost (~$3500/tube), had estimated sales of $40 million as an approved second-line treatment for CTCL while narrowband (nb) UVB therapy generated revenues of $50 million despite not being approved for treating CTCL. Included in the company’s estimates are an assumption that patients will use one tube or jar of SGX301 per month for at least four months, however this is subject to change based on real world use of SGX301.
The company is still evaluating payer coverage as part of the market access strategy, however based on the FLASH trial demographics the payer mix is likely to be approximately 50% commercial, 40% Medicare, and 10% Medicaid. Management is confident that the drug will be covered under Medicare Part D since it is self-administered.
The company recently announced that the FDA has conditionally accepted the proposed proprietary brand name and logo for SGX301 as HyBryte™, with final approval of the name being conditioned on FDA approval of the product candidate.
Lastly, Soligenix announced that HyBryte was awarded an “Innovation Passport” for the treatment of CTCL under the UK’s Innovative Licensing and Access Pathway (ILAP). ILAP is intended to accelerate the development and access to promising medicines and the innovation passport is the first step in the ILAP process. The next step is the development of a roadmap for regulatory and development milestones with the goal of early patient access in the UK. Additional benefits of ILAP included a 150-day accelerated assessment, a rolling review, and a continuous benefit risk assessment.
Financial Update
On May 17, 2021, Soligenix announced financial results for the first quarter of 2021. The company reported revenues of $0.1 million for the first quarter of 2021, compared to $0.9 million for the first quarter of 2020. The revenues are derived from government contracts and grants to support the development of RiVax® along with grants to support the development of SGX943, ThermoVax®, and CiVax®. R&D expenses for the first quarter of 2021 were $1.4 million, compared to $2.7 million for the first quarter of 2020. The decrease was primarily due to the completion of the CTCL and oral mucositis trials. G&A expenses for the first quarter of 2021 and 2020 were both $0.9 million.
Soligenix exited the first quarter of 2021 with approximately $30.5 million in cash and cash equivalents. As of May 12, 2021, Soligenix had approximately 40.1 million shares outstanding, and when factoring in stock options, warrants, and the potential convertible debt the fully diluted share count is approximately 52.0 million.
Conclusion
While we were a bit surprised to see that Soligenix will not be initiating a rolling NDA for SGX301 in the second quarter of 2021, it doesn’t appear that there will be too much of a delay in getting it approved compared to previously guided timelines. In addition, the company has a very strong balance sheet and there will be little to no budgetary impact caused by the change in the NDA submission. We’ve made a slight change to our model, pushing the approval of SGX301 into 2023, which has resulted in a slight decrease in our valuation to $6.00 per share.
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