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Here's Our Take On Soligenix, Inc. (NASDAQ:SNGX)

Here's Our Take On Soligenix, Inc. (NASDAQ:SNGX)
Written by
Chris Sandburg
Published on
July 18, 2017
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Soligenix, Inc. (NASDAQ:SNGX) is an early runner this week. The company gained close to 30% on Monday, running on the back of a 46X multiple of its average daily volume. The appreciation came on the back of news hitting press that H.C. Wainwright had initiated coverage of the stock and – in doing so – had stamped the company with a Buy rating and a price target of $11 a share. An $11 target represents a more than 330% premium to current pricing (and that's after the gains), suggesting there's plenty on the books for the next twelve months or so from a catalyst perspective.Here's our take on the coverage and – specifically – the drivers Wainwright is looking at as justification for its valuation.For those new to the stock, the Soligenix is a biotechnology play that's got a pretty diverse pipeline of assets under development. It's in this diversity that a large portion of the above-noted valuation is rooted – the company has multiple shots on goal, all of which are in markets that could generate multiples of its current market capitalization in annual revenues if they hit.Top down, Soligenix is split into two divisions – a biotherapeutics segment and a vaccines/biodefense segment. The first one goes after orphan designations (again, this is key to a bull thesis) in, primarily, oncology and inflammation type areas. The second develops vaccines and therapeutics for military and civilian applications in the areas of ricin exposure, acute radiation syndrome and emerging and antibiotic resistant infectious diseases.So where are the catalysts coming from?Near term (or, at least, nearest term), there are three major catalysts, all of which fall under the biotherapeutics umbrella. Each is a topline readout from a phase III investigation, one looking at a drug called SGX301 in an indication of cutaneous T-cell lymphoma; a second looking at a drug called SGX492 in an indication of oral mucositis in head & neck cancer; and a looking at a drug called SGX203 in an indication of pediatric Crohn’s disease.The first of these is the real driver near term, with the study well underway and the data set to support an NDA submission for the drug in the lymphoma indication in the US.Looking at the vaccine segment, major catalysts come primarily next year. There are a few preclinical and animal model data sets set to hit press this year, but these are unlikely to inject any real degree of momentum into the company's share price. Next year, there's phase I/II data from a human trial of both the company's ThermoVax asset and its RiVax asset set to hit press. Both of these releases have the potential to bring with them some upside momentum, with this potential rooted in the implications for the company from a government contract perspective. There's big money to be made supplying the US government with stockpile products. If Soligenix can prove that these two products are safe (as would be the case if the first part of the phase I/II data hits press as positive) then it's puts itself in line for said contracts (it's actually already secured some, as per this presentation) and – in turn – has the potential to push programs forward without falling foul of the dilutive risk that generally comes as part and parcel of this space.Cash on hand at last count (March 31, 2017) came in at $7.14 million. There's no debt on the books and the company burns around $2 million a quarter at current rates. This gives Seoligenix a runway through somewhere in the region of the early second quarter next year, at which point we'll probably see some dilution.Bottom line: plenty of catalysts over the next year or two and the potential to score some government capital injections along the way. No debt, a reasonable runway (for a company of this size) and some favorable sentiment in place right now. Far from risk-free and a bit of a slow burner, but a potential runner if things fall into place.We will be updating our subscribers as soon as we know more. For the latest updates on SNGX, sign up below!Image courtesy of Ken via FlickrDisclosure: We have no position in SNGX and have not been compensated for this article.

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