Fintech
Soligenix’s Upcoming Catalysts Highlight Growth Potential as it Sheds Light on its Commercialization of SGX301
New York, New York–(Newsfile Corp. – February 9, 2021) – PCG Digital: Soligenix (NASDAQ: SNGX) continues to build excitement for its SGX301 candidate following strong Phase 3 data and commercialization plans. The company recently held an investor webcast to further explain the company’s plans for commercializing its ground-breaking SGX301 candidate for the treatment of cutaneous T-cell lymphoma (CTCL).
Here are some key takeaways from the commercialization Q&A:
1. Soligenix will commercialize SGX301 in the U.S. on its own
During the presentation, the company noted that after conducting necessary due diligence and simulating different routes to commercialization, it was determined that a partnership would not be the best solution for shareholders. The licensing landscape and CTCL’s small, orphan market were the key drivers behind the decision. Considering that the average biopharmaceutical licensing deal, a Phase 3 licensor will typically retain no more than 40% of the product’s value, it did not make sense to give up so much value when the market is small and highly specialized to begin. However, Soligenix CEO Dr. Chris Schaber noted the company continues discussions regarding partnerships for ex-U.S. rights to SGX301.
The company has submitted its proposed brand name, HyBryte, and logo for SGX301 to the FDA for review and approval.
2. SGX301 marketing and sales force size and costs
CTCL’s small, orphan market will not require Soligenix to build out a massive marketing and sales force. The uniqueness and ability to serve an unmet medical need are the key selling points in the CTCL treatment space. As a result, Soligenix estimates the need for a sales team consisting of around 20 people. The company estimates that pre-launch costs will come in around $7 million, with annual sales and marketing costs coming in below $10 million.
3. Ample cash reserves to carry SGX301 through commercialization
During the webcast, management was asked if the company’s current cash reserves were sufficient enough to carry SGX301 through the commercialization process. After the previously-announced financing deal with Pontifax, the company continues to be well-capitalized for the commercialization process. It was revealed that the company currently maintains a cash balance of in excess of $20 million and also has a $20 million ATM with B. Riley.
“Based on this strategic capital structure, we are well-positioned for success and really have no need for a large capital raise anytime soon,” noted CFO Jonathan Guarino during the webcast.
4. Daavlin partnership for companion light device
On January 7, 2021, Soligenix first announced its strategic partnership with Daavlin, an Ohio-based company with a 40-year history in phototherapy. Daavlin has an extensive product line that is delivered to healthcare providers worldwide.
Under the strategic partnership, Daavlin will supply and distribute a commercially-ready companion light device that is critical to the success of SGX301 in treating CTCL. The companion light device is a derivative of an existing, 510K-approved product. Unlike other phototherapies, Daavlin’s light device does not require a dedicated room or any complex wiring. In fact, the device can be stored and moved out of the way when not in use.
The Daavlin companion device will be sold directly to physicians initially, as treatments will be conducted in a doctor’s office. However, Soligenix management notes that the company does intend to offer a house-use version of the Daavlin device down the road. However, it is important to note that Daavlin’s UV devices are already approved for home use.
5. Soligenix estimates peak U.S. sales of SGX301 to hit $90 million
The pricing of SGX301 continues to be evaluated and will not be finalized until closer to the U.S. launch. However, management did note that an existing, inferior treatment, Valchor, was being considered as a benchmark price. Valchor’s price is roughly $3,500 per WAC/tube and generates estimated annual sales of around $40 million.
Given the unique nature of SGX301 and its ability to serve as an early-stage treatment for CTCL, the company primary market research has shown that four out of five dermatologists are likely to prescribe the product, if/when approved. With Valchor as a benchmark, Soligenix estimates SGX301 will have peak U.S. net annual sales that exceed $90 million.
SGX301 Commercialization Timeline with Multiple Near Term Catalysts Anticipated
As SGX301 begins its commercialization phase, there will be several important milestones over the coming months that could serve to be significant catalysts for Soligenix. The first milestone to watch for will be the initial submission of the rolling New Drug Application (NDA). The NDA, along with the completed Clinical Study Report, is estimated to be handed over to the FDA during the second quarter of 2021.
Under the Prescription Drug User Fee Act, or PDUFA, the FDA is required to review new drug applications within a 10-month period. If the new drug has been given fast track designation, the FDA deadline to review the application is only six months.
SGX301 has already been granted fast track designation and orphan drug status. As a result, the FDA will have six months from the date that Soligenix officially files the NDA. Just as an example, this means that even if the NDA is filed at the end of June, a review will take place around the end of the year. The official U.S. commercial launch is estimated to occur during the second half of 2022.
Aside from the rolling NDA filing, resulting FDA review, and official commercial launch in 2022, investors will have a few other potential catalysts in the shorter-term. Soligenix announced that it has submitted abstracts to present on SGX301 to the American Academy of Dermatology Meeting in March 2021 and to the Society for Investigative Dermatology Meeting in May 2021. Management notes its plans to submit its manuscript to the JAMA Dermatology journal this year as well.
Zack’s Research Updates Soligenix with a Positive Report
Two days after Soligenix’s webcast, Zack’s Small-Cap Research issued an updated research report on the company.
Zack’s notes, that based on its probability-adjusted discounted cash flow (DCF) model (which estimates future revenues from SGX301, CiVax, etc.), there is significant potential price appreciation for SNGX.
“The webinar on SGX301 provided a comprehensive overview of the company’s plans for commercializing SGX301, including encouraging data from primary market research with physicians and initial revenue projections. As discussed, there are a number of upcoming milestones for the company as it relates to SGX301, with perhaps the most important being the submission of the rolling NDA, which should begin in the second quarter of 2021.”
The full report can be found here.
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