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Monday, 28 January 2013
Soligenix shares fly higher on bullish Seeking Alpha article
Soligenix's (OTC:SNGX) stock soared this morning on the back of an article in the influential financial markets blog Seeking Alpha, which outlined the "reintroduction" of the company after a "devastating setback" in 2011.
Shares of the biopharmaceutical company were lately up 16 cents, or nearly 12% to $1.50, hitting a high of $1.65 earlier this morning. Its stock price has more than doubled in the last year.
The article focuses on Soligenix as an example of small biotech companies that get defined by lead product candidates, where "a setback or outright failure of the lead program can be catastrophic to the company's share price", with no residual value given to the rest of the pipeline.
"I believe investments in forgotten gems like these can be profitable as the valuations can become very attractive due to the over-reaction of the marketplace. The downside risk could be minimal and the upside gains could be substantial as the company's developments finally begin attracting investor attention once again," the writer notes.
In 2011, Soligenix's share price suffered due to its phase III clinical trial failure of orBec - an oral formulation of beclomethasone dipropionate (BDP) - for Graft-versus-Host disease.
Meanwhile, the company's leaders pushed forward developing the remainder of its platform.
"Soligenix has a unique business model that has allowed for a rather diversified development pipeline. It is comprised of 2 business segments, biotherapeutics and vaccines/biodefense.
"Two key points stand out upon close examination of the product candidates. First, there are 8 development programs. Of these, 6 are being developed either wholly or in part by NIH or FDA funding," the Seeking Alpha entry explains.
"For long-term investors this is key, as it means their investment dollars need only be utilized for 2 out of the 8 programs," it adds.
Soligenix's biotherapeutics product line is based on 2 active ingredients, SGX94 and oral BDP. SGX942 is being evaluated for its potential in treating oral mucositis in head and neck cancer, while oral BDP is the active ingredient in three different product candidates aside from orBec.
BDP is the main ingredient in SGX203 to treat pediatric Crohn's disease, SGX201 in the prevention of acute radiation enteritis, and in OrbeShield to treat gastrointestinal acute radiation syndrome (GI ARS).
Earlier in January, the development stage biopharmaceutical company announced that the Biomedical Advanced Research and Development Authority (BARDA) had called on Soligenix to submit a potential multi-year, multi-million dollar contract proposal to develop OrbeShield.
OrbeShield is being developed for the treatment of GI ARS, which occurs after toxic radiation exposure and involves several organ systems, notably the bone marrow, the gastrointestinal tract and later, the lungs.
The news came after the FDA granted orphan drug designation for OrbeShield, which Soligenix said gives the company a seven year term of market exclusivity for the drug upon final approval, and leverage to a wide range of financial and regulatory benefits.
Through its biodefense division, the company is also developing vaccines including RiVax, designed to protect against the lethal effects of exposure to ricin toxin and VeloThrax, a vaccine against anthrax exposure.
"The heavily government funded Vaccines/Biodefense portion of Soligenix's pipeline is proving to be potentially lucrative not only due to the government aid for their development, but also for the potential contracts that the company could obtain from the U.S. as well as foreign governments," the Seeking Alpha article says.