Soligenix, Inc. (Nasdaq: SNGX) received a positive update from Zacks SCR, highlighting the company’s update of the Cycle 3 cohort from its Phase 3 SGX301 trial targeting cutaneous T-cell lymphoma (CTCL). To make his case, Zacks SCR analyst David Bautz, Ph.D., noted important takeaways for investors, including that SGX301 is a safe and well-tolerated CTCL treatment that shows positive effects in a relatively short period of time. He also noted the drugs increasing level of efficacy with continued use.
He points to those two criteria being critical advantages to the drug since CTCL is a long-lasting condition. Moreover, he believes the safety and tolerability profile is likely to be attractive to prescribing physicians who recognize that SGX301 has shown limited side effects, unlike other CTCL therapies that bring potentially serious side effects, particularly with extended use. He also suggests that with several advantages now supported by a robust set of clinical data, SGX301 has the opportunity to emerge as a front-line therapy to treat CTCL for a large number of patients.
Getting the drug to market is the next step. To reach that milestone, it’s expected that the company will immediately focus on commercialization opportunities, including potential partnerships, and prepare a New Drug Application in the first half of 2021.
Zacks SCR went further to explain their rationale for its bullish sentiment.
Zacks SCR Suggests $15 Value From SGX301
Zacks SCR suggested that investors are missing a compelling value opportunity for the SGX301 asset alone. Their models currently propose a $15 price target for the drug, and that’s without any contribution from its other late-stage drug to treat oral mucositis (OM) in patients with head and neck cancer. Results from that SGX942 trial are expected before the end of 2020.
Thus, they say that despite the shares not responding favorably to the positive data for SGX301 in CTCL, they believe the stock is exceptionally undervalued at its current price, even if SGX301 was the only product in development. They added that at the stock’s current depressed price, an investment in Soligenix offers a very favorable risk/reward profile.
The thesis behind that bullish sentiment is that Soligenix published Cycle 3 data that showed continued optional treatment with SGX301 (synthetic hypericin) across all lesions during the compassionate use, safety portion of its FLASH (Fluorescent Light Activated Synthetic Hypericin) trial (Cycle 3) continued to significantly improve responses and remained safe and well-tolerated over six months. The data strengthen the positive SGX301 primary endpoint treatment response demonstrated in Cycle 1.
According to a recent study update, SGX30l treatment in Cycle 3 further improved response rates, with 49% of patients who elected to receive SGX301 for a total of 18 weeks demonstrating a 50% or greater reduction in their combined CAILS (Composite Assessment of Index Lesion Score) lesion score compared to 40% of patients showing such a reduction after completing 12 weeks of treatment in Cycle 2 (p=0.046).
The company also pointed out that continued analysis of results from the protocol mandated efficacy cycles (Cycles 1 and 2) of the study revealed that 12 weeks of treatment (Cycle 2) with SGX301 is equally effective on both patch (response 37%, p=0.0009) and plaque (response 42%, p
Importantly, SGX301 continued to be very well tolerated, benefiting from the lack of hypericin circulation in the bloodstream after targeted topical application to the lesions, as well as the use of visible light.
A Better Option To Treat CTCL
Also important to note is that along with SGX301’s rapid response time and safety profile, the patch and plaque data from the study are extremely compelling. The results compare especially well to current treatments for CTCL that are generally less effective against plaques and deeper lesions, similar to the problem observed in treating psoriasis.
Moreover, the ability of SGX301 to target both patches and thicker plaques in CTCL is an essential feature of the therapy and, if approved, can benefit patients, regardless of their presentation. Soligenix also noted that the Cycle 3 results are consistent with the positive findings highlighted in a recently reported case study of folliculotropic mycosis fungoides, a hard to treat variant of CTCL where lesions are associated with the hair follicles deep in the skin and more resistant to phototherapy.
The Zacks SCR analysis supports the company’s belief that SGX301 has the potential to be a valuable and life-changing therapy for patients suffering from CTCL, which targets an orphan disease and area of unmet medical need. That, too, adds value by protecting the asset after marketing approval.
Based on the already announced data, investors may indeed be under-appreciating a compelling piece to the company’s pipeline valuation. And, with an additional potential catalyst from the announcement of top-line final results from its other pivotal Phase 3 study of SGX942 expected in less than three months, both drugs’ combined market potential makes the current market-cap multiple appreciably lower than other late-stage Phase 3 companies.
Markets eventually correct, and in this case, that reward is merited.
Read more about Soligenix at https://get.ceo3in60.com/soligenix-bio/
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