Subject : BMC: Soligenix, Inc. (SNGX.OB: Buy, $1.50 Target Price) - A Complete S olution for the Management of Graft-Versus-Host Disease; Initiating Co verage with a Buy Rating
Someone should post to the Biotech Values Board I can't do it
Date : Tue, Aug 03, 2010 07:30 AM
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INITIATION REPORT Soligenix, Inc. (SNGX.OB/OTC)
August 3, 2010
Jonathan Aschoff, Ph.D., 212-702-6652
aschoffj@bmur.com
A Complete Solution for the Management of Graft-Versus-Host Disease; Initiating Coverage with a Buy Rating
Initiating Coverage at Buy
Target Price:$1.50
Investment Summary
§We are initiating coverage of Soligenix Inc. with a Buy rating and a one-year target price of $1.50. We arrive at a value of $1.50 per share using a discounted cash flow valuation based on revenue generated from orBec sales for Graft-Versus-Host disease (treatment and prophylaxis), and the company’s projected mid-2011 cash balance. There are currently no FDA-approved treatments or prophylactic agents for Graft-Versus-Host disease (GVHD), and orBec has the potential to satisfy a critical unmet medical need.
§GVHD represents a critical unmet medical need.There are about 12,000 allogeneic hematopoetic cell transplants (HCT) in the U.S. and the EU each year. Of these 24,000 patients worldwide, about two-thirds develop GVHD. About 75% of GVHD patients suffer from grade 2 GI-GVHD. The current first-line treatment for GI-GVHD is prednisone, a glucocorticoid. Other drugs are used off-label to treat the disease, but are associated with several toxicities. As such, a safe and effective treatment is required for this critical unmet medical need.
§Soligenix has already completed a Phase 3 trial. The trial failed to meet its primary endpoint: time to treatment failure through day 50. However, the trial met most of its secondary endpoints. Specifically, treatment failure rate at day 80 was highly statistically significant (p=0.005). There was also a significant reduction of mortality associated with orBec treatment at 200 days post-HCT. Soligenix is now conducting a confirmatory Phase 3 trial under a Special Protocol Assessment (SPA) from the FDA. It is a replica of the first pivotal trial with a key difference – the secondary endpoint in the first pivotal trial, which achieved statistical significance (p=0.005), will serve as the primary endpoint in the confirmatory Phase 3 trial. We believe that the confirmatory trial will likely meet its endpoint with the same level of statistical significance that was observed in the first pivotal trial. We look forward to top-line results from this trial in 1H11.
§We estimate the global market opportunity for orBec to be around $450 million. Soligenix has partnered with Sigma-Tau and will earn a 35% royalty on sales in the U.S., and we assume a similar partnership for ex-U.S. commercialization. In addition to the Phase 3 acute GVHD trial, Soligenix is exploring the use of orBec in GVHD prophylaxis and chronic GVHD. Given the positive results observed heretofore in acute GVHD, we believe that orBec will likely also demonstrate similar results in the prophylactic setting and in the chronic form of the disease. The potential revenue from orBec sales in the U.S. and EU is about $450 million. With a potential peak GVHD market penetration of 65%, orBec has the potential to generate about $300 million in sales.
Price $0.24
52-Week High/Low
$0.38 - 0.18
Shares Outstanding (mm)
215.81
Market Cap. (mm)
$50.74
Average Daily Volume
422,439.00
