Nature of Business

6 Months Ended

Jun. 30, 2011

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1. Nature of Business

Basis of Presentation

Soligenix, Inc. (“Soligenix,” the “Company,” “we” or “us”) is a late-stage biopharmaceutical company that was incorporated in 1987 and is focused on developing products to treat the life-threatening side effects of cancer treatments and serious gastrointestinal diseases where there remains an unmet medical need, as well as developing several biodefense vaccines and therapeutics. The Company maintains two active business segments: BioTherapeutics and BioDefense. Soligenix’s BioTherapeutics business segment intends to develop orBec® (oral beclomethasone dipropionate, or oral BDP) and other biotherapeutic products, while the Company’s collaboration partner, Sigma-Tau Pharmaceuticals, Inc. (“Sigma-Tau”) will commercialize orBec® in North America and Europe, once approved. Soligenix’s BioDefense business segment intends to use RiVaxTM , its ricin toxin vaccine, to support development efforts with its heat stabilization technology, and SGX202, its radiation injury program, to convert from early stage development to advanced development with the assistance of ongoing government grant funding.

The Company currently generates revenues primarily from the National Institutes of Health (the “NIH”) under three active grants and from its license with Sigma-Tau, once milestones are achieved.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with FDA regulations, litigation, and product liability.

The consolidated financial statements are presented on the basis of accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted from this report, as is permitted by such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim financial information have read or have access to the audited financial statements for the preceding fiscal year. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Results for interim periods are not necessarily indicative of results for the full year. The Company has experienced significant quarterly fluctuations in operating results and it expects those fluctuations will continue.

Liquidity

As of June 30, 2011, the Company had cash and cash equivalents of $4,156,749 as compared to $7,451,714 as of December 31, 2010, representing a decrease of $3,294,965. As of June 30, 2011, the Company had working capital of $3,165,990 as compared to working capital of $6,101,103 as of December 31, 2010, representing a decrease of $2,935,113 or 48%. The decrease in cash and working capital was the result of cash used in operating activities over the six month period, offset by $255,000 in proceeds from issuances of common stock under the common stock purchase agreement with Fusion Capital Fund II, LLC (“Fusion Capital”). For the six months ended June 30, 2011, the Company’s cash used in operating activities was $3,506,317 as compared to $2,506,355 for the same period in 2010, representing an increase of $999,962. Based on our current rate of cash outflows, cash on hand, the timely collection of milestone payments under collaboration agreements, recently announced European territory license with Sigma-Tau which provided a $5,000,000 up front payment, proceeds from our grant-funded programs, and potential proceeds from the Fusion Capital transaction, we believe that our current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures into the first quarter of 2013.

Management’s business strategy can be outlined as follows:

·   complete the confirmatory Phase 3 clinical trial for orBec® in the treatment of acute gastrointestinal Graft-versus-Host disease (“GI GVHD”);

·   Identify a development and marketing partner for orBec® for territories outside of North America and Europe;

·   complete and report data from the Phase 1/2 clinical trial for SGX201 (oral BDP) in the prevention of acute radiation enteritis;

·   evaluate and/or initiate additional trials to explore the effectiveness of orBec® /oral BDP in other therapeutic indications involving inflammatory conditions of the gastrointestinal (“GI”) tract such as prevention of acute GVHD, treatment of chronic GI GVHD, radiation injury, and Crohn’s disease;

·   continue to secure additional government funding for each of our BioTherapeutics and BioDefense programs through grants, contracts and/or procurements;

·   use RiVaxTM to support development efforts with our heat stabilization technology to develop new heat stable vaccines in biodefense and infectious diseases with the potential to collaborate and/or partner with other companies in these areas;

·   acquire or in-license new clinical-stage compounds for development; and

·   explore other business development and acquisition strategies.

The Company’s plans with respect to its liquidity management include the following:

·   The Company has approximately $8.4 million in active grant funding still available to support its research programs through 2011 and beyond. The Company has also submitted additional grant applications for further support of its programs with various funding agencies, and has received encouraging feedback to date on the likelihood of additional funding.

·   The Company has approximately $7.4 million in available capacity under the Company’s Fusion Capital equity facility through October 2011. Although the Company has historically drawn down modest amounts under this agreement, the Company could draw more within certain contractual parameters;

·   The Company will seek non-dilutive funding through completion of partnerships for its orBec® /oral BDP programs in territories outside North America and Europe;

·   The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future.

·   The Company will pursue Net Operating Losses (“NOL”) sales in the State of New Jersey, pursuant to its Technology Business Tax Certificate Transfer Program. Based on the receipt of $245,810 in proceeds pursuant to NOL sales in 2010 and assuming its application is accepted, the Company expects to participate in the expanded program during 2011 and beyond; and

·   The Company may seek additional capital in the private and/or public equity markets to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.