XML 19 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Nature of Business
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Nature of Business

Note 1. Nature of Business


Basis of Presentation


Soligenix, Inc. (the “Company”) is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics (formerly “BioTherapeutics”) and Public Health Solutions (formerly “Vaccines/BioDefense”).


The Company’s Specialized BioTherapeutics business segment is developing a novel photodynamic therapy (SGX301) utilizing topical synthetic hypericin activated with safe visible fluorescent light for the treatment of cutaneous T-cell lymphoma (“CTCL”), its first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).


The Company’s Public Health Solutions business segment includes active development programs for RiVax®, its ricin toxin vaccine candidate and SGX943, a therapeutic candidate for antibiotic resistant and emerging infectious disease, and vaccine programs targeting both filoviruses (such as Marburg and Ebola) and coronaviruses. The development of the vaccine programs is currently supported by the heat stabilization technology, known as ThermoVax®. To date, this business segment has been supported with government grant and contract funding from the National Institute of Allergy and Infectious Diseases (“NIAID”), the Biomedical Advanced Research and Development Authority and the Defense Threat Reduction Agency (“DTRA”).


The Company generates revenues under government grants primarily from the National Institutes of Health (“NIH”) and government contracts from NIAID. The Company is currently developing RiVax® under a NIAID contract of up to $21.2 million over six years, and a one-year NIH grant of $150,000 in support of its SGX942 pediatric program. In addition, the Company has a subcontract of approximately $700,000 from a NIAID grant over five years for its thermostabilization technology, and a DTRA subcontract of approximately $600,000 over three years for SGX943. The Company will continue to apply for additional government funding.


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 the United States (“U.S.”) Food and Drug Administration (the “FDA”) regulations, and other regulatory authorities, litigation, and product liability. Results for the three and six months ended June 30, 2020 are not necessarily indicative of results that may be expected for the full year.


Liquidity


In accordance with Accounting Standards Codification 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of June 30, 2020, the Company had an accumulated deficit of $185,883,709. During the six months ended June 30, 2020, the Company incurred a net loss of $10,358,097 and used $4,338,530 of cash in operating activities. The Company expects to continue to generate losses in the foreseeable future. The Company’s liquidity needs will be largely determined by the budgeted operational expenditures incurred in regards to the progression of its product candidates. The Company’s plans to meet its liquidity needs primarily include its ability to control the timing and spending on its research and development programs and raising additional funds through potential partnership and/or financings. Based on the Company’s approved operating budget, current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, and proceeds available from the At Market Issuance Sales Agreement (“FBR Sales Agreement”) with B. Riley FBR Inc. (“FBR”), management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next 12 months from issuance of the financial statements.


As of June 30, 2020, the Company had cash and cash equivalents of $11,168,305 as compared to $5,420,708 as of December 31, 2019, representing an increase of $5,747,597 or 106%. As of June 30, 2020, the Company had working capital of $5,992,411 as compared to working capital of $1,181,249 as of December 31, 2019, representing an increase of $4,811,162 or 407%. The increase in cash and working capital was primarily related to the management of the Company’s expenses, and proceeds received from the utilization of the FBR Sales Agreement and warrant exercises during the six months ended June 30, 2020.


Management’s business strategy can be outlined as follows:


  ● Following positive primary endpoint topline analysis for the Phase 3 clinical trial of SGX301, as well as further statistically significant improvement in response rates with longer treatment (12 weeks compared to 6 weeks), continue to explore partnership and commercialization while pursuing New Drug Application filing;

  ● Following positive interim analysis and enrollment completion report final topline results in the Company’s pivotal Phase 3 clinical trial of SGX942 for the treatment of oral mucositis in head and neck cancer;

  ● Continue development of RiVax® in combination with the Company’s ThermoVax® technology to develop a new heat stable vaccine in biodefense with NIAID funding support;
     
  ● Continue development of our therapeutic SGX943 and our vaccine programs targeting both filoviruses (such as Marburg and Ebola) and coronaviruses with DTRA and NIAID funding support;

  ● Continue to apply for and secure additional government funding for each of the Company’s Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements;

  ● Pursue business development opportunities for the Company’s pipeline programs, as well as explore merger/acquisition strategies; and

  ● Acquire or in-license new clinical-stage compounds for development.

The Company’s plans with respect to its liquidity management include, but are not limited to, the following:


  ● The Company has up to $1.54 million in active government contract and grant funding still available as of June 30, 2020, to support its associated research programs through 2020 and beyond, provided the federal agencies exercise all options and do not elect to terminate the contracts or grants for convenience. The Company plans to submit additional contract and grant applications for further support of its programs with various funding agencies.

  ● 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 continue to pursue Net Operating Loss (“NOL”) sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if available.

  ● The Company plans to pursue potential partnerships for pipeline programs; however, there can be no assurances that it can consummate such transactions.

  ● The Company has up to $1.5 million remaining from the FBR Sales Agreement as of August 10, 2020 under the prospectus supplement filed April 10, 2020.
     
  ● The Company has been granted a Paycheck Protection Program Loan through the financial stimulus packages afforded by both the federal and state governments based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19.  The Company was granted a total of $417,830 from JPMorgan Chase Bank, N.A. to fund the Company’s payroll costs and other expenses allowed by the program.  The Company will continue to explore and evaluate additional funding options through financial stimulus packages afforded by both the federal and state governments based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19 as they become available.
     
  ● 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 evaluating additional equity/debt financing opportunities on an ongoing basis 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.