Most traders know the rules – buy low, sell high. But this is often hard to do because it’s difficult to find an oversold stock that has a compelling story. However, take a look at Soligenix, Inc. (NASDAQ: SNGX). This is a small-cap biotech trading on the Nasdaq that is showing promising R&D advances, huge revenue growth, a strong balance sheet, and a truly tiny float.
The stock is up 10% over the past month, after sliding 75% over the prior year. Volume is growing as well, with transaction levels up more than 110% above the longer-term average in recent action. This jump in volume is very important given the tiny float in play (just 6.8 million shares). Why is this new money flowing in? The company’s recent catalysts tell that story, and we will get to them below. But first, we want to take a bird’s eye view of the company.
Soligenix, Inc. (NASDAQ: SNGX) is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need.
SNGX has a significant trove ($4.2M) of cash on the books, which must be weighed relative to virtually no total current liabilities. In other words, the current balance sheet is impressive here. In addition, the company is pulling in trailing 12-month revenues of $5.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 71.5%. That suggests a company perhaps worth significantly more than its current $23 million market capitalization.
The company’s BioTherapeutics business segment is developing SGX301 as a novel photodynamic therapy utilizing safe visible light for the treatment of cutaneous T-cell lymphoma, our first-in-class innate defense regulator (IDR) 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 (GI) disorders characterized by severe inflammation including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).
Its Vaccines/BioDefense business segment includes active development programs for RiVax, a ricin toxin vaccine candidate, OrbeShield, a GI acute radiation syndrome therapeutic candidate and SGX943, a therapeutic candidate for antibiotic resistant and emerging infectious disease.
The development of the company’s vaccine programs incorporates the use of its proprietary heat stabilization platform 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) and the Biomedical Advanced Research and Development Authority (BARDA).
A Turnaround Underway?
As noted above, the stock has finally started to see some promising action, and that action is coming on a clear increase in trading volume, pushing shares higher on a very tight float. To drive this action, the company just announced that its revenues for the quarter ended June 30 were $1.7 million as compared to $1.0 million for the quarter ended June 30, 2017.
Those revenues included payments on a contract in support of RiVax, in addition to the grants received to support the development of SGX301 for the treatment of CTCL and SGX942 for the treatment of oral mucositis in head and neck cancer, as well as the subaward from the Ebola collaboration with the University of Hawaii.
In addition, the company has indicated that both of its critical Phase 3 studies are on track and new subjects are being enrolled. That suggests new potential for positive announcements from the company over the near term.
Christopher J. Schaber, PhD, President and Chief Executive Officer of Soligenix stated, “Our primary focus remains the quality execution of our two pivotal Phase 3 clincial programs. We are continuing to enroll patients in our double-blind, placebo-controlled Phase 3 study for the treatment of cutaneous T-cell lymphoma (CTCL) with SGX301 (synthetic hypericin), where we anticipate the interim analysis in the October 2018 timeframe and final topline results in the first half of 2019. We are also advancing our double-blind, placebo-controlled, multinational Phase 3 clinical trial of SGX942 (dusquetide) for the treatment of oral mucositis in patients with head and neck cancer receiving chemoradiation therapy, with the addition of a number of European clincial study sites that are expected to have a positive impact on patient enrollment. We currently anticipate final results for this pivotal study in the second half of 2019.”
SNGX presents a lot of compelling factors and may be a very interesting opportunity for speculators in the biotech space.