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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Fiscal Year Ended December 31, 2021
For the transition period from ____________ to ____________
Commission File No. 000-16929
SOLIGENIX, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
29 EMMONS DRIVE, SUITE B-10
PRINCETON, NJ
(Address of principal executive offices)
41-1505029
(I.R.S. Employer
Identification Number)
08540
(Zip Code)
(609) 538-8200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class
Common Stock, par value $0.01 per share
Trading Symbol (s)
SNGX
Name of each exchange on which registered
The Nasdaq Capital Market
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Non-accelerated filer
☐
⌧
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☒
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of the common stock held by non-affiliates of the registrant was $39,976,044 (assuming, for this purpose, that executive
officers, directors and holders of 10% or more of the common stock are affiliates), based on the closing price of the registrant’s common stock as reported
on The Nasdaq Capital Market on June 30, 2021.
On March 22, 2022, there were 42,954,091 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: None.
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SOLIGENIX, INC.
ANNUAL REPORT ON FORM 10-K
For the Year Ended December 31, 2021
Table of Contents
Item
Cautionary Note Regarding Forward-Looking Statements
Description
Part I
1.
1A.
1B.
2.
3.
5.
6.
7.
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
14.
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Part II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accountant Fees and Services
Part III
Exhibits and Financial Statement Schedules
15.
Signatures
Consolidated Financial Statements
Part IV
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F-1
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, that reflect our current expectations about our future results, performance, prospects and
opportunities. These forward-looking statements are not guarantees of future performance and are subject to significant
risks, uncertainties, assumptions and other factors, which are difficult to predict and may cause actual results to differ
materially from those expressed in, or implied by, any forward-looking statements. The forward-looking statements within this
report may be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “may,” “would,” “will” and other
similar expressions. However, these words are not the exclusive means of identifying these statements. Statements that are
not historical facts are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections for our
business and the industry and markets related to our business and are forward-looking statements.
Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important
factors which may affect these actual outcomes and results include, without limitation:
● uncertainty as to whether our product candidates will be sufficiently safe and effective to support regulatory
approvals;
● uncertainty inherent in developing therapeutics and vaccines, and manufacturing and conducting preclinical and
clinical trials;
● our ability to obtain future financing or funds when needed, either through the raising of capital, the incurrence of
convertible or other indebtedness or through strategic financing or commercialization partnerships;
● that product development and commercialization efforts will be reduced or discontinued due to difficulties or delays
in clinical trials or a lack of progress or positive results from research and development efforts;
● maintenance and progression of our business strategy;
● the possibility that our products under development may not gain market acceptance;
● our expectations about the potential market sizes and market participation potential for our product candidates may
not be realized;
● our expected revenues (including sales, milestone payments and royalty revenues) from our product candidates and
any related commercial agreements of ours may not be realized;
● the ability of our manufacturing partners to supply us or our commercial partners with clinical or commercial supplies
of our products in a safe, timely and regulatory compliant manner and the ability of such partners to timely address
any regulatory issues that have arisen or may arise in the future;
● competition existing today or that may arise in the future, including the possibility that others may develop
technologies or products superior to our products;
● the effect that global pathogens could have on financial markets, materials sourcing, service providers, patients,
clinical study sites, governments and population (e.g. Coronavirus Disease 2019 (“COVID-19”)); and
● other factors, including those “Risk Factors” set forth under Part I, Item 1A. “Risk Factors” in this Annual Report.
Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances occurring subsequent to the filing of this Form 10-K with the
United States (“U.S.”) Securities and Exchange Commission (“the SEC”) or for any other reason. You should carefully review
and consider the various disclosures we make in this report and our other reports filed with the SEC that attempt to advise
interested parties of the risks, uncertainties and other factors that may affect our business.
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Item 1. Business
PART I
This Annual Report on Form 10-K contains statements of a forward-looking nature relating to future events or our future
financial performance. These statements are only predictions and actual events or results may differ materially. In evaluating
such statements, you should carefully consider the various factors identified in this report that could cause actual results to
differ materially from those indicated in any forward-looking statements, including those set forth in “Risk Factors” in this
Annual Report on Form 10-K. See “Cautionary Note Regarding Forward Looking Statements.”
Our Business Overview
We are a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases
where there is an unmet medical need. We maintain two active business segments: Specialized BioTherapeutics and Public
Health Solutions.
Our Specialized BioTherapeutics business segment is developing and moving toward potential commercialization of
HyBryte™ (a proposed proprietary name of HyBryte™ or synthetic hypericin), a novel photodynamic therapy (“PDT”),
utilizing topical synthetic hypericin activated with safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”).
With a successful Phase 3 study completed, regulatory approval is being sought and commercialization activities for this
product candidate are being advanced initially in the U.S. Development programs in this business segment also include
expansion of synthetic hypericin (SGX302) into psoriasis, our first-in-class innate defense regulator (“IDR”) technology,
dusquetide (SGX942) for the treatment of inflammatory diseases, including 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).
Our Public Health Solutions business segment includes active development programs for RiVax®, our ricin toxin vaccine
candidate and SGX943, our therapeutic candidate for antibiotic resistant and emerging infectious disease and our vaccine
programs targeting filoviruses (such as Marburg and Ebola) and CiVax™, our vaccine candidate for the prevention of
COVID-19 (caused by SARS-CoV-2). The development of our vaccine programs incorporates the use of our 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”), the
Biomedical Advanced Research and Development Authority (“BARDA”) and the Defense Threat Reduction Agency
(“DTRA”).
An outline of our business strategy follows:
● Following positive primary endpoint results for the Phase 3 FLASH (Florescent Light Activated Synthetic Hypericin)
clinical trial of HyBryte™ in CTCL as well as further statistically significant improvement in response rates with
longer treatment (18 weeks compared to 12 and 6 weeks of treatment), pursue a New Drug Application (“NDA”)
filing and commercialization in the U.S. while continuing to explore ex-U.S. partnership.
● Expand development of synthetic hypericin under the research name SGX302 into psoriasis following the positive
Phase 3 FLASH study and positive proof-of-concept demonstrated in a small Phase 1/2 pilot study in mild-to-
moderate psoriasis patients.
● Following feedback from the United Kingdom (“UK”) Medicines and Healthcare products Regulatory Agency
(“MHRA”) that the SGX942 Phase 3 DOM-INNATE (Dusquetide treatment in Oral Mucositis – by modulating
INNATE Immunity) clinical trial, having missed its primary endpoint, would not support a potential marketing
authorization and that a second Phase 3 study would be needed, analyze the DOM-INNATE study full dataset and
design a second Phase 3 study; attempt to identify a potential partner(s) to continue this development program.
● Continue development of our therapeutic SGX943 and our heat stabilization platform technology, ThermoVax®, in
combination with our programs for RiVax® (ricin toxin vaccine), CiVax™ (COVID-19 vaccine) and filovirus vaccines
(targeting Ebola, Sudan, and Marburg viruses), with U.S. government funding support.
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● Continue to apply for and secure additional government funding for each of our Specialized BioTherapeutics and
Public Health Solutions programs through grants, contracts and/or procurements.
● Pursue business development opportunities for our pipeline programs, as well as explore all strategic alternatives,
including but not limited to merger/acquisition strategies.
● Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with
existing pipeline compounds for development.
Corporate Information
We were incorporated in Delaware in 1987 under the name Biological Therapeutics, Inc. In 1987, we merged with Biological
Therapeutics, Inc., a North Dakota corporation, pursuant to which we changed our name to “Immunotherapeutics, Inc.” We
changed our name to “Endorex Corp.” in 1996, to “Endorex Corporation” in 1998, to “DOR BioPharma, Inc.” in 2001, and
finally to “Soligenix, Inc.” in 2009. Our principal executive offices are located at 29 Emmons Drive, Suite B-10, Princeton,
New Jersey 08540 and our telephone number is (609) 538-8200.
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Our Product Candidates in Development
The following tables summarize our product candidates under development:
Specialized BioTherapeutics Product Candidates*
Soligenix Product Candidate
HyBryte™
Therapeutic Indication
Cutaneous T-Cell Lymphoma
SGX302
Mild-to-Moderate Psoriasis
SGX942
Oral Mucositis in Head and Neck
Cancer
SGX203†
Pediatric Crohn’s disease
3
Stage of Development
trial
Phase
trial completed; demonstrated
Phase 2
significantly higher response rate compared to
placebo;
completed;
3
demonstrated statistical significance in primary
(Cycle 1) and
endpoint
in
improvement
demonstrated continued
treatment response with extended treatment in
April 2020 (Cycle 2) and October 2020 (Cycle
3); NDA filling planned for 2H 2022
in March 2020
Positive proof-of-concept demonstrated in a
small Phase 1/2 pilot study; Phase 2a study
anticipated 2H 2022
Phase 2
trial completed; demonstrated
significant response compared to placebo with
positive long-term (12 month) safety also
trial
reported; Phase 3 clinical
results
announced December 2020:
the primary
endpoint of median duration of severe oral
mucositis (“SOM”) did not achieve the pre-
specified criterion for statistical significance
(p≤0.05); although biological activity was
observed with a 56% reduction in the median
duration of SOM from 18 days in the placebo
group to 8 days in the SGX942 treatment
group; analyze full dataset from Phase 3 study
and design a second Phase 3 clinical trial
Phase 1/2 clinical trial completed; efficacy
data, pharmacokinetic(PK)/ pharmacodynamic
(PD) profile and safety profile demonstrated;
Phase 3 clinical trial initiation contingent upon
additional
through
partnership
funding,
such
as
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Public Health Solutions*†
ThermoVax®
Thermostability of vaccines for Ricin toxin,
Ebola, Marburg and SARS- CoV-2 (COVID-19)
viruses
RiVax®
Vaccine against Ricin Toxin Poisoning
Pre-clinical
Phase 1a and 1b trials completed, safety and
neutralizing
protection
demonstrated; Phase 1c trial initiated December
2019, closed January 2020
antibodies
for
SGX943
CiVax™
Therapeutic against Emerging
Infectious Diseases
Vaccine against COVID-19
Pre-clinical
Pre-clinical
Timelines subject to potential disruption due to COVID-19 outbreak.
*
† Contingent upon continued government contract/grant funding or other funding source.
Specialized BioTherapeutics Overview
Synthetic Hypericin
Synthetic Hypericin is a potent photosensitizer that is topically applied to skin lesions, taken up by cutaneous T-cells and
then activated by safe visible light. Hypericin is also found in several species of Hypericum plants, although this active
moiety is chemically synthesized by a proprietary manufacturing process and not extracted from plants. Importantly,
hypericin is optimally activated with visible light thereby avoiding the negative consequences of ultraviolet (“UV”) light. Other
light therapies using UVA or UVB light can result in serious adverse effects including secondary skin cancers.
Combined with photoactivation, in clinical trials synthetic hypericin has demonstrated significant anti-proliferative effects on
activated normal human lymphoid cells and inhibited growth of malignant T-cells isolated from CTCL patients. In both
settings, it appears that the mode of action is an induction of cell death in a concentration as well as a light dose-dependent
fashion. These effects appear to result, in part, from the generation of singlet oxygen during photoactivation of hypericin.
Synthetic hypericin is one of the most efficient known generators of singlet oxygen, the key component for phototherapy. The
generation of singlet oxygen induces necrosis and apoptosis in adjacent cells. The use of topical synthetic hypericin coupled
with directed visible light results in generation of singlet oxygen only at the treated site. We believe that the use of visible
light (as opposed to cancer-causing UV light) is a major advance in photodynamic therapy. In a small published Phase 1/2
proof of concept pilot clinical study using synthetic hypericin twice weekly for six weeks, statistically significant efficacy was
demonstrated in patients with CTCL (58.3% response, p=0.04) and psoriasis (80% response, p<0.02). Subsequently, a
pivotal Phase 3 study in CTCL has further confirmed the biological efficacy of synthetic hypericin (termed HyBryte™ in the
context of CTCL).
HyBryte™ – for Treating Cutaneous T-Cell Lymphoma
HyBryte™ is a novel, first-in-class, PDT, that utilizes safe visible light for activation. The active ingredient in HyBryte™ is
synthetic hypericin, a photosensitizer which is topically applied to skin lesions and then activated by visible fluorescent light
16 to 24 hours later.
Based on the positive and previously published Phase 1/2 results, we initiated our pivotal Phase 3 clinical study of
HyBryte™ for the treatment of CTCL during December 2015 and completed the trial in 2020. This trial, referred to as the
“FLASH” study (Fluorescent Light Activated Synthetic Hypericin), aimed to evaluate the response to HyBryte™ as a skin
directed therapy to treat early stage CTCL. We completed the study with approximately 35 CTCL centers across the U.S.
participating in this pivotal trial. The Phase 3 protocol was a highly powered, double-blind, randomized, placebo-controlled,
multicenter trial that enrolled 169 subjects (166 evaluable). The trial consisted of three treatment cycles, each of eight weeks
duration. Treatments were administered twice weekly for the first six weeks and treatment response was determined at the
end of the eighth week. In the first treatment cycle, approximately 66% of subjects received HyBryte™ and 33% received
placebo
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treatment of their index lesions. In the second cycle, all subjects received HyBryte™ treatment of their index lesions, and in
the third cycle, all subjects received HyBryte™ treatment of all of their lesions. The majority of subjects enrolled elected to
continue into the third optional, open-label cycle of the study. Subjects were followed for an additional six months after their
last evaluation visit. The primary efficacy endpoint was assessed on the percentage of patients in each of the two treatment
groups (i.e., HyBryte™ and placebo) achieving a partial or complete response of the treated lesions, defined as a ≥ 50%
reduction in the total Composite Assessment of Index Lesion Disease Severity (“CAILS”) score for three index lesions at the
Cycle 1 evaluation visit (Week 8) compared to the total CAILS score at baseline. Secondary endpoints for the trial included
the duration of responses, the extent of the regression of the tumors, and the safety of the treatment. We continue to work
closely with the Cutaneous Lymphoma Foundation, as well as the National Organization for Rare Disorders.
Positive primary endpoint analysis for the Phase 3 study for HyBryte™ was completed in March 2020. The study enrolled
169 patients (166 evaluable) randomized 2:1 to receive either HyBryte™ (116 patients) or placebo (50 patients) and
demonstrated a statistically significant treatment response (p=0.04) in the CAILS primary endpoint assessment at 8 weeks
for Cycle 1. A total of 16% of the patients receiving HyBryte™ achieved at least a 50% reduction in their index lesions
compared to only 4% of patients in the placebo group at 8 weeks. HyBryte™ treatment in the first cycle was safe and well
tolerated.
Analysis of the second open-label treatment cycle (Cycle 2) was completed in April 2020, showing that continued treatment
with HyBryte™ twice weekly for an additional 6 weeks (12 weeks total) increased the positive response rate to 40%
(p<0.0001 compared to placebo and p<0.0001 compared to 6-weeks treatment). After the subsequent additional 6-week
treatment, the response rate in patients receiving a total of 12 weeks treatment increased two and a half-fold. Treatment
responses were assessed at Week 8 (after 6 weeks of treatment) and at Week 16 (after 12 weeks of treatment). A positive
response was defined as an improvement of at least 50% in the CAILS score for the three index lesions evaluated in both
Cycles 1 and 2. The data continued to indicate that HyBryte™ is safe and well tolerated.
Analysis of the optional third open-label treatment cycle (Cycle 3) was completed in October 2020. Cycle 3 was focused on
safety and all patients could elect to receive HyBryte™ treatment of all their lesions for an additional 6 weeks or up to 18
weeks in total. Of note, 66% of patients elected to continue with this optional safety cycle of the study. Of the subset of
patients that received HyBryte™ throughout all three cycles of treatment (18 weeks), 49% of them demonstrated a treatment
response (p=0.046 vs. patients completing 12 weeks of HyBryte™ treatment in Cycle 2; p<0.0001 vs. patients receiving
placebo in Cycle 1). Moreover, in a subset of patients evaluated in this cycle, it was demonstrated that HyBryte™ is not
systemically available, consistent with the general safety of this topical product observed to date. At the end of Cycle 3,
HyBryte™ continued to be well tolerated despite extended and increased use of the product to treat multiple lesions.
In addition, 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 HyBryte™ is equally effective on both patch (response 37%, p=0.0009) and plaque
(response 42%, p<0.0001) lesions when compared to Cycle 1 placebo lesion responses, further demonstrating the unique
benefits of the more deeply penetrating visible light activation of hypericin.
HyBryte™ has received Orphan Drug designation as well as Fast Track designation from the FDA. The Orphan Drug Act is
intended to assist and encourage companies to develop safe and effective therapies for the treatment of rare diseases and
disorders. In addition to providing a seven-year term of market exclusivity for HyBryte™ upon final FDA approval, Orphan
Drug designation also positions us to be able to leverage a wide range of financial and regulatory benefits, including
government grants for conducting clinical trials, waiver of FDA user fees for the potential submission of an NDA for
HyBryte™, and certain tax credits. In addition, Fast Track is a designation that the FDA reserves for a drug intended to treat
a serious or life-threatening condition and one that demonstrates the potential to address an unmet medical need for the
condition. Fast Track designation is designed to facilitate the development and expedite the review of new drugs. For
instance, should events warrant, we will be eligible to submit an NDA for HyBryte™ on a rolling basis, permitting the FDA to
review sections of the NDA prior to receiving the complete submission. Additionally, NDAs for Fast Track development
programs ordinarily will be eligible for priority review. HyBryte™ for the treatment of CTCL also was granted Orphan Drug
designation from the European Medicines Agency (“EMA”) Committee for Orphan Medical Products and Promising
Innovative Medicine (“PIM”) designation from the MHRA, as well as Innovation Passport under the Innovative Licensing and
Access Pathway (“ILAP”) in the UK.
The U.S. Patent Office granted us a patent titled “Systems and Methods for Producing Synthetic Hypericin” for the unique
proprietary process manufacturing the highly purified form of synthetic hypericin, the active pharmaceutical ingredient (“API”)
in HyBryte™, in August 2018.
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The U.S. Patent Office allowed the divisional patent application titled “Systems and Methods for Producing Synthetic
Hypericin” in October 2019. The allowed claims are directed to unique, proprietary methods to produce a novel, highly
purified form of synthetic hypericin. This new divisional claim set expands on the previous issued claims in the parent U.S.
patent.
The European patent office granted the divisional patent application titled “Formulations and Methods of Treatment of Skin
Conditions” (No. 2932973) in April 2020. The granted claims are directed to the therapeutic use of synthetic hypericin in the
treatment of CTCL. This new patent expands on our comprehensive patent estate, which includes protection on the
composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of use in both CTCL and
psoriasis, and is being pursued worldwide.
During January 2021, we signed an exclusive Supply, Distribution and Services Agreement with The Daavlin Distributing Co.
(“Daavlin”), securing long-term supply and distribution of a commercially ready light device, which is an integral component
of the regulatory and commercial strategy for HyBryte™ for the treatment of CTCL. Pursuant to the agreement, Daavlin will
exclusively manufacture the proprietary light device for use with HyBryte™ for the treatment of CTCL. Upon approval of
HyBryte™ by the FDA, we will promote HyBryte™ and the companion light device, and facilitate the direct purchase of the
device from Daavlin. Daavlin will exclusively distribute and sell the HyBryte™ light device to us, physicians and patients.
The Hong Kong Registrar of Patents granted a patent for the application titled “Formulations and Methods of Treatment of
Skin Conditions” (No. 16102842.8), published on January 29, 2021 under Publication No. 1214771 B. The granted claims
are directed to the therapeutic use of synthetic hypericin in the treatment of CTCL, similar to those granted in Europe in
2020. This new patent is the first granted in Hong Kong and expands on our comprehensive patent estate, which includes
protection on the composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of use in
both CTCL and psoriasis.
In April 2021, the FDA conditionally accepted HyBryte™ as the proposed brand name for SGX301 or synthetic hypericin, in
the treatment of early stage CTCL. The name HyBryte™ was developed in compliance with the FDA’s Guidance for Industry,
Contents of a Complete Submission for the Evaluation of Proprietary Names. The FDA’s conditional approval validates
HyBryte™ as a proprietary name that is consistent with the FDA’s goal of preventing medication errors and potential harm to
the public by ensuring that only appropriate proprietary names are approved for use. Final approval of the HyBryte™
proprietary name is conditioned on FDA approval of the product candidate, SGX301.
In May 2021, HyBryte™ was awarded an "Innovation Passport" for the treatment of early stage CTCL in adults under the
UK’s ILAP. The decision to award the Innovation Passport to the HyBryte™ program was made by the Innovative Licensing
and Access Pathway Steering Group, which is comprised of representatives from MHRA, the National Institute for Health
and Care Excellence (“NICE”), and the Scottish Medicines Consortium (“SMC”). ILAP was launched at the start of 2021 to
accelerate the development and access to promising medicines, thereby facilitating patient access to new medicines. The
pathway, part of the UK’s plan to attract life sciences development in the post-Brexit era, features enhanced input and
interactions with the MHRA, NICE, and SMC. The innovation passport designation is the first step in the ILAP process and
triggers the MHRA and its partner agencies to create a target development profile to chart out a roadmap for regulatory and
development milestones with the goal of early patient access in the UK. Other benefits of ILAP include a 150-day
accelerated assessment, rolling review and a continuous benefit risk assessment.
As a result of discussions with the FDA regarding the HyBryte™ NDA submission and due to disruptions caused by the
global COVID-19 pandemic resulting in delays by the commercial API contract manufacturer affecting the timing of
availability of the pre-requisite amount of accrued stability data required to file the NDA, we plan to file the NDA with the FDA
in the second half of 2022 with the corresponding potential FDA approval in the second half of 2023. We currently do not
plan to pursue a rolling NDA submission, so that we may provide additional supportive data in the NDA filing. We now plan
to submit the NDA in the second half of 2022.
The Japan Patent Office allowed the patent application title “Systems and Methods for Producing Synthetic Hypericin” in
May 2021. The allowed claims are directed to unique, proprietary methods to produce a novel, highly purified form of
synthetic hypericin, and are similar to those previously allowed in the U.S. This new patent is the first allowed in Japan
covering the proprietary methods developed by us and further expands the comprehensive HyBryte™ patent estate, which
includes protection of the composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of
use in both CTCL and psoriasis, and is being pursued worldwide.
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In June 2021, we received a Paediatric Investigation Plan (“PIP”) waiver from the EMA for HyBryte™. As part of the
regulatory process for the registration of new medicines with the EMA, pharmaceutical companies are required to provide a
PIP outlining their strategies for investigation of the new medicinal products in the pediatric population. In some instances, a
waiver negating the need for a PIP for certain conditions may be granted by the EMA when development of a medicine for
use in children is not feasible or appropriate, as is the case for HyBryte™ in CTCL which is extremely rare in children.
In September 2021, we were granted orphan drug designation for the active ingredient hypericin for the treatment of T-cell
lymphoma, extending the target population beyond CTCL as previously granted by the FDA.
We estimate the potential worldwide market for HyBryte™ is in excess of $250 million for the treatment of CTCL. This
potential market information is a forward-looking statement, and investors are urged not to place undue reliance on this
statement. While we have determined this potential market size based on assumptions that we believe are reasonable, there
are a number of factors that could cause our expectations to change or not be realized.
Cutaneous T-Cell Lymphoma
CTCL is a class of non-Hodgkin’s lymphoma (“NHL”), a type of cancer of the white blood cells that are an integral part of the
immune system. Unlike most NHLs, which generally involve B-cell lymphocytes (involved in producing antibodies), CTCL is
caused by an expansion of malignant T-cell lymphocytes (involved in cell-mediated immunity) normally programmed to
migrate to the skin. These skin-trafficking malignant T-cells migrate to the skin, causing various lesions to appear that may
change shape as the disease progresses, typically beginning as a rash and eventually forming plaques and tumors. Mycosis
fungoides (“MF”) is the most common form of CTCL. It generally presents with skin involvement only, manifested as scaly,
erythematous patches. Advanced disease with diffuse lymph node and visceral organ involvement is usually associated with
a poorer response rate to standard therapies. A relatively uncommon sub-group of CTCL patients present with extensive
skin involvement and circulating malignant cerebriform T-cells, referred to as Sézary syndrome. These patients have
substantially graver prognoses (expected five-year survival rate of 24%), than those with MF (expected five-year survival
rate of 88%).
CTCL mortality is related to stage of disease, with median survival generally ranging from about 12 years in the early stages
to only 2.5 years when the disease has advanced. There is currently no FDA-approved drug for front-line treatment of early
stage CTCL. Treatment of early-stage disease generally involves skin-directed therapies. One of the most common
unapproved therapies used for early-stage disease is oral 5 or 8-methoxypsoralen (“Psoralen”) given with ultraviolet A
(“UVA”) light, referred to as PUVA, which is approved for dermatological conditions such as disabling psoriasis not
adequately responsive to other forms of therapy, idiopathic vitiligo and skin manifestations of CTCL in persons who have not
been responsive to other forms of treatment. Psoralen is a mutagenic chemical that interferes with DNA causing mutations
and other malignancies. Moreover, UVA is a carcinogenic light source that when combined with the Psoralen, results in
serious adverse effects including secondary skin cancers; therefore, the FDA requires a Black Box warning for PUVA.
CTCL constitutes a rare group of NHLs, occurring in about 4% of the approximate 500,000 individuals living with NHL. We
estimate, based upon review of historic published studies and reports and an interpolation of data on the incidence of CTCL,
that it affects over 20,000 individuals in the U.S., with approximately 2,800 new cases seen annually.
SGX302 – for Treating Mild-to-Moderate Psoriasis
SGX302 (synthetic hypericin) is a potent photosensitizer that is topically applied to skin lesions and taken up by cutaneous
T-cells. With subsequent activation by safe, visible light, T-cell apoptosis is induced, addressing the root cause of psoriasis
lesions. Other PDTs have shown efficacy in psoriasis with a similar apoptotic mechanism, albeit using UV light associated
with more severe potential long-term toxicities. The use of visible light in the red-yellow spectrum has the advantage of
deeper penetration into the skin (much more than UV light) potentially treating deeper skin disease and thicker plaques and
lesions, similar to what was observed in the positive Phase 3 FLASH study in CTCL. Further, this treatment approach avoids
the risk of secondary malignancies (including melanoma) inherent with both the frequently used DNA-damaging drugs and
other phototherapies that are dependent on UV A or UV B exposure. The use of SGX302 coupled with safe, visible light also
avoids the risk of serious infections and cancer associated with the systemic immunosuppressive treatments used in
psoriasis.
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In September 2021, we announced that following the validation of synthetic hypericin’s biologic activity in the positive pivotal
Phase 3 FLASH study in CTCL, as well as positive proof-of-concept demonstrated in a small Phase 1/2 pilot study in mild-to-
moderate psoriasis patients, we will be expanding this novel therapy into a Phase 2a clinical trial in mild-to-moderate
psoriasis. We will provide further details regarding trial design and timeline; however, our high level plan in the interim is to
evaluate different topical formulations of synthetic hypericin to ensure optimal absorption for broadly treating this disease. In
parallel, we will be working with our psoriasis clinical experts to finalize a protocol with a plan to initiate study enrollment in
the latter part of 2022. We estimate the potential worldwide market for SGX302 to be in excess of $1 billion for the treatment
of mild-to-moderate psoriasis. This potential market information is a forward-looking statement, and investors are urged not
to place undue reliance on this statement. While we have determined this potential market size based on assumptions that
we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.
Psoriasis
Psoriasis is a chronic, non-communicable, itchy and often painful inflammatory skin condition for which there is no
cure. Psoriasis has a significantly detrimental impact on patients' quality of life, and is associated with cardiovascular,
arthritic, and metabolic diseases, as well as psychological conditions such as anxiety, depression and suicide. Many factors
contribute to development of psoriasis including both genetic and environmental factors (e.g., skin trauma, infections, and
medications). The lesions develop because of rapidly proliferating skin cells, driven by autoimmune T-cell mediated
inflammation. Of the various types of psoriasis, plaque psoriasis is the most common and is characterized by dry, red raised
plaques that are covered by silvery-white scales occurring most commonly on the elbows, knees, scalp, and lower back.
Approximately 80% of patients have mild-to-moderate disease. Mild psoriasis is generally characterized by the involvement
of less than 3% of the body surface area (“BSA”), while moderate psoriasis will typically involve 3-10% BSA and severe
psoriasis greater than 10% BSA. Between 20% and 30% of individuals with psoriasis will go on to develop chronic,
inflammatory arthritis (psoriatic arthritis) that can lead to joint deformations and disability. Studies have also associated
psoriasis, and particularly severe psoriasis, with an increased relative risk of lymphoma, particularly CTCL. Although
psoriasis can occur at any age, most patients present with the condition before age 35.
Treatment of psoriasis is based on its severity at the time of presentation with the goal of controlling symptoms. It varies
from topical options including PDT to reduce pain and itching, and potentially reduce the inflammation driving plaque
formation, to systemic treatments for more severe disease. Most common systemic treatments and even current topical
photo/photodynamic therapy such as UV A and B, carry a risk of increased skin cancer.
Psoriasis is the most common immune-mediated inflammatory skin disease. According to the World Health Organization
(“WHO”) Global Report on Psoriasis 2016, the prevalence of psoriasis is between 1.5% and 5% in most developed
countries, with some suggestions of incidence increasing with time. It is estimated, based upon review of historic published
studies and reports and an interpolation of data that psoriasis affects 3% of the U.S. population or more than 7.5 million
people. Current estimates have as many as 60-125 million people worldwide living with the condition. The global psoriasis
treatment market was valued at approximately $15 billion in 2020 and is projected to reach as much as $40 billion by 2027.
Dusquetide
Dusquetide (research name: SGX94) is an IDR that regulates the innate immune system to simultaneously reduce
inflammation, eliminate infection and enhance tissue healing.
Dusquetide is based on a new class of short, synthetic peptides known as IDRs. It has a novel mechanism of action in that it
modulates the body’s reaction to both injury and infection and is both simultaneously anti-inflammatory and anti-infective.
IDRs have no direct antibiotic activity but modulate host responses, increasing survival after infections with a broad range of
bacterial Gram-negative and Gram-positive pathogens including both antibiotic sensitive and resistant strains, as well as
accelerating resolution of tissue damage following exposure to a variety of agents including bacterial pathogens, trauma and
chemo- or radiation-therapy. IDRs represent a novel approach to the control of infection and tissue damage via highly
selective binding to an intracellular adaptor protein, sequestosome-1, also known as p62, which has a pivotal function in
signal transduction during activation and control of the innate defense system. Preclinical data indicate that IDRs may be
active in models of a wide range of therapeutic indications including life-threatening bacterial infections as well as the severe
side-effects of chemo- and radiation-therapy. Additionally, due to selective binding to p62, dusquetide may have potential
anti-tumor action.
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Dusquetide has demonstrated efficacy in numerous animal disease models including mucositis, oncology, colitis, skin
infection and other bacterial infections and has been evaluated in a double-blind, placebo-controlled Phase 1 clinical trial in
84 healthy volunteers with both single ascending dose and multiple ascending dose components. Dusquetide was shown to
have a good safety profile and be well-tolerated in all dose groups when administered by IV over 7 days and was consistent
with safety results seen in pre-clinical studies. We believe that market opportunities for dusquetide include, but are not
limited to, oral and gastrointestinal mucositis, oncology (e.g., breast cancer), acute Gram-positive bacterial infections (e.g.,
methicillin resistant Staphylococcus aureus (“MRSA”)), acute Gram-negative infections (e.g., acinetobacter, melioidosis),
and acute radiation syndrome.
SGX942 – for Treating Oral Mucositis in Head and Neck Cancer
SGX942 is our product candidate containing our IDR technology, dusquetide, targeting the treatment of oral mucositis in
head and neck cancer patients. Oral mucositis in this patient population is an area of unmet medical need where there are
currently no approved drug therapies. Accordingly, we received Fast Track designation for the treatment of oral mucositis as
a result of radiation and/or chemotherapy treatment in head and neck cancer patients from the FDA. In addition, dusquetide
has been granted PIM designation in the UK by the MHRA for the treatment of severe oral mucositis in head and neck
cancer patients receiving chemoradiation therapy. The U.S. Patent and Trademark Office and the European Patent Office
granted us the patent titled “Novel Peptides and Analogs for Use in the Treatment of Oral Mucositis” in August 2016 and
January 2019, respectively. The newly issued patent claims therapeutic use of dusquetide and related IDR analogs, and
adds to composition of matter claims for dusquetide and related analogs that have been granted in the U.S. and worldwide.
We initiated a Phase 2 clinical study of SGX942 for the treatment of oral mucositis in head and neck cancer patients in
December of 2013. We completed enrollment in this trial in the second half of 2015, and in December 2015 released positive
preliminary results. In this Phase 2 proof-of-concept clinical study that enrolled 111 patients, SGX942, at a dose of 1.5
mg/kg, successfully reduced the median duration of SOM by 50%, from 18 days to 9 days (p=0.099) in all patients and by
67%, from 30 days to 10 days (p=0.040) in patients receiving the most aggressive chemoradiation therapy for treatment of
their head and neck cancer. The p-values met the prospectively defined statistical threshold of p<0.1 in the study protocol. A
less severe occurrence of oral mucositis, ulcerative oral mucositis (defined as oral mucositis with a WHO score ≥2
corresponding to the occurrence of overt ulceration in the mouth), was also monitored during the study. In the patients
receiving the most aggressive chemoradiation therapy, the median duration of oral mucositis was found to decrease from
65 days in the placebo treated patients to 51 days in the patients treated with SGX942 1.5 mg/kg (p=0.099).
In addition to identifying the best dose of 1.5 mg/kg, this study achieved all objectives, including increased incidence of
“complete response” of tumor at the one month follow-up visit (47% in placebo vs. 63% in SGX942 at 1.5 mg/kg). Decreases
in mortality and decreases in infection rate were also observed with SGX942 treatment, consistent with the preclinical results
observed in animal models.
SGX942 was found to be generally safe and well tolerated, consistent with the safety profile observed in the prior Phase 1
study conducted in 84 healthy volunteers. The long-term (12 month) follow-up data was consistent with the preliminary
positive safety and efficacy findings. While the placebo population experienced the expected 12-month survival rate of
approximately 80%, as defined in the Surveillance, Epidemiology, and End Results statistics 1975-2012 from the National
Cancer Institute, the SGX942 1.5 mg/kg treatment group reported a 12-month survival rate of 93% (7% mortality in the
SGX942 1.5 mg/kg group compared to 19% in the placebo group). Similarly, tumor resolution (complete response) at
12 months was better in the SGX942 1.5 mg/kg treatment group relative to the placebo population (80% in the 1.5 mg/kg
group compared to 74% in the placebo group). Moreover, in the patients receiving chemotherapy every third week, the
SGX942 1.5 mg/kg treatment group had a tumor resolution rate (complete response) of 82% throughout the 12 months
following chemoradiation therapy, while the placebo group experienced a 64% complete response rate. The long-term
follow-up results from the Phase 2 study are reviewed in “Dusquetide: Reduction in Oral Mucositis associated with Enduring
Ancillary Benefits in Tumor Resolution and Decreased Mortality in Head and Neck Cancer Patients” published online in
Biotechnology Reports and available at the following link: https://doi.org/10.1016/j.btre.2017.05.002. In addition to safety,
evaluations of other secondary efficacy endpoints, such as the utilization of opioid pain medication, indicated that the
SGX942 1.5 mg/kg treatment group had a 40% decrease in the use of opioids at the later stage of the treatment phase of
the trial, when oral mucositis is usually most severe and expected to increase pain medication use. This was in contrast to
the placebo group, which demonstrated a 10% increase in use of opioids over this same period. Data from this Phase 2 trial
was published online in the Journal of Biotechnology. The publication also delineates the supportive nonclinical data in this
indication, demonstrating consistency in the qualitative and quantitative biological response, including dose response,
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across
http://authors.elservier.com/sd/article/S01681656116315668.
the nonclinical and
clinical data
sets. The
results are available at
the
following
link:
In September 2016, we and SciClone Pharmaceuticals, Inc. (“SciClone”) entered into an exclusive license agreement,
pursuant to which we granted rights to SciClone to develop, promote, market, distribute and sell SGX942 in defined
territories. Under the terms of the license agreement, SciClone will be responsible for all aspects of development, product
registration and commercialization in the territories, having access to data generated by us. In exchange for exclusive rights,
SciClone will pay us royalties on net sales, and we will supply commercial drug product to SciClone on a cost-plus basis,
while maintaining worldwide manufacturing rights.
During July 2017, we initiated our pivotal Phase 3 clinical trial referred to as the “DOM–INNATE” study (Dusquetide
treatment in Oral Mucositis – by modulating INNATE immunity) with a controlled roll-out of U.S. study sites, followed by the
addition of European centers in 2018. Approximately 50 U.S. and European oncology centers are participating in this pivotal
Phase 3 study. Based on the positive and previously published Phase 2 results (Study IDR-OM-01), the pivotal Phase 3
clinical trial (Study IDR-OM-02) was a highly powered, double-blind, randomized, placebo-controlled, multinational trial that
sought to enroll approximately 260 subjects with squamous cell carcinoma of the oral cavity and oropharynx who were
scheduled to receive a minimum total cumulative radiation dose of 55 Gy fractionated as 2.0-2.2 Gy per day with
concomitant cisplatin chemotherapy given as a dose of 80-100 mg/m2 every third week. Subjects were randomized to
receive either 1.5 mg/kg SGX942 or placebo given twice a week during and for two weeks following completion of
chemoradiation therapy (“CRT”). The primary endpoint for the study was the median duration of SOM, which was assessed
by oral examination at each treatment visit and then through six weeks following completion of CRT. Oral mucositis is
evaluated using the WHO Grading system. SOM is defined as a WHO Grade of ≥3. Subjects are followed for an additional
12 months after the completion of treatment.
The U.S. Patent Office issued a new patent No. 10,253,068 titled “Novel Peptides for Treating and Preventing Immune-
Related Disorders, Including Treating and Preventing Infection by Modulating Innate Immunity” for our dusquetide related
analogs in April 2019.
In April 2019, the Paediatric Committee of the EMA approved our PIP for SGX942, a prerequisite for filing a Marketing
Authorization Application (“MAA”) for any new medicinal product in Europe. The EMA also agreed that we may defer
conducting the PIP until successful completion of our ongoing pivotal Phase 3 clinical trial of SGX942, which allows us to file
the adult indication MAA prior to completion of the PIP.
During August 2019, an independent DMC completed an unblinded interim analysis with data from approximately 90
subjects, including an assessment of the Phase 3 DOM-INNATE study’s primary efficacy endpoint. The DMC provided a
positive recommendation to randomize approximately 70 additional subjects into the trial to maintain the rigorous
assumption of 90% statistical power for the primary efficacy endpoint. No safety concerns were reported by the DMC based
on the interim analysis.
The Japanese Patent Office granted the patent titled “Novel Peptides and Analogs for Use in the Treatment of Oral
Mucositis” in February 2020. This allowance builds on similar intellectual property in the U.S., New Zealand, Australia and
Singapore and patent applications pending in other jurisdictions worldwide. The new claims cover therapeutic use of
dusquetide (active ingredient in SGX942) and related IDR analogs, and add to composition of matter claims for dusquetide
and related analogs that have been granted in the U.S. and worldwide.
In June 2020, the pivotal Phase 3 DOM–INNATE study (Study IDR-OM-02) completed enrollment of 268 subjects. In
December 2020, the results of our Phase 3 clinical trial for SGX942 showed that the primary endpoint of median duration of
SOM did not achieve the pre-specified criterion for statistical significance (p≤0.05); although biological activity was observed
with a 56% reduction in the median duration of SOM from 18 days in the placebo group to 8 days in the SGX942 treatment
group. Despite this clinically meaningful improvement, the variability in the distribution of the data yielded a p-value that was
not statistically significant. Other secondary endpoints supported the biological activity of dusquetide, including a statistically
significant 50% reduction in the median duration of SOM in the per-protocol population, which decreased from 18 days in the
placebo group to 9 days in the SGX942 treatment group (p=0.049), consistent with the findings in the Phase 2 trial (Study
IDR-OM-01). Similarly, incidence of SOM also followed this biological trend as seen in the Phase 2 study, decreasing by
16% in the SGX942 treatment group relative to the placebo group in the per-protocol population. The per-protocol population
was defined as the population receiving a minimum of 55 Gy radiation and at least
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10 doses of study drug (placebo or SGX942) throughout the intended treatment period, with no major protocol deviations
(e.g. breaks in study drug administration longer than 8 days between successive doses).
Following analysis of the full dataset, including the 12-month long-term follow-up safety data in late 2021, we held a meeting
with the MHRA to review the study results and to obtain further clarity on the future of the oral mucositis development
program. The meeting was informative with the outcome being that based on the SGX942 biologic activity observed and the
consistency in response between the Phase 2 and Phase 3 trials, the Phase 3 DOM-INNATE study could serve as the first
of two Phase 3 studies required to support potential marketing authorization, assuming the second Phase 3 clinical trial
achieves the required level of statistical significance in its primary endpoint. Importantly, we also have further investigated
the impact of SGX942 (dusquetide) on tumor burden in preclinical xenograft studies. These studies, similar to previous
results, continued to demonstrate a potential direct anti-tumor effect of SGX942. This additional benefit of SGX942 is an
important consideration in the oral mucositis treatment space. Other competitive considerations with SGX942 include its
safety and ease of use. In particular, SGX942 is administered as a short 4-minute intravenous (IV) infusion twice weekly.
This contrasts significantly with Galera Therapeutics Inc.’s recently completed Phase 3 oral mucositis study with
Avasopasem. From what is available publicly, Avasopasem must be administered daily with radiation, within a short window
of time of that daily radiation treatment and takes 60 minutes to administer by IV infusion. Interestingly, the recently reported
incidence change observed in the Phase 3 Avasopasem trial (64% incidence in placebo, 54% treated) is favorably compared
with the incidence change in the DOM-INNATE study (68% placebo, 58% SGX942). As well, the decrease in duration of
SOM was similar between the two studies (18 days for placebo vs. 8 days for active in both studies). Given some of the
recently announced complications with the Avasopasem results, and the significant inconveniences and logistical hurdles
with its use, we continue to believe that SGX942 is the superior product. With the benefit of a robust preclinical and clinical
data package for SGX942, we now will be analyzing the existing Phase 3 dataset from the DOM-INNATE study to design a
second Phase 3 study and will look to identify a potential partner(s) to continue this development program.
In January 2022, we announced that dusquetide is effective at reducing tumor size in nonclinical xenograft models. Recent
studies, recapitulating results from previously published studies, have confirmed the efficacy of dusquetide as a stand-alone
and combination anti-tumor therapy, with radiation, chemotherapy and targeted therapy, in the context of the MCF-7 breast
cancer cell line.
Oral Mucositis
Mucositis is the clinical term for damage done to the mucosa by anticancer therapies. It can occur in any mucosal region, but
is most commonly associated with the mouth, followed by the small intestine. We estimate, based upon our review of historic
studies and reports, and an interpolation of data on the incidence of mucositis, that mucositis affects approximately 500,000
people in the U.S. per year and occurs in 40% of patients receiving chemotherapy. Mucositis can be severely debilitating
and can lead to infection, sepsis, the need for parenteral nutrition and narcotic analgesia. The GI damage causes severe
diarrhea. These symptoms can limit the doses and duration of cancer treatment, leading to sub-optimal treatment outcomes.
The mechanisms of mucositis have been extensively studied and have been linked to the interaction of chemotherapy
and/or radiation therapy with the innate defense system. Bacterial infection of the ulcerative lesions is regarded as a
secondary consequence of dysregulated local inflammation triggered by therapy-induced cell death, rather than as the
primary cause of the lesions.
We estimate, based upon our review of historic studies and reports, and an interpolation of data on the incidence of oral
mucositis, that oral mucositis is a subpopulation of approximately 90,000 patients in the U.S., with a comparable number in
Europe. Oral mucositis almost always occurs in patients with head and neck cancer treated with radiation therapy (greater
than 80% incidence of severe mucositis) and is common in patients undergoing high dose chemotherapy and hematopoietic
cell transplantation, where the incidence and severity of oral mucositis depends greatly on the nature of the conditioning
regimen used for myeloablation.
Oral BDP
Oral BDP (beclomethasone 17,21-dipropionate) has been marketed in the U.S. and worldwide since the early 1970s as the
active pharmaceutical ingredient in a nasal spray and in a metered-dose inhaler for the treatment of patients with allergic
rhinitis and asthma. Oral BDP is specifically formulated for oral administration as a single product consisting of two tablets.
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One tablet is intended to release BDP in the upper sections of the GI tract and the other tablet is intended to release BDP in
the lower sections of the GI tract.
Based on its pharmacological characteristics, oral BDP may have utility in treating other conditions of the GI tract having an
inflammatory component. We are planning to pursue development programs for the treatment of pediatric Crohn’s disease,
acute radiation enteritis and GI acute radiation syndrome pending further grant funding. We are also exploring the possibility
of testing oral BDP for local inflammation associated with ulcerative colitis, among other indications.
In July 2019, the European Patent Office issued two patents, both titled “Topically Active Steroids for use in Radiation and
Chemotherapeutic Injury”, following the expiration of the objection period. The new patents (#2,373,160 and #2,902,031)
claim use of BDP for treatment of damage to the GI tract as a result of acute radiation injury, including total body irradiation
in the accidental or biodefense context.
We estimate the potential worldwide market for oral BDP is in excess of $500 million for all applications, including the
treatment of pediatric Crohn’s disease. This potential market information is a forward-looking statement, and investors are
urged not to place undue reliance on this statement. While we have determined this potential market size based on
assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or
not be realized.
SGX203 – for Treating Pediatric Crohn’s Disease
SGX203 (oral BDP) represents a first-of-its-kind oral, locally acting therapy tailored to treat GI inflammation. Based on its
pharmacological characteristics, oral BDP may have utility in treating multiple conditions of the GI tract having an
inflammatory component. BDP has been marketed in the U.S. and worldwide since the early 1970s as the API in a nasal
spray and in a metered-dose inhaler for the treatment of patients with allergic rhinitis and asthma. SGX203 for the treatment
of pediatric Crohn’s disease is specifically formulated as a two tablet delivery system for oral use that allows for
administration of immediate and delayed release BDP throughout the small bowel and the colon. The FDA has given
SGX203 Orphan Drug designation as well as Fast Track designation for the treatment of pediatric Crohn’s disease. We will
pursue a pivotal Phase 3 clinical trial of SGX203 for the treatment of pediatric Crohn’s disease contingent upon additional
funding, such as through partnership funding support.
We estimate the potential worldwide market for oral BDP is in excess of $500 million for all applications, including the
treatment of pediatric Crohn’s disease. This potential market information is a forward-looking statement, and investors are
urged not to place undue reliance on this statement. While we have determined this potential market size based on
assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or
not be realized.
Pediatric Crohn’s Disease
Crohn’s disease causes inflammation of the GI tract. Crohn’s disease can affect any area of the GI tract, from the mouth to
the anus, but it most commonly affects the lower part of the small intestine, called the ileum. The swelling caused by the
disease extends deep into the lining of the affected organ. The swelling can induce pain and can make the intestines empty
frequently, resulting in diarrhea. Because the symptoms of Crohn’s disease are similar to other intestinal disorders, such as
irritable bowel syndrome and ulcerative colitis, it can be difficult to diagnose. People of Ashkenazi Jewish heritage have an
increased risk of developing Crohn’s disease.
Crohn’s disease can appear at any age, but it is most often diagnosed in adults in their 20s and 30s. However,
approximately 30% of people with Crohn’s disease develop symptoms before 20 years of age. We estimate, based upon our
review of historic published studies and reports, and an interpolation of data on the incidence of pediatric Crohn’s disease,
that pediatric Crohn’s disease is a subpopulation of approximately 80,000 patients in the U.S. with a comparable number in
Europe. Crohn’s disease tends to be both severe and extensive in the pediatric population and a relatively high proportion
(approximately 40%) of pediatric Crohn’s patients have involvement of their upper GI tract.
Crohn’s disease presents special challenges for children and teens. In addition to bothersome and often painful symptoms,
the disease can stunt growth, delay puberty, and weaken bones. Crohn’s disease symptoms may sometimes prevent a child
from participating in enjoyable activities. The emotional and psychological issues of living with a chronic disease can be
especially difficult for young people.
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Public Health Solutions Overview
ThermoVax® – Thermostability Platform Technology
ThermoVax® is a novel method for thermostabilizing vaccines with a variety of adjuvants, resulting in a single vial which can
be reconstituted with water for injection immediately prior to use.
One of the adjuvants utilized in ThermoVax® is aluminum salts (known colloquially as Alum). Alum is the most widely
employed adjuvant technology in the vaccine industry.
The value of ThermoVax® lies in its potential ability to eliminate the need for cold chain production, transportation, and
storage for Alum-adjuvanted vaccines. This would relieve the high costs of producing and maintaining vaccines under
refrigerated conditions. Based on historical reports from the World Health Organization and other scientific reports, we
believe that a meaningful proportion of vaccine doses globally are wasted due to excursions from required cold chain
temperature ranges. This is due to the fact that many vaccines need to be maintained either between 2 and 8 degrees
Celsius (“C”), frozen below -20 degrees C, or frozen below -60 degrees C, and even brief excursions from these temperature
ranges usually necessitate the destruction of the product or the initiation of costly stability programs specific for the vaccine
lots in question. ThermoVax® has the potential to facilitate easier storage and distribution of strategic national stockpile
vaccines for ricin exposure in emergency settings.
ThermoVax® development, specifically in the context of an Alum adjuvant, was supported pursuant to our $9.4 million NIAID
grant enabling development of thermo-stable ricin (RiVax®) and anthrax vaccines. Proof-of-concept preclinical studies with
ThermoVax® indicate that it is able to produce stable vaccine formulations using adjuvants, protein immunogens, and other
components that ordinarily would not withstand long temperature variations exceeding customary refrigerated storage
conditions. These studies were conducted with our Alum-adjuvanted ricin toxin vaccine, RiVax® and our Alum-adjuvanted
anthrax vaccine. Each vaccine was manufactured under precise lyophilization conditions using excipients that aid in
maintaining native protein structure of the key antigen. When RiVax® was kept at 40 degrees C (104 degrees Fahrenheit
(“F”)) for up to one year, all of the animals vaccinated with the lyophilized RiVax® vaccine developed potent and high titer
neutralizing antibodies. In contrast, animals that were vaccinated with the liquid RiVax® vaccine kept at 40 degrees C did not
develop neutralizing antibodies and were not protected against ricin exposure. The ricin A chain is extremely sensitive to
temperature and rapidly loses the ability to induce neutralizing antibodies when exposed to temperatures higher than 8
degrees C. When the anthrax vaccine was kept for up to 16 weeks at 70 degrees C, it was able to develop a potent antibody
response, unlike the liquid formulation kept at the same temperature. Moreover, we also have demonstrated the compatibility
of our thermostabilization technology with other secondary adjuvants such as TLR-4 agonists.
We also entered into a collaboration agreement with Axel Lehrer, PhD of the Department of Tropical Medicine, Medical
Microbiology and Pharmacology, John A. Burns School of Medicine, University of Hawaiʻi at Manoa (“UH Manoa”) and
Hawaii Biotech, Inc. (“HBI”) to develop a heat stable subunit Ebola vaccine. Dr. Lehrer, a co-inventor of the Ebola vaccine
with HBI, has shown proof of concept efficacy with subunit Ebola vaccines in non-human primates. The most advanced
Ebola vaccines involve the use of vesicular stomatitis virus and adenovirus vectors – live, viral vectors which complicate the
manufacturing, stability and storage requirements. Dr. Lehrer’s vaccine candidate is based on highly purified recombinant
protein antigens, circumventing many of these manufacturing difficulties. Dr. Lehrer and HBI have developed a robust
manufacturing process for the required proteins. Application of ThermoVax® may allow for a product that can avoid the need
for cold chain distribution and storage, yielding a vaccine ideal for use in both the developed and developing world. This
agreement has expired in accordance with its terms.
In December 2010, we executed a worldwide exclusive license agreement with the University of Colorado (“UC”) for certain
patents relating to ThermoVax® in all fields of use. In April 2018, the UC delivered a notice of termination of our license
agreement based upon our failure to achieve one of the development milestones: initiation of the Phase 1 clinical trial of the
heat stabilization technology by March 31, 2018. After negotiating with the UC, we and the UC agreed to extend the
termination date to October 31, 2018 in order to allow us time to agree upon a potential agreement that would allow us to
keep the rights to, and to continue to develop, the heat stabilization technology or a product candidate containing the heat
stabilization technology in our field of use.
During September 2017, we were awarded funding of approximately $700,000 over five years under a NIAID Research
Project (R01) grant awarded to UH Manoa for the development of a trivalent thermostabilized filovirus vaccine (including
protection against Zaire ebolavirus, Sudan ebolavirus and Marburg Marburgvirus). Previous collaborations demonstrated
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the feasibility of developing a heat stable subunit Ebola vaccine. Under the terms of the subaward, we will continue to
support vaccine formulation development with our proprietary vaccine thermostabilization technology, ThermoVax®.
Ultimately, the objective is to produce a thermostable trivalent filovirus vaccine for protection against Ebola and related
diseases, allowing worldwide distribution without the need for cold storage. Based on current U.S. government needs, efforts
have recently been expanded to focus on a monovalent or bivalent vaccine to specifically address Marburg marburgvirus.
In October 2018, in a series of related transactions, (a) we and the UC agreed to terminate the original license agreement,
(b) the UC and VitriVax, Inc. (“VitriVax”) executed a worldwide exclusive license agreement for the heat stabilization
technology for all fields of use, and (c) we and VitriVax executed a worldwide exclusive sublicense agreement, which was
amended and restated in October 2020, for the heat stabilization technology for use in the fields of ricin and Ebola vaccines.
We paid a $100,000 sublicense fee on the effective date of the sublicense agreement. Under the amended sublicense
agreement to maintain the sublicense we are obliged to pay a minimum annual royalty of $20,000 until first commercial sale
of a sublicensed product, upon which point, we shall pay an earned royalty of 2% of net sales subject to a minimum royalty
of $50,000 each year. We are also required to pay royalty on any sub-sublicense income based on a declining percentage of
all sub-sublicense income calculated within the contractual period until reaching a minimum of 15% after two years. In
addition, we are required to pay VitriVax milestone fees of: (a) $25,000 upon initiation of a Phase 2 clinical trial of the
sublicensed product, (b) $100,000 upon initiation of a Phase 3 clinical trial of the sublicensed product, (c) $100,000 upon
regulatory approval of a sublicensed product, and (d) $1 million upon achieving $10 million in aggregate net sales of a
sublicensed product in the U.S. or equivalent. To date none of these milestones have been met.
In March 2020, we entered into a research collaboration with Axel Lehrer, PhD of the Department of Tropical Medicine,
Medical Microbiology and Pharmacology, John A. Burns School of Medicine, UH Manoa to further expand the filovirus
collaboration to investigation of potential coronavirus vaccines, including for SARS-CoV-2 (causing COVID-19). This
research collaboration will utilize the technology platform developed in the search for filovirus vaccines and will use well-
defined surface glycoprotein(s) from one or more coronaviruses, which are expected to be protective for COVID-19.
During April 2020, we obtained an exclusive worldwide license for CiVax™, a novel vaccine adjuvant, from BTG Specialty
Pharmaceuticals (“BTG”), a division of Boston Scientific Corporation, for the fields of coronavirus infection (including SARS-
CoV-2, the cause of COVID-19), and pandemic flu. CiVax™ is a novel adjuvant, which has been shown to enhance both
cell-mediated and antibody-mediated immunity. We and our collaborators, including UH Manoa and Dr. Axel Lehrer, have
successfully demonstrated the utility of CiVax™ in the development of our heat stable filovirus vaccine program, with vaccine
candidates against Ebola and Marburg virus disease. Given this previous success, CiVax™ will potentially be an important
component of our vaccine technology platform currently being assessed for use against coronaviruses including SARS-CoV-
2, the cause of COVID-19. The license agreement was executed between us and Protherics Medicines Development, one of
the companies that make up the BTG specialty pharmaceutical business, which owns the CiVax™ intellectual property.
In September 2020, the Journal of Pharmaceutical Sciences published a scientific article detailing the thermostabilization of
the filovirus GP proteins and key assays describing their stability (available at: https://www.jpharmsci.org/article/S0022-
3549(20)30509-8/fulltext).
During October 2020, Frontiers in Immunology published a scientific article describing CiVax™, a prototype COVID-19
vaccine, using the novel CoVaccine HT™ adjuvant and demonstrating significant immunogenicity, including strong total and
neutralizing antibody responses, with a balanced Th1 response, as well as enhancement of cell mediated immunity. These
are
at:
a
of
be
https://www.frontiersin.org/articles/10.3389/fimmu.2020.599587/full).
potential COVID-19
considered
(available
attributes
vaccine.
critical
all
to
In December 2020, NIAID awarded us a Direct to Phase II Small Business Innovation Research (“SBIR”) grant of
approximately $1.5 million to support manufacture, formulation (including thermostabilization) and characterization of
COVID-19 and Ebola Virus Disease (“EVD”) vaccine candidates in conjunction with the CoVaccine HT™ adjuvant. This
award also is supporting immune characterization of this novel, emulsified adjuvant that has unique potency and
compatibility with lyophilization strategies to enable thermostabilization of subunit vaccines.
During March 2021, bioRxiv published an accelerated preprint of pre-clinical immunogenicity studies for CiVax™,
demonstrating rapid-onset, broad-spectrum, neutralizing antibody and cell-mediated immunity is confirmed using full-length
Spike protein antigens. The article, titled “Recombinant protein subunit SARS-CoV-2 vaccines formulated with CoVaccine
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HT™ adjuvant
https://www.biorxiv.org/content/10.1101/2021.03.02.433614v1).
induce broad, Th1 biased, humoral and cellular
immune responses
in mice,” (available at:
During August 2021, we announced positive data demonstrating the efficacy of multiple filovirus vaccine candidates in non-
human primates (“NHP”), including thermostabilized multivalent vaccines in a single vial platform presentation. Collaborators
at the University of Hawaiʻi at Mānoa (“UHM”) describe the potent efficacy of vaccine candidates protecting against three
life-threatening filoviruses, Zaire ebolavirus, Sudan ebolavirus and Marburg Marburgvirus in an article titled "Recombinant
Protein Filovirus Vaccines Protect Cynomolgus Macaques from Ebola, Sudan, and Marburg Viruses", published in Frontiers
in Immunology. (available at: https://www.frontiersin.org/articles/10.3389/fimmu.2021.703986/full) These vaccine candidates
contain highly purified protein antigens combined with the novel CoVaccine HT™ adjuvant, in both monovalent (single
antigen) and bivalent (two antigen) formulations. Most recently, efforts to formulate all three antigens and adjuvant into a
thermostable single-vial vaccine platform has also been shown to protect 75% of vaccinated NHPs against subsequent
Sudan ebolavirus challenge, with further development to test efficacy against other filovirus infections ongoing.
During August 2021, we announced a publication describing the formulation of single-vial platform presentations of
monovalent (single antigen), bivalent (two antigens) and trivalent (three antigens) combinations of filovirus vaccine
candidates. In collaboration with UHM and University of Colorado (“UC”) co-authors, the manuscript titled "Single-Vial
Filovirus Glycoprotein Vaccines: Biophysical Characteristics and Immunogenicity after Co-lyophilization with Adjuvant", has
been published in Vaccine. (available at: https:// www.sciencedirect.com/science/article/pii/S0264410X21010021)
During September 2021 we announced publication of pre-clinical immunogenicity studies for CiVax™ (heat stable COVID-19
vaccine program) demonstrating durable broad-spectrum neutralizing antibody responses, including against the Beta,
Gamma and Delta variants of concern. The article, titled "Protein Vaccine Induces a Durable, More Broadly Neutralizing
Antibody Response in Macaques than Natural Infection with SARS-CoV-2 P.1," has been posted as an accelerated preprint
on bioRxiv (available at: https://www.biorxiv.org/content/10.1101/2021.09.24.461759v1). The manuscript is part of the
ongoing collaboration with Axel Lehrer, PhD, Associate Professor at the Department of Tropical Medicine, Medical
Microbiology and Pharmacology, John A. Burns School of Medicine (“JABSOM”), UHM. Development continues under a
non-dilutive $1.5M grant from the NIAID awarded to Soligenix in December 2020.
In December 2021 we announced 100% protection of NHPs against lethal Sudan ebolavirus challenge using a bivalent,
thermostabilized vaccine formulated in a single vial, reconstituted only with water immediately prior to use. This milestone is
part of an ongoing collaboration with UHM, demonstrating the successful presentation of one or more antigen(s) within the
same formulation while maintaining full potency and thermostability. It further demonstrates the broad applicability of the
vaccine platform, and its potential role in the US government's initiative for pandemic preparedness.
RiVax® – Ricin Toxin Vaccine
RiVax® is our proprietary vaccine candidate being developed to protect against exposure to ricin toxin and if approved,
would be the first ricin vaccine. The immunogen in RiVax® induces a protective immune response in animal models of ricin
exposure and functionally active antibodies in humans. The immunogen consists of a genetically inactivated ricin A chain
subunit that is enzymatically inactive and lacks residual toxicity of the holotoxin. RiVax® has demonstrated statistically
significant (p < 0.0001) preclinical survival results, providing 100% protection against acute lethality in an aerosol exposure
non-human primate model (Roy et al, 2015, Thermostable ricin vaccine protects rhesus macaques against aerosolized ricin:
Epitope-specific neutralizing antibodies correlate with protection, PNAS USA 112:3782-3787), and has also been shown to
be well tolerated and immunogenic in two Phase 1 clinical trials in healthy volunteers. Results of the first Phase 1 human
trial of RiVax® established that the immunogen was safe and induced antibodies that we believe may protect humans from
ricin exposure. The antibodies generated from vaccination, concentrated and purified, were capable of conferring immunity
passively to recipient animals, indicating that the vaccine was capable of inducing functionally active antibodies in humans.
The outcome of this study was published in the Proceedings of the National Academy of Sciences (Vitetta et al., 2006, A
Pilot Clinical Trial of a Recombinant Ricin Vaccine in Normal Humans, PNAS, 103:2268-2273). The second trial that was
completed in September 2012 and was sponsored by University of Texas Southwestern Medical Center (“UTSW”) evaluated
a more potent formulation of RiVax® that contained an Alum-adjuvant. The results of the Phase 1b study indicated that
Alum-adjuvanted RiVax® was safe and well tolerated, and induced greater ricin neutralizing antibody levels in humans than
adjuvant-free RiVax®. The outcomes of this second study were published in the Clinical and Vaccine Immunology (Vitetta et
al., 2012, Recombinant Ricin Vaccine Phase 1b Clinical Trial, Clin. Vaccine Immunol. 10:1697-1699).
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We have adapted the original manufacturing process for the immunogen contained in RiVax® for thermostability and large
scale manufacturing and recent studies have confirmed that the thermostabilized RiVax® formulation enhances the stability
of the RiVax® antigen, enabling storage for at least 1 year at temperatures up to 40 degrees C (104 degrees F). The
program will pursue approval via the FDA “Animal Rule” since it is not possible to test the efficacy of the vaccine in a clinical
study which would expose humans to ricin. Uniform, easily measured and species-neutral immune correlates of protection
that can be measured in humans and animals, and are indicative of animal survival to subsequent ricin challenge, are
central to the application of the “Animal Rule”. Recent work has identified such potential correlates of immune protection in
animals and work to qualify and validate these approaches is continuing, with the goal of utilizing these assays in a planned
Phase 1/2 clinical trial with the thermostable RiVax® formulation. During September 2018, we published an extended stability
study of RiVax®, showing up to 100% protection in mice after 12 months storage at 40 degrees C (104 degrees F) as well as
identification of a potential in vitro stability indicating assay, critical to adequately confirming the long-term shelf life of the
vaccine. We have entered into a collaboration with IDT Biologika GmbH (“IDT”) to scale-up the formulation/filling process
and continue development and validation of analytical methods established at IDT to advance the program. We also initiated
a development agreement with Emergent BioSolutions, Inc. to implement a commercially viable, scalable production
technology for the RiVax® drug substance protein antigen.
The development of RiVax® has been sponsored through a series of overlapping challenge grants, UC1, and cooperative
grants, U01, from the NIH, granted to us and to UTSW where the vaccine originated. The second clinical trial was supported
by a grant from the FDA’s Office of Orphan Products to UTSW. To date, we and UTSW have collectively received
approximately $25 million in grant funding from the NIH for the development of RiVax®. In September 2014, we entered into
a contract with the NIH for the development of RiVax® pursuant to which we have been awarded an additional $21.2 million
of funding in the aggregate. The development agreements with Emergent BioSolutions, Inc. and IDT were specifically
funded under this NIH contract.
In 2017, NIAID exercised options to fund additional animal efficacy studies and good manufacturing practices compliant
RiVax® bulk drug substance and finished drug product manufacturing, which is required for the conduct of future preclinical
and clinical safety and efficacy studies. The exercised options provide us with approximately $4.5 million in additional non-
dilutive funding, bringing the total amount awarded to date under this contract to $21.2 million, which expired in
February 2021. The total award of up to $21.2 million supported the preclinical, manufacturing and clinical development
activities necessary to advance heat stable RiVax® with the FDA. In addition to this funding for the development of RiVax®,
biomarkers for RiVax® testing have been successfully identified, facilitating potential approval under the FDA Animal Rule.
During December 2019, we initiated a third Phase 1 double-blind, placebo-controlled, randomized study in eight healthy
adult volunteer subjects designed to evaluate the safety and immunogenicity of RiVax® utilizing ThermoVax®. During
January 2020, we suspended the study after Emergent Manufacturing Operations Baltimore LLC (“EMOB”), the
manufacturer of the drug substance, notified us that, after releasing the final drug product to us, EMOB identified that the
active drug substance tested outside the established specification parameters. Two subjects had received doses as part of
the study before the manufacturer provided this notice. Those two subjects were monitored with no safety issues noted and
data was captured in accordance with the study protocol. They did not receive further doses of study drug.
During April 2020, we received notification from NIAID that they would not be exercising the final contract option to support
the conduct of a Phase 1/2 clinical study in healthy volunteers. As a result, the total contract award will not exceed $21.2
million. This contract subsequently expired in February 2021.
In connection with failures relating to the manufacture of RiVax® bulk drug substance, on July 1, 2020, we filed a demand for
arbitration against Emergent BioSolutions, Inc. (“EBS”), Emergent Product Development Gaithersburg, Inc. (“EPDG”); and
EMOB (together with EBS and EPDG, “Emergent”) with the American Arbitration Association in Mercer County, New Jersey.
We have alleged that (a) EPDG breached contracts, an express warranty, a warranty of merchantability, and a warranty of
fitness for a particular purpose, (b) EMOB breached a contract; (c) EPDG was unjustly enriched; (d) EPDG and EMOB were
negligent in the performance of their work; and (e) EBS fraudulently induced us into entering into the contracts with EPDG
and EMOB. We are seeking to recover damages in excess of $19 million from Emergent. Emergent has answered the
demand for arbitration denying the allegations and asserting affirmative defenses. While we intend to vigorously pursue this
arbitration, we cannot offer any assurances as to any result from the arbitration or that we will recover any damages from
Emergent. For more details regarding the arbitration against Emergent, see Part I – Item 3. “Legal Proceedings” in this
Annual Report.
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In November 2021, we announced publication of pre-clinical immunogenicity studies for RiVax® demonstrating enduring
protection for at least 12 months post-vaccination. The article titled “Durable Immunity to Ricin Toxin Elicited by a
journal mSphere
Thermostable, Lyophilized Subunit Vaccine” has been accepted
(https://journals.asm.org/dot/10.1128/mSphere.00750-21). These results, coupled with the previous demonstration of
efficacy in mice and NHPs as well as long-term thermostability (at least 1 year at 40 degrees C or 104 degrees F), reinforce
the practicality of stockpiling and potentially utilizing the RiVax® vaccine in warfighters and civilian first responders without
the complexities that arise for vaccines that require stringent cold chain handling.
for publication
the
in
RiVax® has been granted Orphan Drug designation as well as Fast Track designation by the FDA for the prevention of ricin
intoxication. In addition, RiVax® has also been granted Orphan Drug designation in the European Union (“EU”) from the
EMA Committee for Orphan Medical Products.
Assuming development efforts are successful for RiVax®, we believe potential government procurement contract(s) could
reach as much as $200 million. This potential procurement contract information is a forward-looking statement, and investors
are urged not to place undue reliance on this statement. While we have determined this potential procurement contract value
based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to
change or not be realized.
As a new chemical entity, an FDA approved RiVax® vaccine has the potential to qualify for a biodefense Priority Review
Voucher (“PRV”). Approved under the 21st Century Cures Act in late 2016, the biodefense PRV is awarded upon approval
as a medical countermeasure when the active ingredient(s) have not been otherwise approved for use in any context. PRVs
are transferable and can be sold, with sales in recent years of approximately $100 million. When redeemed, PRVs entitle the
user to an accelerated review period of nine months, saving a median of seven months review time as calculated in 2009.
However, FDA must be advised 90 days in advance of the use of the PRV and the use of a PRV is associated with an
additional user fee ($2.2 million for fiscal year 2020).
Ricin Toxin
Ricin toxin can be cheaply and easily produced, is stable over long periods of time, is toxic by several routes of exposure
and thus has the potential to be used as a biological weapon against military and/or civilian targets. As a bioterrorism agent,
ricin could be disseminated as an aerosol, by injection, or as a food supply contaminant. The potential use of ricin toxin as a
biological weapon of mass destruction has been highlighted in a Federal Bureau of Investigation Bioterror report released in
November 2007 titled Terrorism 2002-2005, which states that “Ricin and the bacterial agent anthrax are emerging as the
most prevalent agents involved in WMD investigations” (http://www.fbi.gov/stats-services/publications/terrorism-2002-
2005/terror02_05.pdf). In recent years, Al Qaeda in the Arabian Peninsula has threatened the use of ricin toxin to poison
food and water supplies and in connection with explosive devices. Domestically, the threat from ricin remains a concern for
security agencies. In April 2013, letters addressed to the U.S. President, a Senator and a judge tested positive for ricin. As
recently as September 2020, ricin-laced letters addressed to the White House and others addressed to Texas law
enforcement agencies were intercepted before delivery raising fresh concerns about the deadly toxin.
The Centers for Disease Control and Prevention has classified ricin toxin as a Category B biological agent. Ricin works by
first binding to glycoproteins found on the exterior of a cell, and then entering the cell and inhibiting protein synthesis leading
to cell death. Once exposed to ricin toxin, there is no effective therapy available to reverse the course of the toxin. The
recent ricin threat to government officials has heightened the awareness of this toxic threat. Currently, there is no FDA
approved vaccine to protect against the possibility of ricin toxin being used in a terrorist attack, or its use as a weapon on the
battlefield nor is there a known antidote for ricin toxin exposure.
SGX943 – for Treating Emerging and/or Antibiotic-Resistant Infectious Diseases
SGX943 is an IDR, containing the same active ingredient as SGX942. Dusquetide is a fully synthetic, 5-amino acid peptide
with high aqueous solubility and stability. Extensive in vivo preclinical studies have demonstrated enhanced clearance of
bacterial infection with SGX943 administration. SGX943 has shown efficacy against both Gram-negative and Gram-positive
bacterial infections in preclinical models, independent of whether the bacteria is antibiotic-resistant or antibiotic-sensitive.
The innate immune system is responsible for rapid and non-specific responses to combat bacterial infection. Augmenting
these responses represents an alternative approach to treating bacterial infections. In animal models, IDRs are efficacious
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against both antibiotic-sensitive and antibiotic-resistant infections, both Gram-positive and Gram-negative bacteria, and are
active irrespective of whether the bacteria occupy a primarily extracellular or intracellular niche. IDRs are also effective as
stand-alone agents or in conjunction with antibiotics. An IDR for the treatment of serious bacterial infections encompasses a
number of clinical advantages including:
● Treatment when antibiotics are contraindicated, such as:
o before the infectious organism and/or its antibiotic susceptibility is known; or
o in at-risk populations prior to infection.
● An ability to be used as an additive, complementary treatment with antibiotics, thereby:
o enhancing efficacy of sub-optimal antibiotic regimens (e.g., partially antibiotic-resistant infections);
o enhancing clearance of infection, thereby minimizing the generation of antibiotic resistance (e.g., in treating
melioidosis); and
o reducing the required antibiotic dose, again potentially minimizing the generation of antibiotic resistance.
● An ability to modulate the deleterious consequences of inflammation in response to the infection, including the
inflammation caused by antibiotic-driven bacterial lysis.
● Being unlikely to generate bacterial resistance since the IDR acts on the host, and not the pathogen.
Importantly, systemic inflammation and multi-organ failure is the ultimate common outcome of not only emerging and/or
antibiotic-resistant infectious diseases, but also of most biothreat agents (e.g., Burkholderia pseudomallei), indicating that
dusquetide would be applicable not only to antibiotic-resistant infection, but also to biothreat agents, especially where the
pathogen is not known and/or has been engineered for enhanced antibiotic resistance.
In May 2019, we were awarded a DTRA subcontract of approximately $600,000 over three years to participate in a
threat agents. As of
biodefense contract
December 31, 2021, there was negligible revenue earned or expense incurred related to the DTRA subcontract.
the development of medical countermeasures against bacterial
for
The Drug Approval Process
The FDA and comparable regulatory agencies in state, local and foreign jurisdictions impose substantial requirements on the
clinical development, manufacture and marketing of new drug and biologic products. The FDA, through regulations that
implement the Federal Food, Drug, and Cosmetic Act, as amended (“FDCA”), and other laws and comparable regulations
for other agencies, regulate research and development activities and the testing, manufacture, labeling, storage, shipping,
approval, recordkeeping, advertising, promotion, sale, export, import and distribution of such products. The regulatory
approval process is generally lengthy, expensive and uncertain. Failure to comply with applicable FDA and other regulatory
requirements can result in sanctions being imposed on us or the manufacturers of our products, including holds on clinical
research, civil or criminal fines or other penalties, product recalls, or seizures, or total or partial suspension of production or
injunctions, refusals to permit products to be imported into or exported out of the U.S., refusals of the FDA to grant approval
of drugs or to allow us to enter into government supply contracts, withdrawals of previously approved marketing applications
and criminal prosecutions.
Before human clinical testing in the U.S. of a new drug compound or biological product can commence, an Investigational
New Drug (“IND”), application is required to be submitted to the FDA. The IND application includes results of pre-clinical
animal studies evaluating the safety and efficacy of the drug and a detailed description of the clinical investigations to be
undertaken.
Clinical trials are normally done in three phases, although the phases may overlap. Phase 1 trials are smaller trials
concerned primarily with metabolism and pharmacologic actions of the drug and with the safety of the product. Phase 2 trials
are designed primarily to demonstrate effectiveness and safety in treating the disease or condition for which the
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product is indicated. These trials typically explore various doses and regimens. Phase 3 trials are expanded clinical trials
intended to gather additional information on safety and effectiveness needed to clarify the product’s benefit-risk relationship
and generate information for proper labeling of the drug, among other things. The FDA receives reports on the progress of
each phase of clinical testing and may require the modification, suspension or termination of clinical trials if an unwarranted
risk is presented to patients. When data is required from long-term use of a drug following its approval and initial marketing,
the FDA can require Phase 4, or post-marketing, studies to be conducted.
With certain exceptions, once successful clinical testing is completed, the sponsor can submit an NDA, for approval of a
drug, or a Biologic License Application (“BLA”), for biologics such as vaccines, which will be reviewed, and if successful,
approved by the FDA, allowing the product to be marketed. The process of completing clinical trials for a new drug is likely to
take a number of years and require the expenditure of substantial resources. Furthermore, the FDA or any foreign health
authority may not grant an approval on a timely basis, if at all. The FDA may deny the approval of an NDA or BLA, in its sole
discretion, if it determines that its regulatory criteria have not been satisfied or may require additional testing or information.
Among the conditions for marketing approval is the requirement that the prospective manufacturer’s quality control and
manufacturing procedures conform to good manufacturing practice regulations. In complying with standards contained in
these regulations, manufacturers must continue to expend time, money and effort in the area of production, quality control
and quality assurance to ensure full technical compliance. Manufacturing facilities, both foreign and domestic, also are
subject to inspections by, or under the authority of, the FDA and by other federal, state, local or foreign agencies.
Even after initial FDA or foreign health authority approval has been obtained, further studies, including Phase 4 post-
marketing studies, may be required to provide additional data on safety and will be required to gain approval for the
marketing of a product as a treatment for clinical indications other than those for which the product was initially tested. For
certain drugs intended to treat serious, life-threatening conditions that show great promise in earlier testing, the FDA can
also grant conditional approval. However, drug developers are required to study the drug further and verify clinical benefit as
part of the conditional approval provision, and the FDA can revoke approval if later testing does not reproduce previous
findings. The FDA may also condition approval of a product on the sponsor agreeing to certain mitigation strategies that can
limit the unfettered marketing of a drug. Also, the FDA or foreign regulatory authority will require post-marketing reporting to
monitor the side effects of the drug. Results of post-marketing programs may limit or expand the further marketing of the
product. Further, if there are any modifications to the drug, including any change in indication, manufacturing process,
labeling or manufacturing facility, an application seeking approval of such changes will likely be required to be submitted to
the FDA or foreign regulatory authority.
In the U.S., the FDCA, the Public Health Service Act, the Federal Trade Commission Act, and other federal and state
statutes and regulations govern, or influence the research, testing, manufacture, safety, labeling, storage, record keeping,
approval, advertising and promotion of drug, biological, medical device and food products. Noncompliance with applicable
requirements can result in, among other things, fines, recall or seizure of products, refusal to permit products to be imported
into the U.S., refusal of the government to approve product approval applications or to allow us to enter into government
supply contracts, withdrawal of previously approved applications and criminal prosecution. The FDA may also assess civil
penalties for violations of the FDCA involving medical devices.
For biodefense development, such as with RiVax®, the FDA has instituted policies that are expected to result in shorter
pathways to market. This potentially includes approval for commercial use utilizing the results of animal efficacy trials, rather
than efficacy trials in humans. However, we will still have to establish that the vaccine and countermeasures it is developing
are safe in humans at doses that are correlated with the beneficial effect in animals. Such clinical trials will also have to be
completed in distinct populations that are subject to the countermeasures; for instance, the very young and the very old, and
in pregnant women, if the countermeasure is to be licensed for civilian use. Other agencies will have an influence over the
benefit-risk scenarios for deploying the countermeasures and in establishing the number of doses utilized in the Strategic
National Stockpile. We may not be able to sufficiently demonstrate the animal correlation to the satisfaction of the FDA, as
these correlates are difficult to establish and are often unclear. Invocation of the animal rule may raise issues of confidence
in the model systems even if the models have been validated. For many of the biological threats, the animal models are not
available and we may have to develop the animal models, a time-consuming research effort. There are few historical
precedents, or recent precedents, for the development of new countermeasure for bioterrorism agents. Despite the animal
rule, the FDA may require large clinical trials to establish safety and immunogenicity before licensure and it may require
safety and immunogenicity trials in additional populations. Approval of biodefense products may be subject to post-
marketing studies, and could be restricted in use in only certain populations.
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Vaccines are approved under the BLA process that exists under the Public Health Service Act. In addition to the greater
technical challenges associated with developing biologics, the potential for generic competition is lower for a BLA product
than a small molecule product subject to an NDA under the Federal Food, Drug and Cosmetic Act. Under the Patient
Protection and Affordable Care Act enacted in 2010, a “generic” version of a biologic is known as a biosimilar and the
barriers to entry – whether legal, scientific, or logistical – for a biosimilar version of a biologic approved under a BLA are
higher.
Orphan Drug Designation
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biologics intended to treat a rare
disease or condition – generally a disease or condition that affects fewer than 200,000 individuals in the U.S. Orphan drug
designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the generic
identity of the drug or biologic and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does
not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA or BLA
applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA orphan drug
designation is entitled to a seven-year exclusive marketing period in the U.S. for that product, for that indication. During the
seven-year exclusivity period, the FDA may not approve any other applications to market the same drug or biologic for the
same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug
exclusivity. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same
disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan
drug designation are tax credits for certain research and a waiver of the NDA or BLA application user fee.
Fast Track Designation and Accelerated Approval
The FDA is required to facilitate the development, and expedite the review, of drugs or biologics that are intended for the
treatment of a serious or life-threatening disease or condition for which there is no effective treatment and which
demonstrate the potential to address unmet medical needs for the condition. Under the fast track program, the sponsor of a
new drug or biologic candidate may request that the FDA designate the candidate for a specific indication as a fast track
drug or biologic concurrent with, or after, the filing of the IND for the candidate. The FDA must determine if the drug or
biologic candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request. Unique to a fast
track product, the FDA may initiate review of sections of a fast track product’s NDA or BLA before the application is
complete. This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of
the remaining information and the applicant pays applicable user fees. However, the FDA’s time period goal for reviewing an
application does not begin until the last section of the NDA or BLA is submitted. Additionally, the fast track designation may
be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial
process.
Any product submitted to the FDA for marketing, including under a fast track program, may be eligible for other types of FDA
programs intended to expedite development and review, such as accelerated approval. Drug or biological products studied
for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic
benefit over existing treatments may receive accelerated approval, which means the FDA may approve the product based
upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured
earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or
mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or
lack of alternative treatments.
In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that
substitutes for a direct measurement of how a patient feels, functions, or survives. Surrogate endpoints can often be
measured more easily or more rapidly than clinical endpoints. A drug or biologic candidate approved on this basis is subject
to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to
confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit
during post-marketing studies, will allow the FDA to withdraw the drug or biologic from the market on an expedited basis. All
promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.
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Pediatric Information
Under the Pediatric Research Equity Act (“PREA”), NDAs or BLAs or supplements to NDAs or BLAs must contain data to
assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to
support dosing and administration for each pediatric subpopulation for which the drug is safe and effective. The FDA may
grant full or partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation, PREA does not
apply to any drug for an indication for which orphan designation has been granted.
Paediatric Investigation Plan
As part of the regulatory process for the registration of new medicines with the EMA and the MHRA, pharmaceutical
companies are required to provide a PIP outlining the Company’s strategy for investigation of the new medicinal products in
the paediatric population. In some instances, a waiver negating the need for a PIP for certain conditions may be granted by
the EMA or MHRA when development of a medicine for use in children is not feasible or appropriate.
Innovative Licensing and Access Pathway
The ILAP was launched in the UK at the start of 2021 to accelerate the development and access to promising medicines,
thereby facilitating patient access to new medicines. The pathway, part of the UK’s plan to attract life sciences development
in the post-Brexit era, features enhanced input and interactions with the MHRA and other stakeholders including the NICE,
and the SMC. The decision to award the Innovation Passport is made by an ILAP Steering Group, which is comprised of
representatives from MHRA, NICE, and SMC. The Innovation Passport designation is the first step in the ILAP process and
triggers the MHRA and its partner agencies to create a target development profile to chart out a roadmap for regulatory and
development milestones with the goal of early patient access in the UK. Other benefits of ILAP include a 150-day
accelerated assessment, rolling review and a continuous benefit risk assessment.
Early Access to Medicines Scheme
Launched in April 2014 in the United Kingdom by the MHRA, the Early Access to Medicines Scheme (“EAMS”) offers
severely ill patients with life-threatening and seriously debilitating conditions the lifeline of trying ground-breaking new
medicines earlier than they would normally be accessible. PIM designation is the first phase of EAMS and is awarded
following an assessment of early nonclinical and clinical data by the MHRA. The criteria product candidates must meet to
obtain PIM designation are:
● Criterion 1 – The condition should be life-threatening or seriously debilitating with a high unmet medical need (i.e.,
there is no method of treatment, diagnosis or prevention available or existing methods have serious limitations).
● Criterion 2 – The medicinal product is likely to offer major advantage over methods currently used in the UK.
● Criterion 3 – The potential adverse effects of the medicinal product are likely to be outweighed by the benefits,
allowing for the reasonable expectation of a positive benefit risk balance. A positive benefit risk balance should be
based on preliminary scientific evidence that the safety profile of the medicinal product is likely to be manageable
and acceptable in relation to the estimated benefits.
False Claims Laws
The federal False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be
presented, a false claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be
made or used a false record or statement material to a false or fraudulent claim to the federal government. As a result of a
modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for
money or property presented to the U.S. government.
Anti-Kickback Laws
The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering,
paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in
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return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable
under Medicare, Medicaid or other federal healthcare programs. The term remuneration has been interpreted broadly to
include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical
manufacturers on one hand and prescribers, purchasers, and formulary managers on the other.
United States Healthcare Reform
Federal Physician Payments Sunshine Act and its implementing regulations require that certain manufacturers of drugs,
devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health
Insurance Program (with certain exceptions) to report information related to certain payments or other transfers of value
made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on
behalf of, the physicians and teaching hospitals and to report annually certain ownership and investment interests held by
physicians and their immediate family members.
In addition, we may be subject to data privacy and security regulation by both the federal government and the states in
which we conduct our business. The Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the
Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, imposes
certain requirements relating to the privacy, security and transmission of individually identifiable health information. Among
other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates” –
independent contractors or agents of covered entities that receive or obtain protected health information in connection with
providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties, amended
HIPAA to make civil and criminal penalties directly applicable to business associates and possibly other persons, and gave
state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal
HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, state laws govern
the privacy and security of health information in certain circumstances, many of which differ from each other in significant
ways and may not have the same effect, thus complicating compliance efforts.
Third-Party Suppliers and Manufacturers
Drug substance and drug product manufacturing is outsourced to qualified suppliers. We do not have manufacturing
capabilities/infrastructure and do not intend to develop the capacity to manufacture drug products substances. We have
agreements with third-party manufacturers to supply bulk drug substances for our product candidates and with third parties
to formulate, package and distribute our product candidates. Our employees include professionals with expertise in
pharmaceutical manufacturing development, quality assurance and third party supplier management who oversee work
conducted by third-party companies. We believe that we have on hand or can easily obtain sufficient amounts of product
candidates to complete our currently contemplated clinical trials. All of the drug substances used in our product candidates
currently are manufactured by single suppliers. While we have not experienced any supply disruptions, the number of
manufacturers of the drug substances is limited. In the event it is necessary or advisable to acquire supplies from alternative
suppliers, assuming commercially reasonable terms could be reached, the challenge would be the efficient transfer of
technology and know-how from current manufactures to the new supplier. Formulation and distribution of our finished
product candidates also currently are conducted by single suppliers but we believe that alternative sources for these
services are readily available on commercially reasonable terms, subject to the efficient transfer of technology and know-
how from current suppliers to the new supplier.
All of the current agreements for the supply of bulk drug substances for our product candidates and for the formulation or
distribution of our product candidates relate solely to the development (including preclinical and clinical) of our product
candidates. Under these contracts, our product candidates are manufactured upon our order of a specific quantity. In the
event that we obtain marketing approval for a product candidate, we will qualify secondary suppliers for all key
manufacturing activities supporting the marketing application.
Marketing and Collaboration
We do not currently have any sales and marketing capability, other than to potentially market our biodefense vaccine
products directly to government agencies. With respect to other commercialization efforts, we currently intend to seek
distribution and other collaboration arrangements for the sales and marketing of any product candidate that is approved,
while also evaluating the potential to commercialize on our own in orphan disease indications. From time to time, we have
had and are having strategic discussions with potential collaboration partners for our biodefense vaccine product
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candidates, although no assurance can be given that we will be able to enter into one or more collaboration agreements for
our product candidate on acceptable terms, if at all. We believe that both military and civilian health authorities of the U.S.
and other countries will increase their stockpiling of therapeutics and vaccines to treat and prevent diseases and conditions
that could ensue following a bioterrorism attack.
On December 20, 2012, we re-acquired the North American and European commercial rights to oral BDP through an
amendment of our collaboration and supply agreement with Sigma-Tau Pharmaceuticals, Inc., which is now known as
Leadiant Biosciences, Inc. (“Leadiant”). The amendment requires us to make certain approval and commercialization
milestone payments to Leadiant which could reach up to $6 million. In addition, we have agreed to pay Leadiant: (a) a
royalty amount equal to 3% of all net sales of oral BDP made directly by us, and any third-party partner and/or their
respective affiliates in the U.S., Canada, Mexico and in each country in the European Territory for the later to occur of: (i) a
period of ten years from the first commercial sale of oral BDP in each country, or (ii) the expiration of our patents and patent
applications relating to oral BDP in such country (the “Payment Period”); and (b) 15% of all up-front payments, milestone
payments and any other consideration (exclusive of equity payments) received by us and/or a potential partner from us
and/or potential partner’s licensees, distributors and agents for oral BDP in each relevant country in the territory, which
amount will be paid on a product-by-product and a country-by-country basis for the Payment Period.
On August 25, 2013, we entered into an agreement with SciClone, pursuant to which SciClone provided us with access to its
oral mucositis clinical and regulatory data library in exchange for exclusive commercialization rights for SGX942 in the
People’s Republic of China, including Hong Kong and Macau, subject to the negotiation of economic terms. SciClone’s data
library was generated from two sequential Phase 2 clinical studies conducted in 2010 and 2012 evaluating SciClone’s
compound, SCV-07, for the treatment of oral mucositis caused by chemoradiation therapy in head and neck cancer patients,
before SciClone terminated its program. By analyzing data available from the placebo subjects in the SciClone trials, we
acquired valuable insight into disease progression, along with quantitative understanding of its incidence and severity in the
head and neck cancer patient population. This information assisted us with the design of the SGX942 Phase 2 clinical trial,
in which positive preliminary results were announced in December 2015.
On September 9, 2016, we and SciClone entered into an exclusive license agreement, pursuant to which we granted rights
to SciClone to develop, promote, market, distribute and sell SGX942 in the People’s Republic of China, including Hong Kong
and Macau, as well as Taiwan, South Korea and Vietnam. Under the terms of the license agreement, SciClone will be
responsible for all aspects of development, product registration and commercialization in the territory, having access to data
generated by us. In exchange for exclusive rights, SciClone will pay us royalties on net sales, and we will supply commercial
drug product to SciClone on a cost-plus basis, while maintaining worldwide manufacturing rights. We also entered into a
common stock purchase agreement with SciClone pursuant to which we sold 352,942 shares of our common stock to
SciClone for approximately $8.50 per share, for an aggregate price of $3,000,000.
Competition
Our competitors are pharmaceutical and biotechnology companies, most of whom have considerably greater financial,
technical, and marketing resources than we do. Universities and other research institutions, including the U.S. Army Medical
Research Institute of Infectious Diseases, also compete in the development of treatment technologies, and we face
competition from other companies to acquire rights to those technologies.
HyBryte™ Competition
The FDA has approved several treatments for later stages (IIB-IV) of CTCL and/or in conditions that are unresponsive to
prior treatment. Three are targeted therapies (Targretin®-caps, Ontak® and Adcetris®), two are histone deacetylases
inhibitors (Zolina® and Istodax®) and the remaining two are topical therapies (Valchor® and Targretin®-gel). There are
currently no FDA approved therapies for the treatment of front-line, early stage (I-IIA) CTCL; however certain topical
chemotherapies and topical, radiation, photodynamic and other therapies which are approved for indications other than
CTCL are prescribed off-label for the treatment of early stage CTCL. These include narrow-band ultraviolet B (NB-UVB) light
therapy and psoralen combined with ultraviolet A UVA light therapy (“PUVA”); however, PUVA treatments are usually limited
to three times per week and 200 times in total due to the potentially carcinogenic side effect, while NB UVB is known to be
effective against patches but less so against plaque lesions, common in early stage CTCL. There are other drugs currently
in development that may have the potential to be used in early stage (I-IIA) CTCL, including, one PDT (Silicon
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Phthalocyanine 4) in Phase 1 and one topical therapy (naloxone lotion for treatment of pruritus only) in Phase 3. Other
treatments for later stage disease are not considered direct competitors.
SGX94/942 Competition
Because SGX94 (dusquetide) uses a novel mechanism of action in combating bacterial infections, there are no direct
competitors at this time. Bacterial infections are routinely treated with antibiotics and SGX94 treatment is anticipated to be
utilized primarily where antibiotics are insufficient (e.g., due to antibiotic resistance) or contra-indicated (e.g., in situations
where the development of antibiotic resistance is a significant concern). Many groups are working on the antibiotic
resistance problem and research into the innate immune system is intensifying, making emerging competition likely (from
companies such as Celtaxsys Inc., Innaxon Therapeutics and Innate Pharma SA).
There is currently one drug approved for the treatment of oral mucositis in hematological cancer (palifermin). There are
currently no approved drugs for treatment of oral mucositis in cancers with solid tumors (e.g., head and neck cancer). There
are several drugs in clinical development for oral mucositis – three in Phase 3 (brilacidin by Innovation Pharmaceuticals,
Inc., GC4419 by Galera Therapeutics, Inc., and a mucobuccal tablet by Monopar Therapeutics LLC). There are various
natural products in small and/or open label studies (including sage, turmeric, honey and olive oil). In addition, there are
medical devices approved for the treatment of oral mucositis including MuGard®, GelClair®, Episil®, and Caphosol®. These
devices attempt to create a protective barrier around the oral ulceration with no biologic activity in treating the underlying
disease.
Oral BDP Competition
There are a number of approved treatments for Crohn’s disease and additional compounds are in late-stage development.
Remicade® (infliximab) and Humira® (adalimumab) are currently approved for the treatment of pediatric Crohn’s disease;
however, both carry significant Black Box warnings in their labeling for increased risk of serious infection and malignancy,
and therefore are approved for treatment of moderate to severe patients. Entocort® (enteric-coated budesonide) is currently
approved for the treatment of mild to moderate active Crohn’s disease involving the lower GI tract (ileum and/or the
ascending colon) in patients eight years of age and older who weigh more than 25 kilograms. There is one other marketed
biologic, Tysabri® (natalizumab), in a Phase 2 study for pediatric Crohn’s.
ThermoVax® Competition
Multiple groups and companies are working to address the unmet need of vaccine thermostability using a variety of
technologies. In addition, other organizations, such as the Bill and Melinda Gates Foundation and PATH, have programs
designed to advance technologies to address this need.
Several stabilization technologies currently being developed involve mixing vaccine antigen +/- adjuvant with various
proprietary excipients or co-factors that either serve to stabilize the vaccine or biological product in a liquid or dried
(lyophilized) form. Examples of these approaches include the use of various plant-derived sugars and macromolecules being
developed by companies such as iosBio. Variation Biotechnologies, Inc. (“VBI”) is developing a lipid system (resembling
liposomes) to stabilize viral antigens, including virus-like particles (“VLPs”), and for potential application to a conventional
influenza vaccine among others.
Additionally, companies like Altimmune, Inc., and Panacea Biotec Ltd., and Compass Biotech Inc. are developing proprietary
vaccines with the application of some form of stabilization technology.
Public Health Solutions Competition
We face competition in the area of biodefense product development from various public and private companies, universities
and governmental agencies, such as the U.S. Army, some of whom may have their own proprietary technologies which may
directly compete with our technologies.
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The U.S. Army Medical Research Institute of Infectious Diseases, the DoD’s lead laboratory for medical research to counter
biological threats is also developing a ricin vaccine candidate, RVEc™. RVEc™ has been shown to be fully protective in
mice exposed to lethal doses of ricin toxin by the aerosol route. Further studies, in both rabbits and nonhuman primates,
were conducted to evaluate RVEc™’s safety as well as its immunogenicity, with positive results observed. No further data
has been released in recent years. A monoclonal antibody is also being developed by Mapp Biopharmaceutical Inc. as a
ricin therapeutic, with administration 4 hours after exposure demonstrating efficacy while administration 12 hours after ricin
exposure was not protective in animal models.
Patents and Other Proprietary Rights
Our goal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods and other
proprietary technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties,
both in the U.S. and in other countries. Our policy is to actively seek to obtain, where appropriate, the broadest intellectual
property protection possible for our product candidates, proprietary information and proprietary technology through a
combination of contractual arrangements and patents, both in the U.S. and elsewhere in the world.
We also depend upon the skills, knowledge and experience of our scientific and technical personnel, as well as that of our
advisors, consultants and other contractors, none of which is patentable. To help protect our proprietary knowledge and
experience that is not patentable, and for inventions for which patents may be difficult to enforce, we rely on trade secret
protection and confidentiality agreements to protect our interests. To this end, we require all employees, consultants,
advisors and other contractors to enter into confidentiality agreements, which prohibit the disclosure of confidential
information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and
inventions important to our business.
In 2014, we acquired a novel PDT that utilizes safe visible light for activation, which we refer to as HyBryte™. The active
ingredient in HyBryte™ is synthetic hypericin, a photosensitizer which is topically applied to skin lesions and then activated
by fluorescent light 16 to 24 hours later. As part of the acquisition, we acquired a license agreement relating to the use of
photo-activated hypericin, composition of matter patent for HyBryte™ (U.S. patent 8,629,302) and additional issued and
pending applications, both in the U.S. and abroad. U.S. patent 8,629,302 is expected to expire in September 2030. In
August 2018, we were granted a U.S. patent (No. 10,053,513) titled “Systems and Methods for Producing Synthetic
Hypericin”. This newly issued patent, expected to expire in 2036, broadens the production around synthetic hypericin. Our
proprietary formulation of synthetic hypericin also has been granted a European patent for the treatment of psoriasis, EP
2571507, and complements the method of treatment claims covered by the previously issued U.S. patent 6001882,
Photoactivated hypericin and the use thereof. Further, on January 7, 2020, Soligenix was also granted a U.S. patent
(No. 10,526,268) titled “Systems and Methods for Producing Synthetic Hypericin”, which further expanded protection for the
composition of purified synthetic hypericin. This patent is also expected to expire in 2036. Patent protection is also pursued
worldwide with similar patents and expiry dates.
In addition to issued and pending patents, we also have “Orphan Drug” designations for HyBryte™ in the U.S. and the EU
for CTCL, SGX203 in the U.S. for pediatric Crohn’s disease, as well as for RiVax® in the U.S. and EU. Our Orphan Drug
designations provide for seven years of post-approval marketing exclusivity in the U.S. and ten years exclusivity in Europe.
We have pending patent applications for this indication that, if granted, may extend our anticipated marketing exclusivity
beyond the U.S. seven year or EU ten year post-approval exclusivity provided by Orphan Drug legislation.
In 2013, we expanded our patent portfolio to include innate defense regulation through the acquisition of the novel drug
technology, known as SGX94. By binding to the pivotal regulatory protein p62, also known as sequestosome-1, SGX94
regulates the innate immune system to reduce inflammation, eliminate infection and enhance healing. As part of the
acquisition, we acquired all rights, including composition of matter patents for SGX94 as well as other analogs and crystal
structures of SGX94 with its protein target p62, including U.S. patent 8,124,721 (expiring 2028), 9,416,157 (expiring 2028)
and 8,791,061 (expiring 2029), both in the U.S. and abroad. SGX94 was developed pursuant to discoveries made by
Professors B. Brett Finlay and Robert Hancock of University of British Columbia (“UBC”). Soligenix also has rights to the
background technology patents (U.S. patent numbers 7,507,787 [expiring 2024] and 7,687,454 [expiring 2026]). The U.S.
Patent Office has also granted patents titled “Novel Peptides and Analogs for Use in the Treatment of Oral Mucositis”. The
issued patents (U.S. patent numbers 9,850.279 and 10,253,068, both expiring in 2034) claim therapeutic use of dusquetide
and related IDR analogs, and adds to composition of matter claims for dusquetide and related analogs that have been
granted in the U.S. and worldwide.
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We have issued U.S. patent 8,263,582 that cover the use of oral BDP for treating inflammatory disorders of the
gastrointestinal tract, which patent expired on March 15, 2022. We also have European patent EP 1392321 claiming the use
of topically active corticosteroids in orally administered dosage forms that act concurrently to treat inflammation in the upper
and lower gastrointestinal tract, as well as European patent EP 2242477 claiming the use of orally ingested BDP for
treatment of interstitial lung disease. European patents EP 1392321 and EP 2242477 expired in March 2022 and expire on
January 2029, respectively.
The subject of U.S. patent application number 12/633,631 filed December 8, 2009 and continued into patent application
15/495,798 filed April 24, 2017 and corresponding European patent application number 09836727.9, which was granted as
patent 2373160 in October 2017 and pursued in multiple European countries, is the use of topically active BDP in radiation
and chemotherapeutics injury. Additionally, we have numerous patent filings currently issued or pending in foreign
jurisdictions covering this subject matter, including Australia, Canada, China, Hong Kong, Israel, Japan, South Korea and
New Zealand.
ThermoVax® is the subject of U.S. patents 8,444,991 (expiring February 2030) and 8,808,710 (expiring March 2028) both
issued on May 21, 2013 titled “Method of Preparing an Immunologically-Active Adjuvant-Bound Dried Vaccine Composition”
and licensed to us by VitriVax, Inc. ThermoVax® is also U.S. patent application number 15/694.023 filed September 17,
2017 titled “Thermostable Vaccine Compositions and Methods of Preparing Same” and jointly invented by the UC and the
Company. The patent application and the corresponding foreign filings are pending or granted and they address the use of
adjuvants in conjunction with vaccines that are formulated to resist thermal inactivation. The license agreement covers
thermostable alum-adjuvanted vaccines for ricin toxin and Ebola virus. An additional patent, covering vaccine combinations
such as ricin toxin and anthrax, was filed in 2015 and granted on May 21, 2019 in the U.S. (No. 10,293,041, titled
“Multivalent Stable Vaccine Composition and Methods of Making Same”) and is expected to expire in 2035. Patent
protection is also pursued worldwide with similar patents and expiry dates
Additional vaccine thermostabilization patents specific for anti-viral vaccines, including filovirus and coronavirus have been
filed but are not yet granted. If granted, expiry dates would range from 2040 to 2041. Patent protection is also pursued
worldwide with similar patents and expiry dates.
HyBryte™ License Agreement
In September 2014, we acquired a worldwide exclusive license agreement with New York University and Yeda Research and
Development Company Ltd. for the rights to a novel PDT that utilizes safe visible light for activation, which we refer to as
HyBryte™. To maintain this license, we are obligated to pay $25,000 in annual license fees. In addition, we will pay the
licensors: (a) a royalty amount equal to 3% of all net sales of HyBryte™ made directly by us and/or any affiliates; (b) a
royalty amount equal to 2.5% of all net sales of HyBryte™ made by our sublicensees, subject to stated maximums and
(c) 20% of all payments, not based on net sales, received by us from our sublicensees. This license may be terminated by
either party upon notice of a material breach by the other party that is not cured within the applicable cure period. The
exclusive license includes rights to several issued U.S. patents, including U.S. patent numbers 6,867,235 and 7,122,518,
among other domestic and foreign patent applications. U.S. Patent numbers 6,867,235 and 7,122,518 expired in
January 2020 and is expected to expire in November 2023, respectively.
We acquired the license agreement for HyBryte™ and related intangible assets, including U.S. patent 8,629,302, properties
and rights pursuant to an asset purchase agreement with Hy Biopharma Inc. (“Hy Biopharma”). As consideration for the
assets acquired, we initially paid $275,000 in cash and issued 184,912 shares of common stock with a market value of
$3,750,000, and in March 2020 we issued 1,956,182 shares of common stock at a value of $5,000,000 (based upon an
effective per share price of $2.56) as a result of HyBryte™ demonstrating statistical significant treatment response in the
Phase 3 clinical trial. Provided the final success-orientated milestone is attained, we will be required to make a payment of
up to $5.0 million, if and when achieved, payable in our common stock.
SGX94 License Agreements
On December 18, 2012, we announced the acquisition of a first in class drug technology, known as SGX94 (dusquetide),
representing a novel approach to modulation of the innate immune system. SGX94 is an IDR that regulates the innate
immune system to reduce inflammation, eliminate infection and enhance tissue healing by binding to the pivotal regulatory
protein p62, also known as sequestosome-1. As part of the acquisition, we acquired all rights, including composition of
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matter patents, preclinical and Phase 1 clinical study datasets for SGX94. We also assumed a license agreement with UBC
to advance the research and development of the SGX94 technology. The license agreement with UBC provides us with
exclusive worldwide rights to manufacture, distribute, market sell and/or license or sublicense products derived or developed
from this technology. Under the license agreement we are obligated to pay UBC (i) an annual license maintenance fee of
CAN $1,000, and (ii) milestone payments which could reach up to CAN $1.2 million. This license agreement (a) will
automatically terminate if we file, or become subject to an involuntary filing, for bankruptcy, and (b) may be terminated by
UBC in the event of, among other things, our insolvency, dissolution, grant of a security interest in the technology licensed to
us pursuant to the license agreement, or material breach of or failure to perform material obligations under the license
agreement or other research agreements between us and UBC.
Oral BDP License Agreement
On November 24, 1998, the Company, known at the time as Enteron Pharmaceuticals, Inc. (“Enteron”) and George B.
McDonald (“Dr. McDonald”) entered into an exclusive license agreement for the rights to intellectual property, including
know-how, relating to oral BDP. We have an exclusive license to commercially exploit the covered products worldwide,
subject to Dr. McDonald’s right to make and use the technology for research purposes and the U.S. Government’s right to
use the technology for government purposes. Pursuant to the license agreement, as amended, we are required to
(i) reimburse Dr. McDonald for certain out-of-pocket expenses incurred by Dr. McDonald in connection with the patent
applications and issued patents, (ii) pay Dr. McDonald $300,000 upon approval by the FDA of our first NDA incorporating
oral BDP; (iii) pay Dr. McDonald royalty payments equal to 3% of net sales of the covered products and (iv) pay
Dr. McDonald $400,000 in cash upon an approval of oral BDP by the European Medicines Agency.
Additionally, in the event that we sublicense our rights under the license agreement, we will be required to pay Dr. McDonald
10% of any sublicense fees and royalty payments paid by the sublicense to us.
The term of the license agreement expires upon the expiration of the licensed patent applications or patents. Dr. McDonald
has the right to terminate the license agreement in its entirety or to terminate exclusivity under the agreement if we or its
sublicenses have not commercialized or are not actively attempting to commercialize a covered product.
Additionally, the agreement terminates: (i) automatically upon us becoming insolvent; (ii) upon 30 days’ notice, if we breach
any obligation under the agreement without curing such breach during the notice period; and (iii) upon 90 days’ notice by us.
After any termination, we will have the right to sell our inventory for a period not to exceed three months following the date of
termination, subject to the payment of the amounts owed under the agreement.
ThermoVax® License Agreement
On December 21, 2010, we executed a worldwide exclusive license agreement with the UC for ThermoVax®, which is the
subject of U.S. patent number 8,444,991 issued on May 21, 2013 titled “Method of Preparing an Immunologically-Active
Adjuvant-Bound Dried Vaccine Composition.” This patent and its corresponding foreign filings are licensed to us by the UC
and they address the use of adjuvants in conjunction with vaccines that are formulated to resist thermal inactivation. U.S.
Patent 8,444,991 is expected to expire in December 2031. The license agreement also covers thermostable vaccines for
biodefense as well as other potential vaccine indications. In addition, we, in conjunction with UC, filed domestic and foreign
patent applications claiming priority back to a provisional application filed on May 17, 2011 titled: “Thermostable Vaccine
Compositions and Methods of Preparing Same.” In April 2018, the UC delivered a notice of termination of our license
agreement based upon our failure to achieve one of the development milestones: initiation of the Phase 1 clinical trial of the
heat stabilization technology by March 31, 2018. After negotiating with the UC, we and the UC agreed to extend the
termination date to October 31, 2018 in order to allow us time to agree upon a potential agreement that would allow us to
keep the rights to, and to continue to develop, the heat stabilization technology or a product candidate containing the heat
stabilization technology in our field of use.
On October 31, 2018, in a series of related transactions, (a) we and the UC agreed to terminate the original license
agreement, (b) the UC and VitriVax executed a worldwide exclusive license agreement for the heat stabilization technology
for all fields of use, and (c) we and VitriVax executed a worldwide exclusive sublicense agreement, which was amended and
restated in October 2020, for the heat stabilization technology for use in the fields of ricin and Ebola vaccines. We paid a
$100,000 sublicense fee on the effective date of the sublicense agreement. Under the amended sublicense agreement to
maintain the sublicense we are obliged to pay a minimum annual royalty of $20,000 until first commercial sale of a
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sublicensed product, upon which point, we will be required to pay an earned royalty of 2% of net sales subject to a minimum
royalty of $50,000 each year. We are also required to pay royalties on any sub-sublicense income based on a
declining percentage of all sub-sublicense income calculated within the contractual period until reaching a minimum of 15%
after two years. In addition, we are required to pay VitriVax milestone fees of: (a) $25,000 upon initiation of a Phase 2 clinical
trial of the sublicensed product, (b) $100,000 upon initiation of a Phase 3 clinical trial of the sublicensed product,
(c) $100,000 upon regulatory approval of a sublicensed product, and (d) $1 million upon achieving $10 million in aggregate
net sales of a sublicensed product in the U.S. or equivalent. To date none of these milestones have been met.
RiVax® License Agreement
In June 2003, we executed a worldwide exclusive option to license patent applications with UTSW for the nasal, pulmonary
and oral uses of a non-toxic ricin vaccine. In June 2004, we entered into a license agreement with UTSW for the injectable
rights to the ricin vaccine and, in October 2004, we negotiated the remaining oral rights to the ricin vaccine. To maintain this
license, we are obligated to pay $50,000 in annual license fees. Through this license, we have rights to the issued patent
number 7,175,848 titled “Ricin A chain mutants lacking enzymatic activity as vaccines to protect against aerosolized ricin.”
This patent includes methods of use and composition claims for RiVax®.
CoVaccine HT™ License Agreement
In April 2020, we executed an agreement for the exclusive worldwide license of CoVaccine HT™, a novel vaccine adjuvant,
from BTG, a division of Boston Scientific Corporation (NYSE: BSX), for the fields of SARS-CoV-2, the cause of COVID-19
and pandemic flu. The agreement was executed with Protherics Medicines Development, one of the companies that make
up the BTG specialty pharmaceuticals business, which owns the CoVaccine HT™ intellectual property.
Research and Development Expenditures
We spent approximately $8.4 million and $9.8 million in the years ended December 31, 2021 and 2020, respectively, on
research and development. The amounts we spent on research and development per product during the years ended
December 31, 2021 and 2020 are set forth in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in this Annual Report on Form 10-K.
Human Capital
We are committed to a work environment that is welcoming, inclusive and encouraging. To achieve our plans and goals, it is
imperative that we attract and retain top talent. In order to do so, we aim to have a safe and encouraging workplace, with
opportunities for our employees to grow and develop professionally, supported by strong compensation, benefits, and other
incentives. In addition to competitive base salaries, we offer every full-time employee a cash target bonus, a comprehensive
benefits package and equity compensation.
As of December 31, 2021, we employed a total of 15 persons, including 2 part-time employee and 13 full-time employees,
five of whom are MDs/PhDs. In addition to our employees, we contract with third-parties for the conduct of certain clinical
development, manufacturing, accounting and administrative activities. We anticipate increasing the number of our
employees. We have no collective bargaining agreements with our employees, and none are represented by labor unions.
We consider our relationships with our employees to be good.
Throughout the COVID 19 pandemic, many of our employees have worked remotely. In September 2021 our employees
returned to the Company’s facilities in-person. We implemented a number of significant safety measures based on current
guidelines recommended by the Centers for Disease Control. These include, but are not limited to, social distancing,
capacity limitations, mask requirements in common areas, weekly deep cleaning and daily sanitation procedures.
Available Investor Information
We file electronically with the Securities and Exchange Commission (“SEC”) our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) of 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We make available
through our website, free of charge, copies of these reports as soon as reasonably practicable after we electronically file or
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furnish them to the SEC. Our website is located at www.soligenix.com. You can also request copies of such documents by
contacting the company at (609) 538-8200 or sending an email to info@soligenix.com.
Item 1A. Risk factors
An investment in our securities involves a high degree of risk. You should carefully consider the following information about
these risks, together with the other information about these risks contained in this Annual Report, as well as the other
information contained in this Annual Report generally, before deciding to buy our securities. Any of the risks we describe
below could adversely affect our business, financial condition, operating results or prospects. The market prices for our
securities could decline if one or more of these risks and uncertainties develop into actual events and you could lose all or
part of your investment. Additional risks and uncertainties that we do not yet know of, or that we currently think are
immaterial, may also impair our business operations. You should also refer to the other information contained in this Annual
Report, including our financial statements and the related notes.
Summary of Risk Factors
Our business is subject to a number of risks and uncertainties that you should understand before making an investment
decision. These risks include, but are not limited to, the following:
Risks Related to our Business
● We have had significant losses and anticipate future losses; if additional funding cannot be obtained, we may reduce
or discontinue our product development and commercialization efforts or not be able to repay the Convertible Notes.
● If we are unable to develop our product candidates, our ability to generate revenues and viability as a company will
be significantly impaired.
● We have no approved products on the market and therefore do not expect to generate any revenues from product
sales in the foreseeable future, if at all.
● Our business is subject to extensive governmental regulation, which can be costly, time consuming and subjects us
to unanticipated delays.
● There may be unforeseen challenges in developing our biodefense products.
● We are dependent on government funding, which is inherently uncertain, for the success of our biodefense
operations.
● The terms of our loan and security agreement with Pontifax Medison Finance require, and any future debt financing
may require, us to meet certain operating covenants and place restrictions on our operating and financial flexibility.
● If the parties we depend on for supplying our drug substance raw materials and certain manufacturing-related
services do not timely supply these products and services, it may delay or impair our ability to develop, manufacture
and market our products.
● If we are not able to maintain or secure agreements with third parties for pre-clinical and clinical trials of our product
candidates on acceptable terms, if these third parties do not perform their services as required, or if these third
parties fail to timely transfer any regulatory information held by them to us, we may not be able to obtain regulatory
approval for, or commercialize, our product candidates.
● The manufacturing of our products is a highly exacting process, and if we or one of our materials suppliers
encounter problems manufacturing our products, our business could suffer.
● We may use our financial and human resources to pursue a particular research program or product candidate and
fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater
likelihood of success.
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● Even if approved, our products will be subject to extensive post-approval regulation.
● Even if we obtain regulatory approval to market our product candidates, our product candidates may not be
accepted by the market.
● We do not have extensive sales and marketing experience and our lack of experience may restrict our success in
commercializing some of our product candidates.
● Our products, if approved, may not be commercially viable due to change in health care practice and third party
reimbursement limitations.
● Our product candidates may cause serious adverse events or undesirable side effects which may delay or prevent
marketing approval, or, if approval is received, require them to be taken off the market, require them to include
safety warnings or otherwise limit their sales.
● If we fail to obtain or maintain orphan drug exclusivity for our product candidates, our competitors may sell products
to treat the same conditions and our revenue will be reduced.
● Federal and/or state health care reform initiatives could negatively affect our business.
● We may not be able to retain rights licensed to us by third parties to commercialize key products or to develop the
third party relationships we need to develop, manufacture and market our products.
● We may suffer product and other liability claims; we maintain only limited product liability insurance, which may not
be sufficient.
● We may use hazardous chemicals in our business. Potential claims relating to improper handling, storage or
disposal of these chemicals could affect us and be time consuming and costly.
● We may not be able to compete with our larger and better-financed competitors in the biotechnology industry.
● Competition and technological change may make our product candidates and technologies less attractive or
obsolete.
● Our business could be harmed if we fail to retain our current personnel or if they are unable to effectively run our
business.
● Instability and volatility in the financial markets could have a negative impact on our business, financial condition,
results of operations, and cash flows.
● We may not be able to utilize all of our net operating loss carryforwards.
● Global pathogens could have an impact on financial markets, materials sourcing, patients, governments and
population (e.g. COVID-19).
Risks Related to our Intellectual Property
● We may be unable to commercialize our products if we are unable to protect our proprietary rights, and we may be
liable for significant costs and damages if we face a claim of intellectual property infringement by a third party.
● We may be involved in lawsuits to protect or enforce our patents, which could be expensive and time consuming.
● If we infringe the rights of third parties we could be prevented from selling products, forced to pay damages, and
defend against litigation.
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Risks Related to our Securities
● The price of our common stock and warrants may be highly volatile.
● If we fail to remain current with our listing requirements, we could be removed from The Nasdaq Capital Market,
which would limit the ability of broker-dealers to sell our securities and the ability of shareholders to sell their
securities in the secondary market.
● Shareholders may suffer substantial dilution related to issued stock warrants, options and convertible notes.
● Our shares of common stock and warrants are thinly traded, so stockholders may be unable to sell at or near ask
prices or at all if they need to sell shares or warrants to raise money or otherwise desire to liquidate their shares.
● We do not currently intend to pay dividends on our common stock in the foreseeable future, and consequently, our
stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common
stock.
● Upon our dissolution, our stockholders may not recoup all or any portion of their investment.
● The issuance of our common stock pursuant to the terms of the asset purchase agreement with Hy Biopharma may
cause dilution and the issuance of such shares of common stock, or the perception that such issuances may occur,
could cause the price of our common stock to fall.
Risks Related to our Business
We have had significant losses and anticipate future losses; if additional funding cannot be obtained, we may
reduce or discontinue our product development and commercialization efforts.
We have experienced significant losses since inception and, at December 31, 2021, had an accumulated deficit of
approximately $206 million. We expect to incur additional operating losses in the future and expect our cumulative losses to
increase. As of December 31, 2021, we had approximately $26 million in cash and cash equivalents available, and as of
March 22, 2022 we had approximately $23.1 million in cash and cash equivalents available. Based on our projected
budgetary needs, funding from existing contracts and grants over the next year and sales pursuant to our At Market
Issuance Sales Agreement (“B. Riley Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley”), we expect to be able to
maintain the current level of our operations through at least March 31, 2023.
In September 2014, we entered into a contract with the NIH for the development of RiVax® to protect against exposure to
ricin toxin that would provide up to $24.7 million of funding in the aggregate over six years if options to extend the contract
are exercised by the NIH. In 2017, we were awarded two separate grants from the NIH of approximately $1.5 million each to
support our pivotal Phase 3 trials of HyBryte™ for the treatment of CTCL and SGX942 for the treatment of oral mucositis in
head and neck cancer. In December 2020, we were awarded Direct to Phase II SBIR grant from NIAID of approximately
$1.5 million to support manufacture, formulation (including thermostabilization) and characterization of COVID-19 and EVD
vaccine candidates in conjunction with the CoVaccine HT™ adjuvant. Our biodefense grants have an overhead component
that allows us an agency-approved percentage over our incurred costs. We estimate that the overhead component
associated with our existing contracts and grants will fund some fixed costs for direct employees working on these contracts
and grants as well as other administrative costs. As of December 31, 2021, we had approximately $1.35 million in awarded
grant funding available.
Our product candidates are positioned for or are currently in clinical trials, and we have not yet generated any significant
revenues from sales or licensing of these product candidates. From inception through December 31, 2021, we have
expended approximately $108 million developing our current product candidates for pre-clinical research and development
and clinical trials. We currently expect to spend approximately $12.9 million for the year ending December 31, 2022 in
connection with the development of our therapeutic and vaccine products, licenses, employment agreements, and
consulting agreements, of which approximately $1.30 million is expected to be reimbursed through our existing government
contracts and grants.
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We have no control over the resources and funding NIH, BARDA and NIAID may devote to our programs, which may be
subject to periodic renewal and which generally may be terminated by the government at any time for convenience. Any
significant reductions in the funding of U.S. government agencies or in the funding areas targeted by our business could
materially and adversely affect our biodefense program and our results of operations and financial condition. If we fail to
satisfy our obligations under the government contracts, the applicable Federal Acquisition Regulations allow the government
to terminate the agreement in whole or in part, and we may be required to perform corrective actions, including but not
limited to delivering to the government any incomplete work. If NIH, BARDA or NIAID do not exercise future funding options
under the contracts or grants, terminate the funding or fail to perform their responsibilities under the agreements or grants, it
could materially impact our biodefense program and our financial results.
Unless and until we are able to generate sales or licensing revenue from one of our product candidates, we will require
additional funding to meet these commitments, sustain our research and development efforts, provide for future clinical trials,
and continue our operations. There can be no assurance we can raise such funds. If additional funds are raised through the
issuance of equity securities, stockholders may experience dilution of their ownership interests, and the newly issued
securities may have rights superior to those of the common stock. If additional funds are raised by the issuance of debt, we
may be subject to limitations on our operations. If we cannot raise such additional funds, we may have to delay or stop some
or all of our drug development programs.
If we are unable to develop our product candidates, our ability to generate revenues and viability as a company will
be significantly impaired.
In order to generate revenues and profits, our organization must, along with corporate partners and collaborators, positively
research, develop and commercialize our technologies or product candidates. Our current product candidates are in various
stages of clinical and pre-clinical development and will require significant further funding, research, development, pre-clinical
and/or clinical testing, regulatory approval and commercialization, and are subject to the risks of failure inherent in the
development of products based on innovative or novel technologies. Specifically, each of the following is possible with
respect to any of our product candidates:
● we may not be able to maintain our current research and development schedules;
● we may be unable to secure procurement contracts on beneficial economic terms or at all from the U.S. government
or others for our biodefense products;
● we may encounter problems in clinical trials; or
● the technology or product may be found to be ineffective or unsafe, or may fail to obtain marketing approval.
If any of the risks set forth above occur, or if we are unable to obtain the necessary regulatory approvals as discussed below,
we may be unable to develop our technologies and product candidates and our business will be seriously harmed.
Furthermore, for reasons including those set forth below, we may be unable to commercialize or receive royalties from the
sale of any other technology we develop, even if it is shown to be effective, if:
● it is not economical or the market for the product does not develop or diminishes;
● we are not able to enter into arrangements or collaborations to manufacture and/or market the product;
● the product is not eligible for third-party reimbursement from government or private insurers;
● others hold proprietary rights that preclude us from commercializing the product;
● we are not able to manufacture the product reliably;
● others have brought to market similar or superior products; or
● the product has undesirable or unintended side effects that prevent or limit its commercial use.
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We expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which
may make it difficult to predict our future performance.
We are a late-stage biopharmaceutical company. Our operations to date have been primarily limited to developing our
technology and undertaking pre-clinical studies and clinical trials of our product candidates in our two active business
segments, Specialized BioTherapeutics and Public Health Solutions. We have not yet obtained regulatory approvals for any
of our product candidates. Consequently, any predictions made about our future success or viability may not be as accurate
as they could be if we had commercialized products. Our financial condition has varied significantly in the past and will
continue to fluctuate from quarter-to-quarter or year-to-year due to a variety of factors, many of which are beyond our
control. Factors relating to our business that may contribute to these fluctuations include other factors described elsewhere
in this Annual Report and also include:
● our ability to obtain additional funding to develop our product candidates;
● our ability to repay existing debt in accordance with its terms;
● delays in the commencement, enrollment and timing of clinical trials;
● the success of our product candidates through all phases of clinical development;
● any delays in regulatory review and approval of product candidates in clinical development;
● our ability to obtain and maintain regulatory approval for our product candidates in the U.S. and foreign jurisdictions;
● potential side effects of our product candidates that could delay or prevent commercialization, limit the indications for
any approved drug, require the establishment of risk evaluation and mitigation strategies, or cause an approved
drug to be taken off the market;
● our dependence on third-party contract manufacturing organizations to supply or manufacture our products;
● our dependence on contract research organizations to conduct our clinical trials;
● our ability to establish or maintain collaborations, licensing or other arrangements;
● market acceptance of our product candidates;
● our ability to establish and maintain an effective sales and marketing infrastructure, either through the creation of a
commercial infrastructure or through strategic collaborations;
● competition from existing products or new products that may emerge;
● the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for our products;
● our ability to discover and develop additional product candidates;
● our ability and our licensors’ abilities to successfully obtain, maintain, defend and enforce intellectual property rights
important to our business;
● our ability to attract and retain key personnel to manage our business effectively;
● our ability to build our finance infrastructure and improve our accounting systems and controls;
● potential product liability claims;
● potential liabilities associated with hazardous materials; and
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● our ability to obtain and maintain adequate insurance policies.
Accordingly, the results of any quarterly or annual periods should not be relied upon as indications of future operating
performance.
We have no approved products on the market and therefore do not expect to generate any revenues from product
sales in the foreseeable future, if at all.
To date, we have no approved product on the market and have not generated any significant product revenues. We have
funded our operations primarily from sales of our securities and from government contracts and grants. We have not
received, and do not expect to receive for at least the next several years, if at all, any revenues from the commercialization
of our product candidates. To obtain revenues from sales of our product candidates, we must succeed, either alone or with
third parties, in developing, obtaining regulatory approval for, manufacturing and marketing drugs with commercial potential
or successfully obtain government procurement or stockpiling agreements. We may never succeed in these activities, and
we may not generate sufficient revenues to continue our business operations or achieve profitability.
Our business is subject to extensive governmental regulation, which can be costly, time consuming and subjects
us to unanticipated delays.
Our business is subject to very stringent federal, foreign, state and local government laws and regulations, including the
Federal Food, Drug and Cosmetic Act, the Environmental Protection Act, the Occupational Safety and Health Act, and state
and local counterparts to these acts. These laws and regulations may be amended, additional laws and regulations may be
enacted, and the policies of the FDA and other regulatory agencies may change.
The regulatory process applicable to our products requires pre-clinical and clinical testing of any product to establish its
safety and efficacy. This testing can take many years, is uncertain as to outcome, and requires the expenditure of substantial
capital and other resources. We estimate that the clinical trials of our product candidates that we have planned will take at
least several years to complete. Furthermore, failure can occur at any stage of the trials, and we could encounter problems
that cause us to abandon or repeat clinical trials. Favorable results in early studies or trials, if any, may not be repeated in
later studies or trials. Even if our clinical trials are initiated and completed as planned, we cannot be certain that the results
will support our product candidate claims. Success in preclinical testing, Phase 1 and Phase 2 clinical trials does not ensure
that later Phase 2 or Phase 3 clinical trials will be successful. In addition, we, the FDA or other regulatory authorities may
suspend clinical trials at any time if it appears that we are exposing participants to unacceptable health risks or the FDA or
other regulatory authorities find deficiencies in our submissions or conduct of our trials.
We may not be able to obtain, or we may experience difficulties and delays in obtaining, necessary domestic and foreign
governmental clearances and approvals to market a product (for example, the FDA may not recognize fast track designation
upon an NDA submission, resulting in no priority review and subjecting us to longer potential review times than originally
anticipated). Also, even if regulatory approval of a product is granted, that approval may entail limitations on the indicated
uses for which the product may be marketed.
Following any regulatory approval, a marketed product and its manufacturer are subject to continual regulatory review. Later
discovery of problems with a product or manufacturer may result in restrictions on such product or manufacturer. These
restrictions may include product recalls and suspension or withdrawal of the marketing approval for the product.
Furthermore, the advertising, promotion and export, among other things, of a product are subject to extensive regulation by
governmental authorities in the U.S. and other countries. If we fail to comply with applicable regulatory requirements, we
may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating
restrictions and/or criminal prosecution.
There may be unforeseen challenges in developing our biodefense products.
For development of biodefense vaccines and therapeutics, the FDA has instituted policies that are expected to result in
accelerated approval. This includes approval for commercial use using the results of animal efficacy trials, rather than
efficacy trials in humans, referred to as the Animal Rule. However, we will still have to establish that the vaccines we are
developing are safe in humans at doses that are correlated with the beneficial effect in animals. Such clinical trials will also
have to be completed in distinct populations that are subject to the countermeasures; for instance, the very young and the
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very old, and in pregnant women, if the countermeasure is to be licensed for civilian use. Other agencies will have an
influence over the risk benefit scenarios for deploying the countermeasures and in establishing the number of doses utilized
in the Strategic National Stockpile. We may not be able to sufficiently demonstrate the animal correlation to the satisfaction
of the FDA, as these correlates are difficult to establish and are often unclear. Invocation of the Animal Rule may raise
issues of confidence in the model systems even if the models have been validated. For many of the biological threats, the
animal models are not available and we may have to develop the animal models, a time-consuming research effort. There
are few historical precedents, or recent precedents, for the development of new countermeasures for bioterrorism agents.
Despite the Animal Rule, the FDA may require large clinical trials to establish safety and immunogenicity before licensure
and it may require safety and immunogenicity trials in additional populations. Approval of biodefense products may be
subject to post-marketing studies, and could be restricted in use in only certain populations. The government’s biodefense
priorities can change, which could adversely affect the commercial opportunity for the products we are developing. Further,
other countries have not, at this time, established criteria for review and approval of these types of products outside their
normal review process, i.e., there is no Animal Rule equivalent, and consequently there can be no assurance that we will be
able to make a submission for marketing approval in foreign countries based on such animal data.
Additionally, few facilities in the U.S. and internationally have the capability to test animals with ricin, or otherwise assist us in
qualifying the requisite animal models. We have to compete with other biodefense companies for access to this limited pool
of highly specialized resources. We therefore may not be able to secure contracts to conduct the testing in a predictable
timeframe or at all.
We are dependent on government funding, which is inherently uncertain, for the success of our biodefense
operations.
We are subject to risks specifically associated with operating in the biodefense industry, which is a new and unproven
business area. We do not anticipate that a significant commercial market will develop for our biodefense products. Because
we anticipate that the principal potential purchasers of these products, as well as potential sources of research and
development funds, will be the U.S. government and governmental agencies, the success of our biodefense division will be
dependent in large part upon government spending decisions. The funding of government programs is dependent on
budgetary limitations, congressional appropriations and administrative allotment of funds, all of which are inherently
uncertain and may be affected by changes in U.S. government policies resulting from various political and military
developments. Our receipt of government funding is also dependent on our ability to adhere to the terms and provisions of
the original grant and contract documents and other regulations. We can provide no assurance that we will receive or
continue to receive funding for grants and contracts we have been awarded. The loss of government funds could have a
material adverse effect on our ability to progress our biodefense business.
The terms of our loan and security agreement with Pontifax Medison Finance require, and any future debt financing
may require, us to meet certain operating covenants and place restrictions on our operating and financial flexibility.
In December 2020, we entered into a loan and security agreement with Pontifax Medison Finance (the “Loan and Security
Agreement”), that is secured by a lien covering substantially all of our assets, other than our intellectual property and
licenses for intellectual property. The Loan and Security Agreement contains customary affirmative and negative covenants
and events of default. Affirmative covenants include, among others, covenants requiring us to protect and maintain our
intellectual property and comply with all applicable laws, deliver certain financial reports, maintain a minimum cash balance
and maintain insurance coverage. Negative covenants include, among others, covenants restricting us from transferring any
material portion of our assets, incurring additional indebtedness, engaging in mergers or acquisitions, changing foreign
subsidiary voting rights, repurchasing shares, paying dividends or making other distributions, making certain investments,
and creating other liens on our assets, including our intellectual property, in each case subject to customary exceptions. If
we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial
flexibility. These restrictions may include, among other things, limitations on borrowing and specific restrictions on the use of
our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem capital stock or make investments. If
we default under the terms of the Loan and Security Agreement or any future debt facility, the lender may accelerate all of
our repayment obligations and take control of our pledged assets, potentially requiring us to renegotiate our agreement on
terms less favorable to us or to immediately cease operations. Further, if we are liquidated, the lender’s right to repayment
would be senior to the rights of the holders of our common stock. The lender could declare a default upon the occurrence of
any event that it interprets as a material adverse effect as defined under the Loan and Security Agreement. Any declaration
by the lender of an event of default could significantly harm our business and prospects and could cause the price of our
common stock to decline.
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If the parties we depend on for supplying our drug substance raw materials and certain manufacturing-related
services do not timely supply these products and services, it may delay or impair our ability to develop,
manufacture and market our products. We do not have or anticipate having internal manufacturing capabilities.
We rely on suppliers for our drug substance raw materials and third parties for certain manufacturing-related services to
produce material that meets appropriate content, quality and stability standards, which material will be used in clinical trials
of our products and, after approval, for commercial distribution. To succeed, clinical trials require adequate supplies of drug
substance and drug product, which may be difficult or uneconomical to procure or manufacture. We and our suppliers and
vendors may not be able to (i) produce our drug substance or drug product to appropriate standards for use in clinical
studies, (ii) perform under any definitive manufacturing, supply or service agreements with us or (iii) remain in business for a
sufficient time to be able to develop, produce, secure regulatory approval of and market our product candidates. If we do not
maintain important manufacturing and service relationships, we may fail to find a replacement supplier or required vendor or
develop our own manufacturing capabilities which could delay or impair our ability to obtain regulatory approval for our
products and substantially increase our costs or deplete profit margins, if any. If we do find replacement manufacturers and
vendors, we may not be able to enter into agreements with them on terms and conditions favorable to us and, there could be
a substantial delay before a new facility could be qualified and registered with the FDA and foreign regulatory authorities.
We rely on third parties for pre-clinical and clinical trials of our product candidates and, in some cases, to maintain
regulatory files for our product candidates. If we are not able to maintain or secure agreements with such third
parties on acceptable terms, if these third parties do not perform their services as required, or if these third parties
fail to timely transfer any regulatory information held by them to us, we may not be able to obtain regulatory
approval for, or commercialize, our product candidates.
We rely on academic institutions, hospitals, clinics and other third-party collaborators for preclinical and clinical trials of our
product candidates. Although we monitor, support, and/or oversee our pre-clinical and clinical trials, because we do not
conduct these trials ourselves, we have less control over the timing and cost of these studies and the ability to recruit trial
subjects than if we conducted these trials wholly by ourselves. If we are unable to maintain or enter into agreements with
these third parties on acceptable terms, or if any such engagement is terminated, we may be unable to enroll patients on a
timely basis or otherwise conduct our trials in the manner we anticipate. In addition, there is no guarantee that these third
parties will devote adequate time and resources to our studies or perform as required by a contract or in accordance with
regulatory requirements, including maintenance of clinical trial information regarding our product candidates. If these third
parties fail to meet expected deadlines, fail to timely transfer to us any regulatory information, fail to adhere to protocols or
fail to act in accordance with regulatory requirements or our agreements with them, or if they otherwise perform in a
substandard manner or in a way that compromises the quality or accuracy of their activities or the data they obtain, then
preclinical and/or clinical trials of our product candidates may be extended, delayed or terminated, or our data may be
rejected by the FDA or regulatory agencies.
The manufacturing of our products is a highly exacting process, and if we or one of our materials suppliers
encounter problems manufacturing our products, our business could suffer.
The FDA and foreign regulators require manufacturers to register manufacturing facilities. The FDA and foreign regulators
also inspect these facilities to confirm compliance with current Good Manufacturing Practice (“cGMP”) or similar
requirements that the FDA or foreign regulators establish. We, or our materials suppliers, may face manufacturing or quality
control problems causing product production and shipment delays or a situation where we or the supplier may not be able to
maintain compliance with the FDA’s cGMP requirements, or those of foreign regulators, necessary to continue
manufacturing our drug substance. Any failure to comply with cGMP requirements or other FDA or foreign regulatory
requirements could adversely affect our clinical research activities and our ability to market and develop our products.
We may use our financial and human resources to pursue a particular research program or product candidate and
fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater
likelihood of success.
Because we have limited financial and human resources, we are currently focusing on the regulatory approval of certain
product candidates. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other
indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to
capitalize on viable commercial products or profitable market opportunities. Our spending on existing and future product
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candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the
commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product
candidate through strategic alliance, licensing or other royalty arrangements in cases in which it would have been more
advantageous for us to retain sole development and commercialization rights to such product candidate, or we may allocate
internal resources to a product candidate in an area in which it would have been more advantageous to enter into a
partnering arrangement.
Even if approved, our products will be subject to extensive post-approval regulation.
Once a product is approved, numerous post-approval requirements apply. Among other things, the holder of an approved
NDA is subject to periodic and other FDA monitoring and reporting obligations, including obligations to monitor and report
adverse events and instances of the failure of a product to meet the specifications in the NDA. Application holders must
submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product
labeling, or manufacturing process. Application holders must also submit advertising and other promotional material to the
FDA and report on ongoing clinical trials.
Depending on the circumstances, failure to meet these post-approval requirements can result in criminal prosecution, fines,
injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing
product approvals, or refusal to allow us to enter into supply contracts, including government contracts. In addition, even if
we comply with FDA and other requirements, new information regarding the safety or effectiveness of a product could lead
the FDA to modify or withdraw product approval.
Even if we obtain regulatory approval to market our product candidates, our product candidates may not be
accepted by the market.
Even if the FDA approves one or more of our product candidates, physicians and patients may not accept it or use it. Even if
physicians and patients would like to use our products, our products may not gain market acceptance among healthcare
payors such as managed care formularies, insurance companies or government programs such as Medicare or Medicaid.
Acceptance and use of our products will depend upon a number of factors including: perceptions by members of the health
care community, including physicians, about the safety and effectiveness of our drug product; cost-effectiveness of our
product relative to competing products; availability of reimbursement for our product from government or other healthcare
payers; and effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any.
The degree of market acceptance of any product that we develop will depend on a number of factors, including:
● cost-effectiveness;
● the safety and effectiveness of our products, including any significant potential side effects, as compared to
alternative products or treatment methods;
● the timing of market entry as compared to competitive products;
● the rate of adoption of our products by doctors and nurses;
● product labeling or product insert required by the FDA for each of our products;
● reimbursement policies of government and third-party payors;
● effectiveness of our sales, marketing and distribution capabilities and the effectiveness of such capabilities of our
collaborative partners, if any; and
● unfavorable publicity concerning our products or any similar products.
Our product candidates, if successfully developed, will compete with a number of products manufactured and marketed by
major pharmaceutical companies, biotechnology companies and manufacturers of generic drugs. Our products may also
compete with new products currently under development by others. Physicians, patients, third-party payors and the medical
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community may not accept and utilize any of our product candidates. If our products do not achieve market acceptance, we
will not be able to generate significant revenues or become profitable.
Because we expect sales of our current product candidates, if approved, to generate substantially all of our product
revenues for the foreseeable future, the failure of these products to find market acceptance would harm our business and
could require us to seek additional financing.
We do not have extensive sales and marketing experience and our lack of experience may restrict our success in
commercializing some of our product candidates.
We do not have extensive experience in marketing or selling pharmaceutical products whether in the U.S. or internationally.
To obtain the expertise necessary to successfully market and sell any of our products, the development of our own
commercial infrastructure and/or collaborative commercial arrangements and partnerships will be required. Our ability to
make that investment and also execute our current operating plan is dependent on numerous factors, including, the
performance of third party collaborators with whom we may contract.
Our products, if approved, may not be commercially viable due to change in health care practice and third party
reimbursement limitations.
Initiatives to reduce the federal deficit and to change health care delivery are increasing cost-containment efforts. We
anticipate that Congress, state legislatures and the private sector will continue to review and assess alternative benefits,
controls on health care spending through limitations on the growth of private health insurance premiums and Medicare and
Medicaid spending, price controls on pharmaceuticals, and other fundamental changes to the health care delivery system.
Any changes of this type could negatively impact the commercial viability of our products, if approved. Our ability to
successfully commercialize our product candidates, if they are approved, will depend in part on the extent to which
appropriate reimbursement codes and authorized cost reimbursement levels of these products and related treatment are
obtained from governmental authorities, private health insurers and other organizations, such as health maintenance
organizations. In the absence of national Medicare coverage determination, local contractors that administer the Medicare
program may make their own coverage decisions. Any of our product candidates, if approved and when commercially
available, may not be included within the then current Medicare coverage determination or the coverage determination of
state Medicaid programs, private insurance companies or other health care providers. In addition, third-party payers are
increasingly challenging the necessity and prices charged for medical products, treatments and services.
Our product candidates may cause serious adverse events or undesirable side effects which may delay or prevent
marketing approval, or, if approval is received, require them to be taken off the market, require them to include
safety warnings or otherwise limit their sales.
Serious adverse events or undesirable side effects from any of our product candidates could arise either during clinical
development or, if approved, after the approved product has been marketed. The results of future clinical trials may show
that our product candidates cause serious adverse events or undesirable side effects, which could interrupt, delay or halt
clinical trials, resulting in delay of, or failure to obtain, marketing approval from the FDA and other regulatory authorities.
If any of our product candidates cause serious adverse events or undesirable side effects:
● regulatory authorities may impose a clinical hold which could result in substantial delays and adversely impact our
ability to continue development of the product;
● regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field
alerts to physicians and pharmacies;
● we may be required to change the way the product is administered, conduct additional clinical trials or change the
labeling of the product;
● we may be required to implement a risk minimization action plan, which could result in substantial cost increases
and have a negative impact on our ability to commercialize the product;
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● we may be required to limit the patients who can receive the product;
● we may be subject to limitations on how we promote the product;
● sales of the product may decrease significantly;
● regulatory authorities may require us to take our approved product off the market;
● we may be subject to litigation or product liability claims; and
● our reputation may suffer.
Any of these events could prevent us from achieving or maintaining market acceptance of the affected product or could
substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating
significant revenues from the sale of our products.
If we fail to obtain or maintain orphan drug exclusivity for our product candidates, our competitors may sell
products to treat the same conditions and our revenue will be reduced.
Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to treat a rare disease or
condition, defined as a patient population of fewer than 200,000 in the U.S., or a patient population greater than 200,000 in
the U.S. where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the
U.S. In the EU, the European Medicines Agency’s Committee for Orphan Medicinal Products grants orphan drug designation
to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threatening or
chronically debilitating condition affecting not more than five in 10,000 persons in the EU. Additionally, designation is granted
for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and
chronic condition when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the
necessary investment in developing the drug or biological product or where there is no satisfactory method of diagnosis,
prevention, or treatment, or, if such a method exists, the medicine must be of significant benefit to those affected by the
condition.
In the U.S., orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards
clinical trial costs, tax advantages, and user-fee waivers. In addition, if a product receives the first FDA approval for the
indication for which it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may
not approve any other application to market the same drug for the same indication for a period of seven years, except in
limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or where the
manufacturer is unable to assure sufficient product quantity. In the EU, orphan drug designation entitles a party to financial
incentives such as reduction of fees or fee waivers and ten years of market exclusivity following drug or biological product
approval. This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where
it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.
Even though we have orphan drug designation for HyBryte™ in the U.S. and Europe, and SGX203, RiVax® in the U.S., we
may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with
developing drugs or biologic products. Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may
not effectively protect the product from competition because different drugs with different active moieties can be approved for
the same condition. Absent patent or other intellectual property protection, even after an orphan drug is approved, the FDA
or European Medicines Agency may subsequently approve the same drug with the same active moiety for the same
condition if the FDA or European Medicines Agency concludes that the later drug is safer, more effective, or makes a major
contribution to patient care.
Federal and/or state health care reform initiatives could negatively affect our business.
The availability of reimbursement by governmental and other third-party payers affects the market for any pharmaceutical
product. These third-party payers continually attempt to contain or reduce the costs of healthcare. There have been a
number of legislative and regulatory proposals to change the healthcare system and further proposals are likely. Medicare’s
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policies may decrease the market for our products. Significant uncertainty exists with respect to the reimbursement status of
newly approved healthcare products.
Third-party payers are increasingly challenging the price and cost-effectiveness of medical products and services. Once
approved, we might not be able to sell our products profitably or recoup the value of our investment in product development
if reimbursement is unavailable or limited in scope, particularly for product candidates addressing small patient populations.
On July 15, 2008, the Medicare Improvements for Patients and Providers Act of 2008 became law with a number of
Medicare and Medicaid reforms to establish a bundled Medicare payment rate that includes services and drug/labs that were
separately billed at that time. Bundling initiatives that have been implemented in other healthcare settings have occasionally
resulted in lower utilization of services that had not previously been a part of the bundled payment.
In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.
The requirements governing drug pricing vary widely from country to country. We expect that there will continue to be a
number of U.S. federal and state proposals to implement governmental pricing controls. While we cannot predict whether
such legislative or regulatory proposals will be adopted, the adoption of such proposals could have a material adverse effect
on our business, financial condition and profitability.
We may not be able to retain rights licensed to us by third parties to commercialize key products or to develop the
third party relationships we need to develop, manufacture and market our products.
We currently rely on license agreements from New York University, Yeda Research and Development Company Ltd., the
University of Texas Southwestern Medical Center, the University of British Columbia, Harvard University and George B.
McDonald, MD as well as sublicense agreement from VitriVax for the rights to commercialize key product candidates. We
may not be able to retain the rights granted under these agreements or negotiate additional agreements on reasonable
terms, if at all. Our existing license agreements impose, and we expect that future license agreements will impose, various
diligence, milestone payment, royalty, and other obligations on us. If we fail to comply with our obligations under these
agreements, or we are subject to a bankruptcy, we may be required to make certain payments to the licensor, we may lose
the exclusivity of our license, or the licensor may have the right to terminate the license, in which event we would not be able
to develop or market products covered by the license.
Additionally, the milestone and other payments associated with these licenses will make it less profitable for us to develop
our drug candidates. See “Business – Patents and Other Proprietary Rights” for a description of our license agreements.
Licensing of intellectual property is of critical importance to our business and involves complex legal, business, and scientific
issues. Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:
● the scope of rights granted under the license agreement and other interpretation-related issues;
● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject
to the licensing agreement;
● the sublicensing of patent and other rights;
● our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our
licensors and us and our collaborators; and
● the priority of invention of patented technology.
If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our
current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the
affected product candidates.
Additionally, the research resulting in certain of our licensed patent rights and technology was funded by the U.S.
government. As a result, the government may have certain rights, or march-in rights, to such patent rights and technology.
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When new technologies are developed with government funding, the government generally obtains certain rights in any
resulting patents, including a non-exclusive license authorizing the government to use the invention for non-commercial
purposes. The government can exercise its march-in rights if it determines that action is necessary because we fail to
achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety
needs, to meet requirements of federal regulations or to give preference to U.S. industry. In addition, our rights in such
inventions may be subject to certain requirements to manufacture products embodying such inventions in the U.S. Any
exercise by the government of such rights could harm our competitive position, business, financial condition, results of
operations and prospects.
Furthermore, we currently have very limited product development capabilities and no manufacturing, marketing or sales
capabilities. For us to research, develop and test our product candidates, we need to contract or partner with outside
researchers, in most cases with or through those parties that did the original research and from whom we have licensed the
technologies. If products are successfully developed and approved for commercialization, then we will need to enter into
additional collaboration and other agreements with third parties to manufacture and market our products. We may not be
able to induce the third parties to enter into these agreements, and, even if we are able to do so, the terms of these
agreements may not be favorable to us. Our inability to enter into these agreements could delay or preclude the
development, manufacture and/or marketing of some of our product candidates or could significantly increase the costs of
doing so. In the future, we may grant to our development partners rights to license and commercialize pharmaceutical and
related products developed under the agreements with them, and these rights may limit our flexibility in considering
alternatives for the commercialization of these products. Furthermore, third-party manufacturers or suppliers may not be able
to meet our needs with respect to timing, quantity and quality for the products.
Additionally, if we do not enter into relationships with additional third parties for the marketing of our products, if and when
they are approved and ready for commercialization, we would have to build our own sales force or enter into
commercialization agreements with other companies. Development of an effective sales force in any part of the world would
require significant financial resources, time and expertise. We may not be able to obtain the financing necessary to establish
a sales force in a timely or cost effective manner, if at all, and any sales force we are able to establish may not be capable of
generating demand for our product candidates, if they are approved.
We may suffer product and other liability claims; we maintain only limited product liability insurance, which may
not be sufficient.
The clinical testing, manufacture and sale of our products involves an inherent risk that human subjects in clinical testing or
consumers of our products may suffer serious bodily injury or death due to side effects, allergic reactions or other
unintended negative reactions to our products. As a result, product and other liability claims may be brought against us. We
currently have clinical trial and product liability insurance with limits of liability of $10 million, which may not be sufficient to
cover our potential liabilities. Because liability insurance is expensive and difficult to obtain, we may not be able to maintain
existing insurance or obtain additional liability insurance on acceptable terms or with adequate coverage against potential
liabilities. Furthermore, if any claims are brought against us, even if we are fully covered by insurance, we may suffer harm
such as adverse publicity.
We may use hazardous chemicals in our business. Potential claims relating to improper handling, storage or
disposal of these chemicals could affect us and be time consuming and costly.
Our research and development processes and/or those of our third party contractors involve the controlled use of hazardous
materials and chemicals. These hazardous chemicals are reagents and solvents typically found in a chemistry laboratory.
Our operations also may produce hazardous waste products. Federal, state and local laws and regulations govern the use,
manufacture, storage, handling and disposal of hazardous materials. While we attempt to comply with all environmental laws
and regulations, including those relating to the outsourcing of the disposal of all hazardous chemicals and waste products,
we cannot eliminate the risk of contamination from or discharge of hazardous materials and any resultant injury. In the event
of such an accident, we could be held liable for any resulting damages and any liability could materially adversely affect our
business, financial condition and results of operations.
Compliance with environmental laws and regulations may be expensive. Current or future environmental regulations may
impair our research, development or production efforts. We might have to pay civil damages in the event of an improper or
unauthorized release of, or exposure of individuals to, hazardous materials. We are not insured against these environmental
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risks. We may agree to indemnify our collaborators in some circumstances against damages and other liabilities arising out
of development activities or products produced in connection with these collaborations.
In addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal
of hazardous or radioactive materials and waste products may require us to incur substantial compliance costs that could
materially adversely affect our business, financial condition and results of operations.
We may not be able to compete with our larger and better financed competitors in the biotechnology industry.
The biotechnology industry is intensely competitive, subject to rapid change and sensitive to new product introductions or
enhancements. Most of our existing competitors have greater financial resources, larger technical staffs, and larger research
budgets than we have, as well as greater experience in developing products and conducting clinical trials. Our competition is
particularly intense in the gastroenterology and transplant areas and is also intense in the therapeutic area of inflammatory
bowel diseases. We face intense competition in the biodefense area from various public and private companies and
universities as well as governmental agencies, such as the U.S. Army, which may have their own proprietary technologies
that may directly compete with our technologies. In addition, there may be other companies that are currently developing
competitive technologies and products or that may in the future develop technologies and products that are comparable or
superior to our technologies and products. We may not be able to compete with our existing and future competitors, which
could lead to the failure of our business.
Additionally, if a competitor receives FDA approval before we do for a drug that is similar to one of our product candidates,
FDA approval for our product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the
listing with the FDA by the competitor of patents covering its newly-approved drug product. Periods of non-patent exclusivity
for new versions of existing drugs such as our current product candidates can extend up to three and one-half years. See
“Business – The Drug Approval Process.”
These competitive factors could require us to conduct substantial new research and development activities to establish new
product targets, which would be costly and time consuming. These activities would adversely affect our ability to
commercialize products and achieve revenue and profits.
Competition and technological change may make our product candidates and technologies less attractive or
obsolete.
We compete with established pharmaceutical and biotechnology companies that are pursuing other forms of treatment for
the same indications we are pursuing and that have greater financial and other resources. Other companies may succeed in
developing products earlier than us, obtaining FDA approval for products more rapidly, or developing products that are more
effective than our product candidates. Research and development by others may render our technology or product
candidates obsolete or noncompetitive, or result in treatments or cures superior to any therapy we develop. We face
competition from companies that internally develop competing technology or acquire competing technology from universities
and other research institutions. As these companies develop their technologies, they may develop competitive positions that
may prevent, make futile, or limit our product commercialization efforts, which would result in a decrease in the revenue we
would be able to derive from the sale of any products.
There can be no assurance that any of our product candidates will be accepted by the marketplace as readily as these or
other competing treatments. Furthermore, if our competitors’ products are approved before ours, it could be more difficult for
us to obtain approval from the FDA. Even if our products are successfully developed and approved for use by all governing
regulatory bodies, there can be no assurance that physicians and patients will accept our product(s) as a treatment of
choice.
Furthermore, the pharmaceutical research industry is diverse, complex, and rapidly changing. By its nature, the business
risks associated therewith are numerous and significant. The effects of competition, intellectual property disputes, market
acceptance, and FDA regulations preclude us from forecasting revenues or income with certainty or even confidence.
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Our business could be harmed if we fail to retain our current personnel or if they are unable to effectively run our
business.
We currently have 16 employees and we depend upon these employees, in particular Dr. Christopher Schaber, our
President and Chief Executive Officer, to manage the day-to-day activities of our business. Because we have such limited
personnel, the loss of any of them or our inability to attract and retain other qualified employees in a timely manner would
likely have a negative impact on our operations. We may be unable to effectively manage and operate our business, and our
business may suffer, if we lose the services of our employees.
Instability and volatility in the financial markets could have a negative impact on our business, financial condition,
results of operations, and cash flows.
During recent years, there has been substantial volatility in financial markets due at least in part to the uncertainty with
regard to the global economic environment. In addition, there has been substantial uncertainty in the capital markets and
access to additional financing is uncertain. Moreover, customer spending habits may be adversely affected by current and
future economic conditions. These conditions could have an adverse effect on our industry and business, including our
financial condition, results of operations, and cash flows.
To the extent that we do not generate sufficient cash from operations, we may need to issue stock or incur indebtedness to
finance our plans for growth. Recent turmoil in the credit markets and the potential impact on the liquidity of major financial
institutions may have an adverse effect on our ability to fund our business strategy through borrowings, under either existing
or newly created instruments in the public or private markets on terms we believe to be reasonable, if at all.
We may not be able to utilize all of our net operating loss carryforwards.
The State of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology
companies to sell unused net operating loss (“NOL”) carryforwards to other New Jersey-based corporate taxpayers. During
the year ended December 31, 2021 in accordance with this program, we sold New Jersey NOL carry forwards resulting in
the recognition of $864,742 of income tax benefit, net of transaction costs. Due to a delay in the program, these funds were
not recognized or received until April 2021. We have applied for and received confirmation that we have NOLs for the year
ended December 31, 2020 that qualify for an income tax benefit in the amount of $1,154,935. The program has been
delayed again this year, and we will therefore not recognize this benefit until we receive our certificate for the funds. We
have not yet sold our 2021 New Jersey NOLs but may do so in the future. If there is an unfavorable change in the State of
New Jersey’s Technology Business Tax Certificate Program (whether as a result of a change in law, policy or otherwise) that
terminates the program or eliminates or reduces our ability to use or sell our NOL carryforwards or if we are unable to find a
suitable buyer to utilize our New Jersey NOL carryforwards to the extent the NOLs expire before we are able to utilize them
against our taxable income, our cash taxes may increase which may have an adverse effect on our financial condition.
Global pathogens that could have an impact on financial markets, materials sourcing, patients, governments and
population (e.g. COVID-19).
Based on the current outbreak of the Coronavirus SARS-CoV-2, the pathogen responsible for COVID-19, which has already
had an impact on financial markets, there could be additional repercussions to our operating business, including but not
limited to, the sourcing of materials for our product candidates, manufacture of supplies for our preclinical and/or clinical
studies, delays in clinical operations, which may include the availability or the continued availability of patients for our trials
due to such things as quarantines, our conduct of patient monitoring and clinical trial data retrieval at investigational study
sites.
The future impact of the outbreak is highly uncertain and cannot be predicted, and we cannot provide any assurance that the
outbreak will not have a material adverse impact on our operations or future results or filings with regulatory health
authorities. The extent of the impact to us, if any, will depend on future developments, including actions taken to contain the
coronavirus.
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Risks Related to our Intellectual Property
We may be unable to commercialize our products if we are unable to protect our proprietary rights, and we may be
liable for significant costs and damages if we face a claim of intellectual property infringement by a third party.
Our near and long-term prospects depend in part on our ability to obtain and maintain patents, protect trade secrets and
operate without infringing upon the proprietary rights of others. In the absence of patent and trade secret protection,
competitors may adversely affect our business by independently developing and marketing substantially equivalent or
superior products and technology, possibly at lower prices. We could also incur substantial costs in litigation and suffer
diversion of attention of technical and management personnel if we are required to defend ourselves in intellectual property
infringement suits brought by third parties, with or without merit, or if we are required to initiate litigation against others to
protect or assert our intellectual property rights. Moreover, any such litigation may not be resolved in our favor.
Although we and our licensors have filed various patent applications covering the uses of our product candidates, patents
may not be issued from the patent applications already filed or from applications that we might file in the future. Moreover,
the patent position of companies in the pharmaceutical industry generally involves complex legal and factual questions, and
has been the subject of much litigation. Any patents we own or license, now or in the future, may be challenged, invalidated
or circumvented. To date, no consistent policy has been developed in the U.S. Patent and Trademark Office (the “PTO”)
regarding the breadth of claims allowed in biotechnology patents.
In addition, because patent applications in the U.S. are maintained in secrecy until patent applications publish or patents
issue, and because publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we
cannot be certain that we and our licensors are the first creators of inventions covered by any licensed patent applications or
patents or that we or they are the first to file. The PTO may commence interference proceedings involving patents or patent
applications, in which the question of first inventorship is contested. Accordingly, the patents owned or licensed to us may
not be valid or may not afford us protection against competitors with similar technology, and the patent applications licensed
to us may not result in the issuance of patents.
It is also possible that our owned and licensed technologies may infringe on patents or other rights owned by others, and
licenses to which may not be available to us. We may be unable to obtain a license under such patent on terms favorable to
us, if at all. We may have to alter our products or processes, pay licensing fees or cease activities altogether because of
patent rights of third parties.
In addition to the products for which we have patents or have filed patent applications, we rely upon unpatented proprietary
technology and may not be able to meaningfully protect our rights with regard to that unpatented proprietary technology.
Furthermore, to the extent that consultants, key employees or other third parties apply technological information developed
by them or by others to any of our proposed projects, disputes may arise as to the proprietary rights to this information,
which may not be resolved in our favor.
We may be involved in lawsuits to protect or enforce our patents, which could be expensive and time consuming.
The pharmaceutical industry has been characterized by extensive litigation regarding patents and other intellectual property
rights, and companies have employed intellectual property litigation to gain a competitive advantage. We may become
subject to infringement claims or litigation arising out of patents and pending applications of our competitors, or additional
interference proceedings declared by the PTO to determine the priority of inventions. The defense and prosecution of
intellectual property suits, PTO proceedings, and related legal and administrative proceedings are costly and time-
consuming to pursue, and their outcome is uncertain. Litigation may be necessary to enforce our issued patents, to protect
our trade secrets and know-how, or to determine the enforceability, scope, and validity of the proprietary rights of others. An
adverse determination in litigation or interference proceedings to which we may become a party could subject us to
significant liabilities, require us to obtain licenses from third parties, or restrict or prevent us from selling our products in
certain markets. Although patent and intellectual property disputes might be settled through licensing or similar
arrangements, the costs associated with such arrangements may be substantial and could include our paying large fixed
payments and ongoing royalties. Furthermore, the necessary licenses may not be available on satisfactory terms or at all.
Competitors may infringe our patents, and we may file infringement claims to counter infringement or unauthorized use. This
can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a
court may decide that a patent of ours is not valid or is unenforceable or may refuse to stop the other party
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from using the technology at issue on the grounds that our patents do not cover its technology. An adverse determination of
any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly.
Also, a third party may assert that our patents are invalid and/or unenforceable. There are no unresolved communications,
allegations, complaints or threats of litigation related to the possibility that our patents are invalid or unenforceable. Any
litigation or claims against us, whether or not merited, may result in substantial costs, place a significant strain on our
financial resources, divert the attention of management and harm our reputation. An adverse decision in litigation could
result in inadequate protection for our product candidates and/or reduce the value of any license agreements we have with
third parties.
Interference proceedings brought before the PTO may be necessary to determine priority of invention with respect to our
patents or patent applications. During an interference proceeding, it may be determined that we do not have priority of
invention for one or more aspects in our patents or patent applications and could result in the invalidation in part or whole of
a patent or could put a patent application at risk of not issuing. Even if successful, an interference proceeding may result in
substantial costs and distraction to our management.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or
interference proceedings, there is a risk that some of our confidential information could be compromised by disclosure. In
addition, there could be public announcements of the results of hearings, motions or other interim proceedings or
developments. If investors perceive these results to be negative, the price of our common stock could be adversely affected.
If we infringe the rights of third parties we could be prevented from selling products, forced to pay damages, and
defend against litigation.
If our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur
substantial costs and we may have to: obtain licenses, which may not be available on commercially reasonable terms, if at
all; abandon an infringing product candidate; redesign our products or processes to avoid infringement; stop using the
subject matter claimed in the patents held by others; pay damages; and/or defend litigation or administrative proceedings
which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and
management resources.
Risks Related to our Securities
The price of our common stock may be highly volatile.
The market price of our securities, like that of many other research and development public pharmaceutical and
biotechnology companies, has been highly volatile and the price of our common stock may be volatile in the future due to a
wide variety of factors, including:
● announcements by us or others of results of pre-clinical testing and clinical trials;
● announcements of technological innovations, more important bio-threats or new commercial therapeutic products by
us, our collaborative partners or our present or potential competitors;
● failure of our common stock to continue to be listed or quoted on a national exchange or market system, such as
The Nasdaq Stock Market (“Nasdaq”) or NYSE Amex LLC;
● our quarterly operating results and performance;
● developments or disputes concerning patents or other proprietary rights;
● acquisitions;
● litigation and government proceedings;
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● adverse legislation;
● changes in government regulations;
● our available working capital;
● economic and other external factors;
● general market conditions.
Since January 1, 2022, the closing stock price of our common stock has fluctuated between a high of $0.91 per share to a
low of $0.58 per share. On March 22, 2022, the last reported sales prices of our common stock on The Nasdaq Capital
Market was $0.71 per share. The fluctuation in the price of our common stock has sometimes been unrelated or
disproportionate to our operating performance. In addition, potential dilutive effects of future sales of shares of common
stock and warrants by us, as well as potential sale of common stock by the holders of warrants and options, could have an
adverse effect on the market price of our shares.
If we fail to remain current with our listing requirements, we could be removed from The Nasdaq Capital Market,
which would limit the ability of broker-dealers to sell our securities and the ability of shareholders to sell their
securities in the secondary market.
Companies trading on The Nasdaq Stock Market, such as our Company, must be reporting issuers under Section 12 of the
Exchange Act, as amended, and must meet the listing requirements in order to maintain the listing of common stock on The
Nasdaq Capital Market. If we do not meet these requirements, the market liquidity for our securities could be severely
adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of shareholders to sell their
securities in the secondary market.
On December 20, 2021, we received a written notice (the “Bid Price Notice”) from the Listing Qualifications department of
Nasdaq indicating that we are is not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing
Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market. The notification of noncompliance had no immediate
effect on the listing or trading of our common stock on The Nasdaq Capital Market, and we are currently monitoring the
closing bid price of our common stock and evaluating our alternatives, if appropriate, to resolve the deficiency and regain
compliance with this rule.
The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the
closing bid price for the last 30 consecutive business days, we no longer meet this requirement. The Bid Price Notice
indicated that we will be provided 180 calendar days, or until June 20, 2022, in which to regain compliance. If at any time
during this period the bid price of our common stock closes at or above $1.00 per share for a minimum of ten consecutive
business days, the Nasdaq staff will provide us with a written confirmation of compliance and the matter will be closed.
In the event we do not regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, the
Nasdaq staff will provide us with written notification that our securities are subject to delisting from The Nasdaq Capital
Market. At that time, we may appeal the delisting determination to a Nasdaq Listing Qualifications Panel.
Alternatively, if we fail to regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, but
meet the continued listing requirement for market value of publicly held shares and all of the other applicable standards for
initial listing on The Nasdaq Capital Market, with the exception of the minimum bid price, and provide written notice of our
intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then we
may be granted an additional 180 calendar days to regain compliance with Rule 5550(a)(2).
The warrants may not have any value.
The outstanding warrants do not confer any rights of common stock ownership on their holders, such as voting rights or the
right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price for a
limited period of time. Specifically, the holders of the outstanding warrants may exercise their right to acquire the common
stock and pay the per share exercise price, prior to the expiration date, after which date any unexercised warrants will expire
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and have no further value. In the event our common stock does not exceed the exercise price of the warrants during the
period when the warrants are exercisable, the warrants may not have any value.
Shareholders may suffer substantial dilution related to issued stock warrants, options and convertible notes.
As of December 31, 2021, we had a number of agreements or obligations that may result in dilution to investors. These
include:
● warrants to purchase a total of approximately 3,328,072 shares of our common stock at a current weighted average
exercise price of $2.25;
● options to purchase approximately 2,115,825 shares of our common stock at a current weighted average exercise
price of $2.48;
● the B. Riley Sales Agreement pursuant to which we may, but have no obligation to, sell up to an additional $26.8
million worth of our common stock as of March 22, 2022; and
● convertible promissory notes issued to Pontifax Medison Finance, which may be converted into up to 3,658,536
shares of common stock at a price of $4.10 per share under the initial loan borrowing of $10 million and the third
tranche of $5 million, which was still available as of December 31, 2021 under the loan and security agreement. The
second tranche of $5 million expired on December 15, 2021. The third tranche of $5 million expired on March 15,
2022 which reduced the amount issuable upon conversion to 2,439,024 shares.
We also have an incentive compensation plan for our management, employees and consultants. We have granted, and
expect to grant in the future, options to purchase shares of our common stock to our directors, employees and consultants.
To the extent that warrants or options are exercised, our stockholders experience dilution and our stock price may decrease.
Our shares of common stock and warrants are thinly traded, so stockholders may be unable to sell at or near ask
prices or at all if they need to sell shares or warrants to raise money or otherwise desire to liquidate their shares.
Our common stock and warrants have from time to time been “thinly-traded,” meaning that the number of persons interested
in purchasing our common stock or warrants at or near ask prices at any given time may be relatively small or non-existent.
This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown
to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence
sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant
to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we
become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect on share price. We cannot give stockholders
any assurance that a broader or more active public trading market for our common shares and warrants will develop or be
sustained, or that current trading levels will be sustained.
We do not currently intend to pay dividends on our common stock in the foreseeable future, and consequently, our
stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common
stock.
We have never declared or paid cash dividends on our common stock and do not anticipate paying any cash dividends to
holders of our common stock in the foreseeable future. Consequently, our stockholders must rely on sales of their common
stock and warrants after price appreciation, which may never occur, as the only way to realize any future gains on their
investments. There is no guarantee that shares of our common stock or warrants will appreciate in value or even maintain
the price at which our stockholders have purchased their shares.
Upon our dissolution, our stockholders may not recoup all or any portion of their investment.
In the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, the proceeds and/or our assets
remaining after giving effect to such transaction, and the payment of all of our debts and liabilities will be distributed to the
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holders of common stock on a pro rata basis. There can be no assurance that we will have available assets to pay to the
holders of common stock, or any amounts, upon such a liquidation, dissolution or winding-up. In this event, our stockholders
could lose some or all of their investment.
The issuance of our common stock pursuant to the terms of the asset purchase agreement with Hy Biopharma Inc.
may cause dilution and the issuance of such shares of common stock, or the perception that such issuances may
occur, could cause the price of our common stock to fall.
On April 1, 2014, we entered into an option agreement pursuant to which Hy Biopharma granted us an option to purchase
certain assets, properties and rights (the “Hypericin Assets”) related to the development of Hy Biopharma’s synthetic
hypericin product candidate for the treatment of CTCL, which we refer to as HyBryte™, from Hy Biopharma. In exchange for
the option, we paid $50,000 in cash and issued 4,307 shares of common stock in the aggregate to Hy Biopharma and its
assignees. We subsequently exercised the option, and on September 3, 2014, we entered into an asset purchase
agreement with Hy Biopharma, pursuant to which we purchased the Hypericin Assets. Pursuant to the purchase agreement,
we initially paid $275,000 in cash and issued 184,912 shares of common stock in the aggregate to Hy Biopharma and its
assignees, and the licensors of the license agreement acquired from Hy Biopharma. Also, on September 3, 2014, we
entered into a Registration Rights Agreement with Hy Biopharma, pursuant to which we may be required to file a registration
statement with the SEC. In March 2020, we issued 1,956,182 shares of common stock at a value of $5,000,000 (based
upon an effective per share price of $2.56) as a result of HyBryte™ demonstrating statistically significant treatment response
in the Phase 3 clinical trial. We will be required to issue up to $5.0 million worth of our common stock (subject to a cap equal
to 19.9% of our issued and outstanding common stock) in the aggregate, if HyBryte™ is approved for the treatment of CTCL
by either the FDA or the EMA.
The number of shares that we may issue under the purchase agreement will fluctuate based on the market price of our
common stock. Depending on market liquidity at the time, the issuance of such shares may cause the trading price of our
common stock to fall.
We may ultimately issue all, some or none of the additional shares of our common stock that may be issued pursuant to the
purchase agreement. We are required to register any shares issued pursuant to the purchase agreement for resale under
the Securities Act of 1933, as amended (the “Securities Act”). After any such shares are registered, the holders will be able
to sell all, some or none of those shares. Therefore, issuances by us under the purchase agreement could result in
substantial dilution to the interests of other holders of our common stock. Additionally, the issuance of a substantial number
of shares of our common stock pursuant to the purchase agreement, or the anticipation of such issuances, could make it
more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise
wish to effect sales.
Repayment of certain convertible notes, if they are not otherwise converted, will require a significant amount of
cash, and we may not have sufficient cash flow from our business to make payments on our indebtedness.
Our ability to pay the principal of and/or interest on the convertible notes issued pursuant to the Loan and Security
Agreement with Pontifax Medison Finance (the “Convertible Notes”) depends on our future performance, which is subject to
economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from
operations in the future sufficient to service the Convertible Notes or other future indebtedness and make necessary capital
expenditures. If we are unable to generate such cash flow, we may be required to adopt and implement one or more
alternatives, such as selling assets, restructuring indebtedness or obtaining additional debt financing or equity financing on
terms that may be onerous or highly dilutive. Our ability to refinance the Convertible Notes or other future indebtedness will
depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these
activities or engage in these activities on desirable terms, which could result in a default on our debt obligations, including
the Convertible Notes.
The issuance of shares of common stock upon conversion of the Convertible Notes could substantially dilute
shareholders’ investments and could impede our ability to obtain additional financing.
The Convertible Notes are convertible into shares of our common stock and give the holders an opportunity to profit from a
rise in the market price of our common stock such that conversion or exercise thereof could result in dilution of the equity
interests of our shareholders. We have no control over whether the holders will exercise their right to convert their
Convertible Notes. While the Convertible Notes are convertible at a minimum price of $4.10 per share which is higher than
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our current market price, we cannot predict the market price of our common stock at any future date, and therefore, cannot
predict whether the Convertible Notes will be converted. The existence and potentially dilutive impact of the Convertible
Notes may prevent us from obtaining additional financing in the future on acceptable terms, or at all.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We currently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New
Jersey pursuant to a lease that expires in to October 2022. This office space currently serves as our corporate headquarters,
and both of our business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. Our
office space is sufficient to satisfy our current needs. We may add new space or expand existing space as we add
employees, and we believe that suitable additional or substitute space will be available as needed to accommodate any
such expansion of our operations.
Item 3. Legal Proceedings
From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our
management evaluates our exposure to these claims and proceedings individually and in the aggregate and allocates
additional monies for potential losses on such litigation if it is possible to estimate the amount of loss and if the amount of the
loss is probable.
In July 2020, we filed a demand for arbitration against Emergent BioSolutions, Inc. (“EBS”); Emergent Product Development
Gaithersburg, Inc. (“EPDG”); and Emergent Manufacturing Operations Baltimore LLC (“EMOB” and, together with EBS and
EPDG, Emergent) with the American Arbitration Association in Mercer County, New Jersey in which we have alleged that
(a) EPDG breached the EPDG Subcontract (defined in the following paragraph), the EPDG Quality Agreement (defined in
the following paragraph), an express warranty, a warranty of merchantability, and a warranty of fitness for a particular
purpose, (b) EMOB breached the EMOB Quality Agreement (defined in the following paragraph); (c) EPDG was unjustly
enriched; (d) EPDG and EMOB were negligent in the performance of their work; and (e) EBS fraudulently induced us into
entering into the contracts with EPDG and EMOB. Emergent has answered that demand for arbitration denying the
allegations and asserting affirmative defenses. In arbitration arose as a result of the following:
After several months of negotiations and based on representations Emergent made related to its capabilities in developing
upstream and downstream processes for vaccines and its designation as a Center for Innovation in Advanced Development
and Manufacturing, in May 2015, we entered into a subcontract (the “EPDG Subcontract”) with EPDG, pursuant to which
EPDG agreed to manufacture, and provide to the us, RiVax® bulk drug substance (“BDS”). In March 2017, we entered into a
quality agreement (the “EPDG Quality Agreement”) with EPDG for the purpose of defining and allocating the quality-related
responsibilities between EPDG and us with respect to the production of the RiVax® BDS under the EPDG Subcontract.
After nearly three years of EPDG failing to meet the scope of work set forth in the EPDG Subcontract, Emergent
recommended that both development and manufacturing work under the EPDG Subcontract be transferred to EMOB. In
July 2018, we entered into a quality agreement (the “EMOB Quality Agreement”) with EMOB, which agreement allocated
various defined responsibilities between EMOB and us with respect to the manufacture, supply, and testing of the RiVax®
BDS. Under the EMOB Quality Agreement, EMOB assumed sole responsibility for, inter alia, (i) employee training;
(ii) providing adequate and qualified personnel; (iii) notifying us of out-of-specification results within two (2) business days of
identification of the out of-specification results; (iv) performing testing using agreed-to testing procedures, test methods,
specifications, and required compendia requirements; (v) ensuring that EMOB-generated data was accurate, controlled and
safe from manipulation or loss; (vi) ensuring that the procedures, the state of automation and/or management controls were
in place to assure data integrity; (vii) apprising us of any significant changes to analytical methodology for intermediaries, in-
process or final product; and (viii) assuring that samples were stored in appropriate, continuously monitored conditions.
In January 2020, EMOB informed us (a) of the existence of a questionable test result that could result in a determination that
the RiVax® BDS manufactured, tested and released by EMOB was out-of-specification and should never have been
released by Emergent (b) that the validity of “initial release” test results for such BDS was faulty because Emergent used
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an improper test method. We immediately suspended the Phase 1c trial to evaluate RiVax® in healthy adults, ending both
further enrollment and further dosing. Emergent conducted an internal review of this deviation and found multiple internal
failures including an “Inadequate analytical method transfer process,” an “Inability to comply with standard operating
procedures around method transfer and data review,” and an “Inability to comply with test method procedures,” We quickly
initiated a “for-cause” audit of the Emergent facility and confirmed the failures Emergent identified and admitted to in its own
internal investigation.
We are seeking to recover damages in excess of $19 million from Emergent. While we intend to vigorously pursue this
arbitration, we cannot offer any assurances that we will recover any damages from Emergent.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock is traded on The Nasdaq Capital Market under the symbol “SNGX.” The following table sets forth the
high and low sales prices per share of our common stock for the periods indicated, as reported by The Nasdaq Capital
Market.
Period
Year Ended December 31, 2020:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Year Ended December 31, 2021:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Price Range
High
Low
$
$
$
$
$
$
$
$
3.54
2.47
2.99
2.80
2.48
1.62
1.32
1.23
$
$
$
$
$
$
$
$
1.33
1.32
1.65
1.21
1.26
0.86
0.85
0.68
On March 22, 2022, the last reported price of our common stock quoted on The Nasdaq Capital Market was $0.71 per
share. The Nasdaq Capital Market prices set forth above represent inter-dealer quotations, without adjustment for retail
mark-up, mark-down or commission, and may not represent the prices of actual transactions. Our stock is listed on The
Nasdaq Capital Market under the under the symbol “SNGX.” On December 13, 2016, certain of our common stock warrants
began trading on The Nasdaq Capital Market under the symbol “SNGXW”. These tradable warrants expired on December
15, 2021. For the period from January 1, 2021 through December 15, 2021, the high and low sales price per warrant as
reported by Nasdaq were $0.65 and $0.01 respectively.
Transfer Agent
The transfer agent and registrar for our common stock and warrants is American Stock Transfer & Trust Company, LLC. The
address is 6201 15th Avenue, Brooklyn, NY 11219 and the telephone number is (718) 921-8200.
Holders of Common Stock
As of March 22, 2022, there were 111 holders of record of our common stock. As of such date, 42,954,091 shares of our
common stock were issued and outstanding.
Dividends
We have never declared nor paid any cash dividends, and currently intend to retain all our cash and any earnings for use in
our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determination
to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our consolidated
financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems
relevant.
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Item 6. Selected Financial Data
Not applicable.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Our Business Overview
We are a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases
where there is an unmet medical need. We maintain two active business segments: Specialized BioTherapeutics and Public
Health Solutions.
Our Specialized BioTherapeutics business segment is developing and moving toward potential commercialization of
HyBryte™ (a proposed proprietary name of HyBryte™ or synthetic hypericin), a novel PDT, utilizing topical synthetic
hypericin activated with safe visible light for the treatment of CTCL. With a successful Phase 3 study completed, regulatory
approval is being sought and commercialization activities for this product candidate are being advanced initially in the U.S.
Development programs in this business segment also include our first-in-class IDR technology, dusquetide (SGX942) for the
treatment of inflammatory diseases, including oral mucositis in head and neck cancer, and proprietary formulations of oral
BDP for the prevention/treatment of GI disorders characterized by severe inflammation including pediatric Crohn’s disease
(SGX203).
Our Public Health Solutions business segment includes active development programs for RiVax®, our ricin toxin vaccine
candidate and SGX943, our therapeutic candidate for antibiotic resistant and emerging infectious disease and our vaccine
programs targeting filoviruses (such as Marburg and Ebola) and CiVax™, our vaccine candidate for the prevention of
COVID-19 (caused by SARS-CoV-2). The development of our vaccine programs incorporates the use of our proprietary heat
stabilization platform technology, known as ThermoVax®. To date, this business segment has been supported with
government grant and contract funding from NIAID, BARDA and DTRA.
An outline of our business strategy follows:
● Following positive primary endpoint results for the Phase 3 clinical trial of HyBryte™, as well as further statistically
significant improvement in response rates with longer treatment (18 weeks compared to 12 and 6 weeks of
treatment), pursue New Drug Application (“NDA”) filing and commercialization in the U.S. while continuing to explore
ex-U.S. partnership.
● Expand development of synthetic hypericin under the research name SGX302 into psoriasis following the positive
Phase 3 FLASH study and positive proof-of-concept demonstrated in a small Phase 1/2 pilot study in mild-to-
moderate psoriasis patients.
● Following feedback from the United Kingdom (“UK”) Medicines and Healthcare products Regulatory Agency
(“MHRA”) that the SGX942 Phase 3 DOM-INNATE (Dusquetide treatment in Oral Mucositis – by modulating
INNATE Immunity) clinical trial, having missed its primary endpoint, would not support a potential marketing
authorization and that a second Phase 3 study would be needed, analyze the DOM-INNATE study full dataset and
design a second Phase 3 study; attempt to identify a potential partner(s) to continue this development program.
● Continue development of our therapeutic SGX943 and our heat stabilization platform technology, ThermoVax®, in
combination with our programs for RiVax® (ricin toxin vaccine), CiVax™ (COVID-19 vaccine) and filovirus vaccines
(targeting Ebola, Sudan, and Marburg viruses), with U.S. government funding support. Continue to apply for and
secure additional government funding for each of our Specialized BioTherapeutics and Public Health Solutions
programs through grants, contracts and/or procurements.
● Pursue business development opportunities for our pipeline programs, as well as explore merger/acquisition
strategies.
● Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with
existing pipeline compounds for development.
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Corporate Information
We were incorporated in Delaware in 1987 under the name Biological Therapeutics, Inc. In 1987, we merged with Biological
Therapeutics, Inc., a North Dakota corporation, pursuant to which we changed our name to “Immunotherapeutics, Inc.” We
changed our name to “Endorex Corp.” in 1996, to “Endorex Corporation” in 1998, to “DOR BioPharma, Inc.” in 2001, and
finally to “Soligenix, Inc.” in 2009. Our principal executive offices are located at 29 Emmons Drive, Suite B-10, Princeton,
New Jersey 08540 and our telephone number is (609) 538-8200.
Our Product Candidates in Development
The following tables summarize our product candidates under development:
Specialized BioTherapeutics Product Candidates*
Soligenix Product Candidate
HyBryte™
Therapeutic Indication
Cutaneous T-Cell Lymphoma
Stage of Development
Phase 2
trial completed; demonstrated
significantly higher response rate compared
to placebo; Phase 3 demonstrated
statistical significance in primary endpoint in
March 2020 (Cycle 1); and demonstrated
treatment
continued
response with extended
in
April 2020 (Cycle 2) and October (Cycle 3);
NDA filing planned for 2H 2022
in
treatment
improvement
SGX 302
Mild-to-Moderate Psoriasis
Positive proof-of-concept demonstrated in a
small Phase 1/2 pilot study; Phase 2a study
anticipated 2H 2022
SGX942
Oral Mucositis in Head and Neck Cancer
Phase 2
trial completed; demonstrated
significant response compared to placebo
with positive long-term (12 month) safety
also reported; Phase 3 clinical trial results
announced December 2020: The primary
endpoint of median duration of severe oral
mucositis (“SOM”) did not achieve the pre-
specified
statistical
significance (p≤0.05), although biological
activity was observed with a 56% reduction
in the median duration of SOM from 18
days in the placebo group to 8 days in the
SGX942
full
dataset from Phase 3 study and design a
second Phase 3 clinical trial
treatment group; analyze
criterion
for
SGX203†
Pediatric Crohn’s disease
data,
Phase 1/2 clinical trial completed; efficacy
pharmacokinetic
(PK)/pharmacodynamic (PD) profile and
safety profile demonstrated; Phase 3 clinical
trial initiation contingent upon additional
funding, such as through partnership
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Public Health Solutions*†
Soligenix Product Candidate
ThermoVax®
Indication
Thermostability of vaccines for Ricin toxin,
Ebola, Sudan, Marburg and SARS- CoV-2
(COVID-19) viruses
Stage of Development
Pre-clinical
RiVax®
Vaccine against Ricin Toxin Poisoning
Phase 1a and 1b trials completed, safety and
protection
neutralizing
demonstrated; Phase 1c
initiated
December 2019, closed January 2020
antibodies
trial
for
SGX943
CiVax™
Therapeutic against Emerging Infectious
Diseases
Pre-clinical
Vaccine against COVID-19
Pre-clinical
Timelines subject to potential disruption due to COVID-19 outbreak.
*
† Contingent upon continued government contract/grant funding or other funding source.
Critical Accounting Policies
Our management’s discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in
the U.S. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and
liabilities. We base our estimates on historical experience, known trends and events and various other factors that we
believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions
on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in the notes to our financial statements appearing at
the end of this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the
assumptions and estimates used in the preparation of our financial statements.
Revenue Recognition
Our revenues are primarily generated from government contracts and grants. The revenue from government contracts and
grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and
grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These
revenues are recognized when expenses have been incurred by subcontractors or when we incur reimbursable internal
expenses that are related to the government contracts and grants.
Research and Development Costs
As part of the process of preparing our financial statements, we are required to estimate our accrued research and
development expenses. This process involves reviewing open contract and purchase orders, communicating with our
personnel to identify services that have been performed on our behalf and estimating the level of service performed and the
associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. The
majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when
contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as
of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. Examples
of estimated accrued research and development expenses include fees paid to:
● contract research organizations (“CROs”) in connection with performing research activities on our behalf and
conducting preclinical studies and clinical trials on our behalf;
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● investigative sites or other service providers in connection with clinical trials;
● vendors in connection with preclinical and clinical development activities; and
● vendors related to product manufacturing and development and distribution of preclinical and clinical supplies.
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts
expended pursuant to quotes and contracts with multiple CROs that conduct and manage preclinical studies and clinical
trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and
may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level
of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors
such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing fees, we estimate
the time period over which services will be performed, enrollment of patients, number of sites active and the level of effort to
be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate,
we adjust the accrual or amount of prepaid expense accordingly. Although we do not expect our estimates to be materially
different from amounts actually incurred, our understanding of the status and timing of services performed relative to the
actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low
in any particular period. To date, we have not made any material adjustments to our prior estimates of accrued research and
development expenses.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires
management to make estimates and assumptions such as the fair value of stock options and to accrue for clinical trials in
process that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ
from those estimates.
Material Changes in Results of Operations
Year Ended December 31, 2021 Compared to 2020
For the year ended December 31, 2021, we had a net loss of $12,550,973 as compared to a net loss of $17,688,522 for the
prior year, representing a decreased loss of $5,137,549 or 29%. The decrease in net loss is primarily due to the additional
costs in 2020 relating to the issuance of $5,000,000 worth of fully vested shares of common stock to Hy Biopharma, Inc.
(“Hy Biopharma”) in connection with the achievement of a development milestone. For the year ended December 31, 2021,
we had revenues of $824,268 as compared to $2,359,447 for the prior year, representing a decrease of $1,535,179 or 65%.
The decrease in revenues was primarily a result of the finalization of the Rivax® contract and oral mucositis grant.
We incurred costs related to contract and grant revenues in the year ended December 31, 2021 and 2020 of $728,640 and
$1,820,949, respectively, representing a decrease of $1,092,309 or 60%. The decrease in costs was primarily the result of
grants being fully utilized.
Our gross profit for the year ended December 31, 2021 was $95,628 or 12% as compared to $538,498 or 23% of total
revenues for the prior year, representing a decrease of $442,870 or 82%. The decrease in revenues and gross profit were
primarily the result of the conclusion of the CTCL study.
Research and development expenses decreased by $1,406,780 or 14% to $8,389,387 for year ended December 31, 2021
as compared to $9,796,167 for the prior year. The decrease in research and development spending for the year ended
December 31, 2021 was related to the conclusion of the CTCL and oral mucositis Phase 3 studies.
General and administrative expenses increased by $518,288 or 12%, to $4,847,126 for the year ended December 31, 2021,
as compared to $4,328,838 for the prior year. This increase is primarily related to an increase in legal fees associated with
the Emergent arbitration partially offset by a decrease in company headcount.
Research and development milestone expense decreased by $5,000,000 or 100%, to $0 for the year ended December 31,
2021, as compared to $5,000,000 for the prior year. The decrease is due to the issuance of $5,000,000 worth of fully vested
shares of common stock to Hy Biopharma in connection with the achievement of a development milestone in 2020.
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Other expense and income for the year ended December 31, 2021 was $274,830 of expense as compared to $61,092 of
income for the prior year, reflecting a decrease of $335,922 or 550%. The decrease was primarily due to a full year of
interest expense in 2021 on the Pontifax convertible debt agreement partially offset by the gain on forgiveness of the PPP
loan, an increase in research and development tax incentives and an insurance reimbursement.
The State of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology
companies to sell unused NOL carryforwards to other New Jersey-based corporate taxpayers. We sold NOLs resulting in the
recognition of income tax benefits of $864,742 and $836,893 during the years ended December 31, 2021 and 2020,
respectively. We have applied for and received preliminary confirmation for NOLs related to the year ended
December 31, 2020 in the amount of $1,154,935, which will not be recognized until a certificate for the refund is received.
We have not yet sold our 2021 New Jersey NOLs but may do so in the future. We will continue to explore opportunities to
sell unused NOL carryforwards for the year ended December 31, 2021. However, there can be no assurance as to the
continuation or magnitude of this program in future years.
Business Segments
We maintain two active business segments for the years ended December 31, 2021 and 2020: Specialized BioTherapeutics
and Public Health Solutions.
There were no revenues for the Specialized BioTherapeutics business segment for the year ended December 31, 2021 as
compared to $117,369 for the year ended December 31, 2020, representing a decrease of $117,369 or 100%. The decrease
was due to there being no reimbursable development activity under the oral mucositis juvenile toxicology grant to support
the evaluation of SGX942 (dusquetide) in pediatric indications during the year ended December 31, 2021.
Revenues for the Public Health Solutions business segment for the year ended December 31, 2021 were $824,268 as
compared to $2,242,078 for the year ended December 31, 2020, representing a decrease of $1,417,810 or 63%. The
decrease in revenues was primarily the result of grants and contracts coming to an end during the year ended
December 31, 2020.
Loss from operations for the Public Health Solutions business segment for the year ended December 31, 2021 was
$647,600 as compared to $85,417 for the year ended December 31, 2020, representing an increased loss of $562,183 or
658%. The loss for the year ended December 31, 2021 is attributable to the expiration of grants and contracts to offset
research and development spending. Loss from operations for the Specialized BioTherapeutics business segment for
the year ended December 31, 2021 was $7,280,936 as compared to $13,610,715 for the year ended December 31, 2020,
representing a decreased loss of $6,329,779 or 47%. This is primarily attributed to no expenses incurred in fiscal year 2021
for patient enrollments due to the Phase 3 clinical trial of HyBryte™ and the $5,000,000 Hy Biopharma milestone expense in
2020.
Financial Condition and Liquidity
Cash and Working Capital
As of December 31, 2021, we had cash and cash equivalents of $26,043,897 as compared to $18,676,663 as of
December 31, 2020, representing an increase of $7,367,234 or 39%. As of December 31, 2021, we had working capital of
$20,278,345, representing an increase of $6,891,860 as compared to working capital of $13,386,485 for the prior year. The
increase in cash and cash equivalents and working capital was primarily related to our usage of the At Market Issuance
Sales Agreement (“B. Riley Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley”) offset by loan proceeds from
Pontifax Medison Finance received in December 2020.
Based on our current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, cash
available from the loan from Pontifax Medison Finance, and proceeds available from the B. Riley Sales Agreement,
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 twelve months from issuance of the financial statements.
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Our plans with respect to our liquidity management include, but are not limited to, the following:
● We have up to $1.35 million in active government grant funding still available as of December 31, 2021 to support
our associated research programs through November 2022, provided the federal agencies do not elect to terminate
the grants for convenience. We plan to submit additional contract and grant applications for further support of our
programs with various funding agencies. However, there can be no assurance that we will obtain additional
governmental grant funding;
● We have continued to use equity instruments to provide a portion of the compensation due to vendors and
collaboration partners and expect to continue to do so for the foreseeable future;
● We will continue to pursue NOL sales in the state of New Jersey pursuant to its Technology Business Tax Certificate
Transfer Program if the program is available;
● We plan to pursue potential partnerships for pipeline programs; however, there can be no assurances that we can
consummate such transactions;
● We have up to $26.8 million remaining from the B. Riley Sales Agreement as of March 22, 2022 under the
prospectus supplement updated August 28, 2020; and
● We may seek additional capital in the private and/or public equity markets, pursue government contracts and grants
as well as business development activities, to continue our operations, respond to competitive pressures, develop
new products and services, and to support new strategic partnerships. We are currently evaluating additional
equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there
can be no assurances that we can consummate such a transaction, or consummate a transaction at favorable
pricing.
Expenditures
Under our budget and based upon our existing product development agreements and license agreements pursuant to letters
of intent and option agreements, we expect our total research and development expenditures for the year ending
December 31, 2022 to be approximately $12.9 million before any contract or grant reimbursements, of which $11.7 million
relates to the Specialized BioTherapeutics business and $1.2 million relates to the Public Health Solutions business. We
anticipate contract and grant reimbursements for the same period of approximately $1.3 million to offset research and
development expenses in the Specialized BioTherapeutics and Public Health Solutions business segments.
The table below details our costs for research and development by program and amounts reimbursed for the years ended
December 31, 2021 and 2020:
Research & Development Expenses
RiVax® and ThermoVax® Vaccines
SGX942 (Dusquetide)
CiVax™
HyBryte™ (SGX301 or synthetic hypericin)
Other
Total
Reimbursed under Government Contracts and Grants
RiVax® and ThermoVax® Vaccines
SGX942 (Dusquetide)
CiVax™
SGX943
Total
Grand Total
2021
2020
$
616,598
2,284,731
20,000
4,923,914
544,144
$ 8,389,387
$
565,407
4,275,384
—
4,393,838
561,538
$ 9,796,167
$
146,913
—
$ 1,663,297
78,860
—
78,792
1,820,949
$ 11,617,116
514,436
67,291
728,640
$ 9,118,027
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Contractual Obligations
We have licensing fee commitments of approximately $100,000 per year for the next five years for several licensing
agreements with entities, consultants and universities. Additionally, we have collaboration and license agreements, which
upon clinical or commercialization success may require the payment of milestones of up to $7.9 million and/or royalties up to
6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or
commercialization success will occur.
We currently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New
Jersey pursuant to a lease that expires in to October 2022. This office space currently serves as our corporate headquarters,
and both of our business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. The
rent for the remainder of the term will be $11,108, or approximately $21.50 per square foot. Our office space is sufficient to
satisfy our current needs.
In September 2014, we entered into an asset purchase agreement with Hy Biopharma pursuant to which we acquired
certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic
hypericin product. As consideration for the assets acquired, we initially paid $275,000 in cash and issued 184,912 shares of
common stock with a fair value based upon our stock price on the date of grant of $3,750,000. These amounts were
charged to research and development expense during the third quarter of 2014 as the assets will be used in our research
and development activities and do not have alternative future use pursuant to generally accepted accounting principles in
the U.S.
In January 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to increase the
number of shares of common stock from 5,000 to 500,000, issuable to Dr. Schaber immediately prior to the completion of a
transaction, or series or a combination of related transactions, negotiated by our Board of Directors whereby, directly or
indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholders to a third
party.
In March 2020, we filed a prospectus supplement covering the offer and sale of up to 1,956,182 shares of our common
stock, which were issued to Hy Biopharma. We were required to issue the shares to Hy Biopharma as payment following the
achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of HyBryte™ being
successful in the treatment of CTCL. The number of shares of our common stock issued to Hy Biopharma was calculated
using an effective price of $2.56 per share, based upon a formula set forth in the asset purchase agreement.
Provided the final success-oriented milestone is attained, we will be required to make a payment of up to $5.0 million, if and
when achieved. The potential future payment will be payable in our common stock, not to exceed 19.9% of our outstanding
stock.
In December 2020, we entered into a $20 million convertible debt financing agreement with Pontifax Medison Finance
(“Pontifax”), the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the terms of the
agreement with Pontifax, we have access to up to $20 million in convertible debt financing in three tranches, which will
mature on June 15, 2025 and have an interest only period through December 2022 with a rate of 8.47% on borrowed
amounts and a 1% rate on amounts available but not borrowed. Upon the closing of this transaction, we borrowed the first
tranche of $10 million. We did not utilize our option to draw the second or third tranche of $5 million each, which expired on
December 15, 2021 and March 15, 2022, respectively. Interest expense incurred and paid in 2021 totaled $894,808 and
$668,715, respectively.
Pontifax may elect to convert the outstanding loan drawn under the first tranche into shares of our common stock at any time
prior to repayment at a conversion price of $4.10 per share. We also have the ability to force the conversion of the loan into
shares of our common stock, subject to certain conditions.
CARES Act Loan
On April 13, 2020, we were advised that one of our principal banks, JPMorgan Chase Bank, N.A., had approved a $417,830
loan (the “Loan”) under the Paycheck Protection Program (“PPP”) pursuant to the Coronavirus Aid, Relief and Economic
Security Act that was signed into law on March 27, 2020.
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As a U.S. small business, we qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees
to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business
disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the
average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes,
including payroll, benefits, rent and utilities.
The Loan had a term of two years, was unsecured, and was guaranteed by the Small Business Administration (“SBA”). The
Loan bore interest at a fixed rate of 0.98% per annum, with interest and principal deferred during the eight-week or twenty-
four-week period following the Loan origination date (“the loan forgiveness period”) and subsequent 10 months. Some or all
of the Loan was eligible for forgiveness if at least 60% of the Loan proceeds were used by us to cover payroll costs,
including benefits and if we maintained our employment and compensation within certain parameters during the loan
forgiveness period and complied with other relevant conditions. We used the proceeds for purposes consistent with the PPP
and met the conditions for forgiveness of the Loan.
On June 29, 2021, the SBA and JPMorgan notified us that the entire balance of this note has been forgiven. We recorded
the forgiveness of the principal and accrued interest of $421,584 as a gain on forgiveness in other income on the
consolidated statement of operations for the year ended December 31, 2021.
Contingencies
We follow subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain
conditions may exist as of the date the financial statements are issued, which may result in a loss to us but which will only be
resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment
inherently involves an exercise of judgment. A liability is only recorded if management determines that it is both probable
and reasonably estimable.
COVID-19
Based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact
on financial markets, there could be additional repercussions to our operating business, including but not limited to, the
sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical
operations, which may include the availability or the continued availability of patients for trials due to such things as
quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.
The continued global spread of COVID-19 has affected our operations but did not have a material impact on our business,
operating results, financial condition or cash flows as of and for the year ended December 31, 2021. In particular, due to
delays by our third party commercial active pharmaceutical ingredient contract manufacturer of HyBryte™ we are unable to
provide the pre-requisite amount of accrued stability data required to file the HyBryte™ NDA with the FDA by the first half of
2022. Therefore, the timeline for anticipated NDA filing with the FDA is being adjusted to the second half of 2022 with
corresponding potential FDA approval adjusted to the second half of 2023.
The future impact of the outbreak is highly uncertain and cannot be predicted, and we cannot provide any assurance that the
outbreak will not have a material adverse impact on our operations or future results or filings with regulatory health
authorities. The extent of the impact to us, if any, will depend on future developments, including actions taken to contain the
coronavirus.
Emergent BioSolutions Legal Proceedings
In July 2020, we filed a demand for arbitration against Emergent BioSolutions, Inc. (“Emergent”) and certain of its
subsidiaries with the American Arbitration Association in Mercer County, New Jersey. We allege in the arbitration various
breaches of contracts and warranties as well as acts of fraud. Emergent has answered that demand for arbitration denying
the allegations and asserting affirmative defenses. (see Part I, Item 3 – Legal Proceedings).
We are seeking to recover damages in excess of $19 million from Emergent. While we intend to vigorously pursue this
arbitration, we cannot offer any assurances that we will recover any damages from Emergent.
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We have received invoices from Emergent related to the above matter. No accrual has been made for these invoices as
management deems them invalid and not probable of being required to pay them based on the numerous breaches cited in
the pending arbitration. These invoices total approximately $331,000.
Item 8. Financial Statements and Supplementary Data
The information required by this Item 8 is contained on pages F-1 through F-22 of this Annual Report on Form 10-K and is
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and
communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no
matter how well designed and operated, can only provide reasonable assurance of achieving their objectives and
management necessarily applies its judgment in evaluating the possible controls and procedures.
Our management has evaluated, with the participation of our principal executive officer and principal financial officer, the
effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including
our principal executive officer and principal financial officer, has concluded that, as of the end of the period covered by this
report, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Company management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and
principal financial officers and effected by our Board of Directors, management and other personnel to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles and includes those policies and procedures that:
● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of our assets;
● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are
being made only in accordance with authorizations of management and directors; and
● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections
of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making
this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in Internal Control-Integrated Framework, 2013.
Based on our assessment, management has concluded that, as of December 31, 2021, our internal control over financial
reporting is effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation of such
internal control that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B. Other Information
Item 9C Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The table below contains information regarding the current members of the Board of Directors and executive officers. The
ages of individuals are provided as of March 22, 2022.
Name
Christopher J. Schaber, PhD
Gregg A. Lapointe, CPA, MBA
Diane L Parks, MBA
Robert J. Rubin, MD
Jerome B. Zeldis, MD, PhD
Jonathan Guarino, CPA, CGMA
Oreola Donini, PhD
Richard Straube, MD
Age
55
63
69
76
71
49
50
70
Position
Chairman of the Board, Chief Executive Officer and President
Director
Director
Director
Director
Chief Financial Officer, Senior Vice President and Corporate Secretary
Chief Scientific Officer and Senior Vice President
Chief Medical Officer and Senior Vice President
Christopher J. Schaber, PhD has over 30 years of experience in the pharmaceutical and biotechnology industry.
Dr. Schaber has been our President and Chief Executive Officer and a director since August 2006. He was appointed
Chairman of the Board on October 8, 2009. He also has served on the board of directors of the Biotechnology Council of
New Jersey (“BioNJ”) since January 2009 and the Alliance for Biosecurity since October 2014, and has been a member of
the corporate council of the National Organization for Rare Disorders (“NORD”) since October 2009. He also serves on the
scientific advisory board for private start-up medical device company, Simphotek, Inc. Prior to joining Soligenix, Dr. Schaber
served from 1998 to 2006 as Executive Vice President and Chief Operating Officer of Discovery Laboratories, Inc., where he
was responsible for overall pipeline development and key areas of commercial operations, including regulatory affairs,
quality control and assurance, manufacturing and distribution, pre-clinical and clinical research, and medical affairs, as well
as coordination of commercial launch preparation activities. From 1996 to 1998, Dr. Schaber was a co-founder of Acute
Therapeutics, Inc., and served as its Vice President of Regulatory Compliance and Drug Development. From 1994 to 1996,
Dr. Schaber was employed by Ohmeda PPD, Inc., as Worldwide Director of Regulatory Affairs and Operations. From 1989
to 1994, Dr. Schaber held a variety of regulatory, development and operations positions with The Liposome Company, Inc.,
and Elkins-Sinn Inc., a division of Wyeth-Ayerst Laboratories. Dr. Schaber received his BA degree from Western Maryland
College, his MS degree in Pharmaceutics from Temple University School of Pharmacy and his PhD degree in
Pharmaceutical Sciences from the Union Graduate School. Dr. Schaber was selected to serve as a member of our Board of
Directors because of his extensive experience in drug development and pharmaceutical operations, including his experience
as an executive senior officer with our Company and Discovery Laboratories, Inc., and as a member of the board of directors
of BioNJ; because of his proven ability to raise funds and provide access to capital; and because of his advanced degrees in
science and business.
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Gregg A. Lapointe, CPA, MBA has been a director since March 2009. Mr. Lapointe is currently CEO of Cerium
Pharmaceuticals, Inc. and serves on the Board of Directors of Rigel Pharmaceuticals, Inc., Cytori Therapeutics, Inc. and
Catabasis Pharmaceuticals, Inc. Mr. Lapointe has previously served on the Board of Directors of ImmunoCellular
Therapeutics Ltd., Raptor Pharmaceuticals, Inc., SciClone Pharmaceuticals, Inc., the Pharmaceuticals Research and
Manufacturers of America (PhRMA), Questcor Pharmaceuticals, Inc. and the Board of Trustees of the Keck Graduate
Institute of Applied Life Sciences. He previously served in varying roles for Sigma-Tau Pharmaceuticals, Inc. (now known as
Leadiant Biosciences, Inc.), a private biopharmaceutical company, from September 2001 through February 2012, including
Chief Operating Officer from November 2003 to April 2008 and Chief Executive Officer from April 2008 to February 2012.
From May, 1996 to August 2001, he served as Vice President of Operations and Vice President, Controller of
AstenJohnson, Inc. (formerly JWI Inc.). Prior to that, Mr. Lapointe spent several years in the Canadian medical products
industry in both distribution and manufacturing. Mr. Lapointe began his career at Price Waterhouse. Mr. Lapointe received
his B.A. degree in Commerce from Concordia University in Montreal, Canada, a graduate diploma in Accountancy from
McGill University and his M.B.A. degree from Duke University. He is a C.P.A. in the state of Illinois. Mr. Lapointe was
selected to serve as a member of our Board of Directors because of his significant experience in the areas of global strategic
planning and implementation, business development, corporate finance, and acquisitions, and his experience as an
executive officer and board member in the pharmaceutical and medical products industries.
Diane L. Parks, MBA has been a director since July 2019. From February 2016 until July 2018, she served as Head of U.S.
Commercial and Senior Vice President of Marketing, Sales & Market Research at Kite Pharma, Inc., a biopharma company
developing cancer immunotherapy products with a primary focus on genetically engineered autologous T cell therapy with
chimeric antigen receptors. From October 2014 to October 2015, Ms. Parks served as Vice President of Global Marketing at
Pharmacyclics LLC, a biopharmaceutical company primarily focused on the development of cancer therapies. Prior to
Pharmacyclics LLC, Ms. Parks held senior leadership roles as Vice President of Sales for Amgen, Inc., a biopharmaceutical
company, representing oncology and nephrology products, and Senior Vice President of Specialty Biotherapeutics and
Managed Care at Genentech, Inc., a biotechnology company that discovers, develops, manufactures and commercializes
medicines to treat patients with serious or life-threatening medical conditions that was acquired by Roche Holding AG in
2009. At Genentech, she led the launches of multiple products as well as commercial development of Lucentis® and
Rituxan®. Since May 2019, she has been a member of the board of directors of Calliditas Therapeutics AB (publ), a
biopharmaceutical company, the shares of which are traded on the Nasdaq Stockholm Exchange, that is developing and
commercializing pharmaceutical products for patients with significant unmet medical needs in niche indications. From
July 2018 to November 2019, Ms. Parks has been a member of the board of managers of Healogix LLC, a global marketing
research-based consultancy that helps pharmaceutical and biotechnology companies achieve successful product
development and commercial clarity. Since November 2019, she has been a member of the board of directors of Kura
Oncology, Inc., a clinical-stage biopharmaceutical company, the shares of which are traded on the Nasdaq Stockholm
Exchange, which focuses on the discovery and development of precision medicines for cancer treatments. Since
September 2020, Ms. Parks has been a member of the board of directors for a non-profit company called Lymphoma
Research Foundation, which is devoted exclusively to funding lymphoma research and serving those impacted by blood
cancer. Ms. Parks holds a BS from Kansas State University and an MBA in marketing from Georgia State University. She
has been a commercial leader in the biotech and pharma industry for over 30 years. Ms. Parks was selected to serve as a
member of our Board of Directors because of her over 30 years’ experience as a businesswoman and commercial executive
with an extensive record of driving profitable growth for large pharmaceutical and biotech companies.
Robert J. Rubin, MD has been a director since October 2009. Dr. Rubin was a clinical professor of medicine at Georgetown
University from 1995 until 2012 when he was appointed a Distinguished Professor of Medicine. From 1987 to 2001, he was
president of the Lewin Group (purchased by Quintiles Transnational Corp. in 1996), an international health policy and
management consulting firm. From 1994 to 1996, Dr. Rubin served as Medical Director of ValueRx, a pharmaceutical
benefits company. From 1992 to 1996, Dr. Rubin served as President of Lewin-VHI, a health care consulting company. From
1987 to 1992, he served as President of Lewin-ICF, a health care consulting company. From 1984 to 1987, Dr. Rubin served
as a principal of ICF, Inc., a health care consulting company. From 1981 to 1984, Dr. Rubin served as the Assistant
Secretary for Planning and Evaluation at the Department of Health and Human Services and as an Assistant Surgeon
General in the U.S. Public Health Service. Dr. Rubin has served on the Board of BioTelemetry, Inc. (formerly known as
CardioNet, Inc.) from 2007 to February 2021. He is a board certified nephrologist and internist. Dr. Rubin received an
undergraduate degree in Political Science from Williams College and his medical degree from Cornell University Medical
College. Dr. Rubin was selected to serve as a member of our Board of Directors because of his vast experience in the health
care industry, including his experience as a nephrologist, internist, clinical professor of medicine and Assistant Surgeon
General, and his business experience in the pharmaceutical industry.
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Jerome B. Zeldis, MD, PhD has been a director since June 2011. Dr. Zeldis is currently Chief Medical Officer and President
of Clinical Research, Drug Safety and Regulatory of Sorrento Therapeutics, Inc. He is also Chief Medical Officer and
Principal at Celularity, Inc. Previously, Dr. Zeldis was Chief Executive Officer of Celgene Global Health and Chief Medical
Officer of Celgene Corporation, a publicly traded, fully integrated biopharmaceutical company. He was employed by
Celegene from 1997 to 2016. From September 1994 to February 1997, Dr. Zeldis worked at Sandoz Research Institute and
the Janssen Research Institute in both clinical research and medical development. He has been a board member of several
biotechnology companies and is currently on the boards of Metastat, Inc., PTC Therapeutics Inc., BioSig Technologies, Inc.,
the Castleman’s Disease Organization and Alliqua, Inc. He has previously served on the boards of the NJ Chapter of the
Arthritis Foundation and PTC Therapeutics, Inc. Additionally, he has served as Assistant Professor of Medicine at the
Harvard Medical School (from July 1987 to September 1988), Associate Professor of Medicine at University of California,
Davis from (September 1988 to September 1994), Clinical Associate Professor of Medicine at Cornell Medical School
(January 1995 to December 2003) and Professor of Clinical Medicine at the Robert Wood Johnson Medical School
(July 1998 to June 2010). Dr. Zeldis received a BA and an MS from Brown University, and an MD, and a PhD in Molecular
Biophysics and Biochemistry from Yale University. Dr. Zeldis trained in Internal Medicine at the UCLA Center for the Health
Sciences and in Gastroenterology at the Massachusetts General Hospital and Harvard Medical School. Dr. Zeldis was
selected to serve as a member of our Board of Directors because of his experience as an executive officer of a publicly
traded biopharmaceutical company and in clinical research and medical development, and his experience in the health care
industry, including his experience as an internist, gastroenterologist and professor of medicine.
Jonathan Guarino, CPA, CGMA has been with our company since September 2019 and is currently our Senior Vice
President and Chief Financial Officer. Mr. Guarino has had significant experience with both development-stage and
commercial companies. From September 2016
for Hepion
Pharmaceuticals, Inc. (formerly ContraVir Pharmaceuticals, Inc.), a New Jersey-based public biotechnology company, where
he contributed to the establishment of the financial infrastructure, as well as assisted with capital fund-raising and debt
financings. He worked as Controller for Suite K Value Added Services LLC from August 2015 to September 2016 and as a
senior manager of technical accounting for Covance, Inc., from June 2014 to May 2015. Prior to these positions, he held
accounting and finance positions of increasing importance with several companies, including PricewaterhouseCoopers LLP,
BlackRock, Inc. and Barnes & Noble, Inc. Mr. Guarino is a CPA (certified public accountant) and CGMA (chartered global
management accountant), who received his BS in Business from Montclair State University.
to July 2019, he served as Corporate Controller
Oreola Donini, PhD, has been with our company since August 2013 and is currently our Senior Vice President and Chief
Scientific Officer, a position she has held since December 2014. Dr. Donini served as our Vice President of Preclinical
Research and Development from August 2013 until December 2014. She has more than 18 years’ experience in drug
discovery and preclinical development with start-up biotechnology companies. From 2012 to 2013, Dr. Donini worked with
ESSA Pharma Inc. as Vice President Research and Development. From 2004 to 2013, Dr. Donini worked with Inimex
Pharmaceuticals Inc. (“Inimex”), lastly as Senior Director of Preclinical R&D from 2007 to 2013. Prior to joining Inimex, she
worked with Kinetek Pharmaceuticals Inc., developing therapies for infectious disease, cancer and cancer supportive care.
Dr. Donini is a co-inventor and leader of our SGX94 innate defense regulator technology, developed by Inimex and
subsequently acquired by us. She was responsible for overseeing the manufacturing and preclinical testing of SGX94, which
demonstrated efficacy in combating bacterial infections and mitigating the effects of tissue damage due to trauma, infection,
radiation and/or chemotherapy treatment. These preclinical studies resulted in a successful Phase 1 clinical study and
clearance of Phase 2 protocols for oral mucositis in head and neck cancer and acute bacterial skin and skin structure
infections. While with ESSA Pharma Inc. as the Vice President of Research and Development, Dr. Donini led the preclinical
testing of a novel N-terminal domain inhibitor of the androgen receptor for the treatment of prostate cancer. While with
Kinetek Pharmaceuticals Inc., her work related to the discovery of novel kinase and phosphatase inhibitors for the treatment
of cancer. Dr. Donini received her PhD from Queen’s University in Kinston, Ontario, Canada and completed her post-
doctoral work at the University of California, San Francisco. Her research has spanned drug discovery, preclinical
development, manufacturing and clinical development in infectious disease, cancer and cancer supportive care.
Richard Straube, MD has been with our company since January 2014 and is currently our Senior Vice President and Chief
Medical Officer. Dr. Straube is a board-certified pediatrician with 36 years’ experience in both academia and industry,
including clinical research experience in host-response modulation. From 2009 until joining our company, he was Chief
Medical Officer of Stealth Peptides Incorporated, a privately-held, clinical stage, biopharmaceutical company. Prior to joining
us, Dr. Straube served from 1988 to 1993 in various capacities, including most recently as Senior Director, Infectious
Diseases and Immunology, Clinical Research, for Centocor, Inc., a privately-held biopharmaceutical company focused on
developing monoclonal antibody-based diagnostics. While at Centocor, Inc., Dr. Straube was responsible for the initial anti-
cytokine and anti-endotoxin programs targeted at ameliorating inappropriate host responses to infectious and immunologic
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challenges. Programs that he managed at Centocor, Inc. include assessments of immunomodulation using monoclonal
removal of inciting molecular triggers, removal of internal immune-messengers, augmentation of normal host defenses, and
maintenance of normal sub-cellular function in the face of injury. From 1993 to 1995, Dr. Straube was Director of Medical
Affairs at T-cell Sciences, Inc., a privately-held biotechnology company. From 1995 to 1997, he was Director of Clinical
Investigations of the Pharmaceutical Products Division of Ohmeda Corp., a privately-held biopharmaceutical company. He
served from 1998 to 2007 as Executive Vice President of Research and Development and Chief Scientific Officer at INO
Therapeutics LLC, a privately-held biotherapeutics company, where he was responsible for the clinical trials and subsequent
approval of inhaled nitric oxide for the treatment of persistent pulmonary hypertension of the newborn. From 2007 to 2009,
Dr. Straube was the Chief Medical Officer at Critical Biologics Corporation, a privately-held biotechnology company.
Dr. Straube received his medical degree and residency training at the University of Chicago, completed a joint adult and
pediatrician infectious diseases fellowship at the University of California, San Diego (“UCSD”), and as a Milbank Scholar
completed training in clinical trial design at the London School of Hygiene and Tropical Medicine. While on the faculty at the
UCSD Medical Center, his research focused on interventional studies for serious viral infections.
Board Leadership Structure
Our Board of Directors believes that Dr. Schaber’s service as both the Chairman of our Board of Directors and our Chief
Executive Officer is in the best interest of our Company and our stockholders. Dr. Schaber possesses detailed and in-depth
knowledge of the issues, opportunities and challenges facing our Company and our business and, therefore, is best
positioned to develop agendas that ensure that the Board of Directors’ time and attention are focused on the most important
matters. His combined role enables decisive leadership, ensures clear accountability, and enhances our ability to
communicate our message and strategy clearly and consistently to our stockholders, employees, and collaborative partners.
Mr. Lapointe, Ms. Parks, Dr. Rubin, and Dr. Zeldis are independent and the Board of Directors believes that the independent
directors provide effective oversight of management. Moreover, in addition to feedback provided during the course of
meetings of the Board of Directors, the independent directors hold executive sessions. Following an executive session of
independent directors, the independent directors’ report back to the full Board of Directors regarding any specific feedback
or issues, provide the Chairman with input regarding agenda items for Board of Directors and Committee meetings, and
coordinate with the Chairman regarding information to be provided to the independent directors in performing their duties.
The Board of Directors believes that this approach appropriately and effectively complements the combined Chairman/Chief
Executive Officer structure.
Although we believe that the combination of the Chairman and Chief Executive Officer roles is appropriate under the current
circumstances, our corporate governance guidelines do not establish this approach as a policy, and the Board of Directors
may determine that it is more appropriate to separate the roles in the future.
Committees of the Board of Directors
Our Board of Directors has the following three committees: (1) Compensation, (2) Audit and (3) Nominating and Corporate
Governance. Our Board of Directors has adopted a written charter for each of these committees, which are available on our
website at www.soligenix.com under the “Investors” section.
Director
Gregg A. Lapointe, CPA
Diane L. Parks, MBA
Robert J. Rubin, MD
Jerome B. Zeldis, MD, PhD
– Committee Chair
– Member
Audit
Committee
Compensation
Committee
Nominating and
Corporate Governance
Committee
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Audit Committee
Our Board of Directors has an Audit Committee, which is comprised of Mr. Lapointe (Chair), Ms. Parks and Dr. Rubin. The
Audit Committee assists our Board of Directors in monitoring the financial reporting process, the internal control structure
and the independent registered public accountants. Its primary duties are to serve as an independent and objective party to
monitor the financial reporting process and internal control system, to review and appraise the audit effort of the independent
registered public accountants and to provide an open avenue of communication among the independent registered public
accountants, financial and senior management, and our Board of Directors. Our Board of Directors has determined that
Mr. Lapointe, Ms. Parks and Dr. Rubin are “independent” directors, within the meaning of applicable listing standards of The
Nasdaq Stock Market LLC (“Nasdaq”) and the Exchange Act and the rules and regulations thereunder. Our Board of
Directors has also determined that the members of the Audit Committee are qualified to serve on the committee and have
the experience and knowledge to perform the duties required of the committee and that Mr. Lapointe qualifies as an “audit
committee financial expert” as that term is defined in the applicable regulations of the Exchange Act.
Compensation Committee
Our Board of Directors has a Compensation Committee, which is comprised of Dr. Rubin (Chair), Mr. Lapointe and
Dr. Zeldis. The Compensation Committee is responsible for reviewing and approving the executive compensation program,
assessing executive performance, setting salary, making grants of annual incentive compensation and approving certain
employment agreements. Our Board of Directors has determined that Dr. Rubin, Mr. Lapointe and Dr. Zeldis are
“independent” directors within the meaning of applicable listing standards of Nasdaq and the Exchange Act and the
rules and regulations thereunder.
Nominating and Corporate Governance Committee
Our Board of Directors has a Nominating and Corporate Governance Committee (“Nominating Committee”), which is
comprised of Dr. Zeldis (Chair), Mr. Lapointe and Ms. Parks. The Nominating Committee makes recommendations to the
Board of Directors regarding the size and composition of our Board of Directors, establishes procedures for the nomination
process, identifies and recommends candidates for election to our Board of Directors. Our Board of Directors has
determined that Dr. Zeldis, Mr. Lapointe and Ms. Parks are “independent” directors, as such term is defined by the applicable
Nasdaq listing standards.
Code of Ethics
We have adopted a code of ethics that applies to all our executive officers and senior financial officers (including our chief
executive officer, chief financial officer, chief accounting officer and any person performing similar functions). A copy of our
code of ethics is publicly available on our website at www.soligenix.com under the “Investors” section. If we make any
substantive amendments to our code of ethics or grant any waiver, including any implicit waiver, from a provision of the code
to our chief executive officer, chief financial officer or chief accounting officer, we will disclose the nature of such amendment
or waiver in a Current Report on Form 8-K.
Diversity Considerations in Identifying Director Nominees
We do not have a formal diversity policy or set of guidelines in selecting and appointing directors that comprise our Board of
Directors. However, when making recommendations to our Board of Directors regarding the size and composition of our
Board of Directors, our Nominating Committee does consider each individual director’s qualifications, skills, business
experience and capacity to serve as a director and the diversity of these attributes for the Board of Directors as a whole.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee is or has at any time during the past year been one of our officers or
employees. None of our executive officers currently serves or in the past year has served as a member of the Board of
Directors or Compensation Committee of any entity that has one or more executive officers serving on our Board of
Directors or Compensation Committee.
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Item 11. Executive Compensation
In 2018, in furtherance of our compensation philosophy and objectives, the Compensation Committee engaged the Setren
Smallberg & Associates (“SS&A”), an outside executive compensation consulting firm determined to be independent by the
Compensation Committee, to conduct a review of, and recommend changes to, our compensation program for our most
highly compensated executive officers. A representative of SS&A attended Compensation Committee meetings at the
invitation of the Compensation Committee Chairman and was also in direct contact with the Compensation Committee and
company management from time to time. SS&A provided the Compensation Committee with assistance and advice in the
review of our salary structure, annual and equity incentive awards and other related executive pay issues. In addition, SS&A
provided advice regarding marketplace trends and best practices relating to competitive pay levels.
SS&A did not provide any services to us other than its services as the Compensation Committee’s independent
compensation consultant, and SS&A did not receive any fees or compensation from us other than the fee it received as the
independent compensation consultant. Except as described above, SS&A did not provide any services to us in 2019, 2020
or 2021. The Compensation Committee confirmed that SS&A’s work for the Compensation Committee did not create any
conflicts of interest.
Summary Compensation
The following table contains information concerning the compensation paid during each of the two years ended
December 31, 2021 and 2020, respectively to our Chief Executive Officer and each of the three other most highly
compensated executive officers (collectively, the “Named Executive Officers”).
Summary Compensation
Name
Christopher J. Schaber (1)
Position Year
CEO & 2021 $ 484,948
President 2020 $ 475,439
Salary
Bonus
$ 96,990
$ 306,499
Option
Awards
All Other
Compensation
$ 75,951
$ 133,466
Jonathan Guarino (2)
Oreola Donini (3)
Richard C. Straube (4)
CFO & 2021 $ 224,400
Senior VP 2020 $ 220,000
$ 38,372
$ 45,788
$
3,893
$ 55,707
CSO & 2021 $ 286,092
Senior VP 2020 $ 248,745
$ 53,678
$ 127,611
$ 33,296
$ 97,486
CMO & 2021 $ 176,868
Senior VP 2020 $ 173,400
$ 29,183
$ 121,108
$ 19,027
$ 55,707
29,520
28,365
Total
$ 687,409
$ 943,769
29,520
28,296
$ 296,185
$ 349,791
4,783
4,107
$ 377,849
$ 477,949
— $ 225,078
— $ 350,215
$
$
$
$
$
$
$
$
(1) Dr. Schaber deferred the payment of his 2021 bonus of $96,990 until January 15, 2022. Option awards figure includes
the value of Common Stock option awards at grant date as calculated under FASB ASC 718. Other compensation
represents health insurance costs paid by us.
(2) Mr. Guarino deferred the payment of his 2021 bonus of $38,372 until January 15, 2022. Option awards figure includes
the value of Common Stock option awards at grant date as calculated under FASB ASC 718. Other compensation
represents health insurance costs paid by us.
(3) Dr. Donini deferred the payment of her 2021 bonus of $53,678 until January 15, 2022. Option awards figure includes the
value of Common Stock option awards at grant date as calculated under FASB ASC 718. Other compensation
represents health insurance costs paid by us.
(4) Dr. Straube deferred the payment of his 2021 bonus of $29,183 until January 15, 2022. Option awards figure includes
the value of Common Stock option awards at grant date as calculated under FASB ASC 718. Other compensation
represents health insurance costs paid by us.
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Employment and Severance Agreements
In August 2006, we entered into a three-year employment agreement with Christopher J. Schaber, PhD. Pursuant to this
employment agreement we agreed to pay Dr. Schaber a base salary of $300,000 per year and a minimum annual bonus of
$100,000. Dr. Schaber’s employment agreement automatically renews every three years, unless otherwise terminated, and
last was automatically renewed in December 2019 for an additional term of three years. We agreed to issue him options to
purchase 12,500 shares of our common stock, with one third immediately vesting and the remainder vesting over
three years. Upon termination without “Just Cause” as defined by this agreement, we would pay Dr. Schaber nine months of
severance, as well as any accrued bonuses, accrued vacation, and we would provide health insurance and life insurance
benefits for Dr. Schaber and his dependents. No unvested options shall vest beyond the termination date. Dr. Schaber’s
monetary compensation (base salary of $300,000 and bonus of $100,000) remained unchanged from 2006 with the 2007
renewal. Upon a change in control of the company due to merger or acquisition, all of Dr. Schaber’s options shall become
fully vested, and be exercisable for a period of five years after such change in control (unless they would have expired
sooner pursuant to their terms). In the event of his death during the term of the agreement, all of his unvested options shall
immediately vest and remain exercisable for the remainder of their term and become the property of Dr. Schaber’s
immediate family.
In January 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to increase the
number of shares of common stock from 5,000 to 500,000, issuable to Dr. Schaber immediately prior to the completion of a
transaction or series or a combination of related transactions negotiated by our Board of Directors whereby, directly or
indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholders to a third
party.
In December 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to modify the
severance terms. Upon termination without “Just Cause” as defined by this agreement, we would pay Dr. Schaber
twelve months of severance, as well as a pro rata bonus calculated by the average of his prior two year’s annual bonuses, if
any, and based on the number of months that he was employed during the year in which his employment was terminated;
however, in the case of termination without “Just Cause” within one year following a change in control or the sale or other
disposition of all or substantially all of our assets Dr. Schaber will be entitled 18 months of severance and health insurance
and life insurance benefits for him and his dependents.
On June 22, 2011, the Compensation Committee eliminated his fixed minimum annual bonus payable and revised it to an
annual targeted bonus of 40% of his annual base salary. On December 12, 2019, the Compensation Committee approved
an increase in salary for Dr. Schaber to $475,439. On December 10, 2020, the Compensation Committee approved an
increase in salary for Dr. Schaber to $484,948. On December 10, 2021, the Compensation Committee approved an increase
in salary for Dr. Schaber to $499,496.
In July 2013, we entered into a one-year employment agreement with Oreola Donini, PhD, our Vice President Preclinical
Research & Development. Pursuant to the agreement, we have agreed to pay Dr. Donini $170,000 (CAD) per year and a
targeted annual bonus of 20% of base salary. We also agreed to issue her options to purchase 40,000 shares of our
common stock with one-quarter immediately vesting and the remainder vesting over three years. Dr. Donini’s employment
agreement automatically renews each year, unless otherwise terminated, and has automatically renewed each year since
execution. Upon termination without “Just Cause”, as defined in Dr. Donini’s employment agreement, we would pay
Dr. Donini three months of severance, accrued bonuses and vacation, and health insurance benefits. No unvested options
vest beyond the termination date. In December 2014, Dr. Donini was named Chief Scientific Officer and Senior Vice
President. Upon Dr. Donini’s promotion to Chief Scientific Officer, the Compensation Committee increased her targeted
bonus to 30% of her annual base salary. On December 12, 2019, the Compensation Committee approved an increase in
salary for Dr. Donini to $248,745. On December 10, 2020, the Compensation Committee approved an increase in salary for
Dr. Donini to $260,000. On December 10, 2021, the Compensation Committee approved an increase in salary for Dr. Donini
to $280,800.
In December 2014, we entered into a one-year employment agreement with Richard C. Straube, MD, our Chief Medical
Officer and Senior Vice President. Pursuant to the agreement, we agreed to pay Dr. Straube $300,000 per year and a
targeted annual bonus of 30% of base salary. We also issued him options to purchase 10,000 shares of our common stock
with one-third immediately vesting and the remainder vesting over three years. On March 26, 2019, we entered into an
amendment to our employment agreement with Dr. Straube. Pursuant to the amended agreement, which amendment
becomes effective as of April 1, 2019, Dr. Straube will be required to devote at least 20 hours per week to the performance
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of his duties and we will pay him $170,000 per year. The amended employment agreement automatically renews each year,
unless otherwise terminated. Upon termination without “Just Cause”, as defined in the amended employment agreement, we
would pay Dr. Straube one month of severance. No unvested options vest beyond the termination date. On December 12,
2019, the Compensation Committee approved an increase in salary for Dr. Straube to $173,400. On December 10, 2020,
the Compensation Committee approved an increase in salary for Dr. Straube to $176,868. On December 10, 2021, the
Compensation Committee approved an increase in salary for Dr. Straube to $182,174.
On September 9, 2019, we entered into a one-year employment agreement with Jonathan Guarino, CPA, CGMA, our Senior
Vice President and Chief Financial Officer. Pursuant to the agreement, we have agreed to pay Mr. Guarino $220,000
per year and a targeted annual bonus of 30% of base salary. We also agreed to issue him options to purchase 40,000
shares of our common stock with one-quarter immediately vesting and the remainder vesting over three years. Mr. Guarino’s
employment agreement automatically renews each year, unless otherwise terminated. Upon termination without “Just
Cause”, as defined in Mr. Guarino’s employment agreement, we would pay Mr. Guarino three months of severance, accrued
salary, bonuses and vacation, and health insurance benefits. No unvested options vest beyond the termination date. On
December 10, 2020, the Compensation Committee approved an increase in salary for Mr. Guarino to $224,400. On
December 10, 2021, the Compensation Committee approved an increase in salary for Mr. Guarino to $231,132.
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Table of Contents
Outstanding Equity Awards at Fiscal Year-End
The following table contains information concerning unexercised options, stock that has not vested, and equity incentive
plan awards for the Named Executive Officers outstanding at December 31, 2021. We have never issued Stock Appreciation
Rights.
Name
Christopher J. Schaber
Number of Securities
Underlying Unexercised
Options (#)
Exercisable Unexercisable
—
13,000
Jonathan Guarino
Oreola Donini
Richard C. Straube
—
—
—
—
—
3,750
15,000
18,750
30,000
33,750
45,000
7,500
2,500
20,000
6,139
—
—
—
—
—
—
—
15,000
35,000
52,500
—
—
—
—
—
—
7,500
20,000
30,000
10,000
10,000
14,000
60,000
60,000
56,250
45,000
41,250
30,000
26,250
15,000
32,500
7,500
20,000
2,046
4,000
2,000
3,000
7,000
20,000
35,000
40,000
45,000
35,000
17,500
10,000
5,000
7,000
20,000
35,000
40,000
22,500
20,000
10,000
68
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
Option
Exercise
Price
($)
Option
Expiration
Date
— $ 6.80 12/04/2022
— $
20.10 12/04/2023
— $
15.00 12/04/2024
— $
11.30 12/30/2025
— $ 2.01 12/06/2027
— $ 0.97 12/12/2028
$ 0.96 01/01/2029
$ 1.24 12/11/2029
$ 1.45 01/01/2030
$ 2.34 12/09/2030
$ 1.28
$ 0.78
1/3/2031
12/8/2031
3,750
15,000
18,750
30,000
33,750
45,000
7,500
2,500
20,000
6,139
$ 0.97 09/08/2029
$ 1.24 12/11/2029
$ 2.34 12/09/2030
12/8/1931
$ 0.78
— $
15.60 8/14/2023
— $
20.10 12/4/2023
— $
15.00 12/4/2024
11.30 12/30/2025
— $
— $ 2.67 3/30/2027
— $ 2.01 12/06/2027
— $ 0.97 12/13/2028
$ 1.24 12/11/2029
$ 2.34 12/09/2030
12/8/2031
$ 0.78
15,000
35,000
52,500
— $
20.10 1/06/2024
— $
15.00 12/04/2024
— $
11.30 12/30/2025
— $ 2.67 3/30/2027
— $ 2.01 12/06/2027
— $ 0.97 12/13/2028
$ 1.24 12/11/2029
$ 2.34 12/09/2030
12/8/2031
$ 0.78
7,500
20,000
30,000
Table of Contents
Compensation of Directors
The following table contains information concerning the compensation of the non-employee directors during the year ended
December 31, 2021.
Name
Gregg A. Lapointe
Diane L. Parks
Robert J. Rubin
Jerome B. Zeldis
Fees Earned
Paid in Cash
(1)
$ 60,000
$ 47,500
$ 52,500
$ 50,000
Option
Awards (2)
$ 30,000
$ 30,000
$ 30,000
$ 30,000
Total
90,000
77,500
82,500
80,000
$
$
$
$
(1) Directors who are compensated as full-time employees receive no additional compensation for service on our Board of
Directors. Each independent director who is not a full-time employee is paid $35,000 annually, on a prorated basis, for
their service on our Board of Directors, the chairman of our Audit Committee is paid $15,000 annually, on a prorated
basis, and the chairmen of our Compensation and Nominating Committees is paid $10,000 annually, on a prorated
basis. Additionally, Audit Committee members are paid $7,500 annually and Compensation and Nominating Committee
members are paid $5,000 annually. This compensation is paid quarterly.
(2) We maintain a stock option grant program pursuant to the nonqualified stock option plan, whereby members of our
Board of Directors or its committees who are not full-time employees receive an initial grant of fully vested options to
purchase 15,000 shares of common stock. Upon re-election to the Board, each Board member will receive stock options
with a value of $30,000, calculated using the closing price of the common stock on the trading day prior to the date of
the annual meeting of our stockholders, which vest at the rate of 25% per quarter, commencing with the first quarter
after each annual meeting of stockholders.
Stock Ownership Policy
In April 2012, our Board of Directors adopted a stock ownership policy applicable to our non-employee directors to
strengthen the link between director and stockholder interests. Pursuant to the stock ownership policy, each non-employee
director is required to hold a minimum ownership position in the common stock equal to the annual cash compensation paid
for service on the Board of Directors, exclusive of cash compensation paid for service as a chair or member of any
committees of the Board of Directors.
Stock counted toward the ownership requirement includes common stock held by the director, unvested and vested
restricted stock, and all shares of common stock beneficially owned by the director held in a trust and by a spouse and/or
minor children of the director. The policy provides that the ownership requirement must be attained within three years after
the later of June 21, 2012 and the date a director is first elected or appointed to the Board of Directors. To monitor progress
toward meeting the requirement, the Nominating Committee will review director ownership levels at the end of March of
each year. Non-employee directors are prohibited from selling any shares of common stock unless such director is in
compliance with the stock ownership policy. A copy of our director compensation and stock ownership policy is publicly
available on our website at www.soligenix.com under the “Investors” section.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The table below provides information regarding the beneficial ownership of the common stock as of March 22, 2022, of
(1) each person or entity who owns beneficially 5% or more of the shares of our outstanding common stock, (2) each of our
directors, (3) each of the Named Executive Officers, and (4) our directors and officers as a group. Except as otherwise
indicated, and subject to applicable community property laws, we believe the persons named in the table have sole voting
and investment power with respect to all shares of common stock held by them.
Name of Beneficial Owner
Christopher J. Schaber (1)
Gregg A. Lapointe (2)
Diane L. Parks (3)
Robert J. Rubin (4)
Jerome B. Zeldis (5)
Jonathan Guarino (6)
Oreola Donini (7)
Richard Straube (8)
All directors and executive officers as a group (8 persons)
Shares of
Common
Stock
Beneficially
Owned **
499,595
107,903
90,660
107,409
123,441
76,625
212,250
176,375
1,394,258
Percent
of Class
1.2 %
*
*
*
*
*
*
*
3.2 %
(1) Includes 70,095 shares of common stock owned by Dr. Schaber, options to purchase 429,500 shares of common stock
exercisable within 60 days of March 22, 2022. The address of Dr. Schaber is c/o Soligenix, 29 Emmons Drive, Suite B-
10, Princeton, New Jersey 08540.
(2) Includes 7,379 shares of Common Stock and options to purchase 100,524 shares of Common Stock exercisable within
60 days of March 22, 2022. The address of Mr. Lapointe is c/o Soligenix, 29 Emmons Drive, Suite B-10, Princeton, New
Jersey 08540.
(3) Includes 14,940 shares of Common Stock and options to purchase 75,720 shares of Common Stock exercisable within
60 days of March 22, 2022. The address of Ms. Parks is c/o Soligenix, 29 Emmons Drive, Suite B-10, Princeton, New
Jersey 08540.
(4) Includes 4,385 shares of Common Stock, options to purchase 103,024 shares of Common Stock exercisable within
60 days of March 22, 2022. The address of Dr. Rubin is c/o Soligenix, 29 Emmons Drive, Suite B-10, Princeton, New
Jersey 08540.
(5) Includes 22,917 shares of Common Stock and options to purchase 100,524 shares of Common Stock exercisable within
60 days of March 22, 2022. The address of Dr. Zeldis is c/o Soligenix, 29 Emmons Drive, Suite B-10, Princeton, New
Jersey 08540.
(6) Includes options to purchase 11,000 shares of Common Stock and options to purchase 65,625 shares of Common
Stock exercisable within 60 days of March 22, 2022. The address of Mr. Guarino is c/o Soligenix, 29 Emmons Drive,
Suite B-10, Princeton, New Jersey 08540.
(7) Includes options to purchase 212,250 shares of Common Stock owned by Dr. Donini exercisable within 60 days of
March 22, 2022. The address of Dr. Donini is c/o Soligenix, 29 Emmons Drive, Suite B-10, Princeton, New Jersey
08540.
(8) Includes options to purchase 176,375 shares of Common Stock owned by Dr. Straube exercisable within 60 days of
March 22, 2022. The address of Dr. Straube is c/o Soligenix, 29 Emmons Drive, Suite B-10, Princeton, New Jersey
08540.
*
Indicates less than 1%.
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** Beneficial ownership is determined in accordance with the rules of the SEC. Shares of Common Stock subject to options
or warrants currently exercisable or exercisable within 60 days of March 22, 2022 are deemed outstanding for
computing the percentage ownership of the stockholder holding the options or warrants, but are not deemed outstanding
for computing the percentage ownership of any other stockholder. Percentage of ownership is based on 42,954,091
shares of Common Stock outstanding as of March 22, 2022.
Equity Compensation Plan Information
In December 2005, our Board of Directors approved the 2005 Equity Incentive Plan, which was approved by stockholders on
December 29, 2005. The maximum number of shares of our common stock available for issuance under the 2005 Equity
Incentive Plan is 300,000 shares. In April 2015, our Board of Directors approved the 2015 Equity Incentive Plan, which was
approved by stockholders on June 18, 2015. The maximum number of shares of our common stock available for issuance
under the 2015 Equity Incentive Plan is 2,000,000 shares.
The following table sets forth certain information, as of December 31, 2021, with respect to the following compensation plans
(including individual compensation arrangements) under which our equity securities are authorized for issuance:
● all compensation plans previously approved by our security holders; and
● all compensation plans not previously approved by our security holders.
Number of
Securities
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans
(excluding
securities
reflected in
the first
column)
Weighted-
Average
Exercise
Price of
Outstanding
Options,
Warrants and
Rights
2.48
—
2.48
—
—
—
Number of
Securities to
be Issued
upon Exercise
of
Outstanding
Options,
Warrants and
Rights
2,115,825
$
—
$
2,115,825
Plan Category
Equity compensation plans approved by security holders (1)
Equity compensation plans not approved by security holders
Total
(1) Includes our 2005 Equity Incentive Plan and our 2015 Equity Incentive Plan. Our 2005 Equity Incentive Plan expired in
2015 and thus no securities remain available for future issuance under that plan.
Item 13. Certain Relationships and Related Transactions and Director Independence
Related Party Transactions
Our audit committee is responsible for the review, approval and ratification of related party transactions. The audit committee
reviews these transactions under our Code of Ethics, which governs conflicts of interests, among other matters, and is
applicable to our employees, officers and directors.
We are party to a registration rights agreement with certain stockholders. The agreement provides that the stockholders
have the right to require that we register its shares under the Securities Act for sale to the public, subject to certain
conditions. The stockholders also have piggyback registration rights, which means that, if not already registered, they have
the right to include their shares in any registration that we effect under the Securities Act, subject to specified exceptions.
We must pay all expenses incurred in connection with the exercise of these demand registration rights.
We are unable to estimate the dollar value of the registration rights to the holders of these rights. The amount of
reimbursable expenses under the agreements depends on a number of variables, including whether registration rights are
exercised
71
Table of Contents
incident to a primary offering by us, the form on which we are eligible to register such a transaction, and whether we have a
shelf registration in place at the time of a future offering.
Other than as described above, the employment agreements and compensation paid to our directors, we did not engage in
any transactions with related parties since January 1, 2019. For a discussion of our employment agreements and
compensation paid to our directors, see “Item 11. Executive Compensation”.
Director Independence
The Board of Directors has determined that Mr. Lapointe, Ms. Parks, Dr. Rubin, and Dr. Zeldis are “independent” as such
term is defined by the applicable listing standards of Nasdaq. Our Board of Directors based this determination primarily on a
review of the responses of the Directors to questionnaires regarding their employment, affiliations and family and other
relationships.
Item 14. Principal Accountant Fees and Services
The following table highlights the aggregate fees billed during each of the two years ended December 31, 2021 and 2020 by
EisnerAmper LLP.
Audit fees
Tax fees
Total
Audit Fees
2021
$ 167,041
13,520
$ 180,561
2020
173,380
12,250
185,630
$
$
This category includes the fees for the examination of our consolidated financial statements, review of our Annual Report on
Form 10-K and quarterly reviews of the interim financial statements included in our Quarterly Reports on Form 10-Q.
Tax Fees
This category relates to professional services for tax compliance, tax advice and tax planning.
Other Fees
Our principal accountants did not bill us for any services or products other than as reported above in this Item 14 during
each of the two years.
Pre-Approval Policies and Procedures
The audit committee has adopted a policy that requires advance approval of all audit services and permitted non-audit
services to be provided by the independent auditor as required by the Exchange Act. The audit committee must approve the
permitted service before the independent auditor is engaged to perform it. The audit committee approved all of the services
described above in accordance with its pre-approval policies and procedures.
72
Table of Contents
Item 15. Exhibits and Financial Statements Schedules
a.
(1) Consolidated Financial Statements:
Part IV
The financial statements required to be filed by Item 8 of this Annual Report on Form 10-K and filed in this Item 15, are as
follows:
Table of Contents
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2021 and 2020
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2021 and 2020
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 274)
F-1
F-2
F-3
F-4
F-5
F-6
F-7 – F-22
F-23
(2) Financial Statement Schedules
Schedules are omitted because they are not applicable, or are not required, or because the information is included in the
consolidated financial statements and notes thereto.
(3) Exhibits:
2.1
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
4.1
Agreement and Plan of Merger, dated May 10, 2006 by and among the Company, Corporate Technology
Development, Inc., Enteron Pharmaceuticals, Inc. and CTD Acquisition, Inc. (incorporated by reference to
Exhibit 2.1 included in our Registration Statement on Form SB-2 (File No. 333-133975) filed on May 10, 2006).
Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 included in
our current report on Form 8-K filed on June 22, 2012).
Amended and Restated By-laws (incorporated by reference to Exhibit 3.1 included in our Quarterly Report on
Form 10-QSB, as amended, for the fiscal quarter ended June 30, 2003).
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 included in our current report on Form 8-K filed on June 22, 2016).
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 included in our current report on Form 8-K filed on October 7, 2016).
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 included in our current report on Form 8-K filed on June 14, 2017).
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 of our current report on Form 8-K filed on September 28, 2018).
Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 of amendment number 1 to current report on Form 8-K filed on December 3, 2020).
Amendment to Amended and Restated By-laws (incorporated by reference to Exhibit 3.1 included in our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020).
Form of Warrant to be issued to Aegis Capital Corp. (incorporated by reference to Exhibit 4.1 included in our
current report on Form 8-K filed on October 31, 2017).
73
Table of Contents
4.2
4.3
4.4
4.5
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
Form of Warrant to be issued to each investor in the June 2018 registered public offering Form of Warrant to
(incorporated by reference to Exhibit 4.8 included in our Amendment No. 2 to Registration Statement on Form
S-1 (File No. 333-225226) filed on June 20, 2018).
Form of Representative’s Warrant (incorporated by reference to Exhibit 4.9 included in our Amendment No. 1 to
Registration Statement on Form S-1 (File No. 333-225226) filed on June 18, 2018).
Description of Securities. *
Registration Rights Agreement, dated December 15, 2020 by and among Soligenix, Inc. and the other parties
named therein (incorporated by reference to Exhibit 4.1 included in our current report on Form 8-K filed on
December 16, 2020).
License Agreement between the Company and the University of Texas Southwestern Medical Center
(incorporated by reference to Exhibit 10.9 included in our Annual Report on Form 10-KSB filed March 30, 2004,
as amended, for the fiscal year ended December 31, 2004).
2005 Equity Incentive Plan, as amended on September 25, 2013 (incorporated by reference to Exhibit 10.1
included in our current report on Form 8-K filed on September 30, 2013). **
Form S-8 Registration of Stock Options Plan dated December 30, 2005 (incorporated by reference to our
registration statement on Form S-8 filed on December 30, 2005).
Form S-8 Registration of Stock Options Plan dated June 20, 2014 (incorporated by reference to our registration
statement on Form S-8 filed on June 20, 2014).
Form S-8 Registration of Stock Options Plan dated December 11, 2015 (incorporated by reference to our
registration statement on Form S-8 filed on December 14, 2015).
Employment Agreement dated December 27, 2007, between Christopher J. Schaber, PhD and the Company
(incorporated by reference to Exhibit 10.30 included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2008). **
Exclusive License Agreement dated November 24, 1998, between Enteron Pharmaceuticals, Inc. and George
B. McDonald, MD and amendments (incorporated by reference to Exhibit 10.42 included in our Registration
Statement on Form S-1 (File No. 333-157322) filed on February 13, 2009).
First Amendment to Employment Agreement dated as of July 12, 2011, between the Company and Christopher
J. Schaber, PhD(incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed on July 14,
2011).**
Amendment to the Exclusive License Agreement dated as of July 26, 2011, between George McDonald, MD
and the Company(incorporated by reference to Exhibit 10.2 of our current report on Form 8-K filed on July 28,
2011).
Amendment No. 2 to the Collaboration and Supply Agreement between the Company, Enteron and Sigma-Tau
dated as of December 20, 2012 (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K
filed on December 27, 2012). †
Amendment to Exclusive License Agreement dated as of December 20, 2012 between Enteron and McDonald
(incorporated by reference to Exhibit 10.4 of our current report on Form 8-K filed on December 27, 2012).
Amendment to Consulting Agreement dated as of December 20, 2012 between Enteron and McDonald
(incorporated by reference to Exhibit 10.5 of our current report on Form 8-K filed on December 27, 2012).
74
Table of Contents
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
10.26
10.27
Contract HHSO100201300023C dated September 18, 2013 between the Company and the U.S. Department of
Health and Human Services Biomedical Advanced Research and Development Authority (incorporated by
reference to Exhibit 10.1 of our current report on Form 8-K filed on September 24, 2013). †
Contract HHSN272201300030C dated September 24, 2013 by and between the Company and the National
Institutes of Health(incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed on
September 30, 2013). †
Employment Agreement dated as of January 6, 2014 between the Company and Richard Straube, M.D.
(incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed on January 8, 2014). **
Asset Purchase Agreement dated September 3, 2014 between the Company and Hy Biopharma, Inc.
(incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed on September 5, 2014). †
Registration Rights Agreement dated September 3, 2014 between the Company and Hy Biopharma, Inc.
(incorporated by reference to Exhibit 10.2 of our current report on Form 8-K filed on September 5, 2014).
Contract HHSN272201400039C dated September 17, 2014 by and between the Company and the National
Institutes of Health(incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed on
September 23, 2014). †
Lease Agreement dated November 21, 2014, between the Company and CPP II, LLC (incorporated by
reference to Exhibit 10.42 included in our Annual Report on Form 10-K for the fiscal year ended December 31,
2014).
At Market Issuance Sales Agreement dated August 11, 2017 between Soligenix, Inc. and FBR Capital Markets
& Co. (incorporated by reference to Exhibit 1.1 included in our Quarter Report on Form 10-Q for the fiscal
quarter ended June 30, 2017).
Form of Registration Rights Agreement dated October 31, 2017 (incorporated by reference to Exhibit 10.3
included in our current report on Form 8-K filed on October 31, 2017).
First Amendment to Employment Agreement dated as of April 1, 2019 between the Company and Richard
Straube, M.D. (incorporated by reference to Exhibit 10.30 included in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2018.**
Soligenix, Inc. 2015 Equity Incentive Plan, as amended on as amended on June 18, 2017, September 27, 2018
and September 6, 2019 (incorporated by reference to Exhibit 10.1 included in our current report on Form 8-K
filed on September 11, 2019).
Employment Agreement dated as of September 6, 2019 between the Company and Jonathan L. Guarino
(incorporated by reference to Exhibit 10.2 included in our current report on Form 8-K filed on September 11,
2019).**
Second Amendment to Employment Agreement dated as of January 2, 2020, between Soligenix, Inc. and
Christopher J. Schaber, PhD(incorporated by reference to Exhibit 10.2 included in our current report on Form 8-
K filed on January 3, 2020).**
Amendment No. 1 to At Market Issuance Sales Agreement dated August 28, 2020 between Soligenix, Inc. and
B. Riley FBR, Inc. (incorporated by reference to Exhibit 10.2 included in our current report on Form 8-K filed on
August 28, 2020).
Third Extension and Amendment to Lease dated July 7, 2020 between CPP II LLC and Soligenix, Inc.
(incorporated by reference to Exhibit 10.1 included in our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2020).
75
Table of Contents
10.28
10.29
21.1
23.1
31.1
31.2
32.1
32.2
Loan and Security Agreement, dated December 15, 2020. (incorporated by reference to Exhibit 10.1 included in
our current report on Form 8-K filed on December 16, 2020).
Third Amendment to Employment Agreement dated as of December 10, 2020, between Soligenix, Inc. and
Christopher J. Schaber, PhD. (incorporated by reference to Exhibit 10.2 included in our current report on Form
8-K filed on December 16, 2020). **
Subsidiaries of the Company. *
Consent of EisnerAmper LLP. *
Certification of the Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the
Sarbanes-Oxley Act of 2002). *
Certification of the Chief Financial Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the
Sarbanes-Oxley Act of 2002). *
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL document
Filed herewith.
Indicates management contract or compensatory plan.
*
**
† Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
76
Table of Contents
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SOLIGENIX, INC.
By: /s/ Christopher J. Schaber
Christopher J. Schaber, PhD
Chief Executive Officer and President
Date: March 29, 2022
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant
and in the capacities indicated and on the dates indicated.
Name
Capacity
Date
/s/ Christopher J. Schaber
Christopher J. Schaber, PhD
/s/ Gregg A. Lapointe
Gregg A. Lapointe, CPA
/s/ Diane L. Parks
Diane L. Parks, MBA
/s/ Robert J. Rubin
Robert J. Rubin, MD
/s/ Jerome B. Zeldis
Jerome B. Zeldis, MD, PhD
/s/ Jonathan Guarino Jonathan
Guarino, CPA, CGMA
Chairman of the Board, Chief Executive
Officer
and
President (principal executive officer)
Director
Director
Director
Director
Chief Financial Officer, Senior Vice
President, and
Corporate Secretary (principal accounting
officer)
77
March 29, 2022
March 29, 2022
March 29, 2022
March 29, 2022
March 29, 2022
March 29, 2022
Table of Contents
SOLIGENIX, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2021 and 2020
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2021 and 2020
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 274)
Page
F-2
F-3
F-4
F-5
F-6
F-7 – F-22
F-23
F-1
Table of Contents
Soligenix, Inc. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2021 and 2020
Assets
Current assets:
Cash and cash equivalents
Contracts and grants receivable
Research and development incentives receivable
Prepaid expenses and other current assets
Total current assets
Security deposit
Office furniture and equipment, net of accumulated depreciation of $167,848 and
$154,769
Deferred issuance cost
Right-of-use lease assets
Research and development incentives receivable
Other assets
Total assets
Liabilities and shareholders' equity
Current liabilities:
Accounts payable
Accrued expenses
Accrued compensation
Paycheck Protection Program loan
Lease liabilities - current
Total current liabilities
Non-current liabilities:
Convertible debt, net of debt discount of $143,847 and $140,261
Paycheck Protection Program loan, net of current
Lease liabilities, net of current
Total liabilities
Commitments and contingencies
Shareholders’ equity:
Preferred stock, 350,000 shares authorized; none issued or outstanding
Common stock, $.001 par value; 75,000,000 shares authorized; 42,873,445 shares
and 30,643,656 shares issued and outstanding at December 31, 2021 and
December 31, 2020, respectively
Additional paid-in capital
Accumulated other comprehensive income/(loss)
Accumulated deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity
December 31,
2021
December 31,
2020
$
$
$
26,043,897
138,889
103,832
282,903
26,569,521
22,777
22,220
20,266
106,155
121,238
7,750
26,869,927
2,925,544
2,956,545
302,936
$
$
$
—
106,151
6,291,176
9,856,153
—
—
16,147,329
18,676,663
203,774
361,096
225,473
19,467,006
22,777
23,510
53,523
228,027
73,142
23,250
19,891,235
2,129,844
2,638,308
875,096
324,979
112,294
6,080,521
9,859,739
92,851
116,296
16,149,407
—
—
42,873
216,402,890
41,942
(205,765,107)
10,722,598
26,869,927
$
30,644
196,949,655
(24,337)
(193,214,134)
3,741,828
19,891,235
$
The accompanying notes are an integral part of these consolidated financial statements.
F-2
Soligenix, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Years Ended December 31, 2021 and 2020
Table of Contents
Revenues:
Contract revenue
Grant revenue
Total revenues
Cost of revenues
Gross profit
Operating expenses:
Research and development
General and administrative
Research and development expense – milestone
Total operating expenses
Loss from operations
Other (expense)/income:
Gain on forgiveness of PPP loan
Foreign currency transaction loss
Interest expense, net
Research and development incentives
Other income
Total other (expense)/income
Net loss before income taxes
Income tax benefit
Net loss applicable to common stockholders
Basic and diluted net loss per share
Basic and diluted weighted average common shares outstanding
Year Ended
December 31,
2021
2020
$
33,351
790,917
824,268
(728,640)
95,628
1,930,533
428,914
2,359,447
(1,820,949)
538,498
8,389,387
4,847,126
—
13,236,513
(13,140,885)
421,584
(39,361)
(862,577)
174,770
30,754
(274,830)
(13,415,715)
864,742
(12,550,973)
(0.31)
40,132,182
9,796,167
4,328,838
5,000,000
19,125,005
(18,586,507)
—
(23,385)
(10,882)
95,359
—
61,092
(18,525,415)
836,893
$ (17,688,522)
(0.64)
$
27,486,949
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Table of Contents
Soligenix, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Loss
For the Years Ended December 31, 2021 and 2020
Net loss
Other comprehensive loss:
Foreign currency translation adjustments
Comprehensive loss
Year Ended
December 31,
2021
$ (12,550,973)
2020
$ (17,688,522)
66,279
$ (12,484,694)
20,673
$ (17,667,849)
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
Soligenix, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
For the Years Ended December 31, 2021 and 2020
Accumulated
Balance, December 31, 2019
Issuance of common stock
pursuant to B. Riley At Market
Issuance Sales Agreement
Cost associated with issuance of
common stock
Issuance of common stock for
milestone
Issuance of common stock to
vendors
Exercise of warrants
Exercise of common stock options
Share-based compensation
expense
Foreign currency translation
adjustment
Net loss
Balance, December 31, 2020
Issuance of common stock
pursuant to B. Riley At Market
Issuance Sales Agreement
Cost associated with issuance of
common stock
Issuance of common stock to
vendors
Exercise of warrants
Exercise of common stock options
Share-based compensation
expense
Foreign currency translation
adjustment
Net loss
Balance, December 31, 2021
Common Stock
Shares
21,753,124
Par Value
$ 21,753
Additional
Paid–In
Capital
$ 177,006,004
Other
Comprehensive
Income/(Loss)
$
Accumulated
Deficit
(45,010) $ (175,525,612) $
Total
1,457,135
6,438,431
6,439
14,191,721
—
—
(580,456)
1,956,182
1,956
4,998,044
30,000
460,161
5,758
30
460
6
58,970
860,458
4,981
—
—
409,933
—
—
—
—
—
—
—
20,673
—
—
—
—
—
—
$
30,643,656
$ 30,644
$ 196,949,655
(24,337) $ (193,214,134) $
—
(17,688,522)
— 14,198,160
—
(580,456)
—
5,000,000
—
—
—
59,000
860,918
4,987
—
409,933
—
20,673
(17,688,522)
3,741,828
12,174,515
12,174
19,693,473
25,000
20
30,254
25
—
30
(655,156)
27,475
79
25,805
—
—
361,559
—
—
—
—
—
—
$
42,873,445
$ 42,873
$ 216,402,890
—
—
—
—
—
—
— 19,705,647
—
(655,156)
—
—
—
27,500
79
25,835
—
361,559
66,279
41,942
—
—
66,279
(12,550,973)
$ (205,765,107) $ 10,722,598
(12,550,973)
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
Soligenix, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2021 and 2020
+
Operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation
Non-cash lease expense
Share-based compensation
Issuance of common stock for milestone
Issuance of common stock to vendors
Deferred issuance costs written off
Amortization of deferred issuance costs associated with convertible debt
Gain on forgiveness of PPP loan
Change in operating assets and liabilities:
Contracts and grants receivable
Prepaid expenses and other current assets
Security deposit
Research and development incentives receivable
Operating lease liability
Accounts payable and accrued expenses
Accrued compensation
Net cash used in operating activities
Investing activities:
Purchases of office furniture and equipment
Net cash used in investing activities
Financing activities:
Proceeds from issuance of common stock pursuant to B. Riley At Market Issuance Sales
Agreement
Costs associated with B. Riley At Market Issuance Sales Agreement
Proceeds from the exercise of warrants
Proceeds from the exercises of stock options
Proceeds from convertible debt
Costs associated with issuance of convertible debt
Principal repayment – financing lease
Proceeds from paycheck protection program
Net cash provided by financing activities
Effect of exchange rate on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental information:
Cash paid for state income taxes
Cash paid for interest
Cash paid for lease liabilities:
Operating lease
Financing lease
Non-cash activities:
Right-of use assets and lease liabilities recorded
Deferred issuance cost reclassified to additional-paid-in capital
$
$
$
$
$
$
$
2021
2020
$
(12,550,973)
$
(17,688,522)
34,161
116,290
361,559
—
27,500
—
41,926
(421,584)
64,885
(57,430)
—
205,237
(116,290)
1,127,259
(572,160)
(11,739,620)
(11,789)
(11,789)
19,705,647
(621,899)
79
25,835
—
(45,512)
(6,149)
—
19,058,001
60,642
7,367,234
18,676,663
26,043,897
7,727
668,715
133,300
6,408
—
33,257
$
$
$
$
$
$
$
62,372
130,670
409,933
5,000,000
59,000
61,609
1,205
—
815,061
384,424
(20)
21,924
(131,845)
(1,157,160)
576,923
(11,454,426)
(7,147)
(7,147)
14,198,160
(656,264)
860,918
4,987
10,000,000
(141,466)
(7,516)
417,830
24,676,649
40,879
13,255,955
5,420,708
18,676,663
4,021
34,406
141,050
8,544
240,727
67,733
The accompanying notes are an integral part of these consolidated financial statements.
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Note 1. Nature of Business
Basis of Presentation
Soligenix, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
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 and Public Health Solutions.
The Company’s Specialized BioTherapeutics business segment is developing and moving toward commercialization of
HyBryte™ (a proposed proprietary name of SGX301 or synthetic (hypericin), a novel photodynamic therapy (“PDT”) utilizing
safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With a successful Phase 3 study complete,
regulatory approval is being sought and commercialization activities for this product candidate are being advanced initially in
the United States (“U.S.”). Development programs in this business segment also include expansion of synthetic hypericin
(SGX302) into psoriasis, the Company’s first-in-class innate defense regulator (“IDR”) technology, dusquetide (SGX942) for
the treatment of inflammatory diseases, including oral mucositis in head and neck cancer, and proprietary formulations of
oral beclomethasone 17,21-dipropionate (“BDP”)
the prevention/treatment of gastrointestinal (“GI”) disorders
characterized by severe inflammation, including pediatric Crohn’s disease (SGX203).
for
The Company’s Public Health Solutions business segment includes active development programs for RiVax®, its ricin toxin
vaccine candidate and SGX943, its therapeutic candidate for antibiotic resistant and emerging infectious disease, and
vaccine programs, including a program targeting filoviruses (such as Marburg and Ebola) and a program developing
CiVax™, its vaccine candidate for the prevention of COVID-19 (caused by SARS-CoV-2). The development of the vaccine
programs is currently supported by the heat stabilization platform technology, known as ThermoVax®. To date, this business
segment has been supported with grant and contract funding from the National Institute of Allergy and Infectious Diseases
(“NIAID”), the Biomedical Advanced Research and Development Authority (“BARDA”) 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 the NIAID. The Company has a subcontract of approximately $700,000 from a NIAID grant over
five years for its thermostabilization technology, a DTRA subcontract of approximately $600,000 over three years for
SGX943 and a subcontract of approximately $1.5 million from a NIAID grant over two years for development of CiVax™. 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 U.S. Food and Drug Administration (the “FDA”) regulations, and other regulatory authorities, litigation,
and product liability.
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
December 31, 2021, the Company had an accumulated deficit of $205,765,107. During the year ended December 31, 2021,
the Company incurred a net loss of $12,550,973 and used $11,739,620 of cash in operations. 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 partnerships 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 B. Riley Sales Agreement with B. Riley, 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.
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As of December 31, 2021, the Company had cash and cash equivalents of $26,043,897 as compared to $18,676,663 as of
December 31, 2020, representing an increase of $7,367,234 or 39%. As of December 31, 2021, the Company had working
capital of $20,278,345 as compared to working capital of $13,386,485, for the prior year, representing an increase of 51%.
The increase in cash and cash equivalents was primarily the result of proceeds from financing activities partially offset by
cash used in operations.
Management’s business strategy can be outlined as follows:
● Following positive primary endpoint results for the Phase 3 FLASH (Florescent Light Activated Synthetic Hypericin)
clinical trial of HyBryte™ in CTCL, as well as further statistically significant improvement in response rates with
longer treatment (18 weeks compared to 12 and 6 weeks of treatment), pursue New Drug Application (“NDA”) filing
and commercialization in the U.S. while continuing to explore ex-U.S. partnership.
● Expand development of synthetic hypericin under the research name SGX302 into psoriasis following the positive
Phase 3 FLASH study and positive proof-of-concept demonstrated in a small Phase 1/2 pilot study in mild-to-
moderate psoriasis patients.
● Following feedback from the United Kingdom (“UK”) Medicines and Healthcare products Regulatory Agency
(“MHRA”) that the SGX942 Phase 3 DOM-INNATE (Dusquetide treatment in Oral Mucositis – by modulating
INNATE Immunity) clinical trial, having missed its primary endpoint, would not support a potential marketing
authorization and that a second Phase 3 study would be needed, analyze the DOM-INNATE study full dataset and
design a second Phase 3 study; attempt to identify a potential partner(s) to continue this development program.
● Continue development of the Company’s heat stabilization platform technology, ThermoVax®, in combination with its
programs for RiVax® (ricin toxin vaccine), CiVax™ (COVID-19 vaccine) and filovirus vaccines for Ebola, Sudan, and
Marburg Viruses, with U.S. government 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.
● Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with
existing pipeline 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 $1.35 million in active government grant funding still available as of December 31, 2021 to
support its associated research programs through November 2022, provided the federal agencies do not elect to
terminate the grants for convenience. The Company plans to submit additional contract and grant applications for
further support of its programs with various funding agencies. However, there can be no assurance that the
Company will obtain additional governmental grant funding;
● 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 as well as continue to explore merger
and acquisition strategies. However, there can be no assurances that the Company can consummate such
transactions;
● The Company has up to $26.8 million remaining from the B. Riley Sales Agreement as of March 22, 2022 under the
prospectus supplement updated August 13, 2021; and
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●
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.
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated as a result of consolidation.
Reclassifications
Certain amounts in the statement of operations for the year ended December 31, 2020 were reclassified to conform to the
current year presentation.
Operating Segments
Operating segments are defined as components of an enterprise about which separate financial information is available that
is evaluated on a regular basis by the chief operating decision maker, or decision-making group, in deciding how to allocate
resources to an individual segment and in assessing the performance of the segment. The Company divides its operations
into two operating segments: Specialized BioTherapeutics and Public Health Solutions.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash
equivalents.
Contracts and Grants Receivable
Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an
institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the
respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no
allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.
Website Development Costs
In February 2019, Altamont Pharmaceutical Holdings, LLC (“Altamont”), a company which owned 5% or more of the
Company’s shares of common stock at the time, signed a service agreement with a third-party vendor to re-develop the
Company’s website. Upon completion of the project at the end of June 2019, the Company capitalized the related website
development costs of $46,500 in accordance with FASB Codification ASC 350-50 “Accounting for Web Site Development
Costs.” During the quarter ended September 30, 2019, the Company began amortizing the website development costs on a
straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized
website development costs periodically for impairment. Website amortization expense for 2021 and 2020 was $15,500 and
$15,500, respectively, and accumulated amortization was $38,750 and $23,250, respectively, as of December 31, 2021 and
2020. Website development costs are included in the other assets in the accompanying consolidated balance sheets.
Impairment of Long-Lived Assets
Office furniture and equipment, and website development costs with finite lives are evaluated and reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company
recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future
undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the
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carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the
carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.
The Company did not record any impairment of long-lived assets for the years ended December 31, 2021 or 2020.
Fair Value of Financial Instruments
FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB
ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial
statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to
the Company on December 31, 2021. Accordingly, the estimates presented in these financial statements are not necessarily
indicative of the amounts that could be realized on disposition of the financial instruments.
FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are
observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable
inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the fair value hierarchy are as follows:
● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to
access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted
market prices such as exchange-traded instruments and listed equities.
● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation
methodologies. These models consider various assumptions, including volatility factors, current market prices and
contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in
the marketplace, can be derived from observable data or are supported by observable levels at which transactions
are executed in the marketplace.
● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair
values are determined using pricing models, discounted cash flows or similar techniques and at least one significant
model assumption or input is unobservable.
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, contracts and grants
receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued
compensation approximate their fair value based on the short-term maturity of these instruments.
The carrying amounts reported in the consolidated balance sheets for convertible debt and the loan under the Paycheck
Protection Program (“PPP”) approximate their fair value based on their maturity dates.
Revenue Recognition
The Company’s revenues are primarily generated from government contracts and grants. The revenue from government
contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the
contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management
fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs
reimbursable internal expenses that are related to the government contracts and grants.
Research and Development Costs
Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and
Development. Research and development includes costs such as clinical trial expenses, contracted research and
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license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation,
employee benefits, equipment depreciation and allocation of various corporate costs.
Share-Based Compensation
Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to
directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance).
Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of
three years. These options have a ten year life for as long as the individuals remain employees or directors. In general,
when an employee or director terminates their position, the options will expire within three months, unless otherwise
extended by the Board.
From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for
services performed under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant
of stock options, restricted stock, deferred stock and unrestricted stock to the Company’s employees and non-employees
(including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515).
However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect
a Securities Act of 1933, as amended restrictive legend. Stock compensation expense for equity-classified awards to
nonemployees is measured on the date of grant and is recognized when the services are performed.
The fair value of options issued during the years ended December 31, 2021 and 2020 was estimated using the Black-
Scholes option-pricing model and the following assumptions:
● a dividend yield of 0%;
● an expected life of 4 years;
● volatility of 84% - 87% for 2021 and 77% - 85% for 2020; and
● risk-free interest rates ranging from 0.27% to 1.13% in 2021 and 0.22% to 1.66% in 2020.
The fair value of each option grant made during 2021 and 2020 was recognized as share-based compensation ratably over
the option vesting periods, which approximates the service period.
Foreign Currency Transactions and Translation
In 2018, the Company changed the status of a wholly-owned subsidiary in the United Kingdom (“UK”) from inactive to active
and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical
trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the
UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with
related transaction gains or losses included in net loss. On a quarterly basis, the financial statements of the UK subsidiary
are translated into U.S. dollars and consolidated into the Company’s financials, with related translation adjustments reported
as a cumulative translation adjustment (“CTA”), which is a component of accumulated other comprehensive loss. In 2021
and 2020, the Company recognized foreign currency transaction losses of $39,361 and $23,385, respectively, in its
consolidated statements of operations.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is
established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all
available positive and negative evidence is considered, including the Company’s current and past performance, the market
environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward
periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax
benefit of $864,742 and $836,893 from the sale of New Jersey NOL carryforwards during the years ended December 31,
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2021 and 2020, respectively, The Company recognizes accrued interest and penalties associated with uncertain tax
positions, if any, as part of income tax expense. There were no tax related interest and penalties recorded for 2021 and
2020. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax
positions at December 31, 2021 or 2020.
Research and Development Incentive Income and Receivable
The Company recognizes other income from United Kingdom research and development incentives when there is
reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration
can be reliably measured. The small or medium sized enterprise (“SME”) research and development tax relief program
supports companies that seek to research and develop an advance in their field and is governed through legislative law by
HM Revenue & Customs as long as specific eligibility criteria are met.
Management has assessed the Company’s research and development activities and expenditures to determine which
activities and expenditures are likely to be eligible under the SME research and development tax relief program described
above. At each period end, management estimates the refundable tax offset available to the Company based on available
information at the time. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not
subject to accounting for income taxes. As a result, amounts realized under the SME R&D tax relief scheme are recorded as
a component of other income.
The research and development incentive receivable represents an amount due in connection with the above program. The
Company has recorded a research and development incentive receivable of approximately $225,000 and $434,000 as of
December 31, 2021 and 2020, respectively in the consolidated balance sheets.
Balance at December 31, 2020
UK research and development incentives, transfer
UK research and development incentives
Additional 2019 incentive earned
UK research and development incentives cash receipt
Foreign currency translation
Balance at December 31, 2021
Earnings Per Share
Current
Long-Term
$ 361,096
73,142
—
51,893
(383,933)
1,634
$ 103,832
$
73,142 $
(73,142)
122,877
—
—
(1,639)
$ 121,238 $
Total
434,238
—
122,877
51,893
(383,933)
(5)
225,070
Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income (loss) available to common
stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into
common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a
significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results
for each period presented.
The following table summarizes potentially dilutive adjustments to the number of common shares, which were excluded from
the diluted calculation because their effect would be anti-dilutive due to the losses in each period.
Common stock purchase warrants
Stock options
Total
Use of Estimates and Assumptions
December 31,
2021
3,328,072
2,115,825
5,443,897
December 31,
2020
5,731,477
1,933,804
7,665,281
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires
management to make estimates and assumptions such as the fair value of stock options and to accrue for clinical trials in
process that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ
from those estimates.
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Note 3. Leases
The Company classifies a lease for its office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey and a lease
for a copy machine in the office as an operating lease and a financing lease, respectively, and recorded related right-of-use
lease assets and lease liabilities accordingly. As of December 31, 2021 and 2020, the Company’s consolidated balance
sheets included a right-of-use lease asset of $106,155 and $222,445 for the office space and $0 and $5,582 for the copy
machine, respectively. Lease liabilities in the Company’s consolidated balance sheets as of December 31, 2021 and 2020
included corresponding lease liabilities of $106,151 and $112,294 for the office space and $0 and $6,149 for the copy
machine, respectively.
The following represent a reconciliation of contractual lease cash flows to the right-of-use lease assets and liabilities
recognized in the financial statements:
Contractual cash payments for the remaining lease term as of
December 31, 2021:
2022
Total
Discount rate applied
Remaining lease term (months) as of December 31, 2021
Right-of-use lease asset:
Right-of-use lease asset, January 1,2020
Add: new lease extension
Less: reduction/amortization
Right-of-use lease asset, December 31, 2020
Less: reduction/amortization
Right-of-use lease asset, December 31, 2021
Lease liability:
Lease liability, January 1, 2020
Add: new lease extension
Less: repayments
Lease liability, December 31, 2020
Less: repayments
Lease liability, December 31, 2021
Lease expenses for the year ending December 31, 2020:
Lease expense
Amortization expense
Interest expense
Total
Lease expenses for the year ending December 31, 2021:
Lease expense
Amortization expense
Interest expense
Total
F-13
$
$
$
$
$
$
$
$
$
$
Operating
Lease
Financing
Lease
111,083
111,083
$
$
10 %
10
—
—
10 %
—
112,388
240,727
130,670
222,445
116,290
106,155
113,559
240,727
131,845
222,441
116,290
106,151
$
$
$
$
139,876
$
—
—
$
139,876
133,300
$
—
—
$
133,300
13,025
—
7,443
5,582
5,582
—
13,665
7,516
6,149
6,149
—
—
7,443
1,028
8,471
—
5,582
259
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Note 4. Accrued Expenses
The following is a summary of the Company’s accrued expenses:
Clinical trial expenses
Other
Total
Note 5. Debt
December 31,
2021
2,911,960
44,585
2,956,545
$
$
$
$
2020
2,510,111
128,197
2,638,308
On December 16, 2020, the Company entered into a $20 million convertible debt financing agreement with Pontifax Medison
Debt Financing (“Pontifax”), the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the
terms of the agreement with Pontifax, the Company had access to up to $20 million in convertible debt financing in three
tranches, which will mature on June 15, 2025 and have an interest only period through December 2022 with an interest rate
of 8.47% on borrowed amounts and an interest rate of 1% on amounts available but not borrowed as an unused line of
credit fee. The agreement is secured by a lien covering substantially all of the Company’s assets, other than intellectual
property. The agreement contains customary representations, warranties and covenants, including covenants by the
Company limiting additional indebtedness, liens, including on intellectual property, guaranties, mergers and consolidations,
substantial asset sales, investments and loans, certain corporate changes, transactions with affiliates and fundamental
changes. Affirmative covenants include, among others, covenants requiring us to protect and maintain our intellectual
property and comply with all applicable laws, deliver certain financial reports, maintain a minimum cash balance and
maintain insurance coverage. Upon the closing of this transaction, the Company accessed the first tranche of $10 million,
had the option to draw the second tranche of $5 million at any time over during the initial 12 months of the loan and the third
tranche of $5 million upon filing of the HyBryte™ new drug application, subject to certain conditions. The Company has
elected to let both the second and third tranches expire as of December 15, 2021 and March 15, 2022, respectively. Interest
expense incurred during the years ended December 31, 2021 and 2020 was $894,808 and $34,306, respectively. Interest
expense paid during the years ended December 31, 2021 and 2020 was $668,715 and $34,306, respectively. The Company
amortized $41,926 and $1,205 of issuance costs during the years ended December 31, 2021 and 2020, respectively. The
net deferred issuance costs of $143,847 has been recorded as a reduction of the carrying value of the $10,000,000
convertible debt borrowed as of December 31, 2021.
Pontifax may elect to convert the outstanding loan drawn into shares of the Company’s common stock at any time prior to
repayment at a conversion price of $4.10 per share. The Company also has the ability to force the conversion of the loan
into shares of the Company’s common stock at the same conversion price, subject to certain conditions.
Principal and interest payments due, assuming no conversion is as follows:
Year
2022
2023
2024
2025
Total
CARES Act Loan
Principal
$
— $
4,000,000
4,000,000
2,000,000
$ 10,000,000
Interest
847,000
719,138
380,338
60,566
$ 2,007,042
$
Total
847,000
4,719,138
4,380,338
2,060,566
$ 12,007,042
On April 13, 2020, the Company was advised that one of its principal banks, JPMorgan Chase Bank, N.A., had approved a
$417,830 loan (the “Loan”) under the PPP pursuant to the Coronavirus Aid, Relief and Economic Security Act that was
signed into law on March 27, 2020.
As a U.S. small business, the Company qualified for the PPP, which allows businesses and nonprofits with fewer than 500
employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the
business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the
average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes,
including payroll, benefits, rent and utilities.
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The Loan had a term of two years, was unsecured, and was guaranteed by the Small Business Administration (“SBA”). The
Loan bore interest at a fixed rate of 0.98% per annum, with interest and principal deferred during the eight-week or twenty-
four-week following the Loan origination date (“the loan forgiveness period”) and subsequent 10 months. Some or all of the
Loan was eligible for forgiveness if at least 60% of the Loan proceeds were used by the Company to cover payroll costs,
including benefits and if the Company maintains its employment and compensation within certain parameters during the
forgiveness period and complied with other relevant conditions. The Company used the proceeds for purposes consistent
with the PPP and met the conditions for the forgiveness of the Loan.
On June 29, 2021, the SBA and JPMorgan notified the Company that the entire balance of this note has been forgiven. The
Company recorded the forgiveness of the principal and accrued interest of $421,584 as a gain on forgiveness in other
income on the consolidated statement of operations.
Note 6. Income Taxes
The income tax benefit consisted of the following for the years ended December 31, 2021 and 2020:
2021
2020
Federal
Foreign
State
Income tax benefit
$
— $
—
—
—
(836,893)
$ (836,893)
(864,742)
$ (864,742)
The significant components of the Company’s deferred tax assets and liabilities at December 31, 2021 and 2020 are as
follows:
Net operating loss carry forwards
Orphan drug and research and development credit carry forwards
Equity based compensation
Intangibles
Total
Valuation allowance
Net deferred tax assets
2021
$ 28,065,000
8,605,000
264,000
1,953,000
38,887,000
(38,887,000)
$
— $
2020
$ 27,022,000
8,149,000
264,000
817,000
36,252,000
(36,252,000)
—
The Company had gross NOLs at December 31, 2021 of approximately $123,800,000 for federal tax purposes,
approximately $25,200,000 for state tax purposes and approximately $1,400,000 for foreign tax purposes. Federal losses
generated in 2018 or later will carry forward indefinitely. In addition, the Company has approximately $8,605,000 of various
tax credits which credit the Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities.
However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382
limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points. In addition, the
NOL carry forwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such
exams. Although the Company has not undergone an IRC Section 382 analysis, it is likely that the utilization of the NOLs
may be substantially limited.
The Company and one or more of its subsidiaries files income tax returns in the U.S. Federal jurisdiction, and various state
and local jurisdictions. During the year ended December 31, 2021 in accordance with the State of New Jersey’s Technology
Business Tax Certificate Program, which allowed certain high technology and biotechnology companies to sell unused NOL
carry forwards to other New Jersey-based corporate taxpayers, the Company sold New Jersey NOL carry forwards, resulting
in the recognition of $864,742 of income tax benefit, net of transaction costs. The Company has not yet sold its 2021 New
Jersey NOLs but may do so in the future. There can be no assurance as to the continuation or magnitude of this program in
the future.
F-15
Table of Contents
Reconciliations of the difference between income tax benefit computed at the federal and state statutory tax rates and the
provision for income tax benefit for the years ended December 31, 2021 and 2020 were as follows:
Federal tax at statutory rate
State tax benefits, plus sale of NJ NOL, net of federal benefit
Foreign tax rate difference
Orphan drug and research and development credits
Permanent differences
Foreign NOL adjustments
Expiration of tax attributes
Change in valuation allowance
Income tax benefit
2021
2020
(21.0)%
(7.6)
0.1
(4.3)
1.3
0.6
4.9
19.6
(6.4)%
(21.0)%
(5.8)
0.1
4.8
1.4
0.4
6.9
8.7
(4.5)%
Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax provisions taken on their
income tax returns. The Company has analyzed its tax positions and has concluded that as of December 31, 2021, there
were no uncertain positions. The Company’s U.S. federal and state net operating losses have occurred since its inception
and as such, tax years subject to potential tax examination could apply from 2011, the earliest year with a net operating loss
carryover, because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or
state taxing authorities. Interest and penalties, if any, as they relate to income taxes assessed, are included in the income
tax provision. The Company did not have any unrecognized tax benefits and has not accrued any interest or penalties for
the years ended December 31, 2021 and 2020.
Note 7. Shareholders’ Equity
Preferred Stock
The Company has 350,000 shares of preferred stock authorized, none of which are issued or outstanding.
Common Stock
The following items represent transactions in the Company’s common stock for the year ended December 31, 2021:
● During the year ended December 31, 2021, the Company issued 20 shares of common stock as a result of a
warrant exercise. The weighted average exercise price per share was $3.95.
● During the year ended December 31, 2021, the Company issued 12,174,515 shares of common stock pursuant to
the B. Riley Sales Agreement at a weighted average price of $1.62 per share.
● During the year ended December 31, 2021, the Company issued 30,254 shares of common stock as a result of
option exercises. The weighted average exercise price per share was $0.85.
● The Company issued a vendor 25,000 fully vested shares of common stock with a fair value of $1.10 per share on
September 29, 2021.
The following items represent transactions in the Company’s common stock for the year ended December 31, 2020:
● The Company issued 10,000 shares of restricted common stock on January 8, 2020, February 10, 2020 and
March 12, 2020 for a total of 30,000 shares to a vendor as consideration for its service performed. The fair values
for the shares issued were $1.68, $2.25 and $1.97 per share, respectively. The shares were fully vested on the date
of grant and resulted in the recognition of $59,000 of expense during the year ended December 31, 2020.
● On March 23, 2020, the Company issued 1,956,182 fully vested shares of common stock to Hy Biopharma, Inc. (“Hy
Biopharma”) as payment for a milestone. The fair value of the shares was $2.56 per share.
F-16
Table of Contents
● On November 25, 2020, the Company increased its authorized shares of common stock from 50,000,000 to
75,000,000.
● During the year ended December 31, 2020, the Company issued 460,161 shares of common stock as a result of
warrant exercises and 5,758 shares of common stock as a result of option exercises. The weighted average
exercise price per warrant and option was $1.87 and $1.19, respectively. The cash exercise price of $1,882 for
2,189 shares issued upon the exercise of such options was received in December 2019.
● During the year ended December 31, 2020, the Company issued 6,438,431 shares of common stock pursuant to the
B. Riley Sales Agreement at a weighted average price of $2.21 per share.
All issuances of the Company’s common stock for the years ended December 31, 2021 and 2020 described above, other
than shares issued under the B. Riley Sales Agreement and those issued to Hy Biopharma, were issued under the 2015
Plan and are registered on a Registration Statement on Form S-8 (SEC File No. 333-208515). However, as shares of
common stock are not covered by a reoffer prospectus, the certificates evidencing such shares reflect a Securities Act of
1933, as amended, restrictive legend. The shares issued to Hy Biopharma and those issued under the B. Riley Sales
Agreement were registered on a Registration Statement on Form S-3 (SEC File No. 333-239928).
B. Riley At Market Issuance Sales Agreement
On August 11, 2017, the Company entered into the B. Riley Sales Agreement to sell shares of the Company’s common
stock from time to time, through an “at-the-market” equity offering program under which B. Riley acts as sales agent. Under
the B. Riley Sales Agreement, the Company sets the parameters for the sale of shares, including the number of shares to be
issued, the time period during which sales may be requested to be made, limitation on the number of shares that may be
sold in any one trading day and any minimum price below which sales may not be made. The B. Riley Sales Agreement
provides that B. Riley is entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the
sale of shares sold under the B. Riley Sale Agreement. The Company has no obligation to sell any shares under the B. Riley
Sales Agreement, and may suspend solicitation and offers under the B. Riley Sales Agreement at any time.
The Company’s shelf registration statement on Form S-3 (File No. 333- 217738) filed on May 5, 2017 (the “May 2017
Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) expired on August 10, 2020, but
was available to be utilized for a period up to six months or until a new shelf registration statement was declared effective,
whichever occurred first. All sales under the B. Riley Sales Agreement from August 11, 2017 through August 10, 2020 were
made pursuant to the May 2017 Registration Statement.
All sales of common stock made pursuant to the B. Riley Sales Agreement since the expiration of the May 2017 Registration
Statement have been, and future sales will be, made pursuant to the Company’s shelf registration statement on Form S-3
(File No. 333- 239928) filed on July 17, 2020 (the "July 2020 Registration Statement") with the SEC, and any amendments
thereto, the base prospectus filed as part of such registration statement, and any prospectus supplements. The July 2020
Registration Statement was declared effective on August 28, 2020.
On August 13, 2021, the Company filed a prospectus supplement to the B. Riley Sales Agreement to offer and sell shares of
Company common stock having an aggregate offering price of up to $30.0 million under the July 2020 Registration
Statement. As of March 22, 2022, there was $26.8 million available for the sale of common stock under the B. Riley Sales
Agreement.
Note 8. Related Party Transaction
In February 2019, the Company issued Altamont, a company which owned 5% or more of the Company’s shares of common
stock at the time, 12,845 shares of the Company’s common stock with a fair value of $9,120 as consideration for its
contractual investor relations and web hosting services. The Company recognized $2,550 of expense for the services
provided during the year ended December 31, 2020.
F-17
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Note 9. Stock Option Plans and Warrants to Purchase Common Stock
Stock Option Plans
The Amended and Restated 2005 Equity Incentive Plan (“2005 Plan”) was replaced by the 2015 Plan, which was approved
in June 2015. No securities are available for future issuance under the 2005 Plan. As of December 31, 2021, there are no
shares currently available for grants under the 2015 Plan. In accordance with the 2015 Plan and the rules of the Nasdaq
Stock Market, any additional grants offered may not be exercised until the Company’s stockholders approve an amendment
increasing the number of shares authorized for issuance under the 2015 Plan. The plan is divided into four separate equity
programs:
1)
2)
3)
4)
the Discretionary Option Grant Program, under which eligible persons may, at the discretion of the Plan
Administrator, be granted options to purchase shares of common stock,
the Salary Investment Option Grant Program, under which eligible employees may elect to have a portion of their
base salary invested each year in options to purchase shares of common stock,
the Automatic Option Grant Program, under which eligible nonemployee Board members will automatically receive
options at periodic intervals to purchase shares of common stock, and
the Director Fee Option Grant Program, under which non-employee Board members may elect to have all, or any
portion, of their annual retainer fee otherwise payable in cash applied to a special option grant.
Shares available for grant under the 2015 Plan were as follows:
Shares available for grant at January 1, 2021
Options granted
Options forfeited
Options exercised
Shares available for grant at December 31, 2021
Activity under the 2005 Plan and the 2015 Plan for the years ended December 31, 2021 and 2020
Balance outstanding at December 31, 2019
Granted
Forfeited
Exercised
Balance outstanding at December 31, 2020
Granted
Forfeited
Exercised
Balance outstanding at December 31, 2021
Options
1,506,972
520,812
(88,222)
(5,758)
1,933,804
452,189
(239,914)
(30,254)
2,115,825
$
$
$
214,689
(452,189)
207,246
30,254
—
Weighted
Average
Exercise
Price
3.77
2.17
13.06
1.19
2.96
0.91
3.65
0.85
2.48
As of December 31, 2021, there were 1,548,346 options exercisable with a weighted average exercise price of $2.89 and a
weighted average remaining contractual term of 6.92 years. As of December 31, 2021, there were 2,115,825 options
outstanding with a weighted average remaining term of 7.55 years. Options outstanding as of December 31, 2021 had no
intrinsic value. Options exercised during the year ended December 31, 2021 had an intrinsic value of approximately $7,000
on the dates of exercise.
F-18
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The Company awarded 452,189 and 520,812 stock options during the years ended December 31, 2021 and 2020,
respectively, which had a weighted average grant date fair value per share of $0.56 and $0.97, respectively. The weighted-
average exercise price, by price range, for outstanding options to purchase common stock at December 31, 2021 was:
Price Range
$0.71-$3.00
$6.40-$15.60
$20.10-$22.60
Total
Weighted
Average
Remaining
Contractual
Life in Years
7.97
3.13
2.00
7.55
Outstanding
Options
1,941,203
129,310
45,312
2,115,825
Exercisable
Options
1,373,724
129,310
45,312
1,548,346
The Company’s share-based compensation expense for the years ended December 31, 2021 and 2020 was recognized as
follows:
Share-based compensation
Research and development
General and administrative
Total
2021
158,478
203,081
361,559
$
$
2020
195,560
214,373
409,933
$
$
At December 31, 2021, the total compensation cost for stock options not yet recognized was approximately $457,000 and
will be expensed over the next three years.
Warrants to Purchase Common Stock
Warrant activity for the years ended December 31, 2021 and 2020 was as follows:
Balance at December 31, 2019
Granted
Exercised
Expired
Balance at December 31, 2020
Granted
Exercised
Expired
Balance at December 31, 2021
Weighted
Average
Exercise
Price
2.88
—
1.87
—
2.96
—
3.95
3.95
2.25
Warrants
6,192,711
$
—
(461,234)
5,731,477
—
$
—
(20)
(2,403,385)
3,328,072
$
The remaining life, by grant date, for outstanding warrants at December 31, 2021 was:
Grant Date
11/1/2017
3/29/2018
7/2/2018
Total
Note 10. Concentrations
Exercise
Price
Remaining
Contractual
Outstanding
Exercisable
Life in Years Warrants
Warrants
$
$
$
2.50
1.95
2.25
0.83
1.24
0.01
49,872
10,000
3,268,200
3,328,072
49,872
10,000
3,268,200
3,328,072
At December 31, 2021 and 2020, the Company had deposits in major financial institutions that exceeded the amount under
protection by the Securities Investor Protection Corporation (“SIPC”). Currently, the Company is covered up to $250,000 by
the SIPC and at times maintains cash balances in excess of the SIPC coverage.
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Note 11. Commitments and Contingencies
The Company has commitments of approximately $100,000 per year for the next five years at December 31, 2021 for
several licensing agreements with consultants and universities. Additionally, the Company has collaboration and license
agreements, which upon clinical or commercialization success, may require the payment of milestones of up to $7.9 million
and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that
clinical or commercialization success will occur. In June 2018, the Company paid approximately $197,000 in milestone
payments.
The Company currently leases approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in
Princeton, New Jersey pursuant to a lease that expires in October 2022. This office space currently serves as the
Company’s corporate headquarters, and both of the Company’s business segments (Specialized BioTherapeutics and
Public Health Solutions), operate from this space. The rent for the first 10 months of 2020 was approximately $11,883
per month, or approximately $23.00 per square foot, and then decreased to approximately $11,108, or approximately $21.50
per square foot, starting November 2020, which rate will continue for the remainder of the lease period.
On September 3, 2014, the Company entered into an asset purchase agreement with Hy Biopharma pursuant to which the
Company acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy
BioPharma’s synthetic hypericin product. As consideration for the assets acquired, the Company paid $275,000 in cash and
issued 184,912 shares of common stock with a fair value based on the Company’s stock price on the date of grant of
$3,750,000. These amounts were charged to research and development expense during the third quarter of 2014 as the
assets will be used in the Company’s research and development activities and do not have alternative future use pursuant to
generally accepted accounting principles in the U.S. The Company is required to issue Hy Biopharma shares of common
stock upon the achievement of certain milestones. In March 2020, the Company issued 1,956,182 fully vested shares of
common stock to Hy Biopharma as payment for achieving a milestone: the Company determining the Phase 3 clinical trial of
HyBryte™ to be successful in the treatment of CTCL. The number of shares of common stock issued to Hy Biopharma was
calculated using an effective price of $2.56 per share, based upon a formula set forth in the purchase agreement. Provided
all future success-oriented milestones are attained, the Company will be required to make additional payments of up to $5.0
million, if and when achieved. Payments will be payable in restricted securities of the Company provided they do not exceed
19.9% ownership of the Company’s outstanding stock. As of December 31, 2021, no other milestone or royalty payments
have been paid or accrued.
In January 2020, the Company’s Board of Directors authorized the amendment of Dr. Schaber’s employment agreement to
increase the number of shares of the Company’s common stock from 5,000 to 500,000 issuable to Dr. Schaber immediately
prior to the completion of a transaction, or series or a combination of related transactions, negotiated by its Board of
Directors whereby, directly or indirectly, a majority of its capital stock or a majority of its assets are transferred from the
Company and/or its stockholders to a third party.
As a result of the above agreements, the Company has future contractual obligations over the next five years as follows:
Year
2022
2023
2024
2025
2026
Total
Contingencies
Research and Property and
Development Other Leases
$ 100,000
100,000
100,000
100,000
100,000
$ 500,000
$ 111,083
$
—
—
—
—
$ 111,083
$
Total
211,083
100,000
100,000
100,000
100,000
611,083
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for
contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to
the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses
such contingent liabilities, and such assessment inherently involves an exercise of judgment. A liability is only recorded if
management determines that it is both probable and reasonably estimable.
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Table of Contents
COVID-19
Based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact
on financial markets, there could be additional repercussions to the Company’s operating business, including but not limited
to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in
clinical operations, which may include the availability or the continued availability of patients for trials due to such things as
quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.
The future impact of the outbreak is highly uncertain and cannot be predicted, and the Company cannot provide any
assurance that the outbreak will not have a material adverse impact on the Company’s operations or future results or filings
with regulatory health authorities. The extent of the impact to the Company, if any, will depend on future developments,
including actions taken to contain the coronavirus.
Emergent BioSolutions Legal Proceedings
On July 1, 2020, the Company filed a demand for arbitration against Emergent BioSolutions, Inc. and certain of its
subsidiaries with the American Arbitration Association in Mercer County, New Jersey. The Company alleges in the arbitration
various breaches of contracts and warranties as well as acts of fraud. Emergent has answered that demand for arbitration
denying the allegations and asserting affirmative defenses.
The Company is seeking to recover damages in excess of $19 million from Emergent. While the Company intends to
vigorously pursue this arbitration, the Company cannot offer any assurances that it will recover any damages from
Emergent.
The Company has received invoices from Emergent related to the above matter. No accrual has been made for these
invoices as management deems them invalid and not probable of being required to pay them based on the numerous
breaches sited in the pending arbitration. These invoices total approximately $331,000.
F-21
Table of Contents
Note 12. Operating Segments
The Company maintains two active operating segments: Specialized BioTherapeutics and Public Health Solutions. Each
segment includes an element of overhead costs specifically associated with its operations, with its corporate shared services
group responsible for support functions generic to both operating segments.
Revenues
Specialized BioTherapeutics
Public Health Solutions
Total
Loss from Operations
Specialized BioTherapeutics
Public Health Solutions
Corporate
Total
Amortization and Depreciation Expense
Specialized BioTherapeutics
Public Health Solutions
Corporate
Total
Other (Expense)/Income, Net
Specialized BioTherapeutics
Corporate
Total
Share-Based Compensation
Specialized BioTherapeutics
Public Health Solutions
Corporate
Total
Identifiable Assets
Specialized BioTherapeutics
Public Health Solutions
Corporate
Total
F-22
For the Years Ended
December 31,
2021
2020
— $
824,268
824,268
(7,280,936)
(647,600)
(5,212,349)
(13,140,885)
7,804
16,801
9,556
34,161
135,409
(410,239)
(274,830)
136,594
21,884
203,081
361,559
$
$
$
$
$
$
$
$
$
117,369
2,242,078
2,359,447
(13,610,715)
(85,417)
(4,890,375)
(18,586,507)
11,839
21,672
28,861
62,372
71,974
(10,882)
61,092
148,107
47,453
214,373
409,933
$
$
$
$
$
$
$
$
$
$
As of December 31,
2021
2020
$
$
128,645
146,296
26,594,986
26,869,927
$
$
176,447
147,784
19,567,004
19,891,235
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Soligenix, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Soligenix, Inc. and Subsidiaries (the “Company”) as of
December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive loss, shareholders’
equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2021 and 2020, and the results of their operations and their cash flows for each of the years
then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over
financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical
audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
Accrual for Clinical Trial Expenses
As described in Note 2 to the financial statements, the Company is required to estimate at each balance sheet date its
expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and
under clinical site agreements in connection with conducting clinical trials. The Company recorded clinical trial accruals of
$2.9 million, which are included in accrued expenses on the December 31, 2021 consolidated balance sheet. The amounts
recorded for clinical trial accruals represent the Company’s estimate of the unpaid clinical trial expenses based on the
progress of the research and development services for clinical trials compared to the amounts paid for clinical trials through
December 31, 2021.
We identified management’s estimate of the accruals for clinical trial expenses as a critical audit matter due to the significant
management judgement and subjectivity in estimating the accruals. Auditing the Company’s clinical trial accruals involved a
high degree of subjectivity due to the significant estimation required in determining the progress to completion of specific
F-23
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tasks conducted under the Company’s clinical trials and the costs of those tasks that will be invoiced by the vendors, clinical
research organizations and consultants and under clinical site agreements subsequent to the date that the financial
statements are issued.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the financial statements. We obtained an understanding and evaluated the design of controls over management’s
estimation process, including the process of estimating the expenses incurred to date based on the status of the clinical
trials, the significant assumptions about the status of research and development services incurred and the completeness
and accuracy of the data used to calculate the estimates. We performed procedures over the clinical trial accruals that
included, among others, reading selected agreements and change orders with the vendors, clinical research organizations
and consultants, and evaluating the significant assumptions described above and the methods used in developing the
clinical trial estimates and calculating the amounts that were unpaid at the balance sheet date. We made direct inquiries of
financial and clinical personnel on the status of the clinical trials, progress to completion of clinical trials, method of allocating
contractual charges to specific tasks performed during the clinical trials, and the status of change orders. We compared the
current estimate of expenses incurred to estimates previously made by management and assessed the historical accuracy
of management’s previous estimates. We also examined invoices issued and payments made to service providers after the
consolidated balance sheet date.
/s/ EisnerAmper LLP
We have served as the Company’s auditor since 2010.
EISNERAMPER LLP
Iselin, New Jersey
March 29, 2022
F-24
SOLIGENIX, INC.
DESCRIPTION OF SECURITIES
EXHIBIT 4.4
The following description of the terms of our securities is not complete and is qualified in its entirety by reference to our Certificate of
Incorporation, as amended (the “Certificate of Incorporation”), and our Bylaws, as amended (the “Bylaws”), both of which are filed as
exhibits to our Annual Reports on Form 10-K.
Under our Certificate of Incorporation and Bylaws, we are authorized capital to issue 75,350,000 shares of capital stock, consisting of
75,000,000 shares of common stock, par value $0.001 per share, 230,000 shares of undesignated preferred stock (none of which are
currently outstanding), 10,000 shares of Series B Convertible Preferred Stock, par value $0.05 per share (none of which are currently
outstanding), 10,000 shares of Series C Convertible Preferred Stock, par value $0.05 per share (none of which are currently outstanding),
and 100,000 shares of Series A Junior Participating Preferred Stock, par value $0.001 per share.
Our common stock is listed on The Nasdaq Capital Market under the symbol “SNGX.” Our common stock warrants issued in December
2016 were listed on The Nasdaq Capital Market under the symbol “SNGXW” and expired on December 15, 2021. All outstanding shares
of common stock are validly issued, fully paid, and nonassessable.
Common Stock
Voting Rights
Holders of our common stock are entitled to one vote for each share held in the election of directors and in all other matters to be voted on
by the stockholders. There is no cumulative voting in the election of directors. The affirmative vote of the holders of a plurality of the
shares of common stock represented at an annual meeting is required to elect each director.
Dividends and Liquidation Rights
Holders of common stock are entitled to receive dividends as may be declared from time to time by our board of directors out of funds
legally available therefor. In the event of liquidation, dissolution or winding up of the corporation, holders of common stock are to share in
all assets remaining after the payment of liabilities.
Conversion, Redemption and Other Rights
Holders of common stock have no pre-emptive or conversion rights and are not subject to further calls or assessments. There are no
redemption or sinking fund provisions applicable to the common stock. The rights of the holders of the common stock are subject to any
rights that may be fixed for holders of preferred stock.
Preferred Stock
Our Certificate of Incorporation authorizes the issuance of 230,000 shares of undesignated preferred stock, 10,000 shares of Series B
Convertible Preferred Stock, par value $0.05 per share (“Series B Preferred Stock”), 10,000 shares of Series C Convertible Preferred
Stock, par value $0.05 per share (“Series C Preferred Stock”), and 100,000 shares of Series A Junior Participating Preferred Stock, par
value $0.001 per share (“Junior Preferred Stock”). Our board of directors is empowered, without stockholder approval, to designate and
issue additional series of preferred stock with dividend, liquidation, conversion, voting or other rights, including the right to issue
convertible securities with no limitations on conversion, which could adversely affect the voting power or other rights of the holders of our
common stock, substantially dilute a common stockholder’s interest and depress the price of our common stock.
No shares of the Series B Preferred Stock, the Series C Preferred Stock or the Junior Preferred Stock are outstanding. Due to the terms
of the Series C Preferred Stock, no additional shares of Series C Preferred Stock can be issued.
Series B Preferred Stock
Our Certificate of Incorporation authorizes the issuance of 10,000 shares of Series B Preferred Stock, none of which are outstanding and
6,411 of which have been converted to common stock and therefore are not reissuable.
Voting Rights
Each holder of Series B Preferred Stock is entitled to the number of votes equal to the number of whole shares of common stock into
which the shares of Series Preferred Stock held by such holder is then convertible (as adjusted from time to time pursuant to our
Certificate of Incorporation) with respect to any and all matters presented to the stockholders for their action or consideration. Except as
provided by law, holders of Series B Preferred Stock vote together with the holders of common stock as a single class.
2
Dividends and Liquidation Rights
The holders of the Series B Preferred Stock are entitled to a dividend of 8% per annum, payable annually in shares of Series B Preferred
Stock. In addition, when and if our board of directors shall declare a dividend payable with respect to the then outstanding shares of
common stock, the holders of the Series B Preferred Stock are entitled to the amount of dividends per share as would be payable on the
largest number of whole shares of common stock into which each share of Series B Preferred Stock could then be converted.
In the event of liquidation, dissolution or winding up of the company, the holders of Series B Preferred Stock then outstanding will be
entitled to be paid an amount equal to $1,000 per share (subject to adjustment in the event of any stock dividend, stock split, combination
or other similar recapitalization affecting such shares pursuant to our Certificate of Incorporation), plus any dividends declared but unpaid
thereon before any payment is made to the holders of common stock, Junior Preferred Stock or any other class or series of stock ranking
on liquidation junior to the Series B Preferred Stock. After the holders of the Series B Preferred Stock have been paid in full, the remaining
assets of the company will be distributed to the holders of Junior Preferred Stock and common stock, subject to the preferences of the
Junior Preferred Stock.
Conversion, Redemption and Other Rights
Each share of Series B Preferred Stock is convertible into 1.333 shares of common stock. The conversion ratio is subject to an adjustment
upon the issuance of additional shares of common stock for a price below the closing price of the common stock and equitable adjustment
for stock splits, dividends, combinations, reorganizations and similar events.
Subject to certain conditions, after the second anniversary of the issuance of the Series B Preferred Stock, the Company will have the
right, but not the obligation, to redeem the then-outstanding shares of Series B Preferred Stock for cash in an amount calculated pursuant
to the terms of our Certificate of Incorporation.
Junior Preferred Stock
Voting Rights
The holders of the Junior Preferred Stock will have 10,000 votes per share of Junior Preferred Stock on all matters submitted to a vote of
our stockholders, including the election of directors.
Dividends and Liquidation Rights
If our board of directors declares or pays dividends on common stock, the holders of the Junior Preferred Stock would be entitled to
receive a per share dividend payment of 10,000 times the dividend declared per share of common stock. In the event we make a
distribution on the common stock, the holders of the Junior Preferred Stock will be entitled to a per share distribution, in like kind, of
10,000 times such distribution made per share of common stock. In the event of any merger, consolidation or other transaction in which
shares of common stock are exchanged, each share of Junior Preferred Stock will be entitled to receive 10,000 times the amount received
per share of common stock. These rights are protected by customary anti-dilution provisions.
Upon any liquidation, dissolution or winding up, no distribution may be made to the holders of shares of stock ranking junior to the Junior
Preferred Stock unless the holders of the Junior Preferred Stock have received the greater of (i) $37.00 per one one-thousandth share
plus an amount equal to accrued and unpaid dividends and distributions thereon, and (ii) an amount equal to 10,000 times the aggregate
amount to be distributed per share to holders of common stock. Further, no distribution may be made to the holders of stock ranking on a
parity upon liquidation, dissolution or winding up with the Junior Preferred Stock, unless distributions are made ratably on the Junior
Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders of the Junior Preferred
Stock are entitled above and to which the holders of such parity shares are entitled.
Outstanding Warrants
2016 Warrants
On December 16, 2016, we consummated a public offering of an aggregate of 1,670,000 shares of common stock, together with warrants
to purchase up to 2,370,005 shares of common stock. In connection with the offering, we also issued the underwriter a warrant to
purchase up to 33,400 shares of common stock. We refer to the warrants issued to the investors and the underwriter in connection with
the offering as the “2016 Warrants.” The 2016 Warrants were listed on The Nasdaq Capital Market under the symbol “SNGXW”.
The 2016 Warrants expired on December 15, 2021.
Other Warrants
As of March 22, 2022, 59,872 shares of common stock were issuable upon the exercise of warrants other than the 2016 Warrants. Such
warrants expire between 2022 and 2023. As of March 22, 2022, the weighted average exercise price of such warrants was $2.41 per
share. The exercise price and the number of shares of common stock purchasable upon the exercise of each such warrant are subject to
adjustment upon the happening of certain events, such as stock dividends, distributions, and splits.
3
Anti-Takeover Provisions
Provisions in our Certificate of Incorporation and Bylaws may discourage certain types of transactions involving an actual or potential
change of control of our company which might be beneficial to us or our security holders.
As noted above, our Certificate of Incorporation permits our board of directors to issue shares of any class or series of preferred stock in
the future without stockholder approval and upon such terms as our board of directors may determine. The rights of the holders of
common stock will be subject to, and may be adversely affected by, the rights of the holders of any class or series of preferred stock that
may be issued in the future.
Our Bylaws generally provide that any board vacancy, including a vacancy resulting from an increase in the authorized number of
directors, may be filled by a majority of the directors, even if less than a quorum.
Additionally, our Bylaws provide that stockholders must provide timely notice in writing to bring business before an annual meeting of
shareholders or to nominate candidates for election as directors at an annual meeting of shareholders. Notice for an annual meeting is
timely if our Secretary receives the written notice not less than 45 days and no more than 75 days prior to the anniversary of the date that
we mailed proxy materials for the preceding year’s annual meeting. However, if the date of the annual meeting is advanced more than
thirty (30) days prior to, or delayed by more than thirty (30) days after, the anniversary of the preceding year’s annual meeting, notice by
the stockholder to be timely must be delivered not later than the close of business on the later of (i) the 90th day prior to such annual
meeting or (ii) the 10th day following the day on which public announcement of the date of such annual meeting is first made. Our Bylaws
also specify the form and content of a shareholder’s notice. These provisions may prevent shareholders from bringing matters before an
annual meeting of shareholders or from making nominations for directors at an annual meeting of shareholders.
Delaware Anti-Takeover Statute
We are subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”) regulating corporate takeovers. In
general, Section 203 prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in a business
combination with an interested stockholder for a period of three years following the date the person became an interested stockholder
unless:
●
●
●
prior to the date of the transaction, our board of directors approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder;
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced,
calculated as provided under Section 203; or
at or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at
an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the
outstanding voting stock which is not owned by the interested stockholder.
Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the
interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior
to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. We expect the
existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance.
We also anticipate that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of
common stock held by stockholders.
Forum Selection Provisions
As permitted by the DGCL, our Bylaws require, to the fullest extent permitted by law, unless we consent in writing to the selection of an
alternative forum, that the Court of Chancery of the State of Delaware, shall be the sole and exclusive forum for (i) any derivative action or
proceeding brought on behalf of the company, (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer,
other employee or stockholder of the company to the company or the our stockholders, (iii) any action asserting a claim arising pursuant to
any provision of the DGCL, our Certificate of Incorporation or our By-laws or (iv) any action asserting a claim governed by the internal
affairs doctrine.
Further, our Bylaws provided that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the
United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint
asserting a cause of action arising under the Securities Act.
4
Exclusions or Limitations to Forum Selection Provisions
Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the
Exchange Act or the rules and regulations thereunder. Accordingly, the exclusive forum provisions in our Bylaws do not apply to claims
arising under the Exchange Act. The forum selection provisions, however, are intended to apply to the fullest extent permitted by law,
including to actions or claims arising under the Securities Act. However, it is possible that a court could find our forum selection provisions
to be inapplicable or unenforceable with respect to actions or claims arising under the Securities Act. Even if a court accepts that our
forum selection provisions apply to actions or claims arising under the Securities Act, our stockholders shall not be deemed to have
waived compliance with the federal securities laws and the rules and regulations thereunder.
Transfer Agent
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. Its address is 6201 15th
Avenue, Brooklyn, NY 11219 and its telephone number is (718) 921-8200.
5
The following represents a list of Soligenix, Inc.’s subsidiaries:
SUBSIDIARIES OF SOLIGENIX, INC.
Name
Enteron Pharmaceuticals, Inc.
Orasomal Technologies Inc.
Soligenix BioPharma Canada Incorporated
Soligenix UK Limited
Soligenix NE B.V.
Soligenix Biopharma HI, Inc.
Ownership
100.00%
75.30%
100.00%
100.00%
100.00%
100.00%
State of Incorporation
Delaware
Delaware
Canada
United Kingdom
Netherlands
Hawaii
EXHIBIT 21.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements of Soligenix, Inc. on Form S-1 (Nos. 333-
221681 and 333-225226), Form S-3 (Nos. 333-217738, 333-239928 and 333-252153) and Form S-8 (Nos. 333-130801,
333-196941 and 333-208515) of our report dated March 29, 2022, on our audits of the consolidated financial statements as
of December 31, 2021 and 2020 and for each of the years then ended, which report is included in this Annual Report on
Form 10-K to be filed on or about March 29, 2022.
Exhibit 23.1
/s/ EisnerAmper LLP
EISNERAMPER LLP
Iselin, New Jersey
March 29, 2022
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Christopher J. Schaber, Ph.D., certify that:
1. I have reviewed this Form 10-K of the Soligenix, Inc. for the fiscal year ended December 31, 2021;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
March 29, 2022
/s/ Christopher J. Schaber
Christopher J. Schaber, Ph.D.
President and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Jonathan Guarino, certify that:
1.
I have reviewed this Form 10-K of the Soligenix, Inc. for the fiscal year ended December 31, 2021;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
March 29, 2022
/s/ Jonathan Guarino
Jonathan Guarino
Senior Vice President and Chief Financial Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Form 10-K of Soligenix, Inc. (the “Company”) for the fiscal year ended December 31, 2021, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant
to 18 U.S.C. Section 1350, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of
EXHIBIT 32.1
operations of the Company.
March 29, 2022
/s/ Christopher J. Schaber
Christopher J. Schaber, Ph.D.
President and Chief Executive Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Form 10-K of Soligenix, Inc. (the “Company”) for the fiscal year ended December 31, 2021, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant
to 18 U.S.C. Section 1350, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of
EXHIBIT 32.2
operations of the Company.
March 29, 2022
/s/ Jonathan Guarino
Jonathan Guarino
Senior Vice President and Chief Financial Officer