Soligenix(SNGX) - 2024 Q4 - Annual Report

Part I Business Soligenix is a late-stage biopharmaceutical company with two segments: Specialized BioTherapeutics and Public Health Solutions, focusing on rare diseases and biodefense solutions - The company operates through two main segments: Specialized BioTherapeutics for rare diseases and Public Health Solutions for biodefense, supported by government funding[14][15][17] - A key strategy is to advance the confirmatory Phase 3 FLASH2 trial for HyBryte™ in CTCL, expand SGX302 into psoriasis, and seek partners for the SGX942 program for oral mucositis[18] - On June 5, 2024, the company executed a one-for-sixteen reverse stock split, with all share and per-share data restated to reflect this change[11] Specialized BioTherapeutics This segment focuses on HyBryte™ for CTCL in its second Phase 3 trial, alongside SGX302 for psoriasis and dusquetide for inflammatory diseases - The lead product, HyBryte™ (SGX301), a photodynamic therapy for CTCL, began its second confirmatory Phase 3 study (FLASH2) in December 2024, with top-line results anticipated in H2 2026[15][58] - The FDA issued a Refusal to File (RTF) letter in February 2023 for the HyBryte™ NDA, necessitating a second pivotal study, while the company proceeds with the EMA-accepted FLASH2 protocol[52][53][54] - The dusquetide program includes SGX942 for oral mucositis, requiring a second Phase 3 trial, and SGX945 for Behçet's Disease, which initiated a Phase 2a study in Q4 2024[18][25][100] Specialized BioTherapeutics Pipeline Status | Product Candidate | Therapeutic Indication | Stage of Development | | :--- | :--- | :--- | | HyBryte™ | Cutaneous T-Cell Lymphoma | Second Phase 3 trial (FLASH2) initiated Dec 2024 | | SGX302 | Mild-to-Moderate Psoriasis | Phase 2a study ongoing | | SGX942 | Oral Mucositis in Head and Neck Cancer | Awaiting partnership for a second Phase 3 trial | | SGX945 | Aphthous Ulcers in Behçet's Disease | Phase 2a study initiated Q4 2024 | Public Health Solutions This government-funded segment develops biodefense vaccines and therapeutics, including RiVax® for ricin toxin and filovirus vaccines using the ThermoVax® platform - The ThermoVax® platform creates heat-stable vaccines, potentially eliminating cold chain storage, applied to RiVax® and filovirus candidates[17][117][118] - RiVax®, a ricin toxin vaccine candidate, completed Phase 1 trials, received FDA Orphan Drug and Fast Track designations, and secured approximately $25 million in NIH grant funding[143][146][151] - The filovirus vaccine program, in collaboration with the University of Hawai'i, develops thermostabilized Ebola and Marburg vaccines, with a bivalent candidate showing 100% protection in non-human primates[135][137][140] Public Health Solutions Pipeline Status | Product Candidate | Indication | Stage of Development | | :--- | :--- | :--- | | ThermoVax® | Vaccine Thermostability Platform | Pre-clinical | | RiVax® | Vaccine against Ricin Toxin | Phase 1 trials completed | | SGX943 | Therapeutic against Emerging Infectious Diseases | Pre-clinical | Patents and Proprietary Rights The company's IP strategy combines patents, trade secrets, and regulatory exclusivities, covering synthetic hypericin, innate defense regulators, and the ThermoVax® platform - HyBryte™ (synthetic hypericin) is protected by production method patents, with key patents expiring in 2036[211] - The SGX94 (dusquetide) technology is covered by composition of matter patents in the U.S. and abroad, expiring between 2028 and 2034[213] - The ThermoVax® technology is protected by licensed patents, expiring between 2028 and 2040, covering thermostable vaccine methods[214] - The company holds Orphan Drug designations for HyBryte™ (CTCL) and RiVax®, granting seven years of U.S. and ten years of E.U. market exclusivity post-approval[212] Risk Factors The company faces significant risks including historical losses, funding needs, clinical and regulatory hurdles, reliance on government funding and third parties, and IP challenges - The company has an accumulated deficit of $234.0 million as of December 31, 2024, with substantial doubt about its going concern ability without additional financing[232][238][244] - The independent auditor's report includes an explanatory paragraph regarding the company's going concern ability, potentially hindering future financing[232][246] - The Public Health Solutions segment is highly dependent on uncertain government funding, subject to budgetary changes and potential termination[232][263] - Biodefense product development, like RiVax®, relies on the FDA's Animal Rule, posing challenges for efficacy and safety correlation and potential non-acceptance by foreign regulators[232][261] - The company relies on single suppliers for drug substances and third-party manufacturers, creating risks of delays and supply disruptions[232][264] Cybersecurity The CFO manages the company's cybersecurity program, overseen by the Board, integrated into enterprise risk management, with no material incidents reported - The Chief Financial Officer (CFO) is responsible for the company's cybersecurity program and strategy[354] - The Board of Directors oversees cybersecurity risk, receiving annual updates and prompt notification of potentially material incidents[358] - The company has experienced minor cybersecurity incidents, none of which have had a material adverse effect on the business[359] Properties Soligenix leases 6,200 square feet of office space in Princeton, NJ, serving as its corporate headquarters, with the lease expiring in October 2025 - The company's principal executive offices are located in a leased 6,200 square foot space in Princeton, NJ[360] - The current lease expires in October 2025, with a monthly rent of approximately $11,625[360] Legal Proceedings The company reports no legal proceedings as of the current report date - As of the report date, there are no legal proceedings involving the company[361] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under "SNGX," with 3,155,603 shares outstanding as of March 14, 2025, and no history or plans for cash dividends - As of March 14, 2025, 3,155,603 shares of common stock were outstanding[4][369] Common Stock Price Range (SNGX) | Period | High ($) | Low ($) | | :--- | :--- | :--- | | Year Ended Dec 31, 2023 | | | | First Quarter | 129.57 | 28.00 | | Second Quarter | 67.20 | 10.26 | | Third Quarter | 11.86 | 6.73 | | Fourth Quarter | 32.00 | 6.08 | | Year Ended Dec 31, 2024 | | | | First Quarter | 19.20 | 8.89 | | Second Quarter | 14.92 | 2.50 | | Third Quarter | 14.83 | 1.83 | | Fourth Quarter | 4.87 | 2.65 | - The company has never paid cash dividends and does not intend to in the foreseeable future, retaining earnings for business operations[370] Management's Discussion and Analysis of Financial Condition and Results of Operations In FY2024, net loss increased to $8.3 million due to lower grant revenue and a 58% rise in R&D expenses to $5.2 million, with cash at $7.8 million, raising going concern doubts beyond 2025 Financial Performance (2024 vs. 2023) | Metric | 2024 ($) | 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | 119,371 | 839,359 | -86% | | Gross Profit | 0 | 97,311 | -100% | | R&D Expenses | 5,223,589 | 3,312,699 | +58% | | G&A Expenses | 4,215,908 | 4,482,552 | -6% | | Net Loss | 8,266,576 | 6,140,730 | +35% | - The increase in R&D expenses was primarily due to preliminary costs for initiating the Phase 2 Behçet's Disease study and the second confirmatory Phase 3 CTCL trial[399] - As of December 31, 2024, cash and cash equivalents totaled $7.8 million, with management expressing substantial doubt about the company's ability to continue as a going concern beyond the end of 2025 without additional financing[411][412] R&D Expenses by Program (2024 vs. 2023) | Program | 2024 Expense ($) | 2023 Expense ($) | | :--- | :--- | :--- | | RiVax® and ThermoVax® | 253,994 | 133,186 | | SGX942 (Dusquetide) | (330,257) | (28,570) | | HyBryte™ (SGX301) | 4,691,803 | 2,698,609 | | Other | 608,049 | 509,474 | | Total | 5,223,589 | 3,312,699 | Financial Statements and Supplementary Data This section presents the audited consolidated financial statements for 2024 and 2023, including balance sheets, statements of operations, and cash flows, along with notes and the auditor's report from Cherry Bekaert LLP - The independent auditor's report from Cherry Bekaert LLP expresses substantial doubt about the company's going concern ability due to recurring losses and negative operating cash flows[658] Consolidated Balance Sheet Highlights (as of Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 7,819,514 | 8,446,158 | | Total Assets | 8,966,483 | 9,797,326 | | Total Liabilities | 4,848,412 | 7,274,904 | | Total Shareholders' Equity | 4,118,071 | 2,522,422 | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Total Revenues | 119,371 | 839,359 | | Loss from Operations | (9,439,497) | (7,697,940) | | Net Loss | (8,266,576) | (6,140,730) | | Basic and Diluted Net Loss Per Share | (4.98) | (12.66) | Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes identified - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[443] - Based on a COSO framework assessment, management concluded that internal control over financial reporting was effective as of December 31, 2024[446] Part III Directors, Executive Officers and Corporate Governance This section details biographical information for directors and executive officers, board structure, risk oversight, committee compositions, and adopted corporate governance policies - Dr. Christopher J. Schaber serves as both Chairman of the Board and CEO, a structure deemed in the company's best interest[451][465] - The Board of Directors has three standing committees: Audit, Compensation, and Nominating and Corporate Governance, with independent director members[472][473] - The company adopted a Nasdaq-compliant clawback policy in 2023 to recover excess incentive-based compensation from executive officers upon accounting restatement[482] Executive Compensation This section details Named Executive Officer compensation for 2023-2024, including CEO Christopher J. Schaber's total compensation of $832,627 in 2024, and outlines employment agreements and equity award practices Summary Compensation for Named Executive Officers | Name | Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Christopher J. Schaber | CEO & President | 2024 | 540,255 | 108,051 | 148,950 | 832,627 | | | | 2023 | 519,476 | 72,727 | 75,482 | 700,484 | | Jonathan Guarino | CFO & Senior VP | 2024 | 254,800 | 42,806 | 66,200 | 399,177 | | | | 2023 | 245,000 | 31,605 | 45,289 | 354,693 | - The Compensation Committee engaged Setren & Associates, Inc. in 2024 to review and recommend on the executive compensation program[483][485] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 14, 2025, directors and executive officers collectively owned 2.67% of common stock, with no 5%+ beneficial owners, and 5,770,122 shares available under the 2015 Equity Incentive Plan - As of March 14, 2025, all directors and executive officers as a group beneficially owned 86,401 shares, representing 2.67% of the class[509] - The company is not aware of any person beneficially owning more than 5% of its outstanding common stock as of the reporting date[508] - As of December 31, 2024, 5,770,122 shares were available for future issuance under the company's 2015 Equity Incentive Plan[512][514] Principal Accountant Fees and Services Cherry Bekaert LLP billed $214,463 in 2024 and $59,870 in 2023 exclusively for audit services, all pre-approved by the audit committee Accountant Fees Billed | Fee Category | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Audit Fees | 214,463 | 59,870 | | Total | 214,463 | 59,870 | - All fees paid to the principal accountant were exclusively for audit services, with no fees billed for tax or other services[521][522][523] Part IV Exhibits and Financial Statement Schedules This section lists consolidated financial statements and a comprehensive index of exhibits, including corporate governance documents, material contracts, and certifications - Lists all financial statements included in the filing, starting on page F-1[526] - Includes a detailed index of exhibits filed with the 10-K, such as corporate governance documents, material contracts, and executive employment agreements[527][529][532]