Soligenix Inc (OTCBB:SNGX) Drops Down
tags: SNGX
Last Thursday Soligenix Inc (OTCBB:SNGX) corrected by nearly 4%, dropping to a close at 70 cents per share. On Friday the negative sentiment got even stronger and as a result the stock crashed by 10% and fell to $0.63. Throughout the session over 525 thousand shares changed hands, which is the biggest volume seen by SNGX so far this year and quite a few times bigger than the monthly average of 96 thousand traded shares.
The likely catalyst for the stock’s decline appears to be the 8-K filing that SNGX submitted on June 22. Along with the announcement of the appointment of Ms. Karen Krumeich as the company’s Senior Vice President and Chief Financial Officer the filing contained some rather alarming information. Apparently during the June 16 Annual Meeting of Stockholders an increase of the authorized shares from 50 million to 100 million was approved. Furthermore, it was also decided that the Board of Directors will have the right to implement a reverse stock split at a ratio ranging from 1-for-2 to 1-for-10 in the next three years.
While the initial reaction was indeed rather negative SNGX could definitely recover its losses. The company remains far from the typical biopharmaceutical pannystock and this becomes immediately obvious after a single glance at the latest financial report. As of March 31, 2016, SNGX had:
• $4.26 million cash
• $5.37 million total current assets
• $6.64 million total current liabilities
• $2.63 million revenues
• $1.15 million net loss
While SNGX are still incurring heavy losses the net loss has been cut down significantly from the $4.57 million reported at the end of March 2015. At the same time the revenues have grown by over 200%. The revenues generated by SNGX are coming from the company’s BARDA and NIAID grants and contracts. At the end of May the National Institute of Allergy and Infectious Diseases (NIAID) decided to provide SNGX with an additional $3.2 million in funding for the development of its ricin vaccine, RiVax. The company has so far received $16.7 million under this contract out of the potential $24.7 million that will be granted if all of the contract options get exercised.
SNGX have multiple product candidates in late-stage clinical trials and they are currently planning a pivotal Phase 2b/3 clinical program for their SGX942 drug product. Despite all of its positive aspects the company shouldn’t be approached without caution. Do your own due diligence and don’t underestimate the risks.
