Dr. Christopher Schaber, President and CEO of Soligenix, a company developing drug therapies in rare diseases and areas of unmet medical need, including a treatment for oral mucositis in head and neck cancer patients. Chris, your drug, Dusquetide or SGX942, sounds like a tremendous development. Can you tell us more about it? Christopher Schaber: We believe Dusquetide is an important development, and we will be announcing any day that we will be initiating the Phase 3 pivotal study and opening it up for enrollment. We will now have two pivotal Phase 3 clinical trials actively enrolling patients. The other I am referring to is our synthetic Hyericin (SGX301) for the treatment of cutaneous T-cell lymphoma (CTCL), another drug candidate in the oncology setting. BJ: It seems your stock is grossly undervalued. CS: I think a lot of folks would agree. It’s frustrating at times, but small cap biotech is not for the faint of heart, as you know. We continue to work very diligently on a number of fronts. We are advancing multiple development programs in rare diseases; we are very active on the business development front, and we continue to pursue non-dilutive funding through government grants and contracts, where we have had a reasonable level of success to date. We are very active on the IR and PR side of the business as well. We are working to get our story in front of as many potential investors as possible, both institutional and retail. As you may be aware, back in April the stock had a bit of a run reaching about $5.00, which was nice. It has since pulled back a bit. We still thought we were grossly undervalued, even when the stock was at $5.00. Our mindset is to just keep driving forward with those things that are in our control, such as the execution of our development programs. BJ: You have products here with big markets. Can you take a minute and discuss the significance of the most recent results in oral mucositis? CS: Yes, the oral mucositis market has the potential to be quite significant. Dusquetide, the active ingredient in SGX942, has a mechanism of action that is very unique. It’s a first-in-class, new chemical entity. It not only controls inflammation, but accelerates tissue healing and clears infections. To date, our clinical focus has been oral mucositis in head and neck cancer patients receiving concomitant radiation and chemotherapy, where the incidence of developing oral mucositis is very high because you are concentrating treatment on the head and neck area. This ultimately results in the high incidence of severe oral mucositis, in excess of 75%. When I say “severe”, I am referring to patients that have such significant pain that they can no longer eat and/or drink. Unfortunately, often times this severe oral mucositis leads to breaks or discontinuation of cancer treatment, as well as hospitalization due to malnourishment (if you can’t eat) and dehydration (if you can’t drink). It’s difficult to imagine, but the oral mucositis in the head and neck cancer population can become so severe that some patients will even quit treatment all together, essentially giving up on their cancer therapy. It is truly a devastating side-effect. With Dusquetide’s novel mechanism, we have shown some very good data in multiple preclinical studies, as well as clinically. In the completed Phase 2 study that enrolled 111 head and neck cancer patients, we demonstrated some very positive outcomes. In the acute phase, which is the focus of our therapy, i.e., what impact does it have on severe oral mucositis when patients are receiving their cancer treatment, we were able to reduce the duration of severe oral mucositis in the patients at the highest risk of developing the disease, reducing it by 67% in the drug group compared to placebo. This is dramatic. We took it down from 30 days in the placebo group to only 10 days in the drug group, which was at a Dusquetidein dose of 1.5 milligram per kilogram. We also saw potential positive ancillary benefits. We reduced infection, we reduced opioid use, we saw more tumor complete responders, and we saw increased survival. Most of these were in the acute phase, but some of these important benefits also carried out long term, including a statistical trend in survival at one year post-treatment. As you would imagine, we will be looking at these same important outcomes in the pivotal Phase 3 study as well. Although our focus is the side-effect of the cancer therapy – oral mucositis - you can’t rule out the potential for an impact on the disease itself. The mechanism of action of Dusquetide, in some preliminary animal models, has been shown to have an impact on cancer as well. We are very excited, and anticipate initiating the pivotal Phase 3 study shortly, which we are calling the “DOM–INNATE” study. It stands for Dusquetide treatment in Oral Mucositis – by modulating INNATE immunity, as the Dusquetide works through modulation of the body’s own innate immune system. We think it’s a catchy name for the study and we are excited to begin enrolling approximately 190 subjects. BJ: How many people are going through chemotherapy for head and neck cancer? CS: Oral mucositis in head and neck cancer affects about 90,000 patients in the U.S., and an equal number in Europe. The global market potential here, is a $500M+ market opportunity. BJ: How many people are diagnosed with oral mucositis? CS: As noted, oral mucositis in head and neck cancer is about 180,000 patients in U.S. and Europe. If you start factoring in other regions of the world, it has the potential to reach upwards of 300,000 patients, especially when looking at Asia and other areas. It’s important to note that there is oral mucositis in other cancers as well, but the incidence may not be as high as it is in head and neck cancer. Being a small company, our focus is getting the strongest signal with the smallest number of patients so that we have the potential to get this drug out there as quickly as possible, obviously assuming successful outcome in the Phase 3 study. BJ: Are there any drugs currently attempting the same treatment? CS: There are some drugs earlier in development, but there is nothing currently approved. It’s an area of unmet medical need, and we received Fast Track designation from the FDA. There has been some data out there, with folks showing some preliminary findings. However, from what I can glean from the literature, none of these treatments have the multi-pronged mechanism of action that we have where we reduce the inflammation, clear infection and promote tissue healing. If you think about oral mucositis, it is not only critical to reduce the exaggerated inflammation that causes the overt ulcerations in the mouth and throat, but when you have those open ulcers in the mouth, the infection rates are higher. This is a concern, and our data show that we can clear infection nicely, not only preclinically, but even in our Phase 2 study the incidence of infection was reduced with Dusquetide treatment. As you would imagine, tissue healing is also important, in terms of healing the ulcers as quickly as possible. We have data that show we reduced the ulcerations as well. We are confident in our approach and data, and believe we have a novel way to treat this devastating side effect of cancer treatment that has a significant impact on many patients. BJ: How is the drug administered? CS: Administration is through a short, four minute, IV infusion. The patients go in for their radiation and chemo, Monday through Friday for seven weeks. They will typically get our drug shortly after their radiation treatment on two days of the week. Where we believe we have an advantage as well, is that it’s now well-documented in the literature, that oral mucositis is linked to a dysregulation of the innate immune system. It’s really a systemic issue, not a barrier issue, or an issue that is strictly at the epithelial cells in the mouth. Therefore, we believe a systemic treatment, like we are doing with Dusquetide, is the most relevant approach to combating this disease. Further, the short IV infusion doesn’t impact the patient care at all. It doesn’t create difficulty for the patient or physician during administration of the radiation and chemotherapy. BJ: Do you have a sense of the economics for the drug? CS: We haven’t come out with anything publically as yet, as we are awaiting the outcome of the Phase 3 study. At the end of the day, the data drives pricing. If we are able to show that we can do what we did in the Phase 2 study, there is a number of important hard, clinically-meaningful outcomes that will help these patients. If you look at a drug for oral mucositis that was approved for transplantation patients, a drug called Palafermin, the price ranged from $8,000-$10,000 per course of treatment. In our initial market estimates, we have been conservative with our numbers. We must see what the data shows, both short-term, in controlling and/or reducing the severe oral mucositis, as well as long term, such as with measures like tumor response and survival. These are all important factors in determining a reasonable price for the safe and effective treatment of severe oral mucositis. BJ: You have a 190 patient study, with enrollment initiating soon. Can you give us some more details on the study, and when you expect to see results? CS: What we have publicly announced is that we will be initiating the study mid-year. Current guidance is that we will have data by the first half of 2019. We estimate an approximate 20 month enrollment cycle to get the subjects. We could accelerate that a little bit, but what we typically like to do is have a controlled roll-out. It’s important to enroll quality patients and, when you are doing a study with 200 patients or less, you have to make sure you are enrolling quality patients from the very beginning. With our studies, the first step is to identify strong medical centers that have experience participating in clinical trials. We then closely monitor the first patients enrolled at each of these centers to ensure that each patient is meeting study protocol entry criteria, and that the center is adhering to the protocol and properly capturing the necessary measures in the case report forms. Once we are confident in the centers, we then will open the enrollment a bit more. As the Phase 3 oral mucositis study is multinational, we will initiate enrollment in the U.S. in 2017, and then most likely wait until early 2018 to open enrollment in centers outside U.S. BJ: So you are taking a very careful approach in the management of the clinical trial. CS: Exactly. Not only for the oral mucositis study, but also for our pivotal Phase 3 cutaneous T-cell lymphoma study in approximately 120 patients. As I said before, when you are dealing with studies of 200 or less, you have to be careful that you are getting quality patients. Although enrollment timelines are important, and we try to be very aggressive, it’s all about quality patients and data. For example, with our Phase 3 study with SGX301 (synthetic hypericin) in cutaneous T-cell lymphoma, we recently announced that we were adjusting guidance for completion of that study from the end of this year to the first half of 2018. This decision was driven by maintaining the quality. When the centers were up and running, enrollment was not as rapid as we had anticipated. Although we could have potentially opened up additional centers to participate, we determined that this was not in the best interest of the study. Sometimes it’s better to adjust the timeline slightly to give yourself a higher probability of success. There’s obviously no guarantees, but if you can maintain high quality, that’s ultimately what you’re looking to achieve when executing clinical studies. BJ: Can you discuss milestones and other recent developments with the company? CS: Initiating the Phase 3 study with Dusquetide in oral mucositis in head and neck cancer patients is a very important milestone, as well as the active enrollment in our Phase 3 study in cutaneous T-cell lymphoma. We feel that it is an accomplishment for a company of our size to have two pivotal Phase 3 studies in two unique areas with high unmet medical need. We also have our biodefense business segment, which we did not talk about as yet, that is funded entirely by the U.S. government. A lead candidate here is a heat stable ricin toxin vaccine, called RiVax, currently operating under a $24.7M NIH (National Institute of Health) contract award. We are advancing this novel vaccine to combat bioterrorism. With biodefense, you cannot expose humans to a toxin and then treat them, so it is developed under what is known as the FDA Animal Rule – where you show efficacy in animal models, such as non-human primates and safety of the vaccine itself in humans. Thus far, the data that we have generated with RiVax has been very promising, not only from the efficacy standpoint in animals, but also safety of the vaccine in two Phase 1 human studies. Again, we continue to move in lock-step with the NIH funding to advance this program. We anticipate some additional data before the end of this year that will show advancement of the program. One of the nice things about biodefense is that you have one customer, the government, so from a commercialization standpoint, it’s pretty straightforward. You may not be aware but, at the end of 2016, the U.S. government has now put in place a biodefense priority review voucher (PRV) program. So, products that meet a certain criteria, which our ricin toxin vaccine potentially does, if you are successful in getting FDA approval, you are now given this PRV that allows for one of two options: 1. You can use it with another drug candidate you may be developing to accelerate FDA approval, or, 2. You can sell the PRV to another party, such as big pharma, for cash. The PRVs have sold at varying prices – mostly for pediatric rare diseases – selling for as much as $350M. If you are fortunate enough to reach the finish line and gain FDA approval, you not only have the potential for a large procurement contract with the government, but you may also qualify for a the PRV, which you can turn around and potentially sell to big pharma companies that are looking to accelerate their drug registration review cycles from the standard FDA review of about 10 months or longer, to a six month review. So, if you’re talking about a billion dollar blockbuster drug, as you would imagine, a savings of six months, could result in significant commercial revenue impact. BJ: What is your sense of the time frame as to the clarity of the success with this strategy? CS: You would apply for the PRV at about the time of your new drug application, as it is ultimately the FDA approval that triggers the PRV, if you are fortunate enough to qualify for it. With RiVax®, if all continues to go according to plan, there is the potential to get a read in the next 18-24 months, maybe a bit longer or sooner depending on the data. BJ: Do you have a sense of how many vouchers are out there available for purchase today? Is there a marketplace for these things? CS: I do not have an exact number. Yes, there definitely appears to be a market for them, and folks would be aware that you received one because you would typically announce it. There is a website – priorityreviewvoucher.org that summarizes PRVs. I don’t have the detailed list in front of me, but there is a table on the website that summarizes the PRVs that have been sold to date – and for how much. As you would imagine, with these vouchers, it’s based on supply and demand. Depending upon the time frame of when you get FDA approval and the voucher, and who may be out there on the market, so to speak, with the need. Assuming success, we will obviously be very careful in making sure we optimize its value as much as possible. BJ: It sounds like the company is indeed undervalued. CS: The only thing we can do is make sure the programs are developed and have the funding to advance them. We are always on the lookout for non-dilutive funding such as on the government end and more importantly – through business development. Currently, we have a partnership with SciClone Pharmaceuticals, and we are in active discussion with other companies. You never know if you will cross the finish line until an agreement gets signed; however, we remain confident in our potential to secure additional partnership over the coming year. Time will tell. We remain optimistic. We feel we are advancing some very good science in the company, and we will continue to drive development forward and update the public. Hopefully, the company will be recognized for what it’s created in the not too distant future. BJ: Thanks for taking the time to speak with us Chris. Please keep us updated on Soligenix’s progress. CS: Thank you for having me, Brett. Note: Since the time of this interview, Soligenix has announced (7/27/17) that the Dusquetide Phase 3 Study has been opened for patient enrollment. __________ Note: This interview has been edited and condensed.