Soligenix Positioned To Fill Unmet Medical Need; SGX942 Targeting Oral Mucositis In Patients With Head and Neck Cancer (NasdaqCM: SNGX)

October 04 07:30 2019
Soligenix Positioned To Fill Unmet Medical Need; SGX942 Targeting Oral Mucositis In Patients With Head and Neck Cancer (NasdaqCM: SNGX)

Soligenix (NasdaqCM: SNGX) is nearing the release of its topline data for its late-stage Phase 3, DOM-INNATE trial to treat oral mucositis in patients with head and neck cancer, an unmet medical need. And, as the release date approaches, investors may be looking for any clue they can get as to how the drug is performing. That clue, incidentally, may have been provided by the independent Data Monitoring Committee (DMC), who recently recommended that Soligenix increase its patient enrollment by 70 patients to validate the trial’s 90% statistical significance threshold. Keeping in mind that the DMC had the power to end the trial if it thought the data could not meet its endpoint, it instead asked that the trial sample be increased to maintain a 90% statistical power measurement. That news should be interpreted as good. After all, the DMC is not in the business to put patients at risk of adverse events.

Soligenix’s most recent announcement about the DOM-INNATE trial was published on August 28th, when they announced a positive recommendation from the DMC to continue enrollment in the company’s ongoing Phase 3 trial targeting the treatment of oral mucositis in patients with head and neck cancer. The recommendation from the DMC piqued the interest of those following the study, with many interpreting the request as a clue to how SGX942 may be benefiting study patients. There is consensus on several fronts.

The most common theme on the financial blogs is that the DMC news is a positive event, noting that if not, the trial would have most likely been stopped for futility. Second, the DMC cited no safety concerns, which is a significant win for any drug completing late-stage Phase 3 trials. And, third, instead of limiting the trial, the DMC asked for the company to increase enrollment by 70 patients to maintain statistical power of 90% to validate the studies primary endpoint. It’s that recommendation that inspired investors to make some positive assumptions, noting that with the trial blinded to Soligenix, the DMC may have offered an indication that they like what they see and want to make sure that the study can maintain a 90% statistical power achievement. 

Even better news may be that despite the increase in enrollment to 260 patients from the original 190 study sample size, Soligenix has confidently stated that they are expecting to release topline data during the first half of next year as planned. Thus, the hoped for catalyst remains a near-term event.

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Reading Between The Lines Of The DMC Recommendation

For investors, reading between the lines of the DMC recommendation may prove to be beneficial. After all, when it comes to blinded trials, finding any advantage to gauge interim progress can often mean the difference between investment success and failure.

In this case, both the retail and institutional base has pointed out that the recommendation to increase the sample size may be a promising signal that the company is on track to achieve its primary endpoint. Further, Soligenix’s Chief Medical Officer, Dr. Richard Straube, appears to be taking the DMC recommendation in stride and commented that it is likely that the DMC’s request to increase the trial enrollment may have been required to account for any potential variability observed in the Phase 3 trial that differs from the trial’s original design assumptions. That has led some to speculate that the trial data may be on the cusp of confirming its 90% statistical power; otherwise, the DMC would have likely ended the trial for futility, noting that the end result could not be met. However, that’s not what they did.

Furthermore, Dr. Straube recently provided the markets with an opinion regarding the interim trial data following the DMC’s recommendation. Investors should keep in mind that the interim results are 100% blinded to Soligenix, so any assumptions made by Soligenix are based only on professional and clinical trial experience.

Soligenix’s CMO Provides Insight To Study Design

During a recent Q&A with Zack’s Small Cap Research, Dr. Straube made some poignant observations about the DMC’s request to increase the enrollment numbers. Responding to the increase in sample size as well as to potential concern that the trial was knocked off track, he made it clear that he is not very concerned by the DMC action, saying:

“Nothing is wrong with the study. Given the uncertainties involved with predicting outcomes for any clinical trial, the recommended increase in sample size is not dramatic. Reviewing the medical histories of the patients currently enrolled in the trial, there is nothing to lead us to believe that there is anything other than increased inter-patient variability that always changes between clinical trials. This could easily arise with the expansion of the trial to a larger number of clinical sites and expansion into Europe that was required to complete the larger trial in a reasonable timeframe, and to support the use of the study for a marketing authorization application with the European Health Authorities.”

Additionally, he explained that an increase in a study’s sample size is not uncommon, especially when it’s related to maintaining statistical significance. Also from the Zack’s interview, he offered a layman’s explanation of how sample size and statistical significance can affect a trial, saying,

“I will try to explain without being too technical. Please bear with me. The initial sample size of 190 was a “best estimation” based on both statistical requirements and expected relative outcomes in the treated and control arms of the Phase 2 clinical trial. Statistically, you must decide the degree of risk that you will accept that the trial will be “negative” despite the drug actually working (false negative result) referred to as the power of the trial (statistical jargon “1-β”; in our case set to 90%) and the risk that the trial is “positive” despite the drug actually working (false positive result), referred to as the statistical threshold (in our case set at p

But again, differences between the Phase 2 and Phase 3 study are anticipated given the broader number of clinical centers in more countries included in the Phase 3 study, which was critical to ultimately allow us to pursue marketing approval in Europe and the US, and other jurisdictions, as well as enabling us to complete the trial in a reasonable timeframe.”

The Blinded Results Will Soon Be Known

Combining the known strengths of SGX942- it’s safe, it’s tolerable, and the DMC has no hesitation allowing additional patients to enroll, it’s perhaps more likely than not that the study is progressing on target to meet its primary endpoint. This is a speculative statement. But, acknowledging that the DMC would not subject 70 new patients to a trial that had no chance to meet its 90% statistical significance threshold, it’s a leveraged assumption. Also noting that the trial is 100% blinded to the Soligenix management team, the company pointed out that it’s also fair to consider that a contributing factor of the resizing recommendation may be related to the placebo population, which may be responding in a slightly different way than they did during the Phase 2 study. Such an event is not uncommon.

In fact, Soligenix noted that in almost every clinical study done in recent years to treat oral mucositis, the placebo populations have varied in their response from trial to trial. And, in the DOM-INNATE adaptive trial design, Soligenix may have expected to confront these variables, thereby utilizing interim results to take variability into account and be able to adjust to changing situations.

The interim analysis also has provided Soligenix a unique opportunity to double-check their assumptions on sizing by getting “real-time” information and then adjusting what they are doing. Compared to running a trial off of response rates based solely on historical results that offer a “hope and see” approach to success, Soligenix chose to receive the interim analysis as a proactive measure to address trial progression and response rates.

Yet, some investors question why Soligenix chose such a high statistical power of 90%, when perhaps an 80% power design may have been enough to warrant SGX942 approval. There’s an answer for that from Dr. Straube, as well.

Why 90% Power and How it Affects Potential Approval

A study designed to meet a 90% statistical power measure may appear to be extremely high. And maybe it is. But, Soligenix pointed out that there are critical elements to understanding how power affects a trial design. Dr. Straube recently spoke to the 90% statistical power design by stating,

“I know for those not living clinical development, this concept of power can be difficult to understand. Power basically measures the risk that an efficacious drug does NOT achieve statistical significance. A power of 80% vs. 90% doubles the risk that the drug works but does not achieve statistical significance (that is, would not meet the p-value threshold that is mandated for Phase 3 studies).

We believe SGX942 has the potential to dramatically affect these critically ill patients. This belief is anchored in the very consistent results ranging from preclinical to clinical studies. Therefore, we have determined that the additional sample size to give SGX942 the best opportunity for success is well worthwhile. Since Soligenix remains completely blinded, it is impossible for us to estimate what the sample sizes would be at other powers, but it’s safe to say it would be less.”

Moreover, with sample size being the focus of the DMC recommendation, investors may also be wondering what the results may have been for the 190 patient population. According to Dr. Straube, the increase in enrollment should not be misinterpreted. He pointed out in that same Zack’s interview that,

“We have no idea what the power of the trial would be if the same rates of success in the two treatment groups continued through the remainder of enrollment to 190 patients, other than it is less than 90%.

In fact, we may still have achieved statistical significance at 190 patients; however, you must keep in mind that for the efficacy analysis, the DMC was tasked with providing guidance so that our high power calculation of 90% was maintained, assuming there was a promising and meaningful signal in the primary endpoint, which there obviously appears to have been.”

Of course, no matter the speculation and high hopes, it’s the topline results of the trial that matter most.

Soligenix Nears Topline Data Release For Oral Mucositis Drug Candidate

At the end of the day, both investors and the Soligenix team want positive results. And, as it stands, the chance to meet the trial’s primary endpoint by enrolling 260 evaluable patients stands at 90%. Moreover, analysis of the known data suggests that the failure risk is reduced further with an increased patient population because the trial is based on actual enrollment size measured across sites in the US and Europe. In addition to lowering the chances of an endpoint miss, the increased patient data also increases the chances that many of the trial’s secondary endpoints targeting infection rate and tumor resolution may also demonstrate statistical benefit. Those results could also position SGX942 with important distinguishing factors as it heads toward commercialization.

And, there is a critical note that can’t be understated… Soligenix has stated on multiple occasions that they have the cash resources to complete the trial without the need to raise additional capital. In addition, the company also stated that they do not expect any problems related to enrolling the additional patients and views the feedback from the DMC as an event that strongly suggests that SGX942 is demonstrating therapeutic benefits. Even more of a positive note, it’s not a stretch to conclude that the DMC may have provided a clue that the analysis requires only 70 more patients to conclusively prove that SGX942 provides a meaningful benefit to patients.

While any biotech holds risk ahead of a planned data release, a cumulative series of positive events can often provide a clue to the future. And, for the DOM-INNATE trial, several clues lean toward a positive and compelling scenario. The most significant evidence of that statement may be that the DMC certainly would not subject additional patients to a treatment that was showing little benefit in treating oral mucositis. That’s the primary point that deserves attention.

Moreover, despite the increase to enrollment, Soligenix still expects to release topline data in the first half of 2020. Thus, while the stock may be consolidating at lower levels than a month ago, it’s likely that the followers of Soligenix believe they can time the results and move money elsewhere for the time being. And, while that might be true, it’s also possible that such a strategy can backfire if Soligenix was to make a surprise announcement. When it comes to drugs targeting unmet medical needs, that’s always a possibility.

It’s also noteworthy to add that in addition to the compelling information already provided to the markets, revenue and valuation models by Zack’s Small Cap Research show that the commercialization and potential revenues from SGX942 could push the stock closer to $8.00 per share. That result could deliver a more than 750% return from current levels.

And, based on what investors know, combined with the DMC recommendation, it’s more than fair to speculate that SGX942 appears to be on track to meet its primary endpoint, and ultimately drive shareholder value substantially higher. If that happens, both Zack’s Small Cap Research and the investors that followed their research may be well rewarded.

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