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Maxim Group lowers price target for Soligenix on dilution worries

Analyst Jason McCarthy said the New Jersey biotech’s US$8mln capital raise boosted its balance sheet but created dilution
A syringe
Soligenix shares rallied Monday after the biotech received European and Canadian patents for its ricin toxin vaccine, RiVax

Analysts at Maxim Group lowered the price target Monday for Soligenix Inc. (NASDAQ:SNGX) saying the biotech’s US$8mln capital raise strengthened the firm’s balance sheet, but created equity dilution.   

“On July 2, 2018 Soligenix raised US$8M in capital via an equity financing; 7.8mln shares (3.1mln warrants, US$2.25 exercise price) at the market, US$1.03. Factoring in the associated dilution decreases our price target to US$4, from US$5,” wrote Maxim Group analyst Jason McCarthy.

McCarthy reiterated a Buy rating for Soligenix while acknowledging that the US$8mln capital infusion boosted the firm’s balance sheet.

“The recent capital raise extends the runway into 2H19 and through several catalysts, including phase 3 data for lead assets SGX301 and SGX942, as well as RiVax,” wrote the analyst.

“Each program represents a significant opportunity for Soligenix and upside at the current valuation of the company,” he added.

Meanwhile, shares of Soligenix closed up 2.9% to US$1.08 on Monday after the biotech received European and Canadian patents for its ricin toxin vaccine, RiVax.

"Soligenix continues to advance its RiVax program with funding from the US government," said Soligenix Inc CEO Christopher J. Schaber. "Soligenix is a world leader in ricin toxin vaccine development, with a Phase 2 clinical trial planned to begin this year."

Ricin toxin is a lethal plant-derived toxin and potential biological weapon because of its stability and high potency. There are currently no effective treatments for ricin poisoning. 

The company says that the successful development of an effective vaccine against ricin toxin may act as a deterrent against the actual use of ricin as a biological weapon and could be used to vaccinate military personnel and emergency responders at high risk of potential exposure in the event of a biological attack.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive

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