Biotech Stock Mailbag: Soligenix

BOSTON (TheStreet) -- Thanks for returning to the Biotech Stock Mailbag.

Let's kick things off with an email from Dennis W., who asks:

"I would love you to write about Soligenix(SNGX.OB), as it is in a phase III trial for graft-versus-host disease (GVHD). Since the Osiris Therapeutics(OSIR) trial imploded, Soligenix has the only treatment on the horizon for this disease. At 25 cents per share, this stock seems very undervalued. Thanks for all you do to keep small investors like me informed!"

When I last heard from Soligenix, it was May 2007 and the small drug company was known as DOR Biopharma. The vice chairman at the time, Steve Kanzer, was being physically restrained and forcibly removed from an FDA advisory panel meeting that voted against approving Soligenix's GVHD drug OrBec. (Click here and scroll to photo No. 4 to see Kanzer's terrible, horrible, no good, very bad day.)

In October 2007, the FDA followed through, as expected, and refused to approve OrBec. Over the next two years, DOR worked with the FDA to agree on the design for a new, confirmatory phase III study of OrBec in GVHD patients, which if successful, could be used to re-file the drug with the FDA.

That study began last October; top-line results are expected in the first half of 2011.

OrBec carries the stigma of a drug scorned once by the FDA, but the previous phase III data weren't terrible. OrBec demonstrated a positive effect on the gastrointestinal (GI) manifestations of GVHD -- and OrBec patients lived longer -- but the study failed to meet its primary endpoint mainly because of a bad study design. For this reason, the FDA wanted the company to conduct a confirmatory study.

The primary endpoint of the new study is treatment failure at study day 80, which was one of the positive, statistically significant secondary endpoints in the old study. The new study is also enrolling more patients and is better powered statistically than the old study.