Asfiled with the Securities and Exchange Commission on November 20, 2017.

RegistrationNo. 333-_________ 

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON,D.C. 20549

FORMS-1

REGISTRATIONSTATEMENT

 UNDERTHE SECURITIES ACT OF 1933

SOLIGENIX,INC.

(Exactname of registrant as specified in its charter)

Soligenix,Inc.

29Emmons Drive, Suite B-10

Princeton,New Jersey 08540

(609)538-8200

(Address,including zip code, and telephone number, including area code,

ofregistrant’s principal executive offices)

ChristopherJ. Schaber, Ph.D.

Presidentand Chief Executive Officer

Soligenix,Inc.

29Emmons Drive, Suite B-10

Princeton,New Jersey 08540

(609)538-8200

(Name,address, including zip code, and telephone number,

includingarea code, of agent for service)

withcopies to:

DriscollR. Ugarte, Esq.
Duane Morris LLP
5100 Town Center Circle, Suite 650
Boca Raton, Florida 33486
(561) 962-2100

Approximatedate of commencement of proposed sale to the public: From time to time, at the discretion of the selling stockholders, afterthe effective date of this registration statement.

Ifany of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933 check the following box: ☒

Ifthis Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, pleasecheck the following box and list the Securities Act registration statement number of the earlier effective registration statementfor the same offering.  ☐

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box andlist the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box andlist the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the SecuritiesAct.  ☐

CALCULATIONOF REGISTRATION FEE

TheRegistrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date untilthe Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter becomeeffective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effectiveon such date as the Commission, acting pursuant to Section 8(a), may determine.

Theinformation in this preliminary prospectus is not complete and may be changed. The selling stockholders shall not sell these securitiesuntil the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus isnot an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or other jurisdictionwhere the offer or sale is not permitted.

SOLIGENIX,INC.

982,000SHARES OF COMMON STOCK

Thisprospectus relates to the sale from time to time of up to 982,000 shares of our common stock by the selling stockholders namedin this prospectus in the section “Selling Stockholders,” including their pledgees, assignees and successors-in-interest,whom we collectively refer to in this document as the “Selling Stockholders.”

The shares of common stock being offered by the Selling Stockholders were issued pursuant to the securities purchase agreementdated November 2, 2017, pursuant to which we issued, in a private placement, to the Selling Stockholders an aggregate of 982,000shares of our common stock. In a concurrent public offering, we issued an aggregate of 1,575,500 shares of our common stock, including1,320,500 shares issued to the Selling Stockholders or their affiliates. In connection with the private placement and the publicoffering, we issued the placement agent warrants to purchase up to 51,150 shares of our common stock as partial payment of placementagent fees. Neither the warrants issued to the placement agent nor the shares underlying such warrants are being offered for saleby this prospectus. The common stock offered by this prospectus shall be adjusted to cover any additional securities as may becomeissuable to prevent dilution resulting from stock splits, stock dividends or similar transactions. 

Soligenix,Inc. is not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares by theSelling Stockholders. References in this prospectus to the “Company,” “we,” “our,” and “us”refer to Soligenix, Inc.

The Selling Stockholdersmay sell the shares of common stock described in this prospectus in a number of different ways and at varying prices. See “Planof Distribution” beginning on page 70 for more information about how the Selling Stockholders may sell the shares of commonstock being registered pursuant to this prospectus.

Wehave paid and will pay the expenses incurred in registering the shares, including legal and accounting fees. See “Plan ofDistribution.”

Our common stock andour common stock warrant issued in connection with our December 2016 public offering are traded on The Nasdaq Capital Market underthe symbols “SNGX” and “SNGXW,” respectively. On November 15, 2017, the last reported closing sales pricesof our common stock and our common stock warrant issued in connection with our 2016 public offering on The Nasdaq Capital Marketwere $2.20 per share and $0.61 per warrant.

Brokersor dealers effecting transactions in these shares should confirm that the shares are registered under applicable state securitieslaws or that an exemption from registration is available.

Ourbusiness and an investment in our securities involves significant risks, including those set forth in the “Risk Factors”section of this prospectus beginning on page 4.

Neitherthe Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities orpassed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Thedate of this prospectus is ___________________, 2017

Tableof Contents

Youshould rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone toprovide you with different information.

Wehave not authorized the placement agent or any underwriters, brokers or dealers to make an offer of the units in any jurisdictionwhere the offer is not permitted.

Youshould not assume that the information in this prospectus is accurate as of any date other than the date on the front of thisprospectus.

RISKFACTORS

Aninvestment in our securities involves a high degree of risk. You should carefully consider the following information about theserisks, together with the other information about these risks contained in this prospectus, as well as the other information containedin this prospectus generally, before deciding to buy our securities. Any of the risks we describe below could adversely affectour business, financial condition, operating results or prospects. The market prices for our securities could decline if one ormore of these risks and uncertainties develop into actual events and you could lose all or part of your investment. Additionalrisks and uncertainties that we do not yet know of, or that we currently think are immaterial, may also impair our business operations.You should also refer to the other information contained in this prospectus, including our financial statements and the relatednotes.

RisksRelated to our Business

Wehave had significant losses and anticipate future losses; if additional funding cannot be obtained, we may reduce or discontinueour product development and commercialization efforts.

We have experiencedsignificant losses since inception and, at September 30, 2017, had an accumulated deficit of approximately $155.1 million. We expectto incur additional operating losses in the future and expect our cumulative losses to increase. As of September 30, 2017, we hadapproximately $5.0 million in cash and cash equivalents available. Based on our projected budgetary needs, funding from existingcontracts and grants over the next two years, sales to the purchasers under our existing equity lines, and sales in the privateplacement and the concurrent public offering in November 2017, we expect to be able to maintain the current level of our operationsthrough at least December 31, 2018.

InSeptember 2014, we entered into a contract with the National Institutes of Health (“NIH”) for the development of RiVax®to protect against exposure to ricin toxin that would provide up to $24.7 million of funding in the aggregate over six years ifoptions to extend the contract are exercised by the NIH. In September 2013, we entered into contracts with NIAID and BARDA forthe development of OrbeShield^® that would provide up to $32.7 million of funding in the aggregate if options toextend the contracts are exercised by BARDA and the NIH. We have received approximately $18 million in combined BARDA and NIHcontract funding for the development of OrbeShield^®. We have completed the contract with NIAID and the BARDA contractbase period, with BARDA electing not to extend the contract. In addition, we were awarded two separate grants from the NIH ofapproximately $1.5 million each to support of our pivotal Phase 3 trials of SGX301 for the treatment of Cutaneous T-Cell Lymphomaand SGX942 for the treatment of Oral Mucositis in head and neck cancer. Our biodefense grants have an overhead component thatallows us an agency-approved percentage over our incurred costs. We estimate that the overhead component associated with our existingcontracts and grants will fund some fixed costs for direct employees working on these contracts and grants as well as other administrativecosts. We have approximately $20.6 million in awarded contract and grant funding, assuming the NIAID options are exercised forthe development of RiVax®. BARDA has elected not to fund the additional options remaining under the contract.

Ourproduct candidates are positioned for or are currently in clinical trials, and we have not yet generated any significant revenuesfrom sales or licensing of these product candidates. From inception through September 30, 2017, we have expended approximately$74.1 million developing our current product candidates for pre-clinical research and development and clinical trials, and wecurrently expect to spend approximately $10.5 million over the 12 month period from September 30, 2017 in connection with thedevelopment of our therapeutic and vaccine products, licenses, employment agreements, and consulting agreements, of which approximately$5.5 million is expected to be reimbursed through our existing government contracts and grants.

Wehave no control over the resources and funding NIH, BARDA and NIAID may devote to our programs, which may be subject to periodicrenewal and which generally may be terminated by the government at any time for convenience. Any significant reductions in thefunding of U.S. government agencies or in the funding areas targeted by our business could materially and adversely affect ourbiodefense program and our results of operations and financial condition. If we fail to satisfy our obligations under the governmentcontracts, the applicable Federal Acquisition Regulations allow the government to terminate the agreement in whole or in part,and we may be required to perform corrective actions, including but not limited to delivering to the government any incompletework. If NIH, BARDA or NIAID do not exercise future funding options under the contracts or grants, terminate the funding or failto perform their responsibilities under the agreements or grants, it could materially impact our biodefense program and our financialresults.

Unlessand until we are able to generate sales or licensing revenue from one of our product candidates, we will require additional fundingto meet these commitments, sustain our research and development efforts, provide for future clinical trials, and continue ouroperations. There can be no assurance we can raise such funds. If additional funds are raised through the issuance of equity securities,stockholders may experience dilution of their ownership interests, and the newly issued securities may have rights superior tothose of the common stock. If additional funds are raised by the issuance of debt, we may be subject to limitations on our operations.If we cannot raise such additional funds, we may have to delay or stop some or all of our drug development programs.

Ifwe are unable to develop our product candidates, our ability to generate revenues and viability as a company will be significantlyimpaired.

Inorder to generate revenues and profits, our organization must, along with corporate partners and collaborators, positively research,develop and commercialize our technologies or product candidates. Our current product candidates are in various stages of earlyclinical and pre-clinical development and will require significant further funding, research, development, pre-clinical and/orclinical testing, regulatory approval and commercialization, and are subject to the risks of failure inherent in the developmentof products based on innovative or novel technologies. Specifically, each of the following is possible with respect to any ofour product candidates:

Ifany of the risks set forth above occur, or if we are unable to obtain the necessary regulatory approvals as discussed below, wemay be unable to develop our technologies and product candidates and our business will be seriously harmed. Furthermore, for reasonsincluding those set forth below, we may be unable to commercialize or receive royalties from the sale of any other technologywe develop, even if it is shown to be effective, if:

Weexpect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficultto predict our future performance.

Weare a late-stage biopharmaceutical company. Our operations to date have been primarily limited to developing our technology andundertaking pre-clinical studies and clinical trials of our product candidates in our two active business segments, BioTherapeuticsand Vaccines/BioDefense. We have not yet obtained regulatory approvals for any of our product candidates. Consequently, any predictionsmade about our future success or viability may not be as accurate as they could be if we had commercialized products. Our financialcondition has varied significantly in the past and will continue to fluctuate from quarter-to-quarter or year-to-year due to avariety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuationsinclude other factors described elsewhere in this prospectus and also include:

Accordingly,the results of any quarterly or annual periods should not be relied upon as indications of future operating performance.

Wehave no approved products on the market and therefore do not expect to generate any revenues from product sales in the foreseeablefuture, if at all.

Todate, we have no approved product on the market and have not generated any significant product revenues. We have funded our operationsprimarily from sales of our securities and from government contracts and grants. We have not received, and do not expect to receivefor at least the next several years, if at all, any revenues from the commercialization of our product candidates. To obtain revenuesfrom sales of our product candidates, we must succeed, either alone or with third parties, in developing, obtaining regulatoryapproval for, manufacturing and marketing drugs with commercial potential or successfully obtain government procurement or stockpilingagreements. We may never succeed in these activities, and we may not generate sufficient revenues to continue our business operationsor achieve profitability.

Ourbusiness is subject to extensive governmental regulation, which can be costly, time consuming and subjects us to unanticipateddelays.

Ourbusiness is subject to very stringent federal, foreign, state and local government laws and regulations, including the FederalFood, Drug and Cosmetic Act, the Environmental Protection Act, the Occupational Safety and Health Act, and state and local counterpartsto these acts. These laws and regulations may be amended, additional laws and regulations may be enacted, and the policies ofthe United States Food and Drug Administration (the “FDA”) and other regulatory agencies may change.

Theregulatory process applicable to our products requires pre-clinical and clinical testing of any product to establish its safetyand efficacy. This testing can take many years, is uncertain as to outcome, and requires the expenditure of substantial capitaland other resources. We estimate that the clinical trials of our product candidates that we have planned will take at least severalyears to complete. Furthermore, failure can occur at any stage of the trials, and we could encounter problems that cause us toabandon or repeat clinical trials. Favorable results in early studies or trials, if any, may not be repeated in later studiesor trials. Even if our clinical trials are initiated and completed as planned, we cannot be certain that the results will supportour product candidate claims. Success in preclinical testing, Phase 1 and Phase 2 clinical trials does not ensure that later Phase2 or Phase 3 clinical trials will be successful. In addition, we, the FDA or other regulatory authorities may suspend clinicaltrials at any time if it appears that we are exposing participants to unacceptable health risks or the FDA or other regulatoryauthorities find deficiencies in our submissions or conduct of our trials.

Wemay not be able to obtain, or we may experience difficulties and delays in obtaining, necessary domestic and foreign governmentalclearances and approvals to market a product. Also, even if regulatory approval of a product is granted, that approval may entaillimitations on the indicated uses for which the product may be marketed.

Followingany regulatory approval, a marketed product and its manufacturer are subject to continual regulatory review. Later discovery ofproblems with a product or manufacturer may result in restrictions on such product or manufacturer. These restrictions may includeproduct recalls and suspension or withdrawal of the marketing approval for the product. Furthermore, the advertising, promotionand export, among other things, of a product are subject to extensive regulation by governmental authorities in the U.S. and othercountries. If we fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawalof regulatory approvals, product recalls, seizure of products, operating restrictions and/or criminal prosecution.

Theremay be unforeseen challenges in developing our biodefense products.

Fordevelopment of biodefense vaccines and therapeutics, the FDA has instituted policies that are expected to result in acceleratedapproval. This includes approval for commercial use using the results of animal efficacy trials, rather than efficacy trials inhumans, referred to as the Animal Rule. However, we will still have to establish that the vaccines we are developing are safein humans at doses that are correlated with the beneficial effect in animals. Such clinical trials will also have to be completedin distinct populations that are subject to the countermeasures; for instance, the very young and the very old, and in pregnantwomen, if the countermeasure is to be licensed for civilian use. Other agencies will have an influence over the risk benefit scenariosfor deploying the countermeasures and in establishing the number of doses utilized in the Strategic National Stockpile. We maynot be able to sufficiently demonstrate the animal correlation to the satisfaction of the FDA, as these correlates are difficultto establish and are often unclear. Invocation of the Animal Rule may raise issues of confidence in the model systems even ifthe models have been validated. For many of the biological threats, the animal models are not available and we may have to developthe animal models, a time-consuming research effort. There are few historical precedents, or recent precedents, for the developmentof new countermeasure for bioterrorism agents. Despite the Animal Rule, the FDA may require large clinical trials to establishsafety and immunogenicity before licensure and it may require safety and immunogenicity trials in additional populations. Approvalof biodefense products may be subject to post-marketing studies, and could be restricted in use in only certain populations. Thegovernment’s biodefense priorities can change, which could adversely affect the commercial opportunity for the productswe are developing. Further, other countries have not, at this time, established criteria for review and approval of these typesof products outside their normal review process, i.e., there is no Animal Rule equivalent, and consequently there can be no assurancethat we will be able to make a submission for marketing approval in foreign countries based on such animal data.

Additionally,few facilities in the United States and internationally have the capability to test animals with anthrax or ricin, or otherwiseassist us in qualifying the requisite animal models. We have to compete with other biodefense companies for access to this limitedpool of highly specialized resources. We therefore may not be able to secure contracts to conduct the testing in a predictabletimeframe or at all.

Weare dependent on government funding, which is inherently uncertain, for the success of our biodefense operations.

Weare subject to risks specifically associated with operating in the biodefense industry, which is a new and unproven business area.We do not anticipate that a significant commercial market will develop for our biodefense products. Because we anticipate thatthe principal potential purchasers of these products, as well as potential sources of research and development funds, will bethe U.S. government and governmental agencies, the success of our biodefense division will be dependent in large part upon governmentspending decisions. The funding of government programs is dependent on budgetary limitations, congressional appropriations andadministrative allotment of funds, all of which are inherently uncertain and may be affected by changes in U.S. government policiesresulting from various political and military developments. Our receipt of government funding is also dependent on our abilityto adhere to the terms and provisions of the original grant and contract documents and other regulations. We can provide no assurancethat we will receive or continue to receive funding for grants and contracts we have been awarded. The loss of government fundscould have a material adverse effect on our ability to progress our biodefense business.

Ifthe parties we depend on for supplying our drug substance raw materials and certain manufacturing-related services do not timelysupply these products and services, it may delay or impair our ability to develop, manufacture and market our products. We donot have or anticipate having internal manufacturing capabilities.

Werely on suppliers for our drug substance raw materials and third parties for certain manufacturing-related services to producematerial that meets appropriate content, quality and stability standards, which material will be used in clinical trials of ourproducts and, after approval, for commercial distribution. To succeed, clinical trials require adequate supplies of drug substanceand drug product, which may be difficult or uneconomical to procure or manufacture. We and our suppliers and vendors may not beable to (i) produce our drug substance or drug product to appropriate standards for use in clinical studies, (ii) perform underany definitive manufacturing, supply or service agreements with us or (iii) remain in business for a sufficient time to be ableto develop, produce, secure regulatory approval of and market our product candidates. If we do not maintain important manufacturingand service relationships, we may fail to find a replacement supplier or required vendor or develop our own manufacturing capabilitieswhich could delay or impair our ability to obtain regulatory approval for our products and substantially increase our costs ordeplete profit margins, if any. If we do find replacement manufacturers and vendors, we may not be able to enter into agreementswith them on terms and conditions favorable to us and, there could be a substantial delay before a new facility could be qualifiedand registered with the FDA and foreign regulatory authorities.

Werely on third parties for pre-clinical and clinical trials of our product candidates and, in some cases, to maintain regulatoryfiles for our product candidates. If we are not able to maintain or secure agreements with such third parties on acceptable terms,if these third parties do not perform their services as required, or if these third parties fail to timely transfer any regulatoryinformation held by them to us, we may not be able to obtain regulatory approval for, or commercialize, our product candidates.

Werely on academic institutions, hospitals, clinics and other third-party collaborators for preclinical and clinical trials of ourproduct candidates. Although we monitor, support, and/or oversee our pre-clinical and clinical trials, because we do not conductthese trials ourselves, we have less control over the timing and cost of these studies and the ability to recruit trial subjectsthan if we conducted these trials wholly by ourselves. If we are unable to maintain or enter into agreements with these thirdparties on acceptable terms, or if any such engagement is terminated, we may be unable to enroll patients on a timely basis orotherwise conduct our trials in the manner we anticipate. In addition, there is no guarantee that these third parties will devoteadequate time and resources to our studies or perform as required by a contract or in accordance with regulatory requirements,including maintenance of clinical trial information regarding our product candidates. If these third parties fail to meet expecteddeadlines, fail to timely transfer to us any regulatory information, fail to adhere to protocols or fail to act in accordancewith regulatory requirements or our agreements with them, or if they otherwise perform in a substandard manner or in a way thatcompromises the quality or accuracy of their activities or the data they obtain, then preclinical and/or clinical trials of ourproduct candidates may be extended, delayed or terminated, or our data may be rejected by the FDA or regulatory agencies.

Themanufacturing of our products is a highly exacting process, and if we or one of our materials suppliers encounter problems manufacturingour products, our business could suffer.

TheFDA and foreign regulators require manufacturers to register manufacturing facilities. The FDA and foreign regulators also inspectthese facilities to confirm compliance with current Good Manufacturing Practice (“cGMP”) or similar requirements thatthe FDA or foreign regulators establish. We, or our materials suppliers, may face manufacturing or quality control problems causingproduct production and shipment delays or a situation where we or the supplier may not be able to maintain compliance with theFDA’s cGMP requirements, or those of foreign regulators, necessary to continue manufacturing our drug substance. Any failureto comply with cGMP requirements or other FDA or foreign regulatory requirements could adversely affect our clinical researchactivities and our ability to market and develop our products.

Wemay use our financial and human resources to pursue a particular research program or product candidate and fail to capitalizeon programs or product candidates that may be more profitable or for which there is a greater likelihood of success.

Becausewe have limited financial and human resources, we are currently focusing on the regulatory approval of certain product candidates.As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that laterprove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercialproducts or profitable market opportunities. Our spending on existing and future product candidates for specific indications maynot yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particularproduct candidate, we may relinquish valuable rights to that product candidate through strategic alliance, licensing or otherroyalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercializationrights to such product candidate, or we may allocate internal resources to a product candidate in an area in which it would havebeen more advantageous to enter into a partnering arrangement.

Evenif approved, our products will be subject to extensive post-approval regulation.

Oncea product is approved, numerous post-approval requirements apply. Among other things, the holder of an approved New Drug Application(“NDA”) is subject to periodic and other FDA monitoring and reporting obligations, including obligations to monitorand report adverse events and instances of the failure of a product to meet the specifications in the NDA. Application holdersmust submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling,or manufacturing process. Application holders must also submit advertising and other promotional material to the FDA and reporton ongoing clinical trials.

Dependingon the circumstances, failure to meet these post-approval requirements can result in criminal prosecution, fines, injunctions,recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals,or refusal to allow us to enter into supply contracts, including government contracts. In addition, even if we comply with FDAand other requirements, new information regarding the safety or effectiveness of a product could lead the FDA to modify or withdrawproduct approval.

Evenif we obtain regulatory approval to market our product candidates, our product candidates may not be accepted by the market.

Evenif the FDA approves one or more of our product candidates, physicians and patients may not accept it or use it. Even if physiciansand patients would like to use our products, our products may not gain market acceptance among healthcare payors such as managedcare formularies, insurance companies or government programs such as Medicare or Medicaid. Acceptance and use of our productswill depend upon a number of factors including: perceptions by members of the health care community, including physicians, aboutthe safety and effectiveness of our drug or device product; cost-effectiveness of our product relative to competing products;availability of reimbursement for our product from government or other healthcare payers; and effectiveness of marketing and distributionefforts by us and our licensees and distributors, if any.

Thedegree of market acceptance of any product that we develop will depend on a number of factors, including:

Ourproduct candidates, if successfully developed, will compete with a number of products manufactured and marketed by major pharmaceuticalcompanies, biotechnology companies and manufacturers of generic drugs. Our products may also compete with new products currentlyunder development by others. Physicians, patients, third-party payors and the medical community may not accept and utilize anyof our product candidates. If our products do not achieve market acceptance, we will not be able to generate significant revenuesor become profitable.

Becausewe expect sales of our current product candidates, if approved, to generate substantially all of our product revenues for theforeseeable future, the failure of these products to find market acceptance would harm our business and could require us to seekadditional financing.

Wedo not have extensive sales and marketing experience and our lack of experience may restrict our success in commercializing someof our product candidates.

Wedo not have extensive experience in marketing or selling pharmaceutical products whether in the U.S. or internationally. To obtainthe expertise necessary to successfully market and sell any of our products, the development of our own commercial infrastructureand/or collaborative commercial arrangements and partnerships will be required. Our ability to make that investment and also executeour current operating plan is dependent on numerous factors, including, the performance of third party collaborators with whomwe may contract.

Ourproducts, if approved, may not be commercially viable due to change in health care practice and third party reimbursement limitations.

Recentinitiatives to reduce the federal deficit and to change health care delivery are increasing cost-containment efforts. We anticipatethat Congress, state legislatures and the private sector will continue to review and assess alternative benefits, controls onhealth care spending through limitations on the growth of private health insurance premiums and Medicare and Medicaid spending,price controls on pharmaceuticals, and other fundamental changes to the health care delivery system. Any changes of this typecould negatively impact the commercial viability of our products, if approved. Our ability to successfully commercialize our productcandidates, if they are approved, will depend in part on the extent to which appropriate reimbursement codes and authorized costreimbursement levels of these products and related treatment are obtained from governmental authorities, private health insurersand other organizations, such as health maintenance organizations. In the absence of national Medicare coverage determination,local contractors that administer the Medicare program may make their own coverage decisions. Any of our product candidates, ifapproved and when commercially available, may not be included within the then current Medicare coverage determination or the coveragedetermination of state Medicaid programs, private insurance companies or other health care providers. In addition, third-partypayers are increasingly challenging the necessity and prices charged for medical products, treatments and services.

Ourproduct candidates may cause serious adverse events or undesirable side effects which may delay or prevent marketing approval,or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limittheir sales.

Seriousadverse events or undesirable side effects from any of our product candidates could arise either during clinical development or,if approved, after the approved product has been marketed. The results of future clinical trials may show that our product candidatescause serious adverse events or undesirable side effects, which could interrupt, delay or halt clinical trials, resulting in delayof, or failure to obtain, marketing approval from the FDA and other regulatory authorities.

Ifany of our product candidates cause serious adverse events or undesirable side effects:

Anyof these events could prevent us from achieving or maintaining market acceptance of the affected product or could substantiallyincrease commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues fromthe sale of our products.

Ifwe fail to obtain or maintain orphan drug exclusivity for our product candidates, our competitors may sell products to treat thesame conditions and our revenue will be reduced.

Underthe Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to treat a rare disease or condition,defined as a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in theUnited States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in theUnited States. In the European Union, the European Medicines Agency’s Committee for Orphan Medicinal Products grants orphandrug designation to promote the development of products that are intended for the diagnosis, prevention, or treatment of a life-threateningor chronically debilitating condition affecting not more than five in 10,000 persons in the European Union. Additionally, designationis granted for products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating orserious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficientto justify the necessary investment in developing the drug or biological product or where there is no satisfactory method of diagnosis,prevention, or treatment, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition.

Inthe United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towardsclinical trial costs, tax advantages, and user-fee waivers. In addition, if a product receives the first FDA approval for theindication for which it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may notapprove any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances,such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assuresufficient product quantity. In the European Union, orphan drug designation entitles a party to financial incentives such as reductionof fees or fee waivers and ten years of market exclusivity following drug or biological product approval. This period may be reducedto six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficientlyprofitable not to justify maintenance of market exclusivity.

Eventhough we have orphan drug designation for SGX301 in the United States and Europe, and SGX203, RiVax® and OrbeShield®in the United States, we may not be the first to obtain marketing approval for any particular orphan indication due to the uncertaintiesassociated with developing drugs or biologic products. Further, even if we obtain orphan drug exclusivity for a product, thatexclusivity may not effectively protect the product from competition because different drugs with different active moieties canbe approved for the same condition. Absent patent or other intellectual property protection, even after an orphan drug is approved,the FDA or European Medicines Agency may subsequently approve the same drug with the same active moiety for the same conditionif the FDA or European Medicines Agency concludes that the later drug is safer, more effective, or makes a major contributionto patient care.

Federaland/or state health care reform initiatives could negatively affect our business.

Theavailability of reimbursement by governmental and other third-party payers affects the market for any pharmaceutical product.These third-party payers continually attempt to contain or reduce the costs of healthcare. There have been a number of legislativeand regulatory proposals to change the healthcare system and further proposals are likely. Medicare’s policies may decrease themarket for our products. Significant uncertainty exists with respect to the reimbursement status of newly approved healthcareproducts.

Inaddition, third-party payers are increasingly challenging the price and cost-effectiveness of medical products and services. Onceapproved, we might not be able to sell our products profitably or recoup the value of our investment in product development ifreimbursement is unavailable or limited in scope, particularly for product candidates addressing small patient populations. OnJuly 15, 2008, the Medicare Improvements for Patients and Providers Act of 2008 became law with a number of Medicare and Medicaidreforms to establish a bundled Medicare payment rate that includes services and drug/labs that were separately billed at thattime. Bundling initiatives that have been implemented in other healthcare settings have occasionally resulted in lower utilizationof services that had not previously been a part of the bundled payment.

Inaddition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. Therequirements governing drug pricing vary widely from country to country. We expect that there will continue to be a number ofU.S. federal and state proposals to implement governmental pricing controls. While we cannot predict whether such legislativeor regulatory proposals will be adopted, the adoption of such proposals could have a material adverse effect on our business,financial condition and profitability.

Wemay not be able to retain rights licensed to us by third parties to commercialize key products or to develop the third party relationshipswe need to develop, manufacture and market our products.

Wecurrently rely on license agreements from New York University, Yeda Research and Development Company Ltd., the University of TexasSouthwestern Medical Center, the University of British Columbia, Harvard University, the University of Colorado, and George B.McDonald, MD for the rights to commercialize key product candidates. We may not be able to retain the rights granted under theseagreements or negotiate additional agreements on reasonable terms, if at all. Our existing license agreements impose, and we expectthat future license agreements will impose, various diligence, milestone payment, royalty, and other obligations on us. If wefail to comply with our obligations under these agreements, or we are subject to a bankruptcy, we may be required to make certainpayments to the licensor, we may lose the exclusivity of our license, or the licensor may have the right to terminate the license,in which event we would not be able to develop or market products covered by the license. Additionally, the milestone and otherpayments associated with these licenses will make it less profitable for us to develop our drug candidates. See “Business- Patents and Other Proprietary Rights” for a description of our license agreements.

Licensingof intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues.Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:

Ifdisputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our currentlicensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

Additionally,the research resulting in certain of our licensed patent rights and technology was funded by the U.S. government. As a result,the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developedwith government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive licenseauthorizing the government to use the invention for non-commercial purposes. The government can exercise its march-in rights ifit determines that action is necessary because we fail to achieve practical application of the government-funded technology, becauseaction is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give preference toU.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodyingsuch inventions in the United States. Any exercise by the government of such rights could harm our competitive position, business,financial condition, results of operations and prospects.

Furthermore,we currently have very limited product development capabilities and no manufacturing, marketing or sales capabilities. For usto research, develop and test our product candidates, we need to contract or partner with outside researchers, in most cases withor through those parties that did the original research and from whom we have licensed the technologies. If products are successfullydeveloped and approved for commercialization, then we will need to enter into additional collaboration and other agreements withthird parties to manufacture and market our products. We may not be able to induce the third parties to enter into these agreements,and, even if we are able to do so, the terms of these agreements may not be favorable to us. Our inability to enter into theseagreements could delay or preclude the development, manufacture and/or marketing of some of our product candidates or could significantlyincrease the costs of doing so. In the future, we may grant to our development partners rights to license and commercialize pharmaceuticaland related products developed under the agreements with them, and these rights may limit our flexibility in considering alternativesfor the commercialization of these products. Furthermore, third-party manufacturers or suppliers may not be able to meet our needswith respect to timing, quantity and quality for the products.

Additionally,if we do not enter into relationships with additional third parties for the marketing of our products, if and when they are approvedand ready for commercialization, we would have to build our own sales force or enter into commercialization agreements with othercompanies. Development of an effective sales force in any part of the world would require significant financial resources, timeand expertise. We may not be able to obtain the financing necessary to establish a sales force in a timely or cost effective manner,if at all, and any sales force we are able to establish may not be capable of generating demand for our product candidates, ifthey are approved.

Wemay suffer product and other liability claims; we maintain only limited product liability insurance, which may not be sufficient.

Theclinical testing, manufacture and sale of our products involves an inherent risk that human subjects in clinical testing or consumersof our products may suffer serious bodily injury or death due to side effects, allergic reactions or other unintended negativereactions to our products. As a result, product and other liability claims may be brought against us. We currently have clinicaltrial and product liability insurance with limits of liability of $10 million, which may not be sufficient to cover our potentialliabilities. Because liability insurance is expensive and difficult to obtain, we may not be able to maintain existing insuranceor obtain additional liability insurance on acceptable terms or with adequate coverage against potential liabilities. Furthermore,if any claims are brought against us, even if we are fully covered by insurance, we may suffer harm such as adverse publicity.

Wemay use hazardous chemicals in our business. Potential claims relating to improper handling, storage or disposal of these chemicalscould affect us and be time consuming and costly.

Ourresearch and development processes and/or those of our third party contractors involve the controlled use of hazardous materialsand chemicals. These hazardous chemicals are reagents and solvents typically found in a chemistry laboratory. Our operations alsomay produce hazardous waste products. Federal, state and local laws and regulations govern the use, manufacture, storage, handlingand disposal of hazardous materials. While we attempt to comply with all environmental laws and regulations, including those relatingto the outsourcing of the disposal of all hazardous chemicals and waste products, we cannot eliminate the risk of contaminationfrom or discharge of hazardous materials and any resultant injury. In the event of such an accident, we could be held liable forany resulting damages and any liability could materially adversely affect our business, financial condition and results of operations.

Compliancewith environmental laws and regulations may be expensive. Current or future environmental regulations may impair our research,development or production efforts. We might have to pay civil damages in the event of an improper or unauthorized release of,or exposure of individuals to, hazardous materials. We are not insured against these environmental risks.

Wemay agree to indemnify our collaborators in some circumstances against damages and other liabilities arising out of developmentactivities or products produced in connection with these collaborations.

Inaddition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal ofhazardous or radioactive materials and waste products may require us to incur substantial compliance costs that could materiallyadversely affect our business, financial condition and results of operations.

Wemay not be able to compete with our larger and better financed competitors in the biotechnology industry.

Thebiotechnology industry is intensely competitive, subject to rapid change and sensitive to new product introductions or enhancements.Most of our existing competitors have greater financial resources, larger technical staffs, and larger research budgets than wehave, as well as greater experience in developing products and conducting clinical trials. Our competition is particularly intensein the gastroenterology and transplant areas and is also intense in the therapeutic area of inflammatory bowel diseases. We faceintense competition in the biodefense area from various public and private companies and universities as well as governmentalagencies, such as the U.S. Army, which may have their own proprietary technologies that may directly compete with our technologies.In addition, there may be other companies that are currently developing competitive technologies and products or that may in thefuture develop technologies and products that are comparable or superior to our technologies and products. We may not be ableto compete with our existing and future competitors, which could lead to the failure of our business.

Additionally,if a competitor receives FDA approval before we do for a drug that is similar to one of our product candidates, FDA approval forour product candidate may be precluded or delayed due to periods of non-patent exclusivity and/or the listing with the FDA bythe competitor of patents covering its newly-approved drug product. Periods of non-patent exclusivity for new versions of existingdrugs such as our current product candidates can extend up to three and one-half years. See “Business - The Drug ApprovalProcess.”

Thesecompetitive factors could require us to conduct substantial new research and development activities to establish new product targets,which would be costly and time consuming. These activities would adversely affect our ability to commercialize products and achieverevenue and profits.

Competitionand technological change may make our product candidates and technologies less attractive or obsolete.

Wecompete with established pharmaceutical and biotechnology companies that are pursuing other forms of treatment for the same indicationswe are pursuing and that have greater financial and other resources. Other companies may succeed in developing products earlierthan us, obtaining FDA approval for products more rapidly, or developing products that are more effective than our product candidates.Research and development by others may render our technology or product candidates obsolete or noncompetitive, or result in treatmentsor cures superior to any therapy we develop. We face competition from companies that internally develop competing technology oracquire competing technology from universities and other research institutions. As these companies develop their technologies,they may develop competitive positions that may prevent, make futile, or limit our product commercialization efforts, which wouldresult in a decrease in the revenue we would be able to derive from the sale of any products.

Therecan be no assurance that any of our product candidates will be accepted by the marketplace as readily as these or other competingtreatments. Furthermore, if our competitors’ products are approved before ours, it could be more difficult for us to obtainapproval from the FDA. Even if our products are successfully developed and approved for use by all governing regulatory bodies,there can be no assurance that physicians and patients will accept our product(s) as a treatment of choice.

Furthermore,the pharmaceutical research industry is diverse, complex, and rapidly changing. By its nature, the business risks associated therewithare numerous and significant. The effects of competition, intellectual property disputes, market acceptance, and FDA regulationspreclude us from forecasting revenues or income with certainty or even confidence.

Ourbusiness could be harmed if we fail to retain our current personnel or if they are unable to effectively run our business.

Wecurrently have 18 employees and we depend upon these employees, in particular Dr. Christopher Schaber, our President and ChiefExecutive Officer, to manage the day-to-day activities of our business. Because we have such limited personnel, the loss of anyof them or our inability to attract and retain other qualified employees in a timely manner would likely have a negative impacton our operations. We may be unable to effectively manage and operate our business, and our business may suffer, if we lose theservices of our employees.

Instabilityand volatility in the financial markets could have a negative impact on our business, financial condition, results of operations,and cash flows.

Duringrecent years, there has been substantial volatility in financial markets due at least in part to the uncertainty with regard tothe global economic environment. In addition, there has been substantial uncertainty in the capital markets and access to additionalfinancing is uncertain. Moreover, customer spending habits may be adversely affected by current and future economic conditions.These conditions could have an adverse effect on our industry and business, including our financial condition, results of operations,and cash flows.

Tothe extent that we do not generate sufficient cash from operations, we may need to issue stock or incur indebtedness to financeour plans for growth. Recent turmoil in the credit markets and the potential impact on the liquidity of major financial institutionsmay have an adverse effect on our ability to fund our business strategy through borrowings, under either existing or newly createdinstruments in the public or private markets on terms we believe to be reasonable, if at all.

Wemay not be able to utilize all of our net operating loss carryforwards.

TheState of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology companiesto sell unused net operating loss (“NOL”) carryforwards to other New Jersey-based corporate taxpayers. In accordancewith this program, during the year ended December 31, 2016, we sold New Jersey NOL carryforwards, resulting in the recognitionof $530,143 of income tax benefit. If there is an unfavorable change in the State of New Jersey’s Technology Business TaxCertificate Program (whether as a result of a change in law, policy or otherwise) that terminates the program or eliminates orreduces our ability to use or sell our NOL carryforwards, our cash taxes may increase which may have an adverse effect on ourfinancial condition.

RisksRelated to our Intellectual Property

Wemay be unable to commercialize our products if we are unable to protect our proprietary rights, and we may be liable for significantcosts and damages if we face a claim of intellectual property infringement by a third party.

Ournear and long term prospects depend in part on our ability to obtain and maintain patents, protect trade secrets and operate withoutinfringing upon the proprietary rights of others. In the absence of patent and trade secret protection, competitors may adverselyaffect our business by independently developing and marketing substantially equivalent or superior products and technology, possiblyat lower prices. We could also incur substantial costs in litigation and suffer diversion of attention of technical and managementpersonnel if we are required to defend ourselves in intellectual property infringement suits brought by third parties, with orwithout merit, or if we are required to initiate litigation against others to protect or assert our intellectual property rights.Moreover, any such litigation may not be resolved in our favor.

Althoughwe and our licensors have filed various patent applications covering the uses of our product candidates, patents may not be issuedfrom the patent applications already filed or from applications that we might file in the future. Moreover, the patent positionof companies in the pharmaceutical industry generally involves complex legal and factual questions, and recently has been thesubject of much litigation. Any patents we own or license, now or in the future, may be challenged, invalidated or circumvented.To date, no consistent policy has been developed in the U.S. Patent and Trademark Office (the “PTO”) regarding thebreadth of claims allowed in biotechnology patents.

Inaddition, because patent applications in the U.S. are maintained in secrecy until patent applications publish or patents issue,and because publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannotbe certain that we and our licensors are the first creators of inventions covered by any licensed patent applications or patentsor that we or they are the first to file. The PTO may commence interference proceedings involving patents or patent applications,in which the question of first inventorship is contested. Accordingly, the patents owned or licensed to us may not be valid ormay not afford us protection against competitors with similar technology, and the patent applications licensed to us may not resultin the issuance of patents.

Itis also possible that our owned and licensed technologies may infringe on patents or other rights owned by others, and licensesto which may not be available to us. We may be unable to obtain a license under such patent on terms favorable to us, if at all.We may have to alter our products or processes, pay licensing fees or cease activities altogether because of patent rights ofthird parties.

Inaddition to the products for which we have patents or have filed patent applications, we rely upon unpatented proprietary technologyand may not be able to meaningfully protect our rights with regard to that unpatented proprietary technology. Furthermore, tothe extent that consultants, key employees or other third parties apply technological information developed by them or by othersto any of our proposed projects, disputes may arise as to the proprietary rights to this information, which may not be resolvedin our favor.

Wemay be involved in lawsuits to protect or enforce our patents, which could be expensive and time consuming.

Thepharmaceutical industry has been characterized by extensive litigation regarding patents and other intellectual property rights,and companies have employed intellectual property litigation to gain a competitive advantage. We may become subject to infringementclaims or litigation arising out of patents and pending applications of our competitors, or additional interference proceedingsdeclared by the PTO to determine the priority of inventions. The defense and prosecution of intellectual property suits, PTO proceedings,and related legal and administrative proceedings are costly and time-consuming to pursue, and their outcome is uncertain. Litigationmay be necessary to enforce our issued patents, to protect our trade secrets and know-how, or to determine the enforceability,scope, and validity of the proprietary rights of others. An adverse determination in litigation or interference proceedings towhich we may become a party could subject us to significant liabilities, require us to obtain licenses from third parties, orrestrict or prevent us from selling our products in certain markets. Although patent and intellectual property disputes mightbe settled through licensing or similar arrangements, the costs associated with such arrangements may be substantial and couldinclude our paying large fixed payments and ongoing royalties. Furthermore, the necessary licenses may not be available on satisfactoryterms or at all.

Competitorsmay infringe our patents, and we may file infringement claims to counter infringement or unauthorized use. This can be expensive,particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide thata patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue onthe grounds that our patents do not cover its technology. An adverse determination of any litigation or defense proceedings couldput one or more of our patents at risk of being invalidated or interpreted narrowly.

Also,a third party may assert that our patents are invalid and/or unenforceable. There are no unresolved communications, allegations,complaints or threats of litigation related to the possibility that our patents are invalid or unenforceable. Any litigation orclaims against us, whether or not merited, may result in substantial costs, place a significant strain on our financial resources,divert the attention of management and harm our reputation. An adverse decision in litigation could result in inadequate protectionfor our product candidates and/or reduce the value of any license agreements we have with third parties.

Interferenceproceedings brought before the PTO may be necessary to determine priority of invention with respect to our patents or patent applications.During an interference proceeding, it may be determined that we do not have priority of invention for one or more aspects in ourpatents or patent applications and could result in the invalidation in part or whole of a patent or could put a patent applicationat risk of not issuing. Even if successful, an interference proceeding may result in substantial costs and distraction to ourmanagement.

Furthermore,because of the substantial amount of discovery required in connection with intellectual property litigation or interference proceedings,there is a risk that some of our confidential information could be compromised by disclosure. In addition, there could be publicannouncements of the results of hearings, motions or other interim proceedings or developments. If investors perceive these resultsto be negative, the price of our common stock could be adversely affected.

Ifwe infringe the rights of third parties we could be prevented from selling products, forced to pay damages, and defend againstlitigation.

Ifour products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantialcosts and we may have to: obtain licenses, which may not be available on commercially reasonable terms, if at all; abandon aninfringing product candidate; redesign our products or processes to avoid infringement; stop using the subject matter claimedin the patents held by others; pay damages; and/or defend litigation or administrative proceedings which may be costly whetherwe win or lose, and which could result in a substantial diversion of our financial and management resources.

RisksRelated to our Securities 

Theprice of our common stock and warrants may be highly volatile.

Themarket price of our common stock, like that of many other research and development public pharmaceutical and biotechnology companies,has been highly volatile and the price of our common stock may be volatile in the future due to a wide variety of factors, including:

SinceJanuary 1, 2016, the closing stock price (split adjusted) of our common stock has fluctuated between a high of $12.50 per shareto a low of $1.84 per share. On November 15, 2017, the last reported closing sales price of our common stock on The Nasdaq CapitalMarket was $2.20 per share. The fluctuation in the price of our common stock has sometimes been unrelated or disproportionate toour operating performance. In addition, potential dilutive effects of future sales of shares of common stock by us, as well aspotential sale of common stock by the holders of warrants and options, could have an adverse effect on the market price of ourshares.

Shareholdersmay suffer substantial dilution related to issued stock warrants and options.

Asof November 15, 2017, we had a number of agreements or obligations that may result in dilution to investors. These include:

Wealso have an incentive compensation plan for our management, employees and consultants. We have granted, and expect to grant inthe future, options to purchase shares of our common stock to our directors, employees and consultants. To the extent that warrantsor options are exercised, our stockholders will experience dilution and our stock price may decrease.

Additionally,the sale, or even the possibility of the sale, of the shares of common stock underlying these warrants and options could havean adverse effect on the market price for our securities or on our ability to obtain future financing.

Ourshares of common stock are thinly traded, so stockholders may be unable to sell at or near ask prices or at all if they need tosell shares to raise money or otherwise desire to liquidate their shares.

Ourcommon stock has from time to time been “thinly-traded,” meaning that the number of persons interested in purchasingour common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributableto a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers,institutional investors and others in the investment community that generate or influence sales volume, and that even if we cameto the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as oursor purchase or recommend the purchase of our shares until such time as we become more seasoned and viable. As a consequence, theremay be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasonedissuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverseeffect on share price. We cannot give stockholders any assurance that a broader or more active public trading market for our commonshares will develop or be sustained, or that current trading levels will be sustained.

Wedo not currently intend to pay dividends on our common stock in the foreseeable future, and consequently, our stockholders’ability to achieve a return on their investment will depend on appreciation in the price of our common stock.

Wehave never declared or paid cash dividends on our common stock and do not anticipate paying any cash dividends to holders of ourcommon stock in the foreseeable future. Consequently, our stockholders must rely on sales of their common stock after price appreciation,which may never occur, as the only way to realize any future gains on their investments. There is no guarantee that shares ofour common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.

Upondissolution of the Company, our stockholders may not recoup all or any portion of their investment.

Inthe event of a liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the proceeds and/or assetsof the Company remaining after giving effect to such transaction, and the payment of all of our debts and liabilities will bedistributed to the holders of common stock on a pro rata basis. There can be no assurance that we will have available assets topay to the holders of common stock, or any amounts, upon such a liquidation, dissolution or winding-up of the Company. In thisevent, our stockholders could lose some or all of their investment.

Thesale or issuance of our common stock pursuant to an at the market offering agreement with FBR Capital Markets & Co. may causedilution and the sale of the shares of common stock sold pursuant to the at the market offering agreement, or the perception thatsuch sales may occur, could cause the price of our common stock to fall.

OnAugust 11, 2017, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with FBR Capital Markets& Co. (“FBR”) to sell shares of our common stock, with aggregate gross proceeds of up to $4,800,000, from timeto time, through an “at-the-market” equity offering program under which FBR will act as sales agent. From August 11,2017 through November 15, 2017, we sold 450,000 shares under the Sales Agreement and received gross proceeds of $1,015,266.

Underthe Sales Agreement, we will set the parameters for the sale of shares, including the number of shares to be issued, the timeperiod during which sales are requested to be made, limitation on the number of shares that may be sold in any one trading dayand any minimum price below which sales may not be made. Subject to the terms and conditions of the Sales Agreement, FBR may sellthe shares by methods deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the SecuritiesAct of 1933, as amended (the “Securities Act”), including sales made directly on or through The Nasdaq Capital Market,the existing trading market for our common stock, sales made to or through a market maker other than on an exchange or otherwise,in negotiated transactions at market prices, and/or any other method permitted by law. The Sales Agreement provides that FBR willbe entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the sale of shares sold underthe Sales Agreement.

Dependingon market liquidity at the time, sales of shares under the Sales Agreement may cause the trading price of our common stock tofall. Additionally, further sales of our common stock, if any, under the Sales Agreement will depend upon market conditions andother factors to be determined by us. We ultimately may sell all, some or none of the shares of our common stock that may be soldpursuant to the Sales Agreement and, after such shares have been sold, the purchasers may sell all, some or none of those shares.Therefore, sales under the Sales Agreement could result in substantial dilution to the interests of other holders of our commonstock. Additionally, the sale of a substantial number of shares of our common stock under the Sales Agreement, or the anticipationof such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and ata price that we might otherwise wish to effect sales.

Thesale or issuance of our common stock to Lincoln Park Capital may cause dilution and the sale of the shares of common stock acquiredby Lincoln Park, or the perception that such sales may occur, could cause the price of our common stock to fall.

OnMarch 22, 2016, we entered into an additional purchase agreement (the “2016 Purchase Agreement”) with Lincoln ParkCapital Fund, LLC (“Lincoln Park”). Pursuant to the 2016 Purchase Agreement, Lincoln Park has committed to purchaseup to $12 million of our common stock, of which approximately $10.2 million worth of our common stock remains issuable as of November 15, 2017. Concurrently with the execution of the 2016 Purchase Agreement, we issued 10,000 shares of our common stock toLincoln Park as a partial fee for its commitment to purchase shares of our common stock under the 2016 Purchase Agreement. FromMarch 22, 2016 through November 15, 2017, we sold 310,000 shares to Lincoln Park and issued 7,618 additional shares to LincolnPark as additional commitment shares under the 2016 Purchase Agreement and received proceeds of $1,828,250. The shares that maybe sold pursuant to the 2016 Purchase Agreement may be sold by us to Lincoln Park at our sole discretion from time to time overthe remaining term of approximately 16 months from November 15, 2017, provided the registration statement registering theresale of shares sold to Lincoln Park under the 2016 Purchase Agreement remains effective. The purchase price for the shares thatwe may sell to Lincoln Park under the 2016 Purchase Agreement will fluctuate based on the price of our common stock. We have theright to control the timing and amount of any sales of our shares to Lincoln Park, except that, pursuant to the terms of our agreementswith Lincoln Park, we would be unable to sell shares to Lincoln Park that would cause Lincoln Park to beneficially own more than4.99% of our issued and outstanding common stock.

Dependingon market liquidity at the time, sales of shares under the 2016 Purchase Agreement may cause the trading price of our common stockto fall. Additionally, further sales of our common stock, if any, to Lincoln Park under the 2016 Purchase Agreement will dependupon market conditions and other factors to be determined by us. Lincoln Park may ultimately purchase all, some or none of theshares of our common stock that may be sold pursuant to the 2016 Purchase Agreement and, after it has acquired shares, LincolnPark may sell all, some or none of those shares. Therefore, sales to Lincoln Park by us could result in substantial dilution tothe interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stockto Lincoln Park, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securitiesin the future at a time and at a price that we might otherwise wish to effect sales.

Theissuance of our common stock pursuant to the terms of the asset purchase agreement with Hy Biopharma Inc. may cause dilution andthe issuance of such shares of common stock, or the perception that such issuances may occur, could cause the price of our commonstock to fall.

OnApril 1, 2014, we entered into an option agreement pursuant to which Hy Biopharma Inc. (“Hy Biopharma”) granted usan option to purchase certain assets, properties and rights (the “Hypericin Assets”) related to the development ofHy Biopharma’s synthetic hypericin product candidate for the treatment of CTCL, which we refer to as SGX301, from Hy Biopharma.In exchange for the option, we paid $50,000 in cash and issued 4,307 shares of common stock in the aggregate to Hy Biopharma andits assignees. We subsequently exercised the option, and on September 3, 2014, we entered into an asset purchase agreement withHy Biopharma, pursuant to which we purchased the Hypericin Assets. Pursuant to the purchase agreement, we paid $275,000 in cashand issued 184,912 shares of common stock in the aggregate to Hy Biopharma and its assignees, and the licensors of the licenseagreement acquired from Hy Biopharma, and may issue up to an aggregate of $10 million worth of our common stock (subject to acap equal to 19.99% of our issued and outstanding common stock) in the aggregate upon attainment of specified milestones. Thenext milestone payment will be payable if the Phase 3 clinical trial of SGX301 is successful in demonstrating efficacy and safetyin the CTCL patient population. Also on September 3, 2014, we entered into a Registration Rights Agreement with Hy Biopharma,pursuant to which we have filed a registration statement with the Securities and Exchange Commission (the “SEC”).

Thenumber of shares that we may issue under the purchase agreement will fluctuate based on the market price of our common stock.Depending on market liquidity at the time, the issuance of such shares may cause the trading price of our common stock to fall.

Wemay ultimately issue all, some or none of the additional shares of our common stock that may be issued pursuant to the purchaseagreement. We are required to register any shares issued pursuant to the purchase agreement for resale under the Securities Act.After any such shares are registered, the holders will be able to sell all, some or none of those shares. Therefore, issuancesby us under the purchase agreement could result in substantial dilution to the interests of other holders of our common stock.Additionally, the issuance of a substantial number of shares of our common stock pursuant to the purchase agreement, or the anticipationof such issuances, could make it more difficult for us to sell equity or equity-related securities in the future at a time andat a price that we might otherwise wish to effect sales.

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS AND

INDUSTRYDATA AND MARKET INFORMATION

Thisprospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of theExchange Act. These forward-looking statements are often identified by words such as “may,” “should,”“would,” “expect,” “intend,” “anticipate,” “believe,” “estimate,”“continue,” “plan,” “potential” and similar expressions. These statements involve estimates,assumptions and uncertainties that could cause actual results to differ materially from those expressed for the reasons describedin this prospectus. You should not place undue reliance on these forward-looking statements.

Youshould be aware that our actual results could differ materially from those contained in the forward-looking statements due toa number of factors, including:

Youshould also consider carefully the statements under “Risk Factors” in this prospectus and Sections entitled “Business”and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which address additionalfactors that could cause our actual results to differ from those set forth in the forward-looking statements and could materiallyand adversely affect our business, operating results and financial condition. All subsequent written and oral forward-lookingstatements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the applicable cautionarystatements.

Theforward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securitieslaws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date onwhich the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact ofeach factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materiallyfrom those contained in any forward-looking statements.

IndustryData and Market Information

Thisprospectus contains estimates, projections and other statistical data made by independent parties and by us relating to marketsize and growth, the potential value of government procurement contracts, the incidence of certain medical conditions and otherindustry data. These data, to the extent they contain estimates or projections, involve a number of subjective assumptions andlimitations, and you are cautioned not to give undue weight to such estimates or projections. Industry publications and otherreports we have obtained from independent parties generally state that the data contained in these publications or other reportshave been obtained in good faith or from sources considered to be reliable, but they do not guarantee the accuracy or completenessof such data. While we believe that the data from these industry publications and other reports are generally reliable, we havenot independently verified the accuracy or completeness of such data. These and other factors could cause results to differ materiallyfrom those expressed in these publications and reports.

Wehave provided estimates of the potential worldwide market or value of potential government procurement contracts and grants forcertain of our product candidates. These estimates are based on a number of factors, including our expectation as to the numberof patients with a certain medical condition that would potentially benefit from a particular product candidate, the current costsof treating patients with the targeted medical condition, our expectation that we will be able to demonstrate to the FDA’ssatisfaction in our clinical trials that the product candidate is safe and effective, our belief that our product candidate would,if approved, have an assumed treatment cost per patient, historic values of government procurement contracts for vaccines, andour expectation of the dosage of the product candidate. While we have determined these estimates based on assumptions that webelieve are reasonable, there are a number of factors that could cause our expectations to change or not be realized. Among thesefactors are the following: (1) there is no assurance that the product candidate will prove to be safe and effective or will ultimatelybe approved for sale by the FDA; (2) any FDA approval of the product candidate may contain restrictions on its use or requirewarning labels; (3) third party payors may not be willing to provide reimbursement for the product candidate at the assumed priceper patient; (4) the government may not be willing to procure our vaccine candidates in amounts or at costs similar to its historicprocurement activities; (5) the dosage that ultimately may be approved may be different from the assumed dosage; and (6) doctorsmay not adopt the product candidate for use as quickly or as broadly as we have assumed. It is possible that the ultimate marketfor a product candidate or value of procurement contracts will differ significantly from our expectations due to these or otherfactors. As a result of these and other factors, investors should not place undue reliance on such estimates.

USEOF PROCEEDS

Thisprospectus relates to shares of our common stock that may be offered and sold from time to time by the Selling Stockholders. Wewill not receive any proceeds upon the sale of shares by the Selling Stockholders in this offering.

DIVIDENDPOLICY

Wehave never declared nor paid any cash dividends, and currently intend to retain all our cash and any earnings for use in our businessand, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividendswill be at the discretion of the Board of Directors and will be dependent upon our consolidated financial condition, results ofoperations, capital requirements and such other factors as the Board of Directors deems relevant.

MARKETFOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MarketInformation

Ourcommon stock is traded on The Nasdaq Capital Market under the symbol “SNGX”. The following table sets forth, as adjustedfor the reverse stock split of one-for-ten effective October 7, 2016, for the periods indicated, the high and low sales pricesper share of our common stock as reported by the OTCQB through December 12, 2016 and The Nasdaq Capital Market, beginning on December13, 2016.

On November 15, 2017,the last reported price of our common stock quoted on The Nasdaq Capital Market was $2.20 per share. The Nasdaq prices set forthabove represent inter-dealer quotations, without adjustment for retail mark-up, mark-down or commission, and may not representthe prices of actual transactions.

On December 13, 2016,our common stock warrant issued in connection with our December 2016 public offering began trading on The Nasdaq Capital Marketunder the symbol “SNGXW”. For the period December 13, 2016 through November 15, 2017, the high and low sales priceper warrant as reported by Nasdaq were $1.3144 and $0.2109, respectively. On November 15, 2017, the last reported price of ourcommon stock warrant on Nasdaq was $0.61 per warrant. 

TransferAgent

Thetransfer agent and registrar for our common stock and warrants is American Stock Transfer & Trust Company, LLC. The addressis 6201 15th Avenue, Brooklyn, NY 11219 and the telephone number is (718) 921-8200.

Holdersof Common Stock

As of November 15,2017, there were 87 holders of record of our common stock. As of such date, 8,730,640 shares of our common stock were issued andoutstanding.

EquityCompensation Plan Information

InDecember 2005, our Board of Directors approved the 2005 Equity Incentive Plan, which was approved by stockholders on December29, 2005. In September 2013, our stockholders approved an amendment to the 2005 Equity Incentive Plan to increase the maximumnumber of shares of our common stock available for issuance under the plan by 125,000 shares, bringing the total shares reservedfor issuance under the plan to 300,000 shares. In April 2015, our Board of Directors approved the 2015 Equity Incentive Plan,which was approved by stockholders on June 18, 2015. As of June 8, 2017, a maximum of 600,000 shares of our common stock are availablefor issuance under the 2015 Equity Incentive Plan. The following table provides information, as of December 31, 2016 with respectto options outstanding under our 2005 Equity Incentive Plan and our 2015 Equity Incentive Plan. All share numbers in this paragraphand in the following table have been adjusted for the one-for-ten reverse stock split effective October 7, 2016.

MANAGEMENT’SDISCUSSION AND ANALYSIS

OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

Thefollowing discussion and analysis provides information that we believe is relevant to an assessment and understanding of our resultsof operations and financial condition. You should read this analysis in conjunction with our audited consolidated financial statementsand related notes and our unaudited consolidated interim financial statements and their notes. This discussion and analysis containsstatements of a forward-looking nature relating to future events or our future financial performance. These statements are onlypredictions, and actual events or results may differ materially. In evaluating such statements, you should carefully considerthe various factors identified in this prospectus, which could cause actual results to differ materially from those expressedin, or implied by, any forward-looking statements, including those set forth in “Risk Factors” in this prospectus. See“Cautionary Note Regarding Forward-Looking Statements and Industry Data and Market Information.”

OurBusiness Overview

Weare a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where thereis an unmet medical need. We maintain two active business segments: BioTherapeutics and Vaccines/BioDefense.

OurBioTherapeutics business segment is developing a novel photodynamic therapy (SGX301) utilizing topical synthetic hypericin activatedwith safe visible florescent light for the treatment of cutaneous T-cell lymphoma (“CTCL”), our first-in-class innatedefense regulator technology, dusquetide (SGX942) for the treatment of oral mucositis in head and neck cancer, and proprietaryformulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal (“GI”)disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis(SGX201).

OurVaccines/BioDefense business segment includes active development programs for RiVax^®, our ricin toxin vaccine candidate,OrbeShield^®, our GI acute radiation syndrome (“GI ARS”) therapeutic candidate and SGX943, our therapeuticcandidate for antibiotic resistant and emerging infectious disease. The development of our vaccine programs currently is supportedby our heat stabilization technology, known as ThermoVax^®, under existing and on-going government contract funding.With the government contract from the National Institute of Allergy and Infectious Diseases (“NIAID”), we will attemptto advance the development of RiVax^® to protect against exposure to ricin toxin. We have advanced the developmentof OrbeShield® for the treatment of GI ARS with funds received under our awarded government contracts with the BiomedicalAdvanced Research and Development Authority (“BARDA”) and grants from the NIAID.

Anoutline of our business strategy follows:

CriticalAccounting Policies

Ourdiscussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements,which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financialstatements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses, andrelated disclosure of contingent assets and liabilities. We evaluate these estimates and judgments on an on-going basis.

RevenueRecognition

Ourrevenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is basedupon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilitiesand administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenseshave been incurred by subcontractors or when we incur reimbursable internal expenses that are related to the government contractsand grants.

Researchand Development Costs

Researchand development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Researchand development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternativefuture use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocationof various corporate costs. Purchased in-process research and development expense represents the value assigned or paid for acquiredresearch and development for which there is no alternative future use as of the date of acquisition.

Accountingfor Warrants

Weconsidered FASB ASC 815, Evaluating Whether an Instrument is Considered Indexed to an Entity’s Own Stock, which providesguidance for determining whether an equity-linked financial instrument (or embedded feature) issued by an entity is indexed tothe entity’s stock and, therefore, qualifying for the first part of the scope exception in paragraph 815-10-15. We evaluatedthe provisions and determined that warrants issued in connection with our June 2013 registered public offering contain provisionsthat protect holders from a decline in the issue price of our common stock (or “down-round” provisions) and containnet settlement provisions. Consequently, these warrants were recognized as liabilities at their fair value on the date of grantand remeasured at fair value on each reporting date. During the year ended December 31, 2016, we entered into amendments withthe holders of those warrants, and as a result the warrants were then reclassified to equity as the amended terms of the warrantsqualified them to be accounted for as equity instruments.

Share-BasedCompensation

Stockoptions are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors uponre-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issuedto employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. Stock options vestover each three-month period from the date of issuance to the end of the three year period. These options have a ten year lifefor as long as the individuals remain employees or directors. In general, when an employee or director terminates their positionthe options will expire within three months, unless otherwise extended by the Board.

Fromtime to time, we issue restricted shares of common stock to vendors and consultants as compensation for services performed. Typicallythese instruments vest upon issuance and therefore the entire share-based compensation expense is recognized upon issuance tothe vendors and/or consultants.

Share-basedcompensation expense for options, warrants and shares of common stock granted to non-employees has been determined in accordancewith FASB ASC 505-50, Equity-Based Payments to Non-Employees, and represents the fair value of the consideration received,or the fair value of the equity instruments issued, whichever may be more reliably measured. For options that vest over futureperiods, the fair value of options granted to non-employees is amortized as the options vest. The fair value is remeasured eachreporting period until performance is complete.

Thefair value of each option grant made during 2017 and 2016 was estimated on the date of each grant using the Black-Scholes optionpricing model and amortized ratably over the option vesting periods, which approximates the service period.

IncomeTaxes

Deferredtax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statementcarrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established whenit is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positiveand negative evidence is considered, including the Company’s current and past performance, the market environment in whichthe Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred taxassets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporarydifferences are expected to be recovered or settled. No current or deferred income taxes have been provided through September30, 2017 due to the net operating losses incurred by the Company since its inception. The Company recognizes accrued interestand penalties associated with uncertain tax positions, if any, as part of income tax expense. There were no tax related interestand penalties recorded for 2017 and 2016. Additionally, the Company has not recorded an asset for unrecognized tax benefits ora liability for uncertain tax positions at September 30, 2017 and December 31, 2016.

EarningsPer Share

Basicearnings per share (“EPS”) excludes dilution and is computed by dividing income (loss) available to common stockholdersby the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that couldoccur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in theissuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrantsoutstanding, fluctuations in the actual market price can have a variety of results for each period presented.

Useof Estimates and Assumptions

Thepreparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires managementto make estimates and assumptions such as the fair value of warrants and stock options and recovery of the useful life of intangiblesthat affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

MaterialChanges in Results of Operations

Threeand Nine Months Ended September 30, 2017 Compared to September 30, 2016

Forthe three months ended September 30, 2017, we had a net loss of $963,094 as compared to a net loss of $1,673,217 for the sameperiod in the prior year, representing a decrease in the net loss of $710,123 or 42%. For the nine months ended September 30,2017, we had a net loss of $5,008,129 as compared to a net loss of $2,915,424 for the same period in the prior year, representingan increase in the net loss of $2,092,705 or 72%. Included in the net loss for the three months and nine months ended September30, 2016 is non-cash expense of $176,293, and non-cash income of $1,109,192, respectively, representing the change in the fairvalue of the warrant liability related to warrants issued in connection with our June 2013 registered public financing, whichwere reclassified to equity in November 2016.

Forthe three and nine months ended September 30, 2017, revenues related to government contracts awarded in support of our developmentof OrbeShield^® for the treatment of GI ARS and RiVax^®, our ricin toxin vaccine program, as wellas grants awarded in support of our pivotal Phase 3 clinical trials of SGX301, for the treatment of CTCL, and SGX942, for thetreatment of oral mucositis in head and neck cancer. For the three months ended September 30, 2017, we had revenues of $1,822,066as compared to $2,959,254 for the same period in the prior year, representing a decrease of $1,137,188 or 38%. For the nine monthsended September 30, 2017, we had revenues of $4,143,921 as compared to $8,750,291 for the same period in the prior year, representinga decrease of $4,606,370 or 53%. The decrease in revenues was a result of the completion of the NIAID contract during the firstquarter of 2017, along with the BARDA contract base period, with BARDA electing not to extend the current contract beyond thebase period. This was partially offset by an increase in grant revenue for the three months ended September 30, 2017.

Weincurred costs related to those revenues for the three months ended September 30, 2017 and 2016 of $1,474,151 and $2,630,046,respectively, representing a decrease of $1,155,895, or 44%. For the nine months ended September 30, 2017, costs related to revenueswere $3,238,633 as compared to $7,204,920 for the same period in the prior year, representing a decrease of $3,966,287 or 55%.The decrease in costs was primarily the result of the decrease in revenues from the completion of the NIAID and BARDA contracts.

Ourgross profit for the three months ended September 30, 2017 was $347,915 or 19% of revenues, as compared to $329,208 or 11% ofrevenues for the same period in 2016, representing an increase of $18,707 or 8% of revenues. For the nine months ended September30, 2017, gross profit was $905,288 or 22% of revenues, as compared to $1,545,371 or 18% of revenues for the same period in 2016,representing a decrease of $640,083. The increase in gross profit percentage of 4% for the nine months ended September 30, 2017,as compared to the same periods in 2016, was primarily attributable to higher amounts of reimbursement in 2017 for certain contractorand employee expenses from contracts and grants, as well as management and administrative fees from the two grants awarded in2017 in support of our pivotal Phase 3 trials of SGX301 and SGX942.

Researchand development expenses were $605,719 for the three months ended September 30, 2017 as compared to $1,177,263 for the same periodin 2016, representing a decrease of $571,544 or 49%. For the nine months ended September 30, 2017, research and development expenseswere $3,606,973 compared to $3,433,595 for the same period in 2016, representing an increase of $173,378 or 5%. The decrease inresearch and development spending for the three months ended September 30, 2017 was primarily due to the two grants awarded inwhich certain research and development expenses are reimbursable under the terms of the grants. As a result, the expendituresfor those research and development expenses are recorded in cost of revenues. The increase in research and development spendingfor the nine months ended September 30, 2017 was related to expenditures incurred in the preparation and initiation of the Phase3 clinical trial of SGX942 as well as the ongoing Phase 3 clinical trial of SGX301.

Generaland administrative expenses were $711,819 for the three months ended September 30, 2017 as compared to $650,762 for the same periodin 2016, representing an increase of $61,057 or 9%. For the nine months ended September 30, 2017, general and administrative expenseswere $2,322,957 compared to $2,526,255, representing a decrease of $203,298 or 8%. The increase in general and administrativeexpenses for the three months ended September 30, 2017 is primarily related to an increase in professional consulting fees. Thedecrease in general and administrative expenses for the nine months ended September 30, 2017 is primarily related to a decreasein our compensation expenses, including stock option expense.

Otherincome (expense) for the three months ended September 30, 2017 was $6,529 as compared $(174,400) for the same period in 2016,representing an increase in other income of $180,929 or 104%. For the nine months ended September 30, 2017 and 2016, total otherincome was $16,513 and $1,499,055, respectively, representing a decrease of $1,482,542 or 99%. The change in both the three andnine months ended September 30, 2017 is primarily due to the change in the fair value of the warrant liability for the three andnine months ended September 30, 2016 resulting in $(176,293) and $1,109,192 of other income (expense). In addition, $390,599 wasincluded in other income for the nine months ended September 30, 2016 related to an amount that had previously been accrued. Wewere notified during the quarter ended June 30, 2016 that the amount was no longer considered outstanding by the counterpartyand therefore reversed the amount accrued, resulting in other income.

YearEnded December 31, 2016 Compared to 2015

Forthe year ended December 31, 2016, we had a net loss of $3,245,383 as compared to a net loss of $7,831,230 for the prior year,representing a decreased loss of $4,585,847 or 59%. Included in the net loss for December 31, 2016 and 2015 is the change in thefair value of the warrant liability related to warrants issued in connection with our June 2013 registered public financing of$1,541,241 of other income and $1,201,870 of other expense, respectively. During the year ended December 31, 2016, the price protectionprovision of the warrants was eliminated through an amendment and the warrant liability was reclassified to equity as the amendedterms of the warrants qualified them to be accounted for as equity instruments.

Forthe year ended December 31, 2016 and 2015, revenues and associated costs related to government contracts and grants awarded insupport of our development of OrbeShield^® for the treatment of GI ARS and RiVax™. and other development programs.For the year ended December 31, 2016, we had revenues of $10,448,794 as compared to $8,768,390 for the prior year, representingan increase of $1,680,404 or 19%. The increase in revenues was a result of increased activities performed under our governmentcontracts associated with RiVax^™.

Weincurred costs related to contract and grant revenues in the year ended December 31, 2016 and 2015 of $8,433,671 and $6,882,204,respectively, representing an increase of $1,551,467 or 23%. The costs primarily relate to the increased development activityin these programs and the resulting payments made to subcontractors and the allocated employee costs in connection with researchperformed pursuant to the contracts and grants.

Ourgross profit for the year ended December 31, 2016 was $2,015,123 or 19%, as compared to $1,886,186 or 22% for the prior year,representing an increase of $128,937 or 7%. This increase in gross profit is due primarily to the increased activity in our RiVax™development contracts. The decrease in gross profit percentage is attributable to the management fee associated with certain contractspayable upon the achievement of development milestones.

Researchand development expenses decreased by $1,103,972 or 20%, to $4,295,867 for the year ended December 31, 2016 as compared to $5,399,839for the prior year. This decrease is primarily related to the manufacturing expenditures for the pediatric Crohn’s developmentprogram incurred during 2015, as well as the completion of patient enrollment in the Phase 2 trial of SGX942 for the treatmentof oral mucositis in head and neck cancer in late 2015.

Generaland administrative expenses decreased by $167,785 or 5%, to $3,428,838 for the year ended December 31, 2016, as compared to $3,596,623for the prior year. This decrease is primarily related to a decrease in professional fees.

Otherincome (expense) for the year ended December 31, 2016 was $1,934,056 as compared to $(1,209,887) for the prior year, reflectinga change of $3,143,943 or 260%. The change is primarily due to the change in the fair value of the warrant liability resultingin $(1,201,870) of other expense in 2015 compared to $1,541,241 of other income in 2016. In addition, $390,599 is included inother income in 2016 related to an amount that had previously been accrued. We were notified that the amount was no longer consideredoutstanding by the counterparty and therefore reversed the amount accrued, resulting in other income.

TheState of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology companiesto sell unused net operating loss (“NOL”) carryforwards to other New Jersey-based corporate taxpayers. In accordancewith this program, during the year ended December 31, 2016, we sold New Jersey NOL carryforwards, resulting in the recognitionof $530,143 of income tax benefit as compared to $488,933 for the year ended December 31, 2015. There can be no assurance as tothe continuation or magnitude of this program in future years.

BusinessSegments

Wemaintain two active business segments for the years ended December 31, 2016 and December 31, 2015: Vaccines/BioDefense and BioTherapeutics.

Revenuesfor the Vaccines/BioDefense business segment for the year ended December 31, 2016 were $10,448,794 as compared to $8,754,418 forthe year ended December 31, 2015, representing an increase of $1,694,376 or 19%. This increase in revenues was a result of theincreased development activity under our RiVax™ contracts. Revenues for the BioTherapeutics business segment for the yearended December 31, 2016 were $0 as compared to $13,972 for the year ended December 31, 2015. The revenue for the year ended December31, 2015 is related to work performed under our oral mucositis grant which expired in early 2015.

Incomefrom operations for the Vaccines/BioDefense business segment for the year ended December 31, 2016 was $1,563,884 as compared to$1,263,709 for the year ended December 31, 2015. Income from operations is primarily attributable to our gross margins relatedto our government contracts. Loss from operations for the BioTherapeutics business segment for the year ended December 31, 2016was $3,399,933 as compared to $4,487,988 for the year ended December 31, 2015, representing a decrease of $1,088,055 or 24%. Thisdecreased loss is due primarily to the completion of patient enrollment in the Phase 2 clinical trial of SGX942 in patients sufferingfrom oral mucositis associated with their CRT for head and neck cancer and offset by expenses incurred in the initiation of thepivotal Phase 3 clinical trial of SGX301 for the treatment of CTCL.

Amortizationand depreciation expense for the Vaccines/BioDefense business segment for the year ended December 31, 2016 was $40,186 as comparedto $39,925 for the year ended December 31, 2015. Amortization and depreciation expense for the BioTherapeutics business segmentfor the year ended December 31, 2016 was $41,395 as compared to $199,661 for the year ended December 31, 2015. The $158,266 decreasein amortization and depreciation expense for the BioTherapeutics segment was the result of a license agreement becoming fullyamortized during the year ended December 31, 2015 and accordingly, there was no amortization expense recognized during the yearended December 31, 2016 for the license agreement.

FinancialCondition and Liquidity

Cashand Working Capital

Asof September 30, 2017, we had cash and cash equivalents of $4,999,153 as compared to $8,772,567 as of December 31, 2016, representinga decrease of $3,773,414 or 43%. As of September 30, 2017, we had working capital of $3,047,007 as compared to working capitalof $7,243,918 as of December 31, 2016, representing a decrease of $4,196,911 or 58%. The decrease in cash and cash equivalentsand working capital is primarily related to expenditures to support the pivotal Phase 3 clinical trial of SGX301 for the treatmentof CTCL and expenditures incurred in the preparation and initiation of the Phase 3 clinical trial of SGX942 for the treatmentof oral mucositis in head and neck cancer.

Basedon our current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, proceeds availablefrom the equity line with Lincoln Park, proceeds remaining from the At-the-Market sale of shares of our common stock with FBRand proceeds from the State of New Jersey Technology Business Tax Certificate Transfer Program, management believes that its currentcash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the nexttwelve months.

Ourplans with respect to our liquidity management include, but are not limited to, the following:

Expenditures

Underour budget and based upon our existing product development agreements and license agreements pursuant to letters of intent andoption agreements, we expect our total research and development expenditures for the 12 month period from September 30, 2017 tobe approximately $10.5 million before any contract or grant reimbursements, of which $7.0 million relates to the BioTherapeuticsbusiness and $3.5 million relates to the Vaccines/BioDefense business. We anticipate contract and grant revenues in the next12 months of approximately $5.5 million to offset research and development expenses of the Vaccines/BioDefense business segment.

Thetable below details our costs for research and development by program and amounts reimbursed for the nine months ended September30:

ContractualObligations

Wehave commitments of approximately $425,000 as of September 30, 2017 relating to several licensing agreements with consultantsand universities. Additionally, we have collaboration and license agreements, which upon clinical or commercialization successmay require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if andwhen achieved. However, there can be no assurance that clinical or commercialization success will occur. As of September 30, 2017,no milestone or royalty payments have been paid or accrued.

InDecember 2014, we entered into a lease agreement through May 31, 2018 for existing and expanded office space. The rent for thefirst 12 months was approximately $12,300 per month, or approximately $20.85 per square foot. This rent increased to approximately$12,375 per month, or approximately $20.95 per square foot, for the next 12 months, and thereafter increased to approximately$12,460 per month, or approximately $21.13 per square foot for the remainder of the lease. In October 2017, the lease was amendedthrough October 2020. The rent for the first 12 months will be approximately $11,367 per month, or approximately $22.00 per squarefoot. The rent will increase to approximately $11,625 per month, or approximately $22.50 per square foot, for the next 12 monthsand increase to approximately $11,883 per month, or approximately $23.00 per square foot for the remainder of the lease.

OnSeptember 3, 2014, we entered into an asset purchase agreement with Hy Biopharma, Inc. (“Hy Biopharma”) pursuant towhich we acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’ssynthetic hypericin product. As consideration for the assets acquired, we paid $275,000 in cash and issued 184,912 shares of commonstock with a fair value of $3,750,000. These amounts were charged to research and development expense during the third quarterof 2014 as the assets will be used in our research and development activities and do not have alternative future use pursuantto generally accepted accounting principles in the United States. Provided all future success-oriented milestones are attained,we will be required to make payments of up to $10.0 million, if and when achieved. Payments will be payable in restricted securitiesof the Company not to exceed 19.9% ownership of our outstanding stock. As of September 30, 2017, no milestone payments have beenmade or accrued.

InFebruary 2007, our Board of Directors authorized the issuance of 5,000 shares of our common stock to Dr. Schaber immediately priorto the completion of a transaction, or series or a combination of related transactions negotiated by our Board of Directors whereby,directly or indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholdersto a third party. Dr. Schaber’s amended employment agreement includes our obligation to issue such shares if such eventoccurs. 

Asa result of these above agreements, we have future contractual obligations over the next five years as follows:

BUSINESS

OurBusiness Overview

Weare a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where thereis an unmet medical need. We maintain two active business segments: BioTherapeutics and Vaccines/BioDefense.

OurBioTherapeutics business segment is developing a novel photodynamic therapy (SGX301) utilizing topical synthetic hypericin activatedwith safe visible florescent light for the treatment of cutaneous T-cell lymphoma (“CTCL”), our first-in-class innatedefense regulator technology, dusquetide (SGX942) for the treatment of oral mucositis in head and neck cancer, and proprietaryformulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal (“GI”)disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis(SGX201).

OurVaccines/BioDefense business segment includes active development programs for RiVax^®, our ricin toxin vaccine candidate,OrbeShield^®, our GI acute radiation syndrome (“GI ARS”) therapeutic candidate and SGX943, our therapeuticcandidate for antibiotic resistant and emerging infectious disease. The development of our vaccine programs currently is supportedby our heat stabilization technology, known as ThermoVax^®, under existing and on-going government contract funding.With the government contract from the National Institute of Allergy and Infectious Diseases (“NIAID”), we will attemptto advance the development of RiVax^® to protect against exposure to ricin toxin. We have advanced the developmentof OrbeShield® for the treatment of GI ARS with funds received under our awarded government contracts with the BiomedicalAdvanced Research and Development Authority (“BARDA”) and grants from the NIAID.

Anoutline of our business strategy follows:

ProductCandidates in Development

Thefollowing tables summarize our product candidates under development:

BioTherapeuticProduct Candidates

VaccineThermostability Platform**

BioDefenseProducts**

**Contingent upon continued government contract/grant funding or other funding source.

CorporateInformation

Wewere incorporated in Delaware in 1987 under the name Biological Therapeutics, Inc. In 1987, we merged with Biological Therapeutics,Inc., a North Dakota corporation, pursuant to which we changed our name to “Immunotherapeutics, Inc.” We changed ourname to “Endorex Corp.” in 1996, to “Endorex Corporation” in 1998, to “DOR BioPharma, Inc.”in 2001, and finally to “Soligenix, Inc.” in 2009. Our principal executive offices are located at 29 Emmons Drive,Suite B-10, Princeton, New Jersey 08540 and our telephone number is (609) 538-8200.

BioTherapeuticsOverview

SGX301– for Treating Cutaneous T-Cell Lymphoma

SGX301is a novel, first-in-class, photodynamic therapy that utilizes safe visible light for activation. The active ingredient in SGX301is synthetic hypericin, a photosensitizer which is topically applied to skin lesions and then activated by fluorescent light 16to 24 hours later. Hypericin is also found in several species of Hypericum plants, although the drug used in SGX301 ischemically synthesized by a proprietary manufacturing process and not extracted from plants. Importantly, hypericin is optimallyactivated with visible light thereby avoiding the negative consequences of ultraviolet light. Other light therapies using UVAlight result in serious adverse effects including secondary skin cancers.

Combinedwith photoactivation, in clinical trials hypericin has demonstrated significant anti-proliferative effects on activated normalhuman lymphoid cells and inhibited growth of malignant T-cells isolated from CTCL patients. In both settings, it appears thatthe mode of action is an induction of cell death in a concentration as well as a light dose-dependent fashion. These effects appearto result, in part, from the generation of singlet oxygen during photoactivation of hypericin.

Hypericinis one of the most efficient known generators of singlet oxygen, the key component for phototherapy. The generation of singletoxygen induces necrosis and apoptosis in adjacent cells. The use of topical hypericin coupled with directed visible light resultsin generation of singlet oxygen only at the treated site. We believe that the use of visible light (as opposed to cancer-causingultraviolet light) is a major advance in photodynamic therapy. In a published Phase 2 clinical study in CTCL, after six weeksof twice weekly therapy, a majority of patients experienced a statistically significant (p<0.04) improvement with topicalhypericin treatment whereas the placebo was ineffective: 58.3% compared to 8.3%, respectively.

SGX301has received Orphan Drug designation as well as Fast Track designation from the FDA. The Orphan Drug Act is intended to assistand encourage companies to develop safe and effective therapies for the treatment of rare diseases and disorders. In additionto providing a seven-year term of market exclusivity for SGX301 upon final FDA approval, Orphan Drug designation also positionsus to be able to leverage a wide range of financial and regulatory benefits, including government grants for conducting clinicaltrials, waiver of FDA user fees for the potential submission of a New Drug Application (“NDA”) for SGX301, and certaintax credits. In addition, Fast Track is a designation that the FDA reserves for a drug intended to treat a serious or life-threateningcondition and one that demonstrates the potential to address an unmet medical need for the condition. Fast Track designation isdesigned to facilitate the development and expedite the review of new drugs. For instance, should events warrant, we will be eligibleto submit a NDA for SGX301 on a rolling basis, permitting the FDA to review sections of the NDA prior to receiving the completesubmission. Additionally, NDAs for Fast Track development programs ordinarily will be eligible for priority review. SGX301 forthe treatment of CTCL also was granted Orphan Drug designation from the European Medicines Agency (“EMA”) Committeefor Orphan Medical Products and Promising Innovative Medicine (“PIM”) designation from the Medicines and HealthcareProducts Regulatory Agency (“MHRA”) in the United Kingdom (“UK”).

Weinitiated our pivotal Phase 3 clinical study of SGX301 for the treatment of CTCL during December 2015 and are actively enrollingpatients. The Phase 3 protocol is expected to be a highly powered, double-blind, randomized, placebo-controlled, multicenter trialand will seek to enroll approximately 120 evaluable subjects. The trial will consist of three treatment cycles, each of eightweeks duration. Treatments will be administered twice weekly for the first six weeks and treatment response will be determinedat the end of the eighth week. In the first treatment cycle, approximately 80 subjects will receive SGX301 and 40 will receiveplacebo treatment of their index lesions. In the second cycle, all subjects will receive SGX301 treatment of their index lesions,and in the third cycle all subjects will receive SGX301 treatment of all of their lesions. Subjects will be followed for an additionalnine months after the completion of treatment. The primary efficacy endpoint will be assessed on the percentage of patients ineach of the two treatment groups (i.e., SGX301 and placebo) achieving a partial or complete response of the treated lesions, definedas a ≥ 50% reduction in the total Composite Assessment of Index Lesion Disease Severity (“CAILS”) score for threeindex lesions at the Cycle 1 evaluation visit (Week 8) compared to the total CAILS score at baseline. Other secondary measureswill assess treatment response including duration, degree of improvement, time to relapse and safety.

DuringSeptember 2017 we announced the National Cancer Institute (“NCI”), part of the National Institutes of Health (“NIH”)awarded us a Small Business Innovation Research (“SBIR”) grant of approximately $1.5 million over two years to supportthe conduct of our pivotal, Phase 3, randomized, double-blind, placebo-controlled study evaluating SGX301 (synthetic hypericin)as a treatment for CTCL.

Weestimate the potential worldwide market for SGX301 is in excess of $250 million for all applications, including the treatmentof CTCL. This potential market information is a forward-looking statement, and investors are urged not to place undue relianceon this statement. While we have determined this potential market size based on assumptions that we believe are reasonable, thereare a number of factors that could cause our expectations to change or not be realized. See “Risk Factors” and “CautionaryNote Regarding Forward-Looking Statements and Industry Data and Market Information.”

CutaneousT-Cell Lymphoma

CTCLis a class of non-Hodgkin’s lymphoma (“NHL”), a type of cancer of the white blood cells that are an integralpart of the immune system. Unlike most NHLs, which generally involve B-cell lymphocytes (involved in producing antibodies), CTCLis caused by an expansion of malignant T-cell lymphocytes (involved in cell-mediated immunity) normally programmed to migrateto the skin. These skin-trafficking malignant T-cells migrate to the skin, causing various lesions to appear that may change shapeas the disease progresses, typically beginning as a rash and eventually forming plaques and tumors. Mycosis fungoides (“MF”)is the most common form of CTCL. It generally presents with skin involvement only, manifested as scaly, erythematous patches.Advanced disease with diffuse lymph node and visceral organ involvement is usually associated with a poorer response rate to standardtherapies. A relatively uncommon sub-group of CTCL patients present with extensive skin involvement and circulating malignantcerebriform T-cells, referred to as Sézary syndrome. These patients have substantially graver prognoses than those withMF.

CTCLmortality is related to stage of disease, with median survival generally ranging from about 12 years in the early stages to only2.5 years when the disease has advanced. There is currently no FDA-approved drug for front-line treatment of early stage CTCL.Treatment of early-stage disease generally involves skin-directed therapies. One of the most common unapproved therapies usedfor early-stage disease is oral 5 or 8-methoxypsoralen (“Psoralen”) given with ultraviolet A (“UVA”) light,referred to as PUVA, which is approved for dermatological conditions such as disabling psoriasis not adequately responsive toother forms of therapy, idiopathic vitiligo and skin manifestations of CTCL in persons who have not been responsive to other formsof treatment. Psoralen is a mutagenic chemical that interferes with DNA causing mutations and other malignancies. Moreover, UVAis a carcinogenic light source that when combined with the Psoralen, results in serious adverse effects including secondary skincancers; therefore, the FDA requires a Black Box warning for PUVA.

CTCLconstitutes a rare group of NHLs, occurring in about 4% of the approximate 500,000 individuals living with NHL. We estimate, basedupon review of historic published studies and reports and an interpolation of data on the incidence of CTCL, that it affects over20,000 individuals in the U.S., with approximately 2,800 new cases seen annually.

Dusquetide

Dusquetide(research name: SGX94) is an innate defense regulator (“IDR”) that regulates the innate immune system to simultaneouslyreduce inflammation, eliminate infection and enhance tissue healing.

Dusquetideis based on a new class of short, synthetic peptides known as IDRs. It has a novel mechanism of action in that it modulates thebody’s reaction to both injury and infection and is both simultaneously anti-inflammatory and anti-infective. IDRs haveno direct antibiotic activity but modulate host responses, increasing survival after infections with a broad range of bacterialGram-negative and Gram-positive pathogens including both antibiotic sensitive and resistant strains, as well as accelerating resolutionof tissue damage following exposure to a variety of agents including bacterial pathogens, trauma and chemo- or radiation-therapy.IDRs represent a novel approach to the control of infection and tissue damage via highly selective binding to an intracellularadaptor protein, sequestosome-1, also known as p62, which has a pivotal function in signal transduction during activation andcontrol of the innate defense system. Preclinical data indicate that IDRs may be active in models of a wide range of therapeuticindications including life-threatening bacterial infections as well as the severe side-effects of chemo- and radiation-therapy.Additionally, due to selective binding to p62, dusquetide may have potential anti-tumor action.

Dusquetidehas demonstrated efficacy in numerous animal disease models including mucositis, colitis, skin infection and other bacterial infectionsand has been evaluated in a double-blind, placebo-controlled Phase 1 clinical trial in 84 healthy volunteers with both singleascending dose and multiple ascending dose components. Dusquetide was shown to have a good safety profile and be well-toleratedin all dose groups when administered by IV over 7 days and was consistent with safety results seen in pre-clinical studies. Dusquetideis the subject of an open Investigational New Drug (“IND”) application which has been cleared by the FDA. We believethat market opportunities for dusquetide include, but are not limited to, oral and gastrointestinal mucositis, acute Gram-positivebacterial infections (e.g., methicillin resistant Staphylococcus aureus (MRSA)), acute Gram-negative infections (e.g.,acinetobacter, melioidosis), and acute radiation syndrome.

SGX942– for Treating Oral Mucositis in Head and Neck Cancer

SGX942is our product candidate containing our IDR technology, dusquetide, targeting the treatment of oral mucositis in head and neckcancer patients. Oral mucositis in this patient population is an area of unmet medical need where there are currently no approveddrug therapies. Accordingly, we received Fast Track designation for the treatment of oral mucositis as a result of radiation and/orchemotherapy treatment in head and neck cancer patients from the FDA. In addition, dusquetide has been granted PIM designationin the UK by the MHRA for the treatment of severe oral mucositis in head and neck cancer patients receiving chemoradiation therapy.

Weinitiated a Phase 2 clinical study of SGX942 for the treatment of oral mucositis in head and neck cancer patients in Decemberof 2013. We completed enrollment in this trial in the second half of 2015, and in December 2015 released positive preliminaryresults. In this Phase 2 proof-of-concept clinical study that enrolled 111 patients, SGX942, at a dose of 1.5 mg/kg, successfullyreduced the median duration of severe oral mucositis by 50%, from 18 days to 9 days (p=0.099) in all patients and by 67%, from30 days to 10 days (p=0.040) in patients receiving the most aggressive chemoradiation therapy for treatment of their head andneck cancer. The p-values met the prospectively defined statistical threshold of p<0.1 in the study protocol. In addition toidentifying the best dose of 1.5 mg/kg, this study achieved all objectives, including increased incidence of “complete response”of tumor at the one month follow-up visit (47% in placebo vs. 63% in SGX942 at 1.5 mg/kg). Decreases in mortality and decreasesin infection rate were also observed with SGX942 treatment, consistent with the preclinical results observed in animal models.SGX942 was found to be generally safe and well tolerated, consistent with the safety profile observed in the prior Phase 1 studyconducted in 84 healthy volunteers. The long-term (12 month) follow-up data was consistent with the preliminary positive safetyand efficacy findings. While the placebo population experienced the expected 12-month survival rate of approximately 80%, as definedin the Surveillance, Epidemiology, and End Results statistics 1975-2012 from the National Cancer Institute, the SGX942 1.5 mg/kgtreatment group reported a 12-month survival rate of 93% (7% mortality in the SGX942 1.5 mg/kg group compared to 19% in the placebogroup). Similarly, tumor resolution (complete response) at 12 months was better in the SGX942 1.5 mg/kg treatment group relativeto the placebo population (80% in the 1.5 mg/kg group compared to 74% in the placebo group). The long-term follow-up results fromthe Phase 2 study are reviewed in “Dusquetide: Reduction in Oral Mucositis associated with Enduring Ancillary Benefits inTumor Resolution and Decreased Mortality in Head and Neck Cancer Patients” published online in Biotechnology Reports andavailable at the following link: https://doi.org/10.1016/j.btre.2017.05.002. In addition to safety, evaluations of othersecondary efficacy endpoints, such as the utilization of opioid pain medication, indicated that the SGX942 1.5mg/kg treatmentgroup had a 40% decrease in the use of opioids at the later stage of the treatment phase of the trial, when oral mucositis isusually most severe and expected to increase paid medication use. This was in contrast to the placebo group, which demonstrateda 10% increase in use of opioids over this same period. Data from this Phase 2 trial was published online in the Journal of Biotechnology.The publication also delineates the supportive nonclinical data in this indication, demonstrating consistency in the qualitativeand quantitative biological response, including dose response, across the nonclinical and clinical data sets. The results areavailable at the following link: http://authors.elservier.com/sd/article/S01681656116315668.

OnSeptember 9, 2016, we and SciClone Pharmaceuticals, Inc. (“SciClone”) entered into an exclusive license agreement,pursuant to which we granted rights to SciClone to develop, promote, market, distribute and sell SGX942 in defined territories.Under the terms of the license agreement, SciClone will be responsible for all aspects of development, product registration andcommercialization in the territories, having access to data generated by us. In exchange for exclusive rights, SciClone will payus royalties on net sales, and we will supply commercial drug product to SciClone on a cost-plus basis, while maintaining worldwidemanufacturing rights.

Wehave received clearance from the FDA to advance the pivotal Phase 3 protocol for SGX942 in the treatment of oral mucositis inpatients with head and neck cancer receiving chemoradiation therapy. Additionally, we have received positive Scientific Advicefrom the EMA for the development of SGX942 as a treatment for oral mucositis in patients with head and neck cancer. The ScientificAdvice from the EMA indicates that a single, double-blind, placebo-controlled, multinational, Phase 3 pivotal study, if successful,in conjunction with the Phase 2 dose-ranging study, is generally considered sufficient to support a marketing authorization application(“MAA”) to the EMA for potential licensure in Europe. The advice also provided several suggestions to strengthen thestudy design and data collection that will be integrated into the final protocol. Scientific Advice is offered by the EMA to stakeholdersfor clarification of questions arising during development of medicinal products. The scope of Scientific Advice is limited toscientific issues and focuses on development strategies rather than pre-evaluation of data to support an MAA. Scientific Adviceis legally non-binding and is based on the current scientific knowledge which may be subject to future changes.

Wehad been working with leading oncology centers, a number of which participated in the Phase 2 study, to advance this Phase 3 clinicaltrial referred to as the “DOM–INNATE” study (Dusquetide treatment in Oral Mucositis –by modulating INNATE immunity). Based on the positive and previously published Phase 2 results (Study IDR-OM-01), the pivotalPhase 3 clinical trial (Study IDR-OM-02) will be a highly powered, double-blind, randomized, placebo-controlled, multinationaltrial that will seek to enroll approximately 190 subjects with squamous cell carcinoma of the oral cavity and oropharynx who arescheduled to receive a minimum total cumulative radiation dose of 55 Gy fractionated as 2.0-2.2 Gy per day with concomitant cisplatinchemotherapy given as a dose of 80-100 mg/m² every third week. Subjects will be randomized to receive either 1.5 mg/kgSGX942 or placebo given twice a week during and for two weeks following completion of chemoradiation therapy (“CRT”).The primary endpoint for the study will be the median duration of severe oral mucositis, which will be assessed by oral examinationat each treatment visit and then through six weeks following completion of CRT. Oral mucositis will be evaluated using the WHOGrading system. Severe oral mucositis is defined as a WHO Grade of ≥3. Subjects will be followed for an additional 12 monthsafter the completion of treatment.

DuringJuly 2017, we initiated our pivotal Phase 3 study with a controlled roll-out of U.S. study sites, and will follow with the additionof European centers in 2018.

DuringSeptember 2017, the National Institute of Dental and Craniofacial Research (“NIDCR”), part of the NIH, awarded usa SBIR grant of approximately $1.5 million over two years to support the conduct of our Phase 3, multinational, randomized, double-blind,placebo-controlled study evaluating SGX942 (dusquetide) as a treatment for severe oral mucositis in patients with head and neckcancer receiving CRT.

Weestimate the potential worldwide market for SGX942 is in excess of $500 million for all applications, including the treatmentof oral mucositis. This potential market information is a forward-looking statement, and investors are urged not to place unduereliance on this statement. While we have determined this potential market size based on assumptions that we believe are reasonable,there are a number of factors that could cause our expectations to change or not be realized. See “Risk Factors” and“Cautionary Note Regarding Forward-Looking Statements and Industry Data and Market Information.”

OralMucositis

Mucositisis the clinical term for damage done to the mucosa by anticancer therapies. It can occur in any mucosal region, but is most commonlyassociated with the mouth, followed by the small intestine. We estimate, based upon our review of historic studies and reports,and an interpolation of data on the incidence of mucositis, that mucositis affects approximately 500,000 people in the U.S. peryear and occurs in 40% of patients receiving chemotherapy. Mucositis can be severely debilitating and can lead to infection, sepsis,the need for parenteral nutrition and narcotic analgesia. The GI damage causes severe diarrhea. These symptoms can limit the dosesand duration of cancer treatment, leading to sub-optimal treatment outcomes.

Themechanisms of mucositis have been extensively studied and have been recently linked to the interaction of chemotherapy and/orradiation therapy with the innate defense system. Bacterial infection of the ulcerative lesions is regarded as a secondary consequenceof dysregulated local inflammation triggered by therapy-induced cell death, rather than as the primary cause of the lesions.

Weestimate, based upon our review of historic studies and reports, and an interpolation of data on the incidence of oral mucositis,that oral mucositis is a subpopulation of approximately 90,000 patients in the U.S., with a comparable number in Europe. Oralmucositis almost always occurs in patients with head and neck cancer treated with radiation therapy (greater than 80% incidenceof severe mucositis) and is common in patients undergoing high dose chemotherapy and hematopoietic cell transplantation, wherethe incidence and severity of oral mucositis depends greatly on the nature of the conditioning regimen used for myeloablation.

OralBDP

OralBDP (beclomethasone 17,21-dipropionate) represents a first-of-its-kind oral, locally acting therapy tailoredto treat GI inflammation. BDP has been marketed in the U.S. and worldwide since the early 1970s as the active pharmaceutical ingredientin a nasal spray and in a metered-dose inhaler for the treatment of patients with allergic rhinitis and asthma. Oral BDP is specificallyformulated for oral administration as a single product consisting of two tablets. One tablet is intended to release BDP in theupper sections of the GI tract and the other tablet is intended to release BDP in the lower sections of the GI tract.

Basedon its pharmacological characteristics, oral BDP may have utility in treating other conditions of the gastrointestinal tract havingan inflammatory component. We are planning to pursue development programs for the treatment of pediatric Crohn’s disease,acute radiation enteritis and GI ARS pending further grant funding. We are also exploring the possibility of testing oral BDPfor local inflammation associated with ulcerative colitis, among other indications.

Weare pursuing Orphan Drug designations for relevant indications as appropriate in both the U.S. and Europe. An Orphan Drug designationprovides for seven years of market exclusivity upon approval in the U.S. and Europe, respectively.

SGX203– for Treating Pediatric Crohn’s Disease

SGX203is a two tablet delivery system of BDP specifically designed for oral use that allows for administration of immediate and delayedrelease BDP throughout the small bowel and the colon. The FDA has given SGX203 Orphan Drug designation as well as Fast Track designationfor the treatment of pediatric Crohn’s disease.

Weestimate the potential worldwide market for oral BDP is in excess of $500 million for all applications, including the treatmentof pediatric Crohn’s disease. This potential market information is a forward-looking statement, and investors are urgednot to place undue reliance on this statement. While we have determined this potential market size based on assumptions that webelieve are reasonable, there are a number of factors that could cause our expectations to change or not be realized. See “RiskFactors” and “Cautionary Note Regarding Forward-Looking Statements and Industry Data and Market Information.”

PediatricCrohn’s Disease

Crohn’sdisease causes inflammation of the GI tract. Crohn’s disease can affect any area of the GI tract, from the mouth to theanus, but it most commonly affects the lower part of the small intestine, called the ileum. The swelling caused by the diseaseextends deep into the lining of the affected organ. The swelling can induce pain and can make the intestines empty frequently,resulting in diarrhea. Because the symptoms of Crohn’s disease are similar to other intestinal disorders, such as irritablebowel syndrome and ulcerative colitis, it can be difficult to diagnose. People of Ashkenazi Jewish heritage have an increasedrisk of developing Crohn’s disease.

Crohn’sdisease can appear at any age, but it is most often diagnosed in adults in their 20s and 30s. However, approximately 30% of peoplewith Crohn’s disease develop symptoms before 20 years of age. We estimate, based upon our review of historic published studiesand reports, and an interpolation of data on the incidence of pediatric Crohn’s disease, that pediatric Crohn’s diseaseis a subpopulation of approximately 80,000 patients in the U.S. with a comparable number in Europe. Crohn’s disease tendsto be both severe and extensive in the pediatric population and a relatively high proportion (approximately 40%) of pediatricCrohn’s patients have involvement of their upper gastrointestinal tract.

Crohn’sdisease presents special challenges for children and teens. In addition to bothersome and often painful symptoms, the diseasecan stunt growth, delay puberty, and weaken bones. Crohn’s disease symptoms may sometimes prevent a child from participatingin enjoyable activities. The emotional and psychological issues of living with a chronic disease can be especially difficult foryoung people.

SGX201– for Preventing Acute Radiation Enteritis

SGX201is a delayed-release formulation of BDP specifically designed for oral use. In 2012, we completed a Phase 1/2 clinical trial testingSGX201 in prevention of acute radiation enteritis. Patients with rectal cancer scheduled to undergo concurrent radiation and chemotherapyprior to surgery were randomized to one of four dose groups. The objectives of the study were to evaluate the safety and maximaltolerated dose of escalating doses of SGX201, as well as the preliminary efficacy of SGX201 for prevention of signs and symptomsof acute radiation enteritis. The study demonstrated that oral administration of SGX201 was safe and well tolerated across allfour dose groups. There was also evidence of a potential dose response with respect to diarrhea, nausea and vomiting and the assessmentof enteritis according to National Cancer Institute Common Terminology Criteria for Adverse Events for selected gastrointestinalevents. In addition, the incidence of diarrhea was lower than that seen in recent published historical control data in this patientpopulation. This program was supported in part by a $500,000 two-year SBIR grant awarded by the NIH. We continue to work withour Radiation Enteritis medical advisors to identify additional funding opportunities to support the clinical development program.

Wehave received Fast Track designation from the FDA for SGX201 for acute radiation enteritis.

Weestimate the potential worldwide market for oral BDP is in excess of $500 million for all applications, including the treatmentof acute radiation enteritis. This potential market information is a forward-looking statement, and investors are urged not toplace undue reliance on this statement. While we have determined this potential market size based on assumptions that we believeare reasonable, there are a number of factors that could cause our expectations to change or not be realized. See “RiskFactors” and “Cautionary Note Regarding Forward-Looking Statements and Industry Data and Market Information.”

AcuteRadiation Enteritis

Externalradiation therapy is used to treat most types of cancer, including cancer of the bladder, uterine, cervix, rectum, prostate, andvagina. During delivery of treatment, some level of radiation will also be delivered to healthy tissue, including the bowel, leadingto acute and chronic toxicities. The large and small bowels are very sensitive to radiation and the larger the dose of radiationthe greater the damage to normal bowel tissue. Radiation enteritis is a condition in which the lining of the bowel becomes swollenand inflamed during or after radiation therapy to the abdomen, pelvis, or rectum. Most tumors in the abdomen and pelvis need largedoses, and almost all patients receiving radiation to the abdomen, pelvis, or rectum will show signs of acute enteritis.

Patientswith acute enteritis may have nausea, vomiting, abdominal pain and bleeding, among other symptoms. Some patients may develop dehydrationand require hospitalization. With diarrhea, the gastrointestinal tract does not function normally, and nutrients such as fat,lactose, bile salts, and vitamin B12 are not well absorbed.

Symptomswill usually resolve within two to six weeks after therapy has ceased. Radiation enteritis is often not a self-limited illness,as over 80% of patients who receive abdominal radiation therapy complain of a persistent change in bowel habits. Moreover, acuteradiation injury increases the risk of development of chronic radiation enteropathy, and overall 5% to 15% of the patients whoreceive abdominal or pelvic irradiation will develop chronic radiation enteritis.

Weestimate, based upon our review of historic published studies and reports, and an interpolation of data on the treatment coursesand incidence of cancers occurring in the abdominal and pelvic regions, there to be over 100,000 patients annually in the U.S.,with a comparable number in Europe, who receive abdominal or pelvic external beam radiation treatment for cancer, and these patientsare at risk of developing acute and chronic radiation enteritis.

Vaccines/BioDefenseOverview

ThermoVax^®– Thermostability Technology

Ourthermostability technology, ThermoVax^®, is a novel method of rendering aluminum salt, (known colloquially as Alum),adjuvanted vaccines stable at elevated temperatures. Alum is the most widely employed adjuvant technology in the vaccine industry.The value of ThermoVax^® lies in its potential ability to eliminate the need for cold chain production, transportation,and storage for Alum adjuvanted vaccines. This would relieve companies of the high costs of producing and maintaining vaccinesunder refrigerated conditions. Based on historical reports from the World Health Organization and other scientific reports, webelieve that a meaningful proportion of vaccine doses globally are wasted due to excursions from required cold chain temperatureranges. This is due to the fact that most Alum adjuvanted vaccines need to be maintained at between 2 and 8 degrees Celsius (“C”)and even brief excursions from this temperature range (especially below freezing) usually necessitates the destruction of theproduct or the initiation of costly stability programs specific for the vaccine lots in question. We believe that the savingsrealized from the elimination of cold chain costs and related product losses would significantly increase the profitability ofvaccine products. We believe that elimination of the cold chain could further facilitate the use of these vaccines in the lesserdeveloped parts of the world. ThermoVax^® has the potential to facilitate easier storage and distribution of strategicnational stockpile vaccines in emergency settings.

ThermoVax^®development was supported pursuant to our $9.4 million NIAID grant enabling development of thermo-stable ricin (RiVax^®)and anthrax (VeloThrax^®) vaccines. Proof-of-concept preclinical studies with ThermoVax^® indicatethat it is able to produce stable vaccine formulations using adjuvants, protein immunogens, and other components that ordinarilywould not withstand long temperature variations exceeding customary refrigerated storage conditions. These studies were conductedwith our aluminum-adjuvanted ricin toxin vaccine, RiVax^® and our aluminum-adjuvanted anthrax vaccine, VeloThrax^®.Each vaccine was manufactured under precise lyophilization conditions using excipients that aid in maintaining native proteinstructure of the key antigen. When RiVax^® was kept at 40 degrees C (104 degrees Fahrenheit) for up to one year,all of the animals vaccinated with the lyophilized RiVax^® vaccine developed potent and high titer neutralizingantibodies. In contrast, animals that were vaccinated with the liquid RiVax^® vaccine kept at 40 degrees C did notdevelop neutralizing antibodies and were not protected against ricin exposure. The ricin A chain is extremely sensitive to temperatureand rapidly loses the ability to induce neutralizing antibodies when exposed to temperatures higher than 8 degrees C. When VeloThrax^®was kept for up to 16 weeks at 70 degrees C, it was able to develop a potent antibody response, unlike the liquid formulationkept at the same temperature. Moreover, we also have demonstrated the compatibility of our thermostabilization technology withother secondary adjuvants such as TLR-4 agonists. Additionally, the University of Colorado conducted a study that demonstrateda heat stable vaccine formulation of a human papillomavirus (“HPV”) vaccine. The work was conducted by Drs. Randolphand Garcea and demonstrated the successful conversion of a commercial virus-like-particle based vaccine requiring cold chain storageto a subunit, alum-adjuvanted, vaccine which is stable at ambient temperatures. This work, funded by a University of Coloradoseed grant and the Specialized Program of Research Excellence in cervical cancer, is the first demonstration of the utility ofThermoVax^® technology for the development of a subunit based commercial vaccine.  The HPV vaccine formulationwas found to be stable for at least 12 weeks at 50 degrees C.  In the study, mice immunized with the ThermoVax^®-stabilizedHPV subunit vaccine were also found to achieve immune responses similar to the commercial HPV vaccine, Cervarix^®,as measured by either total antibody levels or neutralizing antibody levels. Moreover, whereas the immune responses to Cervarix^®were reduced after storage for 12 weeks at 50 degrees C, the ThermoVax^® formulated vaccine retained its efficacy.The results were published online in the European Journal of Pharmaceutics and Biopharmaceutics. See http://www.sciencedirect.com/science/article/pii/S0939641115002416).

Wealso entered into a collaboration agreement with Axel Lehrer, PhD of the Department of Tropical Medicine, Medical Microbiologyand Pharmacology, John A. Burns School of Medicine, University of Hawaiʻiat Manoa (“UH Manoa”) and Hawaii Biotech, Inc. (“HBI”) to develop a heat stable subunit Ebola vaccine.Dr. Lehrer, a co-inventor of the Ebola vaccine with HBI, has shown proof of concept efficacy with subunit Ebola vaccines in non-humanprimates. The most advanced Ebola vaccines involve the use of vesicular stomatitis virus and adenovirus vectors – live,viral vectors which complicate the manufacturing, stability and storage requirements. Dr. Lehrer’s vaccine candidate isbased on highly purified recombinant protein antigens, circumventing many of these manufacturing difficulties. Dr. Lehrer andHBI have developed a robust manufacturing process for the required proteins. Application of ThermoVax^® may allowfor a product that can avoid the need for cold chain distribution and storage, yielding a vaccine ideal for use in both the developedand developing world. Although this agreement has expired in accordance with its terms, we expect to extend the period of theagreement or enter into another agreement with Dr. Lehrer and HBI to replace this agreement.

DuringSeptember 2017 we announced we will be participating in a Research Project (R01) grant awarded to UH Manoa for the developmentof a thermostabilized Ebola vaccine, with our awarded funding of approximately $700,000 over 5 years. Previous collaborationsdemonstrated the feasibility of developing a heat stable subunit Ebola vaccine. Under the terms of the subaward, we will continueto support vaccine formulation development with our proprietary vaccine thermostabilization technology, ThermoVax^®.Ultimately, the objective is to produce a thermostable trivalent filovirus vaccine for protection against Ebola and related diseases,allowing worldwide distribution without the need for cold storage.

Weintend to seek out potential partnerships with companies marketing FDA/ex-U.S. health authority approved Alum adjuvanted vaccinesand currently developing Alum adjuvanted vaccines that are interested in eliminating the need for cold chain for their products.We believe that ThermoVax^® also will enable us to expand our vaccine development expertise beyond biodefense intothe infectious disease space and also has the potential to allow for the development of multivalent vaccines (e.g., combinationricin-anthrax vaccine).

RiVax™ –Ricin Toxin Vaccine

RiVax^®is our proprietary vaccine candidate being developed to protect against exposure to ricin toxin and if approved, would bethe first ricin vaccine. The immunogen in RiVax^® induces a protective immune response in animal models of ricinexposure and functionally active antibodies in humans. The immunogen consists of a genetically inactivated ricin A chain subunitthat is enzymatically inactive and lacks residual toxicity of the holotoxin. RiVax^® has demonstrated statisticallysignificant (p < 0.0001) preclinical survival results, providing 100% protection against acute lethality in an aerosol exposurenon-human primate model (Roy et al, 2015, Thermostable ricin vaccine protects rhesus macaques against aerosolized ricin: Epitope-specificneutralizing antibodies correlate with protection, PNAS USA 112:3782-3787), and has also been shown to be well tolerated and immunogenicin two Phase 1 clinical trials in healthy volunteers. Results of the first Phase 1 human trial of RiVax^® establishedthat the immunogen was safe and induced antibodies that we believe may protect humans from ricin exposure. The antibodies generatedfrom vaccination, concentrated and purified, were capable of conferring immunity passively to recipient animals, indicating thatthe vaccine was capable of inducing functionally active antibodies in humans. The outcome of this study was published in the Proceedingsof the National Academy of Sciences (Vitetta et al., 2006, A Pilot Clinical Trial of a Recombinant Ricin Vaccine in Normal Humans,PNAS, 103:2268-2273). The second trial which was completed in September 2012 and was sponsored by University of Texas SouthwesternMedical Center (“UTSW”), evaluated a more potent formulation of RiVax^® that contained an aluminum adjuvant(Alum). The results of the Phase 1b study indicated that Alum-adjuvanted RiVax^® was safe and well tolerated, andinduced greater ricin neutralizing antibody levels in humans than adjuvant-free RiVax^®. The outcomes of this secondstudy were published in the Clinical and Vaccine Immunology (Vitetta et al., 2012, Recombinant Ricin Vaccine Phase 1b ClinicalTrial, Clin. Vaccine Immunol. 10:1697-1699). We have adapted the original manufacturing process for the immunogen contained inRiVax^® for thermostability and large scale manufacturing and recent studies have confirmed that the thermostabilizedRiVax^® formulation significantly enhances the stability of the RiVax® antigen, enabling storage for at least1 year at temperatures up to 40°C (104 °F). The program will pursue approval via the FDA “Animal Rule” sinceit is not possible to test the efficacy of the vaccine in a clinical study which would expose humans to ricin. Uniform, easilymeasured and species-neutral immune correlates of protection that can be measured in humans and animals, and are indicative ofanimal survival to subsequent ricin challenge, are central to the application of the “Animal Rule”. Recent work hasidentified such potential correlates of immune protection in animals and work to qualify and validate these approaches is continuing,with the goal of utilizing these assays in a planned Phase 1/2 clinical trial with the thermostable RiVax® formulation. Wehave entered into a collaboration with IDT Biologika GmbH to scale-up the formulation/filling process and continue developmentand validation of analytical methods established at IDT to advance the program. We also have initiated a development agreementwith Emergent BioSolutions, Inc. to implement a commercially viable, scalable production technology for the RiVax^®drug substance protein antigen.

Thedevelopment of RiVax^® has been sponsored through a series of overlapping challenge grants, UC1, and cooperativegrants, U01, from the NIH, granted to Soligenix and to UTSW where the vaccine originated. The second clinical trial was supportedby a grant from the FDA’s Office of Orphan Products to UTSW. To date, we and UTSW have collectively received approximately$25 million in grant funding from the NIH for the development of RiVax^®. In September 2014, we entered into a contractwith the NIH for the development of RiVax^® that would provide up to an additional $24.7 million of funding in theaggregate if options to extend the contract are exercised by the NIH. The development agreements with Emergent BioSolutions andIDT are specifically funded under this NIH contract.

DuringJune 2017 NIAID exercised an option for the evaluation of RiVax^® to fund additional animal efficacy studies. Theexercised option will provide us with approximately $2.0 million in additional funding. Additionally, during August 2017 NIAIDexercised an option to fund GMP (good manufacturing practices) compliant RiVax^® bulk drug substance and finisheddrug product manufacturing, which is required for the conduct of future preclinical and clinical safety and efficacy studies.The exercised option will provide us with approximately $2.5 million in additional non-dilutive funding, bringing the total amountawarded to date under this contract to $21.2 million, of which $17.9 million is still available. If all contract options are exercised,the total award of up to $24.7 million will support the preclinical, manufacturing and clinical development activities necessaryto advance heat stable RiVax^® with the U.S. FDA.

RiVax^® hasbeen granted Orphan Drug designation by the FDA for the prevention of ricin intoxication.

Assumingdevelopment efforts are successful for RiVax^®, we believe potential government procurement contract(s) couldreach $200 million. This potential procurement contract information is a forward-looking statement, and investors are urged notto place undue reliance on this statement. While we have determined this potential procurement contract value based on assumptionsthat we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements and Industry Data and Market Information.”

Asa new chemical entity, an FDA approved RiVax® vaccine has the potential to qualify for a biodefense Priority Review Voucher(“PRV”). Approved under the 21st Century Cures Act in late 2016, the biodefense PRV is awarded upon approval as amedical countermeasure when the active ingredient(s) have not been otherwise approved for use in any context. PRVs are transferableand can be sold, with sales in recent years varying from between $125 million to $350 million. When redeemed, PRVs entitle theuser to an accelerated review period of nine months, saving a median of seven months review time as calculated in 2009. However,FDA must be advised 90 days in advance of the use of the PRV and the use of a PRV is associated with an additional user fee ($2.7million in 2017).

RicinToxin

Ricintoxin can be cheaply and easily produced, is stable over long periods of time, is toxic by several routes of exposure and thushas the potential to be used as a biological weapon against military and/or civilian targets. As a bioterrorism agent, ricin couldbe disseminated as an aerosol, by injection, or as a food supply contaminant. The potential use of ricin toxin as a biologicalweapon of mass destruction has been highlighted in a Federal Bureau of Investigation Bioterror report released in November 2007titled Terrorism 2002-2005, which states that “Ricin and the bacterial agent anthrax are emerging as the most prevalentagents involved in WMD investigations” (http://www.fbi.gov/stats-services/publications/terrorism-2002-2005/terror02_05.pdf).In recent years, Al Qaeda in the Arabian Peninsula has threatened the use of ricin toxin to poison food and water supplies andin connection with explosive devices. Domestically, the threat from ricin remains a concern for security agencies. As recentlyas April 2013, letters addressed to the President of the United States, a U.S. Senator and a judge tested positive for ricin.

TheCenters for Disease Control and Prevention has classified ricin toxin as a Category B biological agent. Ricin works by first bindingto glycoproteins found on the exterior of a cell, and then entering the cell and inhibiting protein synthesis leading to celldeath. Once exposed to ricin toxin, there is no effective therapy available to reverse the course of the toxin. The recent ricinthreat to government officials has heightened the awareness of this toxic threat. Currently, there is no FDA approved vaccineto protect against the possibility of ricin toxin being used in a terrorist attack, or its use as a weapon on the battlefieldnor is there a known antidote for ricin toxin exposure.

OrbeShield^®–for Treating GI Acute Radiation Syndrome

OrbeShield^®is an oral immediate and delayed release formulation of the topically active corticosteroid BDP and is being developed forthe treatment of GI ARS. Corticosteroids are a widely used class of anti-inflammatory drugs. BDP is a corticosteroid with predominantlytopical activity that is approved for use in asthma, psoriasis and allergic rhinitis.

OrbeShield^®has demonstrated positive preclinical results in a canine GI ARS model which indicate that dogs treated with OrbeShield^®demonstrated statistically significant (p=0.04) improvement in survival with dosing at either two hours or 24 hours afterexposure to lethal doses of total body irradiation (“TBI”) when compared to control dogs. OrbeShield^®appears to significantly mitigate the damage to the GI epithelium caused by exposure to high doses of radiation using a well-establishedcanine model of GI ARS.

TheGI tract is highly sensitive to ionizing radiation and the destruction of epithelial tissue is one of the first effects of radiationexposure. The rapid loss of epithelial cells leads to inflammation and infection that are often the primary cause of death inacute radiation injury. This concept of GI damage also applies to the clinical setting of oncology, where high doses of radiationcannot be administered effectively to the abdomen because radiation is very toxic to the intestines. We are seeking to treat thesame type of toxicity in our acute radiation enteritis clinical program with SGX201. As a result, we believe that OrbeShield^®has the potential to be a “dual use” compound, a desirable characteristic which is a specific priority for ARSand other medical countermeasure indications. The FDA has cleared the IND application for OrbeShield^® for the mitigationof morbidity and mortality associated with GI ARS.

InSeptember 2013, we received two government contracts from BARDA and NIAID for the advanced preclinical and manufacturing developmentof OrbeShield^® leading to FDA approval to treat GI ARS. The BARDA contract contained a two year base period withtwo contract options, exercisable by BARDA, for a total of five years and up to $26.3 million. The NIAID contract consisted ofa one year base period and two contract options, exercisable by NIAID, for a total of three years and up to $6.4 million. We receiveda combined approximate $18 million in contract funding from both BARDA and NIAID which includes combined supplemental fundingof $634,000, extending the programs through the first quarter of 2017. The NIAID contract was completed during the first quarterof 2017 along with the BARDA contract base period, with BARDA electing not to extend the current contract beyond the base period.We will continue to apply for additional government funding. Previously, development of OrbeShield^® had been largelysupported by a $1 million NIH grant to our academic partner, the Fred Hutchinson Cancer Research Center. In July 2012, we receivedan SBIR grant from NIAID of approximately $600,000 to support further preclinical development of OrbeShield^® forthe treatment of acute GI ARS. The FDA has given OrbeShield^® Orphan Drug designation and Fast Track designationfor the prevention of death following a potentially lethal dose of total body irradiation during or after a radiation disaster.

Assumingdevelopment efforts are successful for OrbeShield^®, we believe potential government procurement contracts couldreach as much as $450 million. This potential procurement contract information is a forward-looking statement, and investors areurged not to place undue reliance on this statement. While we have determined this potential procurement contract value basedon assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or notbe realized. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements and Industry Dataand Market Information.”

GIAcute Radiation Syndrome

ARSoccurs after toxic radiation exposure and involves several organ systems, notably the bone marrow, the GI tract and later thelungs. In the event of a nuclear disaster or terrorist detonation of a nuclear bomb, casualties exposed to greater than 2 grays(“Gy”) of absorbed radiation are at high risk for development of clinically significant ARS. Exposure to high dosesof radiation exceeding 10-12 Gy causes acute GI injury which can result in death. The GI tract is highly sensitive due to thecontinuous need for crypt stem cells and production of mucosal epithelium. The extent of injury to the bone marrow and the GItract are the principal determinants of survival after exposure to TBI. Although the hematopoietic syndrome can be rescued bybone marrow transplantation or growth factor administration, there is no established treatment or preventive measure for the GIdamage that occurs after high-dose radiation. As a result, we believe there is an urgent medical need for specific medical countermeasures against the lethal pathophysiological manifestations of radiation-induced GI injury. 

SGX943– for Treating Emerging and/or Antibiotic-Resistant Infectious Diseases

SGX943is an IDR, containing the same active ingredient as SGX942. Dusquetide is a fully synthetic, 5-amino acid peptide with high aqueoussolubility and stability. Extensive in vivo preclinical studies have demonstrated enhanced clearance of bacterial infectionwith SGX943 administration. SGX943 has shown efficacy against both gram-negative and gram-positive bacterial infections in preclinicalmodels, independent of whether the bacteria is antibiotic-resistant or antibiotic-sensitive.

Theinnate immune system is responsible for rapid and non-specific responses to combat bacterial infection. Augmenting these responsesrepresents an alternative approach to treating bacterial infections. In animal models, IDRs are efficacious against both antibiotic-sensitiveand antibiotic-resistant infections, both gram-positive and gram-negative bacteria, and are active irrespective of whether thebacteria occupies a primarily extracellular or intracellular niche. IDRs are also effective as stand-alone agents or in conjunctionwith antibiotics. An IDR for the treatment of serious bacterial infections encompasses a number of clinical advantages including:

Importantly,systemic inflammation and multi-organ failure is the ultimate common outcome of not only emerging and/or antibiotic-resistantinfectious diseases, but also of most biothreat agents (e.g., Burkholderia pseudomallei), indicating that dusquetide wouldbe applicable not only to antibiotic-resistant infection, but also to biothreat agents, especially where the pathogen is not knownand/or has been engineered for enhanced antibiotic resistance.

TheDrug Approval Process

TheFDA and comparable regulatory agencies in state, local and foreign jurisdictions impose substantial requirements on the clinicaldevelopment, manufacture and marketing of new drug and biologic products. The FDA, through regulations that implement the FederalFood, Drug, and Cosmetic Act, as amended (“FDCA”), and other laws and comparable regulations for other agencies, regulateresearch and development activities and the testing, manufacture, labeling, storage, shipping, approval, recordkeeping, advertising,promotion, sale, export, import and distribution of such products. The regulatory approval process is generally lengthy, expensiveand uncertain. Failure to comply with applicable FDA and other regulatory requirements can result in sanctions being imposed onus or the manufacturers of our products, including holds on clinical research, civil or criminal fines or other penalties, productrecalls, or seizures, or total or partial suspension of production or injunctions, refusals to permit products to be importedinto or exported out of the United States, refusals of the FDA to grant approval of drugs or to allow us to enter into governmentsupply contracts, withdrawals of previously approved marketing applications and criminal prosecutions.

Beforehuman clinical testing in the U.S. of a new drug compound or biological product can commence, an Investigational New Drug (“IND”),application is required to be submitted to the FDA. The IND application includes results of pre-clinical animal studies evaluatingthe safety and efficacy of the drug and a detailed description of the clinical investigations to be undertaken.

Clinicaltrials are normally done in three phases, although the phases may overlap. Phase 1 trials are smaller trials concerned primarilywith metabolism and pharmacologic actions of the drug and with the safety of the product. Phase 2 trials are designed primarilyto demonstrate effectiveness and safety in treating the disease or condition for which the product is indicated. These trialstypically explore various doses and regimens. Phase 3 trials are expanded clinical trials intended to gather additional informationon safety and effectiveness needed to clarify the product’s benefit-risk relationship and generate information for properlabeling of the drug, among other things. The FDA receives reports on the progress of each phase of clinical testing and may requirethe modification, suspension or termination of clinical trials if an unwarranted risk is presented to patients. When data is requiredfrom long-term use of a drug following its approval and initial marketing, the FDA can require Phase 4, or post-marketing, studiesto be conducted.

Withcertain exceptions, once successful clinical testing is completed, the sponsor can submit a New Drug Application (“NDA”),for approval of a drug, or a Biologic License Application (“BLA”), for biologics such as vaccines, which will be reviewed,and if successful, approved by the FDA, allowing the product to be marketed. The process of completing clinical trials for a newdrug is likely to take a number of years and require the expenditure of substantial resources. Furthermore, the FDA or any foreignhealth authority may not grant an approval on a timely basis, if at all. The FDA may deny the approval of an NDA or BLA, in itssole discretion, if it determines that its regulatory criteria have not been satisfied or may require additional testing or information.Among the conditions for marketing approval is the requirement that the prospective manufacturer’s quality control and manufacturingprocedures conform to good manufacturing practice regulations. In complying with standards contained in these regulations, manufacturersmust continue to expend time, money and effort in the area of production, quality control and quality assurance to ensure fulltechnical compliance. Manufacturing facilities, both foreign and domestic, also are subject to inspections by, or under the authorityof, the FDA and by other federal, state, local or foreign agencies.

Evenafter initial FDA or foreign health authority approval has been obtained, further studies, including Phase 4 post-marketing studies,may be required to provide additional data on safety and will be required to gain approval for the marketing of a product as atreatment for clinical indications other than those for which the product was initially tested. For certain drugs intended totreat serious, life-threatening conditions that show great promise in earlier testing, the FDA can also grant conditional approval.However, drug developers are required to study the drug further and verify clinical benefit as part of the conditional approvalprovision, and the FDA can revoke approval if later testing does not reproduce previous findings. The FDA may also condition approvalof a product on the sponsor agreeing to certain mitigation strategies that can limit the unfettered marketing of a drug. Also,the FDA or foreign regulatory authority will require post-marketing reporting to monitor the side effects of the drug. Resultsof post-marketing programs may limit or expand the further marketing of the product. Further, if there are any modifications tothe drug, including any change in indication, manufacturing process, labeling or manufacturing facility, an application seekingapproval of such changes will likely be required to be submitted to the FDA or foreign regulatory authority.

Inthe U.S., the FDCA, the Public Health Service Act, the Federal Trade Commission Act, and other federal and state statutes andregulations govern, or influence the research, testing, manufacture, safety, labeling, storage, record keeping, approval, advertisingand promotion of drug, biological, medical device and food products. Noncompliance with applicable requirements can result in,among other things, fines, recall or seizure of products, refusal to permit products to be imported into the U.S., refusal ofthe government to approve product approval applications or to allow the Company to enter into government supply contracts, withdrawalof previously approved applications and criminal prosecution. The FDA may also assess civil penalties for violations of the FDCAinvolving medical devices.

Forbiodefense development, such as with RiVax™ and OrbeShield^®, the FDA has instituted policies that are expectedto result in shorter pathways to market. This potentially includes approval for commercial use utilizing the results of animalefficacy trials, rather than efficacy trials in humans. However, the Company will still have to establish that the vaccine andcountermeasures it is developing are safe in humans at doses that are correlated with the beneficial effect in animals. Such clinicaltrials will also have to be completed in distinct populations that are subject to the countermeasures; for instance, the veryyoung and the very old, and in pregnant women, if the countermeasure is to be licensed for civilian use. Other agencies will havean influence over the benefit-risk scenarios for deploying the countermeasures and in establishing the number of doses utilizedin the Strategic National Stockpile. We may not be able to sufficiently demonstrate the animal correlation to the satisfactionof the FDA, as these correlates are difficult to establish and are often unclear. Invocation of the animal rule may raise issuesof confidence in the model systems even if the models have been validated. For many of the biological threats, the animal modelsare not available and the Company may have to develop the animal models, a time-consuming research effort. There are few historicalprecedents, or recent precedents, for the development of new countermeasure for bioterrorism agents. Despite the animal rule,the FDA may require large clinical trials to establish safety and immunogenicity before licensure and it may require safety andimmunogenicity trials in additional populations. Approval of biodefense products may be subject to post-marketing studies, andcould be restricted in use in only certain populations.

Vaccinesare approved under the BLA process that exists under the Public Health Service Act. In addition to the greater technical challengesassociated with developing biologics, the potential for generic competition is lower for a BLA product than a small molecule productsubject to an NDA under the Federal Food, Drug and Cosmetic Act. Under the Patient Protection and Affordable Care Act enactedin 2010, a “generic” version of a biologic is known as a biosimilar and the barriers to entry – whether legal,scientific, or logistical – for a biosimilar version of a biologic approved under a BLA are higher.

OrphanDrug Designation

Underthe Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biologics intended to treat a rare disease or condition– generally a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan drug designationmust be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the generic identity of the drugor biologic and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantagein, or shorten the duration of, the regulatory review and approval process. The first NDA or BLA applicant to receive FDA approvalfor a particular active ingredient to treat a particular disease with FDA orphan drug designation is entitled to a seven-yearexclusive marketing period in the United States for that product, for that indication. During the seven-year exclusivity period,the FDA may not approve any other applications to market the same drug or biologic for the same disease, except in limited circumstances,such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not preventthe FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a differentdisease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver ofthe NDA or BLA application user fee.

FastTrack Designation and Accelerated Approval

TheFDA is required to facilitate the development, and expedite the review, of drugs or biologics that are intended for the treatmentof a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potentialto address unmet medical needs for the condition. Under the fast track program, the sponsor of a new drug or biologic candidatemay request that the FDA designate the candidate for a specific indication as a fast track drug or biologic concurrent with, orafter, the filing of the IND for the candidate. The FDA must determine if the drug or biologic candidate qualifies for fast trackdesignation within 60 days of receipt of the sponsor’s request. Unique to a fast track product, the FDA may initiate reviewof sections of a fast track product’s NDA or BLA before the application is complete. This rolling review is available ifthe applicant provides, and the FDA approves, a schedule for the submission of the remaining information and the applicant paysapplicable user fees. However, the FDA’s time period goal for reviewing an application does not begin until the last sectionof the NDA or BLA is submitted. Additionally, the fast track designation may be withdrawn by the FDA if the FDA believes thatthe designation is no longer supported by data emerging in the clinical trial process.

Anyproduct submitted to the FDA for marketing, including under a fast track program, may be eligible for other types of FDA programsintended to expedite development and review, such as accelerated approval. Drug or biological products studied for their safetyand effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existingtreatments may receive accelerated approval, which means the FDA may approve the product based upon a surrogate endpoint thatis reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidityor mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit,taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

Inclinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutesfor a direct measurement of how a patient feels, functions, or survives. Surrogate endpoints can often be measured more easilyor more rapidly than clinical endpoints. A drug or biologic candidate approved on this basis is subject to rigorous post-marketingcompliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinicalendpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, willallow the FDA to withdraw the drug or biologic from the market on an expedited basis. All promotional materials for drug candidatesapproved under accelerated regulations are subject to prior review by the FDA.

PediatricInformation

Underthe Pediatric Research Equity Act (“PREA”), NDAs or BLAs or supplements to NDAs or BLAs must contain data to assessthe safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosingand administration for each pediatric subpopulation for which the drug is safe and effective. The FDA may grant full or partialwaivers, or deferrals, for submission of data. Unless otherwise required by regulation, PREA does not apply to any drug for anindication for which orphan designation has been granted.

EarlyAccess to Medicines Scheme

Launchedin April 2014 in the United Kingdom by the MHRA, the Early Access to Medicines Scheme (“EAMS”) offers severely illpatients with life-threatening and seriously debilitating conditions the lifeline of trying ground-breaking new medicines earlierthan they would normally be accessible. PIM designation is the first phase of EAMS and is awarded following an assessment of earlynonclinical and clinical data by the MHRA. The criteria product candidates must meet to obtain PIM designation are:

FalseClaims Laws

Thefederal False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented,a false claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be made or useda false record or statement material to a false or fraudulent claim to the federal government. As a result of a modification madeby the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or propertypresented to the US government.

Anti-KickbackLaws

Thefederal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying,soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in returnfor purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable under Medicare,Medicaid or other federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value.The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers,purchasers, and formulary managers on the other.

UnitedStates Healthcare Reform

FederalPhysician Payments Sunshine Act and its implementing regulations require that certain manufacturers of drugs, devices, biologicaland medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program(with certain exceptions) to report information related to certain payments or other transfers of value made or distributed tophysicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physiciansand teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediatefamily members.

Inaddition, we may be subject to data privacy and security regulation by both the federal government and the states in which weconduct our business. The Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the HealthInformation Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, imposescertain requirements relating to the privacy, security and transmission of individually identifiable health information. Amongother things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates”– independent contractors or agents of covered entities that receive or obtain protected health information in connectionwith providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties, amendedHIPAA to make civil and criminal penalties directly applicable to business associates and possibly other persons, and gave stateattorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAAlaws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, state laws govern theprivacy and security of health information in certain circumstances, many of which differ from each other in significant waysand may not have the same effect, thus complicating compliance efforts.

Third-PartySuppliers and Manufacturers

Drugsubstance and drug product manufacturing is outsourced to qualified suppliers. We do not have manufacturing capabilities/infrastructureand do not intend to develop the capacity to manufacture drug products substances. We have agreements with third-party manufacturersto supply bulk drug substances for our product candidates and with third parties to formulate, package and distribute our productcandidates. Our employees include professionals with expertise in pharmaceutical manufacturing development, quality assuranceand third party supplier management who oversee work conducted by third-party companies. We believe that we have on hand or caneasily obtain sufficient amounts of product candidates to complete our currently contemplated clinical trials. All of the drugsubstances used in our product candidates currently are manufactured by single suppliers. While we have not experienced any supplydisruptions, the number of manufacturers of the drug substances is limited. In the event it is necessary or advisable to acquiresupplies from alternative suppliers, assuming commercially reasonable terms could be reached, the challenge would be the efficienttransfer of technology and know-how from current manufactures to the new supplier. Formulation and distribution of our finishedproduct candidates also currently are conducted by single suppliers but we believe that alternative sources for these servicesare readily available on commercially reasonable terms, subject to the efficient transfer of technology and know-how from currentsuppliers to the new supplier.

Allof the current agreements for the supply bulk drug substances for our product candidates and for the formulation or distributionof our product candidates relate solely to the development (including preclinical and clinical) of our product candidates. Underthese contracts, our product candidates are manufactured upon our order of a specific quantity. In the event that we obtain marketingapproval for a product candidate, we will qualify secondary suppliers for all key manufacturing activities supporting the marketingapplication.

Third-PartySuppliers and Manufacturers

Drugsubstance and drug product manufacturing is outsourced to qualified suppliers. We do not have manufacturing capabilities/infrastructureand do not intend to develop the capacity to manufacture drug products substances. We have agreements with third-party manufacturersto supply bulk drug substances for our product candidates and with third parties to formulate, package and distribute our productcandidates. Our employees include professionals with expertise in pharmaceutical manufacturing development, quality assuranceand third party supplier management who oversee work conducted by third-party companies. We believe that we have on hand or caneasily obtain sufficient amounts of product candidates to complete our currently contemplated clinical trials. All of the drugsubstances used in our product candidates currently are manufactured by single suppliers. While we have not experienced any supplydisruptions, the number of manufacturers of the drug substances is limited. In the event it is necessary or advisable to acquiresupplies from alternative suppliers, assuming commercially reasonable terms could be reached, the challenge would be the efficienttransfer of technology and know-how from current manufactures to the new supplier. Formulation and distribution of our finishedproduct candidates also currently are conducted by single suppliers but we believe that alternative sources for these servicesare readily available on commercially reasonable terms, subject to the efficient transfer of technology and know-how from currentsuppliers to the new supplier.

Allof the current agreements for the supply of bulk drug substances for our product candidates and for the formulation or distributionof our product candidates relate solely to the development (including preclinical and clinical) of our product candidates. Underthese contracts, our product candidates are manufactured upon our order of a specific quantity. In the event that we obtain marketingapproval for a product candidate, we will qualify secondary suppliers for all key manufacturing activities supporting the marketingapplication.

Marketingand Collaboration

Wedo not currently have any sales and marketing capability, other than to potentially market our biodefense vaccine products directlyto government agencies. With respect to other commercialization efforts, we currently intend to seek distribution and other collaborationarrangements for the sales and marketing of any product candidate that is approved, while also evaluating the potential to commercializeon our own in orphan disease indications. From time to time, we have had and are having strategic discussions with potential collaborationpartners for our biodefense vaccine product candidates, although no assurance can be given that we will be able to enter intoone or more collaboration agreements for our product candidate on acceptable terms, if at all. We believe that both military andcivilian health authorities of the U.S. and other countries will increase their stockpiling of therapeutics and vaccines to treatand prevent diseases and conditions that could ensue following a bioterrorism attack.

On December 20, 2012,we re-acquired the North American and European commercial rights to oral BDP through an amendment of our collaboration and supplyagreement with Sigma-Tau Pharmaceuticals, Inc., which is now known as Leadiant Biosciences, Inc. (“Leadiant”). Theamendment requires us to make certain approval and commercialization milestone payments to Leadiant which could reach up to $6million. In addition, we have agreed to pay Leadiant: (a) a royalty amount equal to 3% of all net sales of oral BDP made directlyby us, and any third-party partner and/or their respective affiliates in the U.S., Canada, Mexico and in each country in the EuropeanTerritory for the later to occur of: (i) a period of ten years from the first commercial sale of oral BDP in each country, or (ii)the expiration of our patents and patent applications relating to oral BDP in such country (the “Payment Period”);and (b) 15% of all up-front payments, milestone payments and any other consideration (exclusive of equity payments) received byus and/or a potential partner from us and/or potential partner’s licensees, distributors and agents for oral BDP in eachrelevant country in the territory, which amount will be paid on a product-by-product and a country-by-country basis for the PaymentPeriod.

OnAugust 25, 2013, we entered into an agreement with SciClone Pharmaceuticals, Inc. (“SciClone”), pursuant to whichSciClone provided us with access to its oral mucositis clinical and regulatory data library in exchange for exclusive commercializationrights for SGX942 in the People’s Republic of China, including Hong Kong and Macau, subject to the negotiation of economicterms. SciClone’s data library was generated from two sequential Phase 2 clinical studies conducted in 2010 and 2012 evaluatingSciClone’s compound, SCV-07, for the treatment of oral mucositis caused by chemoradiation therapy in head and neck cancerpatients, before SciClone terminated its program. By analyzing data available from the placebo subjects in the SciClone trials,we acquired valuable insight into disease progression, along with quantitative understanding of its incidence and severity inthe head and neck cancer patient population. This information assisted us with the design of the SGX942 Phase 2 clinical trial,in which positive preliminary results were announced in December 2015.

OnSeptember 9, 2016, we and SciClone entered into an exclusive license agreement, pursuant to which we granted rights to SciCloneto develop, promote, market, distribute and sell SGX942 in the People’s Republic of China, including Hong Kong and Macau,as well as Taiwan, South Korea and Vietnam. Under the terms of the license agreement, SciClone will be responsible for all aspectsof development, product registration and commercialization in the territory, having access to data generated by us. In exchangefor exclusive rights, SciClone will pay us royalties on net sales, and we will supply commercial drug product to SciClone on acost-plus basis, while maintaining worldwide manufacturing rights.

Wealso entered into a common stock purchase agreement with SciClone pursuant to which we sold 352,942 shares of our common stockto SciClone for approximately $8.50 per share, for an aggregate price of $3,000,000. As part of the transaction, we granted SciClonecertain demand registration rights, and SciClone agreed, subject to certain exceptions, not to pledge, sell or otherwise transferor dispose of, or enter into any swap or other arrangement that transfers any of the economic consequences of ownership of, theshares purchased for at least one year from September 9, 2016.

Competition

Ourcompetitors are pharmaceutical and biotechnology companies, most of whom have considerably greater financial, technical, and marketingresources than we do. Universities and other research institutions, including the U.S. Army Medical Research Institute of InfectiousDiseases, also compete in the development of treatment technologies, and we face competition from other companies to acquire rightsto those technologies.

SGX301Competition

TheFDA has approved several treatments for later stages (IIB-IV) of CTCL and/or in conditions that are unresponsive to prior treatment.Two are targeted therapies (Targretin^®-caps and Ontak^®), two are histone deacetylases inhibitors(Zolina^® and Istodax^®) and the remaining two are topical therapies (Valchor^® andTargretin^®-gel). There are currently no FDA approved therapies for the treatment of front-line, early stage (I-IIA)CTCL; however certain topical chemotherapies and topical, radiation, photo and other therapies which are approved for indicationsother than CTCL are prescribed off-label for the treatment of early stage CTCL. These include psoralen combined with ultravioletA (UVA) light therapy (“PUVA”); however, PUVA treatments are usually limited to three times per week and 200 timesin total due to the potentially carcinogenic side effect. There are other drugs currently in development that may have the potentialto be used in early stage (I-IIA) CTCL – one in phase 2 (vorinostat) and others in phase 1. Vorinostat has been approvedby the FDA to treat CTCL patients who have conditions that are unresponsive to other therapies. It currently is being studiedin a phase 2 trial for the treatment of all stages of CTCL.

SGX94/942Competition

BecauseSGX94 (dusquetide) uses a novel mechanism of action in combating bacterial infections, there are no direct competitors at thistime. Bacterial infections are routinely treated with antibiotics and SGX94 treatment is anticipated to be utilized primarilywhere antibiotics are insufficient (e.g., due to antibiotic resistance) or contra-indicated (e.g., in situations where the developmentof antibiotic resistance is a significant concern). Many groups are working on the antibiotic resistance problem and researchinto the innate immune system is intensifying, making emerging competition likely (from companies such as Celtaxsys Inc., InnaxonTherapeutics and Innate Pharma SA).

Thereis currently one drug approved for the treatment of oral mucositis in hematological cancer (palifermin). There are currently noapproved drugs for treatment of oral mucositis in cancers with solid tumors (e.g., head and neck cancer). There are several drugsin clinical development for oral mucositis – one in Phase 3 (under development by Daewoong Pharmaceutical Co., Ltd.), fourin Phase 2 (under development by Cellceutix Corporation, BioAlliance Pharma S.A., Onexeo S.A., and Alder Biopharmaceuticals Inc.)and one in Phase 1 (under development by ActoGenix N.V.). In addition, there are medical devices approved for the treatment oforal mucositis including MuGard, GelClair, Episil and Caphosol. These devices attempt to create a protective barrier around theoral ulceration with no biologic activity in treating the underlying disease.

OralBDP Competition

Thereare a number of approved treatments for Crohn’s disease and additional compounds are in late-stage development.

Remicade(infliximab) and Humira (adalimumab) are currently approved for the treatment of pediatric Crohn’s disease; however, bothcarry significant Black Box warnings in their labeling for increased risk of serious infection and malignancy, and therefore areapproved for treatment of moderate to severe patients. There is one other marketed biologic, Tysabri (natalizumab), in a Phase2 study for pediatric Crohn’s. Entocort (enteric-coated budesonide) also has completed Phase 3 trials in pediatric Crohn’sdisease.

ThermoVax^®Competition

Multiplegroups and companies are working to address the unmet need of vaccine thermostability using a variety of technologies. In addition,other organizations, such as the Bill and Melinda Gates Foundation and PATH, have programs designed to advance technologies toaddress this need.

Severalstabilization technologies currently being developed involve mixing vaccine antigen +/- adjuvant with various proprietary excipientsor co-factors that either serve to stabilize the vaccine or biological product in a liquid or dried (lyophilized) form. Examplesof these approaches include the use of various plant-derived sugars and macromolecules being developed by companies such as StabilitechLtd. Variation Biotechnologies, Inc. (“VBI”) is developing a lipid system (resembling liposomes) to stabilize viralantigens, including virus-like particles (VLPs), and for potential application to a conventional influenza vaccine among others.

Otherapproaches involve process variations to freeze-dry live virus vaccines. For example, PaxVax, Inc. is seeking to employ aspray drying technology in concert with enteric coating to achieve formulations for room temperature stability of live virus vaccinesusing adenovirus vectors. VBI is seeking to utilize their proprietary stabilization technology for a number of vaccines (asa co-development service, similar to the business model being developed by Stabilitech Ltd.), whereas PaxVax is applying the technologyto their own proprietary vaccine development programs. Stabilitech uses combinations of excipients, which include glassifyingsugars similar to the ThermoVax^® technology, and variations in drying cycles during lyophilization, as does theThermoVax^® technology.

Additionally,companies like Pharmathene, Inc., Panacea Biotec Ltd., and Compass Biotech Inc. are developing proprietary vaccines with the applicationof some form of stabilization technology.

Vaccines/BioDefenseCompetition

Weface competition in the area of biodefense product development from various public and private companies, universities and governmentalagencies, such as the U.S. Army, some of whom may have their own proprietary technologies which may directly compete with ourtechnologies.

TheU.S. Army Medical Research Institute of Infectious Diseases, the DoD’s lead laboratory for medical research to counter biologicalthreats is also developing a ricin vaccine candidate, RVEc™. RVEc™ has been shown to be fully protective in mice exposedto lethal doses of ricin toxin by the aerosol route. Further studies, in both rabbits and nonhuman primates, were conducted toevaluate RVEc™’s safety as well as its immunogenicity, with positive results observed.

Inthe area of radiation-protective antidotes such as OrbeShield^®, various companies, such as Cleveland Biolabs, Inc.,Aeolus Pharmaceuticals, Inc., Boulder Biotechnology, Inc., RxBio, Inc., Avaxia Biologics, Inc., Exponential Biotherapies Inc.,Osiris Therapeutics, Inc., ImmuneRegen BioSciences, Inc., Neumedicines, Inc., Cellerant Therapeutics, Inc., Onconova Therapeutics,Inc., Araim Pharmaceuticals, Inc., EVA Pharmaceuticals, Terapio Corporation, Cangene Corporation, Humanetics Corporation and theUniversity of Arkansas Medical Sciences Center are developing biopharmaceutical products that may directly compete with OrbeShield^®,even though their approaches to such treatment are different.

RxBio,Avaxia Biologics and the University of Arkansas have programs specifically for GI ARS. RxBio’s Rx100 is a stem cell protectantdesigned as a single dose (oral or injection) which has shown promise in nonhuman primate studies. Avaxia is developing an orallydelivered anti-TNF antibody as a treatment agent for exposure to radiation following a nuclear accident, attack or explosion.Pasireotide, a drug in development by Novartis for Cushing’s disease, is being developed at the University of Arkansas toprotect the intestine by reducing pancreatic secretions that exacerbate intestinal inflammation.

Patentsand Other Proprietary Rights

Ourgoal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods and other proprietarytechnologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in theU.S. and in other countries. Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protectionpossible for our product candidates, proprietary information and proprietary technology through a combination of contractual arrangementsand patents, both in the U.S. and elsewhere in the world.

Wealso depend upon the skills, knowledge and experience of our scientific and technical personnel, as well as that of our advisors,consultants and other contractors, none of which is patentable. To help protect our proprietary knowledge and experience thatis not patentable, and for inventions for which patents may be difficult to enforce, we rely on trade secret protection and confidentialityagreements to protect our interests. To this end, we require all employees, consultants, advisors and other contractors to enterinto confidentiality agreements, which prohibit the disclosure of confidential information and, where applicable, require disclosureand assignment to us of the ideas, developments, discoveries and inventions important to our business.

In2014, we acquired a novel photodynamic therapy that utilizes safe visible light for activation, which we refer to as SGX301. Theactive ingredient in SGX301 is synthetic hypericin, a photosensitizer which is topically applied to skin lesions and then activatedby fluorescent light 16 to 24 hours later. As part of the acquisition, we acquired a license agreement relating to the use ofphoto-activated hypericin, composition of matter patent for SGX301 (U.S. patent 8,629,302) and additional issued and pending applications,both in the US and abroad. U.S. patent 8,629,302 is expected to expire in June 2032. Our proprietary formulation of synthetichypericin has been granted a European patent for the treatment of psoriasis, EP 2571507, and complements the method of treatmentclaims covered by the previously issued US patent 6001882, Photoactivated hypericin and the use thereof.

Inaddition to issued and pending patents, we also have “Orphan Drug” designations for SGX301 in the U.S. and the EUfor CTCL, SGX203 in the U.S. for pediatric Crohn’s disease, and OrbeShield^® in the U.S. for GI ARS, as wellas for RiVax™ in the U.S. Our Orphan Drug designations provide for seven years of post-approval marketing exclusivity inthe U.S. and ten years exclusivity in Europe. We have pending patent applications for this indication that, if granted, may extendour anticipated marketing exclusivity beyond the U.S. seven year or E.U. ten year post-approval exclusivity provided by OrphanDrug legislation.

In2013, we expanded our patent portfolio to include innate defense regulation through the acquisition of the novel drug technology,known as SGX94. By binding to the pivotal regulatory protein p62, also known as sequestosome-1, SGX94 regulates the innate immunesystem to reduce inflammation, eliminate infection and enhance healing. As part of the acquisition, we acquired all rights, includingcomposition of matter patents for SGX94 as well as other analogs and crystal structures of SGX94 with its protein target p62,including U.S. patent 8,124,721 and additional pending applications, both in the US and abroad. SGX94 was developed pursuant todiscoveries made by Professors B. Brett Finlay and Robert Hancock of University of British Columbia (“UBC”). U.S.patent 8,124,721 is expected to expire in April 2028.

Wehave issued U.S. patents 8,263,582 and 6,096,731 that cover the use of oral BDP for treating inflammatory disorders of the gastrointestinaltract and the prevention and treatment of GI GVHD, respectively. U.S. patent numbers 8,263,582 and 6,096,731 are expected to expirein March 2022 and June 2018, respectively. We also have European patent EP 1392321 claiming the use of topically active corticosteroidsin orally administered dosage forms that act concurrently to treat inflammation in the upper and lower gastrointestinal tract,as well as European patent EP 2242477 claiming the use of orally ingested BDP for treatment of interstitial lung disease. Europeanpatents EP 1392321 and EP 2242477 are expected to expire in March 2022 and January 2029.

Thesubject of U.S. patent application number 12/633,631 filed December 8, 2009 and corresponding European patent application number09836727.9 is the use of topically active BDP in radiation and chemotherapeutics injury. Additionally, we have numerous patentfilings currently issued or pending in foreign jurisdictions covering this subject matter, including Australia, Canada, China,Hong Kong, Israel, India, Japan, South Korea and New Zealand.

ThermoVax^®is the subject of U.S. patent 8,444,991 issued on May 21, 2013 titled “Method of Preparing an Immunologically-ActiveAdjuvant-Bound Dried Vaccine Composition” and also U.S. patent application number 13/474,661 filed May 17, 2012 titled “ThermostableVaccine Compositions and Methods of Preparing Same.” The patent application and the corresponding foreign filings for bothpatents are pending and licensed to us by the University of Colorado (“UC”) and they address the use of adjuvantsin conjunction with vaccines that are formulated to resist thermal inactivation. The license agreement covers thermostable vaccinesfor biodefense as well as other potential vaccine indications. U.S. patent 8,444,991 is expected to expire in December 2031.

RiVax™is the subject of three issued U.S. patent numbers 6,566,500, 6,960,652, and 7,829,668, all titled “Compositions and methodsfor modifying toxic effects of proteinaceous compounds.” This patent family includes composition of matter claims for themodified ricin toxin A chain which is the immunogen contained in RiVax™, and issued in 2003, 2005 and 2010 respectively.The initial filing date of these patents is March 2000 and they are expected to expire in March 2020. The issued patents containclaims that describe alteration of sequences within the ricin A chain that affect vascular leak, one of the deadly toxicitiescaused by ricin toxin. Another U.S. patent number 7,175,848 titled “Ricin A chain mutants lacking enzymatic activity asvaccines to protect against aerosolized ricin,” was filed in October of 2000 and is expected to expire in October 2020.

SGX301License Agreement

InSeptember 2014, we acquired a worldwide exclusive license agreement with New York University and Yeda Research and DevelopmentCompany Ltd. for the rights to a novel photodynamic therapy that utilizes safe visible light for activation, which we refer toas SGX301. To maintain this license we are obligated to pay $25,000 in annual license fees. In addition, we will pay the licensors:(a) a royalty amount equal to 3% of all net sales of SGX301 made directly by us and/or any affiliates; (b) a royalty amount equalto 2.5% of all net sales of SGX301 made by our sublicensees, subject to stated maximums and (c) 20% of all payments, not basedon net sales, received by us from our sublicensees. This license may be terminated by either party upon notice of a material breachby the other party that is not cured within the applicable cure period. The exclusive license includes rights to several issuedUS patents, including U.S. patent numbers 6,867,235 and 7,122,518, among other domestic and foreign patent applications. U.S.Patent numbers 6,867,235 and 7,122,518 are expected to expire in January 2020 and November 2023, respectively.

Weacquired the license agreement for SGX301 and related intangible assets, including U.S. patent 8,629,302, properties and rightspursuant to an asset purchase agreement with Hy Biopharma Inc. (“Hy Biopharma”). As consideration for the assets acquired,we paid $275,000 in cash and issued 184,912 shares of common stock with a market value of $3,750,000. Provided all future success-orientatedmilestones are attained, we will be required to make payments of up to $10.0 million, if and when achieved, payable in commonstock of the Company.

SGX94License Agreements

OnDecember 18, 2012, we announced the acquisition of a first in class drug technology, known as SGX94 (dusquetide), representinga novel approach to modulation of the innate immune system. SGX94 is an IDR that regulates the innate immune system to reduceinflammation, eliminate infection and enhance tissue healing by binding to the pivotal regulatory protein p62, also known as sequestosome-1.As part of the acquisition, we acquired all rights, including composition of matter patents, preclinical and Phase 1 clinicalstudy datasets for SGX94. We also assumed a license agreement with UBC to advance the research and development of the SGX94 technology.The license agreement with UBC provides us with exclusive worldwide rights to manufacture, distribute, market sell and/or licenseor sublicense products derived or developed from this technology. Under the license agreement we are obligated to pay UBC (i)an annual license maintenance fee of CAN $1,000, and (ii) milestone payments which could reach up to CAN $1.2 million. This licenseagreement (a) will automatically terminate if we file, or become subject to an involuntary filing, for bankruptcy, and (b) maybe terminated by UBC in the event of, among other things, our insolvency, dissolution, grant of a security interest in the technologylicensed to us pursuant to the license agreement, or material breach of or failure to perform material obligations under the licenseagreement or other research agreements between us and UBC.

OralBDP License Agreement

OnNovember 24, 1998, the Company, known at the time as Enteron Pharmaceuticals, Inc. (“Enteron”) and George B. McDonald(“Dr. McDonald”) entered into an exclusive license agreement for the rights to intellectual property, including know-how,relating to oral BDP. The Company has an exclusive license to commercially exploit the covered products worldwide, subject toDr. McDonald’s right to make and use the technology for research purposes and the U.S. Government’s right to use thetechnology for government purposes. Pursuant to the license agreement, as amended, the Company is required to (i) reimburse Dr.McDonald for certain out-of-pocket expenses incurred by Dr. McDonald in connection with the patent applications and issuedpatents, (ii) pay Dr. McDonald $300,000 upon approval by the FDA of the Company’s first NDA incorporating oral BDP;(iii) pay Dr. McDonald royalty payments equal to 3% of net sales of the covered products and (iv) pay Dr. McDonald $400,000in cash upon an approval of oral BDP by the European Medicines Agency.

Additionally,in the event that the Company sublicenses its rights under the license agreement, the Company will be required to pay Dr. McDonald10% of any sublicense fees and royalty payments paid by the sublicense to the Company.

Theterm of the license agreement expires upon the expiration of the licensed patent applications or patents. Dr. McDonald has theright to terminate the license agreement in its entirety or to terminate exclusivity under the agreement if the Company or itssublicense has not commercialized or are not actively attempting to commercialize a covered product.

Additionally,the agreement terminates: (i) automatically upon the Company becoming insolvent; (ii) upon 30 days’ notice, if the Companybreaches any obligation under the agreement without curing such breach during the notice period; and (iii) upon 90 days’notice by the Company. After any termination, the Company will have the right to sell its inventory for a period not to exceedthree months following the date of termination, subject to the payment of the amounts owed under the agreement.

ThermoVax^®License Agreement

OnDecember 21, 2010, we executed a worldwide exclusive license agreement with the UC for ThermoVax®, which is the subject ofU.S. patent number 8,444,991 issued on May 21, 2013 titled “Method of Preparing an Immunologically-Active Adjuvant-BoundDried Vaccine Composition.” This patent and its corresponding foreign filings are licensed to us by the UC and they addressthe use of adjuvants in conjunction with vaccines that are formulated to resist thermal inactivation. U.S. Patent 8,444,991 isexpected to expire in December 2031. The license agreement also covers thermostable vaccines for biodefense as well as other potentialvaccine indications. In addition, we, in conjunction with UC, filed domestic and foreign patent applications claiming priorityback to a provisional application filed on May 17, 2011 titled: “Thermostable Vaccine Compositions and Methods of PreparingSame.” To maintain this license we are obligated to pay minimum annual license fees of $15,000 until the initiation of clinicaltrials, $20,000 following the initiation of a Phase 1 clinical trial, and $50,000 following the first commercial sale of a productincorporating ThermoVax®. Under the license agreement we are obligated to pay the UC (i) royalty payments equal to 2% of netsales of the covered products, (ii) 15% of all income from sublicenses and (iii) milestone payments which could reach up to $1.25million.

RiVax™License Agreement

InJune 2003, we executed a worldwide exclusive option to license patent applications with UTSW for the nasal, pulmonary and oraluses of a non-toxic ricin vaccine. In June 2004, we entered into a license agreement with UTSW for the injectable rights to thericin vaccine and, in October 2004, we negotiated the remaining oral rights to the ricin vaccine. To maintain this license weare obligated to pay $50,000 in annual license fees. Through this license, we have rights to the issued patent number 7,175,848titled “Ricin A chain mutants lacking enzymatic activity as vaccines to protect against aerosolized ricin.” This patentincludes methods of use and composition claims for RiVax™.

Researchand Development Expenditure

Wespent approximately $3.6 million and $3.4 million in the nine months ended September 30, 2017 and 2016, respectively, and $4.3million and $5.4 million in the years ended December 31, 2016 and 2015, respectively, on research and development. The amountswe spent on research and development per product during the nine months ended September 30, 2017 and 2016 and the years endedDecember 31, 2016, and 2015 are set forth in “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” beginning on page 26 on this prospectus.

Employees

Asof September 30, 2017, we had 19 full-time employees, eight of whom are MDs/PhDs.

Properties

Wecurrently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10, Princeton, New Jersey 08540. Thisoffice space currently serves as our corporate headquarters. In December 2014, the Company entered into a lease agreement throughMay 31, 2018 for existing and expanded office space. The rent for the first 12 months was approximately $12,300 per month, orapproximately $20.85 per square foot. This rent increased to approximately $12,375 per month, or approximately $20.95 per squarefoot, for the next 12 months and increased to approximately $12,460 per month, or approximately $21.13 per square foot for theremainder of the lease. In October 2017, the lease was amended through October 2020. The rent for the first 12 months will beapproximately $11,367 per month, or approximately $22.00 per square foot. The rent will increase to approximately $11,625 permonth, or approximately $22.50 per square foot, for the next 12 months and increase to approximately $11,883 per month, or approximately$23.00 per square foot for the remainder of the lease. Our office space is sufficient to satisfy our current needs.

LegalProceedings

Fromtime to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluatesour exposure to these claims and proceedings individually and in the aggregate and allocates additional monies for potential losseson such litigation if it is possible to estimate the amount of loss and if the amount of the loss is probable.

MANAGEMENT

Thetable below contains information regarding the current members of the Board of Directors and executive officers. The ages of individualsare provided as of November 15, 2017:

ChristopherJ. Schaber, PhD has over 27 years of experience in the pharmaceutical and biotechnology industry. Dr. Schaber has been ourPresident and Chief Executive Officer and a director since August 2006. He was appointed Chairman of the Board on October 8, 2009.He also serves on the Board of Directors of the Biotechnology Council of New Jersey (“BioNJ”) since January 2009 andthe Alliance for Biosecurity since October 2014, and has been a member of the corporate councils of both the National Organizationfor Rare Diseases (“NORD”) and the American Society for Blood and Marrow Transplantation (“ASBMT”) sinceOctober 2009 and July 2009, respectively. Prior to joining Soligenix, Dr. Schaber served from 1998 to 2006 as Executive Vice Presidentand Chief Operating Officer of Discovery Laboratories, Inc., where he was responsible for overall pipeline development and keyareas of commercial operations, including regulatory affairs, quality control and assurance, manufacturing and distribution, pre-clinicaland clinical research, and medical affairs, as well as coordination of commercial launch preparation activities. From 1996 to1998, Dr. Schaber was a co-founder of Acute Therapeutics, Inc., and served as its Vice President of Regulatory Compliance andDrug Development. From 1994 to 1996, Dr. Schaber was employed by Ohmeda PPD, Inc., as Worldwide Director of Regulatory Affairsand Operations. From 1989 to 1994, Dr. Schaber held a variety of regulatory, development and operations positions with The LiposomeCompany, Inc., and Elkins-Sinn Inc., a division of Wyeth-Ayerst Laboratories. Dr. Schaber received his BA degree from WesternMaryland College, his MS degree in Pharmaceutics from Temple University School of Pharmacy and his PhD degree in PharmaceuticalSciences from the Union Graduate School. Dr. Schaber was selected to serve as a member of our Board of Directors because of hisextensive experience in drug development and pharmaceutical operations, including his experience as an executive senior officerwith our Company and Discovery Laboratories, Inc., and as a member of the Board of Directors of BioNJ; because of his proven abilityto raise funds and provide access to capital; and because of his advanced degrees in science and business.

KeithL. Brownlie, CPA has been a director since June 2011. Mr. Brownlie currently serves on the Board of Directors of Celldex Therapeutics,Inc., a publicly traded biotechnology company that is developing targeted therapeutics to address devastating diseases. He alsoserves on the Board of Directors of Rxi Pharmaceuticals Corporation, a publicly traded biotechnology company involved in the researchand development of RNAi products for the diagnosis, prevention and treatment of human diseases, a position he has held since June2012. From July 2013 until December 2014, Mr. Brownlie served on the Board of Directors of Cancer Genetics, Inc., a publicly traded,early stage diagnostics company. Mr. Brownlie served as a member of the Board of Directors of Epicept Corporation, a publiclytraded, specialty pharmaceutical company focused on the clinical development and commercialization of pharmaceutical productsfor the treatment of cancer and pain, from April 2011 to August 2013 when Epicept Corporation merged with Immune Pharmaceuticals,Inc. From 1974 to 2010, Mr. Brownlie worked with the accounting firm of Ernst & Young LLP where he served as audit partnerfor numerous public companies and was the Life Sciences Industry Leader for the New York metro area. Mr. Brownlie received a BSin Accounting from Lehigh University and is a Certified Public Accountant in the state of New Jersey. Mr. Brownlie co-foundedthe New Jersey Entrepreneur of the Year Program and was Vice President and Trustee of the New Jersey Society of CPAs. In addition,he served as accounting advisor to the Board of the Biotechnology Council of New Jersey. Mr. Brownlie was selected to serve asa member of our Board of Directors because of his vast experience as an audit partner for numerous public companies and as a directorof publicly traded specialty pharmaceutical and biotechnology companies.

Marco M. Brughera,DVM joined the Board of Directors in October 2013. He is the Global Head Rare Disease of the Leadiant Group, a position hehas held since October 2012. Dr. Brughera serves as CEO on the Board of Directors of Leadiant Biosciences SpA and as director onthe Board of Directors of Leadiant Biosciences Ltd, Leadiant Biosciences, Inc., Fennec Pharmaceuticals, Inc. and Lee’s PharmaceuticalHoldings Ltd. From December 2011 through January 2014, Dr. Brughera served on the Board of Directors of Gentium S.p.A., a publiclytraded biopharmaceutical company. From January 2011 through October 2012, Dr. Brughera held several other positions with the Sigma-TauGroup, including Corporate Research and Development Managing Director of Sigma-Tau I ndustrie Farmaceutiche Riuntite S.p.A., Presidentof Sigma-Tau Research Switzerland S.A. and board member of Sigma-Tau Pharmaceuticals, Inc. (now known as Leadiant Biosciences,Inc.), and of Sigma-Tau Rare Diseases S.A. and Sigma-Tau Pharma Ltd. From 2004 to 2010, Dr. Brughera served as the Vice Presidentof Preclinical Development at Nerviano Medical Sciences S.r.l. (“NMS Group”), a pharmaceutical oncology-focused integrateddiscovery and development company. He also served as the Managing Director at Accelera, S.r.l., an independent contract researchorganization affiliated with the NMS Group. From 1999 to 2004, Dr. Brughera held several senior level positions in the areas ofdiscovery and development toxicology with Pharmacia Corporation and Pfizer, Inc. Prior to 1999, he held various positions at Pharmacia&Upjohn Company, Inc., and Farmitalia Carlo Erba S.p.A., an Italian pharmaceutical company. Dr. Brughera earned his degree in veterinarymedicine from the University of Milan and is a European Registered Toxicologist. Dr. Brughera was selected to serve as a memberour Board of Directors because of his background in the areas of drug discovery and development and his experience as an executiveofficer and a director in the pharmaceutical industry.

Gregg A. Lapointe,CPA, MBA has been a director since March 2009. Mr. Lapointe is currently CEO of Cerium Pharmaceuticals, Inc. and serves onthe Board of Directors of Rigel Pharmaceuticals, Inc. and Cytori Therapeutics, Inc. He also currently serves on the Board of Trusteesof the Keck Graduate Institute of Applied Life Sciences. Mr. Lapointe has previously served on the Board of Directors of ImmunoCellularTherapeutics Ltd., Raptor Pharmaceuticals, Inc. and SciClone Pharmaceuticals, Inc., the Pharmaceuticals Research and Manufacturersof America (PhRMA) and Questcor Pharmaceuticals, Inc. He previously served in varying roles for Sigma-Tau Pharmaceuticals, Inc.(now known as Leadiant Biosciences, Inc.), a private biopharmaceutical company, from September 2001 through February 2012, includingChief Operating Officer from November 2003 to April 2008 and Chief Executive Officer from April 2008 to February 2012. From May,1996 to August 2001, he served as Vice President of Operations and Vice President, Controller of AstenJohnson, Inc. (formerly JWIInc.). Prior to that, Mr. Lapointe spent several years in the Canadian medical products industry in both distribution and manufacturing.Mr. Lapointe began his career at Price Waterhouse. Mr. Lapointe received his B.A. degree in Commerce from Concordia Universityin Montreal, Canada, a graduate diploma in Accountancy from McGill University and his M.B.A. degree from Duke University. He isa C.P.A. in the state of Illinois. Mr. Lapointe was selected to serve as a member of our Board of Directors because of his significantexperience in the areas of global strategic planning and implementation, business development, corporate finance, and acquisitions,and his experience as an executive officer and board member in the pharmaceutical and medical products industries.

RobertJ. Rubin, MD has been a director since October 2009. Dr. Rubin was a clinical professor of medicine at Georgetown Universityfrom 1995 until 2012 when he was appointed a Distinguished Professor of Medicine. From 1987 to 2001, he was president of the LewinGroup (purchased by Quintiles Transnational Corp. in 1996), an international health policy and management consulting firm. From1994 to 1996, Dr. Rubin served as Medical Director of ValueRx, a pharmaceutical benefits company. From 1992 to 1996, Dr. Rubinserved as President of Lewin-VHI, a health care consulting company. From 1987 to 1992, he served as President of Lewin-ICF, ahealth care consulting company. From 1984 to 1987, Dr. Rubin served as a principal of ICF, Inc., a health care consulting company.From 1981 to 1984, Dr. Rubin served as the Assistant Secretary for Planning and Evaluation at the Department of Health and HumanServices and as an Assistant Surgeon General in the United States Public Health Service. Dr. Rubin has served on the Board ofBioTelemetry, Inc. (formerly known as CardioNet, Inc.) since 2007. He is a board certified nephrologist and internist. Dr. Rubinreceived an undergraduate degree in Political Science from Williams College and his medical degree from Cornell University MedicalCollege. Dr. Rubin was selected to serve as a member of our Board of Directors because of his vast experience in the health careindustry, including his experience as a nephrologist, internist, clinical professor of medicine and Assistant Surgeon General,and his business experience in the pharmaceutical industry.

JeromeB. Zeldis, MD, PhD has been a director since June 2011. Dr. Zeldis is currently Chief Medical Officer and President of ClinicalResearch, Drug Safety and Regulatory of Sorrento Therapeutics, Inc. He is also Executive Chair of Immodulon Therapeutics Ltd.and Chief Medical Officer and Principle at Celularity, Inc. Previously, Dr. Zeldis was Chief Executive Officer of Celgene GlobalHealth and Chief Medical Officer of Celgene Corporation, a publicly traded, fully integrated biopharmaceutical company. He wasemployed by Celegene from 1997 to 2016. From September 1994 to February 1997, Dr. Zeldis worked at Sandoz Research Institute andthe Janssen Research Institute in both clinical research and medical development. He has been a board member of several biotechnologycompanies and is currently on the boards of Metastat, Inc., PTC Therapeutics Inc., BioSig Technologies, Inc., the Castleman’sDisease Organization and Alliqua, Inc. He has previously served on the boards of the NJ Chapter of the Arthritis Foundation andPTC Therapeutics, Inc. Additionally, he has served as Assistant Professor of Medicine at the Harvard Medical School (from July1987 to September 1988), Associate Professor of Medicine at University of California, Davis from (September 1988 to September1994), Clinical Associate Professor of Medicine at Cornell Medical School (January 1995 to December 2003) and Professor of ClinicalMedicine at the Robert Wood Johnson Medical School (July 1998 to June 2010). Dr. Zeldis received a BA and an MS from Brown University,and an MD, and a PhD in Molecular Biophysics and Biochemistry from Yale University. Dr. Zeldis trained in Internal Medicine atthe UCLA Center for the Health Sciences and in Gastroenterology at the Massachusetts General Hospital and Harvard Medical School.Dr. Zeldis was selected to serve as a member of our Board of Directors because of his experience as an executive officer of apublicly traded biopharmaceutical company and in clinical research and medical development, and his experience in the health careindustry, including his experience as an internist, gastroenterologist and professor of medicine.

OreolaDonini, PhD, has been with our company since August 15, 2013 and is currently our Chief Scientific Officer and Senior VicePresident, a position she has held since December 5, 2014. Dr. Donini served as our Vice President of Preclinical Research andDevelopment from August 15, 2013 until December 4, 2014. She has more than 15 years’ experience in drug discovery and preclinicaldevelopment with start-up biotechnology companies. From 2012 to 2013, Dr. Donini worked with ESSA Pharma Inc. as Vice PresidentResearch and Development. From 2004 to 2013, Dr. Donini worked with Inimex Pharmaceuticals Inc., (“Inimex”), lastlyas Senior Director of Preclinical R&D from 2007-2013. Prior to joining Inimex, she worked with Kinetek Pharmaceuticals Inc.,developing therapies for infectious disease, cancer and cancer supportive care. Dr. Donini is a co-inventor and leader of theCompany’s SGX94 innate defense regulator technology, developed by Inimex and subsequently acquired by the Company. She wasresponsible for overseeing the manufacturing and preclinical testing of SGX94, which demonstrated efficacy in combating bacterialinfections and mitigating the effects of tissue damage due to trauma, infection, radiation and/or chemotherapy treatment. Thesepreclinical studies resulted in a successful Phase 1 clinical study and clearance of Phase 2 protocols for oral mucositis in headand neck cancer and acute bacterial skin and skin structure infections. While with ESSA Pharma Inc. as the Vice President of Researchand Development, Dr. Donini led the preclinical testing of a novel N-terminal domain inhibitor of the androgen receptor for thetreatment of prostate cancer. While with Kinetek Pharmaceuticals Inc., her work related to the discovery of novel kinase and phosphataseinhibitors for the treatment of cancer. Dr. Donini received her PhD from Queen’s University in Kinston, Ontario, Canadaand completed her post-doctoral work at the University of California, San Francisco. Her research has spanned drug discovery,preclinical development, manufacturing and clinical development in infectious disease, cancer and cancer supportive care.

KarenKrumeich has been with our company since June 2016 and is currently our Senior Vice President and Chief Financial Officer.Ms. Krumeich has served as Chief Financial Officer and Vice President of Finance for public and private emerging-growth, start-upand national companies in various sectors of healthcare, including pharmaceuticals, medical devices and healthcare service companies.She has expertise in equity financings, both private and public, Sarbanes-Oxley compliance, acquisitions and integrations, strategicbusiness development and operations analysis. Most recently Ms. Krumeich was the Vice President of Finance for Cerecor Inc., aclinical stage neuroscience company. At Cerecor she was involved in the company’s equity financings and was responsiblefor all finance and administrative functions. Prior to joining Cerecor she was a CFO Partner with Tatum, LLC, a national consultingfirm, and a member of the firm’s National Healthcare Group. As a Partner with Tatum, she served as Interim Chief FinancialOfficer for drug development and medical device companies. Prior to joining Tatum in 2006, she was the Vice President of Financeand Chief Financial Officer of Strata Skin Sciences, Inc. (formerly Mela Sciences, Inc.), a publicly traded development-stagemedical device company. At Mela Sciences, she played a key role in the company’s initial public offering and was responsiblefor all functional areas of finance and accounting, administration, and investor relations. As Vice President of Finance of GranCare Pharmacy, Inc., she was responsible for the financial leadership of the pharmacy division and directed an aggressive acquisitionprogram. Ms. Krumeich began her career with a B.S. in Pharmacy from the University of Toledo, subsequently completed an accountingmajor and transitioned into finance after completing the CPA exam.

RichardStraube, MD has been with our company since January 2014 and is currently our Senior Vice President and Chief Medical Officer.Dr. Straube is a board-certified pediatrician with 35 years’ experience in both academia and industry, including clinicalresearch experience in host-response modulation. From 2009 until joining our company, he was Chief Medical Officer of StealthPeptides Incorporated, a privately-held, clinical stage, biopharmaceutical company. Prior to joining the Company, Dr. Straubeserved from 1988 to 1993 in various capacities, including most recently as Senior Director, Infectious Diseases and Immunology,Clinical Research, for Centocor, Inc., a privately-held biopharmaceutical company focused on developing monoclonal antibody-baseddiagnostics. While at Centocor, Inc., Dr. Straube was responsible for the initial anti-cytokine and anti-endotoxin programs targetedat ameliorating inappropriate host responses to infectious and immunologic challenges. Programs that he managed at Centocor, Inc.include assessments of immunomodulation using monoclonal removal of inciting molecular triggers, removal of internal immune-messengers,augmentation of normal host defenses, and maintenance of normal sub-cellular function in the face of injury. From 1993 to 1995,Dr. Straube was Director of Medical Affairs at T-cell Sciences, Inc., a privately-held biotechnology company. From 1995 to 1997,he was Director of Clinical Investigations of the Pharmaceutical Products Division of Ohmeda Corp., a privately-held biopharmaceuticalcompany. He served from 1998 to 2007 as Executive Vice President of Research and Development and Chief Scientific Officer at INOTherapeutics LLC, a privately-held biotherapeutics company, where he was responsible for the clinical trials and subsequent approvalof inhaled nitric oxide for the treatment of persistent pulmonary hypertension of the newborn. From 2007 to 2009, Dr. Straubewas the Chief Medical Officer at Critical Biologics Corporation, a privately-held biotechnology company. Dr. Straube receivedhis medical degree and residency training at the University of Chicago, completed a joint adult and pediatrician infectious diseasesfellowship at the University of California, San Diego (“UCSD”), and as a Milbank Scholar completed training in clinicaltrial design at the London School of Hygiene and Tropical Medicine. While on the faculty at the UCSD Medical Center, his researchfocused on interventional studies for serious viral infections.

BoardLeadership Structure

OurBoard of Directors believes that Dr. Schaber’s service as both the Chairman of our Board of Directors and our Chief ExecutiveOfficer is in the best interest of our Company and our stockholders. Dr. Schaber possesses detailed and in-depth knowledge ofthe issues, opportunities and challenges facing our Company and our business and, therefore, is best positioned to develop agendasthat ensure that the Board of Directors’ time and attention are focused on the most important matters. His combined roleenables decisive leadership, ensures clear accountability, and enhances our ability to communicate our message and strategy clearlyand consistently to our stockholders, employees, and collaborative partners.

Messrs.Brownlie and Lapointe, Dr. Brughera, Dr. Rubin, and Dr. Zeldis are independent and the Board of Directors believes that the independentdirectors provide effective oversight of management. Moreover, in addition to feedback provided during the course of meetingsof the Board of Directors, the independent directors hold executive sessions. Following an executive session of independent directors,the independent directors’ report back to the full Board of Directors regarding any specific feedback or issues, providethe Chairman with input regarding agenda items for Board of Directors and Committee meetings, and coordinate with the Chairmanregarding information to be provided to the independent directors in performing their duties. The Board of Directors believesthat this approach appropriately and effectively complements the combined Chairman/Chief Executive Officer structure.

Althoughthe Company believes that the combination of the Chairman and Chief Executive Officer roles is appropriate under the current circumstances,our corporate governance guidelines do not establish this approach as a policy, and the Board of Directors may determine thatit is more appropriate to separate the roles in the future.

Roleof the Board of Directors in Risk Oversight

Oneof the key functions of our Board of Directors is informed oversight of our risk management process. Our Board of Directors doesnot have a standing risk management committee, but rather administers this oversight function directly through the Board of Directorsas a whole, as well as through various standing committees of our Board of Directors that address risks inherent in their respectiveareas of oversight. In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposureand our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our managementhas taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessmentand management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. Our Nominatingand Corporate Governance Committee monitors the effectiveness of our corporate governance practices, including whether they aresuccessful in preventing illegal or improper liability-creating conduct. Our compensation committee assesses and monitors whetherany of our compensation policies and programs has the potential to encourage excessive risk-taking.

DirectorIndependence

TheBoard of Directors has determined that Messrs. Brownlie and Lapointe, Dr. Brughera, Dr. Rubin, and Dr. Zeldis are “independent”as such term is defined by the applicable listing standards of The Nasdaq Stock Market LLC (“Nasdaq”). Our Board ofDirectors based this determination primarily on a review of the responses of the Directors to questionnaires regarding their employment,affiliations and family and other relationships.

Committeesof the Board of Directors

OurBoard of Directors has the following three committees: (1) Compensation, (2) Audit and (3) Nominating and CorporateGovernance. Our Board of Directors has adopted a written charter for each of these committees, which are available on our websiteat www.soligenix.com under the “Investors” section.

Director		Audit Committee		Compensation Committee		Nominating and Corporate Governance Committee
Keith L. Brownlie, CPA
Marco M. Brughera, DVM
Gregg A. Lapointe, CPA
Robert J. Rubin, MD
Jerome Zeldis, MD, PhD

–Committee Chair

–Member

AuditCommittee

OurBoard of Directors has an Audit Committee, which is comprised of Mr. Brownlie (Chair), Mr. Lapointe and Dr. Rubin. The Audit Committeeassists our Board of Directors in monitoring the financial reporting process, the internal control structure and the independentregistered public accountants. Its primary duties are to serve as an independent and objective party to monitor the financialreporting process and internal control system, to review and appraise the audit effort of the independent registered public accountantsand to provide an open avenue of communication among the independent registered public accountants, financial and senior management,and our Board of Directors. Our Board of Directors has determined that Mr. Brownlie, Mr. Lapointe and Dr. Rubin are “independent”directors, within the meaning of applicable listing standards of The Nasdaq Stock Market LLC (“Nasdaq”) and the ExchangeAct and the rules and regulations thereunder. Our Board of Directors has also determined that the members of the Audit Committeeare qualified to serve on the committee and have the experience and knowledge to perform the duties required of the committeeand that Mr. Brownlie qualifies as an “audit committee financial expert” as that term is defined in the applicableregulations of the Exchange Act.

CompensationCommittee

OurBoard of Directors has a Compensation Committee, which is comprised of Dr. Rubin (Chair), Dr. Brughera and Dr. Zeldis. The CompensationCommittee is responsible for reviewing and approving the executive compensation program, assessing executive performance, settingsalary, making grants of annual incentive compensation and approving certain employment agreements. Our Board of Directors hasdetermined that Dr. Brughera, Dr. Rubin, and Dr. Zeldis are “independent” directors within the meaning of applicablelisting standards of Nasdaq and the Exchange Act and the rules and regulations thereunder.

Nominatingand Corporate Governance Committee

OurBoard of Directors has a Nominating and Corporate Governance Committee (“Nominating Committee”), which is comprisedof Dr. Zeldis (Chair), Mr. Brownlie and Mr. Lapointe. The Nominating Committee makes recommendations to the Board of Directorsregarding the size and composition of our Board of Directors, establishes procedures for the nomination process, identifies andrecommends candidates for election to our Board of Directors. Our Board of Directors has determined that Dr. Zeldis, Mr. Brownlieand Mr. Lapointe are “independent” directors, as such term is defined by the applicable Nasdaq listing standards.

Codeof Ethics

Wehave adopted a code of ethics that applies to all of our executive officers and senior financial officers (including our chiefexecutive officer, chief financial officer, chief accounting officer and any person performing similar functions). A copy of ourcode of ethics is publicly available on our website at www.soligenix.com under the “Investors” section. If we makeany substantive amendments to our code of ethics or grant any waiver, including any implicit waiver, from a provision of the codeto our chief executive officer, chief financial officer or chief accounting officer, we will disclose the nature of such amendmentor waiver in a Current Report on Form 8-K.

DiversityConsiderations in Identifying Director Nominees

Wedo not have a formal diversity policy or set of guidelines in selecting and appointing directors that comprise our Board of Directors.However, when making recommendations to our Board of Directors regarding the size and composition of our Board of Directors, ourNominating Committee does consider each individual director’s qualifications, skills, business experience and capacity toserve as a director and the diversity of these attributes for the Board of Directors as a whole.

CompensationCommittee Interlocks and Insider Participation

Nomember of our Compensation Committee is or has at any time during the past year been one of our officers or employees. None ofour executive officers currently serves or in the past year has served as a member of the Board of Directors or Compensation Committeeof any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

StockOwnership Policy

InApril 2012, our Board of Directors adopted a stock ownership policy applicable to our non-employee directors to strengthen thelink between director and stockholder interests. Pursuant to the stock ownership policy, each non-employee director is requiredto hold a minimum ownership position in the common stock equal to the annual cash compensation paid for service on the Board ofDirectors, exclusive of cash compensation paid for service as a chair or member of any committees of the Board of Directors.

Stockcounted toward the ownership requirement includes common stock held by the director, unvested and vested restricted stock, andall shares of common stock beneficially owned by the director held in a trust and by a spouse and/or minor children of the director.The policy provides that the ownership requirement must be attained within three years after the later of June 21, 2012 and thedate a director is first elected or appointed to the Board of Directors. To monitor progress toward meeting the requirement, theNominating Committee will review director ownership levels at the end of March of each year. Non-employee directors are prohibitedfrom selling any shares of common stock unless such director is in compliance with the stock ownership policy. A copy of our directorcompensation and stock ownership policy is publicly available on our website at www.soligenix.com under the “Investors”section.

EXECUTIVECOMPENSATION

SummaryCompensation

Thefollowing table contains information concerning the compensation paid during each of the two years ended December 31, 2016 toour Chief Executive Officer and each of the two other most highly compensated executive officers during 2016 (collectively, the“Named Executive Officers”).

SummaryCompensation

Employmentand Severance Agreements

InAugust 2006, we entered into a three-year employment agreement with Christopher J. Schaber, PhD. Pursuant to this employment agreementwe agreed to pay Dr. Schaber a base salary of $300,000 per year and a minimum annual bonus of $100,000. Dr. Schaber’s employmentagreement automatically renews every three years, unless otherwise terminated, and was automatically renewed in December 2007,December 2010, December 2013 and December 2016 for an additional term of three years. We agreed to issue him options to purchase12,500 shares of our common stock, with one third immediately vesting and the remainder vesting over three years. Upon terminationwithout “Just Cause” as defined by this agreement, we would pay Dr. Schaber nine months of severance, as well as anyaccrued bonuses, accrued vacation, and we would provide health insurance and life insurance benefits for Dr. Schaber and his dependents.No unvested options shall vest beyond the termination date. Dr. Schaber’s monetary compensation (base salary of $300,000and bonus of $100,000) remained unchanged from 2006 with the 2007 renewal. Upon a change in control of the Company due to mergeror acquisition, all of Dr. Schaber’s options shall become fully vested, and be exercisable for a period of five years aftersuch change in control (unless they would have expired sooner pursuant to their terms). In the event of his death during the termof the agreement, all of his unvested options shall immediately vest and remain exercisable for the remainder of their term andbecome the property of Dr. Schaber’s immediate family.

InFebruary 2007, our Board of Directors authorized the issuance of 5,000 shares to Dr. Schaber immediately prior to the completionof a transaction, or series or a combination of related transactions negotiated by our Board of Directors whereby, directly orindirectly, a majority of our capital stock or a majority of our assets are transferred from the Company and/or our stockholdersto a third party. The amended agreement with Dr. Schaber includes our obligation to issue such shares to him if such event occurs.

OnJune 22, 2011, the Compensation Committee eliminated his fixed minimum annual bonus payable and revised it to an annual targetedbonus of 40% of his annual base salary. On December 4, 2014, the Compensation Committee approved an increase in salary for Dr.Schaber to $424,360. On December 10, 2015, the Compensation Committee approved an increase in salary for Dr. Schaber to $434,969.On December 14, 2016, the Compensation Committee approved an increase in salary for Dr. Schaber to $443,668.

InMay 2011, we entered into a one-year employment agreement with Mr. Joseph M. Warusz, our Acting Chief Financial Officer, VicePresident Finance and Chief Accounting Officer. Pursuant to the agreement, we have agreed to pay Mr. Warusz $175,000 per yearand a targeted annual bonus of 30% of base salary. We also agreed to issue him options to purchase 4,000 shares of our commonstock with one-third immediately vesting and the remainder vesting over three years. Mr. Warusz’s employment agreement automaticallyrenews each year, unless otherwise terminated, and was automatically renewed each year since execution, until Mr. Warusz retiredfrom the Company effective June 30, 2016. In connection with his retirement, we agreed to provide Mr. Warusz three months of salaryand three months of health insurance benefits and to accelerate the vesting and extend the exercise period of certain options.On December 4, 2014, the Compensation Committee approved an increase in salary for Mr. Warusz to $196,730. On December 10, 2015,the Compensation Committee approved an increase in salary for Mr. Warusz to $201,648. On June 30, 2016, Mr. Warusz retired fromthe Company. As defined in the employment agreement, we paid Mr. Warusz three months of severance, vacation, as well as insurancebenefits to the term of his severance.

InDecember 2014, we entered into a one-year employment agreement with Richard C. Straube, MD, our Chief Medical Officer and SeniorVice President. Pursuant to the agreement, we have agreed to pay Dr. Straube $300,000 per year and a targeted annual bonus of30% of base salary. We also agreed to issue him options to purchase 10,000 shares of our common stock with one-third immediatelyvesting and the remainder vesting over three years. Dr. Straube’s employment agreement automatically renews each year, unlessotherwise terminated, and has automatically renewed each year since execution. Upon termination without “Just Cause”,as defined in Dr. Straube’s employment agreement, we would pay Dr. Straube three months of severance, accrued bonuses andvacation, and health insurance benefits. No unvested options vest beyond the termination date. On December 4, 2014, the CompensationCommittee approved an increase in salary for Dr. Straube to $309,000. On December 10, 2015, the Compensation Committee approvedan increase in salary for Dr. Straube to $316,725. On December 14, 2016, the Compensation Committee approved an increase in salaryfor Dr. Straube to $323,060.

OnJune 16, 2016, we entered into a one-year employment agreement with Karen Krumeich, our Senior Vice President and Chief FinancialOfficer. Pursuant to the agreement, we have agreed to pay Ms. Krumeich $222,000 per year and a targeted annual bonus of 30% ofbase salary. We also agreed to issue her options to purchase 10,000 shares of our common stock with one-quarter immediately vestingand the remainder vesting over three years. Ms. Krumeich’s employment agreement automatically renews each year, unless otherwiseterminated. Upon termination without “Just Cause”, as defined in Ms. Krumeich’s employment agreement, we wouldpay Ms. Krumeich three months of severance, accrued bonuses and vacation, and health insurance benefits. No unvested options vestbeyond the termination date. On December 14, 2016, the Compensation Committee approved an increase in salary for Ms. Krumeichto $226,440.

OutstandingEquity Awards at Fiscal Year-End

Thefollowing table contains information concerning unexercised options, stock that has not vested, and equity incentive plan awardsfor the Named Executive Officers outstanding at December 31, 2016, as adjusted for the reverse stock split of one-for-ten effectiveOctober 7, 2016. We have never issued Stock Appreciation Rights.