Asfiled with the Securities and Exchange Commission on May 25, 2018.

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, of registrant’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, including area code, of agent for service)

Approximatedate of commencement of proposed sale to the public: As soon as practicable after the effective date hereof.

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 and listthe 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 and listthe 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 definitions of “large accelerated filer,” “accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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

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 effective onsuch date as the Commission, acting pursuant to Section 8(a), may determine.

Theinformation in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the RegistrationStatement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sellthese securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is notpermitted.

4,968,944Shares of Common Stock
Warrants to Purchase up to 1,987,578 Shares of Common Stock

Weare offering 4,968,944 shares of our common stock and warrants to purchase up to 1,987,578 shares of our commonstock pursuant to this prospectus (and the shares of our common stock that are issuable from time to time upon exercise ofthe warrants). The warrants will have a per share exercise price of $2.25. Each share of our common stock is being sold inthis offering together with a warrant that will have the right to purchase 0.4 of ashare of our common stock. The shares of our common stock and the warrants will be separately issued. The warrants areexercisable immediately and will expire forty-two months from the date of issuance.

Ourcommon stock and our common stock warrant issued in connection with our December 2016 public offering are traded on The NasdaqCapital Market under the symbols “SNGX” and “SNGXW,” respectively. On May 21, 2018, the last reportedsales prices of our common stock and our common stock warrant issued in connection with our 2016 public offering on The NasdaqCapital Market were $1.61 per share and $0.43 per warrant.

Ourbusiness and an investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page7 of this prospectus for a discussion of information that you should consider before investing in our securities.

Neitherthe Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities ordetermined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

AltamontPharmaceutical Holdings LLC and its affiliates, and certain of our existing stockholders have indicated an interest inpurchasing an aggregate of up to approximately $4.5 million of shares of common stock and warrants in this offering at thepublic offering price. However, because indications of interest are not binding agreements or commitments to purchase, theunderwriters may sell more, less or no securities in this offering to these potential investors, or the potential investorsmay determine to purchase more, less or no securities in this offering. The underwriters will not receive any underwritingdiscount or commission on any securities purchased by these potential investors.

Wehave granted a 45-day option to the representative of the underwriters to purchase up to 745,342 additional shares of common stockand/or additional warrants to purchase up to 298,137 shares of common stock from us solely to cover over-allotments, if any (basedon the closing price of $1.61 on May 21, 2018).

Theunderwriters expect to deliver the shares and warrants against payment therefor on or about      , 2018.

A.G.P.

OfferingSecurities Through Euro Pacific Capital, Inc.

           ,2018

Tableof Contents

Youshould rely only on the information contained in this prospectus or in any free writing prospectus that we may specifically authorizeto be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with anyinformation other than that contained in this prospectus or in any free writing prospectus we may authorize to be delivered ormade available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other informationthat others may give you. This prospectus may only be used where it is legal to offer and sell our securities. The informationin this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus orany sale of our securities. Our business, financial condition, results of operations and prospects may have changed since thatdate. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is notpermitted.

Forinvestors outside the United States: We have not and the underwriters have not done anything that would permit this offering orpossession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in theUnited States. Persons outside the United States who come into possession of this prospectus must inform themselves about, andobserve any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the UnitedStates.

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.

Wehave experienced significant losses since inception and, at March 31, 2018, had an accumulated deficit of approximately $160 million.We expect to incur additional operating losses in the future and expect our cumulative losses to increase. As of March 31, 2018,we had approximately $6.4 million in cash and cash equivalents available. Based on our projected budgetary needs, funding fromexisting contracts and grants over the next two years and sales to the purchasers under our existing equity line, we expect tobe able to maintain the current level of our operations for at least the next twelve months.

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 yearsif options to extend the contract are exercised by the NIH. In September 2013, we entered into contracts with NIAID and BARDAfor the development of OrbeShield^® that would provide up to $32.7 million of funding in the aggregate if optionsto extend 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, in 2017, we were awarded two separate grants from theNIH of approximately $1.5 million each to support our pivotal Phase 3 trials of SGX301 for the treatment of CTCL and SGX942 forthe treatment of oral mucositis in head and neck cancer. Our biodefense grants have an overhead component that allows us an agency-approvedpercentage over our incurred costs. We estimate that the overhead component associated with our existing contracts and grantswill fund some fixed costs for direct employees working on these contracts and grants as well as other administrative costs. Wehave approximately $18.4 million in awarded contract and grant funding, assuming the NIAID options are exercised for the developmentof RiVax^®. BARDA has elected not to fund the additional options remaining under the contract for the developmentof OrbeShield^®.

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 March 31, 2018, we have expended approximately $77.8million developing our current product candidates for pre-clinical research and development and clinical trials, and we currentlyexpect to spend approximately $11.5 million over the next 12 months in connection with the development of our therapeutic andvaccine products, licenses, employment agreements, and consulting agreements, of which approximately $5.9 million is expectedto 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 U.S. 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 countermeasures 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 ricin, or otherwise assist usin qualifying the requisite animal models. We have to compete with other biodefense companies for access to this limited poolof highly specialized resources. We therefore may not be able to secure contracts to conduct the testing in a predictable timeframeor 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 product; cost-effectiveness of our product relative to competing products; availabilityof reimbursement for our product from government or other healthcare payers; and effectiveness of marketing and distribution effortsby 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 theuncertainties associated with developing drugs or biologic products. Further, even if we obtain orphan drug exclusivity for aproduct, that exclusivity may not effectively protect the product from competition because different drugs with different activemoieties can be approved for the same condition. Absent patent or other intellectual property protection, even after an orphandrug is approved, the FDA or European Medicines Agency may subsequently approve the same drug with the same active moiety forthe same condition if the FDA or European Medicines Agency concludes that the later drug is safer, more effective, or makes amajor contribution to 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 decreasethe market 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 (the “UC”),and George B. McDonald, MD for the rights to commercialize key product candidates. We may not be able to retain the rights grantedunder these agreements or negotiate additional agreements on reasonable terms, if at all. Our existing license agreements impose,and we expect that future license agreements will impose, various diligence, milestone payment, royalty, and other obligationson us. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, we may be requiredto make certain payments to the licensor, we may lose the exclusivity of our license, or the licensor may have the right to terminatethe license, in which event we would not be able to develop or market products covered by the license.

In April 2018, the UC delivered a notice of termination ofour license agreement for heat stabilization technology based upon our failure to achieve one of the development milestones: initiationof the Phase 1 clinical trial of the heat stabilization technology by March 31, 2018.  After negotiating with the UC regardingtermination, we and the UC have agreed to extend the termination date to October 31, 2018 in order to allow us time to attemptto agree upon terms of a potential agreement, which would allow us to keep the rights to, and to continue to develop, the heatstabilization technology or a product candidate containing the heat stabilization technology. Currently, no terms have been agreedupon and we cannot assure that our efforts to retain our rights to the heat stabilization technology will proceed on a timelybasis, or at all.  If we are unable to successfully retain our rights to the heat stabilization technology our developmentof the heat stabilization technology may cease and our development of RiVax^® may be delayed, which could harm ourbusiness, prospects, financial condition and results of operations.

Additionally,the milestone and other payments 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 17 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, 2017, we sold New Jersey NOL carryforwards, resulting in the recognitionof $416,810 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 and this Offering

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

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

SinceJanuary 1, 2017, the closing stock price of our common stock has fluctuated between a high of $5.08 per share to a low of $1.54per share. Since January 1, 2017, the closing price of our common stock warrants has fluctuated between a high of $1.31 per warrantto a low of $0.21 per warrant. On May 21, 2018 the last reported sales prices of our common stock and our common stock warranton The Nasdaq Capital Market were $1.61 per share and $0.43 per warrant. The fluctuation in the price of our common stock andwarrants has sometimes been unrelated or disproportionate to our operating performance. In addition, potential dilutive effectsof future sales of shares of common stock and warrants by us, as well as potential sale of common stock by the holders of warrantsand options, could have an adverse effect on the market price of our shares.

Theoutstanding warrants do not confer any rights of common stock ownership on their holders, such as voting rights or the right toreceive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price for a limited periodof time. Specifically, the holders of the outstanding warrants may exercise their right to acquire the common stock and pay theper share exercise price, prior to the expiration date, after which date any unexercised warrants will expire and have no furthervalue.

Holdersof the warrants offered hereby will have no voting rights as common stockholders until they acquire our common stock.

Untilyou acquire shares of our common stock upon exercise of the warrants, you will have no rights with respect to our common stockissuable upon exercise of the warrants. Upon exercise of your warrants, you will be entitled to exercise all the voting rightsof a common stockholder only as to matters for which the record date occurs after the exercise date.

Significantholders or beneficial holders of our common stock may not be permitted to exercise warrants that they hold.

Thewarrants offered hereby will prohibit a holder from exercising its warrants if doing so would result in such holder (togetherwith such holder’s affiliates and any other persons acting as a group together with such holder or any of such holder’saffiliates) beneficially owning more than 4.99% of our common stock outstanding immediately after giving effect to the exercise.As a result, you may not be able to exercise your warrants for shares of our common stock at a time when it would be financiallybeneficial for you to do so. In such circumstance you could seek to sell your warrants to realize value, but you may be unableto do so.

Thewarrants offered hereby are speculative in nature.

Thewarrants offered hereby do not confer any rights of common stock ownership on their holders, such as voting rights or the rightto receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price for a limited periodof time. Specifically, commencing on the date of issuance, holders of the warrants may exercise their right to acquire the commonstock and pay an exercise price of $2.25 per share, prior to forty-two months from the date of issuance, after which date anyunexercised warrants will expire and have no further value. Moreover, the Company has no plans to apply to have the warrants listedon any exchange and no assurance can be given that a market for the warrants will develop. There can be no assurance that themarket price of the common stock will ever equal or exceed the exercise price of the warrants, and consequently, whether it willever be profitable for holders of the warrants to exercise the warrants.

Thewarrants hereby offered may not have any value.

Eachwarrant will have an exercise price of $2.25 per share and will expire 42 months from the original issuance date. In the eventour common stock price does not exceed the exercise price of the warrants during the period when the warrants are exercisable,the warrants may not have any value.

Investorswill experience immediate and substantial dilution as a result of this offering and may suffer substantial dilution related toissued stock warrants and options.

Investorswill incur immediate and substantial dilution as a result of this offering. After giving effect to the sale by us of up to 4,968,944shares of common stock and warrants to purchase up to an aggregate of 1,987,578 shares of common stock offered in this offeringat an assumed public offering price of $1.61 per share (based upon the closing price on May 21, 2018) and $0.01 per warrant, andafter deducting the underwriters’ discount and estimated offering expenses payable by us, investors in this offering canexpect an immediate dilution of $0.78 per share, without giving effect to the potential exercise of the warrants offered hereby.

Inaddition, as of March 31, 2018, 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.

Anti-takeoverprovisions in our corporate governance documents and under Delaware law could make a third party acquisition of the Company difficult.

Provisionsin our Certificate of Incorporation and by-laws may discourage certain types of transactions involving an actual or potentialchange of control of our company which might be beneficial to us or our security holders. We also are subject to certain provisionsof Delaware law that could delay, deter or prevent a change in control of the Company. These provisions could limit the pricethat investors might be willing to pay in the future for shares of our common stock.

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

Ourcommon stock and warrants have from time to time been “thinly-traded,” meaning that the number of persons interestedin purchasing our common stock or warrants at or near ask prices at any given time may be relatively small or non-existent. Thissituation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown tostock analysts, stock brokers, institutional investors and others in the investment community that generate or influence salesvolume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to followan unproven company such as ours or purchase or recommend the purchase of our shares until such time as we become more seasonedand viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent,as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuoussales without an adverse effect on share price. We cannot give stockholders any assurance that a broader or more active publictrading market for our common shares and warrants 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 and warrants afterprice appreciation, which may never occur, as the only way to realize any future gains on their investments. There is no guaranteethat shares of our common stock or warrants will appreciate in value or even maintain the price at which our stockholders havepurchased 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 to Lincoln Park may cause dilution and the sale of the shares of common stock acquired byLincoln 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 a purchase agreement (the “2016 Purchase Agreement”) with Lincoln Park Capital Fund,LLC (“Lincoln Park”). Pursuant to the 2016 Purchase Agreement, Lincoln Park has committed to purchase up to $12 millionof our common stock, of which approximately $10.1 million worth of our common stock remains issuable as of the date of this prospectus.Concurrently with the execution of the 2016 Purchase Agreement, we issued 10,000 shares of our common stock to Lincoln Park asa partial fee for its commitment to purchase shares of our common stock under the 2016 Purchase Agreement. From March 22, 2016through the date of this prospectus, we sold 330,000 shares to Lincoln Park and issued 7,778 additional shares to Lincoln Parkas additional commitment shares under the 2016 Purchase Agreement and received proceeds of $1,866,650. The shares that may besold pursuant to the 2016 Purchase Agreement may be sold by us to Lincoln Park at our sole discretion from time to time over theremaining term of approximately 10 months from the date of this prospectus, 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 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 Actof 1933, as amended (the “Securities Act”). After any such shares are registered, the holders will be able to sellall, some or none of those shares. Therefore, issuances by us under the purchase agreement could result in substantial dilutionto the interests of other holders of our common stock. Additionally, the issuance of a substantial number of shares of our commonstock pursuant to the purchase agreement, or the anticipation of such issuances, could make it more difficult for us to sell equityor equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

Ourmanagement will have broad discretion over the use of the net proceeds from this offering and we may use the net proceeds in wayswith which you disagree or which do not produce beneficial results.

Wecurrently intend to use the net proceeds from this offering to fund our research and development activities and for working capitaland general corporate purposes (see “Use of Proceeds”). We have not allocated specific amounts of the net proceedsfrom this offering for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibilityin applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use ofthese net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceedsare being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable,or any, return for us or our stockholders. The failure of our management to use such funds effectively could have a material adverseeffect on our business, financial condition, and results of operation.

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS
AND INDUSTRY DATA AND MARKET INFORMATION

Thisprospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are often identifiedby words such as “may,” “should,” “would,” “expect,” “intend,” “anticipate,”“believe,” “estimate,” “continue,” “plan,” “potential” and similarexpressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materiallyfrom those expressed for the reasons described in this prospectus. You should not place undue reliance on these forward-lookingstatements.

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 Sections titled “Risk Factors,” “Business” and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” and other sections in this prospectus, which addressadditional factors that could cause our actual results to differ from those set forth in the forward-looking statements and couldmaterially and 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. See “RiskFactors.”

USEOF PROCEEDS

Weestimate that our net proceeds from the sale of the common stock and warrants offered pursuant to this prospectus will be approximately$7.4 million, or approximately $8.5 million if the underwriters exercise in full their option to purchase additional shares ofcommon stock and additional warrants, assuming a public offering price of $1.61 per share of common stock, which is based on theclosing price of our common stock on May 21, 2018, and a public offering price of $0.01 per warrant, and after deductingthe underwriting discount and the estimated offering expenses that are payable by us and excluding proceeds if any from the exerciseof the warrants.

Thepublic offering price per share of common stock will be determined between us, the underwriters and investors based on marketconditions at the time of pricing and may be at a discount to the current market price of our common stock. We will only receiveadditional proceeds from the exercise of the warrants issuable in connection with this offering if such warrants are exercisedat their exercise price of $2.25 per share and the holders of such warrants pay the exercise price in cash upon such exerciseand do not utilize the cashless exercise provision of the warrants.

Wecurrently intend to use the net proceeds from this offering to fund our pivotal Phase 3 clinical trial of SGX301 for the treatmentof CTCL and our pivotal Phase 3 clinical trial of SGX942 for the treatment of oral mucositis in head and neck cancer patients,as well as for general working capital purposes. We have not yet determined the amount of the net proceeds to be used specificallyfor any purposes. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds fromthis offering. Pending any use as described above, we intend to invest the net proceeds in high-quality, short-term, interest-bearingsecurities.

DIVIDENDPOLICY

Wehave never declared nor paid any cash dividends on our common stock, and currently intend to retain all our cash and any earningsfor use in our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determinationto pay cash dividends on our common stock will be at the discretion of the Board of Directors and will be dependent upon our consolidatedfinancial condition, results of operations, 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.

OnMay 21, 2018, the last reported price of our common stock quoted on The Nasdaq Capital Market was $1.61 per share.

OnDecember 13, 2016, our common stock warrants issued in connection with our December 2016 public offering began trading on TheNasdaq Capital Market under the symbol “SNGXW.” The following table sets forth, for the periods indicated, the highand low sales prices per share of our common stock warrants as reported by The Nasdaq Capital Market, beginning on December 13,2016.

OnMay 21, 2018, the last reported price of our common stock warrants on The Nasdaq Capital Market was $0.43 per warrant.

TheNasdaq prices set forth above represent inter-dealer quotations, without adjustment for retail mark-up, mark-down or commission,and may not represent the prices of actual transactions.

TransferAgent

Sharesof our common stock are issued in registered form. American Stock Transfer & Trust Company, LLC, 6201 15^th Avenue,Brooklyn, NY 11219 (Telephone: (718) 921-8200; Facsimile: (718) 765-8719) is the registrar and transfer agent for shares of ourcommon stock.

Holdersof Common Stock

Asof May 21, 2018, there were 255 holders of record of our common stock. As of such date, 8,750,801 shares of our common stock wereissued and outstanding.

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. In June 2017, our stockholders approved an amendment to the 2015 Equity IncentivePlan to increase the maximum number of shares of our common stock available for issuance under the plan, bringing the total sharesavailable for issuance under the plan to 600,000 shares. The following table provides information, as of December 31, 2017 withrespect to options outstanding under our 2005 Equity Incentive Plan and our 2015 Equity Incentive Plan. All share numbers in thisparagraph and in the following table have been adjusted for the one-for-ten reverse stock split effective October 7, 2016.

DILUTION

Ifyou invest in our securities in this offering, your interest will be diluted to the extent of the difference between the publicoffering price per share of our common stock in this offering and our pro forma as adjusted net tangible book value per shareimmediately after this offering. Net tangible book value per share is determined by dividing our total tangible assets less totalliabilities by the number of outstanding shares of our common stock.

Ourpro forma net tangible book value as of March 31, 2018 was $4,021,640 or $0.46 per share of common stock, based upon 8,750,801shares outstanding, after giving effect to the issuance of 10,078 shares of common stock for which we received $18,600 from April1, 2018 through and immediately prior to the date of this prospectus. Assuming that our common stock in this offering is soldto the underwriters at a price of $1.61 per share, based on the closing price on May 21, 2018, the number of outstanding sharesof our common stock, and without counting shares issuable upon the conversion or exercise of any notes, warrants or options, wouldincrease by 4,968,944 shares (rounded to the nearest whole share), for a total of 13,719,745 shares of our common stock outstanding.After giving effect to the sale of the shares of common stock and warrants in this offering at the assumed public offering priceof $1.61 per share (based upon the closing price on May 21, 2018) and $0.01 per warrant, after deducting underwriting discountsand commissions and other estimated offering expenses payable by us, our pro forma as adjusted net tangible book value at March31, 2018 would have been $11,373,472, or $0.83 per share. This represents an immediate increase in pro forma net tangible bookvalue of approximately $0.37 per share to our existing stockholders, and an immediate dilution of $0.78 per share to investorspurchasing shares and warrants in this offering. The following table illustrates the per share dilution:

Theinformation above assumes that the underwriters do not exercise their over-allotment option. If the underwriters exercise theirover-allotment option in full, the pro forma as adjusted net tangible book value will increase to $0.86 per share, representingan immediate increase to existing stockholders of $0.40 per share and an immediate dilution of $0.75 per share to new investors.If any shares are issued upon exercise of outstanding options or warrants, new investors will experience further dilution.

A$1.00 increase in the assumed public offering price of $1.61 per share, with the $0.01 price per warrant remaining the same, wouldincrease the pro forma as adjusted net tangible book value per share by $0.34, assuming the number of shares and warrants offeredby us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts andcommissions and estimated offering expenses payable by us. A $1.00 decrease in the assumed public offering price of $1.61 pershare, with the $0.01 price per warrant remaining the same, would decrease the pro forma as adjusted net tangible book value pershare by $0.34, assuming the number of shares and warrants offered by us, as set forth on the cover page of this prospectus, remainsthe same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. Each 20%increase of the assumed number of shares of common stock and warrants offered by us, as set forth on the cover page of this prospectus,would (a) increase our pro forma as adjusted net tangible book value by approximately $1.5 million, (b) increase our pro formaas adjusted net tangible book value per share after this offering by $0.04 per share and (c) decrease the dilution per share tonew investors in this offering by $0.04, assuming a public offering price of $1.61 per share and $0.01 per warrant remain thesame, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Each 20% decreaseof the assumed number of shares of common stock and warrants offered by us, as set forth on the cover page of this prospectus,would (a) decrease our pro forma as adjusted net tangible book value by approximately $1.5 million, (b) decrease our pro formaas adjusted net tangible book value per share after this offering by $0.05 per share and (c) increase the dilution per share tonew investors in this offering by $0.05, assuming a public offering price of $1.61 per share and $0.01 per warrant remain thesame, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

CAPITALIZATION

Thefollowing table sets forth our capitalization, as of March 31, 2018:

Investorsshould consider this table in conjunction with our financial statements and the notes to those financial statements included elsewherein this prospectus.

MANAGEMENT’SDISCUSSION AND ANALYSIS
OF FINANCIAL 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 fluorescent 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 theBiomedical Advanced Research and Development Authority (“BARDA”) and grants from 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 internal expenses that are related to the government contracts and 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 contained provisionsthat protected holders from a decline in the issue price of our common stock (or “down-round” provisions) and containednet 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. All other warrants that have been issued by us were indexed to our ownstock and therefore were 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. Typically,these 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.

Wedid not issue any stock options for the three months ended March 31, 2018. The fair value of each option grant made during theyears ended December 31, 2017 and 2016 and the three months ended March 31, 2017 was estimated on the date of each grant usingthe Black-Scholes option pricing model and amortized ratably over the option vesting periods, which approximates the service period.

IncomeTaxes

OnDecember 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act(the “Tax Act”). The Tax Act significantly revises U.S. corporate income taxation by, among other things, loweringthe U.S. corporate income tax rate from 35.0 % to 21.0% effective January 1, 2018. We do not anticipate any impact to tax expensedue to the full valuation allowance on our deferred tax assets and believe that the most significant impact on our consolidatedfinancial statements was the reduction of approximately $14 million for the deferred tax assets related to net operatinglosses and other assets. Such reduction was fully offset by changes to our valuation allowance.

InDecember 2017, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin 118, which allowsa measurement period, not to exceed one year, to finalize the accounting for the income tax impacts of the Tax Act. Until theaccounting for the income tax impacts of the Tax Act is complete, the reported amounts are based on reasonable estimates, aredisclosed as provisional and reflect any adjustments in subsequent periods as we refine our estimates or complete our accountingof such tax effects.

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 our current and past performance, the market environment in which we operate, theutilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities aremeasured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expectedto be recovered or settled. No current or deferred income taxes have been provided through March 31, 2018 due to the net operatinglosses incurred by us since our inception. We recognize accrued interest and penalties associated with uncertain tax positions,if any, as part of income tax expense. There were no tax related interest and penalties recorded for the years ended December 31,2017 or 2016 or the three months ended March 31, 2018 or 2017. Additionally, we have not recorded an asset for unrecognized taxbenefits or a liability for uncertain tax positions at March 31, 2018 and December 31, 2017 and 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

ThreeMonths Ended March 31, 2018 Compared to March 31, 2017

Forthe three months ended March 31, 2018, we had a net loss of $2,377,206 as compared to a net loss of $1,733,437 for the same periodin the prior year, representing an increase in the net loss of $643,769 or 37%. For the three months ended March 31, 2018, revenuesand associated costs related to government contracts and grants awarded in support of our development of OrbeShield^®for the treatment of GI ARS and RiVax^® and other development programs. For the three months ended March 31,2018, we had total revenues of $1,119,773 as compared to $1,330,884 for the same period in the prior year, representing a decreaseof $211,111 or 16%. The decrease in revenues was a result of the work being completed under the OrbeShield^® BARDAcontract for the treatment of GI ARS and the completion under the RiVax^® NIAID contract of a primate study duringthe first quarter of 2017. This decrease was partially offset by an increase in NIH grant revenues from grants awarded in September2017 to support the development of SGX301 for the treatment of CTCL and SGX942 for the treatment of oral mucositis in head andneck cancer.

Weincurred costs related to those revenues for the three months ended March 31, 2018 and 2017 of $978,921 and $1,087,315, respectively,representing a decrease of $108,394 or 10%. The decrease in costs is primarily a result of the decrease in total revenues fromthe completion of the BARDA and NIAID contracts.

Ourgross profit for the three months ended March 31, 2018 was $140,852 or 13% of revenues, as compared to $243,569 or 18% of revenuesfor the same period in 2017, representing a decrease of $102,717 or 42%. The decrease in gross profit is consistent with the decreasein revenues. A smaller share of reimbursable costs were available for contracted fixed overhead reimbursement during the threemonths ended March 31, 2018 compared to the three months ended March 31, 2017, resulting in the decrease in gross profit percentageof 5%.

Researchand development expenses were $1,803,360 for the three months ended March 31, 2018 as compared to $1,217,540 for the same periodin 2017, representing an increase of $585,820 or 48%. The increase in research and development spending for the three months endedMarch 31, 2018 was related to expenditures incurred in the Phase 3 clinical trial of SGX942, the ongoing Phase 3 clinical trialof SGX301, and the initiation and expansion of the Phase 3 trial of SGX942 to select UK and European locations.

Generaland administrative expenses were $731,593 for the three months ended March 31, 2018, as compared to $764,219 for the same periodin 2017, representing a decrease of $32,626 or 4%. The decrease is primarily related to a decrease in professional fees.

Interestincome for the three months ended March 31, 2018 was $16,895 as compared to $4,753 for the same period in 2017, representing anincrease of $12,142 or 255%. The increase is due to an increase in interest and dividend income for the three months ended March31, 2018 as compared to the same period in 2017.

YearEnded December 31, 2017 Compared to 2016

Forthe year ended December 31, 2017, we had a net loss of $7,147,083 as compared to a net loss of $3,245,383 for the prior year,representing an increased loss of $3,901,700 or 120%. Included in the net loss for December 31, 2016 is the change in the fairvalue of the warrant liability related to warrants issued in connection with our June 2013 registered public financing of $1,541,241in other income. The warrant liability for the unexercised warrants was reclassified to equity in November 2016 as the price protectionprovision was eliminated through an amendment.

Forthe year ended December 31, 2017 and 2016, 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 developmentprograms. For the year ended December 31, 2017, we had revenues of $5,432,472 as compared to $10,448,794 for the prior year, representinga decrease of $5,016,322 or 48%. The decrease in revenues was primarily a result of the completion of the NIAID contract for OrbeShield^®during the first quarter of 2017, along with the expiration of the base period of the BARDA contract for the developmentof OrbeShield^®, with BARDA electing not to extend the current contract beyond the base period. This was partiallyoffset by an increase in grant revenues awarded in September 2017 to support the development of SGX301 for the treatment of CTCLand SGX942 for the treatment of oral mucositis in head and neck cancer.

Weincurred costs related to contract and grant revenues in the year ended December 31, 2017 and 2016 of $4,310,083 and $8,433,671,respectively, representing a decrease of $4,123,588 or 49%. The decrease in costs was primarily the result of the decrease inrevenues from the completion of the NIAID and BARDA contracts for the development of OrbeShield^®.

Ourgross profit for the year ended December 31, 2017 was $1,122,389 or 21% of revenues, as compared to $2,015,123 or 19% of revenuesfor the prior year, representing a decrease of $892,734 or 44%. The decrease in gross profit is consistent with our decrease intotal revenues. The increase in gross profit percentage of 2% for the year ended December 31, 2017 as compared to December 31,2016, was primarily attributable to higher amounts of reimbursement in 2017 for certain contractor and employee expenses fromcontracts and grants, as well as management and administrative fees from the two grants awarded in 2017 in support of our pivotalPhase 3 trials of SGX301 and SGX942.

Researchand development expenses increased by $1,211,166 or 28%, to $5,507,033 for the year ended December 31, 2017 as compared to $4,295,867for the prior year. The increase in research and development spending for the year ended December 31, 2017 was related to expendituresincurred in the preparation and initiation of the Phase 3 clinical trial of SGX942 as well as the ongoing Phase 3 clinical trialof SGX301.

Generaland administrative expenses decreased $219,683 or 6%, to $3,209,155 for the year ended December 31, 2017, as compared to $3,428,838for the prior year. This decrease is primarily related to a decrease in professional fees.

Otherincome for the year ended December 31, 2017 was $29,906 as compared to $1,934,056 for the prior year, reflecting a decrease of$1,904,150 or 98%. The decrease is primarily due to the change in the fair value of the warrant liability resulting in $1,541,241of other income in 2016. In addition, $390,599 was included in other income in 2016 related to an amount that had previously beenaccrued. We were notified that the amount was no longer considered outstanding by the counterparty and therefore reversed theamount 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, for the year ended December 31, 2017, we sold New Jersey NOL carryforwards, resulting in the recognition of$416,810 of income tax benefit as compared to $530,143 for the year ended December 31, 2016. As of December 31, 2017, paymentof the $416,810 from the sale of the New Jersey NOL carryforward was outstanding. Accordingly, we recorded this amount as a currentincome tax receivable, and subsequently received payment in January 2018. There can be no assurance as to the continuation ormagnitude of this program in future years.

BusinessSegments

Wemaintain two active business segments for the quarter ended March 31, 2018 and the years ended December 31, 2017 and 2016: Vaccines/BioDefenseand BioTherapeutics.

Revenuesfor the Vaccines/BioDefense business segment for the year ended December 31, 2017 were $4,749,294 as compared to $10,448,794 forthe year ended December 31, 2016, representing a decrease of $5,699,500 or 55%. The decrease in revenues was a result of the completionof the NIAID contract during the first quarter of 2017, along with the expiration of the base period BARDA contract for the developmentof OrbeShield^®, with BARDA electing not to extend the current contract beyond the base period. Revenues for theBioTherapeutics business segment for the year ended December 31, 2017 were $683,178 as compared to $0 for the year ended December31, 2016, due to the two grants awarded in 2017 in support of our pivotal Phase 3 trials of SGX301 and SGX942.

Incomefrom operations for the Vaccines/BioDefense business segment for the year ended December 31, 2017 was $232,166 as compared to$1,563,884 for the year ended December 31, 2016. 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, 2017was $4,181,811 as compared to $3,399,933 for the year ended December 31, 2016, representing an increase of $781,878 or 23%. Thisincreased loss is due primarily to expenses incurred in the preparation and initiation of the pivotal Phase 3 clinical trial ofSGX942 as well as the ongoing Phase 3 clinical trial of SGX301.

Amortizationand depreciation expense for the Vaccines/BioDefense business segment for the year ended December 31, 2017 was $33,183 as comparedto $40,186 for the year ended December 31, 2016. Amortization and depreciation expense for the BioTherapeutics business segmentfor the year ended December 31, 2017 was $30,614 as compared to $41,395 for the year ended December 31, 2016. The decrease inamortization and depreciation expense was the result of patents becoming fully amortized during the year ended December 31, 2017.

FinancialCondition and Liquidity

Cashand Working Capital

Asof March 31, 2018, we had cash and cash equivalents of $6,368,057 as compared to $7,809,487 as of December 31, 2017, representinga decrease of $1,441,430 or 18%. As of March 31, 2018, we had working capital of $3,945,717 as compared to working capital of$6,185,863 as of December 31, 2017, representing a decrease of $2,240,146, or 36% in working capital. The decrease in cash andworking capital was primarily related to expenditures to support the pivotal Phase 3 clinical trial of SGX301 for the treatmentof CTCL and expenditures incurred in the pivotal Phase 3 clinical trial of SGX942 for the treatment of oral mucositis in headand neck cancer, including the expansion of the Phase 3 trial of SGX942 to select European study sites.

Basedon our current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, proceeds available fromthe equity line with Lincoln Park Capital Fund LLC and proceeds from the State of New Jersey Technology Business Tax CertificateTransfer Program, management believes that its current cash will be sufficient to meet the anticipated cash needs for workingcapital and capital expenditures for at least the next twelve months from issuance of the financial statements.

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 next 12 months to be approximately $11.5million before any contract or grant reimbursements, of which $7.5 million relates to the BioTherapeutics business and $4.0 millionrelates to the Vaccines/BioDefense business. We anticipate contract reimbursements in the next 12 months of approximately $5.9million to offset research and development expenses in both the BioTherapeutics and the Vaccines/BioDefense business segments.

Thetable below details our costs for research and development by program and amounts reimbursed for the three months ended March31:

Thetable below details our costs for research and development by program and amounts reimbursed for the years ended December 31,2017 and 2016:

ContractualObligations

Wehave commitments of approximately $475,000 as of March 31, 2018 for several licensing agreements with consultants and universities.Additionally, we have collaboration and license agreements, which upon clinical or commercialization success may require the paymentof milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However,there can be no assurance that clinical or commercialization success will occur. As of March 31, 2018, we have accrued for approximately$197,000 in milestone payments.

Wecurrently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuantto a lease that was amended in October 2017 and expires in October 2020. This office space currently serves our corporate headquarters.The rent for the first 12 months is approximately $11,367 per month, or approximately $22.00 per square foot. The rent will increaseto approximately $11,625 per month, 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.

OnSeptember 3, 2014, we entered into an asset purchase agreement with Hy Biopharma pursuant to which we acquired certain intangibleassets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product.As consideration for the assets acquired, we paid $275,000 in cash and issued 184,912 shares of common stock with a fair valueof $3,750,000. These amounts were charged to research and development expense during the third quarter of 2014 as the assets willbe used in our research and development activities and do not have alternative future use pursuant to generally accepted accountingprinciples in the United States. Provided all future success-oriented milestones are attained, we will be required to make paymentsof up to $10.0 million, if and when achieved. Payments will be payable in restricted securities of the Company not to exceed 19.9%ownership of our outstanding stock. As of March 31, 2018, no milestone payments have been made 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 the 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 fluorescent 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 theBiomedical Advanced Research and Development Authority (“BARDA”) and grants from NIAID.

Anoutline of our business strategy follows:

OurProduct Candidates in Development

Thefollowing tables summarize our product candidates under development:

BioTherapeuticProduct Candidates

VaccineThermostability Platform**

BioDefenseProducts**

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 synthetic hypericin has demonstrated significant anti-proliferative effects on activatednormal human lymphoid cells and inhibited growth of malignant T-cells isolated from CTCL patients. In both settings, it appearsthat the mode of action is an induction of cell death in a concentration as well as a light dose-dependent fashion. These effectsappear to 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 synthetic hypericin coupled with directed visiblelight results in generation of singlet oxygen only at the treated site. We believe that the use of visible light (as opposed tocancer-causing ultraviolet light) is a major advance in photodynamic therapy. In a published Phase 2 clinical study in CTCL, aftersix weeks of twice weekly therapy, a majority of patients experienced a statistically significant (p<0.04) improvementwith SGX301 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. This trial, referred toas the “FLASH” study (Fluorescent Light Activated Synthetic Hypericin), aims toevaluate the response to SGX301 as a skin directed therapy to treat early stage CTCL. We are actively enrolling patients withapproximately thirty CTCL centers across the U.S. participating in this pivotal trial. The Phase 3 protocol is a highly powered,double-blind, randomized, placebo-controlled, multicenter trial and will seek to enroll approximately 120 evaluable subjects.The trial will consist of three treatment cycles, each of eight weeks duration. Treatments will be administered twice weekly forthe first six weeks and treatment response will be determined at the end of the eighth week. In the first treatment cycle, approximately80 subjects will receive SGX301 and 40 will receive placebo treatment of their index lesions. In the second cycle, all subjectswill receive SGX301 treatment of their index lesions, and in the third cycle all subjects will receive SGX301 treatment of allof their lesions. The majority of subjects enrolled to date have elected to continue into the third optional, open-label cycleof the study. We continue to work closely with the Cutaneous Lymphoma Foundation, as well as the National Organization for RareDisorders. Subjects will be followed for an additional six months after their last evaluation visit. The primary efficacy endpointwill be assessed on the percentage of patients in each of the two treatment groups (i.e., SGX301 and placebo) achieving a partialor complete response of the treated lesions, defined as a ≥ 50% reduction in the total Composite Assessment of Index LesionDisease Severity (“CAILS”) score for three index lesions at the Cycle 1 evaluation visit (Week 8) compared to thetotal CAILS score at baseline. Other secondary measures will assess treatment response including duration, degree of improvement,time to relapse and safety.

DuringSeptember 2017, 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 — 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. Webelieve that 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.The U.S. Patent and Trademark Office has granted the patent titled “Novel Peptides and Analogs for Use in the Treatmentof Oral Mucositis”. The newly issued patent claims therapeutic use of dusquetide and related IDR analogs, and adds to compositionof matter claims for dusquetide and related analogs that have been granted in the U.S. and worldwide.

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 other secondaryefficacy endpoints, such as the utilization of opioid pain medication, indicated that the SGX942 1.5mg/kg treatment group hada 40% decrease in the use of opioids at the later stage of the treatment phase of the trial, when oral mucositis is usually mostsevere and expected to increase paid medication use. This was in contrast to the placebo group, which demonstrated a 10% increasein use of opioids over this same period. Data from this Phase 2 trial was published online in the Journal of Biotechnology. Thepublication also delineates the supportive nonclinical data in this indication, demonstrating consistency in the qualitative andquantitative biological response, including dose response, across the nonclinical and clinical data sets. The results are availableat 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 were 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) is a highly powered, double-blind, randomized, placebo-controlled, multinational trialthat will seek to enroll approximately 190 subjects with squamous cell carcinoma of the oral cavity and oropharynx who are scheduledto receive a minimum total cumulative radiation dose of 55 Gy fractionated as 2.0-2.2 Gy per day with concomitant cisplatin chemotherapygiven as a dose of 80-100 mg/m² every third week. Subjects will be randomized to receive either 1.5 mg/kg SGX942 orplacebo given twice a week during and for two weeks following completion of chemoradiation therapy (“CRT”). The primaryendpoint for the study will be the median duration of severe oral mucositis, which will be assessed by oral examination at eachtreatment visit and then through six weeks following completion of CRT. Oral mucositis will be evaluated using the WHO Gradingsystem. Severe oral mucositis is defined as a WHO Grade of ≥3. Subjects will be followed for an additional 12 months afterthe 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. We anticipate that approximately fifty U.S. and European oncology centers will be participating inthis pivotal Phase 3 study.

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 — 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.

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.”

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. We intend to pursue a pivotal Phase 3 clinical trial of SGX203 for the treatmentof pediatric Crohn’s disease contingent upon additional funding, such as through partnership funding support.

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.

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 UC conducted a study that demonstrated a heat stable vaccineformulation of a human papillomavirus (“HPV”) vaccine. The work was conducted by Drs. Randolph and Garcea and demonstratedthe successful conversion of a commercial virus-like-particle based vaccine requiring cold chain storage to a subunit, alum-adjuvanted,vaccine which is stable at ambient temperatures. This work, funded by a UC seed grant and the Specialized Program of ResearchExcellence in cervical cancer, is the first demonstration of the utility of ThermoVax^® technology for the developmentof a subunit based commercial vaccine. The HPV vaccine formulation was found to be stable for at least 12 weeks at 50 degreesC. In the study, mice immunized with the ThermoVax^®-stabilized HPV subunit vaccine were also found to achieve immuneresponses similar to the commercial HPV vaccine, Cervarix^®, as measured by either total antibody levels or neutralizingantibody levels. Moreover, whereas the immune responses to Cervarix^® were reduced after storage for 12 weeks at50 degrees C, the ThermoVax^® formulated vaccine retained its efficacy. The results were published online in theEuropean 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 NIAID Research Project (R01) grant awarded to UH Manoa for the developmentof a trivalent thermostabilized Ebola vaccine, with our awarded funding of approximately $700,000 over five 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.

In April 2018, the UC delivered a notice of terminationof our license agreement for heat stabilization technology based upon our failure to achieve one of the development milestones:initiation of the Phase 1 clinical trial of the heat stabilization technology by March 31, 2018.  After negotiating withthe UC regarding termination, we and the UC have agreed to extend the termination date to October 31, 2018 in order to allow ustime to attempt to agree upon terms of a potential agreement, which would allow us to keep the rights to, and to continue to develop,the heat stabilization technology or a product candidate containing the heat stabilization technology. Currently, no terms havebeen agreed upon and we cannot assure that our efforts to retain our rights to the heat stabilization technology will proceedon a timely basis, or at all.  If we are unable to successfully retain our rights to the heat stabilization technology ourdevelopment of the heat stabilization technology may cease and our development of RiVax^® may be delayed, whichcould harm our business, prospects, financial condition and results of operations.

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 enhances the stability of the RiVax^® antigen, enabling storage for at least 1year 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.We have 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 us and to UTSW where the vaccine originated. The second clinical trial was supported bya 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 good manufacturing practices compliant RiVax^® bulk drug substance and finished drugproduct manufacturing, which is required for the conduct of future preclinical and clinical safety and efficacy studies. The exercisedoption will provide us with approximately $2.5 million in additional non-dilutive funding, bringing the total amount awarded todate under this contract to $21.2 million, of which $16.2 million is still available. If all contract options are exercised, thetotal award of up to $24.7 million will support the preclinical, manufacturing and clinical development activities necessary toadvance heat stable RiVax^® with the FDA. In addition, biomarkers for RiVax^® testing have been successfullyidentified, facilitating potential approval under the FDA Animal Rule.

RiVax^®has been granted Orphan Drug designation by the FDA for the prevention of ricin intoxication. In addition, RiVax^®has also been granted Orphan Drug designation in the European Union (“EU”) from the EMA Committee for OrphanMedical Products.

Assumingdevelopment efforts are successful for RiVax^®, we believe potential government procurement contract(s) could reachas much as $200 million. This potential procurement contract information is a forward-looking statement, and investors are urgednot to 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 ReviewVoucher (“PRV”). Approved under the 21st Century Cures Act in late 2016, the biodefense PRV is awarded upon approvalas a medical 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 of up to $350 million. When redeemed, PRVs entitle the user to an accelerated reviewperiod of nine months, saving a median of seven months review time as calculated in 2009. However, FDA must be advised 90 daysin advance of the use of the PRV and the use of a PRV is associated with an additional user fee ($2.7 million 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.

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 expiration of the base period of the BARDA contract for the development of OrbeShield^®,with BARDA electing not to extend the current contract beyond the base period. We intend to continue to apply for additional governmentfunding, as opportunities to do so become available. Previously, development of OrbeShield^® had been largely supportedby a $1 million NIH grant to our academic partner, the Fred Hutchinson Cancer Research Center. In July 2012, we received an SBIRgrant from NIAID of approximately $600,000 to support further preclinical development of OrbeShield^® for the treatmentof acute GI ARS. The FDA has given OrbeShield^® Orphan Drug designation and Fast Track designation for the preventionof 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: