PRINCETON, NJ – Sonnet BioTherapeutics Holdings, Inc. (NASDAQ:), a clinical-stage biotechnology company, has entered into a licensing agreement with Alkem Laboratories Limited for the development and commercialization of SON-080 in India. SON-080 is a recombinant human Interleukin-6 (rhIL-6) aimed at treating diabetic peripheral neuropathy (DPN), chemotherapy-induced neuropathy (CIPN), and autonomic neuropathy.
Under the agreement, Alkem will make an upfront payment of $1.0 million to Sonnet, with the potential for an additional $1.0 million in milestone payments. Furthermore, Sonnet will receive royalties in the low double digits on net sales in India, less certain expenses. Alkem will be responsible for funding and conducting clinical trials necessary for regulatory approval of SON-080 in India.
The diabetic neuropathy market in India was valued at $120.3 million in 2023 and is projected to grow to $246.7 million by 2030. The global market for DPN treatment is expected to reach approximately $6.8 billion by 2030, highlighting the significant potential for SON-080.
Pankaj Mohan, CEO of Sonnet, expressed enthusiasm about the partnership, citing Alkem’s experience and expertise as crucial for advancing SON-080 into Phase 2 clinical development. Dr. Akhilesh Sharma of Alkem emphasized the need for SON-080 development due to the large prevalence of DPN in India.
SON-080 is based on the same mechanism of action for all three neuropathies and has a history of safety data from over 200 patients in previous clinical trials. It has shown promise in preclinical studies for both DPN and CIPN. Encouraging data from the completed Phase 1b portion of the ongoing Phase 1b/2a clinical trial for CIPN was recently announced, with SON-080 well-tolerated and showing potential for rapid symptom improvement.
Alkem is an established Indian pharmaceutical company with a significant presence in various therapeutic areas and a strong commitment to global health improvement. Sonnet, with its proprietary technology for targeted biologic drugs, is actively seeking partnerships to support further clinical trials for SON-080.
This collaboration is based on a press release statement and represents a strategic step in addressing the unmet medical needs for neuropathy treatments in India.
In other recent news, Sonnet BioTherapeutics has secured preliminary approval to sell New Jersey State net operating losses (NOLs) and research and development (R&D) tax credits, potentially raising up to $0.795 million. The company also anticipates a $0.7 million net cash refund from Australia’s R&D Tax Incentive Program. In addition, Sonnet has implemented a one-for-eight reverse stock split and reported positive results from its Phase 1b clinical trial of SON-080. The company has also advanced SON-1210, an immunotherapeutic for metastatic pancreatic cancer, in collaboration with the Sarcoma Oncology Center.
Sonnet BioTherapeutics has introduced the CEO Corner, a new communication platform aimed at providing shareholders with in-depth information on the company’s progress and future plans. The company has also entered an agreement for the immediate exercise of warrants allowing the purchase of up to 2,828,500 shares of common stock at a reduced price, and it plans to issue new unregistered warrants for the purchase of up to 5,657,000 shares. The anticipated gross proceeds from these actions are projected to be around $3.4 million. These are recent developments in Sonnet’s ongoing efforts.
InvestingPro Insights
The recent licensing agreement between Sonnet BioTherapeutics Holdings, Inc. (NASDAQ:SONN) and Alkem Laboratories Limited comes at a critical time for the company, as revealed by several key metrics from InvestingPro.
Sonnet’s financial position appears challenging, with a market capitalization of just $3.17 million and a revenue of $0.06 million in the last twelve months as of Q3 2024. This context underscores the importance of the upfront $1.0 million payment from Alkem, which could provide a significant boost to Sonnet’s cash reserves.
InvestingPro Tips highlight that Sonnet “holds more cash than debt on its balance sheet,” which could be seen as a positive factor in its ability to fund ongoing research and development activities. However, the company “suffers from weak gross profit margins” and is “not profitable over the last twelve months,” indicating the critical nature of partnerships like the one with Alkem for potential future revenue streams.
The stock’s recent performance has been concerning, with InvestingPro data showing a -75.55% total return over the past year and a -68.88% return over the last six months. This trend aligns with the InvestingPro Tip that the stock is “trading near 52-week low,” suggesting that investors may be cautious about the company’s near-term prospects.
Despite these challenges, the partnership with Alkem could be a turning point for Sonnet. The potential market size for diabetic neuropathy treatment in India, as mentioned in the article, presents a significant opportunity that could positively impact Sonnet’s future financial performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Sonnet BioTherapeutics Holdings, providing a deeper understanding of the company’s position and potential.
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