SIGA Technologies, Inc. (SIGA) shares tanked hard on news that a Delaware court of Chancery had ruled in favour of PharmAthene (PIP) in a dispute involving SIGA‘s smallpox drug ST-246. 50% of the net profits that SIGA will be achieving from sales of ST-246 awarded to PharmAthene for the next ten years. Harsh decision, isn’t it?
SIGA’s Chief Executive Officer Dr. Eric A. Rose commented:
“We are gratified that the Court appreciated that the draft term sheet did not constitute a binding license agreement, but we respectfully disagree with the unprecedented decision to grant to PharmAthene a continuing interest in the net profits of this life-saving drug, which SIGA has worked so hard to bring to commercialization. We are continuing to study our options, but, at this point, we believe that we will appeal the unfavourable aspects of today’s decision. Most importantly, while we formulate our legal strategy with regard to today’s ruling, we remain committed to continuing our leadership in developing life-saving biodefense drugs and the smooth execution of the $433 million contract awarded to SIGA by BARDA earlier this year.”
Full press release: SIGA Comments on Court Ruling in PharmAthene Litigation
A few highlights:
- Take in consideration that SIGA will appeal court decision
- Take in consideration that first $40M of net sales belongs to SIGA (by court ruling). PharmAthene will be waiting for 5+ years (judging by the current net figures) before SIGA’s pennies start to flowing into PIP’s income.
Our point is: the 42.8% cut in SIGA’s market capitalization today was a definite market overreaction.
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New York, NY 10065
SIGA designs and develops novel countermeasures to prevent and treat serious infectious diseases, with an emphasis on biological warfare and bioterror defense. SIGA is now considered a leading drug development company in the biodefense arena. Its portfolio of existing drug candidates and its platform for developing additional countermeasures against potential agents of biological warfare and bioterror are intended to fill a critical need for safe and effective treatments