SIGA Technologies up big after new BARDA request Print E-mail
By M.E.Garza   
Tuesday, 22 February 2011 10:25
As we told our subscibers they might last week, the Biomedical Advanced Research and Development Authority (BARDA), a unit of the U.S. Department of Health and Human Services, has advised that it is issuing a new Request for Proposal seeking to procure 1.7 million courses of a smallpox antiviral from SIGA Technologies, Inc. (Nasdaq:SIGA).

Even after the company got bad news from the Small Business Administration last week, we were told that BARDA was conducting to their own research "to determine if there is enough capacity among true small businesses to supply the needed smallpox vaccines." That had prompted some analysts who have been following the drama on Wall Street to point out that BARDA would likely "find a way to get that contract to SIGA because the SIGA technology is really, in the end, what they want and what meets the highest standards."

The Request for Proposal also proposes that the contract would contain an option to procure up to 12 million additional courses. BARDA's previous Request for Proposal on this subject, number 09-35, has been cancelled. Responses to the new Request for Proposal are due February 28, 2011.

Dr. Eric A. Rose, SIGA's Chairman and Chief Executive Officer, noted, "This new Request for Proposal confirms the Government's commitment to a robust biodefense and the procurement of meaningful, new medical countermeasures against the most serious biothreats. SIGA intends to respond to this Request for Proposal, and we believe that we are well positioned to meet the Government's needs."

Still in play is the lawsuit filed by PharmAthene, Inc. (Amex: PIP) against SIGA Technologies Inc. (Nasdaq: SIGA). In early December, BioMedReports invited Eric I. Richman, President and Chief Executive Officer of PharmAthene to share his take on the lawsuit.

According to Richman, in 2006 SIGA and PharmAthene entered into an arrangement where we were to merge.  "Initially we were approached by SIGA for the purpose of licensing their ST-246 their small pox anti-viral product," said Richman. "We negotiated a license agreement term sheet and got to a point where both companies were comfortable with the terms of the deal and then the conversation switched from a license agreement to a merger; which both parties thought was a good idea.

"We entered into a merger arrangement, we find the merger document and we also – both parties wanted the product to not be idle – wanted to develop the product. In order to do so they have asked PharmAthene to loan them – you know provide a bridge loan of three $3 million to continue the development of ST-246. So we also signed a bridge loan and both the bridge loan and the merger document contained language that said that for any reason that the merger did not – was not consummated that the asset ST-246 would becomes PharmAthene’s – licensed to PharmAthene according to the terms of the license agreement term sheet which is attached to both the bridge loan and the merger document. Both parties were very comfortable with that and filed a proxy with the SEC and we are waiting for the SEC comments to – for the SEC to approve the merger.

"At that time we functioned as a single company; they fired their CEO and we basically did support a lot of activities including a phase 1 clinical study and various efficacy trials.

"As the data started coming out, their stock went from $0.80 a share to $5 a share, they called us up and they said that they were no longer interested in merging. That was fine because we had an obligation under the agreement to then continue developing the drug under a license agreement and there was an obligation to negotiate in good faith according to the terms that were attached to the documents. In our view that did not happen."

PharmAthene anticipates that post trial briefs in the case and subsequent oral argument in front of the court will be complete by the end of April 2011.

Disclosure: No positions

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