Siga lands big contract for a smallpox antiviral, but rival protests Print E-mail
By Staff and Wire Reports   
Monday, 16 May 2011 03:34
SigaAfter hours on Friday, SIGA Technologies, Inc. (Nasdaq:SIGA), the biotech specializing in the development of pharmaceutical agents to fight biowarfare pathogens, announced that it had signed a contract with the Biomedical Advanced Research and Development Authority (BARDA) of the United States Department of Health and Human Services (HHS) to deliver two million courses of its smallpox antiviral, ST-246(R), to the Strategic National Stockpile, but the good news didn't go unchecked. 

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That news was followed on Sunday by an announcement that Chimerix Inc., a privately-held firm based in Durham, N.C. which is also a developer of antiviral pharmaceutical agents, had filed a protest over Siga's contract. Siga said it would suspend its work on the government order until further notice. Chimerix said in February that it had been awarded a BARDA contract for continuing to develop its own smallpox medicine. That award was worth $25 million for the first year.

Kenneth Moch, the CEO of Chimerix, said his company filed the protest because Siga had utilized an obscure government clause meant to help companies that are in danger of going out of business. "It's hard to justify how a company with a $700 million market cap would go out of business," Moch said.

Siga's CEO, Eric Rose, said in a statement that his company is "uniquely positioned to assist the government in its efforts to protect our nation against the threat of smallpox, and we are confident that the government's decision to award this contract to Siga will be upheld as entirely proper."

According to the Associated Press and both companies, the U.S. Government Accountability Office will decide the dispute. Siga said that the government agency that awarded the contract, the Biomedical Advanced Research and Development Authority, has indicated that it "intends to defend its decision" to choose Siga.

There are FDA-approved vaccines for smallpox, but no FDA-approved treatments. Both Siga and Chimerix say their medicines are on the "fast track" for approval.

The government contract would be a boon for Siga, which hasn't turned an annual profit since its founding in the late '90s. The five-year contract would be worth at least $433 million, and up to $2.8 billion if the government chose to order more of Siga's smallpox medicine. It also represents the first government purchase of the medicine, Siga said. The base contract award  also includes options (for the delivery of up to 12 million additional courses of ST-246) that would raise the contract's total value to approximately $2.8 billion, if they are fully exercised.

"BARDA's selection of ST-246(R) for the Strategic National Stockpile underscores the U.S. government's commitment to Project BioShield and the procurement of medical countermeasures to address the threat of a smallpox attack," stated Dr. Eric A. Rose, SIGA's Chairman and Chief Executive Officer. "The contract award confirms SIGA's status as a leader in the biodefense industry and highlights our abilities in drug discovery, development and commercialization. Within just five years of the first non-human primate trial for ST-246(R), we are getting ready to deliver the world's first completely new small-molecule drug to address a major bioterrorism threat and one of the most lethal diseases in history. We value our new role as a provider of biodefense countermeasures to the U.S. government, which is the culmination of years of successful research and development collaborations with the U.S. government that have enabled us to take this drug to the commercial stage. We believe this keystone contract is a historic event for the biodefense industry and will be the first of many commercial successes for ST-246(R) here and around the world."

Under the contract, SIGA is supposed to deliver 1.7 million courses of ST-246. Additionally, SIGA will contribute 300,000 courses manufactured using federal funds provided by HHS under prior development contracts. In addition to the option to purchase up to an additional 12 million courses, the contract will also permit SIGA to continue its work on pediatric and geriatric versions of the drug as well as use of ST-246(R) for smallpox prophylaxis. Dr. Rose added, "We believe that the funding to extend ST-246 to these vulnerable populations is critical to the future success of the U.S. government's smallpox biodefense efforts. There are approximately 64 million children in the United States (through age 15), none of whom is currently vaccinated against this disease."

SIGA's groundbreaking drug, ST-246, is an oral therapeutic agent active against orthopoxviruses including smallpox. While no longer present naturally in the environment, smallpox is considered a formidable bioterrorism threat, and there is currently no FDA-approved treatment for symptomatic individuals. ST-246 works by blocking the ability of the virus to spread to other cells, preventing it from causing disease. The FDA has designated ST-246(R) for "fast-track" status, creating a path for expedited FDA review and eventual regulatory approval.

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