A long awaited trial verdict for SIGA Technologies (NASDAQ: SIGA) is poised to be revealed in the coming weeks, as investors are eager to see whether the company will hold on to exclusive rights for its lead drug, ST-246. ST-246 is the world's first treatment for smallpox, a potential bioterrism threat.
While the disease has been eradicated from human populations for several decades, small strands remain available in various government labs around the world for scientific purposes. ST-246 has drawn interest from BARDA, a U.S. agency within the Department of Health and Human Services responsible for the development and purchase of necessary drugs and therapies for public health medical emergencies.
In January 2006, SIGA Technologies collaborated with PharmAthene (NYSE: PIP) on an agreement that could have potentially merged the companies together. SIGA received a $3 million bridge loan from PIP to use for the development of ST-246.
The two companies established a License Agreement Term Sheet, with the objective "to establish a partnership to further develop and commercialize SIGA-246 for the treatment of smallpox related infections and to develop other virus therapeutics". The LATS also covered patents, license, fees, and royalties. However, neither company officially signed the agreement. Each page also contained a footer that stated that the terms were non binding.
The primary issue of this trial is whether the LATS constituted an agreement to merge the two companies, or provide PIP with partial rights to ST-246. SIGA was awarded a $433 million contract to supply BARDA with 1.7 million of smallpox antiviral courses. As the two companies never came to a final merger agreement, PIP sued SIGA for...
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