SIGA Technologies' (SIGA) Quarterly Business Update (Transcript)

Aug. 4.14 | About: SIGA Technologies (SIGA)

SIGA Technologies Inc. (NASDAQ:SIGA)

Quarterly Business Update Call

August 04, 2014 04:30 PM ET

Executives

Rob Fink – IR

Eric Rose – Chairman and Chief Executive Officer

Daniel Luckshire – Executive Vice President and Chief Financial Officer

Analysts

Joaquin Horton – Raymond James

Operator

Good day, ladies and gentlemen, and welcome to the SIGA Technologies Quarterly Business Update Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instruction will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Mr. Rob Fink of KCSA Investor Relations. Mr. Fink, you may begin.

Rob Fink

Thank you. And thank you, all, for joining us today. This is Rob Fink of KCSA Investor Relations Consultant to SIGA Technologies. Hosting the call today is Dr. Eric Rose, Chief Executive Officer; Daniel Luckshire, Chief Financial Officer. Today's call is being simultaneously webcasted and is available on SIGA's website. A replay of the call will also be available in a recorded format on the company's website.

Before we begin today, I would like to remind everyone that this conference contains statements that constitute forward-looking statements. A Safe Harbor statement covering this call will be read at the end of the call and can be found in the company's press release for financial results for the second quarter ended June 30, 2014.

With that said, I'd like to turn the call over to Dr. Rose.

Eric Rose

Thanks, Rich. Good afternoon and thank you all for joining us. Let me start with an update on the bio defense business in July approximately 115,000 courses of tecovirimat ST-246 were accepted into the strategic national stockpile. With the delivery and acceptance of these courses, we received $15.3 million in July pursuant to our procurement contract with BARDA.

Cumulatively as of the end of July, we've delivered $1.3 million in courses of tecovirimat. We have received close to $200 million from the BARDA contract excluding expense reimbursement payment. Going forward, we plan to deliver approximately 710,000 courses by the end of the additional courses by the end of the first quarter 2015, which we expect will generate additional gross proceeds of $89 million.

Moreover SIGA is eligible under the BARDA the contract for an additional approximately $123 million of payments for the successful submission and approval of tecovirimat NDA. I'd like to note, that FDA approval tecovirimat is strategically important to SIGA. We believe that FDA approval will aid our international business development efforts and may make additional domestic markets viable.

Beyond the biodefense business, I would like to talk about another revenue for value creation, strategic investments. We believe that acquiring and licensing or collaborating on clinical stage development program could expand and broaden SIGA's scope and could offer a favorable time or horizon for value creation.

Additionally and importantly strategic investments could also benefit from being supported and supplemented by SIGA's existing infrastructure and expertise. Potentially, adding clinical stage development programs to our existing biodefense business with represented natural continuation of SIGA's long-term evolution.

The evolution started three years with the signing of the BARDA contract, has been pushed along through diligent performance on the contract and the focus has been sharpened with the optimization program that was put in place, late last year.

The end goal of the evolution to use SIGA's infrastructure, expertise and resources to maximize long-term value. At this point, we've completed our prepared remarks to the business operations and will now open the line for question.

Question-and-Answer Session

Operator

(Operator Instructions) our first question is from Joaquin Horton with Raymond James. Your line is open.

Joaquin Horton – Raymond James

Hi, Eric.

Eric Rose

Hi, Joaquin.

Joaquin Horton – Raymond James

I just want to ask a couple questions.

Eric Rose

Sure.

Joaquin Horton – Raymond James

Also nine months, you mentioned that you were going to try to license or do something with the products that we had developed like dengue fever and Lassa fever, the other project you were working on like Ebola. Have you had a success in marketing that idea or licensing it?

Eric Rose

We have not completed any transaction with regard to any of those programs, but as we said then it still remains the case now, that is our intention and we have been actively seeking such collaboration.

Joaquin Horton – Raymond James

And the number of courses that we're going to deliver 710,000. How many of those courses are going to be, I know we had a little over 300,000 pursuant to the contractor earlier without receiving any payment, I believe something over $250,000 is already been delivered, is that correct?

Dan Luckshire

That is correct, Joaquin. This is Dan. Of the 710,000, 670,000 approximately will be billed in board.

Joaquin Horton – Raymond James

Okay.

Dan Luckshire

This 40,000 backed up, free of charge.

Joaquin Horton – Raymond James

Okay, that's all the questions, I have. Thanks.

Eric Rose

Thank you.

Operator

(Operator Instructions) all right, we're not showing any further questions. Please proceed with any closing remarks.

Rob Fink

Great. Thank you. As a reminder. This call concluded certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended including statements regarding the efficacy or potential of products, the timeline for bringing such products to market and to continued develop and possible eventual approval for such products. Forward-looking statements are based on management's estimates, assumptions and projections and is subject to uncertainties, many of which are beyond SIGA's control. Actual results may differ materially from those anticipated in any forward-looking statements.

Factors that may cause such differences include the risk that potential products that appear promising to SIGA or its collaborators cannot be shown to be effective or safe in subsequent preclinical or clinical trials; SIGA or its collaborators will not obtain appropriate or necessary governmental approval to market these or other potential products; SIGA may not be able to obtain anticipated funding for its development projects or other fund needed; SIGA may not be able to secure funding from anticipated government contracts and grants; SIGA may not be able to secure or enforce sufficient legal rights in its products, including patent protection for its products; any challenges to SIGA's patents and other proprietary rights, as is adversely determined, could affect its business and even if determined favorably could be costly; regulatory requirements applicable to SIGA's products may result in the need for further or additional testing or documentation that will deploy or prevent seeking or obtaining needed approvals.

U.S. Biomedical Advanced Research and Development Authority may not complete the procurement set forth in its solicitation to the acquisition of the smallpox antiviral for the Strategic National Stockpile or may incomplete it on different terms; any contractual award we may receive to supply the smallpox antiviral may be subject to 1 or more protests, which may cause contract awards to be delayed or denied; the volatile and competitive nature of biotech industry may hamper SIGA's efforts; changes in domestic and foreign economic marketing condition may adversely affect SIGA's ability to advance its research or its project and may affect its federal, state and foreign regulation on SIGA's business.

More detailed information about SIGA and risk factors that may affect the realization of forward-looking statements, including the forward-looking statements in this conference call, is set forth in SIGA's filings with the SEC, including SIGA's annual report on Form 10-K for the fiscal year ended December 31, 2013 and other documents SIGA has filed with the commission.

In addition, the risk of what appears now to be attributes of our lead candidate compound may turn out to be different as development progresses; the risk that our lead candidate compound may not at any point fail to meet our development objectives; and the risk that the expense, unpredictability and extraordinarily time-consuming process of developing drugs may prevent us from ever realizing any value from these efforts.

SIGA urges investors and security holders to read these documents free of charge at the commission's website at sec.gov. Interested parties may also obtain these documents free of charge from SIGA. Forward-looking statements speak only to the date they are made, and except for any obligation under U.S. federal security laws, SIGA undertakes no obligation to publicly update any forward-looking statement as a result of new information, future events or otherwise.

Operator that now concludes the call. Thank you very much for joining us.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.

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