Shares of SIGA Technologies (NASDAQ:SIGA) could be set to rebound nicely over the next few weeks.
The company announced on Monday evening that the protest filed against the awarding of the BARDA contract that would have SIGA supply the nation's biodefense stockpile with millions of courses of its smallpox antiviral, ST-246, has been lifted. This paves the way for BARDA to purchase the initial 1.7 million courses outlined in the base contract.
Shares jumped by over a dollar in after-hours trading when the news hit the wires.
In order to move the contract award forward and start boosting the national stockpile, BARDA agreed to modify the contract somewhat, and erased language that gave BARDA the option to purchase an additional 12 million courses of ST-246, beyond the initial 1.7 million doses.
That said, even with the changing of wording, BARDA can still purchase additional doses at any point beyond the 1.7 million, if it sees fit.
The lifting of the protest by Chimerix will allow the contract award to move forward, but there is still the question of the US Congressional investigation into the role that investor Ron Perelman might have played in landing the contract for SIGA. There has been some speculation that there are conflicts-of-interest at play behind the initiation of that investigation, but it still looms as a dark shadow as the situation develops.
Given that SIGA is the only company that can provide a product like ST-246 right now, there's little doubt that nothing will come of the investigation, and with Chimerix now looking to have spent all their rounds, it's
'all systems a go' in putting ST-246 where it belongs - in the biodefense stockpile.
After hours Monday and early Tuesday pre-market trading indicate that SIGA could start heading higher quick. There is also a significant amount of shares short that could also propel the price higher if those shares are quickly covered.
It's well worth watching how this one will play out.
One question that likely will not be answered, however, is what Chimerix was gunning for with this latest protest, if all they needed to withdraw the protest was some language removed that really doesn't change anything?
Any doubts as to why SIGA landed this contract are laid out in the below excerpt from SIGA's latest press release:
SIGA's groundbreaking drug, ST-246, is an oral therapeutic agent active against orthopoxviruses including smallpox. It is the only drug from any source ever to have demonstrated efficacy in non-human primate models of orthopox virus disease, which was a requirement of the request for proposal that resulted in the current contract. ST-246 will be the first entirely new small-molecule drug delivered to the Strategic National Stockpile under Project Bioshield. Smallpox, even though no longer present naturally in the environment, 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 for "fast-track" status, creating a path for expedited FDA review and eventual regulatory approval.
SIGA has a ground-breaker on its hands, and now the money can start rolling in.
Early last year, the Israeli government placed a "mock" order for ST-246 from SIGA during a bioterror drill, so the product is already on the radars of international governments.
This one could be huge over the long term. Keep an eye on it.
Disclosure: No position.