Analyst: Winning a government contract could improve investor sentiment towards SIGA Tech after disappointing test data
On Wednesday, SIGA Technologies, Inc. (NASDAQ:SIGA) announced a new contract with the U.S. Department of Defense (DOD) to procure TPOXX valued at approximately $9 million.
This contract covers primarily oral TPOXX and a small amount of intravenous (IV) TPOXX and is the third DOD procurement contract award in the last three years.
The company also received approximately $27 million to develop the post-exposure prophylaxis indication for oral TPOXX.
Also read: Mpox variant sparks global concern as Europe and China step up screening.
Including this order, SIGA currently has approximately USD 154 million in open oral and intravenous TPOXX orders, more than 85% of which were generated within the last three months.
Edison The report adds that SIGA continues to advance its growth strategy and that the company’s backlog has increased significantly with recent contract wins from BARDA and the Department of Defense.
The company is expected to deliver IV TPOXX under orders beginning in July 2023 ($25 million) and August 2022 ($8.4 million, of which $17.8 million from a $26 million order has already been delivered in the first half of 2024).
These are part of approximately $155 million in outstanding TPOXX orders (oral and intravenous).
SIGA expects to deliver the remaining August 2022 IV TPOXX order and 80% of BARDA’s oral TPOXX order in the second half of 2024.
While details of the delivery schedule have not yet been announced, the Edison Group report states that at least partial construction of the new Department of Defense contract is expected to begin in fiscal year 2025.
Recently, the National Institute of Allergy and Infectious Diseases (NIAID) of the National Institutes of Health announced key results from a preliminary analysis of the PALM 007 study of tecovirimat for Mpox.
According to NIAID, the trial’s primary endpoint – a statistically significant improvement in time to lesion healing within 28 days of randomization – was not met in patients in the Democratic Republic of Congo with MPOX who were given SIGA’s tecovirimat compared with a placebo, negatively impacting the stock price.
Edison analysts expect investor sentiment to improve following the recent contract signing with the Department of Defense.
“We believe that Mpox continues to represent an opportunity for SIGA following the WHO’s declaration of a global health emergency,” the analysts added.
Price promotion: SIGA shares were up 4.07% to $9.72 at last check on Friday.
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