ANNAPOLIS, Md., June 1, 2012 /PRNewswire/ -- PharmAthene, Inc. (NYSE Amex: PIP) today announced that the Delaware Court of Chancery has issued its final judgment in the Company's litigation against SIGA Technologies. Upholding its September 22, 2011 ruling, the Court awarded PharmAthene 50% of the net profits over a period of ten years from all sales of SIGA's smallpox antiviral therapeutic, ST-246, and related products, after SIGA receives the first $40 million in net profits.
President and Chief Executive Officer, Eric I. Richman, said, "This decision brings this important phase of the litigation, which has been ongoing for over five years, to a positive close for PharmAthene shareholders. Recently, SIGA reaffirmed its guidance to investors that it anticipates delivery of ST-246 to the U.S. government to start in the first quarter 2013. The definition of net profits adopted by the Court in its final judgment should result in our realizing a significant share of revenue from those sales and will accelerate our profitability."
Under the Court's ruling, once SIGA earns $40 million in "net profits," PharmAthene shall be paid fifty percent (50%) of all net profits for a period from the date of entry of the Court's final order until ten (10) years from "first commercial sale." First commercial sale shall be deemed to occur following initial delivery of and payment for Product. The Court also awarded PharmAthene $2.4 million to cover a portion of its legal fees and expert witness and other costs, along with interest at the legal rate from the date of the final order until payment is made.
In 2011, the Biomedical Advanced Research and Development Authority (BARDA) awarded SIGA a base contract for the initial procurement of 1.7 million treatment courses of ST-246. The five-year base contract award is valued at $433 million, of which approximately $412.5 million is for purchase of the product. In May 2011, SIGA estimated that if the government were to purchase an additional 12 million treatment courses of smallpox antiviral, as outlined in BARDA's "justification for other than full and open competition" notification, the total value for the current U.S. civilian market, including the initial base contract for 1.7 million courses of therapy, could be approximately $2.8 billion.A copy of the Court's final judgment in the case, as well as the initial September 22nd opinion, is available on the Company's website at http://www.pharmathene.com/ under the "Investor Relations" tab. About ST-246 ST-246 is an orally administered anti-viral drug candidate being developed by SIGA Technologies to treat orthopox virus diseases including smallpox. ST-246 acts 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" enabling potential expedited FDA review and approval. In addition, ST-246 has been granted Orphan Drug designation for both the treatment and prevention of smallpox.