SIGA Technologies, Inc., Q2 2012 Guidance/Update Call, Aug 06, 2012

SIGA Technologies Inc. (SIGA)

August 06, 2012 4:30 pm ET

Executives

Todd Fromer - Managing Partner

Eric A. Rose - Executive Chairman, Chief Executive Officer and Member of National Biodefense Science Board

Daniel J. Luckshire - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Secretary

Analysts

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Joaquin Philip Horton

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the SIGA Technologies Second Quarter Business Update Conference Call [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Todd Fromer, Managing Partner of KCSA. You may begin.

Todd Fromer

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

Before we begin today, I would like to remind everyone that this conference call 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 our press release for financial results for the second quarter ended June 30, 2012.

With that said, I'd like to now turn the call over to Dr. Eric Rose. Eric, the floor is yours.

Eric A. Rose

Thank you, Todd. Good afternoon, and thank you, all, for joining us for our business update call. During the call, we'll provide you with a brief business update, and then we will open the call for questions. Let me start by saying that it's been a busy and productive 3 months. Commercially, we have continued to execute our operational plan for the BARDA contract, taking tangible steps toward our commercial goals for ST-246. And on the legal front, we've recently filed our brief and our appeal to the Delaware Supreme Court, which we believe makes a strong case for a change in the Chancery Court's ruling. In the event that notwithstanding our appeal, any net profits of ST-246 would have to be shared with PharmAthene following an appeal, we are pleased by the May 31 ruling by the Delaware Chancery Court, in which the court accepted many of the arguments that SIGA made concerning the net profit definition, including the court's decision to include all product-related expenses, whenever incurred, in order to best reflect the concepts of net profit. In some, we are making progress on many fronts and there's much to look forward to.

Regarding our business operations, in particular, ST-246 and the BARDA contract, I want to highlight a few areas of progress. First, the labeling plan for ST-246 has been submitted and is being reviewed by the FDA. We are eligible for $12 million milestone payment from BARDA once the labeling plan is approved by the government. With respect to the delivery schedule for ST-246, we continue to expect to begin delivering the drug into the Strategic National Stockpile by the end of the first quarter 2013, and we also continue to expect to deliver the full 2 million courses under the contract within 24 months of the date of initial delivery.

As mentioned on previous calls, the size and exact timing of each delivery will be determined in the future based on a variety of factors. Once we meet the 500,000 course delivery threshold, as noted in the contract, we'll be able to invoice BARDA for timely payment of all amounts then due. When we deliver courses of ST-246 into the SNS under the current procurement contract, our plan is that the courses will have a daily dosage of 600 milligrams over a 14-day regimen. We have set daily dosage at 600 milligrams per day after discussions with BARDA, the FDA and CDC. While our discussions have included the FDA, the 600-milligram dosage does not represent an FDA-regulatory decision on dosages at this time. It is our understanding that the FDA will express its formal regulatory decision on dosage after an NDA has been filed for ST-246, consistent with the timing and process once these -- with other drug candidate.

Shifting gears, let me spend a minute discussing the progress we've made on the intravenous formulation, the IV formulation, of ST-246. As you will recall, in addition to an oral formulation, we are pursuing an IV formulation for the drug. This effort has been steadily progressing, and we continue to target an IND filing for the IV formulation by the fourth quarter of this year, and it may happen in the third quarter. Work on the IV formulation is important because it seeks to address an unmet need of a vulnerable segment of the population.

This concludes our prepared remarks. Thank you for attending this business update, and we'll now open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions] The first question is from Adnan Butt of RBC Capital Markets.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

The first question is on the dosing. So you said for delivery, the assumption is 600 mg over a 14-day course. What could impact of the FDA's decision on dosing? And when you file the NDA first, when do you think you might file it? And secondly, what kind of dosing would you be looking for?

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