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Critical biological agents. Category A - The U.S. public health system and primary health-care providers must be prepared to address varied biological agents, including pathogens that are rarely seen in the United States. High-priority agents include organisms that pose a risk to national security because they
* can be easily disseminated or transmitted person-to-person;
* cause high mortality, with potential for major public health impact;
* might cause public panic and social disruption; and
* require special action for public health preparedness
Category A agents include
* variola major (smallpox);
* Bacillus anthracis (anthrax);
* Yersinia pestis (plague);
* Clostridium botulinum toxin (botulism);
* Francisella tularensis (tularaemia);
* filoviruses,
o Ebola hemorrhagic fever,
o Marburg hemorrhagic fever; and
* arenaviruses,
o Lassa (Lassa fever),
o Junin (Argentine hemorrhagic fever) and related viruses.
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SIGA's drug for treating Smallpox:
Drug Name: Tecovirimat [USAN]
Search Term: ST-246
Description: A potent and specific inhibitor of orthopoxvirus replication.
Once you are infected with smallpox, you want to get some of this drug as fast as possible.
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SIGA developed ST246 with the U.S. government and the U.S. gov't is in the process of buying it because smallpox is such a threat. They've already bought some. They're in talks to buy over $450 million worth. If they fulfill order, it could mean at least $10/share in cash profit for SIGA... just the initial order. It has ongoing maintenance portions, too, and other countries will likely want to stockpile it. So, the upside of $30/share is reasonable.
Shareprice is off from it's recent $10 year high because the government modified their "rfp" the day after an offering of shares closed. The timing looked bad. Management denies they knew it was coming and thinks the change in rfp isn't particularly bad. They're downplaying it. The rfp was modified partially to include a competitor, Chimerix CMX001.
Poking around, it looks to me like st-246 is the best drug. It was developed from the bottom up, instead of an adaptation to make an old drug, cidrofovir, tolerable. In early RFPs it appears that the government was specifically asking for ST-246 by the way they posed questions, as if the RFP was a necessary step in getting the 1.7 million doses. Obviously, the government has to go through a long process to buy something that may cost the taxpayer $450 million.
Both drugs have been tested on humans. The competeting product, chimerix cmx001, is a form of cidrofovir anti-viral medication. Cidrofovir is a general anti-viral. The basic form of cidrofovir is toxic in large doses, Chimerix adapted it to be more tolerable. Chimerix is a private company working on various viral disorders like HIV, with Cidrofovir as a starting block.
The "near term" value issue that makes this compelling trade is that they just did an offering ($7.35/share). Analyst coverage can't begin for a couple of months. The people who participated in the offering are disillusioned because the day after it closed some bad news came out (gov't RFP that could include CMX001). VIC author thinks the investment banks that handled the deal will be shamed into somehow pumping it when the window opens and they can begin analyst coverage.
Billionaire Ronald Perelman bought a bunch of stock at $6.25. He started investing in the company in 2003. The VIC writeup says he is the CEO's boss at another company so it is thought that he has a good understanding of the entire situation.
I can't get motivated to buy a bunch more because CMX001 really might be the spoiler. It looks like the gov't could buy all or half CMX001. I also sense that SIGA isn't trying to do the best thing for shareholders.
None of the insiders at SIGA are selling but a high up phd from Palestine just stepped down. I don't know why?
I had fun playing around on this government website where the chain of RFPs exist:
https://www.fbo.gov/?s=main&mode=list&tab=list
It's interesting to see our tax money at work. It's an elaborate form of government due diligence.
Why this stock is worth $2 or $10 I don't know. I see how it could be worth over $30 but I don't know how to handicap the odds. I'll buy a little and keep an eye on the RFPs.
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