Monday, June 23, 2008

News About SIGA

Well, this is a sticky wicket! SIGA Technologies (which I last wrote about here) has just secured $8 million in financing from MacAndrews & Forbes.

I guess this is good news, because:

1. They say some of it will help fuel development of their product pipeline - and I'm concerned about their really promising stuff moving forward as they fight hard to commercialize ST-246, their lead drug for smallpox.

2. MacAndrews & Forbes get a very large options deal, which means they're pretty confident SIGA is poised for a major run-up (and the press release indicates that M&F has a place on SIGA's board, so they're privy to the latest issues with the hopefully impending $100M order of ST-246).


But it may be bad news, because:

1. SIGA needs to demonstrate their ability to manufacture quantity of ST-246 if they're going to get the aforementioned order contract. Back in April, they hit a snag in this step and
hit up the government for more dough. So perhaps things have grown desperate...in which case this $8M isn't going to buy much.

2. This deal may dilute the stock (I don't know enough about finance to understand the impact).

4 comments:

pat said...

Ask the Banker Wanker!

drooga said...

interesting deal.

but it has the potential to be massively dilutive. consider that the stock falls to $2 for arguments sake - then the mkt cap becomes $68 million and the $8 million becomes a stake of over 10% of the company.

it looks like the company is burning about $8 million a year on an operating basis, which means they'll get a years worth of funding.

why isn't big pharma taking a stake for this small amount of money? thats the worry i have.

Jim Leff said...

Pat, not sure, but I suspect that was the banker/wanker...

Glad he's learned to type (though I realize he needs to protect those knuckles for dragging-upon)!

drooga said...

yep thats me - joshi

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