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 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).


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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