That's a nasty sounding statement, and I won't try to spin it positively. And, indeed, SIGA's stock price fell 5% when this came out late yesterday (though, reassuringly, it held steady in after hours trading). I've previously advocated settling with Pharmathene, and that settlement just got a whole lot more expensive. But really what the judge is saying here is what judges are always fond of saying: settle before I knock the bejesus out of one or both of you. So we could argue about which side most deserves knocking (I think PIP is a sleaze machine), but both know what must be done.
“It is very much of a crapshoot as to where this whole thing is going to come out,” Parsons said. “There might be a way to work through these uncertainties that leave both companies fairly well off and no company with an all-or-nothing position.
SIGA will soon receive a contract worth $500M to $2.8B. It's being held up by a technical challenge which the government has taken steps to sidestep. Foreign orders are extremely likely (see my previous writings on SIGA for more details), as is an update on SIGA's promising pipeline. And it's important to bear in mind that SIGA's stock price has been pre-suppressed by the uncertainty of this trial, a cloud over its head for the past few years.
Pharmathene may get an 8 or 9 figure settlement. They may even get a share of the proceeds of ST-246 (though, God, I hope not). But at least some of this peril was already "baked in" to SIGA's stock price - and yesterday's mere 5% fall reflects this. And because huge revenue is imminent, I'm still unconcerned about SIGA's long term prospects. I predict a big pop upon even a large settlement announcement, though it remains to be seen whether that or the government contract is announced first. Either way: up.
So if there's more selling next week, I'd strongly suggest scooping up bargains. The key to investing, after all, is a willingness to march against the flow.
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