SIGA Update

I know some of you are invested in SIGA, whose stock price plummeted yesterday. The following are my thoughts.

Short version: buy more.

Longer version: a competitor, whose smallpox drug has nasty side effects (renal failure) and which doesn't cure monkeys (it's got to be tested in monkeys, because nobody's going to infect humans with smallpox to test them), has, for two years, been using all avenues available to them to protest the government's attempt to award a huge contract to stockpile SIGA's drug (which has no side effects, and cures monkeys like nobody's business) in case of bio-terror attack.

That competitor, backed against the wall (the government recently announced that SIGA would be getting the award, which is what drove the recent peak), just played its trump card, orchestrating a possible congressional investigation of this contracting process. It's a delay tactic, and I believe it will fail. And Congressman Issa, who announced this, turns out to have been getting yearly contributions from the competitor's lobbyist. Ouch.

Simultaneously, this competitor has initiated a protest of the contract award with the GAO. The GAO very rarely sides with protestors, but we'll be hearing from them within a couple of months (maybe much sooner). I expect them to uphold SIGA's award. The competitor can (and likely will) appeal, but at that point SIGA gets the money and starts working on the contract regardless of appeal (it's all currently frozen pending GAO decision).

In other evil efforts to thwart SIGA and keep Americans unprotected in the event of a terrorist smallpox attack....

SIGA is being sued by a company that, years ago, tried to merge with them. The merger was never finalized, but the other guys have tied the matter up in litigation, and have ingeniously trumped up the suit in the press (lots of dire warnings of SIGA's billion dollar exposure) in an effort to draw a generous settlement from SIGA. SIGA's not going to settle, and the other company's very unlikely to win. And even if the judge is crazy enough to think the other guys have a case, SIGA at this point still has shallow pockets (of course, the other company figured that by this point SIGA would be fat with billions from government contracts). So, happily, the idiots who are protesting the contract have strategically blocked the idiots who are suing.

In July, we should have a court decision, we should have a GAO announcement, and Congressman Issa's Republican colleagues should have let him know that playing politics (Issa's on an anti-Obama crusade re: single source contracts) with national security is a bad idea.

Hey, as I said back in 2008....we can "Get Rich Slow With SIGA". And so we wait....