Sunday, July 3, 2011

SIGA's Latest Chapter

SIGA's price has fallen alarmingly low. But keep the faith. 

SIGA finally got its contract, worth $433M. Which is huge news (though the most lucrative parts will be pushed forward into a different, future contract). But as SIGA transforms from a speculative little biotech company with no revenue into a serious, profitable pharma outfit, they're being considered by more mainstream investors. And while long timers like me are used to things like the Pharmathene lawsuit, Chimerix's attempts to stall, and the various political games, these more staid investors are terrified by all these clouds, and so they ain't buying. Meanwhile, long time SIGA investors, fed up and less patient than I, are selling in disgust (individual investors love to sell low...nearly as much as they love to buy high!). And since there won't be another big gulp of revenue for some time, the fast-buck hotshots, who don't like to buy-and-hold, are also standing back.

Lots of sellers and few buyers. Hence: stock price tankage.

But the clouds will gradually part. The lawsuit should resolve shortly. The politics? Who knows; but the important thing is that SIGA has the only safe/effective smallpox cure. The company has won a $433M contract, many others will follow, FDA approval and foreign orders will come in time, and SIGA's pipeline of in-development drugs is awesome. So the stalling can only postpone the inevitable. Their sole competitor's product can't cure monkeys, and since no one's going to make humans sick with smallpox for drug testing, that's a fatal flaw in more ways than one.

It will remain bumpy for a while, but in the long run, SIGA will be enormously profitable. As one of the honchos of the US Dept. of Health and Human Services recently said, "The technology now exists for someone with the right tools and the wrong intentions to create a new smallpox virus in a laboratory.” It's terrifying. And the possibility also exists for cowpox and monkeypox to become human scourges. And SIGA's drug (and SIGA's drug alone) is completely effective on all variants, and is ridiculously safe.

I never said it'd happen fast, or on schedule. But it will happen.

An interesting article: Page 1 and page 2

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