SIGA Applied sciences, Inc. (NASDAQ:SIGA) Q2 2024 Earnings Convention Name August 1, 2024 4:30 PM ET
Firm Members
Diem Nguyen – Chief Govt Officer
Daniel Luckshire – Chief Monetary Officer
Convention Name Members
Soo Romanoff – Edison Group
Operator
Welcome to SIGA Enterprise Replace Name. Earlier than we flip the decision over to SIGA administration, please word that any forward-looking statements made throughout this name are primarily based on administration’s present expectations and observations and are topic to dangers and uncertainties that would trigger precise outcomes to vary from the forward-looking statements. SIGA doesn’t undertake any obligation to replace publicly any forward-looking assertion to mirror occasions or change circumstances after this name.
For a dialogue of things that would trigger outcomes to vary, please see the corporate’s filings with the Securities and Trade Fee, together with, with out limitation, the corporate’s Annual Report on Type 10-Ok for the 12 months ended December 31, 2023 and its subsequent studies on Type 10-Q and kind 8-Ok.
With that, I’ll flip the decision over to Diem Nguyen, Chief Govt Officer of SIGA. Diem?
Diem Nguyen
Good afternoon, everybody, and thanks for becoming a member of at present’s name and the overview of our enterprise outcomes for the second quarter of 2024. I’m joined by Dan Luckshire, our Chief Monetary Officer, and we recognize this chance to offer an replace on our firm. After the replace, we’ll be blissful to reply your questions.
I’m happy to report that SIGA has continued to generate product revenues that outpaced revenues within the comparable durations final 12 months. Product revenues for the three months and 6 months ended June 30, 2024, had been $21 million and $45 million, respectively. This surpassed product revenues of $1 million and $7 million, respectively, for the durations in 2023. These robust outcomes are reflective of SIGA’s endurance.
Our capital administration exercise over the previous a number of years, together with substantial particular money dividends displays and has been made potential by this robust long-term efficiency. Our deal with long-term efficiency is essential as a result of nature of SIGA’s enterprise and the inherent quarter-over-quarter fluctuations. We imagine the monetary outcomes for the primary six months of 2024 helps an essential constructive long-term pattern. Our gross sales displays a various mixture of oral TPOXX deliveries to the US Strategic Nationwide Stockpile, or SNS, the US Division of Protection, and 11 worldwide prospects, in addition to IV TPOXX deliveries to the SNS.
Trying forward, we anticipate a continued diversification of our income base shall be essential for optimum long-term efficiency. Constant to — with what we stated final quarter, we count on 2024 to be one other 12 months of robust product revenues. As a reminder, our 2023 product revenues had been the best achieved over the previous 5 years. Two weeks in the past, the US authorities exercised its procurement possibility below the 19C BARDA contract for the supply of roughly $113 million of oral TPOXX. We plan to work with the US authorities on the timing of supply and presently anticipate deliveries will start throughout the subsequent 90 days. We foresee a significant portion of this order shall be delivered earlier than year-end, supporting our expectation that product revenues will once more be substantial this 12 months.
It’s our view that this award illustrates the US authorities’s perception that smallpox continues to be a menace. It additionally demonstrates its ongoing dedication to sustaining a strong stockpile of smallpox antivirals to assist make sure the well being safety of American individuals and a difficulty that’s constantly garnered bipartisan assist. TPOXX has a robust security profile primarily based upon preclinical security and toxicology knowledge, Part III scientific knowledge in wholesome volunteers, in addition to scientific observations. Over 1,500 mpox sufferers have been enrolled in scientific trials to evaluate the efficacy of TPOXX for the remedy of mpox, using TPOXX and its matching placebo supplied by SIGA to trial sponsors for gratis. Consequently, we anticipate it is going to be a most well-liked antiviral remedy within the occasion of an outbreak.
Our consideration is now firmly set on securing the subsequent procurement contract with the US authorities. Our group continues to be actively engaged with a broad vary of presidency officers as we put together for a request for a proposal, or RFP, which could be issued by the Administration of Strategic Preparedness and Response at any time. Whereas we look forward to this subsequent RFP, there are a selection of things that give us confidence. First, earlier this 12 months, Congress authorised the price range for the US authorities, which incorporates one other substantial enhance within the federal price range for countermeasures, together with the SNS. This funding consequence underscores the federal government’s ongoing dedication to preparedness and response.
Second, the present public well being atmosphere, together with the Clade I impression outbreak within the Democratic Republic of Congo or the DRC, highlights the heightened pandemic dangers and continued want for nations to be response-ready. This contains the well timed procurement of efficient therapies like TPOXX.
And third, now we have a long-standing partnership with the US authorities to offer a essential countermeasure in opposition to one of many world’s most harmful bio-threats. As a reminder, smallpox is one in all solely six illnesses thought of a Class A menace by the CDC, and herd immunity is waning amongst our inhabitants. In truth, TPOXX was among the many first novel small molecule remedy delivered to the SNS below Venture BioShield and was developed in collaboration with BARDA.
All in all, primarily based on our conversations with the federal government officers in addition to different SNS contracts to obtain medical countermeasures, we’re assured that the federal government is receptive to a brand new, long-dated contract, almost certainly between 5 years and 10 years, and the mixture worth of this contract ought to surpass the mixture worth of our present contract, below which most choices have now been exercised.
As a body of reference, the present 19C BARDA contract signed in 2018, has a procurement worth of $546 million. That is an thrilling time for SIGA. As I stated earlier, the well being insecurity of Individuals is a matter that continues to garner bipartisan assist. So whereas we look forward to the receipt of this — our subsequent RFP, we’re maintaining our deal with our longer-term objectives. We’ve the monetary power to advance our enterprise with present and potential prospects exterior the US whereas remaining able to collaborate with the US authorities as soon as it initiates the RFP course of. Dan will present additional particulars on our monetary place shortly. In abstract, our stability sheet is strong with no debt. Our money movement stays robust and now we have exercised prudent money administration. This enables us to just lately pay a particular money dividend in April.
Shifting on, we have additionally made progress in a number of different key areas. In April, we introduced an modification to our Worldwide Promotion Settlement with Meridian Medical Applied sciences, below which SIGA started driving promotional actions exterior the US for oral TPOXX beginning June 1. Since then, our group has strengthened relationships with key international prospects, and we’re assured these efforts will result in development over time.
In June, we introduced an settlement to promote TPOXX to the member states and Affiliation of Southeast Asian Nations. This settlement is a foundational step in a extremely populated area for robust collaboration sooner or later.
In Japan, we proceed to have productive conversations with our associate, Japan Biotechno Pharma and regulators on the brand new drug utility for TPOXX for the remedy of smallpox, mpox, cowpox and issues as a result of neighborhood of virus. Primarily based upon the usual overview timeline for the brand new drug utility, we count on a last regulatory resolution by early subsequent 12 months. If authorised, we anticipate the TPOXX shall be positioned in Nationwide Stockpile prepared for deployment within the occasion of an outbreak. We proceed to pursue the growth of TPOXX approvals in new indications comparable to PEP and mpox and formulations.
First, on PEP, as I acknowledged earlier than, we imagine that TPOXX has a possible profit in opposition to smallpox and a post-exposure prophylaxis. At present, most of — a lot of our work has been centered within the accomplished TPOXX JYNNEOS security and immunogenicity trial to judge TPOXX when administered along with JYNNEOS. As a reminder, this trial was requested by the FDA due to the possible use of TPOXX and JYNNEOS collectively in occasions of an outbreak. The trial was designed to check this drug-vaccine mixture to make sure there could be no impression to affected person security or vaccine immunogenicity. As a reminder, the information from the trial is supportive of the protection goal.
Concerning immunogenicity, we’re persevering with to work with the CDC in session with the FDA to finish an evaluation of samples collected to assist the immunogenicity goal. On the identical time, we’re engaged on our supplemental NDA submission and focusing on submitting it throughout the subsequent 12 months.
Turning to the continuing mpox trials. The trial sponsors proceed to make vital progress. The NIAID PALM 007 trial within the DRC has now accomplished enrollment. We anticipate launch of top-line knowledge within the coming weeks. The NIAID STOMP trial has seen appreciable development with 515 sufferers enrolled as of July, up from 350 reported from our final name.
Mpox stays a worldwide menace, and significantly within the DRC, the place circumstances proceed to rise. To assist investigators and well being businesses, in 2022, we donated over 500 programs of TPOXX capsules and its corresponding placebo for the randomized scientific trial PALM 007. Just lately, we donated one other 100 programs to make sure affected person entry continues throughout knowledge evaluation. We’re additionally working to assist broader entry applications in Africa.
Moreover, the US authorities has distributed roughly 40,000 programs of TPOXX in response to the 2022 mpox outbreak by the CDC’s compassionate use program. We proceed to watch this example actively, offering help when potential to realize the absolute best outcomes for mpox sufferers.
In abstract, our firm is robust, worthwhile and well-positioned for the longer term and supported by the next 4 pillars. Primary; now we have a well-crafted technique that’s yielding outcomes. Two, now we have a prudent strategy to capital administration which has afforded us the chance to pay vital particular money dividends. We’ve a useful TPOXX franchise that fulfills our essential requirement, established by the US authorities to make sure the nation is ready within the occasion of a pure, unintentional or intentional outbreak. And 4, now we have a resilient group with confirmed operational capabilities who’re executing on our technique with urgency and effectiveness. Mixed, we imagine these pillars will improve shareholder worth over time and enhance public well being.
With that, I will flip over to Dan to overview the monetary ends in extra element.
Daniel Luckshire
Thanks, Diem. As famous earlier within the name, SIGA’s product revenues by the three months and 6 months ended June 30, 2024, had been $21 million and $45 million, respectively, which surpasses product revenues of $1 million and $7 million, respectively, for the comparable interval final 12 months. Product revenues for the quarter had been primarily associated to roughly $18 million of IV TPOXX gross sales to the US authorities.
For the six months ended June 30, 2024, product revenues mirrored numerous combine, together with roughly $15 million of oral TPOXX gross sales to the US authorities below the 19C contract, roughly $11 million of worldwide oral TPOXX gross sales to 11 nations, roughly $1 million oral TPOXX gross sales to the US Division of Protection, and the beforehand talked about roughly $18 million of IV TPOXX gross sales to the US authorities.
Along with product revenues, the corporate had analysis and growth revenues of roughly $1 million and $3 million for the three months and 6 months ended June 30, 2024, respectively. Pre-tax working earnings, which excludes curiosity earnings and taxes, was roughly $1 million with the three months ended June 30, 2024. For the six months ended June 30, pre-tax working earnings was roughly $12 million. Compared, there was a pre-tax working loss for the three months and 6 months ended June 30, 2023, of roughly $5 million and $7 million, respectively.
Web earnings for the three months ended June 30, 2024 was roughly $2 million. For the six months ended June 30, web earnings was roughly $12 million. In flip, absolutely diluted earnings per share for the three months ended June 30, 2024, was $0.03 per share, and for the six months ended June 30, absolutely diluted earnings per share was $0.17.
At June 30, 2024, the corporate continued to keep up a robust stability sheet with a money stability of roughly $107 million and no debt. On April 11, SIGA paid the beforehand disclosed particular money dividend of $0.60 per share, which amounted to an roughly $43 million cost to shareholders.
Trying ahead, as Diem talked about earlier within the name, we’re working diligently to proceed our constructive momentum. As such, we imagine 2024 is lining as much as be one other 12 months of robust product income efficiency.
This concludes the monetary replace. At this level, I’ll flip the decision again to Diem.
Diem Nguyen
Thanks, Dan. Leveraging our achievements from 2023 and the constructive momentum generated up to now this 12 months, we imagine SIGA is poised for continued development and innovation. We stay centered on advancing our strategic objectives, together with securing a brand new contract with the US authorities, optimum capital administration, and enhancing our TPOXX franchise. We’re assured that it will ship the worth to our sufferers, companions and shareholders over time.
Now, I wish to open the decision to Q&A. Operator?
Query-and-Reply Session
Q – Soo Romanoff
[Technical Difficulty] Hiya?
Diem Nguyen
Sure.
Soo Romanoff
Hello, sorry. I had some technical difficulties right here. Thanks for taking my query. Congratulations on one other robust quarter. I’ve a multi-part query and these are largely simply to garner a bit extra shade. It sounds such as you’ve delivered — it was good to listen to the $113 million BARDA train for the remaining a part of oral TPOXX come throughout. It seems like you are going to ship a significant portion in 2024 regardless of the manufacturing bottlenecks. Any extra shade on the timeline could be useful.
The second half could be may you present a way of when BARDA will train the remaining $26 million IV TPOXX? I imagine the July 23 IV TPOXX order was but to be delivered. And the final half is may you present an replace on the US authorities negotiations? I imagine we’re taking a look at some sort of recurring association.
Diem Nguyen
Thanks, Soo. When you can hear me, I will attempt to sort out your questions in three components. The primary query pertains to the latest BARDA train of our remaining possibility and when will we anticipate the supply. And what I might state right here is that we have been proactively coordinating with our provide chain in preparation for the US authorities’s train of this selection below the present BARDA contract. And we’re working with our companions to provide and ship oral TPOXX on schedule that is sensible for our buyer, the US authorities. We’re assured in our potential to ship and count on to start out transport throughout the subsequent 90 days with a significant portion of this to be delivered this 12 months. We’re collaborating with the US authorities to find out the optimum timing and subsequently can’t be extra particular at the moment.
Because it pertains to your second query, you had requested in regards to the IV TPOXX possibility. And simply to provide you a bit little bit of background, the $18 million that was mentioned at present of the IV TPOXX gross sales within the second quarter pertains to the 2022 order. As soon as we end this 2022 order, we’ll then coordinate with the US authorities and our provide chain on the timeline for producing and delivering on the 2023 order. Primarily based on what we all know at present, we do anticipate that BARDA will train the ultimate $26 million possibility in 2025.
I suppose the final query that you just had, Soo, was an replace on the US authorities negotiations. As we talked about throughout our ready remarks, Soo, now we have been having discussions with a broad vary of presidency officers. From these conversations, there’s a clear bipartisan assist in serving to to make sure the well being safety of the American individuals. And given the elevated geopolitical danger globally and mpox outbreak within the DRC, we’re ready to reply when ASPR is prepared for the beginning of that RFP course of.
As talked about, our goal is to safe a long-term contract with extra common purchases, and that — this contract displays the worth of TPOXX that is supplied at present in addition to sooner or later. We do imagine the US authorities is open to a long-term contract, doubtlessly as much as 10 years, and one with the next mixture worth than the 2018 contract.
Soo Romanoff
That is nice. If I can ask another query, should you do not thoughts..
Diem Nguyen
Positive, Soo.
Soo Romanoff
It is good to see the — there’s much more curiosity, I imply, with the latest ASEAN nation settlement for oral TPOXX. We touched on this a bit bit, however any readability on the dimensions timelines could be useful. After which additionally, I do know you are working with Meridian. Any sort of shade on the price construction economics for this new order could be sort of good too.
Diem Nguyen
Positive. I will speak in regards to the ASEAN settlement and Dan, you may spotlight when it comes to the Meridian economics. First, I wish to actually spotlight that we’re extremely happy with this settlement which was signed in June. This settlement additional advances our technique to increase entry to TPOXX to much more worldwide markets. Asia is a strategic area for SIGA. This contract represents an essential step to a rising orthopoxvirus preparedness within the Asia area and does set up a footprint in a extremely populated area. It additionally units the groundwork for extra exercise for the longer term.
As we famous in our June launch, we did obtain a $3 million order from a brand new buyer within the ASEAN area. We imagine that is the primary essential step to bigger collaboration because the ASEAN member states collectively characterize a inhabitants of over 600 million individuals with a GDP of over $3.6 trillion. And now we have not disclosed the monetary phrases thus far. Nonetheless, as now we have emphasised, we’re fairly optimistic with this collaboration.
Dan, would you want to speak in regards to the Meridian modification?
Daniel Luckshire
Sure, actually. So we disclosed the unique modification earlier within the early June timeframe. And with that, what it did was it actually allowed us to take over possession of the worldwide advertising and marketing and relationships. With the modification, the objective was to make sure a really, very clean handoff for the subsequent time frame. So with that, there have been some key nations and areas and we needed to make sure, particularly for the handoff, and that basically concentrated in Europe, Australia and Japan. So it is way more restricted in scope than the prior association. As well as, the price is materially decrease than the unique price. We don’t disclose the unique price however it’s materially decrease and the present price is within the high-single digits.
Soo Romanoff
That is nice. When you do not thoughts if we are able to contact on the brand new mpox pressure and the DRC, I do know you touched on this additionally. It looks like the governments are fairly alert now. I imply, are we getting extra inquiries from worldwide markets? After which are the mpox — it sounds just like the mpox trials are progressing and if we are able to count on the US submitting to be made quickly.
Diem Nguyen
Sure, perhaps I can tackle and I will begin with simply the extra inquiries within the worldwide market. Clearly, TPOXX or tecovirimat has the good thing about the anti-bio remedy for smallpox, which is kind of essential from the consideration from a public well being safety perspective and as such driving stockpile concerns from a preparedness perspective.
The mpox outbreak in 2022 heightened the attention of orthopox threats and has pushed, actually, worldwide recognition, in addition to the necessity to one tackle mpox outbreaks at a focused stage, however then a broader long-term consideration from a coverage perspective from a smallpox stockpile. So whereas they seem to be a bit unbiased, when you concentrate on how to have a look at the volumes and the preparedness necessities, they’re intertwined within the consistency of elevated orthopox threats, whether or not that is naturally occurring, comparable to mpox, or whether or not it could possibly be doubtlessly deliberately pushed from a smallpox outbreak perspective.
Particularly, from 2022 to the place we’re at present, we face one other new mpox pressure within the DRC, and we additionally share the priority of not solely the rising variety of mpox circumstances within the DRC but in addition the elevated prevalence of the Clade I pressure, which is way more authorized than Clade II. Mpox circumstances have endured over the previous two years, together with within the US, significantly in people who find themselves not vaccinated and who — or who’ve solely acquired one dose of JYNNEOS.
As a fast reminder, mpox circumstances had been concentrated in Africa in 2022 earlier than spreading globally. This highlights the significance of monitoring case exercise in Africa when pondering globally. The mpox scientific trials as talked about, and are progressing nicely, and we sit up for the top-line ends in the PALM 007 scientific trial within the DRC within the coming weeks. We even have famous the STOMP trial has enrolled roughly 515 sufferers as of July. This can be a substantial enhance from the 350 sufferers famous in our final name, which can be highlighting the elevated circumstances that we’re observing. Assuming the constructive knowledge, we’ll work with our trial sponsors with the objective of submitting an mpox supplemental NDA as early as 2025. We’re monitoring this example fairly carefully, Soo.
Soo Romanoff
Sure, that is nice. Okay. Effectively, thanks for the solutions and nice quarter once more. Congratulations.
Diem Nguyen
Thanks.
Operator
[Operator Instructions] Okay. There are not any additional questions at the moment. I would now wish to return the decision again over to Diem Nguyen, CEO. Diem?
Diem Nguyen
Thanks, Nativ. I would wish to thank everybody for making time to hitch us on at present’s name and for the continuing curiosity in SIGA. We sit up for talking to you once more in our third quarter name. Have remainder of the night.
