SIGA Technologies Q2 2023 Earnings Report

SIGA Technologies EPS Results

• Actual EPS: -$0.04
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

SIGA Technologies Revenue Results

• Actual Revenue: $5.88 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

SIGA Technologies Announcement Details

• Quarter: Q2 2023
• Date: 8/8/2023
• Time: N/A
• Conference Call Date: Tuesday, August 8, 2023
• Conference Call Time: 4:30PM ET

SIGA Technologies (NASDAQ:SIGA), a commercial-stage pharmaceutical company, focuses on the health security related markets in the United States. Its lead product is TPOXX, an oral formulation antiviral drug for the treatment of human smallpox disease caused by variola virus. The company was incorporated in 1995 and is headquartered in New York, New York.

SIGA Technologies Q2 2023 Earnings Call Transcript

[Operator]

Welcome to the CIGA Business Update Call. Before we turn the call over to CIGA Management, please note that any forward looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from forward looking statements. CIGA does not undertake any obligation to update publicly any forward looking statement to reflect events or change circumstances after this call. Statements for a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange commission, including without limitation, the company's annual report on Form 10 ks for the year ended December 31, 2022, and its subsequent reports on Form 10 Q and Form 8 ks. Statements may differ materially from the company.

[Operator]

I will now turn the call over to your host, Phil Gomez, Chief Executive Officer. Mr. Gomez, you may begin, sir.

[Speaker 1]

Statements may differ materially from the company. Thank you for taking the time to join today's call. Today, I'm joined by Dennis Ruby, our Chief Scientific Officer and Dan Luxhire, our CFO. Statements we are pleased to have this opportunity to provide a business, R and D and financial update to our shareholders. We'll then be happy to take questions.

[Speaker 1]

Statements may differ materially from the financial results.

[Speaker 2]

I'd like

[Speaker 1]

to start this call by highlighting our expectations for the second half of twenty twenty three that will be achievable based on the work we have done in the first half of the year. Statements in the second half of twenty twenty three, we expect the company to generate approximately $113,000,000 of revenue statements from deliveries of oral teapots to the U. S. Strategic national stockpile and another $30,000,000 to $45,000,000 of revenue from a broad cross section of domestic and international delivery, including the deliveries of oral TPOXX to the Department of Defense, IV TPOXX to the U. S.

[Speaker 1]

Strategic National Stockpile and Oral TPOXX to international customers. Based on such revenue expectations, we statements represent strong growth over the prior year. These financial expectations reflect successful efforts to diversify our revenue base statements are anchored by the aforementioned $113,000,000 order from the U. S. Department of Health and Human Services under our 19C contract.

[Speaker 1]

Expected deliveries of teapots to a broad cross section of customers is another example of our commitment to consistently meet global demand for teapot. Beyond 2023, we will continue to execute on our strategic plan to maximize growth opportunity. Statements are not included in the Q1. I will ask Dennis to provide details on 2 growth related initiatives for CIGA. 1, the PEP program for oral TPOXX and 2, the MPOX randomized controlled trials and observational trials.

[Speaker 1]

Dennis?

[Speaker 2]

Thanks, Phil. Regarding the PEP label expansion program for oral TPOXX, as a quick background update, Earlier this year, we noted that the company met enrollment targets for both the immunogenicity trial and the expanded safety trial. For the expanded safety trial, the clinical trial results recently became available. As expected, we did not see any drug related serious adverse events. For the JYNNEOS plus TPOXX immunogenicity trial, as a quick reminder, The goal of this trial was to show that TPOXX did not reduce the immune response to the vaccine.

[Speaker 2]

This is supplemental and separate study of those that received the JYNNEOS vaccine while on placebo compared with those that received the JYNNEOS vaccine while on TPOXX, Which is consistent with what we expected. For reasons we don't currently understand, the number of volunteers that had a measurable immune response statements to the JYNNEOS vaccine in both the placebo and TPOXX groups was lower than expected. At this point in time, pending further investigations into the effect of the lower than expected number of responders is that we currently do not have sufficient numbers statements or data points to make the non inferiority statistical determination as originally planned as the primary endpoint of the immunogenicity trial. We're investigating why we saw lower overall percentage of volunteers generating an immune response to the vaccine. To be clear, we're investigating the immune response levels of volunteers of the vaccine.

[Speaker 2]

The analyses are not about the efficacy or safety of TPOXX, nor are they about T BOX's impact on those individuals who are showing an immune response. In terms of getting the maximum and most timely benefit from immunogenicity trial in the context of stockpile expansion conversations with the government, statements are not included in the Q1. We plan to work through a review of the data, clinical trial processes and provide an update on the next investor call or when data becomes available. As contextual comments before I shift gears, I'd like to note that in regard to the PEP program, we believe that the totality of the studies and trials that have been conducted, statements including the immunogenicity trial as well as previous animal challenge experiments and clinical trials are supportive of the use for TPOXX in PEP pending discussions and review with the FDA. In the case of an orthopox epidemic, be it mpox or smallpox, use of tpox for PEP will be important to reduce the morbidity and mortality in the population.

[Speaker 2]

With respect to MPOX trials, 5 randomized controlled trials as well as multiple observation studies continue to enroll patients and collect data. For example, as of August 4, the NIAID STOP trial had enrolled 117 patients and the NIAID PULM trial being conducted in the DRC had enrolled 188 patients. While the MPOX case count this summer has been mild in comparison statements are not subject to the fact that we will continue to coordinate with government agencies on the ACTRCTs and observational trials. Statements are not subject to the financial statements. As noted in the last investor call, RCTs are contemplating an aggregation of their data as it is unblinded with the idea potentially reaching sufficient subject numbers for regulatory evaluation.

[Speaker 2]

While the short term path of the Mbox outbreak is uncertain, What we continue to believe is that there's a high probability that the United States and other countries across the world statements will have to deal with the MPOX cases in future years. It's just unknown as to the ultimate magnitude of the cases. Scope of the cases across different communities and whether case levels become consistent or whether case levels come and go periodically. Statements we believe that in most scenarios, there will be a need for TPOXX. At this point, I'd like to turn the call over to Dan for financial update.

[Speaker 3]

Thanks, Dan. For the 3 6 months ended June 30, 2023, CIGA's revenue was approximately $6,000,000 $14,000,000 respectively. For the Q2, Approximately $1,000,000 of revenue relates to an international sale of royaltypox and approximately $5,000,000 relates to research and development activity. Statements in connection with the international sale of Oil, TPOGS, it was made to a first time customer. Statements for the 6 months ended June 30, approximately $7,000,000 of revenue relates to product sales and supportive activities and approximately $7,000,000 of revenue relates to research and development activity.

[Speaker 3]

In connection with product sales, $5,000,000 of the sales were to the U. S. Department of Defense. Pretax operating loss, statements, which excludes interest income and taxes, was approximately $5,000,000 for the 3 months ended June 30, Net loss for the 3 months ended June 30, 2023 was approximately $3,000,000 For the 6 months ended June 30, Net loss was approximately $4,000,000,000 In turn, fully diluted loss per share for the 3 months ended June 30, 2023 At June 30, 2023, the cash balance for the company was approximately $76,000,000 During the second quarter, CIGA declared and paid a special cash dividend of $0.45 per share or approximately $32,000,000 in total. Additionally, for the 6 months ended June 30, the company repurchased approximately $11,000,000 of its common stock.

[Speaker 3]

As noted by Phil earlier in the call, for the second half of twenty twenty three, we are targeting statements are subject to the impact of the company's earnings release.

[Speaker 1]

We expect approximately $113,000,000 of

[Speaker 3]

revenues from deliveries of royaltypox to the U. S. Strategic national stockpile statements and between $30,000,000 $45,000,000 of revenues from a broad cross section of domestic and international deliveries, statements including $10,000,000 to $15,000,000 of revenues from deliveries of IV TPOXX to the U. S. Strategic national stockpile in connection with the $25,000,000 order by the U.

[Speaker 3]

S. Government in 2022 under the 19C contract. Such revenues in the second half of the year, when combined with the financial results of the first half of twenty twenty three, statements are expected to generate full year 2023 pretax operating income of between $90,000,000 $100,000,000 statements may differ materially from the financial update. At this point, I will turn the call back to Phil.

[Speaker 1]

Statements are not subject to any forward looking statements. Thanks, Dan. Before we open the call to Q and A, I'd like to reiterate a series of points in connection with our business. Statements are not included in the Q1. First, while the mpox outbreak has receded over the past several months, it is likely to continue at some level and has also strongly highlighted statements are not subject to the long term importance of TPOXX in connection with the treatment of orthopoxviruses.

[Speaker 1]

It is our understanding that TPOXX continues to be the leading and in many countries the only therapeutic used statements highlights the differentiated value of PPOD. 2nd, our ongoing international sales growth initiative is progressing in a value creating manner. We have a solid base of international customers through which we continue to pursue additional customers as well as follow on orders. Order activity over the past 12 months shows that a meaningful international market is taking shape. 3rd, the pet based development program continues to represent a growth initiative in that it may provide scientific and regulatory support for any stockpile expansion.

[Speaker 1]

Statements are not subject to the impact of the market. As stated on prior calls, we believe the current size of the stockpile of TPOXX in the U. S. Would not be sufficient to treat all those who would need care in many outbreak scenarios. Statements from the COVID pandemic, which has been reinforced by the mPOC outbreak, is that governments need to be more proactive in addressing the health and suicidal risks associated with viral outbreak.

[Speaker 1]

4th, we continue to be focused on transitioning our U. S. Government contract to a long term SNS contract that focuses on appropriate size requirements for the teapot stockpile as well as smoothing the annual deliveries, which would be critical to supply chain planning statements may differ materially from the company's financial flexibility. 5th, the expansion of our portfolio of customers is resulting in a diversification of the company's revenue base, steps enhancing 1st future revenue prospects. Finally, I'd like to provide a brief update on the CEO search.

[Speaker 1]

I am looking forward to retire later this year and I'm also focused on ensuring a smooth transition to the next CEO. The Board continues to conduct search in a diligent and deliberative manner and CIGA will provide an update when the search concludes. This concludes our prepared remarks and we will now begin the Q and A session.

[Operator]

Are received. Please be prepared to ask your question when prompted. And our first question comes from Pouya Hamami from Madison Group. Your line is

[Speaker 4]

open. Yes. Thank you very much for taking my questions. Just a question is, has there been any further discussion under the 19 CBARTA contract regarding incremental orders or stockpiling after 2024?

[Speaker 1]

Yes. Thank you for the question. So certainly with the exercise of the options this year, we have 2 remaining options, one for oral, one for IV, Which we've indicated would be required in 2024 to be able to maintain the stockpile. And we continue to have discussions with the U. S.

[Speaker 1]

Government statements on the next phase contract, which would go beyond 2024, those are progressing well. We were able to discuss The requirements as they go forward, the U. S. Government at ASPR has indicated they are reviewing requirements broadly in this space. So it's an opportune time statements will be made

[Speaker 2]

to have those conversations

[Speaker 1]

and we'll certainly keep everyone updated as those conversations result and ultimately what we anticipate would be an RFP for resupply of TPOXX as well as ultimately a contract award. But those are continuing with the goal of getting it in place as the options in the current contract are fully executed.

[Speaker 4]

Okay. Thank you. And as a follow-up and I guess relating to this, Have you seen any incremental traction for international orders or for instance, do you see any interest for international jurisdictions for smallpox or

[Speaker 1]

Epox related stockpiling? Yes, we certainly do. I think international sales this year will follow U. S. Government sales, we anticipate higher numbers in the second half of the year.

[Speaker 1]

We have had countries do follow on orders. We have had countries start talking much more about smallpox stockpiling versus just getting material for MPOX. So as we've said on this call many times, it is an evolutionary process with governments needing to Acknowledging the need for TPOXX, identify a requirement, get funding to be able to do it, but we do see those conversations progressing and look forward to the second half of the year as we start to recognize some of those sales. Thanks.

[Speaker 4]

Thank you. Just one last question on the PEP enrollment study, if I will. You had mentioned that there were some immunogenicity data that was different from expectations. How does this affect your timing In terms of potential next steps or label expansion or study readouts?

[Speaker 1]

Yes. As we noted, we've completed the safety study and we didn't see any drug related serious adverse events. And we're focused on A more detailed review of the immunogenicity statistics of the TPOXX plus JYNNEOS study given we didn't see the number of peers have a positive immunogenicity result with Jynneos, both in placebo and of those receiving, tpox. Clearly, this is a month or so later than we anticipated in doing the readout, and we will prepare our filing in parallel to the analysis of the immuno study, it'd be speculative right now, however, to comment on how much this may delay our submission, but we're certainly very focused on finalizing that data.

[Speaker 4]

Okay. Thank you very much.

[Operator]

And our next question comes from Scott Sibley from the Equis Group. Your line is open.

[Speaker 5]

Hey, how are you guys doing? I'm glad to see we bought $11,000,000 in stock backs, I guess that's about 2,000,000 shares, which is almost 3% of the company. According to my math, we only have about $12,000,000 less than if we're already buying this quarter, we're probably about done this quarter. Is the company planning on doing another

[Speaker 1]

statements that we had, Scott, good to talk to you. I will say, at a high level, the Board and management, as we've said, review a multitude of factors as we think about buybacks special dividends and other uses of cash, but as you know, over the past couple of years, we have done the special dividend as well as buybacks at a level of, I think in aggregate about $145,000,000 But Dan, do you want to comment on the specifics?

[Speaker 3]

Yes, Certainly. So the existing program has $21,000,000 remaining authorization left. And then Once that is used or expires, we would talk to the Board about next steps.

[Speaker 5]

Got you. Okay. I didn't realize mid-twenty one. I thought we're half of that.

[Speaker 2]

I guess I read the last thing wrong. But all right, well, that's good news. Good job.

[Operator]

And seeing no final questions, I'll turn the call back over to our host.

[Speaker 1]

I'd like to thank everybody for joining today. We look forward to providing additional updates as we get information on the PEP study and talking to you next quarter. So Thanks everybody for taking the time. Take care. Bye bye.

[Operator]

The meeting has now concluded.