West Coast Editor
SIGA Technologies Inc.'s $16.5 million government grant brings the total federal cash raised by the firm in the past few months to $27 million, more than enough to get the new drug application filed for SIGA's Phase I smallpox drug - and apparently enough to trigger a retreat from the proposed merger with PharmAthene Inc., disclosed in June.
SIGA's stock (NASDAQ:SIGA) closed Thursday at $1.53, down 25 cents, or 14 percent, after trading as low as $1.40.
The latest grant comes from the National Institute of Allergy and Infectious Diseases of the National Institutes for Health, and specifically supports development of the smallpox candidate, oral SIGA-246, through the filing of a new drug application. SIGA spent about $716,000 on the drug during the three months ended June 30, and about $1.6 million last year.
A spokeswoman for Thomas Konatich, chief financial officer and acting CEO for New York-based SIGA, said he would not comment on the merger news.
Stacey Jurchison, PharmAthene's director of education, referred questions to SIGA. Had the deal gone through, Annapolis, Md.-based PharmAthene would have gained a public stock listing and a research facility in Corvallis, Ore., and its shareholders would have owned about 68 percent of the newly formed company. (See BioWorld Today, June 12, 2006.)
The merger also called for the sale, immediately afterward, of at least $25 million worth of SIGA equity securities to investors, including the conversion by PharmAthene investors of not more than $12.4 million of bridge loans.
PharmAthene is working on biodefense products, too, including Valortim, a fully human monoclonal antibody in development with Medarex Inc., of Princeton, N.J., against anthrax infection, and Protexia to prevent and treat organophosphate nerve agent poisoning.
Valortim, granted orphan status by the FDA, has completed Phase I safety testing, and results are expected later this year. PharmAthene acquired Protexia through its buyout in 2005 of Montreal-based Nexia Biotechnologies Inc.
Late last month, the Department of Defense awarded PharmAthene a multiyear contract worth up to $213 million to move forward with Protexia - news that gave SIGA shares a boost. Founded in March 2001, PharmAthene has raised about $60 million in venture capital.
SIGA has antiviral programs targeting various Category A pathogens, including arenaviruses (Lassa fever, Junin, Machupo, Guanarito, Sabia and lymphocytic choriomeningitis), dengue virus and the filoviruses Ebola and Marburg.
Among other companies lately to pull down federal cash for biodefense efforts are South Plainfield, N.J.-based PTC Therapeutics Inc., which got $17.2 million earlier this week, and Alnylam Pharmaceuticals Inc., of Cambridge, Mass., due for $23 million over the next four years under an anti-terror contract gained in September.