BANGALORE, Nov 8 (Reuters) - Shares of SIGA Technologies Inc (SIGA.O) fell 23 percent on Monday, a day after the drugmaker said it would appeal against a Small Business Administration (SBA) ruling that could make it ineligible for a government biodefense contract worth up to $2.8 billion.
On Nov. 5, the SBA ruled the company was “other than small”, following a complaint by rival bidder Chimerix Inc that SIGA was not a small business — a requirement for the government contract.
SIGA had reported on Oct. 8 that the U.S. Department of Health and Human Services was planning to award it a contract to supply 1.7 million courses of its smallpox drug for the strategic national stockpile, with the base contract worth about $500 million in revenue. [ID:nSGE69B0K8]
Noble Financial Capital Markets analyst Raghuram Selvaraju said he does not expect the authority to invalidate the award based on SBA’s decision but might give some benefit to Chimerix as well.
“The fact that SIGA is or is not a small business does not negate the fact that there is a major unmet need for anti-smallpox therapeutic and prophylactic agents and the fact that SIGA’s drug is the only treatment that has shown to be effective.”
New York-based SIGA’s shares, which have risen 55 percent since the company said it could be awarded the biodefense contract for its smallpox drug, were trading down 17 percent at $11.10 in early morning trade on Nasdaq. They touched a near one-month low of $10.24 earlier in the session. (Reporting by Shravya Jain in Bangalore; Editing by Maju Samuel)