SIGA Technologies Inc. Q1 2023 Earnings Call

Welcome to the Seeger business update call before we turn the call over to Seeger management. Please note that any forward looking statements made during this call are based on management's current expectation and observations and are subject to risks and uncertainties that could cause actual results to differ from.

The forward looking statements.

So you go does not undertake any obligation to update publicly any forward looking statements to reflect events or changed circumstances. After this call 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 at.

Annual report on Form 10-K for the year ended December 31, 2022 and its subsequent reports on Form 10-Q and form 8-K.

Thank you for taking the time to join today's call today I'm joined by Dr. Dennis Hruby, Our Chief Scientific Officer, and Dan <unk> our CFO .

Pleased to have this opportunity to provide a business R&D and financial update to our shareholders will then be happy to take questions.

On our last call. We noted that we expect the company's streak of positive financial performance to continue you should continue in 2023 with deliveries of oral T box to the strategic national stockpile being a key driver.

With this expectation we have been proactively building inventory in anticipation of a substantial replenishment order of oral T box for the strategic National stockpile based on a series of considerations. We are currently targeting for 2023, approximately $113 million of oral teapots deliveries to the strategic national stockpile.

These deliveries would occur under the COVID-19 see contract. Additionally, we are targeting approximately $11 million of oral T bus deliveries to the U S Department of defense for 2023.

Furthermore, in addition to pursuing U S government sales of royalty box. We will also continue to work toward generate revenues in 2023 from deliveries of IV T part to the strategic national stockpile as well as generating international sales of T box.

With respect to the international sales effort as of March 31, 2023.

There were firm commitment orders from two European countries for the delivery in 2023 of approximately $8 million of royalty. Pax. Additionally, we are currently engaged in active negotiation to add to this amount.

Some we will continue to work hard to build the 20 on the 2023 international base as the year progresses.

With an eye towards growth, we continue to make progress on two key initiatives one the monkey pox observational clinical trials and to the Pep program for oral T. Pax at this point I will turn the call over to Dennis to discuss these two important initiatives.

Thanks, Phil with respect respect to EM Pax T. Fox has been an essential component of the public health response to the global outbreak.

T box has been used to compassionately treat more than 6900 embarks cases in the U S as well as many cases internationally.

Nine clinical trials have been launched to study the use of T box for imparts five of which are randomized placebo controlled trials that are sponsored by government agencies or Ngos to date more than 175 embarks patients had been enrolled in these trials, while the number of embarks cases have helped over the last.

Or is the months in the U S. The clinical trials continue to enroll our global cross section of patients as they become available it's worth noting that there has been an uptick in embarks cases in some locations a development, we will continue to monitor and consultation with government officials.

Overall, I would like to reiterate what we said on prior investor calls in connection with the timing the ultimate number of participants of the trials. These factors will depend on the path of the M. Pox outbreak and then general speed of enrollment, hence the timing and the likely ultimate enrollment levels the trials, especially the randomized placebo controlled.

Trials continues to be currently unknown.

For example remains to be seen whether there will be.

Any type of impacts case count increase over the coming summer months in the northern hemisphere to roughly mirror the spike in embarks case counts last year as the CDC has predicted.

As such given the currently unknown factors, the timing and composition of an FDA submission for an M. Fox label for T box remains to be determined.

That said it is encouraging to note that the various rct's are contemplating an aggregation of their data as it is unblinded with the idea of potentially reaching sufficient subject numbers for regulatory body.

Although short term path of the impact of the outbreak is uncertain.

<unk> seen and learned to date indicates there's a high probability that the United States and other countries across the world will have to deal with and barks cases in future years, It's just unknown as to the ultimate magnitude of the cases, the scope of the cases across different communities and whether case levels becomes existent or whether case levels come.

And go periodically we believe that in most scenarios there will be a need for T box chip.

Shifting gears I would like to provide an update on the Pep label expansion program for all of T box I'm happy to report that the company has recently met enrollment targets for both the imaging. This the trial and the expanded safety trial as a quick reminder, the Jennie O plus T box Immunogenicity trial test subjects.

As to whether all T box interferes with Jennie O's vaccination, while the expanded safety trial tests the safety of all T box over a 28 day regimen. In contrast, the treatment indication for all G box is 14 days.

<unk> are currently being analyzed for both trials, we expect unblinded results and data lock for both trials to occur within the next 60 days if everything goes according to schedule.

With respect to the Pep program I'd like to note a few things based on previous animal challenge experiments and clinical trials. We expect both trials will be successful and supportive for the use of T box for pet in the case of an ortho pox virus epidemic bid and Pax or smallpox use of T box for Pep will be important to <unk>.

The morbidity and mortality in the population.

Unblinded results from the trials are supportive of a regulatory submission. The next step after a sample analysis would be to commence preparation activities for an NDA supplemental submission for such a submission we're targeting early 2020 four.

At this point I would like to turn the call over to Dan for financial update.

Thanks Dennis.

For the three months ended March 31st 2023 biggest revenue was approximately $8 million of which approximately $5 million relates to the south royalty pox two the U S Department of defense. This.

This is the third shaft royalty pox, two the department of defense over the past 12 months.

The remainder of the first quarter revenues are primarily related to research and development activity.

For the full year 2023 as noted by Phil in his remarks. The company is targeting revenues of approximately 113 million on sales of royalty pox, two the strategic national stockpile and revenues of approximately $11 million on sales of royalty pox two the U S Department of defense.

These targets are based on a series of consideration and are subject to change.

In addition to the targets just mentioned the company is pursuing deliveries and sales of IV <unk> to the strategic stockpile Andrew.

Andrew and exercised option in the 19 see contract.

And as also pursuing international sales royalty box.

We have not provided specific 2023 targets for IV <unk>.

And international standards, because details are still building for these markets.

In connection with the international sales efforts as noted by Phil earlier in the call in March 31, 2023 they were affirmed commitment borders from two European countries for the delivery in 2023 of approximately $8 million, while cheap Hawks.

Surely we are currently engaged in active negotiations to add to this amount.

Returning to the first quarter financial results.

Pretax operating loss, which excludes interest income and taxes.

Approximately $2 million to the three months ended March 31 2023.

Net loss for the three months ended March 31, 2023 was approximately $1 million and fully diluted loss per share was one cent.

At March 31, 2023, the cash balance for the company was approximately $116 million.

During the first quarter.

He can repurchased approximately one 1 million shares of its common stock for approximately $7.5 million.

This concludes the financial update at this point I will turn the call back to Phil.

Thanks, Dan.

As a complement to the operational R&D and financial updates discussed earlier in this call I would like to highlight that we have announced the special cash dividend of 45 cents a share that will be payable on June <unk> 2023 based on a record date of May 16, 2023 <unk>.

As background, we continually evaluate the best use of cash and we are focused on a disciplined process to deploy cash where it can generate the best long term return for our shareholders as part of this process, we consider a wide range of possibilities and a wide range of consideration time in places among the considerations with one strong financial.

Performance over the last year as of year end to a solid balance sheet. We believe it is an appropriate time to declare a special cash dividend did.

The implementation of this action reflects confidence that come from historical financial performance and also reflects optimism about the business going forward.

Before we shift to Q&A I'd like to emphasize a couple of context points in connection with the Pep program <unk>.

First I want to reiterate that the pet based development program represents a growth initiative and that it would provide scientific and regulatory support for any stockpile expansion.

As stated on prior calls we believe the current size of the stockpile T parts in the U S would not be sufficient to treat all of those who would need care.

Many outbreak scenarios.

The lesson from the Covid pandemic, which has been reinforced by the M. Pox outbreak is that governments need to be more proactive in addressing the health and societal rest associated with virus families.

Second we continue to be focused on transitioning our U S contract to a long term S. N S contract that focuses on appropriate size requirements for the teapot stockpile as well as smoothing the annual deliveries, which would be critical of the supply chain planning and provide a higher degree of financial predictability.

With this in mind I want to highlight that we believe the clinical trial results from the Pep program, especially the Immunogenicity trial are an important part of long term contract conversation. This.

This concludes our prepared remarks, and we will now begin the Q&A session.

If you would like to.

To ask a question. Please press star one on your telephone keypad now you'll be placed into the queue. In order received please be prepare to ask your question. When prompted once again to ask a question. Please press star one on your phone now.

Our first question comes from Adam Mccarter from Edison Group. Please state your question.

Hi, there. Thanks for taking my question and really get to hear but that progress at chico's be making just.

Just wanted to hit a little bit more debate. So you mentioned, though that idea, but the international orders and just wants to know whether or not you're getting just a little bit more color around the interests regarding the stockpiling.

Sure Adam So thanks, and thanks for the question, we are still getting I would say a mix of certainly.

Countries that are continuing to follow up on the <unk> pox outbreak and making sure. They have drug on board and I would say, we will see a mix of both existing and new countries. This year based on the conversation. So I would anticipate can do builds of new conversations.

As we've talked before we've also been reflecting those conversations back to include smallpox because many of the countries had not thought about that we're encouraged we certainly have.

At least one country that looks like it's committing to doing more of a smallpox stockpiled at an initial procurement for <unk> and we continue to have those studies. So as Dan said it continues to evolve a lot of discussions it's a slow process as we've seen over time, but encouraged that we still have a growing number of countries where.

We're talking to and starting to be able to also talk about smallpox as well.

Okay.

That's a fantastic. Thank you very much if I could if I could just follow it up with another question as well and just wondering if I could just.

Just in terms of data comes to your placebo controlled studies and Monkey pox and Wendy can you give any guidance somebody when they expect to see some data from those studies coming out in the immediate term.

Yeah, Yeah, I can add a little bit I mean, Dennis talked about this that.

We have a lot of placebo controlled studies ongoing but case levels have come down substantially although we have seen for example in Japan, There's a slowly growing number of cases that are there. So.

So I think there's there's there's two parts of that driving the timeline. One is what is the case load. If we see an increase as we did last spring in cases I think the good news is there are placebo controlled studies throughout the world that will try and catch those both in U S Europe South America.

Asia. So there was a lot of work that's been done to set up those studies and try and catch those but if we don't see the caseload inquiries. So it's going to be hard to do that the second part is as Dennis highlighted which is I think very important the groups, which are predominantly governments places like NIH in the U S. The Oxford University in the U K Cups.

In the U K WH O has helped support.

Support some of the studies in Europe .

They're starting to talk amongst the clinical network and also stocked to regulators to make sure whatever dataset. We have we can try and pull that use all of that data to be able to go for approvals. We don't have to wait for one study to get to critical mass. So there's been conversations that are encouraging, but we'll have to stay tuned and see where that goes.

Excellent. Thank you very much no further questions from me.

Alright. Our next question comes from Joaquin Horton and Investor. Please state your question.

Hi, guys. My question is.

We've been kicking around this to EP program for the last several years is there any way.

Quantify as to what the size or the potential of this program could be.

Okay.

Thanks Joaquin I appreciate the question Hope all is well and retirement for you and I appreciate you calling in.

So as there's a couple ways to answer that question, but the one that we very specifically thought about is the implications for the use of tea pods for Pep in smallpox, which is that you would go from a 14 day treatment to a 28 day treatment.

Currently our contract is for a $1 7 million course requirement and if you wanted to maintain the ability.

To treat $1 7 million people with the potential for a lot of those being Pep you would need to double the amount of drug in the stockpiles. So certainly the initial messaging. We've had is at the very least given the requirements that are always on that are already on the books. There is an opportunity to potentially double what the U S government buys.

I would also add into kind of other perspectives on that one is for those of you that have been following so you got a very long time, our original contract in 2011 contemplated up to 12 million courses in options and BARDA sided path is one of the reasons they may need more than the $1 seven.

So there has been a long history of evaluating that would even potentially higher numbers, but then the other part is the.

The strategic National Stockpile has stated repeatedly including in their multiyear budget. They don't have full funding for all of the things they would like to buy so they'll certainly be a lens of affordability.

That could evolve over time, so we think the doubling of the stockpile is Ah is an important way to think about it immediately and continue to think about the long term preparedness that we think the U S government ultimately should do.

Thank you that's it from me.

Thanks Wolfgang.

Once again, if he would like to ask a question. Please press star one on your phone now.

Our next question comes from Ralph will from our well investments. Please state your question.

Thank you again for the special dividend and for the confidence you show in the purchasing the shares.

I have one question are you besides smallpox and pox.

<unk> actively involved at this point.

Working on that.

<unk> seen a counter measure for any other emerging infectious diseases or other.

Other.

Perhaps the buyout.

Attacks.

Yeah.

Yes, Ralph Thank you very much for the question.

As <unk> heard T boxes are licensed product with sales that is by far our lead product. We do have a candidate product. That's in preclinical that also has the potential to treat orthopods infection. We are doing some work on that but it's very early on so I wouldn't say that's a major one we know the government has always wanted to have two products.

And the second product that was licensed had a black box warning on it. So we think it's important to continue to think about.

Second generation products, there and then we do scan.

For potential products countermeasures things that would be in this space to bring on board. We look at the science, we look at the market potential and we have not brought anything on board to date, but we continue to look at those assets.

We continue to monitor the antibiotic space yet BARDA for RFP, we expect will come probably this next fiscal year and we have a partnership with CIT Politico after that RFP with an antibiotic they have but that's again a little further off and that's a partnership not an asset that we have but we do very actively look at the space and look at things that we could bring.

Onboard that would help us bring products either to the government or to the commercial market. So thank you for your question.

Okay. Thank you for that.

At this time, we have no further questions.

I'd like to thank everybody for joining us at this first quarter conference call. We appreciate your time, we appreciate your support and look forward to continuing to create value for our shareholders. So thank you again and have a great day.

This concludes today's conference call. Thank you for attending.

The host has ended this call.