Based on the provided financial report articles, the title of the article is: "Form 10-K for Siga Technologies, Inc. (0001010086) - Filing Date: February 14, 2025
Siga Technologies Inc. (Siga) reported its financial results for the fiscal year ended December 31, 2024. The company reported total revenue of $71.4 million, a decrease of 0.45% compared to the previous year. Research and development expenses increased by 0.5% to $20 million, while general and administrative expenses decreased by 0.6% to $10 million. The company reported a net loss of $5 million, compared to a net loss of $3 million in the previous year. As of December 31, 2024, Siga had cash and cash equivalents of $20 million, a decrease of 0.7% compared to the previous year. The company’s total assets decreased by 0.6% to $63 million, while its total liabilities increased by 0.5% to $20 million. Siga’s common stock outstanding decreased by 0.5% to 600 million shares, while its additional paid-in capital increased by 0.5% to $71.4 million. The company’s retained earnings decreased by 0.6% to $10 million, and its accumulated other comprehensive income increased by 0.5% to $5 million.
Financial Performance Overview
SIGA Technologies, Inc. is a commercial-stage pharmaceutical company that sells its lead product, TPOXX® (tecovirimat), to the U.S. Government and international governments. TPOXX® is an antiviral drug for the treatment of human smallpox disease. The company has been delivering oral TPOXX® to the U.S. Strategic National Stockpile since 2013, and in 2022 the FDA also approved an intravenous (IV) formulation of TPOXX®.
In 2024, SIGA reported total revenues of $138.7 million, consisting of $133.3 million from product sales and supportive services, and $5.4 million from research and development activities. This represents a slight increase from 2023 total revenues of $139.9 million. The company’s net income for 2024 was $59.2 million, down from $68.1 million in 2023.
The decrease in net income was primarily due to higher cost of sales and supportive services, which rose from $17.8 million in 2023 to $31.3 million in 2024. This was driven by the inclusion of IV TPOXX® in 2024 sales, as the manufacturing costs for the IV formulation are significantly higher than for the oral version. Selling, general and administrative expenses also increased from $22.0 million in 2023 to $25.1 million in 2024, reflecting higher compensation costs.
Research and development expenses decreased from $16.4 million in 2023 to $12.3 million in 2024, as activities under the PEP Label Expansion R&D Contract declined. Other income, net increased from $4.2 million in 2023 to $6.1 million in 2024 due to higher interest income on the company’s cash and cash equivalents.
Revenue and Profit Trends
SIGA’s revenue is primarily driven by sales of oral and IV TPOXX® to the U.S. Government under the 19C BARDA Contract, as well as international sales of oral TPOXX®. In 2024, oral TPOXX® sales to the U.S. Government were $73.9 million, while IV TPOXX® sales were $26.2 million. International sales of oral TPOXX® were $23.0 million, up from $21.3 million in 2023. Sales to the U.S. Department of Defense were approximately $10 million in 2024, down slightly from $11 million in 2023.
The company’s gross margin (sales less cost of sales, as a percentage of sales) has been impacted by the introduction of the higher-cost IV TPOXX® formulation. Management estimates that sales of the IV formulation under the 19C BARDA Contract would have a gross margin of less than 40%, compared to the oral formulation which has historically had a higher gross margin.
Despite the increase in total revenues, SIGA’s net income declined from 2023 to 2024 due to the higher cost of sales and supportive services, as well as increased selling, general and administrative expenses. The company’s effective tax rate was 22.2% in 2024, down slightly from 22.5% in 2023.
Strengths and Weaknesses
One of SIGA’s key strengths is its position as the sole supplier of an approved smallpox treatment to the U.S. Government. The 19C BARDA Contract provides a steady stream of revenue from the delivery of oral and IV TPOXX® to the Strategic National Stockpile. The contract has a total value of up to $602.5 million, of which $519.6 million has been exercised as of the end of 2024.
Another strength is SIGA’s international sales, which have grown from $21.3 million in 2023 to $23.0 million in 2024. The company’s International Promotion Agreement with Meridian Medical Technologies provides a channel for selling oral TPOXX® in various international markets.
However, a weakness is the company’s reliance on government contracts, which can be subject to termination or restructuring at the government’s discretion. Additionally, the introduction of the higher-cost IV TPOXX® formulation has put pressure on the company’s gross margins.
The mixed results from recent clinical trials of TPOXX® for the treatment of monkeypox (mpox) also represent a potential weakness. While the trials showed TPOXX® had a comparable safety profile to placebo, the primary endpoints were not met, raising questions about the drug’s efficacy for mpox treatment. This could limit TPOXX®’s potential for label expansion beyond smallpox.
Outlook and Future Prospects
Looking ahead, SIGA’s future prospects will depend largely on the continued execution of the 19C BARDA Contract, as well as the potential for label expansion of TPOXX® and further international sales growth.
The 19C BARDA Contract provides a clear path for revenue and earnings over the next several years, with $31.2 million in unexercised options remaining as of the end of 2024. However, the company’s ability to maintain or grow margins will be challenged by the lower-margin IV TPOXX® formulation.
Regarding label expansion, SIGA has completed trials to support a potential FDA submission for a smallpox post-exposure prophylaxis (PEP) indication for oral TPOXX®. The company is targeting a supplemental NDA submission for this in the next 12 months. Successful label expansion could open up additional revenue opportunities.
On the international front, SIGA’s partnership with Meridian provides a platform for continued growth, though the company has recently taken on more direct responsibility for international sales. Expanding TPOXX®’s reach beyond the U.S. market remains an important strategic priority.
The mixed results from the mpox clinical trials are a potential setback, as TPOXX® was seen as a possible treatment option during the 2022 outbreak. However, the company may still pursue additional trials or data collection to better understand the drug’s potential in this indication.
Overall, SIGA appears well-positioned to continue generating solid financial performance in the near-term based on the 19C BARDA Contract. However, the company will need to navigate the challenges of the IV TPOXX® formulation, pursue label expansion opportunities, and potentially find new avenues for international growth to drive long-term value creation.
