The Rise and Fall of Biodefense Company Siga Technologies

The Rise and Fall of Siga Technologies

Siga Technologies was once a rising star in the biodefense industry. The company developed treatments for serious infectious diseases like smallpox and Ebola. Their flagship drug, TPOXX, received FDA approval in 2018 for treating smallpox. With concern about bioterrorism on the rise after 9/11, Siga seemed poised for great success.

But behind the scenes, there was trouble brewing. In the mid-2000s, Siga became embroiled in a lengthy legal dispute with PharmAthene, another biodefense company. PharmAthene claimed that Siga failed to meet its contractual obligations to develop an anthrax treatment. The case dragged on for years before Siga ultimately prevailed.

Financial Difficulties and Management Issues

The PharmAthene lawsuit took a heavy toll on Siga. Legal fees mounted and the uncertainty hampered the company's ability to attract new investors and partners. By 2011, Siga was on the brink of bankruptcy.

Around this time, Siga's management team underwent significant turnover. Founder and CEO David de Weese departed and was replaced by Eric Rose. Rose only lasted a year before the board brought in Daniel Luckshire as CEO. The constant shuffling of executives created more uncertainty for investors.

The BARDA Contract

Siga seemingly got a lifeline in 2011 when it secured a $433 million contract from BARDA (the Biomedical Advanced Research and Development Authority) to supply doses of TPOXX for the US strategic national stockpile. But this contract prompted a wave of controversy and allegations of cronyism.

It was revealed that billionaire hedge fund manager Ronald Perelman owned a controlling share of Siga stock and had close ties to lobbyists who advocated for the BARDA contract. Siga was questioned about overcharging for TPOXX and concerns were raised about the lack of competitive bidding for the large government contract.

Ongoing Legal and Financial Issues

The BARDA contract brought in much-needed revenue but it did not resolve Siga's underlying problems. In 2013, activist investor Kyle Bass accused the board of self-dealing and called for a shakeup. By 2014, Siga had burned through nearly all of the BARDA money even as TPOXX was still years away from FDA approval.

When approval finally came in 2018, the celebration was short-lived. Soon after, Siga became mired in another lawsuit, this time with Dr. Jayant Kumar who claimed he was owed over $1 million for his work developing TPOXX. The case was settled but it was another negative distraction.

Moderna Partnership and Looking Ahead

Despite its challenges, Siga has managed to survive where many biotechs would have collapsed. In 2020, Siga entered into a manufacturing partnership with Moderna to help produce COVID-19 vaccines. This deal provides revenue and helps utilize Siga's manufacturing capacity.

As we enter 2024, the future is still uncertain for Siga. TPOXX sales have underperformed expectations so far. But the company is actively developing new pipeline products and exploring research partnerships to build revenue streams for the long-term.

Siga's story illustrates the difficulties even innovative biotech firms face bringing treatments to market. For Siga to achieve its early promise, it will need to leverage its core strengths while overcoming the financial, legal, and managerial issues that have plagued its past. With the right strategy and leadership, Siga may still find a path to success.

FAQs

What does Siga Technologies do?

Siga Technologies is a biodefense company that develops treatments for infectious diseases like smallpox, Ebola, and others that could potentially be used as bioterror agents. Their flagship product is a smallpox drug called TPOXX.

Why did Siga struggle financially?

Siga struggled financially due to a combination of factors - costly legal disputes, management turnover, lack of investor confidence, and delays in getting their products approved and sold. A lawsuit from PharmAthene and controversy around a government contract hurt the company.

How did Siga get the BARDA contract?

Siga was awarded a $433 million contract from BARDA, the Biomedical Advanced Research and Development Authority, to supply its smallpox drug TPOXX for the US national stockpile. The contract was controversial due to allegations of cronyism involving Siga's investors.

Is Siga Technologies still in business?

Yes, Siga Technologies is still operating today despite its challenges over the years. The company has survived through government contracts, partnerships, and by developing new pipeline products. TPOXX was approved by the FDA in 2018.

What is the future outlook for Siga?

The future is uncertain for Siga. While TPOXX is approved, sales have lagged expectations. If Siga can build revenue streams through new products, research partnerships, and smart business strategy, they could still achieve success in the biodefense space.