SIGA Technologies — Monkeypox likely here to stay

SIGA Technologies (NASDAQ: SIGA)

Last close As at 16/07/2024

USD9.28

0.15 (1.64%)

Market capitalisation

USD661m

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Research: Healthcare

SIGA Technologies — Monkeypox likely here to stay

With approximately 64k global cases, monkeypox has become a growing concern and is less transient than initially acknowledged. We expect SIGA Technologies, the leading smallpox therapeutic manufacturer, to remain a beneficiary through the monkeypox epidemic. SIGA’s TPOXX therapy has a strong track record in treating smallpox, which is in the same orthopoxvirus family as monkeypox. The company’s planned submission and approval of post-exposure prophylaxis (PEP) remains a key catalyst and the use of TPOXX supports a refined approach to treating monkeypox. Reflecting what we believe are the most likely assumptions, we arrive at a valuation of $19.80/share, up from $9.17/share.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

SIGA Technologies

Monkeypox likely here to stay

Company update

Pharma and biotech

26 September 2022

Price

US$10.71

Market cap

US$782m

Net cash ($m) at 30 June 2022

114.5

Shares in issue, diluted

73.0m

Free float

56%

Code

SIGA

Primary exchange

Nasdaq

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(51.7)

(21.5)

50.3

Rel (local)

(46.0)

(19.3)

81.0

52-week high/low

US$26.2

US$6.0

Business description

SIGA Technologies is a commercial-stage health security company focused on the treatment of smallpox and other orthopoxvirus. It has contracts with both the US and Canadian governments for TPOXX, its treatment for smallpox, and is looking to expand internationally.

Next events

Q322 results

November 2022

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Ken Mestemacher, CFA

+44 (0)20 3077 5700

SIGA Technologies is a research client of Edison Investment Research Limited

With approximately 64k global cases, monkeypox has become a growing concern and is less transient than initially acknowledged. We expect SIGA Technologies, the leading smallpox therapeutic manufacturer, to remain a beneficiary through the monkeypox epidemic. SIGA’s TPOXX therapy has a strong track record in treating smallpox, which is in the same orthopoxvirus family as monkeypox. The company’s planned submission and approval of post-exposure prophylaxis (PEP) remains a key catalyst and the use of TPOXX supports a refined approach to treating monkeypox. Reflecting what we believe are the most likely assumptions, we arrive at a valuation of $19.80/share, up from $9.17/share.

Year end

Revenue
(US$m)

EBITDA*
(US$m)

PBT*
(US$m)

EPS*
(US$)

P/E
(x)

Net cash
(US$m)

12/20

125.0

88.6

81.5

0.81

13.2

117.9

12/21

133.7

89.7

89.1

0.91

11.8

103.1

12/22e

125.0

63.5

63.0

0.66

16.3

71.8

12/23e

128.1

65.6

65.1

0.72

14.9

94.2

Note: *EBITDA, PBT and EPS (diluted) are normalized, excluding amortization of acquired intangibles, exceptional items and share-based payments.

Limited therapeutic options for monkeypox

Monkeypox is in the same orthopoxvirus pathogen family as smallpox and therapies are generally interchangeable. As monkeypox currently affects a narrow demographic, it was first anticipated to only be a public health issue for a short time; however, infections continue to rise and health and government strategies to limit the spread are still being ironed out. Based on anecdotal reports on the effectiveness of TPOXX, we expect demand for TPOXX stockpile quantities to further expand. Market experts anticipate monkeypox to bleed outside the limited population before we reach an endemic, when we expect there to also be a commercial market opportunity. Incrementally, SIGA’s PEP clinical trials are likely to be a material catalyst.

Positive pricing trends

Smallpox (and monkeypox) therapy market pricing is rarely disclosed, varies across countries and is complicated by contractual R&D funding terms. Recently, the terms of Chimerix’s TEMBEXA antiviral contract US award were disclosed in public documents and imply elevated rates (about $361 per dose). We view these as a decent domestic pricing proxy for TPOXX and PEP. These higher rates likely reflect increased demand and compare to our prior estimate of c $310 per TPOXX dose.

Valuation and sensitivity analysis

Although we are in the early stages of the monkeypox outbreak and the situation (epidemiology and behaviors) is fluid, we want to reflect on what we believe are the most likely scenarios incorporating recent events. We modelled scenarios to test key levers and contextualize potential outcomes. Our sensitivity analysis reflects potential stockpiles by region, pricing and potential commercialization assuming monkeypox becomes endemic. We increased our valuation to $1,446m or $19.80/share (versus $666m or $9.17/share, previously).

Monkeypox outbreak: Key takeaways

Rising cases elevate public concern

Until recently, monkeypox was a rare infectious disease found primarily in Central and West Africa, usually in areas where humans lived in close proximity to animals known to carry the disease.1 That trend has changed with the current monkeypox outbreak, believed to have originated in the UK and now spread across the world, with approximately 64k cases globally and 24k confirmed cases in the United States. According to the World Health Organization (WHO), monkeypox is usually spread through contact with an infected person’s bodily fluids, rash or lesions, and the current outbreak has been spread mostly among men who have sex or intimate contact with other men.2 Individuals are thought to be most contagious when experiencing symptoms like rashes, although research continues to determine if someone can spread monkeypox when asymptomatic.3

  Ibid.

The incubation period for monkeypox is roughly six to 13 days, and results in usually mild symptoms such as fever, headache, chills, exhaustion, etc. Some patients have reported severe symptoms, such as lesions that can lead to permanent scarring.4 A reported death from monkeypox was a Los Angeles resident on 12 September who was severely immunocompromised and had been hospitalized.5 This followed the death of a man in Texas who was also diagnosed with monkeypox and was severely immunocompromised (he died in late August, although it is uncertain if monkeypox was the primary cause for his death).6 Globally, there have been 18 deaths reported this year.7

  Ibid.

Government and health leader strategies have come in phases

Amid rising cases in the United States, monkeypox was declared a public health emergency on 4 August, and on 22 August the US Department of Health and Human Services (HHS) announced the roll out of phase four of its national monkeypox vaccine strategy. As of the announcement, roughly 1.5m vaccine doses had been delivered. The fourth phase of the strategy targets the procurement of an incremental 360,000 vials (up to 1.8m doses) of JYNNEOS vaccine for states/jurisdictions that have utilized 85% of their supplies.

HHS also awarded AmerisourceBergen a $20m contract on 6 September to speed up the distribution of monkeypox treatments and vaccines. HHS announced plans to draw down up to 2,500 JYNNEOS shipments from the strategic national stockpile (SNS) in addition to TPOXX antivirals to be shipped to up to 2,500 locations, a considerable increase from the five locations per state to which the stockpile had been shipping previously. As of 2 September, more than 800k vials of JYNNEOS and 37k courses of TPOXX had been distributed from the SNS.8

See our initiation report on SIGA that discusses the government stockpile for TPOXX.

HHS also plans to deploy 50k patient doses of TPOXX for treatment of severe or at-risk cases. HHS’s announcement comes on the back of the US Biomedical Advanced Research and Development Authority’s (BARDA) exercise of its first procurement option for IV TPOXX earlier in August for 64k doses worth about $26m. SIGA has also reported c $60m in international orders in the year to date (at 30 July 2022) for oral TPOXX from 10 international jurisdictions (nine of which are new customers), of which $5m was fulfilled in Q222 and roughly $26m is expected to be delivered in Q322 (and the remainder between October 2022 and July 2023). 

Several European organizations have announced strategies to procure combination medicines (vaccines and treatments) to control monkeypox. We believe these moves fueled the recent procurement orders for SIGA’s TPOXX from Canada, other European countries and the Asia-Pacific region (see our previous report for more details). While current case numbers are concentrated geographically, the WHO declaration of monkeypox as a Public Health Emergency of International Concern could serve as a catalyst for SIGA’s business and provide further commercial opportunities.

A refined approach to addressing monkeypox

Antivirals are the first line in easing monkeypox symptoms. SIGA’s antiviral product tecovirimat (TPOXX) is the leading therapeutic, originally designed to treat smallpox. Currently, it is the only allowed therapy for all orthopoxvirus pathogens, including monkeypox in both the UK (July 2022) and the EU (January 2022). In the United States, TPOXX was approved by the FDA for smallpox and is now available to treat monkeypox through the Centers for Disease Control and Prevention’s expanded access investigational new drug protocol.9 To date, two vaccines have been approved for monkeypox in the United States: JYNNEOS (Imvamune/Imvanex) and ACAM2000. The National Institutes of Health is also conducting a late-stage trial on the safety and efficacy of TPOXX as a monkeypox therapy. The study is enrolling adults and children infected with monkeypox, with the goal of enrolling more than 500 volunteers. Adults with severe infection, at high risk of severe disease, with a history of active inflammatory skin infections, pregnant women and children will be enrolled in an open-label arm where they will receive TPOXX. Other adult participants will be randomly assigned in a 2:1 ratio to receive TPOXX or a placebo for 14 days in a double-blinded fashion.

Although providers typically employ TPOXX to treat symptomatic patients, it has shown in animal studies the ability to prevent infection when used on a PEP or preventative basis, which allows some flexibility to caregivers. However, the best practice in the successful containment and eradication of pandemic viruses includes the use of both vaccine and antivirals (including use of TPOXX for PEP, see Exhibit 1). There is no one-size-fits-all option for individual cases, because the factors for each selected treatment should consider the intended (different) uses and/or audiences. For instance, patients who anticipate potential near-term exposure to monkeypox or those with vaccine hesitancy or compromised immune systems could be guided to use PEP as a preventative measure. In contrast, those testing positive for monkeypox would likely receive TPOXX orally or intravenously. Others who have not been exposed but seek a protective measure could consider a vaccine such as JYNNEOS.

Exhibit 1: Refined options for monkeypox (six- to 13-day incubation period)

Source: Edison Investment Research

This refined, hybrid approach alleviates concerns about vaccine hesitancy and use of the PEP treatment would create a viable alternative for those who prefer not to use a vaccine (JYNNEOS or ACAM2000). Also, if an individual is HIV positive and/or immunocompromised and/or is a man planning on engaging in intimate contact with another man, the use of PEP beforehand could assist in protecting against transmission.

There is a risk of resistance from potentially different strains of monkeypox, as the CDC recently issued guidance recommending the use of TPOXX be limited to those at high risk for severe disease. Recently, FDA comments suggested that TPOXX usage ‘could promote resistance and render the antivirals ineffective for some patients,’10 although we believe it is too early to know the extent or magnitude of that risk. Note, monkeypox is a DNA virus and this category usually mutates at a much slower rate than RNA viruses such as COVID or Influenza. We also highlight that all viruses have some form of resistance risk. Viral resistance will be monitored as part of the clinical studies.

PEP: TPOXX use case expansion

Treatment indication for oral TPOXX involves a 14-day course of therapy. In comparison, a PEP indication involves a longer course of therapy (28 days, or twice the length of the current FDA-approved treatment label). Typically, an infected individual would receive a 14-day treatment course, whereas an individual at risk of exposure (but not showing symptoms) would receive a PEP treatment (over 28 days). Given the US stockpile expansion opportunity (over the next few years) for SIGA is centered around expanding the indication of oral TPOXX to include PEP, we estimate that the same number of oral treatments will be ordered as in the BARDA contract (about 1.7 million) but there will now be four bottles allocated per treatment rather than two (as in previous orders).

As noted in our initiation report, we believe the PEP label expansion is a meaningful catalyst for SIGA as it would expand its addressable market. Typically, there is roughly a one- to two-week gap in the potential treatment of smallpox infection. Vaccines can protect against infection before exposure and until three to seven (max) days after exposure. The current label for TPOXX assumes use with the onset of symptoms, which typically start after an incubation period of approximately 12–14 days following exposure on average. As a result, there is a gap of time when an exposed person would not be protected by a vaccine, but unlikely to have access to TPOXX under the current approved drug labelling. The PEP program attempts to bridge the gap to cover the virus’s incubation period. Under PEP label expansion, TPOXX could be given to anyone who has been exposed to smallpox given the high chance of infection (as a reminder, susceptible persons have a 90% chance of contracting the disease when exposed to an infected individual).11

Grosenbach et al., Oral Tecovirimat for the Treatment of Smallpox. NEJM. 2018;379:44-53.

PEP development has been supported by a $26m R&D award by the US Department of Defense. As Colonel Ryan Eckmeier explains, ‘There have been long-standing concerns that smallpox could be used as a bioweapon. This PEP indication could help protect a wider range of warfighters against that threat.’12 SIGA and the FDA have agreed on the trial design and two human studies are included: an immunogenicity trial to evaluate whether there is interference with the JYNNEOS smallpox vaccine, and a 28-day safety study. SIGA announced the commencement of the immunogenicity clinical trial on 2 March 2022, and management reported the start of the safety study during the Q222 investor call.

As a reminder, TPOXX received regulatory approval in the EU and UK for the treatment of the broader group of human orthopoxvirus pathogens, including monkeypox. As the same product would be used for treatment and PEP, PEP could be a key component of a refined, hybrid approach to treating monkeypox. Provided there is regulatory approval of PEP, stockpiles of TPOXX/PEP antiviral treatments could largely displace vaccines in our opinion. Overall, we believe the recent news of increasing monkeypox cases and international responses to the outbreak could prompt increased usage of PEP.

Incorporating recent pricing insight

The market price for smallpox (and monkeypox) antivirals and vaccines are rarely disclosed, and often vary across countries and regions. Pricing terms can be further complicated by R&D funding (by the purchaser) to improve or develop the treatment. Available information implies that BARDA procures oral TPOXX at about $310 per dose domestically based on its current contract with SIGA. This rate is at a reduced level as BARDA reimburses SIGA for a portion of its R&D expense, and pricing reflects the size of the US government contract. Also, we believe it is important to note that BARDA pricing was set four years ago.

On 29 August, BARDA awarded Chimerix a multi-year contract for the delivery of 1.7m treatments of the TEMBEXA antiviral, with an initial procurement of 319k treatment courses for about $115m. This arrangement implies a rate of roughly $361 per dose, not including what appears to be a 2% annual inflation escalator. As this is the most recent pricing information available for the key target buyer, we believe the Chimerix contract serves as a government market proxy for domestic monkeypox antivirals. This also suggests that that recent elevated demand has increased potential pricing for TPOXX, which is higher than the assumed domestic pricing of $310 per dose from the current BARDA contract. Reflecting the TEMBEXA implied pricing and the addition of a potential 2% inflation factor suggests a reasonable domestic proxy of $383 per dose, starting in about 2025. Our revised valuation incorporates the updated proxy value.

International rates are significantly higher as negotiated rates exclude R&D funding and the sizing is lower than the US on a per country basis. In Canada, we estimate that the Public Health Agency and Department of National Defence rate was c $933 per dose. This arrangement does not provide R&D funding. Negotiated rates in the European Union and the UK have not been disclosed, nor the terms including consideration for contractual R&D funding, if any. Recent orders with smaller batches are likely priced at more than $1,000 based on our estimates. Therefore, our revised valuation incorporates pricing at about $1,000 for Canada, the European Union, UK and other key, less mature international markets, including Australia, South Korea and Japan. Note the actual price could be higher, as our $1,000 price is based on larger-scale orders (those in excess of $10m), and smaller volumes may not have the benefit of scale pricing.

Valuation and sensitivity analysis

Valuation summary: Most likely scenario

As the monkeypox outbreak is in an early stage, we believe infection rates could vary notably, without even considering human behavior and the responses and strategies of health and government organizations. To provide context, we have analyzed the key levers to consider a few scenarios, ranging from best, worst and most likely (in our view). We believe the key levers are rate of infection and resulting demand, reflected in government stockpiles, potential additional commercialization through partnerships and the associated timing of these events. An additional key lever is pricing, which can vary based on several factors, including discounts (bulk, R&D, etc), payer (venue, contracts, etc) and region. Recognizing the aforementioned developments, we also increase PEP’s probability of success from 40% to 50%. We summarize our assumptions for what we feel is the mostly likely scenario in Exhibit 2.

Exhibit 2: Key levers for most likely scenario

Assumption

Value

Stockpile (by region) as % of covered population

US

0.72%

Canada

0.25%

Europe/Asia

0.53%

PEP Approval

50%

Commercialization

Transmission rate

5%

Reinfection rate

0%

Cases treated by TPOXX or PEP (as % of total infections)

25%

Commercialization pricing

$2,000/dose

Royalty rate

15%

Pricing (stockpile)

US

$383

Canada

$933

Europe/Asia*

$1,000

Assumption

Stockpile (by region) as % of covered population

US

Canada

Europe/Asia

PEP Approval

Commercialization

Transmission rate

Reinfection rate

Cases treated by TPOXX or PEP (as % of total infections)

Commercialization pricing

Royalty rate

Pricing (stockpile)

US

Canada

Europe/Asia*

Value

0.72%

0.25%

0.53%

50%

5%

0%

25%

$2,000/dose

15%

$383

$933

$1,000

Source: Edison Investment Research. Note: *Assumes pricing based on large-scale orders.

Reflecting all of these assumptions, we arrive at a sum-of-the-parts valuation of $1,446m or $19.80/share (see Exhibit 3).

Exhibit 3: SIGA sum-of-the-parts valuation

Product/program

Main indication

Status

Probability of success

Approval/launch/
first contract year

Peak sales
($m)

rNPV
($m)

TPOXX (US base - Oral)

Treatment of smallpox

On market

100%

2018

122

437

TPOXX Canada

Treatment of smallpox

On Market

100%

2020

19

53

TPOXX US IV and pediatric formulations

Treatment of smallpox

IV (NDA filed 2021), pediatric (being formulated)

60–100%

2022–25

33

37

TPOXX US PEP

Post-exposure prophylaxis following exposure to smallpox

Development

50%

2025

149

241

TPOXX EU, Japan, Korea, Australia

Treatment of smallpox

EMA approved

55%

2022

346

296

Commercialization of TPOXX, PE. US, Canada, Europe, Asia.

Treatment of monkeypox

2024

173

269

Total

1,331

Net cash (Q222) ($m)

115

Total firm value ($m)

1,446

Total basic shares (m) as of Q222

73.0

Value per basic share ($)

$19.80

Source: Edison Investment Research

Commercial market for treating monkeypox

As the monkeypox therapy market matures (assuming the outbreak continues), we anticipate that consumers, especially those in certain demographics, will demand TPOXX outside of stockpiles. Therefore, a separate commercial market would develop to meet the increased need for treating monkeypox. However, market leaders in this niche such as SIGA do not have the operational infrastructure to distribute large counts of additional doses (ie 50–100k pa) and would likely partner with a distributor. In such arrangements, the distributor would partner with SIGA to commercialize the product across their distribution network, and in return we estimate that SIGA would receive a royalty for licensing the TPOXX technology. SIGA would continue to manufacture the incremental volumes needed through its competitive contract manufacturing arrangements.

We expect this commercial opportunity for TPOXX would be an incremental component. Although there is an opportunity for monkeypox to ‘bleed’ outside of the current, smaller addressable market (gay men), our analysis only considers the current addressable market. As detailed above in Exhibit 2, we assume a c 5% transmission rate (using early COVID-19 transmission rates), with roughly 25% of the diagnosed resorting to one of SIGA’s therapeutics offerings, TPOXX or PEP. Currently, we assume SIGA has a market share of roughly half of the smallpox vaccine/treatment market and the vaccine companies address the other half. We estimate commercial pricing using Tamiflu as a proxy, where the government price is about 50% of the commercial level.13 In this case, the government/stockpile price of $1,000 puts the commercial price at $2,000, which we use in evaluating our commercial forecast. Furthermore, commercialization prices could also rise by 3–5% inflation per year, higher than the 2% factor we use for international orders.

Using GoodRx.com for illustrating the commercial price an individual would pay, and Evaluate.com for prices of US Medicaid purchase.

To reflect the partnership arrangement, we anticipate that SIGA receives a 15% royalty rate for TPOXX/PEP. Further, we also assume there will be no reinfection from monkeypox. Scientists estimate that the majority of those with monkeypox are gay men, and while monkeypox could continue crossing over to the general population, as stated above, we limit our initial analysis to this smaller population in the United States, Canada, Europe and Asia. Reflecting these assumptions, we arrive at an incremental value of $3.68 per share for the commercial opportunity (see Exhibit 4). Note that this value is included in our above sum-of-the-parts valuation.

Exhibit 4: Incremental value of TPOXX and PEP commercial opportunity

Assumption

Value

Monkeypox transmission rate among limited population of US gay men

5%

Treatment rate (% of positive cases that use SIGA’s TPOXX or PEP treatment)

25%

Price per dosage

$2,000

Royalty rate

15%

NPV

$268.5m

Number of basic shares (as of Q222)

73.0m

Value per basic share

$3.68

Assumption

Monkeypox transmission rate among limited population of US gay men

Treatment rate (% of positive cases that use SIGA’s TPOXX or PEP treatment)

Price per dosage

Royalty rate

NPV

Number of basic shares (as of Q222)

Value per basic share

Value

5%

25%

$2,000

15%

$268.5m

73.0m

$3.68

Source: Edison Investment Research

Sensitivity analysis: Average volume and price

Exhibit 5 summarizes the approximate changes in valuation across average volumes (based on the % of population covered by stockpile, currently at 0.58%) and average prices across the United States, Canada, EU and Asia (currently at $509/dose). We tested the sensitivity of SIGA’s valuation to these assumptions, resulting in a range of prices from $14.48 to $26.43/share. Based on our evaluation, the most likely scenario would be $19.80, an increase of 116% from the previous $9.17 valuation. Moreover, the best- and worst-case scenarios, in our view, would be $23.62 and $16.45, respectively.

Exhibit 5: Sensitivity analysis ($/share)

Driver

Average volume (% of population covered by stockpile)

0.45%

0.50%

0.55%

0.58%

(current)

0.60%

0.65%

0.70%

Average price ($)

$400

14.48

15.28

16.09

16.58

16.89

17.69

18.49

$450

15.55

16.45

17.36

17.92

18.26

19.17

20.08

$500

16.61

17.62

18.63

19.26

19.64

20.65

21.66

$509 (current)

17.04

18.09

19.15

19.80

20.20

21.25

22.30

$550

17.67

18.79

19.90

20.60

21.02

22.14

23.25

$600

18.74

19.96

21.18

21.94

22.40

23.62

24.84

$650

19.80

21.13

22.45

23.28

23.78

25.10

26.43

Source: Edison Investment Research

Exhibit 6: Financial summary

$000s

2020

2021

2022e

2023e

Year end 31 December

US GAAP

US GAAP

US GAAP

US GAAP

PROFIT & LOSS

 

Revenue

 

124,959

133,670

125,034

128,129

Cost of Sales

(14,797)

(16,602)

(30,632)

(30,459)

Gross Profit

110,162

117,069

94,402

97,670

Research & Development

(10,939)

(9,942)

(10,042)

(10,142)

General & Administrative

(14,722)

(18,034)

(21,404)

(22,440)

EBITDA

 

88,579

89,716

63,478

65,611

Operating Profit (before amort. and excepts.)

84,501

89,093

62,956

65,088

Intangible Amortization

-

-

-

-

Other

532

101

-

-

Exceptionals

(8,507)

118

-

-

Operating Profit

 

75,993

89,211

62,956

65,088

Net Interest

(3,017)

-

-

-

Other

-

-

-

-

Profit Before Tax (norm)

 

81,484

89,093

62,956

65,088

Profit Before Tax (reported)

 

72,977

89,211

62,956

65,088

Tax

(17,167)

(19,861)

(15,109)

(15,621)

Deferred tax

-

-

-

-

Profit After Tax (norm)

64,317

69,232

47,847

49,467

Profit After Tax (reported)

55,810

69,350

47,847

49,467

Average Number of Shares Outstanding (m)

79

75

72

68

EPS - normalized ($), basic

 

0.81

0.92

0.67

0.73

EPS - normalized fully diluted ($)

 

0.81

0.91

0.66

0.72

EPS - reported ($)

 

0.70

0.92

0.67

0.73

Dividend per share ($)

-

-

0.45

-

Gross Margin (%)

88

88

76

76

EBITDA Margin (%)

71

67

51

51

Operating Margin (before GW and except.) (%)

68

67

50

51

BALANCE SHEET

Fixed Assets

 

6,223

5,973

7,615

7,666

Intangible Assets

898

898

898

898

Tangible Assets

2,104

2,366

2,417

2,467

Other

3,221

2,709

4,301

4,301

Current Assets

 

143,608

208,753

180,995

205,391

Stocks

-

19,510

30,000

30,000

Debtors

3,340

83,650

76,955

78,942

Cash

117,890

103,139

71,807

94,216

Other

22,378

2,453

2,233

2,233

Current Liabilities

 

(10,484)

(30,488)

(7,241)

(6,432)

Creditors

(1,278)

(2,028)

(1,778)

(1,778)

Short term borrowings

-

-

-

-

Other

(9,205)

(28,460)

(5,462)

(4,653)

Long Term Liabilities

 

(9,555)

(9,924)

(9,569)

(9,569)

Long term borrowings

-

-

-

-

Other long term liabilities

(9,555)

(9,924)

(9,569)

(9,569)

Net Assets

 

129,793

174,314

171,800

197,056

Minority Interests

-

-

-

-

Shareholder equity

 

129,793

174,314

171,800

197,056

CASH FLOW

Operating Cash Flow

 

71,519

11,495

27,663

48,460

Net Interest

-

-

-

-

Tax

-

-

-

-

Capex

(16)

(51)

(51)

(51)

Acquisitions/disposals

-

-

-

-

Financing

-

-

-

-

Dividends

-

-

(32,944)

-

Other (including share buybacks)

(114,600)

(26,195)

(26,000)

(26,000)

Net Cash Flow

(43,097)

(14,751)

(31,332)

22,409

Opening net debt/(cash)

 

(80,942)

(117,890)

(103,139)

(71,807)

HP finance leases initiated

-

-

-

-

Exchange rate movements

-

-

-

-

Other

80,045

0

(0)

-

Closing net debt/(cash)

 

(117,890)

(103,139)

(71,807)

(94,216)

Source: SIGA Technologies, Edison Investment Research

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by SIGA Technologies and prepared and issued by Edison, in consideration of a fee payable by SIGA Technologies. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Lepidico — Materially extended Phase 1 opportunity

On Friday 23 September, Lepidico announced a series of impressive drill results from Helikon 4 (including 34.8m at 1.25% Li2O) that extend the zone of mineralisation both down dip and along strike to the east towards Helikon 3 and Helikon 2. Drilling will continue, with a view to upgrading the mineral resource estimate at Karibib in October into the measured and indicated categories and thereby extend the Phase 1 operating life of the project from 14 to 20 years and potentially beyond. The upgraded resource will form the basis of a new mine plan at Karibib that will complement the company’s chemical plant front-end engineering and design process, which is now scheduled for completion in November once procurement optimisation and design refinements are complete. A final investment decision on the project will then be made, with timing to be advised but possibly in the first quarter of calendar year 2023 (cf anticipated at end-September previously).

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