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Currency in USD
Last close As at 02/06/2023
USD5.48
▲ −0.13 (−2.32%)
Market capitalisation
USD391m
Research: Healthcare
SIGA Technologies has announced a second procurement contract worth up to $10.7m from the US Department of Defense (DoD) for the procurement of oral TPOXX, of which $5.1m is targeted for delivery in 2022. This win follows a $7.4m procurement contract from the DoD in May 2022. Amid the spate of new contract wins globally (including $76m in international orders) for TPOXX, we expect the strong order momentum to continue as countries stockpile treatments due to the ongoing monkeypox outbreak. We maintain our valuation of $19.80 per SIGA share.
SIGA Technologies |
Second contract win from the US DoD in 2022 |
Procurement contract |
Pharma and biotech |
3 October 2022 |
Share price performance
Business description
Analysts
SIGA Technologies is a research client of Edison Investment Research Limited |
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SIGA Technologies has announced a second procurement contract worth up to $10.7m from the US Department of Defense (DoD) for the procurement of oral TPOXX, of which $5.1m is targeted for delivery in 2022. This win follows a $7.4m procurement contract from the DoD in May 2022. Amid the spate of new contract wins globally (including $76m in international orders) for TPOXX, we expect the strong order momentum to continue as countries stockpile treatments due to the ongoing monkeypox outbreak. We maintain our valuation of $19.80 per SIGA share.
Year end |
Revenue |
EBITDA* (US$m) |
PBT* (US$m) |
EPS* |
P/E |
Net cash |
12/20 |
125.0 |
88.6 |
81.5 |
0.81 |
12.3 |
117.9 |
12/21 |
133.7 |
89.7 |
89.1 |
0.91 |
11.0 |
103.1 |
12/22e |
125.0 |
63.5 |
63.0 |
0.66 |
15.2 |
71.8 |
12/23e |
128.1 |
65.6 |
65.1 |
0.72 |
13.9 |
94.2 |
Note: *EBITDA, PBT and EPS (diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
SIGA has received a new procurement order worth up to $10.7m from the US DoD for the supply of oral TPOXX (tecovirimat). Of the total, the company is targeting delivery of $5.1m worth of oral TPOXX in 2022 while the remaining $5.6m will be at the discretion of the DoD. This new contract follows an earlier contract worth $7.4m from the DoD in May 2022, and combining these two contracts, a total of $12.5m of orders should materialise this year.
As we mentioned in our previous note, FY22 continues to be a catalyst-rich year for SIGA with multiple contract wins in North America, European countries and Asia-Pacific. The latest US DoD contract provides another boost to SIGA’s robust contract and sales pipeline, with the company reporting $76m in international orders year-to-date for oral TPOXX from 12 customers across Canada, the EU and Asia-Pacific. Of this total contract value, c $65m is expected to be delivered in 2022.
As a reminder, SIGA has an existing collaboration agreement worth $26m with the US DoD for developing the post-exposure prophylaxis (PEP) indication for oral TPOXX. The DoD has formulated an Expanded Access Protocol for TPOXX so that it can used as a PEP for DoD-affiliated personnel until FDA approval is received. We note that the PEP label expansion is an important catalyst for SIGA as it could potentially expand its addressable market due to the longer course of therapy (28 days, or twice the length of the current FDA-approved treatment label).
With about 64k global cases and 23k cases in the United States, monkeypox remains a growing concern for governments and health agencies. Amid rising cases in the United States, monkeypox was declared a public health emergency on 4 August, and antivirals remain the first line in easing monkeypox symptoms. SIGA’s antiviral product TPOXX is the leading therapeutic, originally designed to treat smallpox. 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. Currently, it is the only allowed therapy for all orthopoxvirus pathogens, including monkeypox, approved in both the UK (July 2022) and the EU (January 2022).
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SigmaRoc’s (SRC) progressive M&A strategy and geographical diversification continues to pay off, with H122 revenue growth of 17%, on an adjusted like-for-like basis, to £247m. In spite of ongoing headwinds, the company is seeing persistent demand, which is well spread in terms of end-markets. SRC trades on an FY22e P/E of 5.7x, at a comfortable discount to its prospective average of c 11x over the past five years and at the lower end of a peer group of companies with similar exposures.
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