Last close As at 05/08/2026
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USD226m
Research: Healthcare
SIGA has reported Q223 results, which came in largely as expected, and management has provided key operational highlights. Activity in the second half of the year has started to firm up with upcoming TPOXX deliveries (for H223) and better-than-expected international orders (offsetting IV orders that will likely be received in FY24). We maintain our FY23 product revenue estimate of $155m and note H223 management sales guidance of $143–158m. We await further clarity on PEP immunogenicity trials, which we believe are the next material catalyst. As we incorporate the reported quarterly results and slight shift in revenue mix for the balance of the year, our valuation adjusts to $1.24bn or $17.46 per share (vs $1.25bn or $17.53 per share previously).
SIGA Technologies |
Second quarter as expected, onward to H223 |
H123 results update |
Pharma and biotech |
10 August 2023 |
Share price performance
Business description
Next events
Analysts
SIGA Technologies is a research client of Edison Investment Research Limited |
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SIGA has reported Q223 results, which came in largely as expected, and management has provided key operational highlights. Activity in the second half of the year has started to firm up with upcoming TPOXX deliveries (for H223) and better-than-expected international orders (offsetting IV orders that will likely be received in FY24). We maintain our FY23 product revenue estimate of $155m and note H223 management sales guidance of $143–158m. We await further clarity on PEP immunogenicity trials, which we believe are the next material catalyst. As we incorporate the reported quarterly results and slight shift in revenue mix for the balance of the year, our valuation adjusts to $1.24bn or $17.46 per share (vs $1.25bn or $17.53 per share previously).
Year end |
Revenue |
EBITDA* |
PBT* |
EPS* |
P/E |
Net cash* |
12/21 |
133.7 |
89.6 |
89.1 |
0.91 |
6.1 |
103.1 |
12/22 |
110.8 |
43.2 |
43.7 |
0.46 |
12.2 |
98.8 |
12/23e |
175.2 |
100.5 |
102.4 |
1.10 |
5.1 |
115.3 |
12/24e |
181.0 |
102.3 |
104.7 |
1.17 |
4.8 |
171.0 |
Note: *EBITDA, PBT and EPS (diluted) are normalized, excluding amortization of acquired intangibles, exceptional items and share-based payments.
BARDA deliveries to drive H223
In Q223, SIGA reported $5.9m in revenue (vs $16.7m in Q222), consisting of international orders of $1.3m and R&D-related revenues of $4.6m. We expect FY23 revenue will be largely weighted to H223 (vs $14.2m total in H123). Specifically, H223 sales are expected to be driven by US domestic deliveries of oral TPOXX to the US strategic national stockpile (SNS), IV TPOXX deliveries to the SNS and oral TPOXX to the US Department of Defense (DoD). We also expect $16m from international orders, which has further upside potential that is currently not reflected in our estimates as government orders are often challenging to time.
PEP remains a key growth catalyst
While the expanded safety trial under the PEP label expansion program demonstrated positive results, SIGA is conducting a detailed review of the preliminary data from the immunogenicity trial in combination with the JYNNEOS vaccine. The initial analysis indicated a lower number of patients than expected recording measurable immune response to JYNNEOS vaccine in both placebo and TPOXX treated groups and requires further review. We look forward to incremental details on this front in the second half, as the PEP label expansion presents the most material (potential) upside opportunity, in our opinion.
Valuation: Adjusts to $17.46 per share
Based on the quarterly results, including updated net cash balance ($76.2m), lower share count (71.1m vs 71.3m previously) and slight mix adjustments, our valuation for SIGA adjusts to $1.24bn or $17.46 per share (vs $1.25bn or $17.53 per share previously).
Financials
SIGA reported Q2 revenues of $5.9m, consisting of $1.3m in product sales and $4.6m in R&D related revenues. Product sales ($1.3m) were related to incremental international orders from a European country and lower than the $8.6m product sales in Q222 (mainly comprised of oral TPOXX delivery to the US DoD of $3.6m and to international entities of $5.0m). As a reminder, the timing of government orders and deliveries often fluctuates and gives rise to variations in comparisons over periods. R&D-related revenue decreased to $4.6m in Q223 (vs $8.1m in Q222) due to the timing of clinical trial activity during the quarter.
Gross profit on product sales for the period stood at $0.3m in Q223 versus $7.7m in Q222, mainly reflecting manufacturing cost related to lower oral TPOXX deliveries during the quarter as compared to higher TPOXX deliveries in Q222. R&D expenses decreased to $5.1m in Q223 from $6.8m (Q222) due to lower vendor-related expenses associated with lesser clinical activities for the PEP label expansion study and BARDA contract, which was partially offset by higher regulatory fees related to the EMA regulatory submissions. SG&A expenses decreased 24.7% y-o-y to $4.4m, primarily due to reduced promotional fees related to lower international sales during the quarter. The company recorded an operating loss of $4.6m (Q223) compared to an operating profit of $3.0m in Q222. Net loss stood at $2.9m in Q223 versus a net profit of $2.0m in Q222.
Management has provided H223 revenue guidance of between $143m and $158m, including $113m from oral stockpile TPOXX deliveries under the BARDA 19C contract and roughly $30–45m through a combination of domestic and international deliveries, including IV TPOXX delivery to the US SNS and oral TPOXX delivery to US DoD.
Based on Q223 performance and increased visibility on upcoming contractual obligations, we have adjusted the mix but our overall FY23 and FY24 revenue forecasts remain unchanged at $175.2m and $181.0m, respectively. We have adjusted the revenue mix slightly to reflect stronger international revenues and slightly later recognition of IV TPOXX revenues. Within our product-related revenue estimate of $154.7m in FY23, we continue to estimate oral TPOXX deliveries of $112.5m for BARDA and $10.7m for the US DoD ($5.6m pending deliveries for H223) in the year. However, we expect FY23 IV TPOXX sales of $16m (vs $26m previously), with the remaining $10m now expected to be delivered in FY24 (of the total $26m in IV sales anticipated in FY23 previously). We expect this to be offset by higher than previously anticipated international oral TPOXX orders of $16m in FY23 ($5m previously). Discussions with international governments are ongoing and we anticipate there could be further upside.
For FY24, our overall product-related revenue estimates remained unchanged at $160.3m. However, the IV TPOXX delivery mix is anticipated to shift and we now expect it to consist of IV TPOXX deliveries of $10m from the August 2022 order (pushed out to FY24 with recognition from FY23) and $16m from the latest July 2023 order. The July 2023 IV TPOXX order was for $25m in totat and we expect the remaining $9m to be delivered in FY25.
We note that IV TPOXX is a lower-margin business with a gross margin of c 35% unlike oral TPOXX with c 85% margin, hence, the increased oral TPOXX order estimates from international markets and later timing of IV TPOXX deliveries to FY24 led to a reduction in our COGS estimates for FY23 ($28.4m vs $34.4m previously). While our R&D estimates remain unchanged for both FY23 and FY24 at $22.8m and $23.0m, respectively, our SG&A estimates in FY23 increase to $24.1m ($21.4m previously) to incorporate additional promotional fees from international sales. FY24 SG&A estimates remain unchanged. Incorporating the above-mentioned changes, our operating profit estimates for FY23 and FY24 now stand at $100.0m ($96.7m previously) and $101.8m (unchanged), respectively. After adjusting our interest rate expectations on net cash, our revised net income estimates are $77.8m and $79.6m, up from previous estimates of $73.5m and $77.4m, respectively.
Anticipate PEP update in Q323
Under its PEP label expansion program, SIGA has two ongoing clinical trials for oral TPOXX in smallpox treatment. Of the two clinical trials, one is an expanded safety study, with nine clinical sites in the United States. During the quarter, the company received clinical results from the study, which do not indicate any drug-related serious adverse events, hence, it successfully clears this stage. The second study is the TPOXX plus JYNNEOS immunogenicity trial, which is a supplemental study to compare the enrolled patients’ immune response between the two groups: one with JYNNEOS smallpox vaccine and placebo and second with JYNNEOS vaccine while on TPOXX treatment. In the preliminary analysis of the trial data, the company did not observe any meaningful difference in immunogenicity between the two groups, which is in line with management’s expectation. However, the number of responders with measurable immune response to JYNNEOS vaccine in both groups were lower than expected. Therefore, the company is conducting further review of the preliminary data and plans to provide a further update during Q323 results.
We note that PEP label expansion presents an important growth catalyst, with potential for an expansion of the US stockpile expansion opportunity (over the next few years). As a reminder, an infected individual would usually receive a 14-day course of TPOXX treatment, whereas an individual at risk of exposure (but not showing symptoms) would receive a PEP treatment (over 28 days), hence, this might double the order potential from 1.7m to 3.4m doses. We do not anticipate this delay to impact our probability or estimates for the PEP opportunity.
Valuation
We value SIGA on a risk-adjusted NPV basis for its various programs and contracts, forecasting to the end of the patent life in each geography. The aforementioned changes to our estimates, rolling forward our model and incorporating the new net cash figure has resulted in a slightly adjustment to our SIGA valuation to $1.24bn or $17.46 per share from $1.25bn or $17.53 per share previously. With a net cash balance of $76.2m and strong second half pipeline, we believe SIGA is adequately funded to support its clinical and market expansion plans.
We would like to highlight that SIGA has paid a special dividend of $0.45/share in H123 (totalling $32.0m), which translates into a payout ratio of c 42% of our projected FY23 net income of $76.2m. Additionally, SIGA continued share buybacks worth $11.0m in H123, indicating evidence of returning capital to shareholders.
Exhibit 1: SIGA’s valuation
Product/program |
Main indication |
Status |
Probability of Success |
Approval/Launch/ |
Peak sales ($m) |
rNPV ($m) |
TPOXX (US base - Oral) |
Treatment of smallpox |
On market |
100% |
2018 |
123 |
363 |
TPOXX (Canada) |
Treatment of smallpox |
On market |
100% |
2020 |
19 |
49 |
TPOXX US IV and pediatric formulations |
Treatment of smallpox |
IV (NDA approved May 2022), pediatric (being formulated) |
60–100% |
2022-2025 |
30 |
27 |
TPOXX US PEP |
Post-exposure prophylaxis following exposure to smallpox |
Development |
50% |
2025 |
128 |
234 |
TPOXX EU, Japan, Korea, Australia |
Treatment of smallpox |
EMA approved |
55% |
2022 |
346 |
224 |
Commercialization of TPOXX, PEP. US, Canada, Europe, Asia |
Treatment of monkeypox |
2024 |
173 |
269 |
||
Total |
|
|
|
|
|
1,165 |
Net Cash (Q223) ($m) |
76.21 |
|||||
Total firm value ($m) |
1,241 |
|||||
Total basic shares (m) outstanding |
71.1 |
|||||
Value per basic share ($) |
$17.46 |
|||||
Source: Edison Investment Research
Exhibit 2: Financial summary
$000s |
2021 |
2022 |
2023e |
2024e |
|
Year end 31 December |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
|
PROFIT & LOSS |
|
|
|||
Revenue |
|
133,670 |
110,776 |
175,159 |
180,974 |
Of which Product revenue |
126,803 |
86,662 |
154,684 |
160,294 |
|
Of which R&D revenue |
6,868 |
24,114 |
20,476 |
20,681 |
|
Cost of Sales |
(16,602) |
(10,433) |
(28,404) |
(33,059) |
|
Gross Profit on product sales |
110,201 |
76,229 |
126,279 |
127,234 |
|
Research & Development |
(9,942) |
(22,526) |
(22,751) |
(22,978) |
|
General & Administrative |
(18,034) |
(35,117) |
(24,066) |
(23,123) |
|
EBITDA |
|
89,615 |
43,218 |
100,463 |
102,338 |
Operating Profit (before amort. and excepts.) |
|
89,093 |
42,700 |
99,938 |
101,814 |
Net Interest |
101 |
1,032 |
2,470 |
2,882 |
|
Exceptionals |
118 |
401 |
- |
- |
|
Profit Before Tax (norm) |
|
89,194 |
43,732 |
102,408 |
104,695 |
Profit Before Tax (reported) |
|
89,312 |
44,133 |
102,408 |
104,695 |
Tax |
(19,861) |
(10,228) |
(24,578) |
(25,127) |
|
Deferred tax |
- |
- |
- |
- |
|
Profit After Tax (norm) |
69,333 |
33,504 |
77,830 |
79,568 |
|
Profit After Tax (reported) |
69,451 |
33,905 |
77,830 |
79,568 |
|
Average Number of Shares Outstanding (m) |
75 |
73 |
71 |
68 |
|
EPS - normalized ($), basic |
|
0.92 |
0.46 |
1.09 |
1.17 |
EPS - normalised (c), fully diluted |
|
90.75 |
45.56 |
110.32 |
117.80 |
EPS - reported ($) |
|
0.92 |
0.46 |
1.09 |
1.17 |
|
|
||||
Gross Margin (%) |
87 |
88 |
82 |
79 |
|
EBITDA Margin (%) |
67 |
39 |
57 |
57 |
|
Operating Margin (before GW and except.) (%) |
67 |
39 |
57 |
56 |
|
|
|
||||
BALANCE SHEET |
|
|
|||
Fixed Assets |
|
5,973 |
9,250 |
10,659 |
10,134 |
Intangible Assets |
898 |
898 |
898 |
898 |
|
Tangible Assets |
2,366 |
1,848 |
1,324 |
799 |
|
Other |
2,709 |
6,503 |
8,437 |
8,437 |
|
Current Assets |
|
208,753 |
185,786 |
212,541 |
275,627 |
Stocks |
19,510 |
39,273 |
43,200 |
45,360 |
|
Debtors |
83,650 |
45,407 |
49,948 |
54,942 |
|
Cash |
103,139 |
98,791 |
115,260 |
171,041 |
|
Other |
2,453 |
2,316 |
4,133 |
4,283 |
|
Current Liabilities |
|
(30,488) |
(21,518) |
(20,888) |
(20,846) |
Creditors |
(2,028) |
(3,355) |
(2,725) |
(2,683) |
|
Short term borrowings |
- |
- |
- |
- |
|
Other |
(28,460) |
(18,162) |
(18,162) |
(18,162) |
|
Long Term Liabilities |
|
(9,924) |
(3,358) |
(3,358) |
(3,358) |
Long term borrowings |
- |
- |
- |
- |
|
Other long term liabilities |
(9,924) |
(3,358) |
(3,358) |
(3,358) |
|
Net Assets |
|
174,314 |
170,160 |
198,954 |
261,558 |
Minority Interests |
- |
- |
- |
- |
|
Shareholder equity |
|
174,314 |
170,160 |
198,954 |
261,558 |
|
|
||||
CASH FLOW |
|
|
|||
Operating Cash Flow |
|
11,495 |
41,611 |
67,140 |
74,381 |
Net Interest |
|||||
Tax |
|||||
Capex |
(51) |
- |
- |
- |
|
Acquisitions/disposals |
- |
- |
- |
- |
|
Financing |
- |
- |
- |
- |
|
Dividends |
- |
(32,940) |
(32,071) |
- |
|
Other (including share buybacks) |
(26,195) |
(13,019) |
(18,600) |
(18,600) |
|
Net Cash Flow |
(14,751) |
(4,348) |
16,469 |
55,781 |
|
Opening net debt/(cash) |
|
(117,890) |
(103,139) |
(98,791) |
(115,260) |
HP finance leases initiated |
|||||
Exchange rate movements |
- |
- |
- |
- |
|
Other |
- |
- |
- |
- |
|
Closing net debt/(cash) |
|
(103,139) |
(98,791) |
(115,260) |
(171,041) |
Source: Company reports, Edison Investment Research
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Research: TMT
Checkit made good progress in H124, growing annual recurring revenue (ARR) by 24% y-o-y and revenue by 19% y-o-y. Net revenue retention of 113% highlights the company’s ability to cross-sell and upsell, and the recent contract renewal with John Lewis and master service agreement with Compass provide further expansion opportunities. We maintain our forecasts.