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SIGA Technologies Inc. Message Board

  • g_dargusch g_dargusch Mar 27, 2013 3:15 PM Flag

    new S/A legal Matters

    PharmAthene (PIP) is engaged in an interesting piece of litigation versus Siga Technologies (SIGA). This lawsuit centers over the terms of a merger which was discussed, but never culminated. During the course of their merger talks, SIGA was strapped for cash, and PharmAthene offered to give them a $3 million loan, but with the idea that if the merger did not go through, that part of the asset ST-246 (called Arestvyr) would belong to PharmAthene, pursuant to a license agreement agreed to by both parties. Well, the deal did not go through, and SIGA and PIP went their separate ways. This lawsuit was initiated after PIP was not given any part of the asset, and PIP sued SIGA in the state of Delaware. Now, here is where it begins to get interesting. SIGA is awarded a huge contract by the Department of Defense for their smallpox antiviral, estimated to be worth around $412.5 million. Well, the Delaware court finds in favor of PharmAthene and orders that after SIGA makes its first $40 million dollars in net profits, that the profits must be split with PharmAthene 5050 until ten years after the first commercial sale of the product. PharmAthene was also awarded some of its legal fees. As is typical, SIGA decided to appeal (I am not blaming them, in their shoes it was probably the best move they had), after the appeals court largely upheld the aforementioned judgment, SIGA appealed to the Delaware Supreme Court. PharmAthene filed a cross-appeal for aspects of the ruling that it did not agree with. For those of you non-law lovers out there, when a person/company/entity appeals to the court they are questioning the previous court's decision, and asking for the higher court to overturn the lower court. What a cross-appeal means is that since PharmAthene was not the one who asked for the appeal, they decided to appeal parts of the court's verdict which they did not like.

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    • 1.) the contract was never contested as being enforceable. Both parties & the judge already agreed that it was non-binding.
      2.) the bridge loan was basically an advanced loan given to SIGA by PIP to finance an earlier than scheduled study on ST-246 in vivo. in order to see whether a merger was in PIP's interest. SIGA at that time had no clear indication when they would receive funding from BARDA for this study and could not confirm the drugs effect potential. A further $25mil was to be financed by PIP for a merger of the two companies IF in fact it did go through or IF not then a refund of PIP's loan and no liability by either party if the merger did not go through (on bad results or negotiable terms not met).
      3) here in lies the case. PIP claims the merger agreement was to be considered complete and enforceable and that SIGA wanted to change the merger agreement after +ve results had been realized. The bridge loan merger document was stapled to the non binding LATS contract as a single document in which PIP claims contained the complete LATS and as such carried enforceable legal implications. SIGA claimed the non binding LATS did not contain all the essential terms of an agreement. Neither PIP nor SIGA protected their purported rights to a contract based on the ambiguity of the legal documentation involved. Both parties had access to legal direction to avoid such a legal mishap and yet neither party never corrected the wink, wink, nudge , nudge, handshake full of holes document. It should all have been thrown out as an insult to proper contract law. PIP nor SIGA neither were naive to the proper legal process.

    • Baloney!

      Without Murtha & his influence that was being peddled to SIGA, PIP is POOP & don't forget it,NWJ?


    • PART 2:What PharmAthene is essentially asking the court to do is to overturn aspects of the lower court's judgment that it did not agree with, but to leave the parts it did agree with intact. SIGA essentially wants the entire judgment thrown out. This appeal represents a significant catalyst for both companies, as once the court comes out with its decision that will be the final say, and if it comes out in SIGA's favor, expect PharmAthene to tank. However, if it comes out in PharmAthene's favor I would expect SIGA to take a hit, but not a huge one like PharmAthene due to the fact that the negative judgment has already been baked into SIGA's stock price. The estimated time for the Delaware Supreme Court to issue its ruling is expected in the next few months.

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