Obviously, SIGA chose to defer recognition of the revenue until next fiscal quarter, which is the 1st quarter of the new fiscal year.
SIGA now has reported $140.225 million ($30.5 million of which is invoiced to BARDA but as yet not received) in deferred revenue (and currently counted as cash in bank and offset by a deferred revenue account). While this new quarter, most likely delivered in May 2014, will result in another 250,000 courses of Arestvyr delivered to the U.S. Strategic National Stockpile. This additional revenue of $29.8 million revenue at $119.24 per avg unit revenue (cost per unit includes the free doses averaged) will be accounted for in Q3.
Even if the margin costs per unit are amortized to be 35 percent of the cost per unit, that would mean that as of today, that mean SIGA has thus far earned $91 million in net income yet to be reported in future quarters.
Assuming SIGA remains at 53 million shares outstanding, that means earnings of $1.72 per share will be reported next quarter, and about $19.37 million per quarter (or $0.365 / share per quarter) thereafter, assuming no new contracts are signed.
Carrying this calculation forward for the following two quarters, that means in the coming fiscal year (of which we are already 1/5 through), SIGA will make $1.72 Q1 + $0.365 Q2 + $0.365 Q3 + $0.365 Q4 = $2.82 / share FY 2015 Ending 3/2015.
PIP's most likely outcome will be to get 50 percent of all revenue streams in the future, but possibly not current or past earnings steams. Even if PIP were to get 50 percent of the deferred revenue and earnings, SIGA would retain rights to license Arestvyr (while PIP may also retain equal rights to license), SIGA will make at a minimum $1.41 / share in FY2015. The best case scenario will be for SIGA to get to keep most of its pre-earned revenue, and therefore will make $2.82 / share in FY 2015.
So, right now, SIGA sits at a future PE of 2.41 in the worst case scenario, and a PE of 1.2 in the best case.
Sentiment: Strong Buy
1) SIGA is clearly not going to declare the income from the BARDA contract until the whole contract is fulfilled. They've said as much.
2) This is pure fiction of the kind that the Delaware Supreme Court reprimanded Parsons for: "PIP's most likely outcome will be to get 50 percent of all revenue streams in the future, but possibly not current or past earnings streams." It comes out of your hat, which is a hat much like the one Parsons tried to wear.
3) The margin on ST-246 is MUCH less -- and thus better -- than 35 percent.
I don't spend much time on this board any more because it is dominated by name-calling jerks. But I wish the best to everyone else. And I'm still very bullish about SIGA's future, especially its Dengue future.
Yah "Kage," and you're still poor as a church mouse for investing in this company...Still pompous as ever....and still ignorant as ever about the facts (will not recognize revenues until the whole contract is "fulfilled"....That word sir implies they have met, or will meet, every condition of the contract...They stated in the CC yesterday, that you didn't apparently bother to listen to, that FDA approval will likely not be obtained during the term of the pending contract That is a condition of the BARDA contract and the main reason why they are deferring revenues in the first place!. As such, they might recognize revenues when the current contract "runs it course", but not when all the conditions of the contract have been "fulfilled"....Do you understand the difference?) ,
Who cares what the margins are on ST-246, or what Parsons did, or said, in the past trial. The only issues left are will there be anything left in the coffers of the company when the current BARDA contract ends, and if so, how much, and what will the company do with that? That, and how does the PIP litigation end up?
"Name calling jerks"? LOL You looking in that mirror again "Kage"? LOL!
A well written and well reasoned post. The issue is if Siga can come out of this PIP mess with between 90-150 million in cash, and if we further assume that no further contracts for ST-246 will be optioned by BARDA,
Best bet IMHO would be for Siga to go out and buy an up and coming public or private biotech. Keep
ST-246 in the arsenal if BARDA or a foreign country ever needs it, and move on. Maybe even merge with another company who is cash rich, but technology poor, and the two of them go out and buy a fairly decent sized biotech with a late phase drug, or drugs, and go from there.