How about trolling somewhere else.
Golong: I like your thinking on the merger. Its a shame the players at each company can't get over their egos and make something good come from all this.
Golong: Looking back on the deal, and considering what we now know, it does look like a bad deal for Siga. But the exclusive license was not just in return for an 8% royalty; the provisions of the LATS provided that PIP was to pay a "license Fee" of $6 million total, which consisted of $2 million cash upfront, $2.5 million as a deferred license fee to be paid twelve months after execution of a license agreement if certain events occurred, and $1.5 million after Siga obtained financing in excess of $15 million. In addition, the LATS contained a provision under which PIP would pay an additional $10 million based on the achievement of specific milestones relating to certain sales targets and regulatory approvals.
But, looking at it at the time the deal was entered, it appeared to be a life saver for Siga. Siga acquired what is now known as ST-246 in 2004. According to the Delaware Supremes' opinion, by late 2005, Siga experienced difficulty developing the drug and was running out of money. Nasdaq threatened to delist Siga's shares, and its largest shareholder, MacAndrews and Forbes, was unwilling to invest additional money. Siga estimated it needed approximately $16 million to complete the development process. Siga also lacked much of the institutional experience necessary to take a drug to market successfully. Siga lacked employees with experience in regulatory or government affairs, quality assurance, quality control, clinical trials, manufacturing and business development. In short, Siga's bargaining position was not too good at the time they contacted PIP for help.
Golong: under Siga's contract with Barda, it is allowed to subcontract the manufacture of ST-246 inasmuch as Siga does not have in-house manufacturing capability. Thus, I don't see its contract with Barda precluding the exclusive license to sell to PIP, which is nothing more than a subcontract.
Golong: The Delaware Supremes found the LATS and other documents constitute an enforceable contract. The LATS provided that PIP would pay Siga an annual royalty of 8% on yearly net sales of patented products of less than $250 million, 10% on sales greater than $250 million, and 12% on sales greater than $1 billion. Also, Siga would be entitled to receive 50% of any amounts by which net margin exceeds 20% on sales to the US Federal Government. The Supremes kicked the case back to Parsons with instructions to award PIP expectancy damages. So, what was it PIP expected under the contract? There is no question that PIP expected a merger, but if the merger did not come to pass, they were to receive an exclusive license to sell in accordance with the provisions of the LATS. A merger has not, and will not, take place. Thus, the only thing left is the license to sell. If Parsons awards an exclusive license to sell under the terms specified in the LATS, his judgment would be "appeal proof" inasmuch as that is exactly what he was ordered to do by the Supremes. What say you?
Golong: the holder of the exclusive license to sell pays a royalty to Siga; not the other way around. The LATS specifies what those payments would be.
Donald Drapkin was Chairman of Siga's Bd. of Directors and Vice-Chairman of McAndrews and Forbes' Bd. of Directors. He testified at trial that he had no knowledge of a license agreement and wasn't involved in the negotiations. His trial testimony was contradicted by the testimony of Siga's Chief Financial Officer Thomas Konatich who testified that Drapkin was in charge of the license agreement negotiations and that he (Konatich) was Drapkin's instrument.
This is just one of several instances where Parsons found Drapkin's trial testimony false, or, at the least, misleading. I can see how false and misleading testimony by a man of Drapkin's stature would particularly irk a Chancery Court Judge.
Drod: I suspect he just doesn't have anything positive to say, and quite frankly, neither do I. I don't know how I let myself get tangled up with these two companies. It's been one heck of a learning experience.