But they are firing the R&D staff BEFORE they have a partnership. What sense does that make? What happens if a partner does not materialize? Further SIGA's R&D people are probably best in the world on dengue and SIGA's other viruses. A partner probably wants these people or at least the option of taking them on board. Strange.
One of the strangest CCs on record. Arestvyr is already developed (outside of extending the shelf life and coming up with a pediatric version). The other programs are early stage. The company is going to exit early stage development and partner instead. This is not really an operating entity anymore. Arestvyr customers will materialize or not. SIGA does not need a big sales force. Arestvyr production is out sourced. What is the day to day business?
Last CC -
"Additionally, there are two more launches scheduled before ours, thus adding to our confidence. We are currently scheduled for a Q4 launch. However, it is probable that it could occur early next year."
Neither company's valuation reflects the value of Arestvyr. The litigation is a #$%$ shoot and an overhang for both stocks, and will stretch into 2014 since whatever Parson decides is headed back to the Supreme Court. The companies are in the same industry addressing the same customers. Redundant costs could get cut. PharmAthene has a promising drug but needs money. SIGA will start receiving significant cash this quarter and could help fund development. The bad blood is way overstated. Drapkin was the source of the contention and he is long gone. Parsons essentially called him a liar which fits with the testimony and e-mail traffic. I am long SIGA and I wish common sense would take hold with both companies. No one can handicap this case. The Supreme Court punted sending the damages back to Parson with no guidance on whether his award was justified under either promissory estoppel or failure to negotiate in good faith. Time to move on.
With respect to expectational damages and the net present value of ST-246 profits, Parsons already ruled -0- because such damages are speculative. The arguments will be over other smaller damages. For example, PIP stated that some PIP employees worked on ST-246 cooperatively with SIGA. Parsons noted that PIP management was surely distracted dealing with SIGA during a period of time when they could have devoted time to other PIP business. These are the $ left to argue over, not much.
I do not see that much is up for discussion. Parsons has a well reasoned ruling (below in part) that explains why he cannot award PharmAthene the present value of lost profits. So, damages are down to legal fees and compensation for time and effort expended by PharmAthene duing the time leading up to the breach to negotiate in good faith.
"………..Applying these precedents to the facts before to the facts before me, I conclude that I cannot award PharmAthene the present value of its estimated lost profits on a license agreement that (1) would have contained the risk of receiving no profits and (2) was never consummated, because such an award would be speculative."
The Supreme Court has ruled that expectational damages are appropriate. The purpose of expectational damages is to put the non-breaching party in the position the party would have occupied had the contract been fulfilled. If Parsons puts PharmAthene into the position PharmAthene would have occupied ex the breach, PharmAthene gets ST-246 (or the economic equivalent). SIGA receives license revenues starting at 8% of revenues escalating up to 12% depending on total revenue. That would put SIGA in a worse position than before the Supreme Court decision.
Stephen P. Lamb, Esquire
Andre Bouchard, Esquire
A.Richard Winchester, Esquire
Christopher A. Selzer, Esquire
Re: Siga Technologies, Inc. v. Pharmathene, Inc., No. 314, 2012
The Court has directed me to advise the parties, that due to the Chief Justice’s illness on
January 10, 2013 he was unable to be present at the oral argument in the above captioned
matter. The Chief Justice reviewed the audio of the oral argument in this matter on March 5,
2013. Therefore, the above matter will now be considered submitted for decision as of
Tuesday, March 5, 2013.
Very truly yours,
/s/ Cathy L. Howard
EFiled: Apr 10 2013 02:29PM EDT
Filing ID 51717264
Setting aside the primary endpoint of a “complete cure” and the different assays for the moment, Efinaconazole’s clinical cure is higher but Tavaborole’s mycological cure rate is higher. I guess the question is how important is the mycological cure rate versus the clinical cure rate? With a true mycological cure, wouldn’t the patient ultimately have a completely clear nail? The subjects applied the solution daily for 48 weeks. The endpoint measurements were taken at the end of week 52. Is Tavaborole just longer acting and might have a better “complete cure” rate in the fullness of time?
"Slightly below." How so? In two trials, Efinaconazole had cure rates of 15.2% and 17.8%. In Tavaborole’s first trial, the cure rate was 6.5%. That is not close. Maybe the next trial is better. If not, even if the company goes forward, doctors will not prescribe it. Efinaconazole has a time to market advantage as well.
I believe investors are worried that Tavaborole is potentially (not for sure but possibly) inferior to Valeant’s Efinaconazole. If so, the revenue potential for Tavaborole is sharply diminished. The company only has 2-3 quarters of cash left. Thus, more dilutive share offerings are possibly coming.
The FDA has requested stability data on the product and more information on the stability-indicating assays. Can anyone offer any insight into the seriousness of this setback? Is this likely just a matter of the FDA wanting more documentation (so just a moderate delay), or is this likely a problem that the FDA has uncovered and is now investigating further (longer delay or worse)?
"Their only concern is if they let the lower court's decision stand, are they setting some type of undesirable precedent that is going to open up a can of worms and make their jobs more difficult in the future."
Here goes (remember the "roll the dice" comment in the oral arguments).
Whatever difficulties may inhere in the area of contract law surrounding so-called “preliminary agreements,” determining the proper measure of damages for the breach of a binding provision contained in an otherwise expressly non-binding preliminary agreement should not be one of them. Bedrock principles of contract law, such as the requirement that damages be capable of proof to a reasonable degree of certainty and reasonably foreseeable as a consequence of the breach at the time the contract was made, should limit the non-breaching party’s recovery to reliance damages.
This fundamental problem with going beyond reliance damages is that it makes it difficult to obtain summary judgment or other pre-trial resolution in such cases because the “but for” causation standard it adopts typically involves factual disputes to be resolved by a jury. This, in turn, creates several perverse incentives for the disappointed party to such a preliminary agreement. Specifically, the disappointed party has an incentive to bring a case since it knows that defense costs may force a settlement in excess of its out-of-pocket or reliance damages, even if the merits of its case are lacking. More troubling, though, is the incentive it creates for the disappointed party to “roll the dice” with a jury and actually obtain an award of its expectation damages. Obviously, these perverse incentives are not desirable consequences for any legal standard.
See the problem with letting the judgement stand?
Interesting. However --
"Because the trial court found that the contract would not have closed—even absent Freedom's breach—Titan was not entitled to receive the 1% commitment fee that presupposed the opposite conclusion, namely, that the deal would have closed. The court's finding that the deal would not have closed, and its 1% commitment fee award to Titan, were fatally inconsistent. Given Titan's inability to establish that the Titan-Freedom Contract would have closed but for Freedom's breach, Titan is not entitled to damages measured on a "benefit-of-the-bargain" basis. Rather, Titan was entitled only to its "reliance" damages, measured by its actually-incurred costs and expenses."
In SIGA’s case, the trial judge did not find that the “deal would not have closed.” By awarding expectation damages, Parsons effectively stated this deal would have closed if SIGA had negotiated in good faith.
I still hope the Supreme Court will find that only reliance damages are appropriate given that SIGA did not breach but simply failed to negotiate in good faith and, if not, that expectation damages are too speculative here.
The judge is saying that no one know one can say how the negotiations would have concluded if SIGA and PIP had bargained to the end in good faith. After the fact, PIP is arguing that only one result was possible (Heads I win; Tails you lose). The judge believes that assumption is speculative and, if speculative, no relief.