U.S. Markets closed

Biodefense drugmaker Siga files for bankruptcy

(Adds details)

Sept 16 (Reuters) - Siga Technologies Inc, a supplier of antiviral smallpox drug to the U.S. strategic stockpile, filed for voluntary bankruptcy protection as it seeks time to appeal a court order favoring PharmAthene Inc in a licensing dispute.

Shares of the company, which is also developing an Ebola drug, fell 51 percent in premarket trading.

The Delaware Court of Chancery had earlier ruled that PharmAthene is entitled to a lumpsum payment in damages from Siga for its failure to execute a license agreement related to its main antiviral smallpox drug, Tecovirimat, Siga said.

The court did not specify the amount but Siga said in bankruptcy court documents that it expected it to be as much as $232 million.

Siga said it would appeal the ruling but must post a bond for the full amount of the damages plus post-judgment interest under Delaware law.

The biodefense drug developer listed total assets of $209.5 million and liabilities of $197.9 million in its Chapter 11 petition with the Southern District of New York.

The only way to stop PharmAthene from enforcing the Chancery court's judgment and to continue operating as a going concern was to file for bankruptcy protection, Siga said on Tuesday.

The company said the filing would also preserve its ability to supply the antiviral smallpox drug to the U.S. Strategic National Stockpile under Project BioShield Act of 2004.

Siga develops drugs against diseases such as smallpox and dengue. The company has partnerships with U.S. agencies including the Department of Health and Human Services, the Centers for Disease Control and Prevention and the Department of Defense.

Up to Monday's close of $1.44, Siga's shares had more than halved in the past year. PharmAthene closed at $2.20 on Monday on the American Stock Exchange.

The case is In re: Siga Technologies Inc, U.S. Bankruptcy Court, Southern District of New York, No: 14-12623.

(Reporting by Tanya Agrawal; Editing by Sriraj Kalluvila)