NEW YORK (AP) -- Shares of PharmAthene Inc. surged Friday after a court confirmed that the company will get a large share of the profit from a smallpox drug made by Siga Technologies Inc.
PharmAthene said the Delaware Court of Chancery upheld its judgment a judgment it issued against Siga in September. After Siga makes its first $40 million in net profit from sales of the smallpox drug, PharmAthene will get 50 percent of the net profit on sales of the drug over the next 10 years.
Siga's drug is called ST-246, and in 2011, it received a $433 million contract to supply 1.7 million doses of the drug to the U.S. biodefense stockpile. PharmAthene said Siga will deliver those doses in early 2013 and said it expects to get "a significant share of revenue from those sales."
PharmAthene stock jumped 46 cents, or 37.7 percent, to $1.68 in morning trading. Shares of Siga Technologies dropped 5 cents, or 2.2 percent, to $2.26.
PharmAthene, based in Annapolis, Md., develops drugs that are designed to protect against biological and chemical threats. New York-based Siga agreed to buy PharmAthene but ended that proposal in 2006. PharmAthene sued Siga for breaching its contract over the profits from ST-246, which was developed by Viropharma Inc. and sold to Siga.