SIGA Technologies - EU gateway to tap into new international orders

SIGA Technologies has announced the formation by the European Commission of a joint procurement mechanism to source oral TPOXX initially involves 13 countries and is open to all countries in the EU and European Free Trade Association (EFTA). This is in anticipation of an initial $18m order of TPOXX in the next 60 days from EU/EFTA member countries; As such, management expects total (global) orders of $164m in FY23. This development allows participating EU/EFTA member countries to acquire courses of oral TPOXX in the near term and efficiently order additional quantities, provided the minimum quantity thresholds are met. While we expect the company’s near-term (H223 and FY24) revenues to be dominated by the replenishment of US government stockpiles, the announced European joint procurement mechanism establishes an important gateway to access an important market and creates longer-term upside revenue potential. Management maintains its FY23 pre-tax operating income guidance of $90–100m.