SIGA Technologies - Onwards and upwards with strong FY23

SIGA Technologies has delivered its best top-line performance in the last five years, supported by a late surge in TPOXX deliveries across both domestic and international markets. FY23 product revenues grew 50.8% to $130.7m, driven by Q423 BARDA deliveries and international orders, resulting in overall revenues increasing to $139.9m (+26.3% y-o-y). Barring packaging-related bottlenecks, which delayed some deliveries to Q124, there could have been incremental upside to meet our $172.6m revenue estimate. The strong cash flow generation and healthy balance sheet (year-end net cash balance of $150.1m) was reflected in the company’s declaration of a special cash dividend of $0.6/share ($42.7m total; >60% payout ratio). Given sales visibility on further BARDA stockpile replenishments and increasing international market traction, we expect FY24 to be another strong year. We revise our FY24 estimates and now expect PEP and pediatric launches in 2026 (2025 previously), resulting in our valuation adjusting to $16.51/share (versus $17.24/share previously).