SIGA Technologies - US stockpiles front and center in Q1 and FY23

SIGA’s Q123 results were largely driven by US TPOXX deliveries under existing contracts. Q123 product revenues of $5.7m ($7.3m in Q122) were primarily attributed to $5.1m in TPOXX deliveries to the US Department of Defense (DoD). An additional $2.6m in R&D-related income took total revenue to $8.3m (down 21% y-o-y). While TPOXX deliveries (oral and intravenous, IV) to the US strategic national stockpile and international expansion remain key growth areas, the potential post-exposure prophylactic (PEP) label expansion following the projected data readout within the next two months (FDA submission targeted for early 2024) is anticipated to be the next key revenue growth catalyst. With a longer duration of treatment required (28 days versus 14 for smallpox), the PEP opportunity could materially expand SIGA’s addressable market, in our view. SIGA remains well capitalized (end-Q123 cash of $115.7m), resulting in the company announcing a special cash dividend of $0.45/share, payable in June 2023. We now obtain a valuation of $17.53/share (ex-dividend), from $17.70/share previously.