Welcome to the SIGA Business Update Call. Before we turn the call over to SIGA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements.

SIGA does not undertake any obligation to update publicly any forward-looking statements to reflect events or changed circumstances after this call.

For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission including without limitation the company's annual report on Form 10-K for the year ended December 31, 2021 and the subsequent reports on Form 10-Q and Form 8-K.

Thank you for taking the time to join today's call. Today I'm joined by Dan Luckshire, our CFO; and Dr. Dennis Hruby, our CSO. We are pleased to have this opportunity to provide a business, R&D and financial update to our shareholders. We'll then be happy to take questions.

On the last call we discussed strong financial results for 2021 with $89 million of pre-tax operating income. This financial performance followed $85 million of pre-tax operating income in 2020. We believe the financial results in 2021 and 2020 highlight the attractive financial capability of SIGA's business.

The results also highlight the current importance of orders under the BARDA 19C contract. Also on our last call, we noted that since the US government stockpiles does not have scheduled expirations this year, there is no immediate need for the US government to secure deliveries of TPOXX in 2022 to replenish expiration.

As such as previously noted, our efforts are following two tracks. On one track, we continue to work with BARDA and the ASPR to exercise options further in advance and we continue to work on a longer-term 10-year contract with annual options to smooth out deliveries and better manage budgets and supply chain.

On the other track, we acknowledge that there are no stockpile expirations scheduled for 2022 that would be a catalyst for significant US government orders of oral TPOXX this year. And as such we're pursuing a series of ongoing initiatives that position the company for the next wave of procurement orders we expect in the coming years.

Let me discuss the initiatives. First, I would like to talk about IV TPOXX. As previously noted, we have an NDA filing with the FDA that has a PDUFA date of May 28. Regulatory approval would mark another milestone for TPOXX and we believe that it also will be a key consideration for the US government in terms of future procurement decisions.

Concurrent with IV regulatory process, we have been working toward delivery of IV TPOXX to the US government stockpile. As a reminder, there was an $8 million order for IV TPOXX in the base 19C BARDA contract. I am pleased to note that we made our first deliveries of IV TPOXX in the first quarter.

We delivered approximately $7 million of IV TPOXX under the base contract order. I am also pleased to note that the use of our IV product was highlighted in a MMWR publication by the CDC in which a patient with monkeypox was treated in the US. The second initiative I would like to discuss involves international sales.

On this front we continue to build on our base. With respect to Canada, the Public Health Agency of Canada, PHAC has placed an order for approximately $13 million of oral TPOXX. We expect to fill this order in 2022.

Additionally, both Meridian and SIGA are coordinating in pursuit of a 2022 order with the Canadian military that we would expect to be consistent and approximate size to previous orders from the Canadian military.

Beyond Canada, I am pleased to report that we have a 2022 order from a new country in the Asia Pacific region for approximately $2.8 million of oral TPOXX. This initial order of approximately $2.8 million is anticipated to be a recurring order from this country in the future but solely at their discretion each year.

We plan to ship product this year to the new customer. With respect to international business development, we continue to have discussions in Europe, the Middle East and the Asia Pacific region around additional procurement of TPOXX. The third initiative I would like to discuss involves expanding our procurement footprint with the US government.

With regard to this initiative there are multiple elements. I will talk about two. First, we are pursuing procurement contracts with the US government beyond ASPR and BARDA.

While we expect procurement contracts with ASPR to continue to be the primary source of US sales of TPOXX, we believe broadening the US government procurement base would provide financial as well as strategic benefit. On this front, we have been coordinating with the Department of Defense on a relatively small first procurement contract.

We expect to finalize details soon. In connection with this procurement process, we are pleased DoD has published the justification of other than following open competition summary of their TPOXX procurement, highlighting why TPOXX is the only drug suitable for use in PEP.

The second element to the US government-centered expansion effort involves the PEP study. As noted in prior investor calls, in terms of the ultimate sizing of the stockpile, we believe the clinical results from the PEP program could play an important role.

Substantial progress in the PEP program would be timely and that we believe that the COVID-19 pandemic has highlighted the importance of having access to broadly active antiviral drugs, especially those that can be used prophylactically.

From our perspective, the current stockpile of TPOXX and a smallpox outbreak would not be nearly sufficient to treat all those who would need care. I will now turn the call over to Dr. Dennis Hruby, who will provide a regulatory and R&D update including details on the PEP clinical program.

Dennis?.

Thank you. As Phil mentioned, we're working with our DoD colleagues on executing, the two clinical trials needed to support regulatory approval of TPOXX, for post-exposure prophylaxis. For the expanded safety study, we've set up 10 clinical sites around the U.S. which have initiated screening and will begin dosing shortly.

For the TPOXX plus JYNNEOS immunogenicity trial we have two sites recruiting and screening volunteers. Although the first volunteers have been enrolled in the study, enrollment has been on the slow side. This is due in part to the post-COVID vaccine hesitancy in the U.S. among other factors.

We're working with DoD to broaden the recruitment effort and to expand the eligibility criteria so as to accelerate enrollment. For both studies the goal is to have all the volunteers complete the active phase by the third quarter of 2022.

If the study showed the expected results, we would commence assembly activities for a package requesting regulatory approval of TPOXX for PEP. As Phil also discussed, our TPOXX IV NDA is under active review by the FDA. We've responded to all information requests and believe the submission is well positioned, for approval in May.

This will be a valuable addition to our orthopox virus countermeasures to be used in patients with advanced disease and in those unable to swallow an oral medication. Likewise, we continue to advance our powder for reconstitution formulation, targeted for use in pediatric patients less than 13 kilograms in weight.

Clinical studies with our most promising pediatric formulation will commence this fall. As mentioned in previous investor calls, we think about TPOXX through the lens of being a treatment for the orthopox family of viruses, not just smallpox. As such, we continue to work towards treating monkeypox patients with TPOXX.

As you know, there are increasing numbers of cases in Africa and infections have been exported to a number of other countries including the U.K. and the U.S. where in both cases TPOXX was used to effectively treat these patients.

We're currently collaborating with Oxford University on a clinical field study in the Central African Republic and have successfully treated a number of patients. It's important to note, that these cases mostly occur in extremely difficult areas to access patients and health care facilities are rare.

It is for this reason we received EMA approval for monkeypox, based on our extensive animal testing and safety trials in humans. We're also working with a different group of quadrators, to set up a second much larger clinical study in a different African country. As we continue to make progress, we will provide updates in the future.

Finally, with the three TPOXX approvals we received in the U.S., Canada and Europe there are various post-marketing commitments associated with these approvals. The SIGA R&D team is diligently working to provide the requested information and in some cases initiate studies requested by the various jurisdictions.

With that update, I'll turn the call over to Dan..

Thanks Dennis. For the three months ended March 31st 2022, SIGA's revenue was approximately $11 million, of which approximately $7 million relates to the first sales of IV TPOXX to the U.S. government under the 19C BARDA contract. The remainder of revenue is related to research and development activity.

Pre-tax operating loss, which excludes interest income taxes and adjustments to the fair value of the warrant, was approximately $1.4 million for the three months ended March 31st 2022. Net loss for the three months ended March 31st 2022 was approximately $0.4 million and fully diluted loss per share was $0.01.

At March 31st 2022, the cash balance of the company was approximately $153 million. During the first quarter, SIGA repurchased approximately one million shares of its common stock, for approximately $6.6 million.

Since the start of the share repurchase program in March of 2020, we have cumulatively repurchased approximately $61 million of SIGA shares as of March 31st 2022.

Please note, that in addition to allocating cash into capital management initiatives, we are also allocating cash into proactively building work-in-process inventory, for active pharmaceutical ingredients, as a risk management tool given the general environment of heightened supply chain risks. This concludes the financial update.

At this point, I'll turn the call back to Phil..

Thanks Dan. As a complement to the operational and tactical initiatives discussed earlier in this call, we have announced a special cash dividend of $0.45 per share, that will be payable on June 2nd 2022, based on a record date of May 17th 2022. As a background, we continually evaluate the best use of cash.

And we are focused on a disciplined process to deploy cash, where it can generate the best long-term return for our shareholders. As part of this process we consider a wide range of possibilities and a wide range of considerations. Time and place is among the consideration.

With strong 2020 and 2021 financial performance, a solid balance sheet and $300 million of procurement options remaining on our BARDA contract that we currently expect to be exercised in the 2022 to 2024 time period, we believe it is an appropriate time to declare a special cash dividend.

We also believe, that the sizing of a special dividend will allow the company to continue to pursue a full range of growth-related initiatives. The implementation of this action reflects confidence that comes from the financial performance of 2020 and 2021 and also reflects optimism about the business going forward.

On a related note, we plan to continue to repurchase shares. The timing and amount of future repurchases will reflect a range of considerations including stock price, potential timing of procurement orders, and cash balance.

Before we turn to Q&A, I'd like to reiterate a few points that have been made in the past in support of our view that SIGA offers an attractive combination of existing revenue streams that are currently generating strong financial results, complemented by organic growth initiatives that hold significant potential when viewed collectively.

First, I'd like to highlight that the ongoing international sales growth initiative is progressing in a value-creating manner. We now have three countries, including the US, that have recognized the need to stockpile a smallpox antiviral and we continue to work hard to expand that base.

While as I've noted many times before, progress on this front is expected to be lumpy and uneven given that the international market for biodefense products is not well-developed, we believe that a meaningful international market is gradually taking shape.

Second, I want to reiterate that the PEP-based development program represents a growth initiative and that it would provide scientific and regulatory support for any stockpile expansion.

As stated on earlier calls, we believe the current size of the stockpile of TPOXX and a smallpox outbreak would not be sufficient to treat all those who would need care. If we've learned anything from COVID, that certainly appears to be the case.

Third, we will be focused on transitioning our US contract to a long-term SNS contract that focuses on appropriate size requirements for the TPOXX stockpile as well as smoothing out the annual deliveries, which will be critical to supply chain planning and financial predictability.

Fourth, our portfolio growth initiatives is diversified including anticipated success at adding the US Department of Defense to our customer base. And fifth, we continue to pursue and support oncology collaborations and other strategies that could open new markets for TPOXX.

As mentioned earlier, we believe these growth initiatives, when viewed collectively, have potential for significant value creation and we believe the declaration of a special dividend reinforces this message. This concludes our prepared remarks and we will now begin the Q&A session. .

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Ken Mestemacher from Edison Group. Please go ahead..

Thank you. Again congratulations team on the solid results this quarter. And I had several questions. The first one just for clarification you had mentioned us the PEP trials talking about the volunteers and I want to make sure I heard that correctly.

Is it that they're going to be registered by the end of 3Q 2022, is that correct?.

Yes Dennis, why don't you provide a little more comment on the PEP trial timeline if that's helpful?.

Yes. Our current timeline calls for both studies to be fully enrolled and the volunteers completing the active phase of their treatments by the third quarter after which the data will have to be QA'd and QC'd and study reports, but we would like to be done with the patient part of the study by the end of the third quarter. .

Great. Thank you.

And so if the two PEP trials go well, do you believe that you could file with the FDA for PEP in say 2023?.

Dennis?.

That will depend a little bit on how long it takes to get the data written up. As a scientist, I've been continually surprised how long it takes to QA QC data and then get the final reports. But certainly, it would be our goal to be starting to assemble the FDA package in 2023..

Great. Switching a little bit, you mentioned the DoD summary of why they are buying the TPOXX and the single source supplier.

What might be some key points you think were made in that?.

Yes, it's a great point Ken. And one I do want to say explicitly that TPOXX is approved for smallpox treatment only in the US. So, PEP is a label that we're looking to expand as we've been talking about with the study.

But I think the two critical points that I saw as they have gone through this procurement and published their thinking on why they're doing a TPOXX procurement as a sole source is they've already drafted an expanded access protocol which they indicated could be used for PEP purposes until the FDA approves TPOXX for PEP.

So, as we've said the government can certainly purchase product before we have FDA approval for use in PEP and that's exactly what we saw in the DoD document.

And then the second point that I think was important was they highlighted our adverse event profile, the tolerability, the ability to dose, and said really that TPOXX is the only product they consider to be appropriate for PEP. And so I think, it was nice to see them publish both of those points in those documents.

And as we said in our comments, we continue to work with them on finalizing that procurement..

Great. Thank you. And then, the -- again, congrats on the APAC sales, that's exciting to see that expand. So you mentioned, the new country would potentially make its purchases annually.

Do you see that as a model of maybe how many other countries will purchase it?.

Yeah. We're certainly seeing a whole variety of models, most of which do depend on some type of decision on an annual basis. So, for those of you following the Canadian orders, there was a base order and then there were options in the contract.

What we see in other countries are they simply do an order every year or intend to do an order every year at their discretion, but it may be just a single contract issued and then a new one in the new year.

But there's no question that since most appropriations from governments are annual, we see people thinking about a stockpile not as a large initial order, but rather something that they want to build over a period of time, recognize the shelf life so that it becomes simply an annual purchase, which is exactly the way we're hopefully moving to the US government as we have these conversations and think about a 10-year contract where you're able to have predictability for your supply chain, for your annual budget on the government side and for us in being able to plan manufacturing and finances.

So we think that's where we're headed. And certainly we're seeing different models, but the same intent in the international markets..

Great, thank you. That’s all the questions I have. Again, congratulations on the excellent results..

The next question comes from Kyle Chung, Private Investor. Please go ahead..

Hi. Thank you for taking my question. Roughly about a month ago, I believe there were press reports that EU would create a strategic stockpile to protect the population against chemical biological radiological and nuclear threats.

Do you know if the plan is to have either TPOXX or some sort of a smallpox defense included in that stockpile?.

Hi, Kyle. Thanks very much for your question. So, the landscape in Europe as you highlight is evolving. So one of the things, that was announced actually now going back over a year, was they are going to create a BARDA-like entity called HERA and we've been tracking that very closely with our colleagues at Meridian.

The initial focus of that is actually COVID, vaccines, drugs, et cetera and influenza. But their intent is to eventually be a centralized entity that develops those types of products so that they're available in Europe. The stockpiling in Europe still remains with country-by-country decisions. There are at the EU level discussions about the threat.

There are some pool procurements through NATO that can provide some benefits, but there isn't yet a fully kind of European stockpile that has articulated chemical, biological, radiological and nuclear stockpiling intent yet.

But I can say, as you can imagine, that is a very active set of conversations that Meridian and SIGA have with both national EU, NATO and European colleagues as they start to figure out what the best strategy is for Europe as they think about having these very important product stockpile..

Thank you..

Thank you..

[Operator Instructions] There are no more questions on the phones. This concludes the question-and-answer session. I would like to turn the conference back over to Phil Gomez for any closing remarks..

So I'd like to thank everybody for joining today's call. As we talked about, we've had a strong 2020-2021 a very strong balance sheet. And I think we've demonstrated over the past couple of years of disciplined approach to use of deploying cash ensuring that we make good investments and good return of capital.

We'll continue to look at potential M&A assets that might be accretive.

But again, I think we've demonstrated a discipline to make sure that if we deploy cash through share buybacks, through forms of dividends, certainly the Board and the company is very focused on being efficient and disciplined as we approach that and we will continue to evaluate all options, as we go into what is essentially kind of the second half of the BARDA 19C contract with as we said over $300 million in options remaining on it.

So I look forward to providing additional updates to our shareholders and we greatly appreciate you joining the call today and we look forward to talking with you on the next quarter's call. Thank you so much..

Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day..