The following discussion should be read in conjunction with our condensed
consolidated financial statements and notes to those statements and other
financial information appearing elsewhere in this Quarterly Report on Form 10-Q
and in the Company's Annual Report on Form 10-K filed on March 3, 2022 (the
"2021 Form 10-K"). In addition to historical information, the following
discussion and other parts of this Quarterly Report contain forward-looking
information that involves risks and uncertainties. SIGA's actual results could
differ materially from those anticipated by such forward-looking statements due
to a number of factors. See the factors set forth under the heading "Safe Harbor
Statement" at the end of this Item 2.
Overview
We are a commercial-stage pharmaceutical company. Our lead product,
TPOXX® ("oral TPOXX®", also known as "tecovirimat" in certain international
markets), is an oral formulation antiviral drug for the treatment of human
smallpox disease caused by variola virus. On July 13, 2018, the United States
Food & Drug Administration ("FDA") approved oral TPOXX® for the treatment of
smallpox. The Company has been delivering oral TPOXX® to the U.S. Strategic
National Stockpile ("Strategic Stockpile") since 2013.
In addition to being approved by the FDA, oral TPOXX® (tecovirimat) has
regulatory approval with the European Medicines Agency ("EMA"), Health Canada
and the Medicines and Healthcare Products Regulatory Agency ("MHRA") of the
United Kingdom. The EMA and MHRA approved label indication covers the treatment
of smallpox, monkeypox, cowpox, and vaccinia complications following vaccination
against smallpox. The Health Canada approved label indication covers the
treatment of smallpox.
With respect to the regulatory approvals by the EMA, MHRA and Health Canada,
oral tecovirimat represents the same formulation that was approved by the
FDA in July 2018 under the brand name TPOXX®.
For the intravenous formulation of TPOXX® ("IV TPOXX®"), SIGA announced on May
19, 2022 that the FDA approved this formulation for the treatment of smallpox.
Monkeypox Outbreak
Starting in June 2022, procurement orders for oral TPOXX® from new international
jurisdictions, as well as orders under existing contracts, have occurred as SIGA
has received a large and ongoing number of inquiries about accessing oral TPOXX®
in connection with a global monkeypox outbreak. The Company believes that a
portion of the courses of oral TPOXX® delivered under these orders will be used
for the treatment of active monkeypox cases as part of a response to this
outbreak by the global health community.
Monkeypox is a disease caused by infection with the monkeypox virus. Monkeypox
virus is part of the same family of viruses as smallpox. Monkeypox symptoms are
similar to smallpox, but not as severe and with historical fatality in Africa of
less than 1% to 10% depending on region and clade. The first human case of
monkeypox was recorded in 1970. Since then, monkeypox has been reported in
several central and western African countries, with case numbers greatly
increasing in recent years. Prior to the ongoing 2022 outbreak, nearly all
monkeypox cases in people outside of Africa were linked to international travel
to countries where the disease commonly occurs, or through imported animals,
including two cases in the United States in 2021. These cases are currently
occurring on multiple continents. On July 23, 2022, the World Health
Organization (WHO) declared the monkeypox outbreak as a public health emergency
of international concern.
COVID-19 Pandemic
The COVID-19 pandemic has caused significant societal and economic disruption.
Such disruption, and the associated risks and costs, are expected to continue
for an indeterminate period of time. Given the uncertain future course of the
COVID-19 pandemic, and the uncertain scale and scope of its future direct and
indirect impact, the Company is continually reviewing business and financial
risks related to the pandemic and seeking coordination with its government
partners with respect to the performance of current and future government
contracts. Additionally, the Company is continually coordinating with service
providers and vendors, in particular Contract Manufacturing Organizations
("CMOs") that constitute our supply chain, with respect to direct and indirect
actions and risks caused by the COVID-19 pandemic.
As of the filing date of this report, the Company has not identified or been
notified by government customers of impediments to the continued full
performance of their government contracts. With regard to day-to-day operations,
the COVID-19 pandemic, and the secondary effects of the pandemic, have at times
slowed the daily pace of execution of government contracts as well as new
contract generation. For example, U.S. and foreign government staffs overseeing
health security preparedness have been involved directly or indirectly in
governmental responses to the pandemic, which has diverted government staff time
that might normally have been directed toward contract matters involving SIGA.
Additionally, the COVID-19 pandemic, and the secondary effects of the pandemic
have increased the risk of delays in connection with a broad range of
operational activities, including: supply chain procurement of raw materials and
manufacturing; and certain research and development activities, such as those
that involve clinical trials. While the Company does not currently expect any
pandemic-related delays in such operational activities to have a material
adverse impact on the financial condition of the Company or its long-term
performance, the Company cannot give assurances as to the full extent of the
impact at this time.
Overall, while the COVID-19 pandemic has not adversely affected the liquidity
position of the Company, the pandemic has diverted foreign government staff time
normally directed toward contract matters involving SIGA and has affected and
could continue to affect the timing of international contract awards for oral
TPOXX®. Additionally, the pandemic could result in a slower pace of future
product deliveries if the pandemic results in shortages or delays in the receipt
by the supply chain of raw materials or supplies. If the general negative effect
of the COVID-19 pandemic becomes more acute, including due to resurgences in
infections or lack of vaccination (or efficacy thereof), there could be material
adverse effects to our business and cash flows.
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Procurement Contracts with the U.S. Government
19C BARDA Contract
On September 10, 2018, the Company entered into a contract with the U.S.
Biomedical Advanced Research and Development Authority ("BARDA") pursuant to
which SIGA agreed to deliver up to 1,488,000 courses of oral TPOXX® to the U.S.
Strategic National Stockpile ("Strategic Stockpile"), and to manufacture and
deliver to the Strategic Stockpile, or store as vendor-managed inventory, up
to 212,000 courses of the intravenous (IV) formulation of TPOXX® ("IV TPOXX®").
Additionally, the contract includes funding from BARDA for a range of
activities, including: advanced development of IV TPOXX®, post-marketing
activities for oral and IV TPOXX®, and procurement activities. As of June 30,
2022, the contract with BARDA (as amended, modified, or supplemented from time
to time, the "19C BARDA Contract") contemplates up to approximately $602.5
million of payments, of which approximately $51.7 million of payments are
included within the base period of performance of five years, approximately
$239.7 million of payments are related to exercised options and up to
approximately $311.1 million of payments are currently specified as unexercised
options. BARDA may choose in its sole discretion when, or whether, to exercise
any of the unexercised options. The period of performance for options is up to
ten years from the date of entry into the 19C BARDA Contract and such options
could be exercised at any time during the contract term, including during the
base period of performance.
The base period of performance specifies potential payments of approximately
$51.7 million for the following activities: payments of approximately $11.1
million for the delivery of approximately 35,700 courses of oral TPOXX® to the
Strategic Stockpile; payments of $8.0 million for the manufacture of 20,000
courses of final drug product of IV TPOXX® ("IV FDP"), of which $3.2 million of
payments are related to the manufacture of bulk drug substance ("IV BDS") to be
used in the manufacture of IV FDP; payments of approximately $32.0 million to
fund advanced development of IV TPOXX®; and payments of approximately $0.6
million for supportive procurement activities. As of June 30, 2022, the Company
has received $11.1 million for the delivery of approximately 35,700 courses of
oral TPOXX® to the Strategic Stockpile, $3.2 million for the manufacture of IV
BDS, $4.3 million for the delivery of IV FDP to the Strategic Stockpile and
$15.5 million for other base period activities. IV BDS has been used for the
manufacture of courses of IV FDP. The $3.2 million received for the completed
manufacture of IV BDS had been recorded as deferred revenue as of December 31,
2021, but with the delivery of IV FDP to the Strategic Stockpile during the six
months ended June 30, 2022, $2.9 million was recognized as revenue. The
remaining $0.3 million of deferred revenue will be recognized as IV FDP
containing such IV BDS is delivered to the Strategic Stockpile.
The options that have been exercised to date provide for payments up to
approximately $239.7 million. There are exercised options for the following
activities: payments up to $11.2 million for the procurement of raw
materials used in the 2020 manufacture of certain courses of oral
TPOXX®; payments up to $213.9 million for the delivery of up to 726,140 courses
of oral TPOXX®; and payments of up to $14.6 million for funding of
post-marketing activities for oral TPOXX®. As of June 30, 2022, the Company has
delivered approximately $225.1 million (including the value of raw materials) of
oral TPOXX® to the Strategic Stockpile, of which approximately $112.5 million
was delivered in 2021; and $7.6 million has been received or billed for in
connection with post-marketing activities for oral TPOXX®.
Unexercised options specify potential payments up to approximately $311.1
million in total (if all such options are exercised). There are options for the
following activities: payments of up to $225.1 million for the delivery of oral
TPOXX® to the Strategic Stockpile; payments of up to $76.8 million for the
manufacture of courses of IV FDP, of which up to $30.7 million of payments would
be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP;
payments of up to approximately $3.6 million to fund post-marketing activities
for IV TPOXX®; and payments of up to approximately $5.6 million for supportive
procurement activities.
The options related to IV TPOXX® are divided into two primary manufacturing
steps. There are options related to the manufacture of bulk drug substance ("IV
BDS Options"), and there are corresponding options (for the same number of IV
courses) for the manufacture of final drug product ("IV FDP Options"). BARDA may
choose to exercise any, all, or none of these options in its sole discretion.
The 19C BARDA Contract includes: three separate IV BDS Options, each providing
for the bulk drug substance equivalent of 64,000 courses of IV TPOXX®; and three
separate IV FDP Options, each providing for 64,000 courses of final drug product
of IV TPOXX®. BARDA has the sole discretion as to whether to simultaneously
exercise IV BDS Options and IV FDP Options, or whether to exercise options at
different points in time (or alternatively, to only exercise the IV BDS Option
but not the IV FDP Option). If BARDA decides to only exercise IV BDS Options,
then the Company would receive payments up to $30.7 million; alternatively, if
BARDA decides to exercise both IV BDS Options and IV FDP Options, then the
Company would receive payments up to $76.8 million. For each set of options
relating to a specific group of courses (for instance, the IV BDS and IV FDP
options that reference the same 64,000 courses), BARDA has the option to
independently purchase IV BDS or IV FDP. The Company estimates that sales of the
IV formulation under this contract (under current terms), assuming the IV FDP
Options were exercised, would have a gross margin (sales less cost of sales, as
a percentage of sales) that is less than 40%.
Under the terms of this contract, exercise of procurement options is at the sole
discretion of BARDA. The request for proposal that preceded the award of the 19C
BARDA Contract indicated that the expected purpose of the contract was to
maintain the level of smallpox antiviral preparedness in the Strategic
Stockpile. Based on prior product delivery activity, and current FDA-approved
shelf life of oral TPOXX®, the Company estimates that approximately 940,000
courses of smallpox antiviral treatment would need to be delivered to the U.S.
Government between 2022 and 2024 in order to maintain stockpile levels of
unexpired smallpox antiviral treatment during this period.
U.S. Department of Defense Procurement Contract ("DoD Contract")
On May 12, 2022, the Company announced a procurement contract with the U.S.
Department of Defense ("DoD"). The DoD Contract includes a firm commitment for
the DoD to procure approximately $3.6 million of oral TPOXX®, and an option,
exercisable at the sole discretion of the DoD, for the procurement of
approximately $3.8 million of oral TPOXX®. In the second quarter of 2022, the
Company delivered and recognized revenue of $3.6 million for the delivery of
oral TPOXX® to the DoD and fulfilled the firm commitment order noted above.
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International Procurement Contracts
This year, through July 31, the Company has received firm commitment orders from
ten international jurisdictions (including Canada) for the delivery of
approximately $60 million of oral TPOXX®, of which approximately $39 million is
for Canada and approximately $21 million is for jurisdictions in Europe, Asia
Pacific, Asia and the Middle East. Additionally, the contract with CDND
(defined below) has an option, exercisable at the sole discretion of CDND, for
the purchase of up to an additional $6 million of oral TPOXX®. With respect to
the $60 million of firm commitment orders that have been received this year,
approximately $5 million of oral TPOXX® was delivered in the three months ended
June 30, 2022, approximately $26 million is expected to be delivered in the
third quarter of 2022 and the remaining orders are expected to be fulfilled
between October 1, 2022 and July 31, 2023. Through an International Promotion
Agreement (defined below), Meridian Medical Technologies, Inc. ("Meridian") is
the counterparty to international contracts under which orders are placed for
the purchase of oral TPOXX®. The Public Health Agency of Canada ("PHAC") and
the Canadian Department of National Defence ("CDND") are among the contracting
parties for the purchase of oral TPOXX® (see below for a summary description of
these contracts).
On January 13, 2021, PHAC awarded a contract to Meridian (the "PHAC Contract")
for the purchase of up to approximately $33 million of oral TPOXX® (tecovirimat)
within five years. In March 2022 and July 2022, PHAC executed amendments in
which total procurement of oral TPOXX® under the PHAC Contract was increased to
an amount of approximately $45 million. Prior to 2022, approximately $10 million
of oral TPOXX® had been ordered and delivered to PHAC. No courses of oral TPOXX®
were delivered under this contract for the first six months of 2022. In July
2022, $16 million of oral TPOXX® was delivered to PHAC. As of July 31, 2022,
after the delivery of $16 million of oral TPOXX® in mid-July, there
are approximately $19 million of firm commitment orders that remain to be
delivered under this contract.
On April 3, 2020, the Company announced that the CDND awarded a contract (the
"Canadian Military Contract") to Meridian, pursuant to which the CDND would
purchase up to approximately $14 million of oral TPOXX® over four years. Prior
to 2022, approximately $4 million of oral TPOXX® had been ordered and delivered
to CDND. No courses of oral TPOXX® were delivered under this contract for the
first six months of 2022. As of June 30, 2022, an approximate firm commitment
order of $4 million remains to be delivered under this contract. Additionally,
there are approximately $6 million of unexercised options, exercisable at the
sole discretion of CDND, remaining under this contract.
The above-listed contract awards were coordinated between SIGA and Meridian
under the international promotion agreement (as amended, the "International
Promotion Agreement") that was entered into by the parties on June 3, 2019.
Under the International Promotion Agreement, Meridian is the counterparty in
connection with international contracts for oral TPOXX® and SIGA is responsible
for manufacture and delivery of any oral TPOXX® purchased thereunder.
International Promotion Agreement
Under the terms of the International Promotion Agreement, Meridian was granted
exclusive rights to market, advertise, promote, offer for sale, or sell oral
TPOXX® in a field of use specified in the International Promotion Agreement in
all geographic regions except for the United States (the "Territory"), and
Meridian has agreed not to commercialize any competing product, as defined in
the International Promotion Agreement, in the specified field of use in the
Territory. SIGA retains ownership, intellectual property, distribution and
supply rights and regulatory responsibilities in connection with TPOXX®, and, in
the United States market, also retains sales and marketing rights with respect
to oral TPOXX®. SIGA's consent is required for the entry into any sales
arrangement pursuant to the International Promotion Agreement.
The fee Meridian retains pursuant to the International Promotion Agreement is a
specified percentage of the collected proceeds of sales of oral TPOXX® net of
certain expenses, for calendar years in which customer collected amounts net of
such expenses are less than or equal to a specified threshold, and a higher
specified percentage of such collected net proceeds for calendar years in which
such net collected amounts exceed the specified threshold. It is probable that
we will exceed the specified threshold in 2022 and, as a result, the Company has
recorded and will continue to record the higher specified percentage for all
International Promotion Agreement sales in 2022. Taking into account Meridian's
fee and manufacturing costs of oral TPOXX®, it is currently estimated by the
Company that international sales of oral TPOXX® will have a contribution margin
(as expressed as a percentage of product sales, and before any consideration of
expenses not directly related to manufacturing or Meridian activities) of
between approximately 65% and 80%, depending on the international sales levels
each year. For purposes of this disclosure, contribution margin (in amount)
represents international product sales less applicable cost of sales and the
Meridian fee (which is included within selling, general and administrative
expenses within the income statement).
Research Agreements and Grants
In July 2019, the Company was awarded a multi-year research contract valued at a
total of $19.5 million, with an initial award of $12.4 million, from the DoD to
support work in pursuit of a potential label expansion for oral TPOXX® that
would include post-exposure prophylaxis ("PEP") of smallpox (such work known as
the "PEP Label Expansion Program" and the contract referred to as the "PEP Label
Expansion R&D Contract"). In subsequent modifications, the DoD increased the
scope and the available funding under the PEP Label Expansion R&D Contract to
approximately $27 million. The period of performance for this contract, as
modified, terminates on January 31, 2025. As of June 30, 2022, remaining
revenue to be recognized in the future under the PEP Label Expansion R&D
Contract is up to $15.4 million. Revenue from the performance obligation under
the PEP Label Expansion R&D Contract is recognized over time using an input
method using costs incurred to date relative to total estimated costs at
completion.
Contracts and grants include, among other things, options that may or may not be
exercised at the U.S. Government's discretion. Moreover, contracts and grants
contain customary terms and conditions including the U.S. Government's right to
terminate or restructure a contract or grant for convenience at any time. As
such, the Company may not be eligible to receive all available funds.
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Critical Accounting Estimates
The methods, estimates and judgments we use in applying our accounting policies
have a significant impact on the results we report in our condensed consolidated
financial statements, which we discuss under the heading "Results of Operations"
following this section of our Management's Discussion and Analysis of Financial
Condition and Results of Operations. Some of our accounting policies require us
to make difficult and subjective judgments, often as a result of the need to
make estimates of matters that are inherently uncertain. Information regarding
our critical accounting policies and estimates appears in Part II, Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations of our 2021 Form 10-K. Our most critical accounting estimates include
revenue recognition over time, the valuation of stock-based awards issued by the
Company and income taxes.
Results of Operations
Three Months Ended June 30, 2022 and 2021
For the three months ended June 30, 2022, revenues from product sales and
supportive services were $8.6 million. Such revenues primarily relate to sales
of oral TPOXX® to the DoD of approximately $3.6 million and international sales
of approximately $5.0 million. For the three months ended June 30, 2021,
revenues from product sales and supportive services were $6.9 million, which
relate to international sales of oral TPOXX® to Canada.
Revenues from research and development activities for the three months ended
June 30, 2022 and 2021, were $8.1 million and $1.7 million, respectively.
The increase of $6.4 million of revenue is primarily related to clinical trial
activity under the PEP Label Expansion R&D Contract in connection with the PEP
development program.
Cost of sales and supportive services for the three months ended June 30, 2022
and 2021 were $0.9 million and $1.0 million, respectively. Such costs in
2022 were primarily associated with the manufacture and delivery of courses of
oral TPOXX®. Such costs in 2021 were associated with the manufacture and
delivery of courses of oral TPOXX® for international sales as well as an
inventory-related loss of $0.6 million.
Selling, general and administrative ("SG&A") expenses for the three months ended
June 30, 2022 and 2021 were $5.9 million and $5.4 million, respectively. The
increase of approximately $0.5 million primarily reflects an increase in
consultant costs in connection with responding to government, medical
profession and media inquiries related to the global monkeypox outbreak.
Research and development ("R&D") expenses for the three months ended June 30,
2022 and 2021 were $6.8 million and $2.3 million, respectively, reflecting an
increase of approximately $4.5 million. The increase is primarily attributable
to an increase in direct vendor-related expenses incurred in connection with
activities under the PEP Label Expansion R&D Contract.
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Changes in the fair value of the liability-classified warrant to acquire common
stock were recorded within the statement of operations. The warrant was fully
exercised during the three months ended June 30, 2022. For the three months
ended June 30, 2022, we recorded a gain of approximately $50,000, reflecting a
decrease in the fair value of the liability-classified warrant primarily due to
the decrease in our stock price prior to the exercise of the Warrant. For the
three months ended June 30, 2021, we recorded a gain of
approximately $0.4 million, reflecting a decrease in the fair value of the
liability-classified warrant primarily due to the decrease in our stock price.
For the three months ended June 30, 2022 and 2021, we recorded pre-tax income
of $3.2 million and $0.5 million, respectively, and a corresponding income tax
provision of $1.2 million and $0.3 million, respectively. The effective tax
rates during the three months ended June 30, 2022 and 2021 were 36.2% and 63.8%,
respectively. Our effective tax rate for the periods ended June 30, 2022 and
2021 differ from the statutory rate primarily as a result of state taxes,
non-deductible executive compensation under Internal Revenue Code Section 162(m)
and a non-taxable adjustment for the fair market value of the Warrant.
Six Months Ended June 30, 2022 and 2021
For the six months ended June 30, 2022, revenues from product sales and
supportive services were $15.9 million. Such revenues primarily relate to
approximately $7.2 million of sales of IV TPOXX® to the U.S. Government under
the 19C BARDA Contract; approximately $3.6 million of oral TPOXX® sales to the
DoD; and approximately $5.0 million of international sales of oral TPOXX®. For
the six months ended June 30, 2021, revenues from product sales and supportive
services were $10.4 million. Such revenues mostly relate to international sales
of oral TPOXX® to Canada.
Revenues from research and development activities for the six months ended June
30, 2022 and 2021, were $11.3 million and $3.0 million, respectively.
Substantially all of the increase of $8.3 million relates to clinical trial
activity under the PEP Label Expansion R&D Contract in connection with the PEP
development program.
Cost of sales and supportive services for the six months ended June 30, 2022 and
2021 were $5.6 million and $1.2 million, respectively. The increase of $4.4
million primarily relates to the manufacture and sale of IV TPOXX® in 2022;
manufacturing costs per unit are higher for IV TPOXX® than oral TPOXX®, and the
sales mix in 2021 was only oral TPOXX®.
SG&A expenses for each of the six months ended June 30, 2022 and
2021 were $9.6 million. An increase in consulting costs in connection with
responding to government, medical profession and media inquiries related to the
global monkeypox outbreak was offset by a decrease in promotion fees in
connection with international sales.
R&D expenses for the six months ended June 30, 2022 and 2021 were $10.4 million
and $4.6 million, respectively. The increase of $5.8 million is primarily
attributable to an increase in direct vendor-related expenses incurred in
connection with activities under the PEP Label Expansion R&D Contract.
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Changes in the fair value of the liability-classified warrant to acquire common
stock were recorded within the statement of operations. The warrant was fully
exercised during the six months ended June 30, 2022. For the six months ended
June 30, 2022, we recorded a gain of approximately $0.4 million, reflecting a
decrease in the fair value of the liability-classified warrant primarily due to
the decrease in our stock price. For the six months ended June 30, 2021, we
recorded a gain of approximately $1.4 million, reflecting a decrease in the fair
value of the liability-classified warrant primarily due to the decrease in our
stock price.
For the six months ended June 30, 2022, we recorded pre-tax income
of $2.1 million and a corresponding income tax provision of $0.5 million. For
the six months ended June 30, 2021, we recorded a pre-tax loss of ($0.6) million
and a corresponding income tax provision of $0.1 million. The effective tax
rates during the six months ended June 30, 2022 and 2021 were 21.2% and (11.3)%,
respectively. Our effective tax rate for the periods ended June 30, 2022 and
2021 differ from the statutory rate primarily as a result of state taxes,
non-deductible executive compensation under Internal Revenue Code Section 162(m)
and a non-taxable adjustment for the fair market value of the Warrant.
Liquidity and Capital Resources
As of June 30, 2022, we had $114.5 million in cash and cash equivalents compared
with $103.1 million at December 31, 2021.
Operating Activities
We prepare our condensed consolidated statement of cash flows using the indirect
method. Under this method, we reconcile net income/(loss) to cash flows from
operating activities by adjusting net income/(loss) for those items that impact
net income/(loss) but may not result in actual cash receipts or payments during
the period. These reconciling items include but are not limited to stock-based
compensation, deferred income taxes, changes in the fair value of our warrant
liability, inventory write offs, gains and losses from various transactions and
changes in the condensed consolidated balance sheet for working capital from the
beginning to the end of the period.
Net cash provided by/(used in) operating activities for the six months ended
June 30, 2022 and 2021 was $54.5 million and ($6.2) million, respectively. For
the six months ended June 30, 2022, the receipt of approximately $80 million for
product delivery and acceptance of oral TPOXX® courses delivered to the
Strategic Stockpile in December 2021 was partially offset by the payment of
approximately $19 million of federal income taxes, as well as customary
operating activities. For the six months ended June 30, 2021, net cash usage
related to support of ordinary working capital (accounts receivable, accounts
payable, inventory, and prepaids, among other items) and customary operating
activity was partially offset by the receipt of cash from international sales.
Investing Activities
There was no cash-related investing activity for the six months ended June 30,
2022. For the six months ended June 30, 2021, we used cash of $24,424 for
capital expenditures.
Financing Activities
Cash used in financing activities for the six months ended June 30,
2022 was $43.1 million, which was primarily attributable to our special cash
dividend of approximately $32.9 million. In addition, we repurchased
approximately 1.5 million shares of common stock for approximately $10.1
million. Cash used in financing activities for the six months ended June 30,
2021 was $13.1 million, which was substantially all attributable to our
repurchase of approximately 1.9 million shares of common stock.
On May 5, 2022, the Board of Directors declared a special dividend of $0.45 per
share on the common stock of the Company, which resulted in an overall
dividend payment of $32.9 million. The special dividend was paid on June 2, 2022
to shareholders of record at the close of business on May 17, 2022.
Future Cash Requirements
As of June 30, 2022, we had outstanding purchase orders associated with
manufacturing obligations in the aggregate amount of approximately $21.7
million.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
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Recently Issued Accounting Standards
The Company did not adopt any accounting standards this quarter.
Safe Harbor Statement
Certain statements in this Quarterly Report on Form 10-Q, including certain
statements contained in the foregoing "Management's Discussion and Analysis of
Financial Condition and Results of Operations," constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Exchange Act, including
statements relating to the progress of SIGA's development programs and timelines
for bringing products to market, delivering products to the Strategic
Stockpile, the enforceability of our procurement contracts, such as the
19C BARDA Contract (the "BARDA Contracts"), with BARDA, and responding to the
global outbreak of monkeypox. The words or phrases "can be," "expects," "may
affect," "may depend," "believes," "estimate," "project" and similar words and
phrases are intended to identify such forward-looking statements. Such
forward-looking statements are subject to various known and unknown risks and
uncertainties, and SIGA cautions you that any forward-looking information
provided by or on behalf of SIGA is not a guarantee of future performance.
SIGA's actual results could differ materially from those anticipated by such
forward-looking statements due to a number of factors, some of which are beyond
SIGA's control, including, but not limited to, (i) the risk that BARDA elects,
in its sole discretion as permitted under the BARDA Contracts, not to exercise
all, or any, of the remaining unexercised options under those contracts, (ii)
the risk that SIGA may not complete performance under the BARDA Contracts on
schedule or in accordance with contractual terms, (iii) the risk that the BARDA
Contracts are modified or canceled at the request or requirement of the U.S.
Government, (iv) the risk that the nascent international biodefense market does
not develop to a degree that allows SIGA to successfully market TPOXX®
internationally, (v) the risk that potential products, including potential
alternative uses or formulations of TPOXX® that appear promising to SIGA or its
collaborators, cannot be shown to be efficacious or safe in subsequent
pre-clinical or clinical trials, (vi) the risk that SIGA or its collaborators
will not obtain appropriate or necessary governmental approvals to market these
or other potential products or uses, (vii) the risk that SIGA may not be able to
secure or enforce sufficient legal rights in its products, including
intellectual property protection, (viii) the risk that any challenge to SIGA's
patent and other property rights, if adversely determined, could affect SIGA's
business and, even if determined favorably, could be costly, (ix) the risk that
regulatory requirements applicable to SIGA's products may result in the need for
further or additional testing or documentation that will delay or prevent SIGA
from seeking or obtaining needed approvals to market these products, (x) the
risk that the volatile and competitive nature of the biotechnology industry may
hamper SIGA's efforts to develop or market its products, (xi) the risk that
changes in domestic or foreign economic and market conditions may affect SIGA's
ability to advance its research or may affect its products adversely, (xii) the
effect of federal, state, and foreign regulation, including drug regulation and
international trade regulation, on SIGA's businesses, (xiii) the risk of
disruptions to SIGA's supply chain for the manufacture of TPOXX®, causing delays
in SIGA's research and development activities, causing delays or the
re-allocation of funding in connection with SIGA's government contracts, or
diverting the attention of government staff overseeing SIGA's government
contracts, (xiv) the risk that the U.S. or foreign governments' responses
(including inaction) to national or global economic conditions or infectious
diseases, such as COVID-19, are ineffective and may adversely affect SIGA's
business, and (xv) risks associated with responding to the current monkeypox
outbreak, as well as the risks and uncertainties included in Item 1A "Risk
Factors" of our Annual Report on Form 10-K for the year ended December 31,
2021 and SIGA's subsequent filings with the Securities and Exchange Commission.
SIGA urges investors and security holders to read those documents free of charge
at the SEC's website at http://www.sec.gov. All such forward-looking statements
are current only as of the date on which such statements were made. SIGA does
not undertake any obligation to update publicly any forward-looking statement to
reflect events or circumstances after the date on which any such statement is
made or to reflect the occurrence of unanticipated events.
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