Registration No. _______________
333-__________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
—————
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
—————
SIGA Technologies, Inc.
(Exact
(Exact name of registrant as specified in its charter)
Delaware 13-3864870
(State or Other Jurisdiction of (I.R.S. Employer identification No.)
Incorporation or Organization)
| Delaware | | 13-3864870 |
| (State or Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification No.) |
420 Lexington Avenue
Suite 408
New York, New York 10170
(212) 672-9100
(Address,
(Address, including zip code, and telephone number, including area code, of Registrant'sregistrant’s principal executive office)
----------
Thomas N. Konatich
Acting offices)
—————
Ayelet Dugary
Chief Financial Officer
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 408
New York, New York 10170
(212) 672-9100
(Name,
(Name, address, including zip code, and telephone number, including area code, of agent for service)
----------
COPY TO:
—————
Copy To:
Thomas E. Constance, Esq.
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
(212) 715-9100
Approximate date of commencement of proposed sale to the public: From time to time as determined byafter the Selling Stockholders.
effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_|
¨ If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X|
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_|
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_|
¨
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. |_|
¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 431(b) under the Securities Act, check the following box. |_|
¨
Indicate by check-mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated file”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer o | Accelerated Filer x |
Non-Accelerated Filer ¨ | Smaller Reporting Company ¨. |
| (Do not check if a smaller reporting company) |
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered (1) | Proposed Maximum Aggregate Offering Price(2) | Amount of Registration Fee (3) |
| Common Stock, par value $0.001 per share | -- | -- |
| Warrants | -- | -- |
| Total | $100,000,000 | $5,580 |
- -------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title| 1. | There are being registered hereunder such indeterminate number of Each Classshares of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered Per Unit Price Registration Fee
- -------------------------------------------------------------------------------------------------------------
common stock par value $.0001
per share ..................... 3,272,400(1) $ 3.98(2) $ 13,007,790 $ 1,391.83
- -------------------------------------------------------------------------------------------------------------
|
(1) Pursuantand warrants to purchase common stock as shall have an aggregate initial offering price not to exceed $100,000,000. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. In addition, pursuant to Rule 416 under
the Securities Act of 1933, as amended (the “Securities Act”), the shares being registered hereunder include such indeterminate number of shares of common stock as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions.| 2. | The proposed maximum aggregate offering price per class of security will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act. |
| 3. | Calculated pursuant to Rule 457(o) under the Securities Act. |
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
Act of 1933, as amended, this
registration statement also covers such indeterminate number of shares of
common stock as may be requiredand Exchange Commission is effective. This prospectus is not an offer to
prevent dilution resulting from stock
splits, stock dividendssell these securities and it is not soliciting an offer to buy these securities in any state where the offer or
similar events. This number represents the
aggregate of 2,000,000 shares issued and 1,000,000 shares underlying
warrants issued pursuant to a securities purchase agreement dated October
19, 2006, between SIGA and certain investors thereto, as well as 136,200
shares underlying warrants issued pursuant to an Exclusive Finder's
Agreement dated November 1, 2005, between SIGA and The Shemano Group,
Inc., and 136,200 shares underlying warrants issued pursuant to a Finder's
Agreement dated October 19, 2006, between SIGA and Empire Financial Group,
Inc., In addition, this registration covers any additional indeterminate
number of shares of common stock, which may become issuable as a result of
anti-dilution provisions of the warrants.
(2) Estimated solely for the purpose of computing the amount of the
registration fee, in accordance with Rule 457(c) under the Securities Act
of 1933, as amended. The maximum offering price per sharesale is
$3.98, which
was the average high and low prices for SIGA's common stock as reported on
the NASDAQ Capital Market on November 15, 2006.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Preliminary Prospectus, not permitted. Subject to Completion, dated November 17, 2006
3,272,400 SHARES
October 29, 2009
SIGA TECHNOLOGIES, INC.
$100,000,000
Of
COMMON STOCK
----------
Shares of common stock of SIGA Technologies, Inc. are being offered by
this prospectus. The shares will be sold
WARRANTS
—————
We may from time to time byoffer and sell in the selling
stockholders named in this prospectus. The prices at which such selling
stockholders may sell the shares will be determined by the prevailing market
price for the shares or in negotiated transactions. The market price of our
common stock as of the close of business day on November 15, 2006, was $4.02 per
share. We will not receive any proceeds from the sale of sharesprimary offering up to $100,000,000 aggregate dollar amount of common stock byand warrants. We will specify in the selling stockholders. accompanying prospectus supplement the terms of the securities to be offered and sold. We may sell these securities to or through underwriters or dealers and also to other purchasers or through agents. We will set forth the names of any underwriters, dealers or agents in the accompanying prospectus supplement.
Our shares are traded on the NASDAQ Capital Market under the symbol "SIGA."“SIGA”. Our principal executive offices are located at 420 Lexington Avenue, Suite 408, New York, New York 10170. Our telephone number is (212) 672-9100.
----------
—————
Investing in the shares involves a high degree of risk. For more information, please see "Risk Factors"“Risk Factors” beginning on page 6.
----------
5.
—————
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The information in this preliminary
—————
This prospectus is not complete and may be
changed. These securities may not be sold untilused to consummate sales of securities unless, to the extent required by applicable law, it is accompanied by a prospectus supplement.
—————
The date of this prospectus is October 29, 2009
| 1 |
| 1 |
| 5 |
| 16 |
| 17 |
| 17 |
| 18 |
| 18 |
| 21 |
| 24 |
| 25 |
| 25 |
| 25 |
| 26 |
| 27 |
| 28 |
| 30 |
| 31 |
| EXHIBIT 5.1 | 33 |
| EXHIBIT 23.1 | 35 |
You should rely only on the information contained or incorporated by reference in this prospectus, any prospectus supplement or any “free writing prospectus” that we may authorize to be delivered to you. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in this prospectus, any prospectus supplement and the documents incorporated by reference herein and therein are accurate only as of their respective dates. Our business, financial condition, results of operations and prospectus may have changed since those dates. Neither this prospectus nor any prospectus supplement shall constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the persons making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.
This prospectus is part of a registration statement
that we filed with the Securities and Exchange Commission
is effective. This preliminary
prospectus is not an offer(SEC) using a “shelf” registration process. Under this shelf registration process, we may from time to
time sell
nor does it seek an offer to buycommon stock or warrants or a combination of these securities, in
any jurisdiction whereone or more primary offerings up to the
offer or sale is not permitted.
----------
The datetotal amount of
$100,000,000. We have provided to you in this prospectus
a general description of the securities we may offer. Each time we sell securities, we will, to the extent required by law, provide a prospectus supplement that will contain specific information about the terms of the offering. We may also add, update or change in any prospectus supplement or any free writing prospectus any of the information contained in this prospectus. To the extent there is
November 17, 2006
TABLE OF CONTENTS
a conflict between the information contained in this prospectus and the prospectus supplement, you should rely on the information in the prospectus supplement, provided that if any statement in one of these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated by reference in this prospectus or any prospectus supplement — the statement in the document having the later date modifies or supersedes the earlier statement. This prospectus, together with any prospectus supplement and any free writing prospectus we may authorize to be delivered to you, includes all material information relating to the primary offering of our securities. This prospectus describes certain risk factors that you should consider before purchasing the shares. See “Risk Factors” beginning on page 5. You should read this prospectus together with the additional information described under the heading “Where You Can Find More Information.”
ABOUT SIGA TECHNOLOGIES, INC .............................................. 1
RISK FACTORS .............................................................. 6
ABOUT THIS PROSPECTUS ..................................................... 14
FORWARD-LOOKING STATEMENTS ................................................ 14
USE OF PROCEEDS ........................................................... 15
SELLING STOCKHOLDERS ...................................................... 16
PLAN OF DISTRIBUTION ...................................................... 17
LEGAL MATTERS ............................................................. 18
EXPERTS ................................................................... 19
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES ... 19
ADDITIONAL INFORMATION .................................................... 19
INCORPORATION BY REFERENCE ................................................ 19
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS .......................... 20
SIGNATURES ................................................................ 22
EXHIBIT INDEX ............................................................. 25
EXHIBIT 5.1 ............................................................... 26
EXHIBIT 23.1 .............................................................. 28
ABOUT TECHNOLOGIES, INC. SIGA TECHNOLOGIES, INC.
We areTechnologies, Inc. (“SIGA”, the “Company” or “we”), is a biotechnology companycorporation incorporated in Delaware on December 9,
1996.28, 1995. We aim to discover, developpursue the research, development and commercializecommercialization of novel anti-infectives antibioticsfor the prevention and vaccines fortreatment of serious infectious diseases, includingdiseases. The major focus of our developmental and commercialization activities is on products intended for use in defense against biological warfare agents such as smallpox, and
arenaviruses (hemorrhagic fevers). and other Category A viral agents. Our lead product, under development, SIGA-246,ST-246®, is an orally administered anti-viralantiviral drug that targets the smallpox virus.orthopox viruses. In December 2005, the FDAU.S. Food and Drug Administration (the “FDA”) accepted our INDInvestigational New Drug (“IND”) application for SIGA-246ST-246® and granted the program "Fast-Track"“Fast-Track” status. Fast Track programs ofIn December 2006, the FDA are designedgranted Orphan Drug designation to facilitateST-246® for the developmentprevention and expeditetreatment of smallpox. In May 2009, we submitted a response to a Request for Proposal (the “BARDA Smallpox RFP”) issued by the reviewU.S. Biomedical Research and Development Agency (“BARDA”) with respect to the purchase of new drugs1.7 million courses of a smallpox antiviral, and, in June 2009, BARDA informed us that are
intendedour response to treat serious or life-threatening conditionsthe BARDA Smallpox RFP was deemed technically acceptable and that demonstratein the potential to address unmet medical needs.competitive range. Our anti-viralantiviral programs are designed to prevent or limit the replication of the viral pathogen. Our
anti-infectives programs are aimed at the increasingly serious problempathogens of drug
resistance. We are also working to develop a technology for the mucosal delivery
of our vaccines which may allow the vaccines to activate the immune system at
the mucus lined surfaces of the body -- the mouth, the nose, the lungs and the
gastrointestinal and urogenital tracts -- the sites of entry for most infectious
agents.
interest.
Product Candidates and Market Potential
Market for Biological Defense Programs
The market for biodefense countermeasures has grown dramatically over the past ten years as a result of the increased awareness of the threat of global terror activity in the wake of the September 11, 2001 terrorist attacks and the October 2001 anthrax letter attacks. The U.S. government is the principal source of worldwide biodefense spending. Most U.S. government spending on biodefense programs results from development funding awarded by the National Institute of Allergies and Infectious Diseases (“NIAID”), BARDA and the U.S. Department of Defense (“DoD”), and procurement of countermeasures by the U.S. Department of Health and Human Services (“HHS”), the U.S. Centers for Disease Control and Prevention (the “CDC”) and DoD. The U.S. government is now the largest source of development and procurement funding for academic institutions and biotechnology companies conducting biodefense research or developing vaccines and immunotherapies directed at potential agents of bioterror or biowarfare.
The Project BioShield Act, which became law in 2004, authorizes the procurement for the government’s “Strategic National Stockpile” (the “SNS”) of countermeasures against biological, chemical, radiological and nuclear attacks. The SNS is a national repository of medical assets and countermeasures designed to provide federal, state and local public health agencies with medical supplies needed to treat those affected by terrorist attacks, natural disasters, industrial accidents and other public health emergencies. Project BioShield appropriated up to $5.6 billion over ten years for SNS purchases. The Pandemic and All-Hazards Preparedness Act (the “Preparedness Act”), passed in 2006, established BARDA as the agency within HHS responsible for awarding procurement contracts for biomedical countermeasures and providing development funding for advanced research and development in the biodefense arena. The Preparedness Act supplements the funding available under Project BioShield for radiological, nuclear, chemical and biological countermeasures, and provides funding for infectious disease pandemics. Funding for BARDA is provided by annual Congressional appropriations. Congress also appropriates annual funding for the CDC for the procurement of medical assets and countermeasures for the SNS and for the NIAID to conduct biodefense research. This appropriation funding supplements amounts available under Project BioShield.
From 2001 through 2008, the federal government has allocated over $16 billion in state and local terrorism preparedness funding from the Departments of Homeland Security, Health and Human Services and Justice. In 2007, approximately $5.0 billion was allocated for emergency, preparedness and response funding. A similar amount was enacted for 2008. One of the major concerns in the field of biological warfare agents is smallpox – although declared extinct in 1980 by the World Health Organization, there is a threat that a rogue nation or a terrorist group may have an illegal inventory of the virus that causes smallpox. The only legal inventories of the virus are held securely at the CDC in Atlanta, Georgia and at a laboratory in Russia. As a result of this threat, the U.S. government has announced its intent to make available significant funds in order to find a way to counteract the virus if turned loose by terrorists or on a battlefield.
In addition to the U.S. government, we believe that other potential additional markets for the sale of biodefense countermeasures include:
state and local governments, which we expect may be interested in these products to protect emergency responders, such as police, fire and emergency medical personnel;
foreign governments, including both defense and public health agencies;
Non-governmental organizations and multinational companies, including the U.S. Postal Service and transportation and security companies; and
health care providers, including hospitals and clinics.
The FDA amended its regulations, effective June 30, 2002, so that certain new drug and biological products used as countermeasures against chemical, biological, radiological, or nuclear agents may be approved for use in humans based on evidence of effectiveness derived only from appropriate animal studies and any additional supporting data. We believe that this change could make it possible for us to have products proven effective in animal studies to be approved for sale more quickly than under the standard regulatory path.
SIGA Biological Warfare Defense Product Portfolio
Anti-Smallpox Drug:
We do not currently have any product approved for sale commercially. Our product candidates are all in various stages of development, as further described below.
Anti-Orthopoxvirus Drug: Smallpox virus is classified as a Category A agent by the Center for Disease Control and Prevention ("CDC")CDC and is considered one of the most significant threats for use as a biowarfare agent. While deliberate introduction of any pathogenic agent would be devastating, we believe the one that hasholds the greatest potential to harmfor harming the general U.S.civilian population of any nation is smallpox. At present, there is no generally effective approved drug with which to treat or prevent smallpox infections. To address thisthe serious risk,product gap, SIGA scientists have identifieddeveloped a lead drug candidate, SIGA-246,ST-246®, which inhibits replication in cell culture and various animal models of all tested orthopox viruses, including vaccinia, cowpox, ectromelia (mousepox), monkeypox, camelpox, and variola replication in cell culture but not
other(smallpox), while having no demonstrated effect on unrelated viruses. There mightGiven the documented safety concerns with the current smallpox vaccine, there should be several uses for an effective smallpox antiviral drug: prophylactically, to protect the non-immune who are at risk toof exposure; therapeutically, to prevent disease or deathreduce mortality and morbidity in those exposed to
smallpox;infected with an orthopox virus; and last,lastly, as an adjunct treatment to the immunocompromised. SIGA
scientists are also working on several other smallpox drug targets, includingvaccine in order to reduce the viral proteinases,frequency of serious adverse events due to develop additional drug candidatesthe live virus used for use in
combination therapy if necessary.vaccination. In December 2005, the FDA approved our IND application for SIGA-246. We initiated a Phase IST-246®. In June 2006, we successfully completed the first human clinical safety study of ST-246®. The trial showed the drug to be well tolerated in the second
quarter of 2006.healthy human volunteers at all tested, orally administered doses. In addition, data from blood-level exposure was sufficient to support once-a-day dosing. The Phase I human trials were performed at Advance Biomedical
Research, Inc.'s clinical unit in Hackensack, New Jersey. The primary objective
of the initial study was a double-blind, randomized, placebo controlled, and ascending single-dose study. In 2006, ST-246® became the first drug ever to evaluate the safety and tolerability of single
escalating doses of SIGA-246 in healthy volunteers. In 2005, the drug
demonstrated antiviral activity in various animal models of poxvirus disease,
including the complete protection of golden ground squirrels from lethal doses
of monkeypox virus. In October, 2006, we reported that the drug demonstrateddemonstrate 100% protection against human smallpox virus in a primate trial conducted at the federal CentersCDC. Later in 2006, in two non-human primate trials, the drug demonstrated 100% protection for Disease Controlanimals injected with high doses of monkeypox virus. One study was sponsored by NIAID, part of the National Institutes of Health (“NIH”). The second study was conducted by the U.S. Army Medical Research Institute of Infectious Diseases (“USAMRIID”) and Prevention. Further, in Novemberwas funded by the DoD’s Threat Reduction Agency. In late 2006, ST-246® received Orphan Drug designation for both the treatment and prevention of smallpox. In 2007, we reportedcompleted an additional Phase I clinical trial evaluating safety, tolerability and pharmacokinetics at three different dosages administered over 21 days to healthy volunteers. The results of this study indicated that the drug also demonstrated protection against monkeypox virusis safe and well tolerated at all tested dosages. In August 2008, a Phase I study was performed in order to demonstrate the bioequivalence of ST-246® polymorph form I and form V.
During 2006, we received grants and contracts from the NIH totaling approximately $21 million for the continued development of ST-246®. In 2007, we received a primate trial.
grant from the NIH for a total of approximately $600,000, to support the development of ST-246® treatment of smallpox vaccine-related adverse events. In 2008, we were awarded a $55 million contract from the NIH to support the development of additional formulations and orthopox-related indications for ST-246®, and $20 million in supplemental funding to our existing $16.5 million contract with the NIH.
In March 2009, BARDA issued the BARDA Smallpox RFP, to which we responded in May 2009, proposing that BARDA purchase ST-246® for the SNS. In June 2009, BARDA informed us that our response to the BARDA Smallpox RFP was deemed technically acceptable and in the competitive range. There can be no assurance that BARDA will complete the purchase contemplated by the BARDA Smallpox RFP on the announced or any other terms or that we will be awarded a contract to sell ST-246®.
Anti-Arenavirus Drug: Arenaviruses are hemorrhagic fever viruses that have been classified as Category A agents by the CDC due to the great risk that they pose to public health and national safety. Among the Category A viruses recognized by the CDC, there are four New World hemorrhagic fever arenaviruses (Junin, Machupo, Guanarito and Sabia viruses) for which there areis no FDA
approved treatmentsFDA-approved treatment available. In order to meet this threat, SIGA scientists have identified atwo lead drug candidate,candidates, ST-294 and ST-193, which hashave demonstrated significant antiviral activity in cell culture assays against arenavirus pathogens. SIGAWe have also has
earlier stagedemonstrated the therapeutic efficacy of ST-193 in several animal challenge studies. We also have programs in development against other hemorrhagic fever viruses, including Lassa virus,Dengue Fever, Rift Valley Fever, Lymphocytic choriomeningitis virus ("LCMV"),(LCMV) and Ebola. We believe that the availability of hemorrhagic fever virus antiviral drugs couldwill address national and global security needs by acting as a significant deterrent and defense against the use of arenaviruses as weapons of bioterrorism. 1
Bacterial Commensal Vectors: Our scientists have developed methods that allow
essentially any gene sequenceIn 2006, we received a three-year grant of $6.0 million from the NIH to support the development of antiviral drugs for Lassa fever virus.
Broad Spectrum Antiviral: Research and development efforts currently underway at SIGA are aimed at developing a comprehensive biodefense against those microbial agents most likely to be expressed in Generally Regarded As Safe
("GRAS") gram-positive bacteria, with the foreign protein being displayed on the
surface of the live recombinant organisms. Since organisms are inexpensive to
grow and are very stable, this technology affords the possibility of rapidly
producing live recombinant vaccinesdeployed as biological weapons. A broad-spectrum antiviral would have great utility against any variety of biological agents
that might be encountered, such as Bacillus anthracis ("anthrax")natural or smallpox.
SIGA scientists are working to develop an alternative vaccine with improved
safety for use in preventing human disease caused by pathogenic orthopoxviruses
such as variola virus. To accomplish this goal we are utilizing our
newly-developed BCV (bacterial commensal vector) technology. BCV utilizes
gram-positive commensal bacteria, such as Streptococcus gordonii, ("S.
Gordonii") to express heterologous antigens of interest, either in secreted form
or attached to its external surface. Phase I human clinical trials indicate that
this S. Gordonii strain is safe and well-tolerated in humans. In several
different animal model systems, S. Gordonii has been shown to efficiently
express various antigens and elicit protective immune responses (cellular,
humoral and mucosal). However, these trials are not a predictor of future
success.
Surface Protein Expression ("SPEX/PLEX") System: Our scientists have
harnessed the protein expression pathways of gram-positive bacteria and turned
them into protein production factories. Using our proprietary SPEX or PLEX
systems, we can produce foreign proteins at high levels in the laboratory for
use in subunit vaccine formulations or other therapeutic applications.
Furthermore, we can envision engineering these bacteria to colonize the mucosal
surfaces of soldiers and/or civilians and secrete therapeutic molecules -- e.g.
anti-toxins that protect against aerosolized botulism toxin.
Antibiotics: To combat the problems associated with emerging antibiotic
resistance, our scientists are developing drugs designed to address a new target
- -- the bacterial adhesion organelles. Specifically, by using novel enzymes
required for the transport and/or assembly of the proteins and structures that
bacteria require for adhesion or colonization, we are developing new classes of
broad spectrum antibiotics. This may prove useful in providing prompt treatment
to individuals encountering an unknown bacterial pathogen in the air or food
supply.
Market for Biological Defense Programs.
The Department of Homeland Security ("DHS") appropriation bill signed by
President Bush on October 1, 2003 created a discretionary reserve of $5.6
billion to fund Project BioShield for a period of 10 years
(www.aamc.org/advocacy/library/laborhhs/labor0022.htm). $3.4 billion may be
obligated during the first 5 years of the bill, and was included in the United
States government's budgets for fiscal 2004 and 2005
(www.whitehouse.gov/omb/budget/fy2006/tables.html). The remainder is reserved
for the last 5 years of the bill. Project BioShield was introduced to encourage
pharmaceutical and biotechnology companies to develop bioterrorism
countermeasures. One of the major concerns in the field of biological warfare
agents is smallpox -- although declared extinct in 1980 by the World Health
Organization ("WHO"), there is a threat that a rogue nation or a terrorist group
may have an illegal inventory of the virus that causes smallpox. It is generally
believed that the only legal inventories of the virus are held under extremely
tight security at the CDC in Atlanta, Georgia and at a laboratory in Russia. As
a result of this threat, the U.S. government has announced its intent to
allocate significant expenditures to find a way to counteract the virus if
turned loose by terrorists or on a battlefield.
Although enough smallpox vaccine exists to vaccinate the entire U.S. population,
a number of issues exist. There is no proven safe and effective treatment for
smallpox. According to the Center for Disease Control, vaccination after
exposure to the smallpox virus offers some benefit; however, after 7 days post
exposure, the benefit is significantly limited. In addition, side effects can be
serious in approximately 1,000 out of every million people receiving a smallpox
vaccination. Up to 52 people out of every million vaccinated would be expected
to experience life threatening reactions, with 1 to 2 people per million
expected to die. Importantly, existing smallpox vaccines are contraindicated in
immunosupressed individuals and in individuals with immunosupressed family
members. This contraindication translates into approximately 30 percent of the
U.S. population that cannot be vaccinated against smallpox without taking on
significant
2
health risks. There are two medications that may help persons who have adverse
reactions to the vaccination: vaccinia immune globulin (VIG) and cidofovir.
Although used extensively in the past, VIG has been shown in controlled studies
to not be effective. The antiviral drug, cidofovir, licensed for treatment of
CMV retinitis has demonstrated activity against pox viruses. It is currently
available under treatment IND in the event of adverse reactions to smallpox
vaccine where VIG is not efficacious.
The FDA amended its regulations, effective June 30, 2002, so that certain
new drug and biological products used to reduce or prevent the toxicity of
chemical, biological, radiological, or nuclear substances may be approved for
use in humans based on evidence of effectiveness derived only from appropriate
animal studies and any additional supporting data. We believe that this change
could make it possible for us to have our products which have been found to be
effective in animal studies to be approved for sale within a relatively short
time.
SIGA Antibiotics Product Portfolio
Our anti-infectives program is targeted principally at drug-resistant
bacteria and hospital-acquired infections. According to estimates from the CDC,
approximately two million hospital-acquired infections occur each year in the
United States. Our anti-infectives approaches aim to block the ability of
bacteria to attach to and colonize human tissue, thereby blocking infection at
the first stage in the infection process. By comparison, antibiotics available
today act by interfering with either the structure or the metabolism of a
bacterial cell, affecting its ability to survive and to reproduce. No currently
available antibiotics target the attachment of a bacterium to its target tissue.
We believe that by preventing attachment, the bacteria should be readily cleared
by the body's immune system. SIGA has Gram-positive, Gram-negative and broad
spectrum antibiotic technologies.
SIGA Antivirals Product Portfolio
SIGA currently has the following antiviral programs which are in various
stages of development, ranging from initial research and screening to initiation
of Phase I human clinical trials: smallpox antiviral, New World Arenavirus
antiviral, Old World Arenavirus antiviral, Filovirus (Ebola & Marburg)
antivirals, Dengue Fever virus antiviral, and Bunyavirus antivirals. Currently
there are no approved antivirals available against anyintentional introduction of these viruses.
Market for Anti-infective Programs
There are currently approximately 83 million prescriptions written for
antibiotics annually in the U.S (www.iatrogenic.org/library/antibioticlib.html)
and it is estimated that the worldwide market for antibiotics was worth
approximately $23.7 billion in 2004 (www.pharmaprojectsplus.com). Although our
products are too early in development to make accurate assessments of how well
they might compete, if successfully developed and marketed against other
products currently existing or in development at this time, the successful
capture of even a relatively small global market share could lead to a large
dollar volume of sales. Some of the antivirals that SIGA is developing are for
biowarfare agents and the market for that area is currently unknown; however,
there is funding available to purchase these drugs in Project Bioshieldinto population centers, as well as throughprovide a treatment option in areas where these pathogens are endemic. Screening for antivirals against specific CDC Category A and B pathogens, utilizing SIGA’s high-throughput screening program, led to the DoD. Marketsidentification of a unique collection of compounds with broad spectrum antiviral activity. Compounds with potent, non-toxic activity against diverse virus families are currently being characterized with respect to antiviral mechanism(s) of action, while our chemi-informatics tools are being employed to explore and determine structure-activity relationships within different compound series. To date, our lead candidate, ST-669, has demonstrated sub-micromolar activity in vitro against viruses in the Poxviridae, Filoviridae, Bunyaviridae, Arenaviridae, Flaviviridae, Togaviridae, Retroviridae, and Picornaviridae families. Lead series are currently being assessed with respect to the mechanism of antiviral action and administered by multiple routes and dosing regimens to those small animal species traditionally used for modeling the pathogenesis of Category A viruses.
Dengue antiviral: Dengue fever, dengue hemorrhagic fever, and dengue shock syndrome are caused by one of four serotypes of dengue virus of the genus Flavivirus. Dengue is a major world threat, with an estimated 50-100 million people infected with the virus each year. There is currently no FDA-approved antiviral or vaccine for the other antiviral programs at SIGA vary widely
depending ontreatment or prevention of dengue-mediated disease. We currently have four drug series in the virus and where they are endemic. Eachpre-clinical development stage, each with activity against all four serotypes of virus. Compounds from two of these programs will
be assessed on an individual basis as it approaches the New Drug Application
stage.
series have recently shown efficacy in a murine model of disease, including ST-610 and ST-148. In 2008, we were awarded a $1.0 million, two-year grant from NIH to support lead optimization and animal efficacy for our dengue antiviral program.
Technology
Antiviral Technology-Two Approaches: SIGA hasTechnology: Two Approaches
We have two approaches to the discovery and development of new antiviral compounds: high-throughput screening (HTS) and rational drug designdesign. For HTS, we use whole cell virus inhibition assays, pseudotype virus inhibition assays, and high-throughputvalidated target biochemical assays. We currently have a 200,000 small-molecule compound library in-house that is utilized for screening ("HTS")against these assays. This strategy allows for both target-specific and target-neutral screening and identification of novel antiviral compounds. Compounds are also screened for toxicity in various cell lines to develop a therapeutic index (TI), which we define as the concentration at which the compound is toxic to 50% of the cells (CC50), divided by the concentration of compound required to inhibit 50% of the virus (EC50) (TI = CC50/EC50). Once hits are identified with an acceptable TI they are selected for chemical optimization and proceed to the antiviral drug development pipeline.
For rational drug design
SIGA applieswe apply advanced receptor structure-based Virtual Ligand Screening technology for ligand/inhibitor discovery. The analysis of the structure reveals potentially
"drugable"“drugable” pockets. The
3
technology allows us to utilize the three-dimensional structure of the target receptor to screen large virtual compound collections as well as databases of commercially available compounds and prioritize them for subsequent experimental validation. Rational drug design is also used to develop structure activity relationships and lead optimization.
For HTS, SIGA uses whole cell virus inhibition assays, pseudotype virus
inhibition assays, as well as validated target biochemical assays. SIGA
currently has an in-house compound library consistingTable of 200,000 small molecules
that is utilized for screening in these various assays. This strategy allows for
both target specific and target neutral screening and identification of novel
antiviral compounds. Compounds are also screened for toxicity in various cell
lines to develop a therapeutic index ("TI"), which is the concentration that the
compound is toxic to 50% of the cells (CC50) divided by the concentration of
compound required to inhibit 50% of the virus (EC50) (TI=CC50/EC50). Once hits
are identified with an acceptable TI, they are selected for chemical
optimization and proceed in to the antiviral drug development pipeline.
Vaccine Technologies: Mucosal Immunity and Vaccine Delivery
Using proprietary technology licensed from Rockefeller University
(Rockefeller), SIGA is developing specific commensal bacteria ("commensals") as
a means to deliver mucosal vaccines. Commensals are harmless bacteria that
naturally occupy the body's surfaces with different commensals inhabiting
different surfaces, particularly the mucosal surfaces. Our vaccine candidates
use genetically engineered commensals to deliver antigens for a variety of
pathogens to the mucosal immune system. When administered, the genetically
engineered commensals colonize the mucosal surface and replicate. By activating
a local mucosal immune response, our vaccine candidates are designed to prevent
infection and disease at the earliest possible stage, as opposed to most
conventional vaccines which are designed to act after infection has already
occurred.
By using an antigen unique to a given pathogen, the technology may
potentially be applied to any infectious agent that enters the body through a
mucosal surface. Our scientists have expressed and anchored a variety of viral
and bacterial antigens on the outside of S. Gordonii, including the M6 protein
from group A streptococcus, a group of organisms that causes a range of
diseases, including strep throat, necrotizing fasciitis, impetigo and scarlet
fever. In addition, proteins from other infectious agents, such as HIV and human
papilloma virus, have also been expressed using this system. We believe this
technology will enable the expression of most antigens regardless of size or
shape. In animal studies, we have found that the administration of a genetically
engineered S. Gordonii vaccine prototype induces both a local mucosal immune
response and a systemic immune response.
Surface Protein Expression Systems ("SPEX" & "PLEX")
The ability to overproduce many bacterial and human proteins has been made
possible through the use of recombinant DNA technology. The introduction of DNA
molecules into Escherichia coli ("E. coli") has been the method of choice to
express a variety of gene products, because of this bacterium's rapid
reproduction and well-understood genetics. Yet, despite the development of many
efficient E. coli-based gene expression systems, the most important concern
continues to be associated with subsequent purification of the product.
Recombinant proteins produced in this manner do not readily cross E. coli's
outer membrane, and as a result, proteins must be purified from the bacterial
cytoplasm or periplasmic space. Purification of proteins from these cellular
compartments can be very difficult. Frequently encountered problems include low
product yields, contamination with potentially toxic cellular material (i.e.,
endotoxin) and the formation of large amounts of partially folded polypeptide
chains in non-active aggregates termed inclusion bodies.
To overcome these problems, we have taken advantage of our knowledge of
Gram-positive bacterial protein expression and anchoring pathways. This pathway
has evolved to handle the transport of surface proteins that vary widely in
size, structure and function. Modifying the approach used to create bacterial
4
commensal mucosal vaccines, we have developed methods which, instead of
anchoring the foreign protein to the surface of the recombinant Gram-positive
bacteria, result in it being secreted into the surrounding medium in a manner
which is readily amenable to simple batch purification. We believe the
advantages of this approach include the ease and lower cost of Gram-positive
bacterial growth, the likelihood that secreted recombinant proteins will be
folded properly, and the ability to purify recombinant proteins from the culture
medium without having to disrupt the bacterial cells and liberating cellular
contaminants. Gram-positive bacteria may be grown simply in scales from those
required for laboratory research up to commercial mass production. Recent
developments in the construction of these recombinant bacteria have resulted in
a plasmid-based expression system ("PLEX"), in which engineered genetic elements
(plasmids) are cloned into commensal bacteria for protein production. This
system allows for higher protein production levels than the original SPEX
constructs. In addition, the PLEX and SPEX systems may be used in concert,
enabling greater flexibility in protein secretion for purification or for
surface expression of multiple proteins, e.g. for multi-component combination
vaccines.
5
Contents Investing in our common stock and warrants involves a high degree of risk, and you should be able to bear losing your entire investment. You should carefully consider the risks presented by the following factors.
This prospectus contains forward-looking statements and other prospective information relating to future events. These forward-looking statements and other information are subject to risks and uncertainties that could cause our actual results to differ materially from our historical results or currently anticipated results including the following:
Risks Related to Our Financial Position and Need for Additional Financing
We have incurred operating losses since our inception and expect to incur net losses and negative cash flow for the foreseeable future.
We incurred net losses of approximately $5.6$17.1 million for the ninesix months ended SeptemberJune 30, 2006,2009 and $2.3$8.6 million, $9.4$5.6 million, and $5.3$9.9 million, for the years ended December 31, 2005, 2004,2008, 2007, and 2003,2006, respectively. As of December 31, 2005, 20042008, 2007, and 2003,2006, our accumulated deficit was approximately $46.5$70.6 million, $44.2$62.0 million, and $34.8$56.4 million, respectively.respectively, and it was $90.5 million as of June 30, 2009. We expect to continue to incurhave significant operating expenditures.expenses. We will need to generate significant revenues to achieve and maintain profitability. Currently our revenue derives only from grants and contracts.
We cannot guarantee that we will achieve sufficient revenues for profitability. Even if we do achieve profitability, we cannot guarantee that we can sustain or increase profitability on a quarterly or annual basis in the future. If revenues grow slower than we anticipate, or if operating expenses exceed our expectations or cannot be adjusted accordingly, then our business, results of operations, financial condition and cash flows will be materially and adversely affected. Because our strategy might include acquisitions of other businesses, acquisition expenses and any cash used to make these acquisitions will reduce our available cash.
Our business willmay suffer if we are unable to raise additional equity funding.
We
Unless and until we successfully sell any of our products, such as pursuant to the BARDA Smallpox RFP, we will continue to be dependent on our ability to raise money inthrough the equity
markets.exercise of existing options or warrants or through the issuance of new equity. There is no guarantee that we will continue to be successful in raising such funds. If we are unable to raise additional equity funds, we may be forced to discontinue or cease certain operations. We currently have sufficient
operating capital to finance our operations beyond the next twelve months. Our annual operating needs vary from year to year depending upon the amount of revenue generated through grants and licensescontracts and the amount of projects we undertake, as well as the amount of resources we expend in connection with acquisitionsany future acquisition, all of which may materially differ from year to year and may adversely affect our business.
Risks Related to Our Common Stock
Our stock price is, and we expect it to remain, volatile, which could limit investors'investors’ ability to sell stock at a profit.
The volatile price of our stock makes it difficult for investors to predict the value of their investment,investments, to sell shares at a profit at any given time, or to plan purchases and sales in advance. A variety of factors may affect the market price of our common stock. These include, but are not limited to:
o
| · | publicity regarding actual or potential clinical results relating to
products under development by our competitors or us;
o delay or failure in initiating, completing or analyzing pre-clinical or
clinical trials or the unsatisfactory design or results relating to products under development by our competitors or us; |
| · | initiating, completing or analyzing, or a delay or failure in initiating, completing or analyzing, pre-clinical or clinical trials or the design or results of these trials; |
| · | achievement or rejection of regulatory approvals by our competitors or us; |
| · | announcements of technological innovations or new commercial products by our competitors or us; |
| · | developments concerning proprietary rights, including patents; |
| · | developments concerning our collaborations; |
| · | regulatory developments in the U.S. and foreign countries; |
| · | economic or other crises and other external factors; |
| · | period-to-period fluctuations in our revenues and other results of operations; and |
| · | changes in financial estimates by securities analysts. |
Additionally, because there is not a highthe volume of trading in our stock fluctuates significantly at times, any information about SIGA in the media may result in significant volatility in our stock price.
We will not be able to control many of these factors, and we believe that period-to-period comparisons of our financial results will not necessarily be indicative of our future performance.
In addition, the stock market in general, and the market for biotechnology companies in particular, has experienced extreme price and volume fluctuations that may have been unrelated or disproportionate to the operating performance of individual companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.
A future issuance of preferred stock may adversely affect the rights of the holders of our common stock.
Our certificate of incorporation allows our Board of Directors to issue up to 10,000,000 shares of preferred stock and to fix the voting powers, designations, preferences, rights and qualifications, limitations or restrictions of these shares without any further vote or action by the stockholders. The rights of the holders of common stock will be subject to, and could be adversely affected by, the rights of the holders of any preferred stock that we may issue in the future. The issuance of preferred stock, while providing desirable flexibility in connection with our future activities, could also have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock, thereby delaying, deferring or preventing a change in control.
Concentration of ownership of our capital stock could delay or prevent a change of control.
Our directors, executive officers and principal stockholders beneficially own a significant percentage of our common stock. They also have, through the exercise or conversion of certain securities, the right to acquire additional common stock. As a result, these stockholders, if acting together, have the ability to significantly influence the outcome of corporate actions requiring shareholder approval. Additionally, this concentration of ownership may have the effect of delaying or preventing a change in control of SIGA. As of March 16, 2009, directors, officers and principal stockholders beneficially owned approximately 33.3% of our stock.
Risks Related to Our Dependence on U.S. Government Contracts and Grants
Most of our immediately foreseeable future revenues are contingent upon grants and contracts from the U.S. government, and we may not achieve sufficient revenues from these agreements to attain profitability.
Until and unless we successfully sell any of our products, our ability to generate revenues will largely depend on our ability to enter into additional research grants, collaborative agreements, strategic alliances, contracts and license agreements with third parties or maintain the agreements we currently have in place. Substantially all of our revenues for the years ended December 31, 2008, 2007, and 2006, respectively, and the nine months ended September 30, 2009, were derived from grants and contracts. Our current revenue is derived from contract work being performed for the NIH under two major contracts, which are scheduled to expire from September 2011 through September 2013.
Risks Related to Product Development
Our business depends significantly on our success in completing development of and commercializing drug candidates that are still under development. If we are unable to commercialize these drug candidates, or experience significant delays in doing so, our business will be materially harmed.
We have invested a substantial majority of our efforts and financial resources in the development of our drug candidates. Our ability to generate near-term revenue is particularly dependent on the success of our smallpox antiviral drug candidate ST-246®. The commercial success of our drug candidates will depend on many factors, including:
successful development, formulation and cGMP scale-up of drug manufacturing that meets FDA requirements;
successful development of animal models;
successful completion of non-clinical development, including studies in approved animal models;
our ability to pay the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights;
successful completion of clinical trials;
receipt of marketing approvals from the FDA and similar foreign regulatory authorities;
a determination by BARDA that our biodefense drug candidates should be purchased for the SNS prior to FDA approval;
establishing commercial manufacturing processes of our own or arrangements on reasonable terms with contract manufacturers;
manufacturing stable commercial supplies of drug candidates, including availability of raw materials;
launching commercial sales of the product, whether alone or in collaboration with others; and
acceptance of the product by potential government customers, physicians, patients, healthcare payors and others in the medical community.
We expect to rely on FDA regulations known as the “animal rule” to obtain approval for our biodefense drug candidates. The animal rule permits the use of animal efficacy studies together with human clinical safety trials to support an application for marketing approval. These regulations are relatively new, and we have limited experience in the application of these rules to the drug candidates that we are developing. It is possible that results from these animal efficacy studies may not be predictive of the actual efficacy of our drug candidates in humans. If we are not successful in completing the development and commercialization of our drug candidates, our business could be harmed.
We will not be able to commercialize our drug candidates if our preclinical development efforts are not successful, our clinical trials do not demonstrate safety or our clinical trials or animal studies do not demonstrate efficacy.
Before obtaining regulatory approval for the sale of our drug candidates, we must conduct extensive preclinical development, clinical trials to demonstrate the safety of our drug candidates and clinical or animal trials to demonstrate the efficacy of our drug candidates. Pre-clinical and clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. Success in preclinical testing and early clinical trials does not ensure that later clinical trials or animal efficacy studies will be successful, and interim results of a clinical trial or animal efficacy study do not necessarily predict final results.
A failure of one or more of our clinical trials or animal efficacy studies can occur at any stage of testing. We may experience numerous unforeseen events during, or as a result of, preclinical testing and the clinical trial or animal efficacy study process that could delay or prevent our ability to receive regulatory approval or commercialize our drug candidates, including:
regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials, or we may abandon projects that we expect to be promising, if our preclinical tests, clinical trials or animal efficacy studies produce negative or inconclusive results;
we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;
regulators or institutional review boards may require that we hold, suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements;
the cost of our clinical trials could escalate and become cost prohibitive;
any regulatory approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the product not commercially viable;
we may not be successful in recruiting a sufficient number of qualifying subjects for our clinical trials; and
the effects of our drug candidates may not be the desired effects or may include undesirable side effects or the drug candidates may have other unexpected characteristics.
We are in various stages of product development, and there can be no assurance of successful commercialization.
In general, our research and development programs are at an early stage of development. To obtain FDA approval for our biological warfare defense products we will be required to perform twoat least one animal modelsefficacy model and provide animal and human safety data. Our other products will be subject to the approval guidelines underusual FDA regulatory requirements, which include a number of phases of testing in humans.
The FDA has not approved any of our biopharmaceutical product candidates. Any drug candidates developed by uscandidate we develop will require significant additional research and development efforts, including extensive pre-clinical and clinical testing and regulatory approval, prior to commercial sale. We cannot be sure our approach to drug discovery will be effective or will result in the development of any drug. We cannot expect thatpredict with certainty whether any drugsdrug resulting from our research and development efforts will be commercially available for manywithin the next several years, or if they will be available at all.
We have limited experience in conducting pre-clinical testing and clinical
trials.
Even if we receive initially positive pre-clinical or clinical results, such results do not mean that similar results will be obtained in the later stages of drug development, such as additional pre-clinical testing or human clinical trials. All of our potential drug candidates are prone to the risks of failure inherent in pharmaceutical product development, including the possibility that none of our drug candidates will or can:
o be safe, non-toxic and effective;
o otherwise meet applicable regulatory standards;
o receive the necessary regulatory approvals;
o develop into commercially viable drugs;
o be manufactured or produced economically and on a large scale;
o be successfully marketed;
o be reimbursed by government and private insurers; and
o achieve customer acceptance.
| · | be safe, non-toxic and effective; |
| · | otherwise meet applicable regulatory standards; |
| · | receive the necessary regulatory approvals; |
| · | develop into commercially viable drugs; |
| · | be manufactured or produced economically and on a large scale; |
| · | be successfully marketed; |
| · | be reimbursed by government and private insurers; and |
| · | achieve customer acceptance. |
In addition, third parties may preclude us from marketing our drugs through enforcement of their proprietary rights that we are not aware of, or third parties may succeed in marketing equivalent or superior drug products. Our failure to develop safe, commercially viable drugs would have a material adverse effect on our business, financial condition and results of operations.
7
MostRisks Related to Commercialization
Because we must obtain regulatory clearance or otherwise operate under strict legal requirements in order to test and market our products in the U.S., we cannot predict whether or when we will be permitted to commercialize our products.
A pharmaceutical product cannot generally be marketed in the U.S. until it has completed rigorous pre-clinical testing and clinical trials and an extensive regulatory clearance process implemented by the FDA. Pharmaceutical products typically take many years to satisfy regulatory requirements and require the expenditure of our immediately foreseeable future revenues are contingent upon grantssubstantial resources depending on the type, complexity and contractsnovelty of the product and its intended use.
Before commencing clinical trials in humans, we must submit and receive clearance from the United States governmentFDA by means of an IND application. Institutional review boards and collaborativethe FDA oversee clinical trials and license
agreements and we may not achieve sufficient revenues from these agreementssuch trials:
| · | must be conducted in conformance with the FDA regulations; |
| · | must meet requirements for institutional review board oversight; |
| · | must meet requirements for informed consent; |
| · | must meet requirements for good clinical and manufacturing practices; |
| · | are subject to continuing FDA oversight; |
| · | may require large numbers of test subjects; and |
| · | may be suspended by us or the FDA at any time if it is believed that the subjects participating in these trials are being exposed to unacceptable health risks or if the FDA finds deficiencies in any of our IND applications or the conduct of these trials. |
Before receiving FDA clearance to attain profitability.
Until and unless we successfully makemarket a product our abilityin the absence of a medical or public health emergency, we must demonstrate that the product is safe and effective on the patient population that will be treated. Data we obtain from preclinical and clinical activities are susceptible to generate
revenuesvarying interpretations that could delay, limit or prevent regulatory clearances. Additionally, we have limited experience in conducting and managing the clinical trials and manufacturing processes necessary to obtain regulatory clearance.
If full regulatory clearance of a product is granted, this clearance will
largely depend on our abilitybe limited only to
enter into additional
collaborative agreements, strategic alliances, research grants, contractsthose states and
license agreementsconditions for which the product is demonstrated through clinical trials to be safe and efficacious. We cannot ensure that any compound developed by us, alone or with
third partiesothers, will prove to be safe and
maintain the agreements we currently
haveefficacious in
place. Substantiallyclinical trials and will meet all of
our revenues for the
years ended December
31, 2005, 2004 and 2003, respectively, were derived from revenues relatedapplicable regulatory requirements needed to
grants, contracts and license agreements. The majority of our current revenue is
derived from contract work being performed for the NIH under two major grants
and a contract, all of which are scheduled to expire in September 2009, and
contracts with the U.S. Air Force which expire November 2007. These agreements
are for specific work to be performed under the agreements and could only be
canceled by the other party thereto for non-performance. We may not earn
significant milestone payments under our existing collaborative agreements until
our collaborators have advanced products into clinical testing, which may not
occur for many years, if at all.
We have material agreements with the following collaborators:
o National Institutes of Health. Under our collaborative agreement with the
NIH we have received SBIR Grants totaling approximately $10.8 million in
2006. The term of these grants expire in September 2009. We have also
received a three year, $16.5 million contract from the NIH, also expiring
in September 2009. We are paid as the work is performed and the agreement
can be cancelled for non-performance. If terminated, we would have to find
another source of funds to continue to conduct the trials. We are current
in all our obligations under our agreements.
o United States Air Force. In November 2006 we received two contracts from
the USAF for a total of $2.3 million. The contracts expire in November
2007. We are current in all our obligations under our agreements.
o United States Army Medical Research and Material Command. In September
2005 we entered into a $3.2 million, one year contract with the USAMRMC.
The agreement, for the rapid identification and treatment of anti-viral
diseases, is funded through the USAF. It is anticipated that our efforts
will aid the USAF Special Operations Command in its use of computational
biology to design and develop specific countermeasures against biological
threat agents Smallpox and Adenovirus. We are current in all our
obligations under our agreement.
o United States Army Medical Research Acquisition Activity. In December
2002, we entered into a four year contract with USAMRAA to develop a drug
to treat Smallpox. We are current in all our obligations under our
agreement.
o Rockefeller University. The term of our agreement with Rockefeller is for
the duration of the patents and a number of pending patents. As we do not
currently know when any patents pending or future patents will expire, we
cannot at this time definitively determine the term of this agreement. The
agreement can be terminated earlier if we are in breach of the provisions
of the agreement and do not cure the breach in the allowed cure period. We
are current in all obligations under the contract.
o Oregon State University. OSU is a signatory of our agreement with
Rockefeller. The term of this agreement is for the duration of the patents
and a number of pending patents. As we do not currently know when any
patents pending or future patents will expire, we cannot at this time
definitively determine the term of this agreement. The agreement can be
terminated earlier if we are in breach of the provisions of the agreement
and do not cure the breach in the allowed cure period. We are current in
all obligations under the contract. We have also entered into a
subcontract agreement with OSU for us to perform work under a grant OSU
has from the NIH.
8
The subcontract agreement was renewable annually and the current terms
expired on August 31, 2003. Work on this agreement was completed in 2003.
o Washington University. We have licensed certain technology from Washington
under a non-exclusive license agreement. The term of our agreement with
Washington is for the duration of the patents and a number of pending
patents. As we do not currently know when any patents pending or future
patents will expire, we cannot at this time definitively determine the
term of this agreement. The agreement cannot be terminated unless we fail
to pay our share of the joint patent costs for the technology licensed. We
have currently met all our obligations under this agreement.
o Regents of the University of California. We have licensed certain
technology from Regents under an exclusive license agreement. We are
required to pay minimum royalties under this agreement. We have currently
met all our obligations under this agreement.
o TransTech Pharma, Inc. Under our collaborative agreement with TransTech
Pharma, a related party, TransTech Pharma is collaborating with us on the
discovery, optimization and development of lead compounds to certain
therapeutic agents. We and TransTech Pharma have agreed to share the costs
of development and revenues generated from licensing and profits from any
commercialized products sales. The agreement will be in effect until
terminated by the parties or upon cessation of research or sales of all
products developed under the agreement. We are current in all obligations
under this agreement.
receive full marketing clearance. The biopharmaceutical market in which we compete and will compete is highly competitive.
The biopharmaceutical industry is characterized by rapid and significant technological change. Our success will depend on our ability to develop and apply our technologies in the design and development of our product candidates and to establish and maintain a market for our product candidates. There also are many companies, both public and private, including major pharmaceutical and chemical companies, specialized biotechnology firms, universities and other research institutions engaged in developing pharmaceutical and biotechnology products. Many of these companies have substantially greater financial, technical, research and development resources, and human resources than us. Competitors may develop products or other technologies that are more effective than any that are being developed by us or may obtain FDA approval for products more rapidly than us. If we commence commercial sales of products, we still must compete in the manufacturing and marketing of such products, areas in which we have no experience. Many of these companies also have manufacturing facilities and established marketing capabilities that would enable such companies to market competing products through existing channels of distribution. Two companies with similar profiles are VaxGen, Inc., which is developing vaccines against anthrax, Smallpoxsmallpox and HIV/AIDS; and Avant Immunotherapeutics, Inc., which has vaccine programs for agents of biological warfare.
Becausewarfare; and Chimerix, Inc., which is attempting to commercialize what it believes to be an alternative smallpox therapeutic.
Our potential products may not be acceptable in the market or eligible for third-party reimbursement resulting in a negative impact on our future financial results.
Any product we must obtain regulatory clearance to test anddevelop may not achieve market acceptance. The degree of market acceptance of any of our products will depend on a number of factors, including:
| · | the establishment and demonstration in the medical community of the clinical efficacy and safety of such products, |
| · | the potential advantage of such products over existing treatment methods, |
| · | the cost of our products relative to their perceived benefits, and |
| · | reimbursement policies of government and third-party payors. |
Physicians, patients or the medical community in
general may not accept or utilize any product we may develop. Our ability to generate revenues and income with respect to drugs, if any, developed through the
United States, we cannot predict whether or when weuse of our technology will depend, in part, upon the extent to which reimbursement for the cost of such drugs will be
permittedavailable from third-party payors, such as government health administration authorities, private healthcare insurers, health maintenance organizations, pharmacy benefits management companies and other organizations. Third-party payors are increasingly disputing the prices charged for pharmaceutical products. If third-party reimbursement was not available or sufficient to
commercialize our products.
A pharmaceutical product cannot be marketed in the U.S. until it has
completed rigorous pre-clinical testing and clinical trials and an extensive
regulatory clearance process implemented by the FDA. Pharmaceutical products
typically take many years to satisfy regulatory requirements and require the
expenditure of substantial resources depending on the type, complexity and
novelty of the product.
Before commencing clinical trials in humans, we must submit and receive
clearance from the FDA by means of an IND application. Institutional review
boards and the FDA oversee clinical trials and such trials:
o must be conducted in conformance with the FDA's good laboratory practice
regulations;
o must meet requirements for institutional review board oversight;
9
o must meet requirements for informed consent;
o must meet requirements for good clinical and manufacturing practices;
o are subject to continuing FDA oversight;
o may require large numbers of test subjects; and
o may be suspended by us or the FDA at any time if it is believed that the
subjects participating in these trials are being exposed to unacceptable
health risks or if the FDA finds deficiencies in the IND application or
the conduct of these trials.
Before receiving FDA clearance to market a product, we must demonstrate
that the product is safe and effective on the patient population that will be
treated. Data we obtain from preclinical and clinical activities are susceptible
to varying interpretations that could delay, limit or prevent regulatory
clearances. Additionally, we have limited experience in conducting and managing
the clinical trials and manufacturing processes necessary to obtain regulatory
clearance.
If regulatory clearance of a product is granted, this clearance will be
limited only to those states and conditions for which the product is
demonstrated through clinical trialsallow profitable price levels to be safe and efficacious. We cannot
ensure that any compound developed by us, alone or with others, will prove to be
safe and efficacious in clinical trials and will meet allmaintained for drugs we develop, it could adversely affect our business.
If our technologies or those of our collaborators are alleged or found to
infringe the patents or proprietary rights of others,products harm people, we may be sued or have to
license those rights from others on unfavorable terms.
Our commercial success will depend significantly on our ability to operate
without infringing the patents and proprietary rights of third parties. Our
technologies, along with our licensors' and our collaborators' technologies, may
infringe the patents or proprietary rights of others. If there is an adverse
outcome in litigation or an interference to determine priority or other
proceeding in a court or patent office, then we, or our collaborators and
licensors, could be subjected to significant liabilities, required to license
disputed rights from or to other parties and/or required to cease using a
technology necessary to carry out research, development and commercialization.
At present we are unaware of any or potential infringementexperience product liability claims against our
patent portfolio.
The costs to establish the validity of patents, to defend against patent
infringement claims of others and to assert infringement claims against others
can be expensive and time consuming, even if the outcome is favorable. An
outcome of any patent prosecution or litigation that is unfavorable to us or one
of our licensors or collaborators may have a material adverse effect on us. We
could incur substantial costs if we are required to defend ourselves in patent
suits brought by third parties, if we participate in patent suits brought
against or initiated by our licensors or collaborators or if we initiate such
suits. We may not have sufficient funds or resourcesbe covered by insurance.
We face an inherent business risk of exposure to potential product liability claims in the event of litigation.
Additionally,that drugs we may not prevaildevelop are alleged to cause adverse effects on patients. Such risk exists for products being tested in any such action.
Any conflicts resulting from third-party patent applicationshuman clinical trials, as well as products that receive regulatory approval for commercial sale. We have obtained and patents
could significantly reduce the coverage of the patents owned, optioned by or
licensedintend to us or our collaborators and limit our ability or that of our
collaboratorskeep in place product liability insurance with respect to obtain meaningful patent protection. If patents are issued to
third parties that contain competitive or conflicting claims,drugs we our licensors
or our collaborators may be legally prohibited from researching, developing or
commercializing of potential products or be required to obtain licenses to these
patents or to develop or obtain alternative technology. We, our licensors and/or
our collaborators may be legally prohibited from using patented technology,develop. However, we may not be able to obtain such insurance. Even if such insurance is obtainable, it may not be available at a reasonable cost or in a sufficient amount to protect us against liability.
We may be required to perform additional clinical trials or change the labeling of our products if we or others identify side effects after our products are on the market, which could harm sales of the affected products.
If we or others identify side effects after any licenseof our products are on the market, or if manufacturing problems occur:
| · | regulatory approval may be withdrawn; |
| · | reformulation of our products, additional clinical trials, changes in labeling of our products may be required; |
| · | changes to or re-approvals of our manufacturing facilities may be required; |
| · | sales of the affected products may drop significantly; |
| · | our reputation in the marketplace may suffer; and |
| · | lawsuits, including class action suits, may be brought against us. |
Any of the above occurrences could harm or prevent sales of the affected products or could increase the costs and expenses of commercializing and marketing these products.
Healthcare reform and controls on healthcare spending may limit the price we charge for any products and the amounts that we can sell.
The U.S. government and private insurers have considered ways to change, and have changed, the patentsmanner in which healthcare services are provided in the U.S. Potential approaches and technologieschanges in recent years include controls on healthcare spending and the creation of third
partieslarge purchasing groups. In the future, the U.S. government may institute further controls and limits on acceptable terms, if athealthcare spending, including through the Medicare and Medicaid programs. These controls and limits might affect the payments we could collect from sales of any of our products. Uncertainties regarding future healthcare reform and private market practices could adversely affect our ability to sell any product profitably in the U.S. At present, we do not foresee any change in FDA regulatory policies that would adversely affect our development programs.
Risks Related to Manufacturing and Manufacturing Facilities
Problems related to large-scale commercial manufacturing could cause us to delay product launches or experience shortages of products.
Our drug candidates require several manufacturing steps, and may involve complex techniques to assure quality and sufficient quantity, especially as the manufacturing scale increases. Our products must be made consistently and in compliance with a clearly defined manufacturing process. Accordingly, it is essential to be able to validate and control the manufacturing process to assure that it is reproducible. Slight deviations anywhere in the manufacturing process, including obtaining materials, filling, labeling, packaging, storage and shipping and quality control and testing, some of which all pharmaceutical companies, including SIGA, experience from time to time, may result in lot failures, delay in the release of lots, product recalls or mayspoilage. We will not be able to obtainsell any lot that fails to satisfy release testing specifications.
If third parties do not manufacture our drug candidates or develop
alternative technologies.products in sufficient quantities and at an acceptable cost or in compliance with regulatory requirements and specifications, the development and commercialization of our drug candidates could be delayed, prevented or impaired.
We currently rely on third parties to manufacture drug candidates that we require for pre-clinical and clinical development. In addition, like many biopharmaceutical companies, we may from time to
time hire scientific personnel formerly employed by other companies involvedindicated in one or more areas similarour response to the activities
10
conducted byBARDA Smallpox RFP that we intend to manufacture ST-246® using contract manufacturers. Any significant delay in obtaining adequate supplies of our drug candidates could adversely affect our ability to develop or commercialize these drug candidates. We expect that we will rely on third parties for a portion of the manufacturing process for commercial supplies of drug candidates that we successfully develop. If our contract manufacturers are unable to scale-up production to generate enough materials for commercial launch, the success of those products may be jeopardized. Our current and anticipated future dependence upon others for the manufacture of our drug candidates may adversely affect our ability to develop drug candidates and commercialize any product that receives regulatory approval on a timely and competitive basis. We currently rely on third parties to demonstrate regulatory compliance and for quality assurance with respect to the drug candidates manufactured for us. We and/orintend to continue to rely on these individuals may bethird parties for these purposes with respect to production of commercial supplies of drugs that we successfully develop. Manufacturers are subject to allegations of
trade secret misappropriationongoing, periodic, unannounced inspection by the FDA and corresponding state and foreign agencies or their designees to ensure strict compliance with applicable regulations.
We cannot be certain that our present or future manufacturers will be able to comply with these regulations and other FDA regulatory requirements or similar claims as a result of their prior
affiliations.
Our ability to compete may decrease ifregulatory requirements outside the U.S. While our contracts call for compliance with all applicable regulatory requirements, we do not adequately protect our
intellectual property rights.
Our commercial success will depend in partcontrol compliance by these manufacturers with these regulations and standards. If we or these third parties fail to comply with applicable regulations, sanctions could be imposed on ourus, which could significantly and our collaborators'
ability to obtain and maintain patent protection for our proprietary
technologies, drug targets and potential products and to effectively preserve
our trade secrets. Because of the substantial length of time and expense
associated with bringing potential products through the development and
regulatory clearance processes to reach the marketplace, the pharmaceutical
industry places considerable importance on obtaining patent and trade secret
protection. The patent positions of pharmaceutical and biotechnology companies
can be highly uncertain and involve complex legal and factual questions. No
consistent policy regarding the breadth of claims allowed in biotechnology
patents has emerged to date. Accordingly, we cannot predict the type and breadth
of claims allowed in these patents.
We have licensed the rights to eight issued U.S. patents and three issued
European patents. These patents have varying lives and they are related to the
technology licensed from Rockefeller University for the Strep and Gram-positive
products. We have one additional patent application in the U.S. and one
application in Europe relating to this technology. We are joint owner with
Washington University of seven issued patents in the U.S. and one in Europe. In
addition, there are four co-owned U.S. patent applications. These patents are
for the technology used for the Gram-negative product opportunities. We are also
exclusive owner of one U.S. patent and three U.S. patent applications. One of
these U.S. patent applications relates to our DegP product opportunities.
We included a summary of out patent positions as of December 31, 2005 in
Part I, Item 1adversely affect supplies of our Annual report on Form 10-K for the year ended December 31,
2005.
We also rely on copyright protection, trade secrets, know-how, continuing
technological innovation and licensing opportunities. In an effort to maintain
the confidentiality and ownership of trade secrets and proprietary information,
we require our employees, consultants and some collaborators to execute
confidentiality and invention assignment agreements upon commencement of a
relationship with us. These agreements may not provide meaningful protection for
our trade secrets, confidential information or inventions in the event of
unauthorized use or disclosure of such information, and adequate remedies may
not exist in the event of such unauthorized use or disclosure.
We may have difficulty managing our growth.
We expect to experience growth in the number of our employees and the
scope of our operations. This future growth could place a significant strain on
our management and operations. Our ability to manage this growth will depend
upon our ability to broaden our management team and our ability to attract, hire
and retain skilled employees. Our success will also depend on the ability of our
officers and key employees to continue to implement and improve our operational
and other systems and to hire, train and manage our employees.
drug candidates.
Our activities may involve hazardous materials, anduse of which may subject us to environmental regulatory liabilities.
Our biopharmaceutical research and development
sometimes involves the controlled use of hazardous and radioactive materials and biological waste. We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these materials and certain waste products. Although we believe that our safety procedures for handling and disposing of these materials comply with legally prescribed standards, the risk of accidental contamination or injury from these materials cannot be completely eliminated. In the event of an accident, we could be held liable for damages, and this liability could exceed our resources. The research and development activities of our company do not produce any unusual hazardous products. We do use small amounts of
32P, 35S and 3H,radioactive isotopes commonly used in pharmaceutical research, which are stored, used and disposed of in accordance with Nuclear Regulatory Commission
("NRC")
11
regulations. We maintain liability insurance in the amount of approximately $5,000,000 and we believe this should be sufficient to cover any contingent losses.
loss.We believe that we are in compliance in all material respects with applicable environmental laws and regulations and currently do not expect to make material additional capital expenditures for environmental control facilities in the near term. However, we may have to incur significant costs to comply with current or future environmental laws and regulations.
Risks Related to Sales of Biodefense Products to the U.S. Government
Our potentialbusiness could be adversely affected by a negative audit by the U.S. government.
U.S. government agencies, such as the Defense Contract Audit Agency (the “DCAA”), routinely audit and investigate government contractors. These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards.
The DCAA also reviews the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property, estimating, compensation and management information systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed, while such costs already reimbursed must be refunded. If an audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including:
termination of contracts;
suspension or prohibition from doing business with the U.S. government.
In addition, we could suffer serious reputational harm if allegations of impropriety were made against us.
Laws and regulations affecting government contracts might make it more costly and difficult for us to successfully conduct our business.
We must comply with numerous laws and regulations relating to the formation, administration and performance of government contracts, which can make it more difficult for us to retain our rights under these contracts. These laws and regulations affect how we do business with federal, state and local government agencies. Among the most significant government contracting regulations that affect our business are:
the Federal Acquisition Regulations, and agency-specific regulations supplemental to the Federal Acquisition Regulations, which comprehensively regulate the procurement, formation, administration and performance of government contracts;
the business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and incorporate other requirements such as the Anti-Kickback Act and Foreign Corrupt Practices Act;
export and import control laws and regulations; and
laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.
Risks Related to Regulatory Approvals
If we are not able to obtain required regulatory approvals, we will not be able to commercialize our drug candidates, and our ability to generate revenue will be materially impaired.
Our drug candidates and the activities associated with their development and commercialization, including their testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the U.S. and by comparable authorities in other countries. Failure to obtain regulatory approval for a drug candidate will prevent us from commercializing the drug candidate. We have limited experience in preparing, filing and prosecuting the applications necessary to gain regulatory approvals and expect to rely on third-party contract research organizations and consultants to assist us in this process. Securing FDA approval requires the submission to the FDA of extensive pre-clinical and clinical data, information about product manufacturing processes and inspection of facilities and supporting information in order to establish the drug candidate’s safety and efficacy. Our future products may not be acceptableeffective, may be only moderately effective, or may prove to have significant side effects, toxicities, or other characteristics that may preclude our obtaining regulatory approval or prevent or limit commercial use.
Failure to obtain regulatory approval in international jurisdictions could prevent us from marketing our products abroad.
We intend to have our products marketed outside the U.S. To market our products in the market or eligible for third
party reimbursement resulting in a negative impact on our future financial
results.
Any products successfully developed by us or our collaborative partnersEuropean Union and many other foreign jurisdictions, we may need to obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ from that required to obtain FDA approval.
The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not achieve market acceptance. The antibiotic products which we are
attempting to develop will compete with a number of well-established traditional
antibiotic drugs manufactured and marketed by major pharmaceutical companies.
The degree of market acceptance of any of our products will dependobtain foreign regulatory approvals on a number
of factors, including:
otimely basis, if at all. Approval by the establishmentFDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and demonstrationapproval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or jurisdictions or by the medical community of the
clinical efficacyFDA. We and safety of such products,
o theour potential advantage of such products over existing treatment methods,
and
o reimbursement policies of government and third-party payors.
Physicians, patients or the medical community in general may not accept or
utilize any products that we or our collaborative partners may develop. Our
ability to receive revenues and income with respect to drugs, if any, developed
through the use of our technology will depend, in part, upon the extent to which
reimbursement for the cost of such drugs will be available from third-party
payors, such as government health administration authorities, private health
care insurers, health maintenance organizations, pharmacy benefits management
companies and other organizations. Third-party payors are increasingly disputing
the prices charged for pharmaceutical products. If third-party reimbursement was
not available or sufficient to allow profitable price levels to be maintained
for drugs developed by us or our collaborative partners, it could adversely
affect our business.
If our products harm people, we may experience product liability claims thatfuture collaborators may not be covered by insurance.
We face an inherent business risk of exposureable to potential product
liability claimsfile for regulatory approvals and may not receive necessary approvals to commercialize our products in the event that drugsany market.
Risks Related to Our Dependence on Third Parties
If third parties on whom we
develop are alleged to cause adverse
effects on patients. Such risk existsrely for
products being tested in human
clinical
or certain animal trials
do not perform as
wellcontractually required or as
products that receive regulatory approval for
commercial sale. We may seek to obtain product liability insurance with respect
to drugs we
and/or or our collaborative partners develop. However,expect, we may not be able to obtain
such insurance. Even if such insurance is obtainable, it may not
be available at a reasonable cost or in a sufficient amount to protect us
against liability.
We may be required to perform additional clinical trials or change the labeling
of our products if we or others identify side effects after our products are on
the market, which could harm sales of the affected products.
If we or others identify side effects after any of our products on the
market, or if manufacturing problems occur:
o regulatory approval
for or commercialize our drug candidates and our business may
be withdrawn;
o reformulation of our products, additional clinical trials, changes in
labeling of our products may be required;
o changes to or re-approvals of our manufacturing facilities may be
required;
12
o sales of the affected products may drop significantly;
o our reputation in the marketplace may suffer; and
o lawsuits, including class action suits, may be brought against us.
Any of the above occurrences could harm or prevent sales of the affected
products or could increase the costs and expenses of commercializing and
marketing these products.
The manufacture of biotechnology products can be a time-consuming and complex
process which may delay or prevent commercialization of our products, or may
prevent our ability to produce an adequate volume for the successful
commercialization of our products.
Our management believes that wesuffer. We do not have the ability to acquire or produce
quantitiesindependently conduct the clinical trials, and certain of products sufficientthe animal trials, required to support our present needs for research and
our projected needsobtain regulatory approval for our initial clinical development programs. The
manufacture of allproducts. We depend on independent investigators, contract research organizations and other third-party service providers to conduct trials of our drug candidates and expect to continue to do so. We rely heavily on these third parties for successful execution of our trials, but do not exercise day-to-day control over their activities. We are responsible for ensuring that each of our trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, for conducting and recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. Third parties may not complete activities on schedule, or may not conduct our trials in accordance with regulatory requirements or our stated protocols. The failure of these third parties to carry out their obligations could delay or prevent the development, approval and commercialization of our drug candidates.
Risks Related to Our Intellectual Property
Our ability to compete may decrease if we do not adequately protect our intellectual property rights.
Our commercial success will depend in part on our ability to obtain and maintain patent protection for our proprietary technologies, drug targets and potential products and to effectively preserve our trade secrets. Because of the substantial length of time and expense associated with bringing potential products through the development and regulatory clearance processes to reach the marketplace, the pharmaceutical industry places considerable importance on obtaining patent and trade secret protection. The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions. No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date. Accordingly, we cannot predict the type and breadth of claims allowed in these patents.
We have licensed the rights to nine issued U.S. patents and three issued European patents. We are joint owner with Washington University of one issued patent in the U.S. We are also exclusive owner of six U.S. patents and nine U.S. patent applications. We are also exclusive owner of two U.S. provisional patent applications. These patents have varying lives.
We also rely on trade secrets, know-how, continuing technological innovation and licensing opportunities. In an effort to maintain the confidentiality and ownership of trade secrets and proprietary information, we require our employees, consultants and some collaborators to execute confidentiality and invention assignment agreements upon commencement of a relationship with us. These agreements may not provide meaningful protection for our trade secrets, confidential information or inventions in the event of unauthorized use or disclosure of such information, and adequate remedies may not exist in the event of such unauthorized use or disclosure.
If our technologies are alleged or found to infringe the patents or proprietary rights of others, we may be sued or have to license those rights from others on unfavorable terms.
Our commercial success will depend significantly on our ability to operate without infringing the patents or proprietary rights of third parties. Our technologies, or the technologies of third parties on which we depend, may infringe the patents or proprietary rights of others. If there is an adverse outcome in any dispute concerning rights to these technologies, then we could be subject to current Good Manufacturing
Practices (GMP) requirements prescribedsignificant liability, required to license disputed rights from or to other parties and/or required to cease using a technology necessary to carry out our research, development and commercialization activities. At present, we are unaware of any or potential infringement claims against our patent portfolio.
The costs to establish the validity of patents, to defend against patent infringement claims of others and to assert infringement claims against others can be expensive and time-consuming, even if the outcome is favorable. An outcome of any patent prosecution or litigation that is unfavorable to us may have a material adverse effect on us. We could incur substantial costs if we are required to defend ourselves in patent suits brought by third parties or if we initiate such suits. We may not have sufficient funds or resources in the FDAevent of litigation. Additionally, we may not prevail in any such action.
Any dispute resulting from third-party patent applications and patents could result in a significant reduction in the coverage of the patents owned, optioned by or licensed to us and limit our ability to obtain meaningful patent protection. If patents are issued to third parties that contain competitive or conflicting claims, we may be legally prohibited from researching, developing or commercializing potential products or be required to obtain licenses to these patents or to develop or obtain alternative technology. We may be legally prohibited from using patented technology, may not be able to obtain any license to the patents and technologies of third parties on acceptable terms, if at all, or may not be able to obtain or develop alternative technologies.
In December 2006, PharmAthene, Inc. (“PharmAthene”) filed an action against us in the Court of Chancery in the State of Delaware, captioned PharmAthene, Inc. v. SIGA Technologies, Inc., C.A. No. 2627-N. In its amended complaint, PharmAthene asks the Court to order us to enter into a license agreement with PharmAthene with respect to ST-246, as well as issue a declaration that we are obliged to execute such a license agreement, and award damages resulting from our supposed breach of that obligation. PharmAthene also alleges that we breached an obligation to negotiate such a license agreement in good faith, as well as seeks damages for promissory estoppel and unjust enrichment based on supposed information, capital and assistance that PharmAthene allegedly provided to us during the negotiation process. In January 2008, the Court of Chancery denied our motion to dismiss the original complaint and lifted a related stay of discovery. Discovery is proceeding. We filed its answer to the amended complaint denying all material allegations. While we believe that we have meritorious defenses to the claim, there can be no assurance concerning the outcome. If PharmAthene were successful in obtaining a license through this litigation, the license may be on terms that are not favorable to us.
In addition, like many biopharmaceutical companies, we may from time to time hire scientific personnel formerly employed by other companies involved in one or more areas similar to the activities conducted by us. We and/or these individuals may be subject to allegations of trade secret misappropriation or other standards prescribed
by the appropriate regulatory agencysimilar claims as a result of their prior affiliations.
Other Risks
We may have difficulty managing our growth.
We might experience growth in the countrynumber of use.our employees and the scope of our operations. This potential future growth could place a significant strain on our management and operations. Our ability to manage this potential growth will depend upon our ability to broaden our management team and our ability to attract, hire and retain skilled employees. Our success will also depend on the ability of our officers and key employees to continue to implement and improve our operational and other systems and to hire, train and manage our employees.
We may be subject to sanction for past non-compliance with certain regulatory audit requirements.
In June 2009 we became aware that we did not comply with certain Department of Health and Human Services ("DHHS") regulations requiring the submission of yearly audited statements to the OIG Office of Audit Services. On September 30, 2009, we submitted the required audits and related statements to the OIG Office of Audit Services. We have asked that the Office of the Inspector General not take any enforcement action in this matter. There can be no assurance that
weno enforcement action will be
able to manufacture products, or have products
manufactured for us, in a timely fashion at acceptable quality and prices, that
we or third party manufacturers can comply with GMP, or that we or third party
manufacturers will be able to manufacture an adequate supply of product.
Healthcare reform and controls on healthcare spending may limit the price we
charge for any products and the amounts thereof that we can sell.
The U.S. federal government and private insurers have considered ways to
change, and have changed, the manner in which healthcare services are provided
in the U.S. Potential approaches and changes in recent years include controls on
healthcare spending and the creation of large purchasing groups. In the future,
the U.S. government may institute further controls and limits on Medicare and
Medicaid spending. These controls and limits might affect the payments we could
collect from sales of any products. Uncertainties regarding future healthcare
reform and private market practices could adversely affect our ability to sell
any products profitably in the U.S. At present, we do not foresee any changes in
FDA regulatory policies that would adversely affect our development programs.
The future issuance of preferred stock may adversely affect the rights of the
holders of our common stock.
Our certificate of incorporation allows our Board of Directors to issue up
to 10,000,000 shares of preferred stock and to fix the voting powers,
designations, preferences, rights and qualifications, limitations or
restrictions of these shares without any further vote or action by the
stockholders. The rights of the holders of common stock will be subject to, and
could be adversely affected by, the rights of the holders of any preferred stock
that we may issue in the future. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire a majority of our outstanding voting stock, thereby
delaying, deferring or preventing a change in control.
Concentration of ownership of our capital stock could delay or prevent change of
control.
Our directors, executive officers and principal stockholders beneficially
own a significant percentage of our common stock and preferred stock. They also
have, through the exercise or conversion of certain securities, the right to
acquire additional common stock. As a result, these stockholders, if acting
together, have the ability to significantly influence the outcome of corporate
actions requiring shareholder approval. Additionally, this concentration of
ownership may have the effect of delaying or preventing a change in control of
SIGA. At October 31, 2006, Directors, Officers and principal stockholders
beneficially owned approximately 49.8% of our stock.
13
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission. The prospectus relates to 2,000,000 shares
of our common stock which the selling stockholders namedtaken in this prospectus may
sell from time to timematter and 1,272,400 shares ofif taken whether such enforcement action would have a material adverse impact on our common stock which may be
issued under certain warrant agreements and which the selling stockholders named
in this prospectus may sell from time to time. We will not receive any of the
proceeds from these sales. We have agreed to pay the expenses incurred in
registering the shares, including legal and accounting fees.
The shares have not been registered under the securities laws of any state
or other jurisdiction as of the date of this prospectus. Brokers or dealers
should confirm the existence of an exemption from registration or effectuate
such registration in connection with any offer and sale of the shares.
This prospectus describes certain risk factors that you should consider
before purchasing the shares. See "Risk Factors" beginning on page 6. You should
read this prospectus together with the additional information described under
the heading "Where You Can Find More Information."
FORWARD-LOOKINGoperations. FORWARD-LOOKING STATEMENTS This prospectus contains or implies certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the efficacy of potential products, the timelines for bringing such products to market and the availability of funding sources for continued development of such products. Forward-looking statements are based on management's estimates, assumptions and projections, and are subject to uncertainties, many of which are beyond the control of SIGA. Actual results may differ materially from those anticipated in any forward-looking statement. Factors that may cause such differences includeincluding (i) the risksrisk that (a) potential products that appear promising to SIGA or its collaborators cannot be shown to be efficacious or safe in subsequent pre-clinical or clinical trials, (b)(ii) the risk that SIGA or its collaborators will not obtain appropriate or necessary governmental approvals to market these or other potential products, (c)(iii) the risk that SIGA may not be able to obtain anticipated funding for its development projects or other needed funding, (d)(iv) the risk that SIGA may not be able to secure funding from anticipated government contracts and grants, (e)(v) the risk that SIGA may not be able to secure or enforce adequatesufficient legal protection,rights in its products, including sufficient patent protection for its products, (f)
unanticipated internal control deficiencies or weaknesses or ineffective
disclosure controls and procedures and (g)(vi) the risk that regulatory approval for SIGA'sSIGA’s products may require further or additional testing that will delay or prevent approval.approval, (vii) the risk that the Biomedical Advanced Research & Development Authority may not complete the procurement set forth in a pre-solicitation for acquisition of smallpox antiviral for the strategic national stockpile, or may complete it on different terms; (viii) the volatile and competitive nature of the biotechnology industry, (ix) changes in domestic and foreign economic and market conditions, (x) the effect of federal, state and foreign regulation on SIGA’s businesses, (xi) the registration statement may not become effective or may become effective only after substantial delay, and (xii) market conditions may not permit an offering of these securities or be sufficiently attractive to market participants to allow any offering to succeed. More detailed information about SIGA and risk factors that may affect the realization of forward-looking statements, including the forward-looking statements in this presentation,prospectus, is set forth in SIGA's filings with the Securities and Exchange Commission,SEC, including SIGA's Annual Report on Form 10-K for the fiscal year ended December 31, 2005,2008, and in other documents that SIGA has filed with the Commission. SIGA urges investors and security holders to read those documents free of charge at the Commission's Web site at http://www.sec.gov. Interested parties may also obtain those documents free of charge from SIGA. Forward-looking statements speak only as of the date they are made, and except for any obligation under the U.S. federal securities laws, we undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Although we believe that our expectations are reasonable, we cannot assure you that our expectations will prove to be correct. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in this prospectus as anticipated, believed, estimated, expected, intended or planned.
14
USE OF PROCEEDS
ThePROCEEDS Unless otherwise provided in the applicable prospectus supplement, we currently intend to use the net proceeds from the sale of the sharessecurities from primary offerings under this prospectus for general corporate purposes, including development of common stock offered will
be received byour product candidates, the selling stockholders.acquisition or in-license of technologies, products or businesses, working capital and capital expenditures. We will not receive anymay set forth additional information on the use of the proceeds from the sale of securities we offer under this prospectus in a prospectus supplement relating to the specific primary offering. We have not determined the amount of net proceeds to be used specifically for the foregoing purposes. As a result, our management will have broad discretion in the allocation of the net proceeds. Pending use of the net proceeds, we intend to invest the proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments.
DESCRIPTION OF SECURITIES The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the particular terms of the securities offered by that prospectus supplement. If we so indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below. We will also include in the prospectus supplement information, where applicable, about material U.S. federal income tax considerations relating to the securities, and the securities exchange, if any, on which the securities will be listed.
We may sell from time to time, in one or more primary offerings, common stock and warrants to purchase common stock.
In this prospectus, we refer to the common stock and warrants to be sold by us in a primary offering collectively as “securities.” The total dollar amount of all securities that we may issue under this prospectus will not exceed $100,000,000.
This prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
DESCRIPTION OF COMMON STOCK The following description of our common stock together with any additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of our common stock that we may offer in primary offerings under this prospectus. For the complete terms of our common stock please refer to our certificate of incorporation and by-laws, which are exhibits to the registration statement that includes this prospectus. The terms of our common stock may also be affected by Delaware law.
Under our certificate of incorporation, our authorized capital stock consists of 100,000,000 shares of common stock,
offered by the selling stockholders.
15
SELLING STOCKHOLDERS
The table below sets forth information regarding ownership of our common
stock by the selling stockholders as of November 16, 2006,$0.0001 par value per share, and the10,000,000 shares of commonpreferred stock, to be sold by them under this prospectus. Beneficial ownership is
determined in accordance with rules$0.0001 par value per share. As of the Securities and Exchange Commission
and includes voting or investment power with respect to the securities. Except
as indicated by footnote, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them. The rules of the
Securities and Exchange Commission require that the number ofJune 30, 2009, we had 37,208,753 shares of common stock outstanding usedand no shares of preferred stock outstanding. We will describe the specific terms of common stock we may offer in calculatingmore detail in a prospectus supplement relating to the percentage for each listed person
includes theoffering of shares of common stock. If we so indicate in a prospectus supplement, the terms of common stock underlying warrants or options held by such
personoffered under that are exercisable within 60 days of November 16, 2006. As of November
16, 2006, 31,796,454 sharesprospectus supplement may differ from the terms described below. Voting Rights. The holders of our common stock were outstanding.
Securities Owned After
Securities Owned Prior to Offering Offering (1)
Number of
Shares of Percent of Shares of Shares of Percent of
Common Common Common Stock Common Common
Name of Selling Stockholder Stock Stock Offered Hereby Stock Stock
Smithfield Fiduciary LLC (1) 966,961 3.22% 716,961 -- 0.0%
Omicron Master Trust (5) 357,157 1.19% 132,157 -- 0.0%
Iroquois Capital LP (2) 966,961 3.22% 716,961 -- 0.0%
Rockmore Investment Master Fund, Ltd (3) 849,107 2.82% 716,961 -- 0.0%
Cranshire Capital LP (4) 1,025,461 3.41% 716,961 -- 0.0%
Gary J. Shemano 205,340 0.68% 95,340 -- 0.0%
Michael R. Jacks 77,420 0.26% 45,920 -- 0.0%
William Corbett 149,420 0.50% 45,920 -- 0.0%
Terrence Cush 25,430 0.08% 20,430 -- 0.0%
Empire Financial Group 39,360 0.13% 39,360 -- 0.0%
Lee Osman 5,000 0.02% 5,000 -- 0.0%
Daniel Schwartz 20,430 0.07% 20,430 -- 0.0%
(1) Highbridge Capital Management, LLCare entitled to one vote per share with respect to each matter presented to our stockholders on which the holders of common stock are entitled to vote and do not have cumulative voting rights. An election of directors by our stockholders is the trading manager of Smithfield
Fiduciary LLC and consequently has voting control and investment discretion over
securities helddetermined by Smithfield Fiduciary LLC. Glenn Dubin and Henry Swieca
control Highbridge Capital Management, LLC. Each of Highbridge Capital
Management, LLC, Glenn Dubin and Henry Swieca disclaims beneficial ownershipa plurality of the securities heldvotes cast by Smithfield Fiduciary LLC.
(2) Joshua Silverman has voting controlthe stockholders entitled to vote on the election. Dividends. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors.
Liquidation and investment decision over securities
heldDissolution. In the event of our liquidation or dissolution, the holders of common stock are entitled to receive ratably all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.
Other Rights. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by Iroquois Capital, LP. Mr. Silverman disclaims beneficial ownershipthe rights of the holders of shares held by Iroquoisof any series of preferred stock that we may designate and issue in the future.
Listing. Our common stock is listed on the NASDAQ Capital LP.
(3) Bruce Bernstein has voting control and investment decision over securities
held by Rockmore Investment Master Fund Ltd. Mr. Bernstein disclaims beneficial
ownership of the shares held by Rockmore Investment Master Fund Ltd.
(4) Mitchell P. Kopin, the president of Downsview Capital, Inc., the general
partner of Cranshire Capital, L.P, has sole voting control and investment
discretion over securities held by Cranshire Capital, L.P. Each of Mitchell P.
Kopin and Downsview Capital, Inc. disclaims beneficial ownership of the shares
held by Cranshire Capital, L.P.
(5) Omicron Capital, L.P., a Delaware limited partnership ("Omicron Capital"),
serves as investment manager to Omicron Master Trust, a trust formedMarket under the lawssymbol “SIGA”. As of Bermuda ("Omicron"), Omicron Capital, Inc., a Delaware corporation
("OCI"), serves as general partner of Omicron Capital, and Winchester Global
Trust Company Limited ("Winchester") serves asOctober 19, 2009, the trustee of Omicron. By reason
of such relationships, Omicron Capital and OCI may be deemed toclosing price per share
dispositive power over the shares of our common stock owned by Omicron,on the NASDAQ Capital Market was $7.40, and Winchester may be deemed to share voting and dispositive power over the shareswe had approximately 60 holders of record of our common stock owned by Omicron. Omicron
16
Capital, OCIstock. Transfer Agent and Winchester disclaim beneficial ownership of such shares of our
common stock. As of the date of this prospectus, Mr. Olivier H. Morali, an
officer of OCI,Registrar. The transfer agent and Mr. Bruce T. Bernstein, a consultant to OCI, have delegated
authority from the board of directors of OCI regarding the portfolio management
decisions with respect to the shares ofregistrar for our common stock ownedis American Stock Transfer & Trust Company.
The following description, together with the additional information we may include in any applicable prospectus supplements, summarizes the material terms and provisions of the warrants that we may offer in a primary offering under this prospectus and the related warrant agreements and warrant certificates. While the terms summarized below will apply generally to any warrants that we may offer, we will describe the particular terms of any series of warrants in more detail in the applicable prospectus supplement. If we so indicate in the prospectus supplement, the terms of any warrants offered under that prospectus supplement may differ from the terms described below. Specific warrant agreements will contain additional important terms and provisions and will be incorporated by Omicron. By
reasonreference as an exhibit to the registration statement that includes this prospectus.
We may be deemed
to share dispositive power overissue warrants for the sharespurchase of our common stock owned by Omicron.
Messrs. Morali and Bernstein disclaim beneficial ownership of such shares of ourin one or more series. We may issue warrants independently or together with common stock and neitherthe warrants may be attached to or separate from the common stock.
We will evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We may enter into the warrant agreement with a warrant agent. We will indicate the name and address and information regarding the warrant agent in the applicable prospectus supplement relating to a particular series of warrants.
If we decide to issue warrants pursuant to this prospectus, we will specify in a prospectus supplement the terms of the series of warrants, including, if applicable, the following:
| · | the offering price and aggregate number of warrants offered; |
| · | the currency for which the warrants may be purchased; |
| · | the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security; |
| · | the date on and after which the warrants and the related securities will be separately transferable; |
| · | the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of the warrants and the price at which these shares may be purchased upon such exercise; |
| · | the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
| · | the terms of any rights to redeem or call the warrants; |
| · | any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
| · | the dates on which the right to exercise the warrants will commence and expire; |
| · | the manner in which the warrant agreement and warrants may be modified; |
| · | a discussion of any material U.S. income tax consequences of holding or exercising the warrants; |
| · | the terms of the securities issuable upon exercise of the warrants; and |
| · | any other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such persons has any legalexercise, including: the right to maintain such
delegated authority. No other person has solereceive dividends, if any, or sharedpayments upon our liquidation, dissolution or winding up or to exercise voting or dispositive
power with respectrights.
Each warrant will entitle the holder to the shares of ourpurchase common stock being offered by Omicron,
as those terms are used for purposes under Regulation 13D-Gwe specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the Securities
Exchange Actwarrants may exercise the warrants at any time up to 5:00 P.M., New York City time on the expiration date that we set forth in the applicable prospectus supplement. After the close of 1934, as amended. Omicron and Winchester are not "affiliates" of
one another, as that term is used for purposesbusiness on the expiration date, unexercised warrants will become void.
Holders of the Exchange Act or of any
other person named in this prospectus aswarrants may exercise the warrants by submitting the warrant certificate representing the warrants to be exercised together with a selling stockholder. No person or
"group" (as that term is used in Section 13(d)completed and executed notice of the Exchange Act or the SEC's
Regulation 13D-G) controls Omicronholders’ election to exercise, and Winchester
The information provided in the table above with respect to the selling
stockholders has been obtained from such selling stockholders.
The selling stockholders have not within the past three years had any
position, office or other material relationship with us or any of our
predecessors or affiliates.
Because the selling stockholders may sell all or some portionpayment of the required amount to us at our designated office.
Upon receipt by us of the Notice of Exercise, surrender of this Warrant and payment of the required amount, the holder shall be entitled to receive as promptly as practicable, and in any event within five Business Days thereafter, a certificate or certificates for common shares of common stock beneficially owned by them, only an estimate (assumingpurchased. We will issue and deliver the selling stockholders sellsecurities purchasable upon such exercise. If fewer than all of the shares offered hereby)warrants represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants.
LEGAL OWNERSHIP OF SECURITIES We can issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail below. We refer to those persons who have securities registered in their own names on the books that we or any applicable trustee maintain for this purpose as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly through others, own beneficial interests in securities that are not registered in their own names, as “indirect holders” of those securities. As we discuss below, indirect holders are not legal holders, and investors in securities issued in book-entry form or in street name will be indirect holders.
We may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that security. Securities issued in global form will be registered in the name of the depositary or its nominee. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the securities, and we will make all payments on the securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a book-entry security will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect holders, and not holders, of the securities.
We may terminate a global security or issue securities in non-global form. In these cases, investors may choose to hold their securities in their own names or in “street name”. Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains at that institution.
For securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the holders of those securities, and we will make all payments on those securities to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name will be indirect holders, not holders, of those securities.
Our obligations, as well as the obligations of any applicable trustee and of any third parties employed by us or a trustee, run only to the legal holders of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because we are issuing the securities only in global form.
For example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to the indirect holders but does not do so. Similarly, we may want to obtain the approval of the holders to amend an indenture, to relieve us of the consequences of a default or of our obligation to comply with a particular provision of the indenture or for other purposes. In such an event, we would seek approval only from the holders, and not the indirect holders, of the securities. Whether and how the holders contact the indirect holders is up to the holders.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or other financial institution, either in book-entry form or in street name, you should check with your own institution to find out:
how it handles securities payments and notices;
whether it imposes fees or charges;
how it would handle a request for the holders’ consent, if ever required;
whether and how you can instruct it to send you securities registered in your own name so you can be givena holder, if that is permitted in the future;
how it would exercise rights under the securities if there were a default or other event triggering the need for holders to act to protect their interests; and
if the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters.
A global security is a security held by a depositary that represents one or any other number of individual securities. Generally, all securities represented by the same global securities will have the same terms.
Each security issued in book-entry form will be represented by a global security that we deposit with and register in the name of a financial institution or its nominee that we select. The financial institution that we select for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, DTC will be the depositary for all securities issued in book-entry form.
A global security may not be transferred to or registered in the name of anyone other than the depositary, its nominee or a successor depositary, unless special termination situations arise. We describe those situations below under “—Special Situations When A Global Security Will Be Terminated”. As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and legal holder of all securities represented by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by a global security will not be a legal holder of the security, but only an indirect holder of a beneficial interest in the global security.
If the prospectus supplement for a particular security indicates that the security will be issued as a global security, then the security will be represented by a global security at all times unless and until the global security is terminated. If termination occurs, we may issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry clearing system.
Special Considerations for Global Securities
As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize an indirect holder as a holder of securities and instead deal only with the depositary that holds the global security.
If securities are issued only as global securities, an investor should be aware of the following:
| · | an investor cannot cause the securities to be registered in his or her name, and cannot obtain non-global certificates for his or her interest in the securities, except in the special situations we describe below; |
| · | an investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities and protection of his or her legal rights relating to the securities, as we describe above; |
| · | an investor may not be able to sell interests in the securities to some insurance companies and to other institutions that are required by law to own their securities in non-book-entry form; |
| · | an investor may not be able to pledge his or her interest in the global security in circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective; |
| · | the depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor’s interest in the global security. We and any applicable trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security. We and the trustee also do not supervise the depositary in any way; |
| · | the depositary may, and we understand that DTC will, require that those who purchase and sell interests in the global security within its book-entry system use immediately available funds, and your broker or bank may require you to do so as well; and |
| · | financial institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in the global security, may also have their own policies affecting payments, notices and other matters relating to the securities. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the actions of any of those intermediaries. |
Special Situations When A Global Security Will Be Terminated
In a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates representing those interests. After that exchange, the choice of whether to hold securities directly or in street name will be up to the numberinvestor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to their own names, so that they will be direct holders. We have described the rights of sharesholders and street name investors above.
A global security will terminate when the following special situations occur:
| · | if the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global security and we do not appoint another institution to act as depositary within 90 days; |
| · | if we notify any applicable trustee that we wish to terminate that global security; or |
| · | if an event of default has occurred with regard to securities represented by that global security and has not been cured or waived. |
The applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of securities covered by the prospectus supplement. When a global security terminates, the depositary, and neither we nor any applicable trustee, is responsible for deciding the names of the institutions that will be beneficially ownedthe initial direct holders.
We may sell the securities to or through underwriters or dealers, through agents, or directly to one or more purchasers. A prospectus supplement or supplements (and any related free writing prospectus that we may authorize to be provided to you) will describe the terms of the offering of the securities, including, to the extent applicable:
| · | the name or names of any underwriters, dealers or agents, if any, and the amounts of securities underwritten or purchased by each of them; |
| · | the purchase price of the securities and the proceeds we will receive from the sale; |
| · | any over-allotment options under which underwriters may purchase additional securities from us; |
| · | any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation; |
| · | any public offering price; |
| · | any discounts or concessions allowed or reallowed or paid to dealers; and |
| · | any securities exchange or market on which the securities may be listed. |
Only underwriters named in the prospectus supplement are underwriters of the securities offered by the selling stockholders after this offering. In addition,prospectus supplement.
If underwriters are used in the
selling stockholderssale, they will acquire the securities for their own account and may
have sold, transferred or otherwise disposed of, or may sell, transfer or
otherwise dispose of, at any time or from time to time since the dates on which
they provided the information regarding the shares beneficially owned by them,
all or a portion of the shares beneficially owned by them in transactions exempt
from the registration requirements of the Securities Act.
We have filed with the Securities and Exchange Commission, under the
Securities Act of 1933, a registration statement on Form S-3, of which this
prospectus forms a part, with respect to the resale ofresell the securities from time to time
onin one or more transactions at a fixed public offering price or at varying prices determined at the
NASDAQ Capital Market or in privately-negotiated transactions and
have agreedtime of sale. The obligations of the underwriters to
prepare and file such amendments and supplementspurchase the securities will be subject to the
registration statement asconditions set forth in the applicable underwriting agreement. We may
offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Subject to certain conditions, the underwriters will be
necessaryobligated to
keep the registration statement
effective until the earlier of (i) five years from the date on which this
registration statement on Form S-3 becomes effective, or (ii) the date on which
the selling stockholders have soldpurchase all of the
shares of common stock.
PLAN OF DISTRIBUTION
The selling stockholderssecurities offered by the prospectus supplement. Any public offering price and any discounts or concessions allowed or reallowed or paid to dealers may
change from time to
time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholderstime. We may use
any one or more ofunderwriters with whom we have a material relationship. We will describe in the
following methods when selling shares:
o ordinary brokerage transactions and transactions in whichprospectus supplement, naming the
broker-dealer solicits purchasers;
o block trades in whichunderwriter, the
broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
o a combinationnature of any such
methods of sale; and
o any other method permitted pursuant to applicable law.
17
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities andrelationship. We may sell securities directly or deliver shares in connection with these trades.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.
The selling stockholders maythrough agents we designate from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
defaulttime. We will name any agent involved in the performanceoffering and sale of their secured obligations,securities and we will describe any commissions we will pay the pledgeesagent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or secured
partiesunderwriters to solicit offers by certain types of institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
We may offerprovide agents and sell the shares of common stock from time to time under
this prospectus after we have filed an amendmentunderwriters with indemnification against civil liabilities related to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the registration
of the shares of common stock. We have agreed to indemnify the selling
stockholders against certain losses, claims, damages and liabilities,offering, including liabilities under the Securities Act.
The selling stockholders have advisedAct, or contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Agents and underwriters may engage in transactions with, or perform services for, us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regardingin the saleordinary course of their sharesbusiness.
All securities we offer, other than common stock, nor is there
an underwriter or coordinating broker actingwill be new issues of securities with no established trading market. Any underwriters may make a market in connection with a proposed salethese securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We cannot guarantee the liquidity of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectustrading markets for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules ofsecurities.
Any underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange ActAct. Overallotment involves sales in excess of 1934the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may applycause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
Any underwriters who are qualified market makers on The Nasdaq Capital Market may engage in passive market making transactions in the securities on The Nasdaq Capital Market in accordance with Rule 103 of Regulation M, during the business day prior to the pricing of the offering, before the commencement of offers or sales of our common stockthe securities. Passive market makers must comply with applicable volume and activitiesprice limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the selling
stockholders.
highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
In compliance with guidelines of the Financial Industry Regulatory Authority, or FINRA, the maximum consideration or discount to be received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate amount of the securities offered pursuant to this prospectus and any applicable prospectus supplement.
The validity of the shares of common stock offered hereby will be passed upon for us by Kramer Levin Naftalis & Frankel LLP. Thomas E. Constance, a director of SIGA, is Chairman of Kramer Levin Naftalis & Frankel LLP, a law firm in New York City, which SIGA has retained to provide legal services.
18
EXPERTS
The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectusProspectus by reference to the Annual Report on Form 10-K for the year ended December 31, 20052008 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
COMMISSION'S
COMMISSION’S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES As permitted by the Delaware General Corporation Law, our Certificate of Incorporation and Bylaws permit us to indemnify our directors and officers to the fullest extent permitted by the Delaware law, and our Certificate of Incorporation, contain provisions that limit the directors’ liability for monetary damages to us or our stockholders for breach of their fiduciary duties, except to the extent that Delaware law prohibits such elimination of liability.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers andor persons controlling persons,us pursuant to the foregoing provisions, we have been advisedinformed that in the opinion of the Securities and Exchange
CommissionSEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by one of our directors, officers or controlling
persons in the successful defense of any action, suit or proceeding) is asserted
by that director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether that indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of that issue.
ADDITIONAL
Government Filings.
We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the SEC's public reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330.
We have filed with the SEC a registration statement on formForm S-3 to register the shares of common stock and warrants to be offered. This prospectus is part of that registration statement and, as permitted by the SEC's rules, does not contain all the information included in the registration statement. For further information about us and our common stock and warrants, you should refer to that registration statement and to the exhibits and schedules filed as part of that registration statement, as well as the documents we have incorporated by reference which are discussed below. You can review and copy the registration statement, its exhibits and schedules, as well as the documents we have incorporated by reference, at the public reference facilities maintained by the SEC as described above. The registration statement, including its exhibits and schedules, are also available on the SEC's web site, given above.
Stock Market.
Shares of our common stock are traded on the NASDAQ Capital Market.
INCORPORATION
INCORPORATION BY REFERENCE The SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents
19
listed below and any further filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until this offering has been completed:
o the Annual Report on Form 10-K for the year ended December 31, 2005;
o 2008;
the description of our common stock contained in our registration statement on Form 8-A under Section 12 of the Exchange Act, dated September 5, 1997, including any amendment or reports filed for the purpose of updating such description;
o quarterly report
the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006;
o quarterly report2009;
the Quarterly Report on Form 10-Q for the quarter ended June 30, 2006;
o quarterly report2009;
the Current Reports on Form 10-Q for 8-K filed on February 3, 2009, March 12, 2009, April 30, 2009, September 3, 2009, and September 17, 2009 ;
the quarter ended September 30,
2006; and
o amended quarterly report on Form 10-Q/A for the quarter ended
September 30, 2006;
o proxy statementProxy Statement on Schedule 14A for the annual meeting of stockholders dated December 19, 2006; and
o Our current reportsheld on Form 8-K filed on January 5, 2006, February
3, 2006, February 7, 2006, March 14, 2006, March 22, 2006, April 3,
2006, April 20, 2006, May 4, 2006, June 13, 2006, June 20, 2006,
July 25, 2006, August 28, 2006, September 25, 2006, October 4, 2006,
October 11, 2006, October 18, 2006, and October 20, 2006.
2009.
We will furnish to any person, including any beneficial owner, to whom this prospectus is delivered, without charge, a copy of these documents upon written or oral request to
Thomas N. Konatich,Ayelet Dugary, Chief Financial Officer, 420 Lexington Avenue, Suite 408, New York, New York 10170, tel. (212) 672-9100.
20
PART II - INFORMATIONINFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated costs and expenses of the sale and distribution of the securities being registered, other than underwriting discounts and commissions, all of which are being borne by us.
Amount
--------------
SEC filing fee .................................... $ 1,391.83
Printing Expenses ................................. $ 5,000.00
Legal fees and expenses ........................... $ 25,000.00
Accounting fees and expenses ...................... $ 5,000.00
Miscellaneous ..................................... $ 500.00
--------------
Total ................................... $ 36,891.83
==============
| | | Amount | |
| SEC filing fee | | $ | 4,000.00 | |
| Printing Expenses | | $ | 1,000.00 | |
| Legal fees and expenses | | $ | 15,000.00 | |
| Accounting fees and expenses | | $ | 10,000.00 | |
| Miscellaneous | | $ | 500.00 | |
| Total | | $ | 30,500.00 | |
All of the amounts shown are estimates except for the fee payable to the Securities and Exchange Commission.
SEC.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers, as well as other employees and individuals, against expenses (including attorneys'attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by any such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent to the Registrant. The Delaware General Corporation Law provides that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Article IX of the Registrant'sRegistrant’s Certificate of Incorporation and Article VII of the Registrant'sRegistrant’s Bylaws provides for indemnification by the Registrant of its directors and officers to the fullest extent permitted by the Delaware General Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director'sdirector’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any transaction from which the director derived an improper personal benefit. The Registrant'sRegistrant’s Certificate of Incorporation provides for such limitation of liability.
Item 16. Exhibits
Exhibit No. Description
- ----------- -----------
5.1
| Exhibit No. | | Description |
| 5.1 | | Opinion of Kramer Levin Naftalis & Frankel LLP. |
| 23.1 | | Consent of PricewaterhouseCoopers LLP. |
| 23.2 | | Consent of Kramer Levin Naftalis & Frankel LLP (contained in the opinion filed as Exhibit 5.1 hereto). |
| 24.1 | | Power of Attorney (included on the signature page of this Registration Statement). |
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
21
| (a) | The undersigned registrant hereby undertakes: |
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, SIGA Technologies, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Citycity of New York, state of New York on November 17, 2006.
SIGA Technologies, Inc.
By: /s/ Thomas N. Konatich
----------------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive
Officer and Chief
Financial Officer
October 29, 2009.
| SIGA Technologies, Inc. |
| By: | /s/ Ayelet Dugary |
| | Name: | Ayelet Dugary |
| | Title: | Chief Financial Officer |
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose signatures appear below each severally constitutes and appoints Thomas N. KonatichEric A. Rose and Donald G. DrapkinAyelet Dugary his true and lawful attorneys-in-fact and agents, with full powers of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments) to this registration statement and to sign any registration statement (and any post-effective amendments) relating to the same offering as this registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits, and other documents in connection therewith, with the Securities and Exchange Commission,SEC, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all which said attorneys-in-fact and agents, or their substitute, may lawfully do, or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date
Acting
Signature | | Title of Capacities | | Date |
/s/ Eric A. Rose, M.D. | | Chief Executive Officer, and Chief Financial
/s/ Thomas N. Konatich Officer (Principal Financial November 17, 2006
- -------------------------- Officer and Principal
Thomas N. Konatich Accounting Officer)
/s/ Donald G. Drapkin
- --------------------------
Donald G. Drapkin Chairman of the Board and Director | | |
| Eric A. Rose, M.D. | | (Principal Executive Officer) | | October 28, 2009 |
| | | | |
/s/ Ayelet Dugary | | Chief Financial Officer | | |
| Ayelet Dugary | | (Principal Financial Officer and Principal Accounting Officer) | | October 28, 2009 |
| | | | |
/s/ James J. Antal | | Director | | |
| James J. Antal | | | | October 28, 2009 |
| | | | |
| | Director | | |
| Michael J. Bayer | | | | |
| | | | |
/s/ Thomas E. Constance | | Director | | |
| Thomas E.Constance | | | | October 28, 2009 |
| | | | |
/s/ Steven L. Fasman | | Director | | |
| Steven L. Fasman | | | | October 28, 2009 |
| | | | |
/s/ Scott Hammer, M.D. | | Director | | |
| Scott Hammer, M.D. | | | | October 28, 2009 |
| | | | |
/s/ Joseph W. Marshall | | Director | | |
| Joseph Marshall | | | | October 28, 2009 |
| | | | |
/s/ Adnan M. Mjalli, Ph.D. | | Director | | |
| Adnan M. Mjalli, Ph.D. | | | | |
| | | | |
/s/ Mehmet C. Oz, M.D. | | Director | | |
| Mehmet C. Oz, M.D. | | | | October 28, 2009 |
| | | | |
/s/ Paul G. Savas | | | | |
| Paul G. Savas | | Director | | October 29, 2009 |
| | | | |
/s/ Bruce Slovin | | | | |
| Bruce Slovin | | Director | | October 28, 2009 |
| | | | |
/s/ Michael Weiner, M.D. | | | | |
| Michael Weiner, M.D. | | Director | | October 28, 2009 |
Table of the Board November 15, 2006
/s/ James J. Antal
- --------------------------
James J. Antal Director November 15, 2006
- --------------------------
Bernard L. Kasten, M.D. Director
/s/ Judy S. Slotkin
- --------------------------
Judy S. Slotkin Director November 15, 2006
23
/s/ Thomas E. Constance
- --------------------------
Thomas E. Constance Director November 15, 2006
/s/ Adnan M. Mjalli
- --------------------------
Adnan M. Mjalli, Ph.D. Director November 16, 2006
/s/ Mehmet C. Oz
- --------------------------
Mehmet C. Oz Director November 16, 2006
/s/ Eric A. Rose
- --------------------------
Eric A. Rose Director November 16, 2006
/s/ Paul G. Savas
- --------------------------
Paul G. Savas Director November 16, 2006
/s/ Michael Weiner
- --------------------------
Michael Weiner Director November 15, 2006
24
EXHIBITContents EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP. 26
23.1 Consent of PricewaterhouseCoopers LLP. 28
23.2 Consent of Kramer Levin Naftalis & Frankel LLP (contained in the opinion
filed as Exhibit 5.1 hereto) 26
24.1 Power of Attorney (included on the signature page of this Registration Statement) 23
- ---------------------------------------------------------------------------------------------------------------
25 | Exhibit No. | | Description | | Page No. |
| | | | | |
| | Opinion of Kramer Levin Naftalis & Frankel LLP. | | 33 |
| | | | | |
| | Consent of PricewaterhouseCoopers LLP. | | 35 |
| | | | | |
| 23.2 | | Consent of Kramer Levin Naftalis & Frankel LLP (contained in the opinion filed as Exhibit 5.1 hereto) | | 33 |
| | | | | |
| 24.1 | | Power of Attorney (included on the signature page of this Registration Statement) | | 30 |