Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates |
The consolidated financial statements and related disclosures are prepared in conformity with accounting principles generally accepted in the United States of America. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the period reported. The most significant estimates include the variables used in the calculation of fair value of stock-based awards including options and warrants granted or issued by the Company; reported amounts of revenue and expenses; impairment of goodwill; and the realization of deferred tax assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Actual results could differ from these estimates. |
Cash, Cash Equivalents, and Short-term Investments and Marketable Securities, Policy | ' |
Cash Equivalents, Short-term Investments and Marketable Securities |
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Highly liquid investments with maturities greater than three months and less than one year are classified as short-term investments. Such investments are generally money market funds, bank certificates of deposit, and U.S. Treasury bills. |
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The Company classifies short-term investments and marketable securities with readily determinable fair values as “available-for-sale.” Investments in securities that are classified as available-for-sale are measured at fair market value in the balance sheet and unrealized holding gains and losses on investments are reported as a separate component of stockholders’ equity until realized. |
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Concentration of Credit Risk, Policy | ' |
Concentration of Credit Risk |
The Company has cash in bank accounts that exceed the Federal Deposit Insurance Corporation insured limits. The Company has not experienced any losses on its cash accounts and no allowance has been provided for potential credit losses because management believes that any such losses would be minimal, if any. |
Accounts Receivable, Policy | ' |
Accounts Receivable |
Accounts receivable are recorded net of provisions for doubtful accounts. At December 31, 2013 and 2012, 100% of accounts receivables represented receivables from National Institutes of Health (“NIH”) and Biomedical Advanced Research and Development Authority (“BARDA”). An allowance for doubtful accounts is based on specific analysis of the receivables. At December 31, 2013 and 2012, the Company had no allowance for doubtful accounts. |
Inventory, Policy | ' |
Inventory |
Inventories are stated at the lower of cost or estimated realizable value. The Company capitalizes inventory costs associated with the Company’s products when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment periodically to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to write down such unmarketable inventory to its estimated realizable value. |
Property, Plant and Equipment, Policy | ' |
Property, Plant and Equipment |
Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided on a straight-line method over the estimated useful lives of the various asset classes. The estimated useful lives are as follows: 5 years for laboratory equipment; 3 years for computer equipment; and 7 years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the lease term. Maintenance, repairs and minor replacements are charged to expense as incurred. |
Revenue Recognition, Policy | ' |
Revenue Recognition |
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, collectability is reasonably assured, title and risk of loss have been transferred to the customer and there are no further contractual obligations. |
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Certain arrangements may provide for multiple deliverables, in which there may be a combination of: up-front licenses; research, development, regulatory or other services; and delivery of product. Multiple deliverable arrangements can be divided into separate units of accounting if the deliverables in the arrangement meet the following criteria: (i) the delivered item(s) have value to the customer on a standalone basis and (ii) in circumstances in which an arrangement includes a general right of return with respect to delivered items, then performance of the remaining deliverables must be considered probable and substantially in control of the Company. If multiple deliverables cannot be divided into separate units of accounting then the deliverables must be combined into a single unit of accounting. |
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Total consideration in a multiple deliverable arrangement is allocated to units of accounting on a relative fair value of selling price basis. Consideration allocated to a delivered item or unit of accounting is limited to the amount that is not contingent upon delivery of additional items. |
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Direct costs incurred by the Company and associated with the deferral of revenue for a unit of accounting will also be deferred and will be recognized as expenses over the same period that the related deferred revenue is recognized as revenue. |
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Subject to the above, payments for development activities are recognized as revenue as earned, over the period of effort. Funding for the acquisition of capital assets under cost-plus-fee contracts or grants is evaluated for appropriate recognition as a reduction to the cost of the asset, a financing arrangement, or revenue based on the specific terms of the related grant or contract. |
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For the years ended December 31, 2013, 2012, and 2011, revenues from NIH and BARDA were 100%, 100% and 96%, respectively, of total revenues recognized by the Company. |
Research and Development Expense, Policy | ' |
Research and Development |
Research and development expenses include costs directly attributable to the conduct of research and development programs, including employee related costs, materials, supplies, depreciation on and maintenance of research equipment, the cost of services provided by outside contractors, including services related to the Company’s clinical trials and facility costs, such as rent, utilities, and general support services. All costs associated with research and development are expensed as incurred. Costs related to the acquisition of technology rights, for which development work is still in process, and that have no alternative future uses, are expensed as incurred. |
Goodwill, Policy | ' |
Goodwill |
The Company evaluates goodwill for impairment at least annually or as circumstances warrant. The impairment review process compares the fair value of the reporting unit in which goodwill resides to its carrying value. The Company operates as one business and one reporting unit. Therefore, the goodwill impairment analysis is performed on the basis of the Company as a whole, using the market capitalization of the Company as an estimate of its fair value. |
Share-based Compensation, Policy | ' |
Share-based Compensation |
Stock-based compensation expense for all share-based payment awards made to employees and directors is determined on the grant date; for options awards, fair value is estimated using the Black-Scholes model and for stock appreciation rights (“SARs”), fair value is estimated using a Monte Carlo method. The value of the portion of the award that is ultimately expected to vest is recorded as expense over the requisite service periods in the Company’s consolidated statement of operations. |
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These compensation costs are recognized net of an estimated forfeiture rate over the requisite service periods of the awards. Forfeitures are estimated on the date of the respective grant and revised if actual or expected forfeiture activity differs from original estimates. |
Income Tax, Policy | ' |
Income Taxes |
The Company recognizes income taxes utilizing the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities at enacted tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is established if it is more likely than not that some or the entire deferred tax asset will not be realized. The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which are inherently uncertain. |
Net Loss Per Share, Policy | ' |
Net Loss per Share |
The objective of basic earning per share (“EPS”) is to measure the performance of an entity over the reporting period by dividing income (loss) by the weighted average shares outstanding. The objective of diluted EPS is consistent with that of basic EPS, except that it also gives effect to all potentially dilutive common shares outstanding during the period. |
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The following is a reconciliation of the basic and diluted net income (loss) per share computation: |
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| Year Ended December 31, |
| 2013 | | 2012 | | 2011 |
Net (loss) income for basic EPS | $ | (17,177,333 | ) | | $ | (14,059,539 | ) | | $ | 29,099,579 | |
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Change in fair value of warrants | — | | | — | | | 24,436,309 | |
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Net loss (income) for diluted EPS | $ | (17,177,333 | ) | | $ | (14,059,539 | ) | | $ | 4,663,270 | |
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Weighted-average shares: basic | 52,368,842 | | | 51,639,622 | | | 50,929,491 | |
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Effect of potential common shares | — | | | — | | | 3,132,159 | |
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Weighted-average shares: diluted | 52,368,842 | | | 51,639,622 | | | 54,061,650 | |
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Earnings (loss) per share: basic | $ | (0.33 | ) | | $ | (0.27 | ) | | $ | 0.57 | |
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Earnings (loss) per share: diluted | $ | (0.33 | ) | | $ | (0.27 | ) | | $ | 0.09 | |
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Anti-dilutive employee share-based awards, excluded | — | | | — | | | 504,668 | |
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The diluted earnings per share calculation reflects the effect of the assumed exercise of outstanding warrants and any corresponding elimination of the benefit included in operating results from the change in fair value of the warrants. Diluted shares outstanding include the dilutive effect of in-the-money options and warrants, unvested restricted stock and restricted stock units. The dilutive effect of such equity awards is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the average amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible, are collectively assumed to be used to repurchase shares. |
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The Company incurred losses for the years ended December 31, 2013 and 2012 whereas for the year ended December 31, 2011, the Company had net income. For all periods presented, certain equity instruments are excluded from the calculation of diluted earnings (loss) per share as the effect of such shares is anti-dilutive. The weighted average number of equity instruments excluded consist of: |
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| Year Ended December 31, | | | |
| 2013 | | 2012 | | 2011 | | | |
Stock Options | 2,725,632 | | | 2,865,861 | | | 504,668 | | | | |
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Stock-Settled Stock Appreciation Rights | 439,056 | | | 421,020 | | | — | | | | |
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Restricted Stock Units | 981,645 | | | 351,011 | | | — | | | | |
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Warrants | 1,802,820 | | | 2,263,538 | | | — | | | | |
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As discussed in Note 5, the appreciation of each SSAR was capped at a determined maximum value. As a result, the weighted average number shown in the table above for stock-settled stock appreciation rights reflects the weighted average maximum number of shares that could be issued. |
Fair Value of Financial Instruments, Policy | ' |
Fair Value of Financial Instruments |
The carrying value of cash and cash equivalents, accounts payable and accrued expenses approximates fair value due to the relatively short maturity of these instruments. Common stock warrants which are classified as liabilities are recorded at their fair market value as of each reporting period. |
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The measurement of fair value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The inputs create the following fair value hierarchy: |
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• | Level 1 – Quoted prices for identical instruments in active markets. | | | | | | | | | | |
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• | Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable. | | | | | | | | | | |
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• | Level 3 – Instruments where significant value drivers are unobservable to third parties. | | | | | | | | | | |
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The Company uses model-derived valuations where inputs are observable in active markets to determine the fair value of certain common stock warrants on a recurring basis and classify such warrants in Level 2. The Company utilizes the Black-Scholes model consisting of the following variables: (i) the closing price of SIGA’s common stock; (ii) the expected remaining life of the warrant; (iii) the expected volatility using a weighted-average of historical volatilities from a combination of SIGA and comparable companies; and (iv) the risk-free market rate. At December 31, 2013 and 2012, the fair value of such warrants was as follows: |
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| | 2013 | | 2012 | | | |
Common stock warrants, current | | $ | 313,425 | | | $ | 333,793 | | | | |
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Common stock warrants, non-current | | — | | | 657,246 | | | | |
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| | $ | 313,425 | | | $ | 991,039 | | | | |
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As of December 31, 2013 and 2012, the Company had $4.0 million and $5.0 million outstanding, respectively, from a loan entered into on December 31, 2012 (refer to Note 6 for details). The fair value of the loan, which is measured using Level 2 inputs, approximates book value at December 31, 2013 and 2012. |
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For the years ended December 31, 2013 and 2012, SIGA did not hold any Level 3 securities. |
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Legal Contingencies, Policy | ' |
Legal Contingencies |
The Company is subject to certain contingencies arising in the ordinary course of business. The Company records accruals for these contingencies to the extent that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. We record anticipated recoveries under existing insurance contracts when recovery is assured. |
Segment Reporting, Policy | ' |
Segment Information |
The Company is managed and operated as one business. The entire business is managed by a single management team that reports to the chief executive officer. The Company does not operate separate lines of business or separate business entities with respect to any of its product candidates. Accordingly, the Company does not prepare discrete financial information with respect to separate product areas or by location and only has one reportable segment. |
Recent Accounting Pronouncements, Policy | ' |
Recent Accounting Pronouncements |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued new guidance on the reporting of reclassifications from accumulated other comprehensive income to net income. The new guidance does not change the requirements for reporting net income or other comprehensive income in financial statements but requires disclosures regarding the reclassification of accumulated other comprehensive income by component into net income. The Company’s adoption of this guidance on January 2, 2013 did not have a material effect on our financial statements. |
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In July 2013, the FASB issued new guidance on the financial statement presentation of unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not anticipate a material impact to the Company’s financial position, results of operations or cash flows as a result of this change. |