PharmAthene awarded 50% profit split on SIGA smallpox drug

USA-based PharmAthene (NYSE Amex: PIP) last week won a significant decision in its litigation against onetime merger partner candidate SIGA Technologies (Nasdaq: SIG) in the Delaware Court of Chancery, meaning that SIGA must share the profit from sales of a smallpox drug that may total more than $400 million.

PharmAthene filed the law suit against SIGA in December 2006 citing PharmAthene's interest in ST-246, an orally available smallpox antiviral drug candidate. The news caused SIGA’s shares to fall 43% 2.69, while PharmAthene leapt 30% to $2.94.

"We are extremely pleased with the Court's decision," remarked Eric Richman, president and chief executive of PharmAthene, adding: "This ruling, providing PharmAthene with 50% of worldwide net profits is transformative for the company. As a result of this ruling, we will appropriately share in the financial success of ST-246 without any of the associated infrastructure and related expenses. The initial US government contract for 1.7 million courses of smallpox antiviral therapy has already been awarded."