SIGA Technologies, Inc. (SIGA) Earnings Call Transcript & Summary

Hello. And welcome to SIGA Technologies Annual Meeting 2020. Please note that today's meeting is being recorded. It is now my pleasure to turn today's meeting over to Philip Gomez, Chief Executive Officer. Mr. Gomez, the floor is yours.

Thank you very much. Will the meeting please come to order? Let me take this opportunity to welcome all of those who have joined the 2020 Annual Meeting of Stockholders of SIGA Technologies, Inc. I am Phillip Gomez, Chief Executive Officer of SIGA. I'd also like to introduce Daniel Luckshire, Executive Vice President and Chief Financial Officer, who will be serving as secretary of the meeting. Let me introduce some of the other personnel of SIGA who are joining the meeting this morning. From our Board of Directors, we have Eric Rose, our Chairman; James Antal, Tom Constance, Julie Kane, Chip Marshall, Michael Plansky and Paul Savas. We also have Jaymie Durnan, who is a nominee to join the Board. From our management and corporate operations, we have Dennis Hruby, Chief Scientific Officer; Tove Bolken, Senior Vice President and Chief Operations and Chief Supply Chain Officer; Robin Abrams, General Counsel and Chief Administrative Officer; Marianna Anesti, Vice President of Business Development and Corporate Strategy; Herb Vloedman, Vice President and Chief Information Officer; Kevin Buckley, Vice President and Controller; Jay Bosner; and Alexa [indiscernible]. Also joining the meeting is Chris Bruner of PricewaterhouseCoopers, our independent auditors. I have presented to the meeting a copy of the notice of annual meeting of stockholders dated April 28, 2020, concerning the matters to be considered and act upon at this meeting and a copy of the proxy statement, annual report and formal proxy together with an affidavit of mailing executed by an employee of American Stock Transfer Inc., evidencing the mailing of such documents to the stockholders. Copies of these documents will be filed with the minutes of the meeting. Barry Rosenthal of American Stock Transfer & Trust Company, Inc. has been appointed to serve as the inspector of election for this meeting and has signed an oath which will be filed with the minutes of the meeting. A list of the holders of record of the outstanding shares of our common stock at the close of business on April 24, 2020, the date fixed by our Board of Directors as the record date for determining the stockholders entitled to notice of and to vote at the meeting has been held available electronically prior to this meeting for inspection by any stockholders so requesting. This list has been certified by an employee of American Stock Transfer Inc., transfer agent for our common stock. The inspector of election has reported that there are present in person or represented by proxy at the meeting, the holders of more than 40,523,712 shares, constituting a majority of the 81,047,424 shares of common stock of SIGA Technologies, Inc. outstanding and entitled to vote at the meeting. There is, therefore, a quorum present and the meeting is confident to transact business. As such, I'd like to begin today's events with a few remarks. As a starting point, I want to highlight that this is an exciting time at SIGA. Since our last annual meeting, we have made tremendous progress with our key initiatives and established a strong financial foundation as we pursue our goals to create value for our shareholders. Some of the key milestones of the past year have included: in June of last year, we signed a promotion agreement with Meridian Medical Technologies, a Pfizer company for international promotion of TPOXX. This has been a productive collaboration with SIGA working with Meridian to present attributes and importance of TPOXX at multiple international conferences, conducting meetings with potential customers, generating our first international procurement award for oral TPOXX in Canada at a price substantially higher than the price charged to the U.S. government, and recently completing our first international delivery of oral TPOXX also to Canada. In July of last year, we were awarded a contract with the U.S. Department of Defense for the development of the postexposure prophylaxis, or PEP, indication for TPOXX. The award was initially funded approximately $12 million. Over the past year, funding for this contract has increased to approximately $23 million. We believe the funding increase highlights the importance of the PEP indication with respect to smallpox preparedness and sizing of the national stockpile. After receiving feedback from the FDA that no additional animal studies are required for this indication, we are planning a clinical study dosing TPOXX in combination with the Jynneos vaccine to determine if there is impact of the immunogenicity of the vaccine when administered while on TPOXX therapy. An additional human safety study of 28 days of therapy will also likely be required as our current therapeutic indication requires only 14 days of dosing. Given the expected dosing regime for PEP, we believe the use of PEP -- TPOXX for PEP would require a higher national stockpile of TPOXX. In March of this year, we entered into a collaboration with Turnstone Biologics to provide TPOXX in connection with Turnstone's proprietary SKV vaccinia oncology immunotherapy platform. As a quick reminder, TPOXX has potential as a new tool to support the adoption of oncolytic vaccinia viral immunotherapies. The availability of a potent antiviral drug against vaccinia such as TPOXX would provide additional assurance to patients receiving these promising investigational therapies as well as physicians and regulators. Also in March, we paid off our term loan and also announced the authorization of a $50 million share buyback program. In April, we announced the exercise of procurement options worth $101 million under the 19C BARDA contract. As previously disclosed, deliveries of products in connection with the April option exercise is expected to start this month and to be completed by April 2021. Looking forward, we're planning to continue the momentum. I'd like to share comments regarding our 2020, 2021 priorities. As I described during our investor calls as well as at several conferences, our priorities are clear: execute on our BARDA contract. We continue to work on those contract activities that have been funded, and we also continue to coordinate with BARDA on the timely exercise of options to ensure the SNS maintains BARDA's commitments for the 1.7 million course stockpile of smallpox antiviral drug. We will also continue discussions to expand the stockpile to a [ combinate ] PEP as well as provide broader coverage for the general population. Continue to make steady progress on the development of our IV formulation of TPOXX, we are targeting an NDA submission for the IV formulation of TPOXX later this year. And we will also -- and we are also targeting delivery or vendor-managed storage of 20,000 courses of IV final drug product under the 19C BARDA contract. Continue to work with Meridian to pursue international sales. While the COVID-19 pandemic has temporarily slowed the pace of discussions in the short term, we believe the importance of pandemic planning has increased substantially, which should provide increased focus on international TPOXX procurements. As part of the international effort, we're working towards regulatory submissions for oral TPOXX with a broader orthopox rather than smallpox-only label in Europe and Canada. As you can see, our clients and regulatory teams have been very busy. We'll continue to pursue a label expansion for TPOXX to include postexposure prophylaxis and will continue to explore as a possible adjunct of vaccinia based vectors for cancer. SIGA has made great strides in the past year and we continue to look for opportunities to expand our business by leveraging our significant capabilities in drug development, manufacture and public private partnerships. We thank you for your support and confidence and the value we can create for shareholders. This concludes my prepared remarks. We will address stockholder questions after Dan Luckshire goes through the order of business for this meeting. I will now turn the meeting over to Dan Luckshire. Dan?

Thanks, Phil. The first order of business for this meeting is the election of our Board of Directors. The following persons have been nominated to serve as directors until their terms expire and their successors are duly elected and qualified: Dr. Rose, Dr. Gomez, Mr. Antal, Mr. Constance, Mr. Durnan, Ms. Kane; Mr. Marshall, Mr. Plansky and Mr. Savas. Additional information about the nominees is available in the proxy statement. We have not received timely notice of any other nominations by a stockholder as required under the bylaws. A motion to elect the nominees as directors has been made and seconded by shareholders. The next order of business is the proposal to approve, on a nonbinding advisory basis, the compensation of the company's executive officers. A motion for the approval, on a nonbinding advisory basis, the compensation of the company's executive officers has been made and seconded by shareholders. The third order of business is the proposal to ratify the appointment of PricewaterhouseCoopers LLP to serve as our independent auditors for 2020. Additional information about this proposal is available in the proxy statement. A motion for the ratification of PricewaterhouseCoopers LLP to serve as our independent auditors for 2020 has been made and seconded by shareholders. The inspector of election will report on the vote shortly. While we are waiting for the inspector of election to report the vote, we would like to address the stockholder question at this point in time. Phil?

Thanks, Dan. We did receive one question from shareholders, which I will read now. "This is Andrew Sole on behalf of Esopus Creek Advisors. We own approximately 4.2 million shares. Phil, thank you for taking our question. First, we'd like to thank you, Dan Dennis, and the entire management team for all of your excellent work on behalf of the company. With respect to foreign sales opportunities for TPOXX, would you be able to share your insights as to whether the tempo of your conversations with foreign governments have changed as the world now comes to appreciate the significant health and economic effects of the current pandemic. Thank you." Andrew, really appreciate your question. As I did mention in my comments, we fundamentally believe COVID has shown what a pandemia can do both to human health and to as importantly our economy and certainly a smallpox outbreak with a higher infectivity and transmission and mortality rate would be even more devastating. So we do agree internationally, we think that will raise awareness. I think it's still early to think about a post-COVID world. A lot of the folks that we talk to are still very much in the throes of their COVID responses. But we do see very hopeful, I think, and encouraging signs of what countries are starting to think about. One thing that I would point to is the European Union recently announced for the first time back in March, they're going to have a physical stockpile. That's something that's been in discussions for many years. Clearly, COVID created an impetus to get over the line and be able to actually create that stockpile, which is good news for products like ours because it provides a mechanism to do that. The other thing I'll point out, and we did announce this in a press release is that Canada, even in the middle of the COVID outbreak has continued to talk with us, take delivery. And so I think there are countries that are certainly multitasking but we appreciate they are still focused on COVID. As that starts to wane, we look forward to the pace of those conversations increasing as well as the substance of those conversations. And that was the only question we got through the e-mail system that we put in place. And Dan, now I'll turn it back over to you.

Thanks, Phil. I have received the report of the inspector of election on each of the matters voted upon by the stockholders. Based thereon, I report that the nominees for directors named in the proxy statement have been elected for the terms set forth therein. For each nominee, more than 70% of the shares voted were in favor of election. The nonbinding advisory resolution regarding executive compensation has been approved, on an advisory basis, by the favorable vote of more than 92% of the shares voted on such resolution. The appointment of PricewaterhouseCoopers LLP as our independent auditors for fiscal year 2020 has been ratified by the favorable vote of more than 99% of the shares voted on such appointment. In accordance with the voting, I declare that the nominees for election as directors have been duly elected. The nonbinding advisory resolution regarding executive compensation has been approved on such -- on an advisory basis. And PricewaterhouseCoopers LLP has been ratified as our independent auditors for fiscal year 2020. The inspector of election is directed to file with me a report of the vote on the matters considered at today's meeting. And I will file such report with the minutes of this meeting. As there is no other business to address during the meeting, a motion to close the meeting has been made and seconded by shareholders. Thank you very much for your attendance today and for your interest in your company. We hope for your attendance again at the next annual meeting. Thank you.

This concluded the meeting, you may now disconnect.