Annapolis-based PharmAthene, Inc. (NYSE Amex: PIP) has finally received a judgment on the dispute against SIGA Technologies over a smallpox antiviral drug designated ST-246.
The case, PharmAthene Inc (PIP) vs. SIGA Technologies Inc., CA2627, was decided today in Delaware Chancery Court in Wilmington.
Back in December 2006 PharmAthene filed a complaint against SIGA Technologies in a Delware Court, citing its interest in ST-246 and the right to an exclusive licensing agreement that includes development and marketing.
The dispute originates from a failed merger agreement between PharmAthene and SIGA Technologies that was terminated in October 2006. The court decision supports the claim that SIGA failed to confer -- in good faith -- terms for a license agreement after the merger broke down. SIGA tried to dismiss the complaint but was rejected back in January 2008.
The big win for PharmAthene means the biodefesnse drug maker will gain $40 million in net profits from ST-246 net sales. Furthermore the company will get 50% of all worldwide sales afterwards of any derivative product from ST-246. PharmAthene will also get back one-third of reasonable attorney fees. In the recent second quarter ended June 30, 2011, PharmAthene reported a net loss of $2.4 Million and $ 14.1 Million in cash and cash equivalents.
Eric I. Richman, President and Chief Executive Officer of PharmAthene, Inc stated "The Court's favorable ruling on behalf of PharmAthene is a tremendous victory for our company and shareholders. Based upon today's ruling, PharmAthene was awarded 50% of net profits for worldwide sales of ST-246, an orally available smallpox antiviral drug candidate, for ten years pursuant to SIGA receiving $40 million in upfront payments. ST-246 represents a high value, high priority medical countermeasure with significant commercial potential, as evidenced by the U.S. government's decision to award an initial procurement contract for ST-246 valued at $433 million. The addition of ST-246 royalties firmly establishes PharmAthene as a leading biodefense contractor with a fully integrated development and commercial portfolio of best-in-class, next generation medical countermeasures targeting the highest priority U.S. government biodefense requirements."