SIGA Technologies Inc (SIGA) 2025 Q3 法說會逐字稿

Welcome to the CIA business update call. Before we turn the call over to CA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. CIGA does not undertake any obligation to update publicly any forward-looking statement to reflect events or change circumstances after this call.

For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission, including without limitation, The company's annual report on Form 10k for the year ended December 31, 2024 and its subsequent reports on Form 10Q and Form 8K. With that, I will turn the call over to Zem Win, Chief Executive Officer of CIGA ZEM.

Good afternoon everyone, and thank you for joining today's call and review of our business results for the 3rd quarter of 2025. I'm joined by Dan Luckshire, our Chief Financial Officer, and we appreciate this opportunity to provide an update on our company. After the update, we'll be happy to answer your questions.

With 9 months of the year behind us, we've continued to make progress across several key initiatives aligned with our mission to support governments in building and maintaining robust preparedness plans in the event of a potential smallpox outbreak, whether accidental, deliberate, or naturally occurring.

Our work is focused on helping to ensure that in the event of such a crisis, rapid and large scale deployment of antiviral treatments can be accomplished to save lives.

Having prepared the strategies, particularly for Category A threats like smallpox, with provisions for stockpiling medical countermeasures can enable immediate action.

In today's dynamic and increasingly complex global landscape, bioterrorism continues to be a significant concern, underscoring the importance of proactive preparedness.

Keepak's strong safety profile makes it an ideal choice for mass distribution under emergency conditions.

The 3rd quarter was relatively quiet as CIGA's financial strength was demonstrated in our strong second quarter performance, which included $79 million of product revenues.

These quarterly fluctuations are consistent with the nature of CIGA's business model, where our financial performance should be assessed beyond quarters.

For the nine months ended September 30th of 2025, product revenue totalled approximately $86 million including $53 million of oral teapots and $26 million of IV teapot sales under the 19C Barter contract, with the delivery of US Strategic National Stockpile or SNS and the $6 million of oral teapot sales to the international customer.

As of the end of the 3rd quarter, there was approximately 26 million outstanding orders remaining from the US government. This outstanding balance relates to the March 2025 US government Order of IV teapot, which we expect to deliver in 2026.

Importantly, we continue to be engaged with the US government regarding future TO's development, manufacturing, and procurement. As a reminder, year-to-date, CIA has been awarded $27 million for paediatric formulation development and IV tech transfer activities.

Since September, Zika has been actively engaged with the US government regarding the future procurement of Tupac.

While the details of our conversation with government officials remain confidential, we're encouraged by their continued interest in maintaining access to tea pox as a critical medical countermeasure for smallpox, particularly amidst the disruption and uncertainty of the ongoing government shutdown.

Antivirals remain essential for bioterrorism preparedness and play a vital role in any comprehensive plan, enabling quick action when it matters most.

I'd also like to highlight an additional point of interest. Our approach to pricing and manufacturing has historically been well aligned with the administration's priorities. The US government has always received our lowest price for teapots compared to international purchasers, and all of our active pharmaceutical ingredients, or API, and finished drug products are produced in facilities located in the US.

On the international side of our business, we continue to have discussions with key stakeholders on critical role biodefense plays in shaping resilient global health security frameworks.

Our goal is to help ensure that countries around the world are equipped to respond swiftly should a smallpox outbreak occur.

Given the growing risk of bioterrorism, many countries and regions have developed preparedness strategies and have allocated larger budgets to executing those strategies, while others are working to do so. In our view, strategic stockpiling supported by sustained investment in crisis preparedness is critical to global health security.

Discussions around potential contracts with both existing as well as new customers are ongoing as we maintain current relationships and look to expand our customer base.

Based on our engagement this year and interest from key stakeholders across strategic markets, we expect multiple international sales in 2026.

I'd also like to share a brief update on the referral procedure for tea pox known as TikovirmatIGA in Europe commenced by the European Medicines Agency or EMA in July.

As we previously explained, the EMA raised questions about our product's efficacy in treating EPOX following a review of the data from EPOC clinical trials, including Palm 007 and Stom.

We have submitted comprehensive science-based responses to questions posed by the EMA which were focused primarily on EPO.

The EMA's Committee for Medicinal Products for Human Use, or CHMP, will meet next week, and we expect it will either issue an opinion or request for additional information.

While we will not speculate on what the CHMP will do, we are confident in the responses we put forth and believe Tox is a safe and effective drug for its approved indications.

We remain ready to address any additional questions and provide greater clarity as needed from the CMP.

As always, we encourage stakeholders to view tea pox through the lens of the comprehensive data and gravity of the disease it's designed to treat, namely smallpox. As a reminder, tep pox is highly targeted and was developed as a smallpox treatment with the goal of reducing mortality.

In preclinical trials, tea ovir might significantly reduced mortality and viral load across 4 pivotal studies in non-human primates and 2 in rabbits.

Safety has been demonstrated in about 10,000 TO recipients across more than 20 clinical trials, which is critical when we need it for mass distribution.

Turning to our late stage pipeline, we continue to advance Tupac's post-exposure prophylaxis program, or PEPP for smallpox.

Collaboration with CDC continues. As a reminder, the CDC is analysing samples collected to support the study's immunogenicity objective.

Based on Tox's mechanism of action, we believe T-ox will not have any impact on Genos immune response when administered commitment with Genos.

Therefore, we continue to move forward toward an FDA submission. While the government shutdown does impact near term timelines for this project, based on current expectations, we continue to target the FDA submission for the PEP indication in 2026.

Also in our pipeline, our paediatric program continues to move forward in partnership with the Biomedical Advanced Research and Development Authority, or BARTA within the US Department of Health and Human Services under the Administration for Strategic Preparedness and Response, or ASPRA.

This initiative is designed to address an important unmet need, providing a treatment option for children too small for the current oral formulation of Tea pox.

We're targeting to submit an I&D as soon as the end of the year, with phase 1 trial targeted to begin shortly thereafter.

As we approach year end, our key priorities remain unchanged, sustaining financial strength and executing our strategic initiatives with discipline and focus. Despite the expected lumpiness of our financial resorts quarter to quarter, our company continues its track record of generating substantial cash flow.

Since 2020, we've returned approximately $230 million to shareholders in the form of dividends and share buybacks, all while incurring zero debt. We believe our approach continues to position us well for long-term success where our core areas of focus has delivered meaningful long-term value for our shareholders.

In closing, we believe CIGA continues to build on its strong foundation of strategic focus, financial discipline and strength, and long-term government partnerships. Our differentiated TEac's franchise and history of performance reinforce our path forward, one that supports global health security and creates long-term shareholder value.

With that, I'll turn over to Dan to review the financial results in more detail.

Dan.

Thanks.

As noted earlier in the call, Sega's product sales for the nine months end of September 30th, 2025 are approximately $86 million including $53 million of oral teapot and $26 million of IV teapot sales under the 19C Barta contract and $6 million of oral teapot sales to an international customer.

The sales under the 19CBAA contract relate to Tupac's deliveries to the US Strategic National Stockpile or SNS.

Product sales for this time period outpaced sales over the comparable period last year of $54 million.

In addition to product sales, the company has research and development revenues of approximately $5 million for the nine months into September 30th, 2025.

With respect to the three months end of September 30th, 2025, as Zen mentioned, it was a relatively quiet quarter which follows a strong second quarter in which the company had $79 million of product revenues. As previously noted, given the nature of the business model of CIGA, fluctuations in revenue amounts between quarters is not unusual.

As a supplemental note, there are $26 million of remaining outstanding orders as of September 30th.

This amount reflects the $26 million of IV Tupac's order received in the first quarter of this year under the 19C BAA contract, which is targeted for delivery in 2026.

Pre-tax operating income for the nine months end of September 30th, 2025, which excludes interest, income, and taxes, is approximately $33 million.

For the three months ended September 30th, 2025, pre-tax operating loss is approximately $10 million.

Net income for the nine months end of September 30th, 2025 is approximately $29 million.

In turn, fully diluted income per share for this period is $0.40 per share.

For the three months ended September 30th, 2025, net loss is approximately $6 million and net loss per share is $0.09.

The company continues to maintain a strong balance sheet. At September 30th, 2025, the company had a cash balance of approximately $172 million and no debt.

This concludes the financial update. At this point, I will turn the call back to Zen.

Thank you, Dan. With that, we'd like to open the call up for questions.

Ladies and gentlemen, should you have a question, please press star, followed by 1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to remove your hand from the queue, please press star, followed by 2. If you're using a speakerphone, please lift the handset before pressing any keys. Just a moment for your first question.

And your first question comes from Jagdeep Prakash at Edison Group. Please go ahead.

Hi, good evening and thank you for taking my questions. My first question is related to the US RFP process for Tea Box.

You mentioned disruptions with the US government and the recent shutdowns.

What kind of potential impact, if any, do you see on the ongoing RFP process and the timelines for TO stockpiling?

Kyoto, thanks. Nice to hear from you. We are fortunate at this time, that the headcount reductions of the world's flows has not materially impacted operational activities or performance of our existing government contracts.

Many of the people we work with continue to engage, given the nature of what they do, as well as the importance of national security.

There are some instances in which activities with the government employees outside BARTA have been impacted. In these cases, the impact has not been material to our operations to date.

The one area that we would like to highlight that we do see some impact is with the CDC. There is a possibility of delays in the CDC completing the completing the analysis of our samples from the trial supporting our PEP program.

The CDC was originally targeting to complete analysis later this year and that could potentially slip given the timelines of the government shutdown.

I mean regarding the new procurement contract for Tupac, as we noted in our prepared remarks, we continue to engage with the government officials regarding Tupac's development, manufacturing, and procurement.

While the headcount reductions for furloughs do expose contractors to some potential delays and occasional choppiness in terms of customary interactions, we believe the key drivers of the procurement activity will be ultimately driven by the views and actions of leadership within the US government, and this includes AR, HHS, DOD, as well as administration, as well as Congress over the long-term.

I mean, we are encouraged by their continued interest in maintaining access to Tox as we believe, and they do too, that it's a critical countermeasure for smallpox.

Thank you, and, you continue to be in active dialogue with the US government, but if you just hypotize that the RFP may be slightly delayed.

Are there any mitigation strategies or operational steps that CIGA is looking to implement or can implement to secure the long-term, longer-term outlook? Obviously your cash position remains strong, so nearer term may not be as much of a concern.

Hi Jody, this is Dan. I'll take that question. you're right in that, you mentioned that we have a strong cash position and, just to reiterate, it's 172 million at September 30th, and there's no debt.

So we are in a very strong position, just to give you a frame of reference, that cash balance is more than 4 times the current annual rate or annual run rate for operating expenses.

So you know that that affords us, a lot of flexibility and so what I would say generally is given this position I would just.

Generally say that over the past decade, TGA has been consistently adapted to different environments and will continue to be adaptive, with an eye toward, finding the best mix of pursuing opportunities and managing risks.

Thank you for that and I just have another couple of questions on the financials. We appreciate that Q3 was a slightly quieter quarter for the company, but you did record, 0.9 million of products revenues. Can you elaborate on what these revenues came from and Are they related to the CDND for instance and secondly, we saw that the cost of goods as a percentage of sales was relatively higher in this quarter versus what we've seen in the previous quarters. Can you just explain what could be the reasons for this?

Right, so, in a quiet quarter like this.

Then you sort of have sort of some technical outcomes that don't necessarily fra any type of trend what you're seeing on the revenue side is really the way the accounting works is certain in limited circumstances and certain types of reimbursement activities are treated as product revenues and that really ties into.

For example, the IV tech transfer, so that's what you see on the product revenue side.

And then on the on the corresponding cost of goods sold, you see the expenses related to it. What you also see is that a lot of cost of goods, as you'd expect, are variable costs related to production costs for inventory.

But there is a small amount percentage wise that's attributable to sort of semi-fixed cost such cost or expenses such as stability, storage, security.

And even when we don't, and when it's a quiet quarter, we don't really have much in the way of product deliveries. We still have those expenses show up each quarter, so that's what you also see coming through the cost of goods sold. So that's why you sort of see, when you look at it on a margin basis, the margin is very different than what you normally see. But again, I would highlight that this is more of a technical outcome and that it does not reflect any type of trend.

Thank you. That's very clear, and I don't have any further questions, so thank you for taking all my questions.

Thank you. As a reminder, if you wish to ask a question, please press star one.

There are no further questions at this time. I'm pleased to turn the call back over to them.

Thanks, Marissa. I'd like to thank everyone for making time to join today's call and for your ongoing interest in SeIGA. We look forward to speaking to you again in our 4th quarter call. Have a great evening.

This concludes today's conference call.

Thank you so much for your participation. You may now disconnect.