As filed
with the Securities and Exchange Commission on October 29, 2009
Registration
No. 333-__________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
—————
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
—————
SIGA
Technologies, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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13-3864870
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(State
or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer Identification No.)
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420
Lexington Avenue
Suite
408
New
York, New York 10170
(212)
672-9100
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
—————
Ayelet
Dugary
Chief
Financial Officer
SIGA
Technologies, Inc.
420
Lexington Avenue, Suite 408
New
York, New York 10170
(212)
672-9100
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
—————
Copy
To:
Thomas
E. Constance, Esq.
Kramer
Levin Naftalis & Frankel LLP
1177
Avenue of the Americas
New
York, New York 10036
(212)
715-9100
Approximate
date of commencement of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box. ¨
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. ¨
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 431(b) under the Securities Act, check
the following box. ¨
Indicate
by check-mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”,
“accelerated file”, and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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Large
Accelerated Filer o
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Accelerated
Filer x
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Non-Accelerated
Filer ¨
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Smaller
Reporting Company ¨.
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(Do
not check if a smaller reporting
company)
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CALCULATION OF REGISTRATION
FEE
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Title
of Each Class of
Securities
to be Registered (1)
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Proposed
Maximum
Aggregate
Offering Price(2)
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Amount
of
Registration Fee
(3)
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Common
Stock, par value $0.001 per share
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--
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--
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Warrants
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--
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--
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Total
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$100,000,000
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$5,580
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1.
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There
are being registered hereunder such indeterminate number of shares of
common stock and warrants to purchase common stock as shall have an
aggregate initial offering price not to exceed $100,000,000. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder. In addition, pursuant to
Rule 416 under the Securities Act of 1933, as amended (the
“Securities Act”), the shares being registered hereunder include such
indeterminate number of shares of common stock as may be issuable with
respect to the shares being registered hereunder as a result of stock
splits, stock dividends or similar
transactions.
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2.
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The
proposed maximum aggregate offering price per class of security will be
determined from time to time by the registrant in connection with the
issuance by the registrant of the securities registered hereunder and is
not specified as to each class of security pursuant to General Instruction
II.D. of Form S-3 under the Securities
Act.
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3.
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Calculated
pursuant to Rule 457(o) under the Securities
Act.
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The
information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
Subject
to Completion, dated October 29, 2009
SIGA
TECHNOLOGIES, INC.
$100,000,000
Of
COMMON
STOCK
WARRANTS
—————
We may
from time to time offer and sell in the primary offering up to $100,000,000
aggregate dollar amount of common stock and warrants. We will specify
in the accompanying prospectus supplement the terms of the securities to be
offered and sold. We may sell these securities to or through
underwriters or dealers and also to other purchasers or through
agents. We will set forth the names of any underwriters, dealers or
agents in the accompanying prospectus supplement.
Our
shares are traded on the NASDAQ Capital Market under the symbol
“SIGA”. Our principal executive offices are located at 420 Lexington
Avenue, Suite 408, New York, New York 10170. Our telephone number is
(212) 672-9100.
—————
Investing
in the shares involves a high degree of risk. For more information,
please see “Risk Factors” beginning on page 5.
—————
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
—————
This
prospectus may not be used to consummate sales of securities unless, to the
extent required by applicable law, it is accompanied by a prospectus
supplement.
—————
The
date of this prospectus is October 29, 2009
TABLE
OF CONTENTS
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1
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1
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5
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30
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31
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EXHIBIT
5.1
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33
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EXHIBIT
23.1
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35
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You
should rely only on the information contained or incorporated by reference in
this prospectus, any prospectus supplement or any “free writing prospectus” that
we may authorize to be delivered to you. We have not authorized
anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on
it. You should assume that the information appearing in this
prospectus, any prospectus supplement and the documents incorporated by
reference herein and therein are accurate only as of their respective
dates. Our business, financial condition, results of operations and
prospectus may have changed since those dates. Neither this
prospectus nor any prospectus supplement shall constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the persons making such offer or solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission (SEC) using a “shelf” registration
process. Under this shelf registration process, we may from time to
time sell common stock or warrants or a combination of these securities, in one
or more primary offerings up to the total amount of $100,000,000. We
have provided to you in this prospectus a general description of the securities
we may offer. Each time we sell securities, we will, to the extent
required by law, provide a prospectus supplement that will contain specific
information about the terms of the offering. We may also add, update or change
in any prospectus supplement or any free writing prospectus any of the
information contained in this prospectus. To the extent there is a conflict
between the information contained in this prospectus and the prospectus
supplement, you should rely on the information in the prospectus supplement,
provided that if any statement in one of these documents is inconsistent with a
statement in another document having a later date — for example, a document
incorporated by reference in this prospectus or any prospectus supplement —
the statement in the document having the later date modifies or supersedes the
earlier statement. This prospectus, together with any prospectus supplement and
any free writing prospectus we may authorize to be delivered to you, includes
all material information relating to the primary offering of our
securities.
This
prospectus describes certain risk factors that you should consider before
purchasing the shares. See “Risk Factors” beginning on page
5. You should read this prospectus together with the additional
information described under the heading “Where You Can Find More
Information.”
ABOUT
SIGA TECHNOLOGIES, INC.
SIGA
Technologies, Inc. (“SIGA”, the “Company” or “we”), is a biotechnology
corporation incorporated in Delaware on December 28, 1995. We pursue the
research, development and commercialization of novel anti-infectives for the
prevention and treatment of serious infectious diseases. The major focus of our
developmental and commercialization activities is on products intended for use
in defense against biological warfare agents such as smallpox, arenaviruses
(hemorrhagic fevers) and other Category A viral agents. Our lead product,
ST-246®, is an orally administered antiviral drug that targets orthopox viruses.
In December 2005, the U.S. Food and Drug Administration (the “FDA”) accepted our
Investigational New Drug (“IND”) application for ST-246® and granted the program
“Fast-Track” status. In December 2006, the FDA granted Orphan Drug
designation to ST-246® for the prevention and treatment of
smallpox. In May 2009, we submitted a response to a Request for
Proposal (the “BARDA Smallpox RFP”) issued by the U.S. Biomedical Research and
Development Agency (“BARDA”) with respect to the purchase of 1.7 million courses
of a smallpox antiviral, and, in June 2009, BARDA informed us that our response
to the BARDA Smallpox RFP was deemed technically acceptable and in the
competitive range. Our antiviral programs are designed to prevent or
limit the replication of the viral pathogens of interest.
Product
Candidates and Market Potential
Market
for Biological Defense Programs
The
market for biodefense countermeasures has grown dramatically over the past ten
years as a result of the increased awareness of the threat of global terror
activity in the wake of the September 11, 2001 terrorist attacks and the October
2001 anthrax letter attacks. The U.S. government is the principal source of
worldwide biodefense spending. Most U.S. government spending on biodefense
programs results from development funding awarded by the National Institute of
Allergies and Infectious Diseases (“NIAID”), BARDA and the U.S. Department of
Defense (“DoD”), and procurement of countermeasures by the U.S. Department of
Health and Human Services (“HHS”), the U.S. Centers for Disease Control and
Prevention (the “CDC”) and DoD. The U.S. government is now the largest source of
development and procurement funding for academic institutions and biotechnology
companies conducting biodefense research or developing vaccines and
immunotherapies directed at potential agents of bioterror or
biowarfare.
The
Project BioShield Act, which became law in 2004, authorizes the procurement for
the government’s “Strategic National Stockpile” (the “SNS”) of countermeasures
against biological, chemical, radiological and nuclear attacks. The SNS is a
national repository of medical assets and countermeasures designed to provide
federal, state and local public health agencies with medical supplies needed to
treat those affected by terrorist attacks, natural disasters, industrial
accidents and other public health emergencies. Project BioShield appropriated up
to $5.6 billion over ten years for SNS purchases. The Pandemic and All-Hazards
Preparedness Act (the “Preparedness Act”), passed in 2006, established BARDA as
the agency within HHS responsible for awarding procurement contracts for
biomedical countermeasures and providing development funding for advanced
research and development in the biodefense arena. The Preparedness Act
supplements the funding available under Project BioShield for radiological,
nuclear, chemical and biological countermeasures, and provides funding for
infectious disease pandemics. Funding for BARDA is provided by annual
Congressional appropriations. Congress also appropriates annual funding for the
CDC for the procurement of medical assets and countermeasures for the SNS and
for the NIAID to conduct biodefense research. This appropriation funding
supplements amounts available under Project BioShield.
From 2001
through 2008, the federal government has allocated over $16 billion in state and
local terrorism preparedness funding from the Departments of Homeland Security,
Health and Human Services and Justice. In 2007, approximately $5.0
billion was allocated for emergency, preparedness and response
funding. A similar amount was enacted for 2008. One of the
major concerns in the field of biological warfare agents is smallpox – although
declared extinct in 1980 by the World Health Organization, there is a threat
that a rogue nation or a terrorist group may have an illegal inventory of the
virus that causes smallpox. The only legal inventories of the virus are held
securely at the CDC in Atlanta, Georgia and at a laboratory in Russia. As a
result of this threat, the U.S. government has announced its intent to make
available significant funds in order to find a way to counteract the virus if
turned loose by terrorists or on a battlefield.
In
addition to the U.S. government, we believe that other potential additional
markets for the sale of biodefense countermeasures include:
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state
and local governments, which we expect may be interested in these products
to protect emergency responders, such as police, fire and emergency
medical personnel;
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foreign
governments, including both defense and public health
agencies;
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Non-governmental
organizations and multinational companies, including the U.S. Postal
Service and transportation and security companies;
and
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health care providers, including
hospitals and clinics.
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The FDA
amended its regulations, effective June 30, 2002, so that certain new drug and
biological products used as countermeasures against chemical, biological,
radiological, or nuclear agents may be approved for use in humans based on
evidence of effectiveness derived only from appropriate animal studies and any
additional supporting data. We believe that this change could make it possible
for us to have products proven effective in animal studies to be approved for
sale more quickly than under the standard regulatory path.
SIGA
Biological Warfare Defense Product Portfolio
We do not
currently have any product approved for sale commercially. Our
product candidates are all in various stages of development, as further
described below.
Anti-Orthopoxvirus
Drug: Smallpox virus is classified as a Category A agent by
the CDC and is considered one of the most significant threats for use as a
biowarfare agent. While deliberate introduction of any pathogenic
agent would be devastating, we believe the one that holds the greatest potential
for harming the general civilian population of any nation is smallpox. At
present, there is no generally effective approved drug with which to treat or
prevent smallpox infections. To address the serious product gap, SIGA scientists
developed a drug candidate, ST-246®, which inhibits replication in cell culture
and various animal models of all tested orthopox viruses, including vaccinia,
cowpox, ectromelia (mousepox), monkeypox, camelpox, and variola (smallpox),
while having no demonstrated effect on unrelated viruses. Given the
documented safety concerns with the current smallpox vaccine, there should be
several uses for an effective smallpox antiviral
drug: prophylactically, to protect the non-immune who are at risk of
exposure; therapeutically, to reduce mortality and morbidity in those infected
with an orthopox virus; and lastly, as an adjunct to the smallpox vaccine in
order to reduce the frequency of serious adverse events due to the live virus
used for vaccination. In December 2005, the FDA approved our IND
application for ST-246®. In June 2006, we successfully completed the
first human clinical safety study of ST-246®. The trial showed the drug to be
well tolerated in healthy human volunteers at all tested, orally administered
doses. In addition, data from blood-level exposure was sufficient to
support once-a-day dosing. The study was a double-blind, randomized,
placebo controlled, and ascending single-dose study. In 2006, ST-246® became the
first drug ever to demonstrate 100% protection against human smallpox virus in a
primate trial conducted at the CDC. Later in 2006, in two non-human
primate trials, the drug demonstrated 100% protection for animals injected with
high doses of monkeypox virus. One study was sponsored by NIAID, part of the
National Institutes of Health (“NIH”). The second study was conducted
by the U.S. Army Medical Research Institute of Infectious Diseases (“USAMRIID”)
and was funded by the DoD’s Threat Reduction Agency. In late 2006, ST-246®
received Orphan Drug designation for both the treatment and prevention of
smallpox. In 2007, we completed an additional Phase I clinical trial
evaluating safety, tolerability and pharmacokinetics at three different dosages
administered over 21 days to healthy volunteers. The results of this
study indicated that the drug is safe and well tolerated at all tested dosages.
In August 2008, a Phase I study was performed in order to demonstrate the
bioequivalence of ST-246® polymorph form I and form V.
During
2006, we received grants and contracts from the NIH totaling approximately $21
million for the continued development of ST-246®. In 2007, we received a grant
from the NIH for a total of approximately $600,000, to support the development
of ST-246® treatment of smallpox vaccine-related adverse
events. In 2008, we were awarded a $55 million contract from
the NIH to support the development of additional formulations and
orthopox-related indications for ST-246®, and $20 million in supplemental
funding to our existing $16.5 million contract with the NIH.
In March
2009, BARDA issued the BARDA Smallpox RFP, to which we responded in May 2009,
proposing that BARDA purchase ST-246® for the SNS. In June 2009,
BARDA informed us that our response to the BARDA Smallpox RFP was deemed
technically acceptable and in the competitive range. There can be no
assurance that BARDA will complete the purchase contemplated by the BARDA
Smallpox RFP on the announced or any other terms or that we will be awarded a
contract to sell ST-246®.
Anti-Arenavirus
Drug: Arenaviruses are hemorrhagic fever viruses that have
been classified as Category A agents by the CDC due to the great risk that they
pose to public health and national safety. Among the Category A
viruses recognized by the CDC, there are four hemorrhagic fever arenaviruses
(Junin, Machupo, Guanarito and Sabia viruses) for which there is no FDA-approved
treatment available. In order to meet this threat, SIGA
scientists have identified two lead drug candidates, ST-294 and ST-193, which
have demonstrated significant antiviral activity in cell culture assays against
arenavirus pathogens. We have also demonstrated the therapeutic efficacy of
ST-193 in several animal challenge studies. We also have programs
against other hemorrhagic fever viruses, including Dengue Fever, Rift Valley
Fever, Lymphocytic choriomeningitis virus (LCMV) and Ebola. We believe that the
availability of hemorrhagic fever virus antiviral drugs will address national
and global security needs by acting as a significant deterrent and defense
against the use of arenaviruses as weapons of bioterrorism. In 2006, we received
a three-year grant of $6.0 million from the NIH to support the development of
antiviral drugs for Lassa fever virus.
Broad Spectrum Antiviral:
Research and development efforts currently underway at SIGA are aimed at
developing a comprehensive biodefense against those microbial agents most likely
to be deployed as biological weapons. A broad-spectrum antiviral
would have great utility against natural or intentional introduction of these
agents into population centers, as well as provide a treatment option in areas
where these pathogens are endemic. Screening for antivirals against
specific CDC Category A and B pathogens, utilizing SIGA’s high-throughput
screening program, led to the identification of a unique collection of compounds
with broad spectrum antiviral activity. Compounds with potent, non-toxic
activity against diverse virus families are currently being characterized with
respect to antiviral mechanism(s) of action, while our chemi-informatics tools
are being employed to explore and determine structure-activity relationships
within different compound series. To date, our lead candidate, ST-669, has
demonstrated sub-micromolar activity in vitro against viruses in
the Poxviridae, Filoviridae, Bunyaviridae, Arenaviridae, Flaviviridae,
Togaviridae, Retroviridae, and Picornaviridae families. Lead series are
currently being assessed with respect to the mechanism of antiviral action and
administered by multiple routes and dosing regimens to those small animal
species traditionally used for modeling the pathogenesis of Category A
viruses.
Dengue antiviral: Dengue
fever, dengue hemorrhagic fever, and dengue shock syndrome are caused by one of
four serotypes of dengue virus of the genus Flavivirus. Dengue is a major world
threat, with an estimated 50-100 million people infected with the virus each
year. There is currently no FDA-approved antiviral or vaccine for the treatment
or prevention of dengue-mediated disease. We currently have four drug series in
the pre-clinical development stage, each with activity against all four
serotypes of virus. Compounds from two of these series have recently shown
efficacy in a murine model of disease, including ST-610 and ST-148. In 2008, we
were awarded a $1.0 million, two-year grant from NIH to support lead
optimization and animal efficacy for our dengue antiviral program.
Technology
Antiviral
Technology: Two Approaches
We have
two approaches to the discovery and development of new antiviral compounds:
high-throughput screening (HTS) and rational drug design. For HTS, we
use whole cell virus inhibition assays, pseudotype virus inhibition assays, and
validated target biochemical assays. We currently have a 200,000 small-molecule
compound library in-house that is utilized for screening against these assays.
This strategy allows for both target-specific and target-neutral screening and
identification of novel antiviral compounds. Compounds are also screened for
toxicity in various cell lines to develop a therapeutic index (TI), which we
define as the concentration at which the compound is toxic to 50% of the cells
(CC50), divided by the concentration of compound required to inhibit 50% of the
virus (EC50) (TI = CC50/EC50). Once hits are identified with an acceptable TI
they are selected for chemical optimization and proceed to the antiviral drug
development pipeline.
For
rational drug design we apply advanced receptor structure-based Virtual Ligand
Screening technology for ligand/inhibitor discovery. The analysis of the
structure reveals potentially “drugable” pockets. The technology allows us to
utilize the three-dimensional structure of the target receptor to screen large
virtual compound collections as well as databases of commercially available
compounds and prioritize them for subsequent experimental validation. Rational
drug design is also used to develop structure activity relationships and lead
optimization.
RISK
FACTORS
Investing
in our common stock and warrants involves a high degree of risk, and you should
be able to bear losing your entire investment. You should carefully
consider the risks presented by the following factors.
This
prospectus contains forward-looking statements and other prospective information
relating to future events. These forward-looking statements and other
information are subject to risks and uncertainties that could cause our actual
results to differ materially from our historical results or currently
anticipated results including the following:
Risks Related to Our
Financial Position and Need for Additional Financing
We
have incurred operating losses since our inception and expect to incur net
losses and negative cash flow for the foreseeable future.
We
incurred net losses of approximately $17.1 million for the six months ended June
30, 2009 and $8.6 million, $5.6 million, and $9.9 million, for the years ended
December 31, 2008, 2007, and 2006, respectively. As of December 31,
2008, 2007, and 2006, our accumulated deficit was approximately $70.6 million,
$62.0 million, and $56.4 million, respectively, and it was $90.5 million as of
June 30, 2009. We expect to continue to have significant operating
expenses. We will need to generate significant revenues to achieve
and maintain profitability. Currently our revenue derives only from grants and
contracts.
We cannot
guarantee that we will achieve sufficient revenues for
profitability. Even if we do achieve profitability, we cannot
guarantee that we can sustain or increase profitability on a quarterly or annual
basis in the future. If revenues grow slower than we anticipate, or
if operating expenses exceed our expectations or cannot be adjusted accordingly,
then our business, results of operations, financial condition and cash flows
will be materially and adversely affected. Because our strategy might
include acquisitions of other businesses, acquisition expenses and any cash used
to make these acquisitions will reduce our available cash.
Our
business may suffer if we are unable to raise additional equity
funding.
Unless
and until we successfully sell any of our products, such as pursuant to the
BARDA Smallpox RFP, we will continue to be dependent on our ability to raise
money through the exercise of existing options or warrants or through the
issuance of new equity. There is no guarantee that we will continue
to be successful in raising such funds. If we are unable to raise
additional funds, we may be forced to discontinue or cease certain
operations. Our annual operating needs vary from year to year
depending upon the amount of revenue generated through grants and contracts and
the amount of projects we undertake, as well as the resources we expend in
connection with any future acquisition, all of which may materially differ from
year to year and may adversely affect our business.
Risks Related to Our Common
Stock
Our
stock price is, and we expect it to remain, volatile, which could limit
investors’ ability to sell stock at a profit.
The
volatile price of our stock makes it difficult for investors to predict the
value of their investments, to sell shares at a profit at any given time, or to
plan purchases and sales in advance. A variety of factors may affect
the market price of our common stock. These include, but are not
limited to:
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publicity
regarding actual or potential clinical results relating to products under
development by our competitors or
us;
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initiating,
completing or analyzing, or a delay or failure in initiating, completing
or analyzing, pre-clinical or clinical trials or the design or results of
these trials;
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achievement
or rejection of regulatory approvals by our competitors or
us;
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announcements
of technological innovations or new commercial products by our competitors
or us;
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developments
concerning proprietary rights, including
patents;
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developments
concerning our collaborations;
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regulatory
developments in the U.S. and foreign
countries;
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economic
or other crises and other external
factors;
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period-to-period
fluctuations in our revenues and other results of operations;
and
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changes
in financial estimates by securities
analysts.
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Additionally,
because the volume of trading in our stock fluctuates significantly at times,
any information about SIGA in the media may result in significant volatility in
our stock price.
We will
not be able to control many of these factors, and we believe that
period-to-period comparisons of our financial results will not necessarily be
indicative of our future performance.
In
addition, the stock market in general, and the market for biotechnology
companies in particular, has experienced extreme price and volume fluctuations
that may have been unrelated or disproportionate to the operating performance of
individual companies. These broad market and industry factors may
seriously harm the market price of our common stock, regardless of our operating
performance.
A
future issuance of preferred stock may adversely affect the rights of the
holders of our common stock.
Our
certificate of incorporation allows our Board of Directors to issue up to
10,000,000 shares of preferred stock and to fix the voting powers, designations,
preferences, rights and qualifications, limitations or restrictions of these
shares without any further vote or action by the stockholders. The rights of the
holders of common stock will be subject to, and could be adversely affected by,
the rights of the holders of any preferred stock that we may issue in the
future. The issuance of preferred stock, while providing desirable flexibility
in connection with our future activities, could also have the effect of making
it more difficult for a third party to acquire a majority of our outstanding
voting stock, thereby delaying, deferring or preventing a change in
control.
Concentration
of ownership of our capital stock could delay or prevent a change of
control.
Our
directors, executive officers and principal stockholders beneficially own a
significant percentage of our common stock. They also have, through the exercise
or conversion of certain securities, the right to acquire additional common
stock. As a result, these stockholders, if acting together, have the ability to
significantly influence the outcome of corporate actions requiring shareholder
approval. Additionally, this concentration of ownership may have the effect of
delaying or preventing a change in control of SIGA. As of March 16, 2009,
directors, officers and principal stockholders beneficially owned approximately
33.3% of our stock.
Risks Related to Our
Dependence on U.S. Government Contracts and Grants
Most
of our immediately foreseeable future revenues are contingent upon grants and
contracts from the U.S. government, and we may not achieve sufficient revenues
from these agreements to attain profitability.
Until and
unless we successfully sell any of our products, our ability to generate
revenues will largely depend on our ability to enter into additional research
grants, collaborative agreements, strategic alliances, contracts and license
agreements with third parties or maintain the agreements we currently have in
place. Substantially all of our revenues for the years ended December
31, 2008, 2007, and 2006, respectively, and the nine months ended September 30,
2009, were derived from grants and contracts. Our current revenue is
derived from contract work being performed for the NIH under two major
contracts, which are scheduled to expire from September 2011 through September
2013.
Risks Related to Product
Development
Our
business depends significantly on our success in completing development of and
commercializing drug candidates that are still under development. If we are
unable to commercialize these drug candidates, or experience significant delays
in doing so, our business will be materially harmed.
We have
invested a substantial majority of our efforts and financial resources in the
development of our drug candidates. Our ability to generate near-term revenue is
particularly dependent on the success of our smallpox antiviral drug candidate
ST-246®. The commercial success of our drug candidates will depend on many
factors, including:
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successful
development, formulation and cGMP scale-up of drug manufacturing that
meets FDA requirements;
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successful
development of animal models;
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successful
completion of non-clinical development, including studies in approved
animal models;
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our
ability to pay the expense of filing, prosecuting, defending and enforcing
patent claims and other intellectual property
rights;
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successful
completion of clinical trials;
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receipt
of marketing approvals from the FDA and similar foreign regulatory
authorities;
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a
determination by BARDA that our biodefense drug candidates should be
purchased for the SNS prior to FDA
approval;
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establishing
commercial manufacturing processes of our own or arrangements on
reasonable terms with contract
manufacturers;
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manufacturing
stable commercial supplies of drug candidates, including availability of
raw materials;
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launching
commercial sales of the product, whether alone or in collaboration with
others; and
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acceptance of the product by
potential government customers, physicians, patients, healthcare payors
and others in the medical
community.
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We expect
to rely on FDA regulations known as the “animal rule” to obtain approval for our
biodefense drug candidates. The animal rule permits the use of animal efficacy
studies together with human clinical safety trials to support an application for
marketing approval. These regulations are relatively new, and we have limited
experience in the application of these rules to the drug candidates that we are
developing. It is possible that results from these animal efficacy studies may
not be predictive of the actual efficacy of our drug candidates in humans. If we
are not successful in completing the development and commercialization of our
drug candidates, our business could be harmed.
We
will not be able to commercialize our drug candidates if our preclinical
development efforts are not successful, our clinical trials do not demonstrate
safety or our clinical trials or animal studies do not demonstrate
efficacy.
Before
obtaining regulatory approval for the sale of our drug candidates, we must
conduct extensive preclinical development, clinical trials to demonstrate the
safety of our drug candidates and clinical or animal trials to demonstrate the
efficacy of our drug candidates. Pre-clinical and clinical testing is expensive,
difficult to design and implement, can take many years to complete and is
uncertain as to outcome. Success in preclinical testing and early clinical
trials does not ensure that later clinical trials or animal efficacy studies
will be successful, and interim results of a clinical trial or animal efficacy
study do not necessarily predict final results.
A failure
of one or more of our clinical trials or animal efficacy studies can occur at
any stage of testing. We may experience numerous unforeseen events during, or as
a result of, preclinical testing and the clinical trial or animal efficacy study
process that could delay or prevent our ability to receive regulatory approval
or commercialize our drug candidates, including:
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regulators
or institutional review boards may not authorize us to commence a clinical
trial or conduct a clinical trial at a prospective trial
site;
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we
may decide, or regulators may require us, to conduct additional
preclinical testing or clinical trials, or we may abandon projects that we
expect to be promising, if our preclinical tests, clinical trials or
animal efficacy studies produce negative or inconclusive
results;
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we
might have to suspend or terminate our clinical trials if the participants
are being exposed to unacceptable health
risks;
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regulators
or institutional review boards may require that we hold, suspend or
terminate clinical development for various reasons, including
noncompliance with regulatory
requirements;
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the
cost of our clinical trials could escalate and become cost
prohibitive;
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any
regulatory approval we ultimately obtain may be limited or subject to
restrictions or post-approval commitments that render the product not
commercially viable;
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we
may not be successful in recruiting a sufficient number of qualifying
subjects for our clinical trials;
and
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the effects of our drug
candidates may not be the desired effects or may include undesirable side
effects or the drug candidates may have other unexpected
characteristics.
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We
are in various stages of product development, and there can be no assurance of
successful commercialization.
In
general, our research and development programs are at an early stage of
development. To obtain FDA approval for our biological warfare
defense products we will be required to perform at least one animal efficacy
model and provide animal and human safety data. Our other products
will be subject to the usual FDA regulatory requirements, which include a number
of phases of testing in humans.
The FDA
has not approved any of our biopharmaceutical product candidates. Any drug
candidate we develop will require significant additional research and
development efforts, including extensive pre-clinical and clinical testing and
regulatory approval, prior to commercial sale. We cannot be sure our approach to
drug discovery will be effective or will result in the development of any drug.
We cannot predict with certainty whether any drug resulting from our research
and development efforts will be commercially available within the next several
years, or if they will be available at all.
Even if
we receive initially positive pre-clinical or clinical results, such results do
not mean that similar results will be obtained in later stages of drug
development, such as additional pre-clinical testing or human clinical trials.
All of our potential drug candidates are prone to the risks of failure inherent
in pharmaceutical product development, including the possibility that none of
our drug candidates will or can:
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be
safe, non-toxic and effective;
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otherwise
meet applicable regulatory
standards;
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receive
the necessary regulatory approvals;
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develop
into commercially viable drugs;
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be
manufactured or produced economically and on a large
scale;
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be
successfully marketed;
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be
reimbursed by government and private insurers;
and
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achieve
customer acceptance.
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In
addition, third parties may preclude us from marketing our drugs through
enforcement of their proprietary rights that we are not aware of, or third
parties may succeed in marketing equivalent or superior drug products. Our
failure to develop safe, commercially viable drugs would have a material adverse
effect on our business, financial condition and results of
operations.
Risks Related to
Commercialization
Because
we must obtain regulatory clearance or otherwise operate under strict legal
requirements in order to test and market our products in the U.S., we cannot
predict whether or when we will be permitted to commercialize our
products.
A
pharmaceutical product cannot generally be marketed in the U.S. until it has
completed rigorous pre-clinical testing and clinical trials and an extensive
regulatory clearance process implemented by the FDA. Pharmaceutical products
typically take many years to satisfy regulatory requirements and require the
expenditure of substantial resources depending on the type, complexity and
novelty of the product and its intended use.
Before
commencing clinical trials in humans, we must submit and receive clearance from
the FDA by means of an IND application. Institutional review boards and the FDA
oversee clinical trials and such trials:
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must
be conducted in conformance with the FDA
regulations;
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must
meet requirements for institutional review board
oversight;
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must
meet requirements for informed
consent;
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must
meet requirements for good clinical and manufacturing
practices;
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are
subject to continuing FDA
oversight;
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may
require large numbers of test subjects;
and
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may
be suspended by us or the FDA at any time if it is believed that the
subjects participating in these trials are being exposed to unacceptable
health risks or if the FDA finds deficiencies in any of our IND
applications or the conduct of these
trials.
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Before
receiving FDA clearance to market a product in the absence of a medical or
public health emergency, we must demonstrate that the product is safe and
effective on the patient population that will be treated. Data we obtain from
preclinical and clinical activities are susceptible to varying interpretations
that could delay, limit or prevent regulatory clearances. Additionally, we have
limited experience in conducting and managing the clinical trials and
manufacturing processes necessary to obtain regulatory clearance.
If full
regulatory clearance of a product is granted, this clearance will be limited
only to those states and conditions for which the product is demonstrated
through clinical trials to be safe and efficacious. We cannot ensure that any
compound developed by us, alone or with others, will prove to be safe and
efficacious in clinical trials and will meet all of the applicable regulatory
requirements needed to receive full marketing clearance.
The
biopharmaceutical market in which we compete and will compete is highly
competitive.
The
biopharmaceutical industry is characterized by rapid and significant
technological change. Our success will depend on our ability to develop and
apply our technologies in the design and development of our product candidates
and to establish and maintain a market for our product candidates. There also
are many companies, both public and private, including major pharmaceutical and
chemical companies, specialized biotechnology firms, universities and other
research institutions engaged in developing pharmaceutical and biotechnology
products. Many of these companies have substantially greater financial,
technical, research and development resources, and human resources than us.
Competitors may develop products or other technologies that are more effective
than any that are being developed by us or may obtain FDA approval for products
more rapidly than us. If we commence commercial sales of products, we still must
compete in the manufacturing and marketing of such products, areas in which we
have no experience. Many of these companies also have manufacturing facilities
and established marketing capabilities that would enable such companies to
market competing products through existing channels of distribution. Two
companies with similar profiles are VaxGen, Inc., which is developing vaccines
against anthrax, smallpox and HIV/AIDS; Avant Immunotherapeutics, Inc., which
has vaccine programs for agents of biological warfare; and Chimerix, Inc., which
is attempting to commercialize what it believes to be an alternative smallpox
therapeutic.
Our
potential products may not be acceptable in the market or eligible for
third-party reimbursement resulting in a negative impact on our future financial
results.
Any
product we develop may not achieve market acceptance. The degree of market
acceptance of any of our products will depend on a number of factors,
including:
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the
establishment and demonstration in the medical community of the clinical
efficacy and safety of such
products,
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the
potential advantage of such products over existing treatment
methods,
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the
cost of our products relative to their perceived benefits,
and
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reimbursement
policies of government and third-party
payors.
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Physicians,
patients or the medical community in general may not accept or utilize any
product we may develop. Our ability to generate revenues and income with respect
to drugs, if any, developed through the use of our technology will depend, in
part, upon the extent to which reimbursement for the cost of such drugs will be
available from third-party payors, such as government health administration
authorities, private healthcare insurers, health maintenance organizations,
pharmacy benefits management companies and other organizations. Third-party
payors are increasingly disputing the prices charged for pharmaceutical
products. If third-party reimbursement was not available or sufficient to allow
profitable price levels to be maintained for drugs we develop, it could
adversely affect our business.
If
our products harm people, we may experience product liability claims that may
not be covered by insurance.
We face
an inherent business risk of exposure to potential product liability claims in
the event that drugs we develop are alleged to cause adverse effects on
patients. Such risk exists for products being tested in human clinical trials,
as well as products that receive regulatory approval for commercial sale. We
have obtained and intend to keep in place product liability insurance with
respect to drugs we develop. However, we may not be able to obtain such
insurance. Even if such insurance is obtainable, it may not be available at a
reasonable cost or in a sufficient amount to protect us against
liability.
We
may be required to perform additional clinical trials or change the labeling of
our products if we or others identify side effects after our products are on the
market, which could harm sales of the affected products.
If we or
others identify side effects after any of our products are on the market, or if
manufacturing problems occur:
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regulatory
approval may be withdrawn;
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reformulation
of our products, additional clinical trials, changes in labeling of our
products may be required;
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changes
to or re-approvals of our manufacturing facilities may be
required;
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sales
of the affected products may drop
significantly;
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our
reputation in the marketplace may suffer;
and
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lawsuits,
including class action suits, may be brought against
us.
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Any of
the above occurrences could harm or prevent sales of the affected products or
could increase the costs and expenses of commercializing and marketing these
products.
Healthcare
reform and controls on healthcare spending may limit the price we charge for any
products and the amounts that we can sell.
The U.S.
government and private insurers have considered ways to change, and have
changed, the manner in which healthcare services are provided in the U.S.
Potential approaches and changes in recent years include controls on healthcare
spending and the creation of large purchasing groups. In the future, the U.S.
government may institute further controls and limits on healthcare spending,
including through the Medicare and Medicaid programs. These controls and limits
might affect the payments we could collect from sales of any of our products.
Uncertainties regarding future healthcare reform and private market practices
could adversely affect our ability to sell any product profitably in the U.S. At
present, we do not foresee any change in FDA regulatory policies that would
adversely affect our development programs.
Risks Related to
Manufacturing and Manufacturing Facilities
Problems
related to large-scale commercial manufacturing could cause us to delay product
launches or experience shortages of products.
Our drug
candidates require several manufacturing steps, and may involve complex
techniques to assure quality and sufficient quantity, especially as the
manufacturing scale increases. Our products must be made consistently and in
compliance with a clearly defined manufacturing process. Accordingly, it
is essential to be able to validate and control the manufacturing process to
assure that it is reproducible. Slight deviations anywhere in the manufacturing
process, including obtaining materials, filling, labeling, packaging, storage
and shipping and quality control and testing, some of which all pharmaceutical
companies, including SIGA, experience from time to time, may result in lot
failures, delay in the release of lots, product recalls or spoilage. We will not
be able to sell any lot that fails to satisfy release testing
specifications.
If
third parties do not manufacture our drug candidates or products in sufficient
quantities and at an acceptable cost or in compliance with regulatory
requirements and specifications, the development and commercialization of our
drug candidates could be delayed, prevented or impaired.
We currently rely on third parties to
manufacture drug candidates that we require for pre-clinical and clinical
development. In addition, we indicated in our response to the BARDA Smallpox RFP
that we intend to manufacture ST-246® using contract manufacturers. Any significant delay in obtaining
adequate supplies of our drug candidates could adversely affect our ability to
develop or commercialize these drug candidates. We expect that we will rely on
third parties for a portion of the manufacturing process for commercial supplies
of drug candidates that we successfully develop. If our contract
manufacturers are unable to scale-up production to generate enough materials for
commercial launch, the success of those products may be jeopardized. Our current
and anticipated future dependence upon others for the manufacture of our drug
candidates may adversely affect our ability to develop drug candidates and
commercialize any product that receives regulatory approval on a timely and
competitive basis.
We
currently rely on third parties to demonstrate regulatory compliance and for
quality assurance with respect to the drug candidates manufactured for us. We
intend to continue to rely on these third parties for these purposes with
respect to production of commercial supplies of drugs that we successfully
develop. Manufacturers are subject to ongoing, periodic, unannounced inspection
by the FDA and corresponding state and foreign agencies or their designees to
ensure strict compliance with applicable regulations.
We cannot
be certain that our present or future manufacturers will be able to comply with
these regulations and other FDA regulatory requirements or similar regulatory
requirements outside the U.S. While our contracts call for compliance with all
applicable regulatory requirements, we do not control compliance by these
manufacturers with these regulations and standards. If we or these third parties
fail to comply with applicable regulations, sanctions could be imposed on us,
which could significantly and adversely affect supplies of our drug
candidates.
Our
activities may involve hazardous materials, use of which may subject us to
environmental regulatory liabilities.
Our
biopharmaceutical research and development sometimes involves the controlled use
of hazardous and radioactive materials and biological waste. We are subject to
federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of these materials and certain waste products.
Although we believe that our safety procedures for handling and disposing of
these materials comply with legally prescribed standards, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of an accident, we could be held liable for damages, and this
liability could exceed our resources. The research and development activities of
our company do not produce any unusual hazardous products. We do use small
amounts of radioactive isotopes commonly used in pharmaceutical research, which
are stored, used and disposed of in accordance with Nuclear Regulatory
Commission regulations. We maintain liability insurance in the amount of
approximately $5,000,000 and we believe this should be sufficient to cover any
contingent loss.
We
believe that we are in compliance in all material respects with applicable
environmental laws and regulations and currently do not expect to make material
additional capital expenditures for environmental control facilities in the near
term. However, we may have to incur significant costs to comply with current or
future environmental laws and regulations.
Risks Related to Sales of
Biodefense Products to the U.S. Government
Our
business could be adversely affected by a negative audit by the U.S.
government.
U.S.
government agencies, such as the Defense Contract Audit Agency (the “DCAA”),
routinely audit and investigate government contractors. These agencies review a
contractor’s performance under its contracts, cost structure and compliance with
applicable laws, regulations and standards.
The DCAA
also reviews the adequacy of, and a contractor’s compliance with, its internal
control systems and policies, including the contractor’s purchasing, property,
estimating, compensation and management information systems. Any costs found to
be improperly allocated to a specific contract will not be reimbursed, while
such costs already reimbursed must be refunded. If an audit uncovers improper or
illegal activities, we may be subject to civil and criminal penalties and
administrative sanctions, including:
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termination of
contracts;
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forfeiture of
profits;
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suspension of
payments;
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fines;
and
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suspension or prohibition from
doing business with the U.S.
government.
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In
addition, we could suffer serious reputational harm if allegations of
impropriety were made against us.
Laws
and regulations affecting government contracts might make it more costly and
difficult for us to successfully conduct our business.
We must
comply with numerous laws and regulations relating to the formation,
administration and performance of government contracts, which can make it more
difficult for us to retain our rights under these contracts. These laws and
regulations affect how we do business with federal, state and local government
agencies. Among the most significant government contracting regulations that
affect our business are:
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the
Federal Acquisition Regulations, and agency-specific regulations
supplemental to the Federal Acquisition Regulations, which comprehensively
regulate the procurement, formation, administration and performance of
government contracts;
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the
business ethics and public integrity obligations, which govern conflicts
of interest and the hiring of former government employees, restrict the
granting of gratuities and funding of lobbying activities and incorporate
other requirements such as the Anti-Kickback Act and Foreign Corrupt
Practices Act;
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export
and import control laws and regulations;
and
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laws, regulations and executive
orders restricting the use and dissemination of information classified for
national security purposes and the exportation of certain products and
technical data.
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Risks Related to Regulatory
Approvals
If
we are not able to obtain required regulatory approvals, we will not be able to
commercialize our drug candidates, and our ability to generate revenue will be
materially impaired.
Our drug
candidates and the activities associated with their development and
commercialization, including their testing, manufacture, safety, efficacy,
recordkeeping, labeling, storage, approval, advertising, promotion, sale and
distribution, are subject to comprehensive regulation by the FDA and other
regulatory agencies in the U.S. and by comparable authorities in other
countries. Failure to obtain regulatory approval for a drug candidate will
prevent us from commercializing the drug candidate. We have limited experience
in preparing, filing and prosecuting the applications necessary to gain
regulatory approvals and expect to rely on third-party contract research
organizations and consultants to assist us in this process. Securing FDA
approval requires the submission to the FDA of extensive pre-clinical and
clinical data, information about product manufacturing processes and inspection
of facilities and supporting information in order to establish the drug
candidate’s safety and efficacy. Our future products may not be effective, may
be only moderately effective, or may prove to have significant side effects,
toxicities, or other characteristics that may preclude our obtaining regulatory
approval or prevent or limit commercial use.
Failure
to obtain regulatory approval in international jurisdictions could prevent us
from marketing our products abroad.
We intend
to have our products marketed outside the U.S. To market our products in the
European Union and many other foreign jurisdictions, we may need to obtain
separate regulatory approvals and comply with numerous and varying regulatory
requirements. The approval procedure varies among countries and can involve
additional testing. The time required to obtain approval may differ from that
required to obtain FDA approval.
The
foreign regulatory approval process may include all of the risks associated with
obtaining FDA approval. We may not obtain foreign regulatory approvals on a
timely basis, if at all. Approval by the FDA does not ensure approval by
regulatory authorities in other countries or jurisdictions, and approval by one
foreign regulatory authority does not ensure approval by regulatory authorities
in other foreign countries or jurisdictions or by the FDA. We and our potential
future collaborators may not be able to file for regulatory approvals and may
not receive necessary approvals to commercialize our products in any
market.
Risks Related to Our
Dependence on Third Parties
If
third parties on whom we rely for clinical or certain animal trials do not
perform as contractually required or as we expect, we may not be able to obtain
regulatory approval for or commercialize our drug candidates and our business
may suffer.
We do not
have the ability to independently conduct the clinical trials, and certain of
the animal trials, required to obtain regulatory approval for our products. We
depend on independent investigators, contract research organizations and other
third-party service providers to conduct trials of our drug candidates and
expect to continue to do so. We rely heavily on these third parties for
successful execution of our trials, but do not exercise day-to-day control over
their activities. We are responsible for ensuring that each of our trials is
conducted in accordance with the general investigational plan and protocols for
the trial. Moreover, the FDA requires us to comply with standards, commonly
referred to as Good Clinical Practices, for conducting and recording and
reporting the results of clinical trials to assure that data and reported
results are credible and accurate and that the rights, integrity and
confidentiality of trial participants are protected.
Our
reliance on third parties that we do not control does not relieve us of these
responsibilities and requirements. Third parties may not complete activities on
schedule, or may not conduct our trials in accordance with regulatory
requirements or our stated protocols. The failure of these third parties to
carry out their obligations could delay or prevent the development, approval and
commercialization of our drug candidates.
Risks Related to Our
Intellectual Property
Our
ability to compete may decrease if we do not adequately protect our intellectual
property rights.
Our
commercial success will depend in part on our ability to obtain and maintain
patent protection for our proprietary technologies, drug targets and potential
products and to effectively preserve our trade secrets. Because of the
substantial length of time and expense associated with bringing potential
products through the development and regulatory clearance processes to reach the
marketplace, the pharmaceutical industry places considerable importance on
obtaining patent and trade secret protection. The patent positions of
pharmaceutical and biotechnology companies can be highly uncertain and involve
complex legal and factual questions. No consistent policy regarding the breadth
of claims allowed in biotechnology patents has emerged to date. Accordingly, we
cannot predict the type and breadth of claims allowed in these
patents.
We have
licensed the rights to nine issued U.S. patents and three issued European
patents. We are joint owner with Washington University of one issued
patent in the U.S. We are also exclusive owner of six U.S. patents
and nine U.S. patent applications. We are also exclusive owner of two
U.S. provisional patent applications. These patents have varying
lives.
We also
rely on trade secrets, know-how, continuing technological innovation and
licensing opportunities. In an effort to maintain the confidentiality and
ownership of trade secrets and proprietary information, we require our
employees, consultants and some collaborators to execute confidentiality and
invention assignment agreements upon commencement of a relationship with us.
These agreements may not provide meaningful protection for our trade secrets,
confidential information or inventions in the event of unauthorized use or
disclosure of such information, and adequate remedies may not exist in the event
of such unauthorized use or disclosure.
If
our technologies are alleged or found to infringe the patents or proprietary
rights of others, we may be sued or have to license those rights from others on
unfavorable terms.
Our
commercial success will depend significantly on our ability to operate without
infringing the patents or proprietary rights of third parties. Our technologies,
or the technologies of third parties on which we depend, may infringe the
patents or proprietary rights of others. If there is an adverse outcome in any
dispute concerning rights to these technologies, then we could be subject to
significant liability, required to license disputed rights from or to other
parties and/or required to cease using a technology necessary to carry out our
research, development and commercialization activities. At present, we are
unaware of any or potential infringement claims against our patent
portfolio.
The costs
to establish the validity of patents, to defend against patent infringement
claims of others and to assert infringement claims against others can be
expensive and time-consuming, even if the outcome is favorable. An outcome of
any patent prosecution or litigation that is unfavorable to us may have a
material adverse effect on us. We could incur substantial costs if we are
required to defend ourselves in patent suits brought by third parties or if we
initiate such suits. We may not have sufficient funds or resources in the event
of litigation. Additionally, we may not prevail in any such action.
Any
dispute resulting from third-party patent applications and patents could result
in a significant reduction in the coverage of the patents owned, optioned by or
licensed to us and limit our ability to obtain meaningful patent protection. If
patents are issued to third parties that contain competitive or conflicting
claims, we may be legally prohibited from researching, developing or
commercializing potential products or be required to obtain licenses to these
patents or to develop or obtain alternative technology. We may be legally
prohibited from using patented technology, may not be able to obtain any license
to the patents and technologies of third parties on acceptable terms, if at all,
or may not be able to obtain or develop alternative technologies.
In
December 2006, PharmAthene, Inc. (“PharmAthene”) filed an action against us in
the Court of Chancery in the State of Delaware, captioned PharmAthene, Inc. v. SIGA
Technologies, Inc., C.A. No. 2627-N. In its amended complaint,
PharmAthene asks the Court to order us to enter into a license agreement with
PharmAthene with respect to ST-246, as well as issue a declaration that we are
obliged to execute such a license agreement, and award damages resulting from
our supposed breach of that obligation. PharmAthene also alleges that
we breached an obligation to negotiate such a license agreement in good faith,
as well as seeks damages for promissory estoppel and unjust enrichment based on
supposed information, capital and assistance that PharmAthene allegedly provided
to us during the negotiation process. In January 2008, the Court of
Chancery denied our motion to dismiss the original complaint and lifted a
related stay of discovery. Discovery is proceeding. We
filed its answer to the amended complaint denying all material
allegations. While we believe that we have meritorious defenses to
the claim, there can be no assurance concerning the outcome. If
PharmAthene were successful in obtaining a license through this litigation, the
license may be on terms that are not favorable to us.
In
addition, like many biopharmaceutical companies, we may from time to time hire
scientific personnel formerly employed by other companies involved in one or
more areas similar to the activities conducted by us. We and/or these
individuals may be subject to allegations of trade secret misappropriation or
other similar claims as a result of their prior affiliations.
Other
Risks
We
may have difficulty managing our growth.
We might
experience growth in the number of our employees and the scope of our
operations. This potential future growth could place a significant strain on our
management and operations. Our ability to manage this potential growth will
depend upon our ability to broaden our management team and our ability to
attract, hire and retain skilled employees. Our success will also depend on the
ability of our officers and key employees to continue to implement and improve
our operational and other systems and to hire, train and manage our
employees.
We
may be subject to sanction for past non-compliance with certain regulatory audit
requirements.
In June
2009 we became aware that we did not comply with certain Department of
Health and Human Services ("DHHS") regulations requiring the submission of
yearly audited statements to the OIG Office of Audit Services. On
September 30, 2009, we submitted the required audits and related statements to
the OIG Office of Audit Services. We have asked that the Office of the
Inspector General not take any enforcement action in this matter. There can
be no assurance that no enforcement action will be taken in
this matter and if taken whether such enforcement action would
have a material adverse impact on our operations.
FORWARD-LOOKING STATEMENTS
This
prospectus contains or implies certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, as amended,
including statements regarding the efficacy of potential products, the timelines
for bringing such products to market and the availability of funding sources for
continued development of such products. Forward-looking statements are based on
management's estimates, assumptions and projections, and are subject to
uncertainties, many of which are beyond the control of SIGA. Actual results may
differ materially from those anticipated in any forward-looking statement.
Factors that may cause such differences including (i) the risk that potential
products that appear promising to SIGA or its collaborators cannot be shown to
be efficacious or safe in subsequent pre-clinical or clinical trials,
(ii) the risk that SIGA or its collaborators will not obtain appropriate or
necessary governmental approvals to market these or other potential products,
(iii) the risk that SIGA may not be able to obtain anticipated funding for
its development projects or other needed funding, (iv) the risk that SIGA
may not be able to secure funding from anticipated government contracts and
grants, (v) the risk that SIGA may not be able to secure or enforce sufficient
legal rights in its products, including sufficient patent protection for its
products, (vi) the risk that regulatory approval for SIGA’s products may
require further or additional testing that will delay or prevent approval, (vii)
the risk that the Biomedical Advanced Research & Development Authority may
not complete the procurement set forth in a pre-solicitation for acquisition of
smallpox antiviral for the strategic national stockpile, or may complete it on
different terms; (viii) the volatile and competitive nature of the biotechnology
industry, (ix) changes in domestic and foreign economic and market conditions,
(x) the effect of federal, state and foreign regulation on SIGA’s businesses,
(xi) the registration statement may not become effective or may become effective
only after substantial delay, and (xii) market conditions may not permit an
offering of these securities or be sufficiently attractive to market
participants to allow any offering to succeed. More detailed
information about SIGA and risk factors that may affect the realization of
forward-looking statements, including the forward-looking statements in this
prospectus, is set forth in SIGA's filings with the SEC, including SIGA's Annual
Report on Form 10-K for the fiscal year ended December 31, 2008, and in other
documents that SIGA has filed with the Commission. SIGA urges investors and
security holders to read those documents free of charge at the Commission's Web
site at http://www.sec.gov. Interested parties may also obtain those documents
free of charge from SIGA. Forward-looking statements speak only as of the date
they are made, and except for any obligation under the U.S. federal securities
laws, we undertake no obligation to publicly update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Although
we believe that our expectations are reasonable, we cannot assure you that our
expectations will prove to be correct. Should any one or more of these risks or
uncertainties materialize, or should any underlying assumptions prove incorrect,
actual results may vary materially from those described in this prospectus as
anticipated, believed, estimated, expected, intended or planned.
USE
OF PROCEEDS
Unless
otherwise provided in the applicable prospectus supplement, we currently intend
to use the net proceeds from the sale of the securities from primary offerings
under this prospectus for general corporate purposes, including development of
our product candidates, the acquisition or in-license of technologies, products
or businesses, working capital and capital expenditures. We may set forth
additional information on the use of proceeds from the sale of securities we
offer under this prospectus in a prospectus supplement relating to the specific
primary offering. We have not determined the amount of net proceeds to be used
specifically for the foregoing purposes. As a result, our management will have
broad discretion in the allocation of the net proceeds. Pending use of the net
proceeds, we intend to invest the proceeds in a variety of capital preservation
instruments, including short-term, investment-grade, interest-bearing
instruments.
DESCRIPTION OF SECURITIES
The
descriptions of the securities contained in this prospectus, together with the
applicable prospectus supplements, summarize the material terms and provisions
of the various types of securities that we may offer. We will describe in the
applicable prospectus supplement relating to any securities the particular terms
of the securities offered by that prospectus supplement. If we so indicate in
the applicable prospectus supplement, the terms of the securities may differ
from the terms we have summarized below. We will also include in the prospectus
supplement information, where applicable, about material U.S. federal
income tax considerations relating to the securities, and the securities
exchange, if any, on which the securities will be listed.
We may
sell from time to time, in one or more primary offerings, common stock and
warrants to purchase common stock.
In this
prospectus, we refer to the common stock and warrants to be sold by us in a
primary offering collectively as “securities.” The total dollar amount of all
securities that we may issue under this prospectus will not exceed
$100,000,000.
This
prospectus may not be used to consummate a sale of securities unless it is
accompanied by a prospectus supplement.
DESCRIPTION OF COMMON STOCK
The
following description of our common stock together with any additional
information we include in any applicable prospectus supplements, summarizes the
material terms and provisions of our common stock that we may offer in primary
offerings under this prospectus. For the complete terms of our common stock
please refer to our certificate of incorporation and by-laws, which are exhibits
to the registration statement that includes this prospectus. The terms of our
common stock may also be affected by Delaware law.
Authorized Capital
Stock
Under our
certificate of incorporation, our authorized capital stock consists of
100,000,000 shares of common stock, $0.0001 par value per share, and
10,000,000 shares of preferred stock, $0.0001 par value per
share. As of June 30, 2009, we had 37,208,753 shares of common
stock outstanding and no shares of preferred stock outstanding. We
will describe the specific terms of common stock we may offer in more detail in
a prospectus supplement relating to the offering of shares of common stock. If
we so indicate in a prospectus supplement, the terms of common stock offered
under that prospectus supplement may differ from the terms described
below.
Common
Stock
Voting Rights. The
holders of our common stock are entitled to one vote per share with respect to
each matter presented to our stockholders on which the holders of common stock
are entitled to vote and do not have cumulative voting rights. An election of
directors by our stockholders is determined by a plurality of the votes cast by
the stockholders entitled to vote on the election.
Dividends. Holders
of common stock are entitled to receive proportionately any dividends as may be
declared by our board of directors.
Liquidation and
Dissolution. In the event of our liquidation or dissolution,
the holders of common stock are entitled to receive ratably all assets available
for distribution to stockholders after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred
stock.
Other
Rights. Holders of common stock have no preemptive,
subscription, redemption or conversion rights. The rights, preferences and
privileges of holders of common stock are subject to and may be adversely
affected by the rights of the holders of shares of any series of preferred stock
that we may designate and issue in the future.
Listing. Our
common stock is listed on the NASDAQ Capital Market under the symbol “SIGA”. As
of October 19, 2009, the closing price per share of our common stock on the
NASDAQ Capital Market was $7.40, and we had approximately 60 holders of record
of our common stock.
Transfer Agent and
Registrar. The transfer agent and registrar for our common
stock is American Stock Transfer &
Trust Company.
DESCRIPTION OF WARRANTS
The
following description, together with the additional information we may include
in any applicable prospectus supplements, summarizes the material terms and
provisions of the warrants that we may offer in a primary offering under this
prospectus and the related warrant agreements and warrant certificates. While
the terms summarized below will apply generally to any warrants that we may
offer, we will describe the particular terms of any series of warrants in more
detail in the applicable prospectus supplement. If we so indicate in the
prospectus supplement, the terms of any warrants offered under that prospectus
supplement may differ from the terms described below. Specific warrant
agreements will contain additional important terms and provisions and will be
incorporated by reference as an exhibit to the registration statement that
includes this prospectus.
General
We may
issue warrants for the purchase of common stock in one or more series. We may
issue warrants independently or together with common stock and the warrants may
be attached to or separate from the common stock.
We will
evidence each series of warrants by warrant certificates that we will issue
under a separate agreement. We may enter into the warrant agreement with a
warrant agent. We will indicate the name and address and information regarding
the warrant agent in the applicable prospectus supplement relating to a
particular series of warrants.
If we
decide to issue warrants pursuant to this prospectus, we will specify in a
prospectus supplement the terms of the series of warrants, including, if
applicable, the following:
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the
offering price and aggregate number of warrants
offered;
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the
currency for which the warrants may be
purchased;
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the
designation and terms of the securities with which the warrants are issued
and the number of warrants issued with each such security or each
principal amount of such security;
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the
date on and after which the warrants and the related securities will be
separately transferable;
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the
number of shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of the warrants and the price at which these
shares may be purchased upon such
exercise;
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the
effect of any merger, consolidation, sale or other disposition of our
business on the warrant agreement and the
warrants;
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the
terms of any rights to redeem or call the
warrants;
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any
provisions for changes to or adjustments in the exercise price or number
of securities issuable upon exercise of the
warrants;
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the
dates on which the right to exercise the warrants will commence and
expire;
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the
manner in which the warrant agreement and warrants may be
modified;
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a
discussion of any material U.S. income tax consequences of holding or
exercising the warrants;
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the
terms of the securities issuable upon exercise of the
warrants; and
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any
other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
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Before
exercising their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise, including: the
right to receive dividends, if any, or payments upon our liquidation,
dissolution or winding up or to exercise voting rights.
Exercise of
Warrants
Each
warrant will entitle the holder to purchase common stock as we specify in the
applicable prospectus supplement at the exercise price that we describe in the
applicable prospectus supplement. Unless we otherwise specify in the applicable
prospectus supplement, holders of the warrants may exercise the warrants at any
time up to 5:00 P.M., New York City time on the expiration date that
we set forth in the applicable prospectus supplement. After the close
of business on the expiration date, unexercised warrants will become
void.
Holders of the warrants may
exercise the warrants by submitting the warrant certificate representing the
warrants to be exercised together with a completed and executed notice of the
holders’ election to exercise, and payment of the required amount to us at our
designated office.
Upon
receipt by us of the Notice of Exercise, surrender of this Warrant and payment
of the required amount, the holder shall be entitled to receive as promptly as
practicable, and in any event within five Business Days thereafter, a
certificate or certificates for common shares purchased. We will
issue and deliver the securities purchasable upon such exercise. If
fewer than all of the warrants represented by the warrant certificate are
exercised, then we will issue a new warrant certificate for the remaining amount
of warrants.
LEGAL
OWNERSHIP OF SECURITIES
We can
issue securities in registered form or in the form of one or more global
securities. We describe global securities in greater detail below. We refer to
those persons who have securities registered in their own names on the books
that we or any applicable trustee maintain for this purpose as the “holders” of
those securities. These persons are the legal holders of the securities. We
refer to those persons who, indirectly through others, own beneficial interests
in securities that are not registered in their own names, as “indirect holders”
of those securities. As we discuss below, indirect holders are not legal
holders, and investors in securities issued in book-entry form or in street name
will be indirect holders.
Book-Entry
Holders
We may
issue securities in book-entry form only, as we will specify in the applicable
prospectus supplement. This means securities may be represented by one or more
global securities registered in the name of a financial institution that holds
them as depositary on behalf of other financial institutions that participate in
the depositary’s book-entry system. These participating institutions, which are
referred to as participants, in turn, hold beneficial interests in the
securities on behalf of themselves or their customers.
Only the
person in whose name a security is registered is recognized as the holder of
that security. Securities issued in global form will be registered in the name
of the depositary or its nominee. Consequently, for securities issued in global
form, we will recognize only the depositary as the holder of the securities, and
we will make all payments on the securities to the depositary. The depositary
passes along the payments it receives to its participants, which in turn pass
the payments along to their customers who are the beneficial owners. The
depositary and its participants do so under agreements they have made with one
another or with their customers; they are not obligated to do so under the terms
of the securities.
As a
result, investors in a book-entry security will not own securities directly.
Instead, they will own beneficial interests in a global security, through a
bank, broker or other financial institution that participates in the
depositary’s book-entry system or holds an interest through a participant. As
long as the securities are issued in global form, investors will be indirect
holders, and not holders, of the securities.
Street Name
Holders
We may
terminate a global security or issue securities in non-global form. In these
cases, investors may choose to hold their securities in their own names or in
“street name”. Securities held by an investor in street name would be registered
in the name of a bank, broker or other financial institution that the investor
chooses, and the investor would hold only a beneficial interest in those
securities through an account he or she maintains at that
institution.
For securities held in
street name, we will recognize only the intermediary banks, brokers and other
financial institutions in whose names the securities are registered as the
holders of those securities, and we will make all payments on those securities
to them. These institutions pass along the payments they receive to their
customers who are the beneficial owners, but only because they agree to do so in
their customer agreements or because they are legally required to do so.
Investors who hold securities in street name will be indirect holders, not
holders, of those securities.
Legal Holders
Our
obligations, as well as the obligations of any applicable trustee and of any
third parties employed by us or a trustee, run only to the legal holders of the
securities. We do not have obligations to investors who hold beneficial
interests in global securities, in street name or by any other indirect means.
This will be the case whether an investor chooses to be an indirect holder of a
security or has no choice because we are issuing the securities only in global
form.
For
example, once we make a payment or give a notice to the holder, we have no
further responsibility for the payment or notice even if that holder is
required, under agreements with depositary participants or customers or by law,
to pass it along to the indirect holders but does not do so. Similarly, we may
want to obtain the approval of the holders to amend an indenture, to relieve us
of the consequences of a default or of our obligation to comply with a
particular provision of the indenture or for other purposes. In such an event,
we would seek approval only from the holders, and not the indirect holders, of
the securities. Whether and how the holders contact the indirect holders is up
to the holders.
Special Considerations for Indirect
Holders
If you
hold securities through a bank, broker or other financial institution, either in
book-entry form or in street name, you should check with your own institution to
find out:
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how
it handles securities payments and
notices;
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whether
it imposes fees or charges;
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how
it would handle a request for the holders’ consent, if ever
required;
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whether
and how you can instruct it to send you securities registered in your own
name so you can be a holder, if that is permitted in the
future;
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how
it would exercise rights under the securities if there were a default or
other event triggering the need for holders to act to protect their
interests; and
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if
the securities are in book-entry form, how the depositary’s rules and
procedures will affect these
matters.
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Global Securities
A global
security is a security held by a depositary that represents one or any other
number of individual securities. Generally, all securities represented by the
same global securities will have the same terms.
Each
security issued in book-entry form will be represented by a global security that
we deposit with and register in the name of a financial institution or its
nominee that we select. The financial institution that we select for this
purpose is called the depositary. Unless we specify otherwise in the applicable
prospectus supplement, DTC will be the depositary for all securities issued in
book-entry form.
A global
security may not be transferred to or registered in the name of anyone other
than the depositary, its nominee or a successor depositary, unless special
termination situations arise. We describe those situations below under “—Special
Situations When A Global Security Will Be Terminated”. As a result of these
arrangements, the depositary, or its nominee, will be the sole registered owner
and legal holder of all securities represented by a global security, and
investors will be permitted to own only beneficial interests in a global
security. Beneficial interests must be held by means of an account with a
broker, bank or other financial institution that in turn has an account with the
depositary or with another institution that does. Thus, an investor whose
security is represented by a global security will not be a legal holder of the
security, but only an indirect holder of a beneficial interest in the global
security.
If
the prospectus supplement for a particular security indicates that the security
will be issued as a global security, then the security will be represented by a
global security at all times unless and until the global security is terminated.
If termination occurs, we may issue the securities through another book-entry
clearing system or decide that the securities may no longer be held through any
book-entry clearing system.
Special Considerations for Global
Securities
As an
indirect holder, an investor’s rights relating to a global security will be
governed by the account rules of the investor’s financial institution and of the
depositary, as well as general laws relating to securities transfers. We do not
recognize an indirect holder as a holder of securities and instead deal only
with the depositary that holds the global security.
If
securities are issued only as global securities, an investor should be aware of
the following:
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an
investor cannot cause the securities to be registered in his or her name,
and cannot obtain non-global certificates for his or her interest in the
securities, except in the special situations we describe
below;
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an
investor will be an indirect holder and must look to his or her own bank
or broker for payments on the securities and protection of his or her
legal rights relating to the securities, as we describe
above;
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an
investor may not be able to sell interests in the securities to some
insurance companies and to other institutions that are required by law to
own their securities in non-book-entry
form;
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an
investor may not be able to pledge his or her interest in the global
security in circumstances where certificates representing the securities
must be delivered to the lender or other beneficiary of the pledge in
order for the pledge to be
effective;
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the
depositary’s policies, which may change from time to time, will govern
payments, transfers, exchanges and other matters relating to an investor’s
interest in the global security. We and any applicable trustee have no
responsibility for any aspect of the depositary’s actions or for its
records of ownership interests in the global security. We and the trustee
also do not supervise the depositary in any
way;
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the
depositary may, and we understand that DTC will, require that those who
purchase and sell interests in the global security within its book-entry
system use immediately available funds, and your broker or bank may
require you to do so as well; and
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financial
institutions that participate in the depositary’s book-entry system, and
through which an investor holds its interest in the global security, may
also have their own policies affecting payments, notices and other matters
relating to the securities. There may be more than one financial
intermediary in the chain of ownership for an investor. We do not monitor
and are not responsible for the actions of any of those
intermediaries.
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Special Situations When A Global
Security Will Be Terminated
In
a few special situations described below, a global security will terminate and
interests in it will be exchanged for physical certificates representing those
interests. After that exchange, the choice of whether to hold securities
directly or in street name will be up to the investor. Investors must consult
their own banks or brokers to find out how to have their interests in securities
transferred to their own names, so that they will be direct holders. We have
described the rights of holders and street name investors above.
A global
security will terminate when the following special situations
occur:
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if
the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary for that global security and we do not
appoint another institution to act as depositary within
90 days;
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if
we notify any applicable trustee that we wish to terminate that global
security; or
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if
an event of default has occurred with regard to securities represented by
that global security and has not been cured or
waived.
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The
applicable prospectus supplement may also list additional situations for
terminating a global security that would apply only to the particular series of
securities covered by the prospectus supplement. When a global security
terminates, the depositary, and neither we nor any applicable trustee, is
responsible for deciding the names of the institutions that will be the initial
direct holders.
PLAN
OF DISTRIBUTION
We may
sell the securities to or through underwriters or dealers, through agents, or
directly to one or more purchasers. A prospectus supplement or supplements (and
any related free writing prospectus that we may authorize to be provided to you)
will describe the terms of the offering of the securities, including, to the
extent applicable:
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the
name or names of any underwriters, dealers or agents, if any, and the
amounts of securities underwritten or purchased by each of
them;
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the
purchase price of the securities and the proceeds we will receive from the
sale;
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any
over-allotment options under which underwriters may purchase additional
securities from us;
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any
agency fees or underwriting discounts and other items constituting agents’
or underwriters’ compensation;
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any
public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers;
and
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any
securities exchange or market on which the securities may be
listed.
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Only
underwriters named in the prospectus supplement are underwriters of the
securities offered by the prospectus supplement.
If
underwriters are used in the sale, they will acquire the securities for their
own account and may resell the securities from time to time in one or more
transactions at a fixed public offering price or at varying prices determined at
the time of sale. The obligations of the underwriters to purchase the securities
will be subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. Subject to certain conditions, the underwriters will be obligated to
purchase all of the securities offered by the prospectus supplement. Any public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may change from time to time. We may use underwriters with whom we have
a material relationship. We will describe in the prospectus supplement, naming
the underwriter, the nature of any such relationship.
We may
sell securities directly or through agents we designate from time to time. We
will name any agent involved in the offering and sale of securities and we will
describe any commissions we will pay the agent in the prospectus supplement.
Unless the prospectus supplement states otherwise, our agent will act on a
best-efforts basis for the period of its appointment.
We may
authorize agents or underwriters to solicit offers by certain types of
institutional investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
We will describe the conditions to these contracts and the commissions we must
pay for solicitation of these contracts in the prospectus
supplement.
We may
provide agents and underwriters with indemnification against civil liabilities
related to this offering, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or underwriters may make
with respect to these liabilities. Agents and underwriters may engage in
transactions with, or perform services for, us in the ordinary course of
business.
All
securities we offer, other than common stock, will be new issues of securities
with no established trading market. Any underwriters may make a market in these
securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. We cannot guarantee the liquidity of the
trading markets for any securities.
Any
underwriter may engage in overallotment, stabilizing transactions, short
covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Overallotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
Any
underwriters who are qualified market makers on The Nasdaq Capital Market may
engage in passive market making transactions in the securities on The Nasdaq
Capital Market in accordance with Rule 103 of Regulation M, during the
business day prior to the pricing of the offering, before the commencement of
offers or sales of the securities. Passive market makers must comply with
applicable volume and price limitations and must be identified as passive market
makers. In general, a passive market maker must display its bid at a price not
in excess of the highest independent bid for such security; if all independent
bids are lowered below the passive market maker’s bid, however, the passive
market maker’s bid must then be lowered when certain purchase limits are
exceeded.
In
compliance with guidelines of the Financial Industry Regulatory Authority, or
FINRA, the maximum consideration or discount to be received by any FINRA member
or independent broker dealer may not exceed 8% of the aggregate amount of the
securities offered pursuant to this prospectus and any applicable prospectus
supplement.
LEGAL
MATTERS
The
validity of the shares of common stock offered hereby will be passed upon for us
by Kramer Levin Naftalis & Frankel LLP. Thomas E. Constance, a
director of SIGA, is Chairman of Kramer Levin Naftalis & Frankel LLP, a law
firm in New York City, which SIGA has retained to provide legal
services.
EXPERTS
The financial statements and
management’s assessment of the effectiveness of internal control over financial
reporting (which is included in Management’s Report on Internal Control over
Financial Reporting) incorporated in this Prospectus by reference to the Annual
Report on Form 10-K for the year ended December 31, 2008 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP, an
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
COMMISSION’S POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
As
permitted by the Delaware General Corporation Law, our Certificate of
Incorporation and Bylaws permit us to indemnify our directors and officers to
the fullest extent permitted by the Delaware law, and our Certificate of
Incorporation, contain provisions that limit the directors’ liability for
monetary damages to us or our stockholders for breach of their fiduciary duties,
except to the extent that Delaware law prohibits such elimination of
liability.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
ADDITIONAL INFORMATION
Government
Filings.
We file
annual, quarterly and special reports, proxy statements and other information
with the SEC. Our SEC filings are available to the public over the Internet at
the SEC's web site at http://www.sec.gov. You may also read and copy any
document we file at the SEC's public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the operation of the SEC's
public reference room in Washington, D.C. by calling the SEC at
1-800-SEC-0330.
We have
filed with the SEC a registration statement on Form S-3 to register the shares
of common stock and warrants to be offered. This prospectus is part of that
registration statement and, as permitted by the SEC's rules, does not contain
all the information included in the registration statement. For further
information about us and our common stock and warrants, you should refer to that
registration statement and to the exhibits and schedules filed as part of that
registration statement, as well as the documents we have incorporated by
reference which are discussed below. You can review and copy the registration
statement, its exhibits and schedules, as well as the documents we have
incorporated by reference, at the public reference facilities maintained by the
SEC as described above. The registration statement, including its exhibits and
schedules, are also available on the SEC's web site, given above.
Stock
Market.
Shares of
our common stock are traded on the NASDAQ Capital Market.
INCORPORATION BY REFERENCE
The SEC
allows us to incorporate by reference the information we file with it, which
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is an important part
of this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any further filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until this offering has
been completed:
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|
•
|
the
Annual Report on Form 10-K for the year ended December 31,
2008;
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|
|
•
|
the
description of our common stock contained in our registration statement on
Form 8-A under Section 12 of the Exchange Act, dated September 5, 1997,
including any amendment or reports filed for the purpose of updating such
description;
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|
|
•
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the
Quarterly Report on Form 10-Q for the quarter ended March 31,
2009;
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|
|
•
|
the
Quarterly Report on Form 10-Q for the quarter ended June 30,
2009;
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|
|
•
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the
Current Reports on Form 8-K filed on February 3, 2009, March 12, 2009,
April 30, 2009, September 3, 2009, and September 17, 2009
;
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|
|
•
|
the
Proxy Statement on Schedule 14A for the annual meeting of stockholders
held on May 13, 2009.
|
We will
furnish to any person, including any beneficial owner, to whom this prospectus
is delivered, without charge, a copy of these documents upon written or oral
request to Ayelet Dugary, Chief Financial Officer, 420 Lexington Avenue, Suite
408, New York, New York 10170, tel. (212) 672-9100.
PART
II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the estimated costs and expenses of the sale and
distribution of the securities being registered, other than underwriting
discounts and commissions, all of which are being borne by us.
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Amount
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||||
|
SEC
filing fee
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$ | 4,000.00 | ||
|
Printing
Expenses
|
$ | 1,000.00 | ||
|
Legal
fees and expenses
|
$ | 15,000.00 | ||
|
Accounting
fees and expenses
|
$ | 10,000.00 | ||
|
Miscellaneous
|
$ | 500.00 | ||
|
Total
|
$ | 30,500.00 | ||
All of
the amounts shown are estimates except for the fee payable to the
SEC.
Item
15. Indemnification of Directors and Officers
Section
145 of the Delaware General Corporation Law provides that a corporation may
indemnify directors and officers, as well as other employees and individuals,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by any such person in connection
with any threatened, pending or completed actions, suits or proceedings in which
such person is made a party by reason of such person being or having been a
director, officer, employee or agent to the Registrant. The Delaware
General Corporation Law provides that Section 145 is not exclusive of other
rights to which those seeking indemnification may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise. Article IX of the Registrant’s Certificate of
Incorporation and Article VII of the Registrant’s Bylaws provides for
indemnification by the Registrant of its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law.
Section
102(b)(7) of the Delaware General Corporation Law permits a corporation to
provide in its certificate of incorporation that a director of the corporation
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director’s duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. The Registrant’s Certificate of
Incorporation provides for such limitation of liability.
Item
16. Exhibits
|
Exhibit No.
|
Description
|
|
|
5.1
|
Opinion
of Kramer Levin Naftalis & Frankel LLP.
|
|
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23.1
|
Consent
of PricewaterhouseCoopers LLP.
|
|
|
23.2
|
Consent
of Kramer Levin Naftalis & Frankel LLP (contained in the opinion filed
as Exhibit 5.1 hereto).
|
|
|
24.1
|
Power
of Attorney (included on the signature page of this Registration
Statement).
|
Item
17. Undertakings
|
(a)
|
The
undersigned registrant hereby
undertakes:
|
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement;
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(b) Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, SIGA Technologies, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of New York, state of New York on October 29,
2009.
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SIGA
Technologies, Inc.
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|||
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By:
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/s/
Ayelet Dugary
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||
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Name:
|
Ayelet
Dugary
|
||
|
Title:
|
Chief
Financial Officer
|
||
KNOW ALL
PERSONS BY THESE PRESENTS, that the persons whose signatures appear below each
severally constitutes and appoints Eric A. Rose and Ayelet Dugary his true and
lawful attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including pre-effective and
post-effective amendments) to this registration statement and to sign any
registration statement (and any post-effective amendments) relating to the same
offering as this registration statement that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits, and other documents in connection therewith, with the SEC,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all which said
attorneys-in-fact and agents, or their substitute, may lawfully do, or cause to
be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
|
Signature
|
Title
of Capacities
|
Date
|
||
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/s/ Eric A. Rose,
M.D.
|
Chief
Executive Officer, Chairman of the Board and Director
|
|||
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Eric
A. Rose, M.D.
|
(Principal
Executive Officer)
|
October
28, 2009
|
||
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/s/ Ayelet
Dugary
|
Chief
Financial Officer
|
|||
|
Ayelet
Dugary
|
(Principal
Financial Officer and Principal Accounting Officer)
|
October
28, 2009
|
||
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/s/ James J.
Antal
|
Director
|
|||
|
James
J. Antal
|
October
28, 2009
|
|||
|
|
Director
|
|||
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Michael
J. Bayer
|
|
|||
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/s/ Thomas E.
Constance
|
Director
|
|||
|
Thomas
E.Constance
|
October
28, 2009
|
|||
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/s/ Steven L.
Fasman
|
Director
|
|||
|
Steven
L. Fasman
|
October
28, 2009
|
|||
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/s/ Scott Hammer,
M.D.
|
Director
|
|||
|
Scott
Hammer, M.D.
|
October
28, 2009
|
|||
|
/s/ Joseph W.
Marshall
|
Director
|
|||
|
Joseph
Marshall
|
October
28, 2009
|
|||
|
/s/
Adnan M. Mjalli, Ph.D.
|
Director
|
|||
|
Adnan
M. Mjalli, Ph.D.
|
October
29, 2009
|
|||
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/s/ Mehmet C. Oz,
M.D.
|
Director
|
|||
|
Mehmet
C. Oz, M.D.
|
October
28, 2009
|
|||
|
/s/ Paul G.
Savas
|
||||
|
Paul
G. Savas
|
Director
|
October
29, 2009
|
||
|
/s/ Bruce
Slovin
|
||||
|
Bruce
Slovin
|
Director
|
October
28, 2009
|
||
|
/s/ Michael Weiner,
M.D.
|
||||
|
Michael
Weiner, M.D.
|
Director
|
October
28, 2009
|
EXHIBIT INDEX
|
Exhibit No.
|
|
Description
|
Page No.
|
|
|
Opinion
of Kramer Levin Naftalis & Frankel LLP.
|
33
|
|||
|
Consent
of PricewaterhouseCoopers LLP.
|
35
|
|||
|
23.2
|
Consent of Kramer
Levin Naftalis & Frankel LLP (contained in the opinion filed
as Exhibit 5.1 hereto)
|
33 | ||
|
24.1
|
Power
of Attorney (included on the signature page of this Registration
Statement)
|
30
|
31
Exhibit
5.1
KRAMER LEVIN NAFTALIS & FRANKEL
LLP
October
29, 2009
SIGA
Technologies, Inc.
420
Lexington Avenue, Suite 408
New York,
New York 10170
Re: SIGA Technologies,
Inc.
Dear
Ladies and Gentlemen:
We have
acted as counsel to SIGA Technologies, Inc., a Delaware corporation (the
"Registrant"), in connection with the preparation and filing of a shelf
registration statement on Form S-3 (the “Registration
Statement”) with the Securities and Exchange Commission (the “Commission”),
relating to the offering from time to time on a delayed or continuous basis,
pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Act”),
of an indeterminate amount and number of (i) shares of common stock, par value
$0.0001 per share (the “Common Stock”) and
(ii) warrants to purchase Common Stock (the “Warrants”, and
together with the Common Stock, the “Securities”), up to
an aggregate offering price of $100,000,000.
In
rendering this opinion, we have examined copies of the following documents
(collectively, the “Transaction
Documents”):
|
|
A.
|
Registration
Statement;
|
|
|
B.
|
the
Restated Certificate of Incorporation of the Registrant, as
amended;
|
|
|
C.
|
the
Amended and Restated Bylaws of the Registrant;
and
|
|
|
D.
|
resolutions
of the Board of Directors of the
Registrant.
|
We have
also reviewed such other documents and made such other investigations as we have
deemed appropriate. As to various questions of fact material to this opinion, we
have relied upon statements, representations and certificates of officers or
representatives of the Registrant, public officials and others. We have not
independently verified the facts so relied on.
Based on
and subject to the foregoing and assuming that (i) the Registration
Statement and any amendments thereto (including any post-effective amendments)
will have become effective and comply with all applicable laws and no stop order
suspending the Registration Statement's effectiveness will have been issued and
remain in effect, in each case, at the time the Securities are offered or issued
as contemplated by the Registration Statement, (ii) a prospectus supplement
will have been prepared and filed with the Commission describing the Securities
offered thereby and will at all relevant times comply with all applicable laws,
(iii) the Registrant will have timely filed all necessary reports pursuant
to the Securities Exchange Act of 1934, as amended, which are incorporated into
the Registration Statement by reference, (iv) all Securities will be issued
and sold in compliance with applicable federal and state securities laws and in
the manner stated in the Registration Statement and the appropriate prospectus
supplement, (v) any definitive purchase, underwriting or similar agreement
(an “Underwriting
Agreement”) and any other necessary agreement with respect to any
Securities will have been duly authorized and validly executed and delivered by
the Registrant and the other party or parties thereto, (vi) the Common
Stock issuable upon exercise of the Warrants will be duly authorized and
reserved for issuance upon such exercise of the Warrants, and (vii) each
agreement or other instrument governing the Warrants (a “Warrant Agreement”)
will be governed by the laws of the State of New York and will be the valid and
binding obligation of each party thereto other than the Registrant, enforceable
against such party in accordance with its terms, we advise you that we are of
the opinion that:
1177
Avenue of the Americas New York NY
10036-2714 Phone
212.715.9100 Fax
212.715.8000 www.kramerlevin.com
also
at 47 Avenue Hoche 75008 Paris France
KRAMER LEVIN NAFTALIS & FRANKEL
LLP
October
29, 2009
Page
2
(1) Common
Stock. Assuming (A) the Board of Directors of the
Registrant or a duly constituted and acting committee thereof (such Board of
Directors or committee being hereinafter referred to as the “Board”) has taken all
necessary corporate action in conformity with the Restated Certificate of
Incorporation of the Registrant and Bylaws of the Registrant to approve the
issuance of the Common Stock, the terms of the offering thereof and related
matters, including Common Stock issuable upon exercise of the Warrants, (B) such
shares of Common Stock have been duly issued, paid for and delivered either (i)
in accordance with the applicable Underwriting Agreement approved by the Board
against payment of the consideration therefor as provided therein; or (ii) upon
exercise of the Warrants in accordance with the terms of the applicable Warrant
Agreement approved by the Board, and (C) if such shares of Common Stock are
certificated, the certificates representing such shares have been duly
authenticated and executed, such shares of Common Stock will be legally issued,
fully paid and non-assessable.
(2) Warrants. Assuming
that the issuance and terms of such Warrants have been duly authorized, when
(A) the Warrant Agreements relating to such Warrants have been duly
authorized, executed and delivered by the Registrant and the warrant agent
appointed by the Registrant, (B) the terms of such Warrants have been duly
established so as not to violate or cause the exercise thereof to violate any
applicable law or result in a default under or breach of any agreement or
instrument binding upon the Registrant and so as to comply with any requirement
or restriction imposed by any court or governmental or regulatory body having
jurisdiction over the Registrant, (C) such Warrants have been duly issued,
paid for and delivered as contemplated in the Registration Statement and any
prospectus supplement relating thereto, and in accordance with the terms of the
applicable Warrant Agreement or any Underwriting Agreement, and (D) if such
Warrants are certificated, the certificates representing such Warrants have been
duly authenticated and executed, such Warrants will be legally issued and fully
paid.
KRAMER LEVIN NAFTALIS & FRANKEL
LLP
October
29, 2009
Page
3
We
express no opinion as to any laws other than the laws of the State of New York,
the Delaware General Corporation Law and the federal laws of the United States
of America, that in each case, in our experience, we recognize are normally
applicable to transactions of the type contemplated by the Transaction Documents
(the "Relevant
Laws").
The
opinion expressed herein is based upon the Relevant Laws and interpretations
thereof in effect on the date hereof, and the facts and circumstances in
existence on the date hereof, and we assume no obligation to revise or
supplement this opinion letter should any such law or interpretation be changed
by legislative action, judicial decision or otherwise or should there be any
change in such facts or circumstances.
This
opinion letter is being delivered to you in connection with the transactions
described in the Transaction Documents and may not be relied on or otherwise
used by any other person or by you for any other
purpose. Notwithstanding the foregoing, we hereby consent to the use
of this opinion as Exhibit 5.1 to the Registration Statement and to the use of
our name under the caption “Legal Matters” in the prospectus included in the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Act, or the rules and regulations promulgated thereunder.
Thomas E.
Constance, a member of this Firm, is a director of the Registrant.
|
Very
truly yours,
|
|
|
/s/ Kramer Levin Naftalis & Frankel
LLP
|
|
|
Kramer
Levin Naftalis & Frankel LLP
|
Exhibit
23.1
CONSENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We hereby
consent to the incorporation by reference in this Registration Statement on Form
S-3 of our report dated
March 6, 2009 relating to the financial statements and the effectiveness of
internal control over financial reporting, which appears in SIGA Technologies
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008. We also
consent to the reference to us under the heading “Experts” in
such Registration Statement.
PricewaterhouseCoopers
New York,
New York
October
28, 2009