January 8, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Antiviral and biothreat company Siga Technologies Inc must pay drugmaker PharmAthene Inc at least $113.1 million in damages in a licensing dispute, said a Delaware judge Wednesday, a further blow to Siga after it filed for bankruptcy protection in September.
As part of that ruling, the Delaware Court of Chancery initially ruled on Aug. 8 that PharmAthene must receive some damages from Siga after the court found the company had failed to obtain the proper license agreement for its smallpox drug Tecovirimat.
PharmAthene bankrolled much of the development of Tecovirimat, but sued Siga in 2006 when it claimed the company refused to grant it joint licensing. In 2011, Siga was awarded a five-year contract to supply American defense officials with 2 million doses of Tecovirimat, in a deal estimated at the time be worth $2.8 billion.
Wednesday’s decision was the portion of the proceedings where damages were awarded, a number that could climb up to more than $190 million, a PharmAthene spokeswoman told Reuters.
Siga protested the judge’s decision, saying it would appeal under a law that allows either party to appeal any trial court rulings that were unfavorable to that party within 30 days of entry of judgment by the court.
“We continue to believe the decision to enter the new judgment is not supported by the record or the law and we intend to appeal to the Supreme Court of Delaware,” William J. Haynes II, SIGA‘s General Counsel, said in a statement.
The case is crucial to Siga’s eventual emergence from bankruptcy, because Tecovirimat, also known as ST-246, is its lead product and may be its only way back to profitability. The drug is an orally administered antiviral that targets orthopoxviruses and is currently used in the Strategic National Stockpile under Project BioShield.
Still, Tecovirimat is not yet licensed as safe or effective by the U.S. Food and Drug Administration, a lengthy and costly process that could be hugely impacted by the broke Siga being forced to shell out nearly $200 million in damages to PharmAthene. But since it has filed for bankruptcy, it may be sheltered from paying out that award, though neither company has said that is the case just yet.
