SIGA Technologies Inc Stock

Thank you. Thank you.

Welcome to CIGA Business Update Call. Before we turn the call over to CIGA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. SIGA does not undertake any obligation to update publicly any forward-looking statements to reflect events or change circumstances after this call. For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31st, 2025, and its subsequent reports on Form 10-Q and Form 8-K. With that, I will turn the call over to Zem Win, Chief Executive Officer of SIGA. Please go ahead.

Good afternoon, everyone, and thank you for joining today's call and review of our business results. I'm joined by Dan Luxhire, our Chief Financial Officer, and we appreciate this opportunity to provide an update on our company. After the update, we'll be happy to answer your questions. I am pleased to report that CIGA continues to make product deliveries and generate revenues while navigating an evolving and dynamic global environment. Despite the external challenges, our focus has not wavered. We continue to engage and partner with governments to build and strengthen long-term preparedness against potential biological threats, namely smallpox. We serve many countries with our smallpox antiviral treatment, and we remain committed to positioning pox for rapid large-scale deployment the moment an outbreak demands it.

The threat of smallpox is real and preparedness requires proactive sustained government investment in medical countermeasure stockpiles. We're proud of the role we play in those efforts. Turning now to our results. As I've said before, our business carries inherent quarter to quarter variability, so our results are best understood in the context of our longer horizon rather than any single period. With that backdrop, I'm pleased to share that for the second quarter of 2026, we recorded product-related revenues of $38 million, mostly comprised of $24 million of IV teapots delivered to the U.S. Strategic National Stockpile, and $13 million of oral teapots delivered to two international companies. customers, one in the Asia Pacific region and one in Europe. This diversification across multiple formulations and customers demonstrate the enduring need for governments to protect against biological threats. Turning to the U.S., this quarter's IV TPOCs delivery marks the fulfillment of the final product order under our 19C contract.

Since 2018, we've successfully delivered on all our product obligations under the agreement, and we're proud of our performance and what it represents. We look forward to building on our more than a decade-long partnership with the U.S. government. This track record highlights the historical strength of CEGA's business model and the important long-term role TPOCs has played in the government smallpox preparedness. We continue to actively engage with the U.S. government across multiple levels on a new multi-year procurement contract. Further, we are encouraged by the recent Senate Health Committee hearings and vote regarding the President's nominee for the role of Assistant Secretary for Preparedness and Response. I will say that while progress toward a new contract has been slower than in the past, we continue to believe the case for smallpox preparedness remains strong. Moreover, we believe the U.S. government's ongoing funding of TPOC's development programs, together with TPOC's orders that were recently filled, reflect a continuing role for TPOC in the national smallpox preparedness.

Shifting to our international business, we continue to engage with governments and key stakeholders as they assess their preparedness strategies. Government procurement is, by nature, a complex process, but the direction of these discussions reinforces our view that there are opportunities for additional international sales. As noted last quarter, we received a 13 million order from a country in the Asia Pacific region, which we delivered in the second quarter. Additionally, we delivered a small number of Oral TPox courses to a new customer in Europe in the second quarter. As a reminder, we recently entered into an exclusive license and distribution agreement with HCMA MENA FCE in connection with the MENA region. which includes countries in the Middle East and North Africa. Since then, we've been meeting regularly with HICMA to develop a detailed plan to expand TPOC's footprints across MENA region where CIGA has historically been underrepresented. Under the agreement, HICMA holds the right to register and commercialize teapots across MENA, and CIGA serves as the exclusive manufacturer and supplier of finished product.

China's regional presence and expertise in bringing innovative medicines to market make them the right partner to expand access to TPoCs in these markets. Turning to our pipeline, we continue to advance our post-exposure prophylaxis, or PEP, and pediatric programs. the PET program, the CDC is advancing its work on the immunogenicity samples, and we are targeting an FDA submission in the first half of 2027. On the pediatric program, our phase one study results are expected by year end, which will determine the next steps. Children will be among the most vulnerable in the smallpox outbreak and a purpose-built liquid gives clinicians a reliable weight-based way to treat them. Together with oral and IV formulations, it extends coverage across a full population from infants to adults. In short, we are focused on what has always driven SIGA, financial and operational discipline, and the partnerships that position us for the long-term success. As 2026 progresses, we believe the case for preparedness has never been clearer, and neither has our purpose.

Smallpox and other high-consequence viruses are a serious threat, but they are threats that can be managed with preparation. We believe TPOX is uniquely suited to meet the smallpox threat. With that, I'll turn it over to Dan to review the financial results in more detail. Dan?.

Thanks, Zen. As noted earlier in the call, the company had product-related revenues of $38 million in the second quarter, following the first quarter in which there were minimal product revenues, reflecting the variable rhythm of CIGA's business model. Product revenues for this quarter include approximately $24 million of IV TPoX deliveries to the S&S and approximately $13 million of international sales to two international customers. The $24 million of IVTPOC's deliveries represent the completion of an order received in 2025 under the 19C contract. The $13 million of international sales is mostly attributable to an order received earlier this year from a customer in the Asia-Pacific region. For the six months ended June 30, 2026, product-related revenues are $41 million. mostly driven by activity in the second quarter. In addition to product-related revenues for the three and six months ended June 30th, 2026, the company also had research and development revenues of approximately $3 million and $6 million respectively during those periods. Pre-tax operating income for the quarter, which excludes interest income and taxes, is approximately $14 million.

For the six months ended June 30, 2026, pre-tax operating income is approximately $9 million. Net income for the quarter is approximately $12 million. For the six months end of June 30th, 2026, net income is $9 million. In turn, fully diluted income per share for the quarter is 17 cents per share, while fully diluted income per share for the six months end of June 30th, 2026 is 13 cents per share. The company continues to maintain a strong balance sheet. As of June 30, 2026, the company had a cash balance of approximately $118 million and no debt. This concludes the financial update. At this point, I will turn the call back to Zem.

Thank you, Din. With that, we would like to open the call for questions. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. And should you wish to decline the polling process, please press star followed by two. And if you're using a speakerphone, you will need to lift the handset first before pressing any key. Please go ahead and press star 1 now if you do have any questions. First, we will hear from Jyoti Prakash at Edison Group.

Hi, congratulations on the strong quarter and thanks for taking my questions. My first question is related to the US RFP. The process has been slower than expected. What do you believe is the reason for this delay? And do you still think that an award in the second half of the year is possible? will that be timely enough to support TPOX deliveries in 2027?.

Hi, Josie. It's nice to hear your voice. Just as a starting point, every new contract process is unique and different, and so there's inherent variability in the terms of timing and process. You're correct that this process has certainly taken longer than generally expected. We believe the scale of change within HHS, including new initiatives, evolving priorities, transition of our contract from BARDA to S&S, and also key open leadership positions have been a meaningful contributor to the slower pace toward this new contract. Based on the continuing funding of multiple initiatives at SIGA by BARDA and the recent delivery of the IV TPOX to the SNS, we remain confident TPOX's role within the U.S. government's smallpox preparedness strategy is a real threat that the CDC still classifies as a Category A threat.

Thank you. And then just to follow up on that, so since the RFP has been delayed and there is some uncertainty on the timing, are you placing greater strategic emphasis on international markets? And we could see that from the research. HICMA agreement and the 13 million international order which was delivered this quarter. So do you expect any additional international orders within this year?.

Thanks, Jonati. As you would expect, CECA always has and will continue to focus on all of our customers, whether it's domestic or international. And given the broader geopolitical environment, we're seeing many governments sharpen their focus on biodefense as well as medical countermeasure preparedness. Thank you. The international procurement decisions are quite complex in nature. As such, we will not comment on specific outcomes at this stage. But what I can say and share is without getting into details, discussions with an international customer have been progressing to the point that we're targeting a new contract as well well as an order against it and targeting hopefully a delivery in that order by March of the next year.

Great. That's quite helpful. And just staying on the international business, your promotion agreement with Meridian recently expired. Has it been renewed or replaced? And if not, how is SEGA now going to manage the promotion and customer relations?.

across Meridian's former territories. Yes, Joji, as I shared, we're focused on all of our customers. And since 2024, CECA has handled and been responsible for the sales, marketing, distribution, and manufacturing of teapots in all of our international markets. even though the Meridian Agreement didn't officially expire until May. So from your perspective and everyone else's perspective, nothing has changed on our end. We continue running these functions as we have been. And as with the case of recent international orders, activities, and new partnerships, the international business continues to move forward without interruption.

That's great. Thank you so much, Rem, and that's all from my side. Appreciate your time and I look forward to further updates in the next quarters. Thank you so much.

Thank you. Ladies and gentlemen, a reminder to please press star one should you have any questions. And at this time, we have no other questions registered, so I will turn the call back over to them.

Thanks, Sylvie. I'd like to thank everybody for making time to join us on today's call and for your ongoing interest in Ziga. We look forward to speaking to you again in our third quarter call. Have a good evening.

Thank you. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Welcome to the SIGA Business Update Call. Before we turn the call over to SIGA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. SIGA does not undertake any obligation to update publicly any forward-looking statements to reflect events or changes, circumstances after this call. For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2025, and its subsequent reports on Form 10-Q and Form 8-K.

With that, I will turn the call over to Diem Nguyen, Chief Executive Officer of SIGA. Diem?

Good afternoon, everyone, and thank you for joining today's call and review of our business results. I'm joined by Dan Luckshire, our Chief Financial Officer, and we appreciate this opportunity to provide an update on our company. After the update, we'll be happy to answer your questions. SIGA's focus remains unchanged, partnering with governments around the globe to build and strengthen long-term preparedness strategies against potential biological threats, specifically smallpox. We are proud to supply our smallpox antiviral treatment to many countries and NGOs, and we remain committed to ensuring that TPOXX is positioned for rapid large-scale deployment whenever it is needed to help save lives.

The case for preparedness has never been stronger. Smallpox and other high-consequence threats, whether the result of an accident, a deliberate act or a natural occurrence, represent a real and serious threat that can be managed only with proactive sustained investment. Stockpiling medical countermeasures is a cornerstone of preparedness strategies, and in today's environment of rising geopolitical tension, accelerating technological risk, including those enabled by AI tools and growing biological threats, the urgency to make that investment is clear. We believe TPOXX is uniquely suited to meet the smallpox threat with a well-established safety profile and targeted mechanism of action that supports broad use in emergency situations.

The first quarter of 2026 reflected a variable rhythm inherent to our business. Activity levels vary quarter-to-quarter. The first quarter had minimal product deliveries, whereas in the second quarter, we expect to deliver approximately $13 million of oral TPOXX to an international customer as well as make additional IV TPOXX deliveries to SNS.

As a reminder, given this quarter-to-quarter variability, we recommend that our results be viewed in the context of our longer-term performance rather than in isolation. We believe our long-term outlook continues to offer substantial opportunities. This belief is grounded in the fundamentals of our business and the enduring need for governments to protect against biological threats. We continue to maintain engagement with the U.S. government, particularly key stakeholders at HHS. Although the pace of progress toward a new contract with the U.S. government has been slower than prior contract processes, we believe the $27 million in funding secured in 2025 to support pediatric formulation development and IV TPOXX technology transfer efforts as well as the 2025 IV TPOXX order are strong signals highlighting the continued role of TPOXX is expected to play in the U.S. biothreat preparedness.

It's worth reiterating that the SIGA's operating model is closely aligned with the U.S. government priorities. Specifically, the U.S. government receives our lowest price of oral TPOXX and our active pharmaceutical ingredient and all finished drug products is manufactured domestically.

Turning to our international business. We continue to engage with governments and other key stakeholders around the world who continue to review their preparedness strategies and funding. Strategic stockpiling remains central to those conversations. Government procurement is a deliberate process. That said, discussions continue, and we see potential for additional international sales over time.

As noted last quarter and earlier on this call, we received a $13 million order from a country in the Asia Pacific region, which we expect to deliver in the second quarter of this year. We also took important steps towards potential sales in a region where SIGA has historically been underrepresented. We recently entered into an exclusive license and distribution agreement with Hikma MENA FZE that gives Hikma the right to register and commercialize TPOXX across the Middle East, North Africa, or MENA.

Under the agreement, SIGA will serve as an exclusive manufacturer and supplier of finished products for Hikma. This agreement represents a key step in our strategy to broaden global access to TPOXX, and Hikma is the right partner for it. Their unparalleled regional presence and deep expertise in bringing innovative medicines to market make Hikma well positioned to bring TPOXX to these markets.

Turning to our pipeline. We continue to advance our post-exposure prophylaxis or PEP and pediatric programs. On the pediatric program, we filed our IND and initiated a Phase I study. Results are expected in the second half of this year, which will inform next steps. On the PEP program, the CDC continues its work on the analysis of immunogenicity samples. We are targeting an FDA submission for PEP indication in the next 12 months.

Looking forward, we remain focused on what has always driven this business, financial and operational discipline and building on the partnership that positions SIGA for long-term success.

As we move further into 2026, we do so with a clear sense of purpose. The global need for biological preparedness is real and growing, and SIGA is prepared to meet it. We have a product approved by regulators around the world, strong government relationships and a team that executes. We look forward to continued progress and to updating you along the way. With that, I'll turn it over to Dan to review the financial results in more detail. Dan?

Thanks, Diem. As noted earlier in the call, the company had minimal product deliveries in the first quarter, reflecting the variable rhythm of SIGA's business model. Product revenues for this quarter include approximately $1 million of IV TPOXX deliveries to the SNS and approximately $2 million of reimbursement revenues in connection with the manufacturing technology transfer.

In addition to product-related revenues in the first quarter, the company also had research and development revenues of approximately $3 million. As we talk about revenues, I would like to highlight that we expect second quarter product revenues to reflect the delivery of approximately $13 million of oral TPOXX to an international customer as well as additional IV TPOXX deliveries to the SNS.

Returning to the first quarter financial results. Pretax operating loss for the quarter, which excludes interest income and taxes, was approximately $5 million, and net loss for this period was approximately $3 million. In turn, fully diluted loss per share for the 3 months ended March 31, 2026, was $0.05. The company continues to maintain a strong balance sheet. As of March 31, 2026, the company had a cash balance of approximately $146 million and no debt. Based on the company's substantial cash balance, a special cash dividend of $0.60 per share was declared on March 26 for shareholders of record as of April 7. The special cash dividend was paid on April 23. This concludes the financial update. At this point, I'll turn the call back to Diem.

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

[Operator Instructions] Your first question comes from Jyoti with Edison Group.

My first question is related to CHMP's recent recommendation that TPOXX should not be used for mpox treatment. Now this was largely expected and you had also guided for this previously. But do you see any impact of this decision on TPOXX broader labeling in smallpox and other orthopox viruses in Europe?

So Jyoti, thank you so much for asking the question. Just for a reminder for those that are on the call, we had shared earlier that the CHMP has confirmed the positive benefit-risk balance of Tecovirimat-SIGA, which is known as TPOXX in Europe as a treatment for smallpox, cowpox and vaccinia complications. So those indications have been reaffirmed by CHMP. And as you mentioned, the CHMP had recommended to the European Commission to withdraw the mpox indication. We are currently taking the necessary regulatory steps to inform all relevant stakeholders as well as implement the CHMP recommendation following its adoption by the European Commission.

I think having said all that, by the way of this background, TPOXX was developed as a treatment for smallpox to save lives and to serve as a critical countermeasure against smallpox. Smallpox is one of the world's most dangerous biothreats, and this antiviral is needed for the event of an outbreak. In contrast, the mpox trials measure tecovirimat's benefit using complete lesion resolution, an endpoint related to the immune activity in patients already progressing towards self-resolution. Saving lives of patients suffering from a smallpox has been and will continue to be SIGA's focus.

This was quite helpful. And my next question is related to the dividend payout. So you recently paid out the fifth consecutive annual special dividend. Now this is a sign of a strong balance sheet. But how comfortable are you returning this level of capital while maintaining sufficient liquidity through the potential gaps in government ordering, particularly given that the revenues tend to be lumpy?

This is Dan. Maybe as a starting point, just to point out that the 2026 dividend as well as prior dividends, they were declared or have been declared and paid with the understanding that we do have a business model that is subject to variability. This variability has been a consistent feature of SIGA's business model. So it's not really a new thing. So we have been navigating this over the years. When assessing a potential dividend in 2026, we considered many factors, including our continuing focus on deploying capital to drive the greatest value for shareholders as well as our substantial cash balance, which at March 31 was approximately $146 million. When you take into account the dividend on a pro forma basis, the cash balance would still be over $100 million and with no debt.

So when you take all these things into account as well as multiple other considerations, the company believes that we are -- we continue to be well positioned to navigate any near-term gaps in government ordering.

That's great, Dan. And you mentioned that your cash position remains strong even after the dividend payout. Now if you look ahead, what would be your key priorities for capital deployment? And we've asked this previously, but are you actively considering acquisitions or in-licensing opportunities?

Yes. As you mentioned, it has been a discussion point in the past. And the answer is yes. We continue to explore ways to expand the pipeline either through acquisition or in-licensing. And you mentioned we talked about this before in prior calls, we have highlighted that we remain committed to deploying capital in ways that we believe will drive the greatest value. That could be through dividends, that could be through acquisitions. It could be through in-licensing or it could be through other means.

That's very helpful. And I have one final question, and this relates to international markets. So you've announced a large $13 million order from the Asia Pacific, which will be delivered in Q2. And you also announced the recent licensing agreement with Hikma for the MENA region. Now are you seeing a broader increase in stockpiling interest across all international markets? Or is it restricted to any particular geographies? And just following on from that, on the Hikma agreement, can you provide a bit more color on the deal economics and if it is structured similarly to your previous partnership with Meridian?

Yes, I can take the answer. As we mentioned earlier in the call, we do expect to deliver approximately $13 million of oral TPOXX to an international customer in the second quarter. We remain engaged and active with other potential customers, and we'll provide updates as additional orders occur in this region as well as others. It's not specific to a target region.

In addition, just with our conversations with Hikma, we're quite enthusiastic and excited about the opportunity as we believe Hikma can help unlock any demand across the MENA region, which was underrepresented for SIGA before. As noted in our prepared remarks, their strong regional presence and deep expertise navigating complex procurement processes make them a highly strategic and attractive partner to bring TPOXX to these markets.

In short, from a deal construct perspective, we will supply finished product to Hikma, who manages the customer relationships in the region. TPOXX will be sold at a price set forth in the agreement. SIGA may also be entitled to additional payments under certain conditions. These financial terms of the agreement are confidential, so not further disclosed.

No further questions from my side.

There are no further questions at this time. I will turn the call back over to Diem Nguyen.

So thank you. I'd like to thank everyone making the time to join us on today's call and for your ongoing interest in SIGA. We look forward to speaking to you again in our second quarter call. Have a great evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Welcome to the SIGA Business Update Call. Before we turn the call over to SIGA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. SIGA does not undertake any obligation to update publicly any forward-looking statements to reflect events or change circumstances after this call. For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission, including without limitation, the company's annual report on Form 10-K for the year ended December 31, 2025, and its subsequent reports on Form 10-Q and Form 8-K.

With that, I will turn the call over to Diem Nguyen, Chief Executive Officer of SIGA. Diem?

Good afternoon, everyone, and thank you for joining today's call and review of our business results. I'm joined by Dan Luckshire, our Chief Financial Officer, and we appreciate this opportunity to provide an update on our company. After the update, we'll be happy to answer your questions. Coming out of 2025, SIGA remains focused on supporting governments around the globe to advance long-term preparedness strategies for potential biological threats, specifically smallpox whether accidental, intentional or naturally occurring. Our efforts are centered on continuing to serve as the leading provider of smallpox antiviral treatment to more than 30 countries and NGOs across the world and helping ensure that antiviral treatments can be rapidly deployed at scale to protect and save lives should an outbreak occur.

Preparedness for high consequence threats like smallpox requires advanced planning, sustained investment and ready access to medical countermeasures primarily through stockpiling. In a time marked by heightened geopolitical risk, rapid technological change and increased biological threats, readiness is more important than ever.

TPOXX established safety profile and targeted mechanism action make it particularly well suited for use in emergency situations requiring broad distribution. From a financial perspective, SIGA delivered solid financial results for 2025. The fourth quarter, like prior quarters, should be viewed in the context of full year and longer-term performance rather than as a stand-alone period as some quarters are quieter than others, given the unique nature of our business model. 2025 product revenues totaled approximately $88 million. This includes $53 million of oral TPOXX and $26 million of IV TPOXX delivered under the current BARDA 19C contract to the U.S. Strategic National Stockpile as well as $6 million from international oral TPOXX sales. At the end of the year, approximately $26 million of U.S. government orders are outstanding related to the March 2025 IV TPOXX procurement order, which we continue to expect to deliver in 2026.

With our current BARDA contracts nearing completion, engagement with the U.S. government, including key stakeholders at HHS and ASPR remains active and constructive. As a reminder, during 2025, SIGA secured $27 million in funding to support pediatric formulation development and IV technology transfer efforts. In our view, this funding reinforces the role of TPOXX is expected to play in biothreat preparedness. Against this backdrop, we remain prepared to move forward when the U.S. government is ready to proceed. A new procurement contract with the U.S. government would be a continuation of a stockpiling relationship that has been productive for more than a decade and would represent another milestone for our relationship with the U.S. government.

I would also like to reinforce an important aspect of our operating model. SIGA's pricing and manufacturing approach has been long aligned with the U.S. government priorities. As our largest customer and partner in developing TPOXX, the U.S. government has always received our lowest price for TPOXX. Additionally, all active pharmaceutical ingredients and finished drug products are manufactured domestically. Internationally, we continue to engage with government and stakeholders focused on strengthening health security. As biothreat risk increase, many countries are reassessing their preparedness strategies and expanding defense budgets. Strategic stockpiling remains foundational to preparedness. We continue to discuss stockpiling of TPOXX with various potential customers across the globe and recently received a $13 million order from a country in the Asia Pacific region.

Turning to Europe. I'd like to address the EMA referral procedure for TPOXX, known as Tecovirimat-SIGA in Europe initiated last July. As previously discussed, the referral was precipitated by the results from the mpox clinical trials, PALM-007 and STOMP. Over the past 7 months, we have gone through 2 rounds of questions and answers as well as EMA Scientific Advisory Group meeting and have provided a thorough science-based responses to the EMA. The EMA's Committee for Medicinal Products for Human Use, or CHMP, is expected to meet in March to issue its recommendation to the European Commission regarding the product marketing authorization. We expect the CHMP to confirm the positive benefit/risk balance of Tecovirimat-SIGA as a treatment for smallpox, cowpox, vaccinia complications and maintain those indications in our product label.

Regarding mpox, based on the results of the mpox clinical trials, we expect the CHMP to recommend withdrawal of the mpox indication. To provide some additional context, TPOXX was developed to reduce mortality and lesion disfiguration and related issues from smallpox by stopping viral dissemination. This distinction is important when evaluating the recent mpox trial data where the vast majority of the patients in those trials were treated well past peak viral load and were already progressing towards self resolution. Speed of treatment is critical, which is why TPOXX continues to represent a strategically critical asset for national and international stockpiles.

In addition to smallpox treatment, efforts within our late stage pipeline continue to focus on the post-exposure prophylaxis program. Our collaboration with the CDC remains ongoing with analysis of immunogenicity samples underway. We're currently targeting an FDA submission of the PEP indication in the next 12 months. In partnership with BARDA, we continue to advance our pediatric program to develop an oral suspension formulation for children who are unable to use oral capsule formulation. Notably, we have recently filed our IND and initiated a Phase I study. Results are expected in the second half of this year.

As we look ahead, our priorities remain consistent, maintaining financial strength, executing with discipline and advancing strategic initiatives to support long-term value creation. In closing, SIGA entered 2026 from a position of strength, defined by strategic focus, financial discipline and durable government partnerships. Our differentiated TPOXX franchise and proven execution position us well to support global health security while continuing to deliver long-term value for shareholders. With that, I'll turn it over to Dan to review the financial results in more detail. Dan?

Thanks, Diem. As noted earlier in the call, SIGA continued to advance its long-term priorities in 2025. This includes securing $27 million in additional U.S. government funding to support development and manufacturing activities as well as generating $88 million of product revenues and $24 million of pretax operating income. Product revenues of $88 million are primarily driven by product deliveries to the SNS under the 19C BARDA contract. Product deliveries to the SNS in 2025 include $53 million of oral TPOXX and $26 million of IV TPOXX sales. In addition to product sales to the U.S. government, 2025 product revenues also include $6 million of oral TPOXX sales to an international customer. In addition to product revenues, the company also has research and development revenues of approximately $7 million for 2025. As a supplemental note, there are $26 million of outstanding U.S. government orders as of December 31, 2025.

This amount reflects the $26 million IV TPOXX order received in the first quarter of 2025, which continues to be targeted for delivery in 2026. Pretax operating income in 2025, which excludes interest income and taxes is approximately $24 million. After taking into account interest income and taxes, net income for 2025 is approximately $23 million. In turn, fully diluted income per share for 2025 is $0.32 per share.

The company continues to maintain a strong balance sheet. At December 31, 2025, the company had a cash balance of approximately $155 million and no debt. This concludes the financial update. At this point, I will turn the call back to Diem.

Thank you, Dan. With that, we would like to open the call for questions.

[Operator Instructions]

Our first question comes from the line of Jyoti Prakash from Edison Group.

Starting off with the U.S. RFP. BARDA recently issued a sources sought notice for smallpox vaccines, which strongly suggest preparedness remains a priority for the government. Now based on your ongoing discussions with the authorities, do you have any updated visibility on the timing of the next U.S. government RFP for TPOXX?

Thanks, Jyoti, for that question. As you mentioned, this sources sought notice as well as the U.S. government actions over the past 12 months suggests that smallpox preparedness remains an important focus for the U.S. In addition to the activity you mentioned, the government took the delivery of approximately $79 million of TPOXX in 2025 and exercise a procurement option for roughly $26 million in IV TPOXX and committed to an additional $27 million for development funding.

In terms of timing, we don't have any additional details to share today. What we can say, based on our ongoing interactions is that smallpox preparedness continues to be a focus area within the government and that we remain engaged and continue our productive conversations with relevant officials across the government, including HHS as well as ASPR leadership. Based on those discussions, we continue to believe that TPOXX remains an important component for the U.S. preparedness strategy.

That's great. And my next question relates to the capital allocation. And SIGA's ended the year with a strong cash position. You mentioned $155 million in cash and no debt on the books. So how should we think about your capital allocation priorities looking ahead? Can we expect continued special dividends as we've seen 2 to 3 years? Or could you take a different approach looking forward?

Jyoti, this is Dan. On this question, as the starting point is, as a general matter, capital management strategy, we plan to remain disciplined and flexible, and we try to do our capital management activities with the goal of supporting long-term value creation for our shareholders. You had a specific question on the special cash dividend. Regarding the special cash dividend, the timing of this question is little early. In reference to prior years, we've usually addressed this topic in the March to May timeframe. So right now, we're kind of in the early stages of this historical time frame. So I don't have anything further to say right now. I would say that please stay tuned for more information between now and May.

That's great. And just if I can follow up on the question. Are you also open to acquisitions or in-licensing opportunities to broaden the pipeline?

Jyoti, yes, the short answer is yes. We continue to have the capability to pursue these types of opportunities. Our approach to M&A as well as investments will always remain disciplined and strategic. Our focus remains on creating shareholder value, while doing what's best for patients, health security and other stakeholders and we approach that thoughtfully.

And I just have one last question from my side, and this relates to international orders. And it is great to see a strong start to 2026 with the recent $13 million TPOXX order. You mentioned that this is a multiyear contract. And are we right in assuming that this relates to the same customer that placed the $11 million order in late 2024. And following from that, could you provide a bit more color on the contract duration, the potential order frequency and then the size of the contract? And finally, can we expect additional international orders through the year?

All right. I think there's a few questions within there. So just maybe the starting point, the $13 million order in the Asia Pacific region, I just want to highlight that we do believe that reflects the progress we've been making in strengthening relationship with government partners around the world. We believe that the partners continue to focus on enhancing preparedness for potential smallpox outbreaks, and we believe the $13 million order reflects that.

I believe you had a question as to the details of that order and consistent with a lot of orders on the international front. For security reasons, most of our customers -- government customers don't allow us really to disclose any specifics. So in terms of the details, what we can share is that, as we mentioned, it does come from a repeat customer. However, it's not the customer you're referring to from 2024, but it is a repeat customer and it is a multiyear contract and multiyear contract feature gives them the flexibility to place additional orders at their discretion and the discretion is both in terms of size as well as timing.

I think there's one part. There's -- I guess the second part of your question is while additional sales in terms of what we're looking for in addition to this order, while additional international sales may occur in 2026. We really do want to continually highlight that these discussions are usually complex, and these processes can take time to move through. So we'll continue to move forward. And when we have something to announce, we'll let you know. And I do want to highlight that we are -- we do remain actively engaged with a range of international customers.

This is very helpful. No further questions from my side.

[Operator Instructions]

There are no further questions at this time. I will now turn the call over back to Diem Nguyen, Chief Executive Officer. Please continue.

Thank you, John. I'd like to thank everyone here for making the time to join us on today's call and as always, for your ongoing interest in SIGA. We look forward to speaking to you again on our first quarter call. Have a great evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Welcome to the SIGA Business Update Call. Before we turn the call over to SIGA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements.

SIGA does not undertake any obligation to update publicly any forward-looking statement to reflect events or change circumstances after this call. For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2024, and its subsequent reports on Form 10-Q and Form 8-K.

With that, I will turn the call over to Diem Nguyen, Chief Executive Officer of SIGA. Diem?

Good afternoon, everyone, and thank you for joining today's call and review of our business results for the third quarter of 2025.

I'm joined by Dan Luckshire, our Chief Financial Officer, and we appreciate this opportunity to provide an update on our company. After the update, we'll be happy to answer your questions.

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

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

Having prepared the strategies, particularly for Category A threats like smallpox, with provisions for stockpiling medical countermeasures can enable immediate action. In today's dynamic and increasingly complex global landscape, bioterrorism continues to be a significant concern, underscoring the importance of proactive preparedness.

TPOXX' strong safety profile makes it an ideal choice for mass distribution under emergency conditions. The third quarter was relatively quiet as SIGA's financial strength was demonstrated in our strong second quarter performance, which included $79 million of product revenues. These quarterly fluctuations are consistent with the nature of SIGA's business model where our financial performance should be assessed beyond quarters.

For the 9 months ended September 30, 2025, product revenue totaled approximately $86 million, including $53 million of oral TPOXX and $26 million of IV TPOXX sales under the 19C BARDA contract, with the delivery of U.S. Strategic National Stockpile, or SNS, and the $6 million of oral TPOXX sales to the international customer.

As of the end of third quarter, there was approximately $26 million of outstanding orders remaining from the U.S. government. This outstanding balance relates to the March 2025 U.S. government order of IV TPOXX, which we expect to deliver in 2026. Importantly, we continue to be engaged with the U.S. government regarding future TPOXX development, manufacturing and procurement.

As a reminder, year-to-date, SIGA has been awarded $27 million for pediatric formulation development and IV tech transfer activities. Since September, SIGA has been actively engaged with the U.S. government regarding the future procurement of TPOXX.

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

Antivirals remain essential for bioterrorism preparedness and play a vital role in any comprehensive plan, enabling quick action when it matters most. I'd also like to highlight an additional point of interest. Our approach to pricing and manufacturing has historically been well aligned with administration's priorities. The U.S. government has always received our lowest price for TPOXX compared to international purchasers. And all of our active pharmaceutical ingredients or API and finished drug product are produced in facilities located in the U.S.

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

Our goal is to help ensure that countries around the world are equipped to respond swiftly should a smallpox outbreak occur. Given the growing risk of bioterrorism, many countries and regions have developed preparedness strategies and have allocated larger budgets to executing those strategies where others are working to do so.

In our view, strategic stockpiling supported by sustained investment in crisis preparedness is critical to global health security. Discussions around potential contracts with both existing as well as new customers are ongoing as we maintain current relationships and look to expand our customer base.

Based on our engagements this year and interest from key stakeholders across strategic markets, we expect multiple international sales in 2026. I'd also like to share a brief update on the referral procedure for TPOXX, known as Tecovirimat-SIGA in Europe, commenced by the European Medicines Agency or EMA in July.

As we previously explained, the EMA raised questions about our product's efficacy in treating mpox following a review of the data from mpox clinical trials, including PALM007 and STOMP. We have submitted comprehensive science-based responses to questions posed by the EMA, which were focused primarily on mpox.

The EMA's Committee for Medicinal Products for Human Use or CHMP will meet next week, and we expect it will either issue an opinion or request for additional information. While we will not speculate on what the CHMP will do, we are confident in the responses we put forth and believe TPOXX is a safe and effective drug for its approved indications. We remain ready to address any additional questions and provide greater clarity as needed from the CHMP.

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

In preclinical trials, Tecovirimat significantly reduced mortality and viral load across four pivotal studies in non-human primates and two in rabbits.

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

Turning to our late-stage pipeline. We continue to advance TPOXX post-exposure prophylaxis program, or PEP, for smallpox. Collaboration with CDC continues. As a reminder, the CDC is analyzing samples collected to support the study's immunogenicity objective. Based on TPOXX mechanism of action, we believe TPOXX will not have any impact to JYNNEOS immune response when administered concomitantly with JYNNEOS.

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

Also in our pipeline, our pediatric program continues to move forward in partnership with the Biomedical Advanced Research and Development Authority, or BARDA, within the U.S. Department of Health and Human Services under the Administration for Strategic Preparedness & Response, or ASPR.

This initiative is designed to address an important unmet need, providing a treatment option for children too small for the current oral formulation of TPOXX. We're targeting to submit a IND as soon as the end of the year with Phase I trial targeted to begin shortly thereafter. As we approach year-end, our key priorities remain unchanged, sustaining financial strength and executing our strategic initiatives with discipline and focus.

Despite the expected lumpiness of our financial results quarter-to-quarter, our company continues its track record of generating substantial cash flow. Since 2020, we've returned approximately $230 million to shareholders in the form of dividends and share buybacks, all while incurring net 0 debt. We believe our approach continues to position us well for long-term success where our core areas of focus has delivered meaningful long-term value for our shareholders.

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

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

Thanks, Diem. As noted earlier in the call, SIGA's product sales for the 9 months ended September 30, 2025, are approximately $86 million, including $53 million of oral TPOXX and $26 million of IV TPOXX sales under the 19C BARDA contract and $6 million of oral TPOXX sales to an international customer.

The sales under the 19C BARDA contract relate to TPOXX deliveries to the U.S. Strategic National Stockpile, or SNS. Product sales for this time period outpaced sales over the comparable period last year of $54 million.

In addition to product sales, the company has research and development revenues of approximately $5 million for the 9 months ended September 30, 2025. With respect to the 3 months ended September 30, 2025, as Diem mentioned, it was a relatively quiet quarter, which follows a strong second quarter in which the company had $79 million of product revenues.

As previously noted, given the nature of the business model of SIGA, fluctuations in revenue amounts between quarters is not unusual. As a supplemental note, there are $26 million of remaining outstanding orders as of September 30. This amount reflects the $26 million of IV TPOXX order received in the first quarter of this year under the 19C BARDA contract, which is targeted for delivery in 2026.

Pre-tax operating income for the 9 months ended September 30, 2025, which excludes interest income and taxes, is approximately $33 million. For the 3 months ended September 30, 2025, pre-tax operating loss is approximately $10 million. Net income for the 9 months ended September 30, 2025, is approximately $29 million. In turn, fully diluted income per share for this period is $0.40 per share. For the 3 months ended September 30, 2025, net loss is approximately $6 million and net loss per share is $0.09.

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

At this point, I will turn the call back to Diem.

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

[Operator Instructions] And your first question comes from Jyoti Prakash at Edison Group.

My first question is related to the U.S. RFP process for TPOXX. You mentioned disruptions with the U.S. government and the recent shutdowns. What kind of potential impact, if any, do you see on the ongoing RFP process and the timelines for TPOXX Stockpiling?

Sure, Jyoti. It's nice to hear from you. We are fortunate at this time that the headcount reductions at the world's furloughs has not materially impacted operational activities or performance of our existing government contracts. Many of the people we work with continue to engage given the nature of what they do as well as importance of national security.

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

The one area that we would like to highlight that we do see some impact is with the CDC. There is a possibility of delays in the CDC completing the analysis of our samples from the trial supporting our PEP program. The CDC was originally targeting to complete analysis later this year, and that could potentially slip given the timelines of the government shutdown.

I mean, regarding the new procurement contract for TPOXX, as we noted in our prepared remarks, we continue to engage with the government officials regarding TPOXX development, manufacturing and procurement. While the headcount reductions for furloughs do expose contractors to some potential delays and occasional choppiness in terms of customary interactions, we believe the key drivers of the procurement activity will be ultimately driven by the views and actions of leadership within the U.S. government. And this includes ASPR, HHS, DoD as well as Administration as well as Congress over the long term. And we are encouraged by their continued interest in maintaining access to TPOXX as we believe and they do too, that it's a critical countermeasure for smallpox.

Thank you and to continue to be in active dialogue with the U.S. government. But if you just hypothize that the RFP may be slightly delayed. Are there any mitigation strategies or operational steps that SIGA is looking to implement or can implement to secure the longer-term outlook? Obviously, your cash position remains strong, so nearer term may not be as much of a concern.

This is Dan. I'll take that question. You're right in that. You mentioned that we have a strong cash position. And just to reiterate, it's $172 million at September 30, and there's no debt. So, we are in a very strong position.

Just to give you a frame of reference, that cash balance is more than 4x the current annual rate or annual run rate for operating expenses. So, that affords us a lot of flexibility. And so, what I would say generally is given this position, I would just generally say that over the past decade, SIGA has been consistently adapted to different environments and we'll continue to be adaptive with an eye toward finding the best mix of pursuing opportunities and managing risks.

And I just have another couple of questions on the financials. We appreciate that Q3 was a slightly quieter quarter for the company, but you did record $0.9 million of products revenue. Can you elaborate on what these revenues came from? And are they related to the CD&D, for instance?

And secondly, we saw that the cost of goods as a percentage of sales was relatively higher in this quarter versus what we've seen in the previous quarters. Can you just explain what could be the reasons for this?

Right, right. So, in a quiet quarter like this, you do -- then you sort of have, sort of, some technical outcomes that don't necessarily reflect any type of trend. What you're seeing on the revenue side is really the way the accounting works is certain -- in limited circumstances and certain types of reimbursement activities are treated as product revenues, and that really ties into the -- for example, the IV tech transfer. So that's what you see on the product revenue side.

And then, on the corresponding cost of goods sold, you see the expenses related to it. What you also see is that, a lot of cost of goods, as you would expect, are variable costs related to production costs for inventory. But there is a small amount percentage-wise that's attributable to, sort of, semi-fixed costs, such costs or expenses such as stability, storage, security.

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

[Operator Instructions] There are no further questions at this time. I'm pleased to turn the call back over to Diem.

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

This concludes today's conference call. Thank you so much for your participation. You may now disconnect.