Corporate Acquisitions

Latest Developments in the Pharmathene-SIGA Case Point to a Strong Buy for PIP

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In Brief...

There's been significant developments in the PIP-SIGA case since my last article (written when PIP was at $1.90) and I wanted to both summarize them and also establish some facts that seem to be points of confusion on the various message boards out there: the Merger Term Sheet was signed, the Merger Agreement was signed and binding, and the Bridge Loan Agreement was signed and binding. The terms of the licensing agreement (the "LATS") were included in all three documents. The LATS was included in each signed and binding agreement because while they were negotiating the LATS they decided to go all the way and merge. The condition was that if the merger agreement didn't go through a licensing agreement would be negotiated based on the terms included in 3 different signed, binding, board-approved agreements. A) "Therefore, I start with the premise that both parties intended to be bound by the LATS and that they believed it dealt with all essential terms. B) "PharmAthene has adduced sufficient facts to support one or more of its claims that SIGA breached its agreement with PharmAthene as it related to the contemplated licensing agreement. were any essential terms missing from the LATS included in all three documents. Edwards was an expert who was testifying on behalf of PIP that the terms of the LATS were sufficient to constitute a binding licensing agreement, an important point in this case. B) "The fact that the LATS was attached to the MTS, the Merger Agreement, and the Bridge Loan Agreement, together with the negotiating history alleged by PharmAthene in terms of the communications between one or more of its representatives and Drapkin provide ample support for an inference that the parties believed the LATS contained all the essential elements of a licensing agreement. If PIP should be awarded the LATS, then the judge could potentially rule that SIGA has to simply give PIP the licensing agreement. BARDA (and then SIGA) have put out press releases saying that there might not be enough small businesses that can fulfill this contract so SIGA would still most likely be awarded it. If he rules against SIGA, SIGA has 45 days to appeal. Any settlement would be worth a $7-10 price for PIP. Everything is on track with their basic fundamentals and the government is not going to be shirking from buying anthax vaccine at some point from PIP.

Read the entire article at SeekingAlpha...

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