Similar to smallpox, belonging to the orthopoxvirus, monkeypox is having a wild run. The virus has spread to the U.S. after cases continue rising in the United Kingdom. With the SARS-CoV-2 virus still existing and the pandemic still very much alive, the monkeypox virus is being paid severe attention. The first case of monkeypox was reported in the U.S. on Thursday last week, which caused concerns. While the virus is less deadly compared to its relative smallpox, there is no specific treatment for it. However rare, it is still a potentially serious viral illness with rashes on the face and body along with fever-like symptoms.

The new outbreak has caused a rally in companies equipped with tackling viral infections, particularly those focused on smallpox treatments. Hence, biotechnology companies, including SIGA Technologies Inc. (SIGA) have been in a bullish role since the news first came out. The biological warfare defense company stock surged as much as 43.35% in regular trading on Friday, May 20, its biggest jump since 2016 amid the Zika contagion fears. SIGA continued rallying further in the after-hours session to add 23.63%. The stock witnessed a huge uptick in trading volume on Friday with 81.65 million shares trading (4,036% of the average) in the regular session and 7.69 million in the after hours. At the end of the day, the stock had a price of $15.33 per share.

Monkeypox Outbreak

The world has not yet come out of the Covid-19 outbreak and now faces another threat from monkeypox. Having started in the U.K., the virus is now reported in all of Europe with cases in Spain, Portugal, Germany, Belgium, France, the Netherlands, Italy, and Sweden. On Friday, Belgium initiated a three-week quarantine for infected persons, becoming the first to do so. So far, over 90 cases have been reported in Europe, the U.S., Canada, Australia, and Israel. The World Health Organization is expecting a further increase in cases identified as surveillance is extended to countries where we do not typically find the disease.

The disease is usually mild and endemic in parts of the west and central Africa, while only very few outbreaks occur beyond that occasionally. However, the current data has shown no relation to travel between the endemic regions and non-endemic ones.

Although there is no specific vaccine or treatment for monkeypox, I have deemed smallpox vaccines 85% effective in treating it. Thus, many countries are now stocking up on smallpox vaccines. Antiviral drugs also help in relieving the symptoms of the disease.

SIGA’s Huge Rally

Amid the new outbreak, SIGA has been one of the top benefiter, the reason being its smallpox drug that was recently approved for a liquid form. On May 19, the company said that the intravenous formulation of its smallpox drug TPOXX has been approved by the FDA. This extends SIGA’s patient population as it brings an essential option for those patients who have trouble swallowing the oral capsules. The oral form of TPOXX is approved in the U.S., Canada, and Europe and includes the treatment of cowpox and monkeypox in addition to smallpox.

This approval came after the company received requests to use its smallpox drug to treat monkeypox, as said by its CEO to Reuters. The CEO Phil Gomez had also mentioned in the interview that the company will be ready in terms of supply.

SIGA’s Earnings

In early May, the company posted its Q1 2022 financial results which are as follows (in millions except per share)

In the first quarter of 2022, $7 million worth of IV TPOXX deliveries were made to the U.S. government, which represents the first sales of the IV drug. Moreover, the company also secured certain contracts for TPOXX, including the first procurement contract in the Asia-Pacific region. The contract encompasses roughly $3 million of oral TPOXX for delivery in 2022. Public Health Agency of Canada also increased its oral TPOXX procurement contract by around $5 million, with the total value now at $38 million. This includes $13 million targeted for delivery in 2022.

Conclusion

SIGA’s rally over the monkeypox outbreak is not just a temporary hike as the company has much lined in deliveries for its TPOXX drug well beyond 2022. While the shares continue to rally at the present as TPOXX was just approved for its liquid form as well, the increasing cases of monkeypox throughout the world are expected to boost the bulls further.