PharmAthene, SIGA to merge, forming powerful biodefense company

One indication of the maturation of a market is the pace of consolidation, and it is happening in the biodefense sector of the homeland security market. Annapolis, Maryland-based PharmAthene and New York-based SIGA Technologies (NASDAQ: SIGA) have entered into a term sheet providing for the merger of PharmAthene and SIGA. The combined company will operate under the name PharmAthene, and will offer an impressive portfolio of procurement-stage biodefense products which target anthrax, smallpox, and chemical nerve agents, but also a strong pipeline of therapeutic and prophylactic drug candidates targeting Category A biowarfare agents and emerging infectious diseases.

David Wright, president and CEO of PharmAthene, will serve as president and CEO of the combined company. It is expected that the shareholders of SIGA will own approximately 32 percent of the combined company, which is likely to remain listed on the NASDAQ stock market. The term sheet is conditioned on customary closing conditions, and is expected to close during the second or third quarter of 2006. PharmAthene has also agreed, subject to the negotiation, to provide SIGA with up to $3 million in interim financing.

The merger makes sense for both companies. PharmAthene has a reputation for strong development and commercialization capabilities, while SIGA’s reputation lies with its research capabilities and scientific savvy. One of SIGA’s products, SIGA-246, is probably the most advanced smallpox treatment currently in development. It is a small molecule orally active antiviral therapeutic which complements PharmAthene’s Valortim, a monoclonal antibody being developed for the prevention and treatment of anthrax infection, and Protexia, a recombinant bioscavenger being developed for chemical nerve agent poisoning. Wright notes that, “Our combined biodefense portfolio will target three of the top five biodefense priorities under Project BioShield.”

SIGA’s research pipeline includes novel classes of antiviral compounds which target hemorrhagic fever viruses, including the viruses which cause Dengue, Ebola, Marburg, and Lassa fever, with a lead antiviral compound targeting Lassa fever undergoing preclinical evaluation.

-read more at the Web sites of SIGA | PharmAthene