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spk04: Welcome to the SEGA Business Update Call. Before we turn the call over to SEGA 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. SEGA 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, 2021, and its subsequent reports on Form 10-Q and Form 8-K.
spk03: Thank you for taking the time to join today's call. Today, I'm joined by Dan Luxshire, our CFO. We are pleased to have this opportunity to provide a business and financial update to our shareholders. We'll then be happy to take questions. We had a strong fourth quarter in which we delivered approximately $113 million of oral teapots to the U.S. government under the 19C BARDA contract. Fourth quarter deliveries to the U.S. government build upon international sales growth we achieved in the first nine months of the year. For 2021, international sales grew to approximately $13 million from approximately $2 million in 2020. In total, revenues in 2021 were approximately $134 million, resulting in approximately $89 million of pre-tax operating income for the year. This performance is attributable to a lot of hard work from the entire SIGA team, especially our supply chain team, as well as our supply chain partners at PCI Pharma Services, Timely delivery involved a team effort in which we collectively worked through many challenges. I would also like to thank our partners at BARDA and the Strategic National Stockpile for working so closely with us to deliver product at the end of the year. As we discussed in November, supply chain challenges are an issue for many industries, including the pharmaceutical industry. Our team has been working continuously with our supply chain partners to manage and mitigate issues when they arise, as well as to identify risks and mitigate such risks. We have had success to date in managing issues, but it is important to note that challenges and risks persist. As such, we will continue to take proactive steps to identify and manage risk in order to put us in the best position to meet future procurement demand. As a historical note, the U.S.-based supply chain that we built many years ago and continue to use today was purposefully centered in the U.S. as a proactive risk management tool. I believe this strategy has served us well in navigating recent supply chain challenges. Looking forward with respect to procurement activity, I'd like to talk about the next steps with the BARDA 19C contract. As a reminder, we built the initial U.S. government stockpile of teapots with final drug products that was manufactured in four years, 2013, 2014, 2016, and 2017. When BARDA issued the 19C contract in 2018, it contained four procurement options for oral teapots in which each option was valued at approximately $112.5 million. Oral TPOX has a seven-year shelf life. And as we saw in 2020 and 2021, BARDA exercised procurement options as stockpiled products that had been manufactured in 2013 and 2014 expired. In substance, we replenished the U.S. government stockpile with deliveries of oral TPOX in those calendar years. We anticipate the remaining two procurement options for oral TPOX, as well as the intravenous or IV TPOX procurement options, will be exercised over the next three years given that we expect significant product expiration over the next three years. These option exercises would generate approximately $300 million of revenue. The exact timing of such option exercises remains to be determined. I will note that since final drug product was not manufactured in 2015, the U.S. government stockpile does not have scheduled expirations this year. As such, there is no immediate need for the U.S. government to secure deliveries in 2022 to replenish expiration. Having said that, we have been working with BARDA and the ASPR to exercise options further in advance and will continue to work on a longer-term 10-year contract with annual options to smooth out deliveries and better manage budgets and supply chain. More importantly, we are focused on ensuring that the requirements for post-exposure prophylaxis, or PEP, The PEP use of TPOCs are also considered by the U.S. government in any new contract. Given the expected 28-day course of treatment for PEP, the existing stockpile would only be able to protect half the number of Americans in the event of an outbreak. Consequently, as I will discuss more momentarily, we strongly believe that a reevaluation of the size of the stockpile is essential. In sum, we expect significant procurements by the U.S. government over the next three years, with the timing among the upcoming calendar years to be determined. In terms of the ultimate sizing of the stockpile, we believe that clinical results from the PEP program could play an important role. And as noted in the prior investor call, we expect to receive immunogenicity data from a PEP clinical trial later this year. Substantial progress in the PEP program is timely in that we believe that the COVID-19 pandemic has highlighted the importance of having access to broad, active antiviral drugs, especially those that can be used prophylactically. I will note that the U.S. government has contracted to purchase approximately 7 million doses of COVID monoclonal antibodies and approximately 13 million courses of COVID antiviral drugs for over $17 billion, highlighting from our perspective that the current stockpile of teapots and a smallpox outbreak would not be nearly sufficient to treat all those who would need care. Before I shift to the topic of international procurement, I would like to note that we have begun making deliveries of our intravenous product to the U.S. government. As a reminder, we have 20,000 courses ordered for IV final drug product in our base 19C contract. And we expect to deliver up to approximately 18,000 courses this year which would equate to approximately $7 million of revenue. As a reminder, the remaining procurement options for IV TPOCs under the 19-C contract have a total value of approximately $77 million. Please note that on the regulatory front for IV TPOCs, our FDA PDUFA date for the NDA is May 28, 2022. We had one extension to provide additional data to the FDA. We believe that review is going well as we reach the final stages. Looking forward with respect to international sales, we believe that the Public Health Agency of Canada, or PHAC, proposed amendment to the TPOCs contract lays the groundwork for approximately $12 million of product deliveries to PHAC in 2022. We are also targeting a delivery to the Canadian Department of National Defense, BDND, for $3 to $4 million of oral TPOCs in 2022. Beyond Canada, we continue to target an initial order from a new jurisdiction for approximately $3 million. This target country has been noted in prior investor calls. Customer remains focused on a purchase, and the negotiations are frustratingly slow, and at this juncture centered on final terms, conditions, and logistics. In Europe, we believe the EMA regulatory approval announced in January, which includes a broader indication for treatment of not only smallpox, but monkeypox, cowpox, and complications from immunization with vaccinia, will be an important milestone as some EU countries would not discuss or advance potential procurement opportunities until we had obtained EMA approval. We are working hard with our partner Meridian to build on the international sales growth of 2021, especially with regard to marketing in Europe, but also key jurisdictions in Asia and the Middle East. I would like to note that meetings with potential customers have picked up recently as the COVID-19 pandemic has waned, with recent meetings being held in Europe, the Middle East, and Asia to discuss sales opportunities. We are monitoring the unfortunate events in Ukraine, which may have an impact on our potential customers in Europe. The war could be a distraction for them as they focus on the immediate implications, but it's also a reminder of the broad threats Europe faces. I would also note there was a press report from Russia that they completed clinical testing of their candidate smallpox antiviral treatment in December of 2021. In the context of international activity, I would also like to touch on our Oncolytic Virus Collaboration Initiative, which had an international bent given the collaboration activity we have announced. As we have described previously, several companies are developing cancer therapies that use the orthopox vaccinia, the virus that historically was used in the smallpox vaccine. While there have not been any products approved with vaccinia to date, the use of TPOX and vaccinia potentially provides an opportunity for higher dosing or more systemic routes of administration. The collaboration we announced with BioArchitect in January focuses on preclinical studies where their product is TPOC. Long term, if collaborations with companies like BioArchitect are ultimately successful, it could open up new commercial markets for TPOCs. Finally, before I turn the call over to Dan for a financial update, I would like to provide an update on our collaboration with CIPLA. BARDA announced at the 2021 World Antimicrobial Resistance Congress an intent to procure and stockpile three additional novel antibiotics by 2030 as part of the new 4x30 initiative. They have completed one contract with Paratech, which they are counting as the first award under this initiative, and they intend to issue three additional RFPs for the other three antibiotics. The second RFP was released on January 20th and was designated a small business set-aside. A small business set-aside is essentially required when two or more small businesses meet the criteria to complete the work contemplated in a federal contract. BARDA has indicated they did not anticipate the third RFP will be a small business set-aside, but there can be no guarantee that that will be the case. Neither SIGA nor CIPLA qualify as a small business under the criteria of the RFP, and we have indicated our opposition to the small business set-aside with BARDA. We believe the small business set aside is unfortunate given the past bankruptcies that have plagued the novel antibiotic development and advancements in the field. Limiting the competition for the second RFP does not encourage larger sustainable companies to support the mission of BARDA in antibiotics. We will continue to monitor development around this RFP and future ones with our partner CIPLA. I'll now pass the call over to Dan who will provide a financial update. Dan?
spk05: Thanks, Bill. For the 12 months ended December 31st, 2021, GIGA's revenue was approximately $134 million, of which approximately $113 million relates to fourth quarter deliveries of oral teapots to the U.S. government under the 19C BARDA contract. Approximately $13 million of full year 2021 revenue relates to international sale. This amount represents an increase of approximately $10 million or more than fourfold, over 2020 level. The remainder of 2021 revenue mostly relates to research and development activity. Pre-tax operating income, which excludes interest income, taxes, and adjustments to the fair value of the warrant, was approximately $89 million for 2021. Net income for 2021 was approximately $69 million, and fully diluted income per share was 91 cents. At December 31st, 2021, the cash balance for the company was approximately $103 million. Additionally, please note that with the company's delivery of approximately $80 million of rural teapots to the U.S. government in December, the company's balance sheet as of December 31st, 2021 includes an $80 million receivable for such delivery, as well as a $19 million tax liability primarily in connection with taxable income generated by deliveries of oral teapots to the U.S. government in the fourth quarter. During the fourth quarter, SIGA repurchased approximately 760,000 shares of its common stock for approximately $5.8 million. For the full year 2021, the company repurchased approximately 3.8 million shares of its common stock for approximately $26 million. which amounts to approximately 5% of shares outstanding as of the start of the year. This concludes the financial update. At this point, I will turn the call back to Phil.
spk03: Thanks, Dan. Before we turn to Q&A, I would like to reiterate a few points that have been made in the past in support of our view that SIGA offers an attractive combination of existing revenue streams that are currently generating strong financial results complemented by organic growth initiatives that hold a significant potential when viewed collectively. First, I'd like to highlight that the ongoing International Sales Growth Initiative is progressing in a value-creating manner. In 2020, this initiative generated our first international sales and $2 million of revenue. In 2021, this initiative has generated approximately $13 million of revenue. While, as noted many times before, progress on this front is expected to be lumpy and uneven given the international market for biodefense products is not well-developed, we believe that a meaningful international market is gradually taking shape. Second, I want to reiterate that the PEP-based development program represents a growth initiative in that it would provide scientific and regulatory support for any stockpile expansion. As stated earlier, we believe the current size of the stockpile of teapots and a smallpox outbreak would not be sufficient to treat all of those who would need care. If we've learned anything from COVID, that certainly appears to be the case. Third, we will be focused on transitioning our U.S. contract to a long-term S&S contract that focuses on appropriate size requirements for the TPOC stockpile, as well as the smoothing of the annual delivery, which will be critical to supply chain planning and financial predictability. Fourth, our portfolio growth initiative is diversified, including ongoing efforts to broaden the U.S. customer base to potentially include the U.S. Department of Defense and others. And fifth, we continue to pursue and support oncology collaborations and other strategies that could open new markets for TPOC. As mentioned earlier, we believe these growth initiatives, when viewed collectively, have potential for significant value creation. And one last point, as we generate cash over time through existing contracts and organic growth initiatives, we will continue to examine the best use of our cash, including share buybacks, as well as potential investments or acquisitions that provide an opportunity to grow earnings, diversify our business, and leverage our successful platform. Since the beginning of our share buyback program in 2020, we have purchased approximately $55 million of stocks, as of December 31st, 2021, or approximately 10% of our outstanding shares.
spk02: This concludes our prepared remarks, and we will now begin the Q&A session.
spk04: And at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, It may be necessary to pick up your handset before pressing the star keys.
spk01: One moment, please, while we poll for questions. Our first question comes from the line of Joe Quinn Horton, who is a private investor. Please proceed with your question. Hey, Phil. Good year.
spk02: I've got a question about Meridian. How long have you been working with Meridian? So we signed the agreement with Meridian in, I believe, 2019. So I believe we're coming up on the third year of that. Third year, okay. Have you noticed any change since there was a change in management since Meridian was Pfizer-Sola to a buyout group?
spk03: So we continue to work with Meridian, Joaquin, and have been pleased with their focus on the sales of TPOC because they have ramped up post-EMA approval. So I would say we continue to have an excellent relationship with Meridian and see the exact team that we had at Pfizer coming across and focusing on the sales currently with TPOC.
spk02: Okay, so let me ask, how many countries have you talked to I don't need to name them, but how many countries have you talked to because of Meridian?
spk03: I don't have a number at the top of my head. I would say certainly more than 10. I'm trying to think about a rough estimate, but as we said when we announced it, I think they have sold to more than 30 countries worldwide, so there may be conversations that I'm forgetting, but it's certainly been quite a number of countries. and potential customers that we wouldn't have access to without the historical relationships that Meridian has had.
spk01: Okay.
spk02: On the PEP program that you're currently doing the testing, when can we expect some top-line data to come in?
spk03: So I believe that data will come in late this year. Part of the challenges that we have right now with doing those studies, especially the one with JYNNEOSAR. There's a lot of vaccine studies that have been done around COVID, and so doing a vaccine study right now to get access to clinical sites and get them up and running and recruit people, we're seeing early challenges with that. So we're doing a few things to continue to try and accelerate it, but I do think that data is going to come out late in the year, and it is subject to the challenges of getting volunteers, explaining that it's a smallpox vaccine, not a COVID vaccine, getting them recruited, and then getting the data out.
spk02: So right now we're focused on recruitment and making sure we get volunteers in as fast as we can.
spk01: Okay. A question for Dan.
spk02: How long ago, Dan, did we do the deal with Piper to bail the company out, that $60 million loan or $80 million loan?
spk05: That loan was done in 2016 and we paid it back in 2020.
spk01: Okay. We worked with Piper at the time, right?
spk05: Yes, we did work with Piper on that deal. So was Lurink
spk02: involved in a fairness opinion on that deal, or were they involved in some other deal that we worked with?
spk05: We worked with them on the sale of the PRV.
spk01: Okay.
spk02: I guess the focus of my question is that you've been there, say, 10 years or more, and I'm struggling to figure out how come we don't have any Wall Street coverage yet. And, you know, I know we've worked with a couple of firms, and I know everybody says, okay, we're not going to do anything because you don't have any investment banking for us.
spk01: But, I mean, there's got to be somebody out there. Any thoughts?
spk05: Yeah, we do continue to look for coverage, and you know the reasons why it's – sell-side coverage is – The model has changed over the years, and so we continue to look for it. And as you did mention, we don't have a lot of financing work, and usually financing work is a big driver. You mentioned the debt deal, but that was a private deal as opposed to a public financing, and there's a difference. So we have been looking, and we'll continue to look at research coverage, and Focus is getting good research coverage.
spk03: And, Joaquin, I appreciate all your questions. Thanks for the update today. And as you know, Joaquin, we also have the Edison Group, which publishes their research, which also provides a nice reference for investors if they'd like to take a look at the analysis from the outside in. So just wanted to thank you for those questions today. Operator, we can take the next caller.
spk04: And, again, as a reminder, if anyone has any questions, be sure to press star 1 on your telephone keypad. Our next question comes from the line of Ken Mastermaker with Edison Group. Please proceed with your question.
spk00: Yes, thank you. I have several questions. First, you mentioned Ukraine and developments there. Can you share with us your thoughts on how investors should view or interpret the impact on SIGA of all that's going on with the situation you know, in the developmental work on the smallpox antiviral issues.
spk03: Thanks, Ken. I appreciate the question. And as I said, I think we're waiting to see broadly how it shapes out. I think there'll certainly be a little disruption in the short term. But it's a reminder that nation states certainly can have actions that aren't anticipated and do surprise folks in thinking about what threats are out there and when they may happen. One of the things I did mention as well is that in February there was a translated press report of Russia updating the status of their smallpox antiviral drug. That's something that they had been developing over the years that had been reported in the WHO biannual Varela working group meeting where scientists from around the world talk about research and development they're doing on products that might be able to mitigate the impact of a smallpox attack. It targets the same T37 protein as our drug. It is a different drug, but they certainly focused on development and announced in December of 2021 that they finished the clinical trials. So it's a reminder that many countries worry about these threats and want to make sure that they have products to mitigate it. So I think that's an important reminder for our potential customers in Europe, Middle East, and Asia. that this is a threat that most large countries take seriously. So I appreciate the question.
spk00: Sure. Thank you. You know, switching gears, you know, Europe definitely seems like it's an area that is going to be good for future expansion. Can you give us some color on the next steps in terms of, you know, getting contract awards and things like that? Yeah, absolutely.
spk03: So there's a number of conversations that go on with customers, especially in Europe, It involves talking to the public health and military folks around the need. They then go to what typically is some type of governance body that determines what products they're going to buy. And then it follows into a procurement process with funding, obviously, having to precede that. So there's a series of conversations that happen. Each country has its own process on how those steps are implemented. But the helpful thing has been EMA's approval. It's helped us have broader discussions to be able to advance those.
spk00: Great, great. And one last question. When do you expect that a new procurement contract with S&S would replace that current BARDA contract you have now?
spk03: Yeah, so we are in discussions and we've started talking to the U.S. government about that. From a pragmatic standpoint, we talked about And it's always helpful to have forcing functions with the government to make sure that we have clear deadlines. And the force of a function for us is the BARDA 19C contract in three years will have exercised all its options and resupplied. So certainly that's a forcing function that we need to get it done before then. But we're focused on getting it done certainly as soon as we can. Post-COVID, there's been some reorganization within the ASPR, within the U.S. government does that. They just named a permanent head. of the strategic national stockpile. So that's something that needed to get put in place. So we'll have the organization to be able to talk to. And so we'll be focusing on those conversations. The reality is, as I said, there were no expiries this year. So the probability of us being able to do a lot of deliveries this calendar year is not high, but we will continue to push to get options exercised in advance and deliver products on a more consistent basis, but it is going to be a process, Ken, that we'll go through to be able to do that. Great.
spk00: Thank you. That's all the questions I have. Thank you for your time.
spk04: And our next question comes from the line of Teddy Green with Seager Technologies. Please proceed with your question.
spk06: Hey, Phil and Dan, I am not with Seager Technologies, but I am a private investor. That was a surprise. Yeah. All right. That was a good quarter. Let's get right to it. I have some questions. Let's talk about the Canadian orders for this year. I heard you say, and if you could just repeat that for me, in regards to the Department of Defense, you're expecting how much product delivered in 22? Dan, I'll let you.
spk03: provide that? I can go back to the comment that you have in front of you, Dan.
spk05: Yes, certainly. So the Department of Defense, the Canadian Department of Defense, we're looking at 4,000 courses, which is a value of about $4 million. And then there's the public health component of Canada, and that value we're looking, we're targeting is $12 million.
spk06: Yeah, I... Yeah, I was looking at that. Actually, I'm on the Canadian website right now looking at the Public Health Agency of Canada. And it looks like they're going to complete the firm year, the firm year three for 7,400 courses. And then they obviously, in January, they requested another $5.5 million worth of product. So it looks like they've increased the actual total contract value to 22.752. So do you confirm the way that I'm reading that? So the firm year three will be delivered of 7,400 and then another roughly 5,900 courses to make it a total of 22.7 total contract value now. And that'll be delivered spread out through 22?
spk05: Yeah, so exactly. And I would say we'll do it as soon as possible. So I would anticipate one delivery to Public Health Canada and another delivery to the military, and hopefully we can efficiently do it around the same time period for both of them. But you're correct in that essentially what you're seeing is those are the two deliveries we're targeting is what you just specified. And then when you talked about the total contract value, that sort of, I mean, take the amounts we talked about for this year as well as the amounts we've delivered in 2020 and 2021, that gets you to that total. There are still some amounts left over that are options. So what they're putting on that paper or that posting is really the firm commitments. There's options also behind that, too.
spk03: yeah right i mean that's why it was increased because there's a little they're moving into a little bit of the option at least that phac is correct right and teddy i i did want to provide a little color on the posting i know you've tracked those and we had we you've asked about that previously so they did post on the website um which entered into a conversation for us about when we can deliver and i i wanted to provide a little more color around a new jurisdiction. So we got Health Canada approval late last year. One of the series of challenges we had with supply chain, and I won't bore everyone with all the challenges we had, was simply getting paper for labels that go on drug packaging and that area. It's one of the reasons we very much thank PCI Pharma Services, our packager, because they did a lot of work to be able to do that. And our new Canadian packaging actually is different than U.S. packaging because it includes both English and French language. So the labels have to be bigger. We have to do a different packaging configuration. So when Canada ordered, we have to have a conversation with them about when we will have the material, the package. They obviously have constraints about when deliveries can happen, given fiscal years, et cetera. So it is a conversation. So I wouldn't want someone to think when it comes out on the Canadian website, that's a signed sealed order that is already gone down the system, is actually a conversation that happens about how we can deliver. And we've provided the update on what we expect this year, working very closely with them. They're great partners to work with, but did want to add that because I know you've had that question about what those websites actually mean as they're updated.
spk06: Okay, great. I appreciate that, Collar. So, Dan, I guess back to you. So are you – how should I model for deliveries? You said the delivery for Department of Defense – And then the initial delivery, I mean, it could be broken down for PHAC of maybe roughly $6.9 million if they deliver the $7,400 from the firm year three. Can we expect that in this first quarter? Should I look at it for the second quarter? Do you have, like, a decent feel for that?
spk05: Yeah, we don't give specific guidance on that, but... Look, I think the way to look at it is that the fact that it was posted indicates that we are actively working on that, and we have been building inventory. Now, the thing to keep in mind is we did get approval in Canada recently, and so with the approval, there are some extra steps when we're actually delivering approved product in Canada versus when it was not approved in Canada. So there's some extra steps that we're going to work through. But we are working on doing this as soon as possible. And, you know, the fact that it's been posted indicates that, you know, we're making good progress on that.
spk06: Right. And also just looking at the inventory that you carry on the balance sheet also, I'm assuming that that product is, you know, it's ready. I mean, you want to deliver this as soon as you can, right?
spk05: Yeah, we really try to be. I mean, we view it as both beneficial to the client in terms of being responsive and also beneficial to us financially. So I think everyone's aligned in terms of doing it as soon as possible.
spk06: Okay. And then, Dan, another question for you. Operating expenses for 2022, how should we look at them? Should it be similar to what you reported for 2021? you know, on a quarterly basis? I mean, it could be lumpy, obviously, depending on when product is delivered. But are you looking at kind of a similar amount for operating expenses for 22?
spk05: Yeah, on expenses and generally, we don't give guidance on it. Historically, we've been very good at maintaining a pretty efficient level. I would hold back on commenting on it in terms of We are in an inflationary environment, and it's early in the year. So in terms of actual numbers, I would hold off on it. I will say, though, that the way we're built is that we're very focused in terms of what types of investments we make in terms of infrastructure, and we don't expect material changes to the infrastructure. But we will have to navigate what we see as – what a lot of companies see as that it is an environment where costs are increasing at a faster rate than before.
spk06: I appreciate it. I understand where you're coming from, and fair enough. Okay, Phil, a little clarity on the 19C contract. The way that I understand it and looking at delivery schedules with the original 11C contract, we have $300 million worth of product remaining on the 19C contract. Is that correct?
spk07: Yes.
spk06: Okay. And so can you just clarify again to me, my understanding is that you did deliver product in 2015, 373,000 courses at 1,200 milligrams, which would expire this year. Am I off on that?
spk03: So I described it as when the product was manufactured. So you are correct. We did make deliveries in 2015, but they were manufactured the year, they were manufactured the year previously. So what I updated on the call was the expiration schedule and there were no, there were no expiration seven years after 2015.
spk06: Okay. So then they need to replenish still because to me the action is, that BARDA has shown is that they want to exactly maintain a proper stockpile of TPOCs. So they do need to replenish over the next two years and that's also in the 10K of the company that you do have expiring product that has to be replenished. I should be looking for a delivery this year and a delivery next year of oral. I'm not talking about IV.
spk03: Is that correct? There is expiries over the next three years. What I was saying was we do not anticipate expires this year, but there are substantial ones next year. And so we will work to get those deliveries as soon as possible so we don't have to do a huge amount in a very short amount of time. It would be much easier to be able to spread those out. But the reality is it's not this year. So I can't say there's a forcing function for the government to absolutely have to do that.
spk06: Okay. So then it would just be a mass, a double the amount the following year is what you're saying.
spk03: It's over two years. I'm sorry, over three years from today. So the expiries are in 23 and 24 that happened. So I do want to say that there's there that's over a two year period after this year. Okay.
spk06: Would it make sense? Go ahead.
spk05: Teddy, maybe to help out is that what we have said is that in the 10K is that over the next three years, we expect expirations of 940,000 courses. And on the call, we just said that there's not expirations in 2022. So in essence, in 2023 and 2024, that's where those expirations will be concentrated.
spk06: Okay now does it make sense to lobby the SNS harder to kind of smooth out the expiration or the shelf life expiration of the product so to have some delivered this year?
spk03: Absolutely that's a key focus for us and something that we always push on which is that we want to be able to smooth out we want to be able to provide product in a more consistent way, and we also want to have longer lead times so that we're able to actually do that in partnership with them. So, yes, that's absolutely a focus for us.
spk06: Okay. And then you said you will be delivering IV product this year, and this will be final drug product, correct? That's correct. Okay. And you said around 18,000 courses of that? That's correct. Okay. And the course for IV runs roughly, is that $400 a course?
spk03: Yeah, if you do the math on the order, that's about what it runs. And it's broken up, as I think we're alluding to, into bulk drug substance, which we had already delivered on previously, and then the final drug product. I do want to point out on the order that we have this year, the base contract 19C, which is what we're delivering under has a initial order of 20,000 courses. We'll be delivering 18,000 courses. In our initial campaign with Papillon, they had a batch failure that was unrelated to TPOC. It was a facility issue that popped up. So we will top up that remainder of the 20,000 courses as we go back into manufacturing on the next production schedule for the intravenous product, which we've obviously worked with Barta on to make sure that they're okay with that. it's much more efficient to do it in a longer campaign than to try and go in and get one more batch done.
spk06: Right, right. And the bulk drugs substance that you had already provided under the base contract, that was like, what, $3.2 million, I think, but it was deferred revenue, correct?
spk05: Correct, yes.
spk06: Okay. Okay. And so once the final drug product, is delivered, that will be deferred revenue until you actually get FDA approval? Is that how I should look at it?
spk05: No, for this, it would be revenue. Okay. In the prior contract, the old contract, we had that deferral until approval because of conditions within the contract. We don't have the same conditions in the current contract. Okay, excellent. So the revenue will be recognized upon delivery.
spk06: Okay, great. Okay. And then one final question. I see a lot of cash on the balance sheet and a lot more that's going to be coming on. And so I heard you say that, you know, obviously we have a second buyback going on. You've talked about potential acquisitions. Have you discussed with the board of directors of dividend policy to return cash to the shareholders?
spk03: So we absolutely look at all potential uses of cash. We think about share buybacks. We think about dividends. We think about acquisitions. So there's always a broad discussion of all the options that are out there. So absolutely.
spk06: Okay. And I mean, I've never really heard you talk about it. I always hear you say about buyback and then a potential possible acquisition and stuff like that. So yeah, Is that something that you are actively or are you more focused on an accretive acquisition, which I still think is obviously with the decline in the biotech sector, maybe things are more attractive, but it's still an extremely competitive environment to find an accretive acquisition. So I'm just curious to understand how, how the company is looking at a potential dividend policy. Is that something on the back burner or is it not? Is it as important as looking at an accretive acquisition? Because the cash is ours. I mean, we're the shareholders that own this company, correct?
spk03: Yes, Steady, the shareholders certainly own the company. And I would say we look at all of those options and have continuing discussions about it. I would also agree with your comment on accretive acquisitions. They certainly are difficult to identify. And as I've said several times on these calls, we don't want to set some artificial targets that we're going to absolutely do an acquisition because we're going to have to be opportunistic about it. I do think we've had a very robust share buyback program. As we've said, we've repurchased quite a number of shares over the past couple of years, including 10% of the shares. And certainly we will continue to look at ways to return cash to shareholders and create shareholder value. So your point's very well taken. We certainly think about all of those types of strategies and we'll continue to do so. I do think we want to have the optionality to be able to do all of those things. So we're not rushing into one strategy to the next. We've had a share buyback program. We've been very active in it as we updated today and we'll continue to look at all those options. So absolutely.
spk06: Okay. And then actually just it kind of triggered me when you said about the buyback. Does the company look to get more aggressive? Because, I mean, look, I definitely feel a lot of frustration watching the stock price of this company come down as we generate more cash from the 19C contract, which means the enterprise value has dropped while the fundamentals improve on the business model. Um, that's very frustrating, uh, for me. And I, and I'm, you know, the hope outside my control is you shared my frustration with that. And because of that, with, with the stock price so depressed here, um, you know, how does, how does the company, and I know this, I might not get an answer, but, but is the company proactive? So if the price comes down a lot, can you be more aggressive? Can you search out? I know that, you know, the, just on basic open market stuff, you can only be a percentage of it. Has the company actively gone out to find out if there are people who want to sell and bid them for their stock?
spk03: So as you allude to, Teddy, there's a lot of rules around share buybacks and how those programs progress. We certainly, as I said, have had a robust share buyback program over the past couple of years, and we're open to all options and ways to ensure that we maximize our opportunities around that share buyback program. And then lastly, I'd go back to our objectives for how we continue to build this business. We certainly have put cash on the balance sheet, but I think it's also important to talk about getting that predictability of our earnings. As I talk to potential new shareholders and shareholders are here, that's really a theme of how do we Think about the cash flows. We have very lumpy cash flows now. It's an opaque process when a government makes a decision on that as we start to get more predictability. I think that'll certainly help people understand the tremendous power of this platform to be able to provide value both to our customers who get a very important product as well as our shareholders. And then I think the ultimate solution. Other one that people are looking for clarity on ultimately is international sales. And that's an area where, as we've said, there isn't a roadmap. You can't go out and say, what are the five other products like key pots that have been sold to governments? What was the timeline? What's the market penetration? What are those sales? And I think we're on a path where we're looking to get data points and clarity on how we can size and give some predictability to what the international market size will be. So, I do think that'll help people understand, again, the power and the growth in our company and how we're able to work and deliver value to our customers and our shareholders. So I appreciate the question. I really do and think it's something that our team works on on a daily basis to make sure we continue to build the value of both what the company is delivering on financially and how that message can be continually evolved to ensure people understand the power that this platform has. So appreciate the questions.
spk06: Okay, thank you very much.
spk04: And we have reached the end of the question and answer session, and I'll turn the call back over to Phil Gomez for closing remarks.
spk03: So I'd like to thank everybody for joining today. It really was a tremendous year last year for SIGA. It was also during a pandemic. We had a lot of people working remotely. I'd like to specifically thank Dennis Ruby and his team in the regulatory group that got us the approvals in Health Canada and Europe, Toby Vulcan, who's our Chief Supply Chain Officer, and Dan, and the rest of the team spent a lot of time ensuring we found ways to get product delivered and continue to execute on the plans that we had last year to meet our objectives.
spk02: So I appreciate everybody joining today. Please have a great day. Thanks.
spk04: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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