SIGA Technologies Inc.

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.

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?

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.