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 risk 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 filing with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K, where the year ended December 31, 2021, and its subsequent reports on Form 10-Q and Form 8-K. I would now like to hand the conference over to Mr. Phil Gomez.

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. With $61 million of international sales this quarter, spread over 12 international customers, SIGA's third quarter financial results continue a trend of substantial financial diversification at SIGA. In combination with the first sales of the intravenous formulation of TPOX, IV TPOX, in the first quarter, of 2022 and the first sale of oral TPOX to the U.S. Department of Defense in the second quarter of 2022, the sale of oral TPOX or TicaveraMAT to 12 international customers in the third quarter of 2022 highlights the continuing and substantial diversification of CIGA's revenue base. Importantly, I would like to note that the new procurement order in August for approximately $26 million of IV TPOX by BARDA and the new DOD procurement contract award in September for up to approximately $11 million of oral TPOCs highlight how diversification can lay the groundwork for future revenues. In total, we have received approximately $115 million of firm commitment procurement orders for TPOCs this year, a portion of which will be recognized as revenue in 2023. Overall, we believe the expanded number of customers and recent repeat order activity by the DOD emphasizes the growing recognition by government of the overall importance of health security preparedness, and that by increasing both the scale and scope of TPOC stockpiling, countries can be better prepared for the outbreak risks of smallpox, monkeypox, and other viruses in the orthopoxvirus family. We believe that broadened procurement of TPOCs is being driven by a combination of trends that have been in place for a while, as well as by activity in connection with the current monkeypox outbreak. With respect to the monkeypox outbreak, in which there have been approximately 77,000 global cases and 28,000 U.S. cases since May, the outbreak is shining a light on the importance of TPOCs, given that TPOCs has been used to compassionately treat approximately 4,000 monkeypox cases in the U.S. and many cases internationally, and approximately 10 clinical trials have been launched or are planned to be launched in the near term, all of which will study the use of TPOX for monkeypox, and half of which are randomized placebo-controlled trials. With regard to the randomized placebo-controlled trials, two of the trials are sponsored by the National Institute of Allergy and Infectious Diseases, or NIAID, and the other one is funded by the National Institute for Healthcare and Research in the UK, the NIHR. Among the NIAID trials, one study is U.S.-based, and the other study, which is being done in collaboration with INRB, is based in the Democratic Republic of Congo. The U.S.-based study seeks to enroll more than 500 participants and will include an open-label arm, and the DRC-based trial seeks to enroll more than 450 participants. The NIHR's UK-based study seeks to recruit at least 500 participants. Randomized placebo-controlled trials, such as the three trials just mentioned, are important because they could provide required data that could be used in any submission with the US FDA for an approved monkeypox label for TPOX. The other trials mentioned at the beginning of this discussion will be observational in nature, also providing important information. All of the trials that have started are at the early stages of enrollment with some of the active trials opening trial sites on a staggered basis. The timing and the ultimate number of participants of the trials will depend on the path of the monkeypox outbreak and the general speed of enrollment. Hence, the timing and the likely ultimate enrollment levels of the trials, especially the randomized placebo-controlled trials, is currently unknown. In turn, this means the timing and likely composition of an FDA submission for monkeypox labeled for TPOX is also currently unknown. Despite the variability of the specific path of the monkeypox outbreak, we do believe there are some things related to the outbreak that offer a degree of clarity when viewed with a long-term perspective. For instance, we believe that monkeypox will have a continuing global impact going forward. While the short-term path of the monkeypox outbreak is uncertain, what we have seen and learned to date indicates there's a meaningful high probability that the United States and other countries across the world will have to deal with monkeypox cases in future years. It is just unknown as to the ultimate magnitude of the cases, the scope of the cases across different communities, and whether case levels become consistent or whether case levels come and go periodically. We believe that in most scenarios, there will be a need for TPOCs, and at least some of the scenarios could lead to significant sales of TPOCs. Over the coming years, the ultimate amount of TPOCs U.S. sales related to monkeypox will be impacted by case levels, obviously. Additionally, labeling of TPOX for monkeypox likely will also materially impact future US sales in connection with monkeypox treatment. As a reminder, the FDA has indicated that it wants efficacy data in the treatment of monkeypox for full approval of TPOX in the US for the monkeypox indication. Moving to a tangential topic, I'd like to spend a few minutes discussing our initiative to get a PEP label for TPOX. that a post-exposure prophylaxis or PEP label for TPOCs could be an important catalyst for U.S. sales growth in the coming years in the context of supporting an expansion of the U.S. strategic stockpile. With respect to PEP, as a reminder, we are working with our DOD colleagues on executing two clinical trials needed to support regulatory approval of TPOCs for post-exposure prophylaxis. For the expanded safety study, we have set up nine clinical sites around the U.S., and such sites began dosing in the middle of the second quarter of this year. Enrollment continues to be strong. The majority of the study has been enrolled, and enrollment is on track to be completed within the next 90 days at the current rate of compliance and activity. For the TPLOX plus GIDEOs immunogenicity trial, we have two sites recruiting and screening volunteers. As a reminder, this trial started in early 2022, and enrollment got off to a slow start. This was due in part to post-COVID vaccine hesitancy in the U.S., among other factors. In coordination with the DOD, we made protocol adjustments and other adjustments so as to normalize the speed of enrollment. In light of the adjustments, as well as the impact of the monkeypox outbreak, enrollment has been running at a substantial rate. If the current rate of activity continues, we expect that enrollment will be complete in the fourth quarter. Thus, in recap, the goal is to have all the volunteers in both studies complete the active phase within the next 90 days. If the studies show the expected results, we would commence assembly activities for package requesting regulatory approval of TPOCs for PEP. At this point, I'd like to hand the call over to Dan for the financial update.

Thanks, Phil. For the three and nine months ended September 30th, 2022, CEGA's revenue was approximately $72 million and $99 million, respectively. For the third quarter, Approximately $61 million of revenue relates to international sales of oral TPOCs to 12 customers, of which 10 are new customers. The quarter also includes approximately $4 million of oral TPOC sales to the U.S. Department of Defense, and the remainder mostly relates to research and development activities. For the nine months ended September 30th, approximately $66 million of revenue relates to international oral TPOC sales. Approximately $7 million of revenue relates to sales of rural TPOCs to the U.S. Department of Defense. Approximately $7 million of revenue relates to sales of IV TPOCs to the U.S. government. And the remainder mostly relates to research and development activities. Operating income, which excludes interest income, taxes, and adjustments to the fair value of the warrant, was approximately $43 million for the three months ended September 30, 2022. For the nine months ended September 30th, operating income was approximately $45 million. Net income for the three months ended September 30th, 2022 was approximately $43 million. For the nine months ended September 30th, net income was approximately $45 million. In turn, fully diluted income per share for the three months ended September 30th was 45 cents per share And for the nine months ended September 30th, fully diluted income per share was $0.47. At September 30th, 2022, the cash balance for the company was approximately $110 million. This concludes the financial update. At this point, I'll turn the call back to Phil.