Siga shares soar as co allays concerns on government contract

Siga shares soar as co allays concerns on government contract

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(Global Markets) - Shares of Siga Technologies Inc (SIGA.O) jumped 34 percent on Friday, a day after board member Fran Townsend responded to allegations of unfair practices in the awarding of a multi-billion dollar government contract to the pharmaceutical company.

In May, Siga was awarded a $433 million contract to supply 1.7 million doses of its ST-246 smallpox drug for the strategic national stockpile by the U.S. Department of Health and Human Services.

However, in June two Congressional committees started probing allegations that Siga shareholder and financier Ron Perelman's political connections helped the company secure the deal.

"There has been a lot of political overhang on the stock because of all the news that has come out and I think the stock is up because Fran was able to address some of those issues," said Noble Financial Capital Markets analyst Nathan Cali.

In an interview with CNN on Thursday, Siga director Townsend said the contract was given in a competitive process, but rival Chimerix did not met the requirements at the time of the contract award.

Siga's ST-246 smallpox drug works by blocking the ability of the virus to spread to other cells and is seen as a protection against a potential biodefense threat.

Siga shares were up 34 percent at $2.46 on Friday on Nasdaq.

(Reporting by Anand Basu in Bangalore; Editing by Sreejiraj Eluvangal)