SIGA Technologies - Business strength intact, timing risk overdone

Following a strong H125, driven by c $85m in TPOXX deliveries, H225 was expectedly softer, which we view as a function of SIGA's inherently lumpy procurement-driven model rather than any deterioration in fundamentals. Q425 revenue of $3.8m primarily comprised R&D reimbursement ($1.6m) and supportive services ($2.2m), while higher opex reflected increased spending on the pediatric label expansion following initiation of the Phase I study. Importantly, the FY26 order book has improved with a new $13m international order from a repeat Asia-Pacific customer, which we expect to be delivered fully within FY26, alongside the remaining $26.5m in IV TPOXX deliveries. With $155.0m in cash and no debt at end-FY25 SIGA remains well capitalized to weather short-term headwinds and execute its growth plans. While we have lowered our valuation to $12.29/share (from $14.57) to reflect timing uncertainty around the next US TPOXX contract, we view the recent share price sell-off as overdone and a potential entry point.

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