The current rally in the share price of SIGA Technologies Inc (OTCMKTS:SIGA) share price can be attributed to different factors: the positive information on its drug testing phase, the positive information presented in conferences by its CEO DR. Gomez or even the expected positive information from its FDA approvals in the near future.The conglomerate of these factors has led to a surge in the share price as it exhibits strong bullish signs in the market.As seen in the chart below, there has been a surge in the company’s share price in the recent past: SIGA Daily ChartThis article will review the stock, assessing its potential upside based on its strategy and financial performance. We want to bring out our view on the benefits accruing to an investor investing in this stock for either the short or long term.Having said this, it is important for us to briefly review the company for readers with rudimentary knowledge of its operations.SIGA Technologies Inc: An OverviewSIGA was formed in 1995 as a pharmaceutical company, currently based in New York city. Since then, the company has been at the forefront in research, developing solutions for lethal disease-causing pathogens such as small pox, Ebola, dengue, Lassa fever just to name a few.During this period, their successes have preceded them with most of their research proving vital in solving future crises that may occur, mostly pertaining solutions to biodefense threats.As a result of the above, the company has had strong relationships with federal agencies and academic laboratories as they harness the power of their large database to come up with more fluid and tangible solutions to the above stated problems. Key among these bodies is the Government's Biomedical Advanced Research and Development Authority (BARDA) with whom SIGA is carrying out the largest project with. In addition, they have multiple projects with other agencies to deliver specific drugs that would help prevent crises around the globe.With these in mind, we further look at the successes akin to SIGA’s story as well as their expected future growth potential.A story of success and growthOver the recent past, SIGA has made headway in their research and development, developing their novel drug: TPOXX® (tecovirimat). This is an antivirus drug targeting treatment of orthopox virus infections, including smallpox. According to the company, laboratory and animal tests suggest that SIGA’s investigational countermeasure TPOXX® blocks the ability of the virus to spread, thus preventing disease symptoms in animal models of smallpox in which TPOXX has been tested to date. Laboratory experiments also suggest that TPOXX may function without compromising acquisition of protective immunity.As a result, the company currently is working with the Biomedical Advanced Research and Development Authority (BARDA) to deliver over 2 million courses of TPOXX® to their strategic stockpile, generating significant revenue for the company.The company’s CEO, DR. Gomez has since May this year presented in two conferences on the successes of the TPOXX® drug: at the Cantor Fitzgerald Global Healthcare Conference and at the Jeffries Global Healthcare conference. This was preceded by the success in Phase I of the test of TPOXX®. The company expects further successes in future phases of the drug tests with the final aim being approval by the FDA.The above successes coupled with positive market expectations may be the reason for the surge in the price in recent weeks. The market may be anticipating a positive phase test or FDA approval, both which may have had the above-named effect on the share prices.Wallet assessmentThe company’s financial health seems to be improving over time. The past three years have seen the over $315 million company with 36 employees generate more revenues per annum as they ready themselves for growth into the future.Their revenue stream has risen from $4,599,000 to $8,687,000 to $21,282,000 in June 2015, 2016 and 2017 respectively. This is attributable to the contract they have with BARDA to deliver two million courses of TPOXX® by 2022. SIGA has maintained professionalism and stuck to deadlines to deliver required quantities of the drug over time, a move that has been financially beneficial to them.During the same period, their research and development expenditure rose from $11,288,000 to $12,848,000 and finally to $25,654,000. The company attributed this to direct vendor related activities. Moreover, their net loss reduced from $272,859,000 to $45,378,000 to $35,799,000.The above show that the company is both making headway at reducing costs while investing heavily in their future products. Given that the entity is a research-driven entity, their investment in research ventures will prove beneficial to them in the future through significant payoffs.Finally, despite the above, their cash flows from operations have been reducing over time from $19,581,000 to negative cash flows of $37,498,000 and $78,460,000 in period to June 2015/16/17. These are generally due to changes in current assets and liabilities over these periods. The management would therefore be prudent to match these changes to ensure that cash flows are generally consistent or positive given that the company is still investing in current projects.The above paints a clear picture of prosperity as well as good management of the company. Their future prospects seem good and so do the prospects akin to investors who invest in this entity.ConclusionSIGA represents one of the success stories in the market. The entity has invested heavily in a lucrative sector and is poised for success given their current financial path as well as deals with government institutions.We will be updating our subscribers as soon as we know more. For the latest updates on SIGA, sign up below!Image courtesy of HCC Public Information Office via FlickrDisclosure: We have no position in SIGA and have not been compensated for this article.
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