Welcome to the SIGA Business Update Call. Before we turn the call over to SIGA management, please note that any forward-looking statements majoring 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 materially from the forward-looking statements. SIGA does not undertake any obligation to update publicly any forward-looking statements to reflect events or change circumstances after this call. For a discussion of factors that could cause actual results to differ, please see the company's filings with Securities and Exchange Commission, including without limitation, the company's annual report on Form 10-K for the year ended December 31, 2024, and its subsequent reports on Form 10-Q and Form 8-K. With that, I will now turn the call over to Diem Nguyen, Chief Executive Officer of SIGA. Diem, please go ahead.

Good afternoon, everyone, and thank you for joining today's call and review of our business results for the fourth quarter and full-year of 2024. I am joined by Dan Luckshire, our Chief Financial Officer, and we appreciate this opportunity to provide an update to our company. After the update, we'll be happy to answer your questions. I'm pleased to share that 2024 was a year of impactful execution and strong financial performance for SIGA. In 2024, we also made considerable progress on several initiatives to drive shareholder value including: one, continuing our partnership with the U.S. government; two, advancing regulatory approvals for TPOXX; and three, cultivating strategic partnerships to expand global access to TPOXX. With product sales of $133 million, up approximately 2% from 2023, we deliver the second consecutive year of product sales growth, reinforcing the critical role that TPOXX and a comprehensive smallpox preparedness program play in strengthening national security. Additionally, our results highlight the strength of our financial position. Of the $133 million in product sales, about $80 million was generated in the fourth quarter from a diverse mix of revenue sources, led by deliveries of oral and IV TPOXX to this U.S. strategic national stockpile. This was followed by deliveries of both oral and IV TPOXX to the U.S. Department of Defense and deliveries of oral TPOXX to international markets. The latter included a notable sale in East Asia for $11 million of oral TPOXX, which is more than double the size of the largest prior individual TPOXX sale in the region. This latest international milestone follows the first sale of TPOXX in Africa in the third quarter in response to a request from the Ministry of Health in Morocco. Beyond the 2024 top-line financial results, we have taken important steps to advance our key initiatives…

Thanks, Diem. As noted earlier in the call, SIGA's product sales for this year surpassed full year sales. This represents the second straight year sales growth and a new high-water mark for annual sales since FDA approval of TPOXX in 2018. Product revenue for full year 2024 was $133 million. Of this amount, $80 million was recognized in the 3 months ended December 31, 2024. In the fourth quarter, $51 million of oral TPOXX and $9 million of IV TPOXX was delivered to the Strategic National Stockpile, or SNS. $9 million in mostly oral TPOXX and a small amount of IV TPOXX was delivered to the U.S. Department of Defense, and there was an $11 million sale to an international customer in the East Asia region. To reiterate the comment made earlier in the call, the international sale in the fourth quarter represents a milestone in that it is more than double the size of the largest prior individual TPOXX sales in the East Asia region. With respect to product sales for the full year 2024, the $133 million amount comes from a diverse mix, similar to the diversity in the fourth quarter. The revenue mix includes $74 million of oral TPOXX sales to the SNS, $26 million of IV TPOXX sales to the SNS, $10 million of oral and IV TPOXX sales to the U.S. Department of Defense and $23 million of oral TPOXX sales to 13 international customers. In addition to product-related revenues, the company also had research and development revenues. For the 3 and 12 months ended December 31, 2024, research and development revenues were $1.6 million and $5.4 million, respectively. Pretax operating income, which excludes interest income and taxes, was approximately $57 million for the three months ended December 31, 2024. For the full year 2024, pretax operating income was approximately $70 million. In comparison, there's a pretax operating income for the 3 and 12 months ended December 31, 2023, of approximately $92 million and $84 million, respectively. I would like to note that differences between pretax operating income margin in 2024 and 2023 and reflects different product mixes in those periods. Net income for the three months ended December 31, 2024, was approximately $46 million. For the 12 months ended December 31, 2024, net income was approximately $59 million. In turn, fully diluted income per share for the 3 months ended December 31, 2024, was $0.63. And for the full year 2024, fully diluted income per share was $0.82. Throughout 2024, the company continued to maintain a strong balance sheet through an abiding commitment to financial discipline. At December 31, 2024, the company had a cash balance of $155 million and no debt. Looking forward to 2025, I would like to note that we had a $70 million outstanding order balance at December 31, 2024, which we expect to deliver in 2025. This concludes the financial update. At this point, I will turn the call back to Diem.

Thank you, Dan. With that, we would like to open the call for questions.

[Operator Instructions] Your first question comes from the line of Jyoti Prakash from Edison Group. Your line is now open.

Hi, thank you for taking my questions. My first question relates to oral TPOXX deliveries. We understand that around $60 million has been delivered from the most recently exercised BARDA option. Have there been any additional deliveries in 2025 to-date? And can we expect the entire remaining order to be delivered in the first half given the expected RFP time lines with the U.S. authorities?

Thanks, Jyoti. I'll let Dan answer that question.

Yes. Thanks for the question, Jyoti. As noted in our prepared remarks, we had $70 million of outstanding orders at December 31, 2024. Most of these orders -- or these orders mostly consist of remaining deliveries of oral and IV TPOXX to the SNS under existing orders. We currently expect those deliveries to start in the second quarter based on coordination with the United States government. And we expect all $70 million of the outstanding orders to be delivered in 2025. There's one, at the very end, you mentioned the RFP. And I guess just to make sure for clarity purposes, just to highlight that the RFP process is a separate process from the delivery process under the 19C contract. And in fact, the RFP timing is not impacted by the delivery timing. I just wanted to make that clear.

Thanks a lot. That's really helpful. My second question relates to your cash position. So you ended the year with a strong cash balance of $155 million. Can we expect you to announce another special dividend this year as you've been doing every year since 2022?

So I'll also take that question, too. Before I get into the direct answer, let me just give you some background. So as a starting point, our capital management strategy is meant to be dynamic and tailored to optimize positive outcomes for our shareholders both in the short term -- balancing the short-term and the long-term. This approach has been used over the past series of years. And so with that, the timing of a special cash dividend each year, it's influenced by several factors, which we regularly review. Some of the factors include cash flow performance, capital allocation priorities, external market conditions. So there's a series of factors that we're continually reviewing. And so when you look at prior years, there's really no specific time line for when special cash dividends occur. In '22 and '23, the Board of Directors declared a special cash dividends in May, which were paid in June. And then in '24, the special cash dividend was declared in March, and it was paid in April. So there's some movement in terms of timing. So when you sort of bring all these things together, to your question, and when you take all these things into account, we currently anticipate making a capital management decision in the second quarter, which is consistent with the timing for most prior years.

Great. My next question relates to your international growth. First of all, congratulations on receiving the regulatory approval in Japan for TPOXX. Can you provide some more details in terms of your distribution agreement with Japan Biotechno Pharma? And just to follow-up on that, you made $11 million of international sales in the last quarter. Does that relate to delivery to Japan Strategic National Stockpile?

Right, right. So on the first part of the question, the terms of the distribution agreement with Japan Biotechno Pharma, or JBP, those terms have not been disclosed. What we can say though is that the distribution agreements with JBP or within other countries were different in nature than the promotion agreement we had with Meridian. And the key point here is that distribution agreements will not have the same level of fees that were paid to Meridian. It's a much more efficient model and financially better for us. On the second part of that question in terms of the $11 million international sale, right now, at this time, we're not currently disclosing that customer. As mentioned in the prepared remarks, customer is located in the East Asia area, but we're not disclosing the specific customer.

Thank you for that. I have another couple of questions. So the next one is related to the mpox opportunity. How do you see that evolving given the results from the PALM 007 and STOMP trials? We understand that there were subsets which -- subsets of patients which -- who saw good results in the PALM 007 trial. So is there any plan to adjust the design of the remaining trials to focus on these particular subset of patients?

Jyoti, thanks for that question. I'll take this one. Just an overarching concept, we are continuing to work with NIAID. They are specifically the PALM 007 and STOMP trial sponsors. We are working with them to fully analyze the clinical data, including reviewing data from certain subgroups, as you mentioned, to determine what types of patients may potentially benefit the most from tecovirimat as well as the optimal treatment regimen. Once this data analysis is complete, we will then be in a better position to determine the best path forward from both a clinical trial and regulatory perspective. I think it is important to note that while we learned a lot from these trials, they certainly had some limitations associated with the trial design. The primary objective was to provide access from a humanitarian perspective. That was particularly consistent in the PALM 007. These trials are not designed by SIGA, and they were not designed with the drug development in mind. As the result, we expressed some of the limitations associated with the mechanism of action. Antivirals generally work based on how their mechanism of action is executed. Tecovirimat's specific mechanism of action, the typical patient profile, the design of the trials, it's not unexpected these trials did not meet their primary endpoint to full resolution of all lesions. As with the case of STOMP and PALM 007, SIGA is not the sponsor of these ongoing trials, so we do not have the ability to modify the designs based on learnings with current ongoing trials. However saying that, Jyoti, we will continue to evaluate the potential benefit of tecovirimat treatment on mpox patients and then design and execute on further studies accordingly.

Great. That's super helpful. And I have one final question. What do you think of the recent funding cuts for the NIH by the Trump administration? And do you see any sort of flow-through impact on your expected RFP for TPOXX?

Thanks, Jyoti. We can only speak on behalf of SIGA. First and foremost, I would say that SIGA has a long history of collaboration with the U.S. government agencies, including through four administrations that is inclusive of Biden, Trump, Obama and Bush. And these relationships naturally evolve following changes in leadership from an administration perspective. For now, our focus remains on maintaining strong partnerships and continue to play an important role in supporting the U.S. national security and public health initiatives. Based on our experiences and conversations today, we do believe national security is of utmost importance, and it does transcend partisan politics and that the new administration is committed to maintaining a robust preparedness strategy, which does include supply of antiviral therapies to treat smallpox. Whatever transpires during this transition period, we believe we are well positioned to engage with the new ASPR as well as other senior officials on the nature and timing of the RFP for a new contract for TPOXX. At this time, any further comment would be purely speculative in nature.

Okay. Thank you so much. No further questions, and congratulations again on the strong quarter.

Thanks, Jyoti.

[Operator Instructions] Your next question comes from the line of Brian Adams from [Carter, Terry & Company] (ph). Your line is now open.

Thank you very much and great year. A couple of quick questions. On the kind of the process of reengaging with BARDA and potentially, again, blue skies, gray skies looking forward, if this were a baseball game and it's nine innings and we're reupping the contract for we all hope to be maybe a number that would be greater than the $555 million, $575 million of original contract six years ago, where do you think we stand on this? Are we in the fourth inning, fifth inning? You had kind of alluded to, ma'am, Dr. Nguyen, that would -- some kind of decision would be made this year. Would there be a COLA increase, maybe a number in the $700 million to $800 million range? That's my first question. And then secondly, the inventory that's on the book shows $49 million. What exactly is that? Is that the value of the drug on your -- that can be deployed? And I'm assuming that will meet a portion of the $70 million of the legacy contract that still needs to be filled. So those are my first two questions.

Hi, Brian, thanks for the thoughtful questions. I will target the first section and then let Dan talk you through with the inventory. First and foremost, I would start by saying that we have continued conversations with BARDA and SNS in terms of tecovirimat and its primary treatment of choice for smallpox. There is a continued re-enforcement of this importance to the U.S. government from a preparedness perspective. We have talked quite a bit about manufacturing strategies as well as potential volume. However, Brian, we have not identified a specific range of volume to-date. I can only say based on macro dynamics that we're facing in our environment today that the smallpox threat continues to increase. Now whether that be from geopolitical tensions or from naturally occurring concerns based on a vulnerable patient population that may not be vaccinated, we think that this is certainly an important time to reflect on the volume requirements. That discussion still remains to be executed or discussed. Dan?

Yes. So on the question about inventory, and it ties a little bit into what Diem was saying in that given what's happening on the geopolitical front, which is -- it keeps getting ratcheted up, but this has been something that's been building for a series of years in terms of risk. And with that, we've been trying to be proactive in terms of having products throughout the supply chain. So within that inventory balance, it does include product to be delivered on that $70 million of outstanding orders. But also, it includes a fair amount of API, so that when there are future orders, we have the ability to be responsive in a very efficient way and in a scale manner. So we are trying to be proactive, but that amount does also include cost of product to be delivered under existing orders.

Okay. And then just asking a very pointed question and not to make anybody difficult, but I want to ask this because it was a really significant company-specific situation. What is the continued, if any, fallout from Dr. Varma in regards to question from your peers or from NIH or BARDA in regards to efficacy of basically TPOXX to treat the early stages of mpox? And I mean you are and have rightfully refuted it. But has it impacted sales, I guess, from what you're hearing or seeing?

So Brian, thank you asking. I want to start by saying that we have had over a decade of a relationship with BARDA as well as SNS from a U.S. perspective. This started originally from the co-development of our product tecovirimat, where we have been incredibly transparent and collaborative in terms of our science. This has then progressed to the procurement of the stockpile of tecovirimat. Jay had been at SIGA for less than a year. In terms of his contributions, I would say that it's minimal, if not none. He was not part of the development of tecovirimat, and he certainly was not part of the clinical trial execution. So we stand by our science. We stand by the data, and so do our partners in terms of the importance of an antiviral like tecovirimat as well as the preclinical and clinical data that shows its safety, and finally, the preclinical data that demonstrates efficacy.

Okay, great. And then my final question. And I applaud you for making the deal, I guess, with Vanderbilt a few months back. But with the cash war chest that you've got, I mean, it would be my recommendation as a shareholder and a portfolio manager that you -- and you're probably already looking at this, but to build out yourselves beyond arguably one or two-trick pony, so to speak, or stable. Are there other either drugs or bioterrorism prophylaxis portfolios or drugs that you're looking at right now that you could tuck in to your portfolio that would be another source of potential revenue and/or income for you down the line?

So Brian, I would actually say that coming in to SIGA almost a year ago, one of the priorities I have is to maximize the TPOXX franchise, which includes global expansion from a registration perspective. But the second aspect is looking at potential diversification of the pipeline. You saw the active -- the degree of activity we had pursued in 2024. I'd like to continue to pursue in 2025 portfolio diversification, exactly to your point.

Thank you very much. That’s all I had. Appreciate it. Thank you very much.

Thanks, Brian.

There are no further questions at this time. I will now turn the call back to Diem. Please continue.

So I wanted to thank everybody for their time today and joining us for today's call and for your ongoing interest in SIGA. We look forward to speaking to you again in our first quarter call. Have a good rest of your evening. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.