Just weeks after Siga Technologies ($SIGA) announced that it has been tapped as the likely winner of a $2.8 billion federal contract for a new smallpox drug, the SBA is now threatening to blow up the deal after citing the developer's close ties to billionaire Ron Perelman. The Wall Street Journal says the agency sent a letter to Siga that it is "controlled by and affiliated with" MacAndrews & Forbes--which is owned by Perelman. And the news sparked a rout on Siga's stock price, with shares plunging 23 percent.
Siga had been singled out by a newly reenergized BARDA to deliver 1.7 million courses of an antiviral for smallpox for the country's strategic stockpile. But the hefty contract is intended to go to a small company, and Siga's lead position in the race to win it quickly earned a challenge from one of its competitors.
"We notified Barda in July 2009 that Siga did not qualify for a small-business set-aside," Chimerix Chief Executive Kenneth Moch tells the WSJ, which broke the story. Siga CEO Eric Rose says in a statement that the company is "appropriately qualified" for the contract and that it intends to continue work on its oral smallpox therapy, which is being subsidized by the federal government.