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Siga's small pox contract is protested by a rival

Sun, 05/15/2011 - 3:17pm
CHRISTINA REXRODE - AP Business Writer - Associated Press

For Siga Technologies Inc., the weekend started with a triumphant announcement and ended with a gauntlet thrown by a rival.

Siga, a pharmaceutical company that develops medicines to fight the effects of potential bioterrorism attacks, announced Friday afternoon that it had won a contract to deliver its smallpox antiviral medicine to the government's stockpile of emergency medical supplies. Investors greeted the news enthusiastically, sending Siga's stock up $1.79, or nearly 13 percent, in after-hours trading, to $15.98.

On Sunday, Siga announced that Chimerix Inc., a developer of antiviral medicines, had filed a protest over Siga's contract. Siga, based in New York, said it would suspend its work on that particular order until further notice.

The government contract would be a boon for Siga, which hasn't turned an annual profit since its founding in the late '90s. The five-year contract would be worth at least $433 million, and up to $2.8 billion if the government chose to order more of Siga's smallpox medicine. It also represents the first government purchase of the medicine, Siga said.

The U.S. Government Accountability Office will examine the grounds of Chimerix's protest, according to Siga. Siga also said that the government agency that awarded the contract, the Biomedical Advanced Research and Development Authority, has indicated that it "intends to defend its decision" to contract with Siga.

A Chimerix spokeswoman did not return a call for comment Sunday afternoon. Officials for the Department of Health and Human Services, which oversees the BARDA program, could not immediately be reached.

There are FDA-approved vaccines for small pox, but no FDA-approved treatments. Siga said its own is on the "fast track" for approval.

Chimerix Inc., based in Research Triangle Park, N.C., said in February that it had been awarded a BARDA contract for continuing to develop its own smallpox medicine. That award was worth $25 million for the first year.

Smallpox was declared eradicated in 1980 and no longer occurs in nature, after the World Health Organization pushed for immunizations worldwide. But there is concern that the virus could be released in a bioterrorism attack. The Centers for Disease Control and Prevention keeps medical supplies stockpiled in case of flu outbreaks, natural disasters or bioterrorism attacks.

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