SIGA Technologies, Inc. (OTCMKTS:SIGA) Bet Starts Paying Off

The bullish nature characterized by the share prices of SIGA Technologies, Inc. (OTCMKTS:SIGA) has been monumental with the company’s share price rising by over 66% in three months to close the period at $5 per share.This followed a lot of positive information that the company has released as well as from the US government as will be discussed later.Have a look at the chart below to find out more on the price action. SIGA Daily ChartGiven the current share price action, we found it important to go through the company once more and assess any recent developments that may have led to it. This will therefore build on the previous article thus readers who have not read it can access it here.We will assess their plans to create value for the shareholder and how recent events have proved their ability to do so. Moreover, the article will explain how SIGA is similar to making a purchase in an expensive option with a very high payoff and finally a financial situation assessment will be done.A Brief Look into SIGASince inception, the New York based company has been dedicated to finding solutions to viruses that have dire consequences. These include viruses such as Ebola, smallpox among others, which are lethal by natureTheir ability to keep to their word and actually develop these viruses has had a significant impact on their relations with other players in the industry as well as their financial performance. SIGA has been working in close coordination with a significant number of major industry players over the recent past as is seen later in this piece.Given the above, they have had significant ties with federal bodies who represent their largest market. These institutions have been banking on the wealth of experience that SIGA’s employees have to develop complex solutions to very challenging diseases.The main body they are working with is the Government's Biomedical Advanced Research and Development Authority (BARDA). Moreover, the project they are also carrying out with other agencies are in a bid to ensure they prevent any global crisis that may arise.With these in mind, we can now assess how SIGA is working at growing and aligning itself within its industry.Recent DevelopmentsOver the recent past, SIGA has broken the news with their novel drug: TPOXX® (tecovirimat) which targets treatment of orthopox virus infections, including smallpox. The anti-virus has been a great success given its ability to mitigate the problems akin to small-pox when taken 72 hours after contracting the deadly virus. The above success is further accentuated by the success rate of the antivirus which stands at a near 100%.This effectiveness is way better than that of its major rival, Chimerix, has been seen to work only up to 68% of the times when ingested 48 hours into contraction of the virus with no statistically significant success thereafter.Therefore, when the government decided that they would be purchasing anti-smallpox drugs, the market knew exactly who would benefit.Source:Given the backdrop above, it is clear that the agency will be doing business with SIGA as a result of the effectiveness described above. The market has therefore been rewarding SIGA for a job well done with a surge in the share prices as seen above.As earlier described, SIGA is similar to an expensive option.Upon investment in SIGA, investors are hopeful that their investment will be used to fund research that will eventually generate huge incomes for them which is not always the case for such companies. However, in the case that they do get to get the approval of the FDA, such drugs tend to recoup their investment and grow the company significantly and long into the future.SIGA has reached the last stage of the above described process to the benefit of their shareholders. Their payoff as a result of the above will definitely be commensurate to their heavy investment in the sector and in research. Success is therefore moments away from SIGA’s door.Financial Base AnalysisThe company’s financial health seems to be improving over time. The past three years have seen the over $338 million company with 36 employees generate more revenues per annum as they ready themselves for growth into the future.Their revenues, however, have not been reflective of this. Over the past few quarters, there has been a decline in their revenue going down from $7.1 million to $5.2 million to $4.2 million over 4Q2016, 1Q2017 and 2Q2017 respectively. This has been below the industry averages which means that the company’s management will need to work much harder to ensure they are at par with other players in the industry.This, however, is during a period when the company has been working tirelessly to reduce their expenses, research and development as well as sales, general and administration costs, a move which has been working well (though not too well) for them given that their operating losses have fallen from $6.6 million to just above $4 million in the most recent quarter.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.The news has not always exactly grim all through. SIGA is cash flow positive!Over the past two quarters, the company has been making positive operating cash flows which stand at $1.5 million and $858,000 in 1Q2017 and 2Q2017 respectively. Over the second period, they chose to also invest a further $39,000 in capital expenditures which would benefit them as we move into the future.Their working capital base has been strong all through standing at over $45 million in 2017. This creates a strong financial base with which the company can invest in the future, a seemingly good future for them in our view.The above is the description of a company that has their footing in a capital-intensive sector with ample finances to do so. The numbers above are not great, however, they would prove good if rightly invested, as has generally been done, in the company’s future.ConclusionSIGA represents one of the success stories in the market. Their strong base coupled with their wealth of experience is proving vital to their growth trend and therefore their future. Investors looking to invest in the health sector would benefit from having SIGA in their portfolio.We will be updating our subscribers as soon as we know more. For the latest updates on SIGA, sign up below!For the full story, check out out complete coverage on SIGA.Disclosure: We have no position in SIGA and have not been compensated for this article.