Rodman ups PharmAthene to market outperform
Rodman & Renshaw has upgraded PharmAthene (AMEX:PIP) to “market outperform,” with a new 12-month price target of $7, from “market perform,” after a Delaware court judge issued a final judgment with “favorable economics” to PharmAthene in its dispute with SIGA Technologies. Shares of PharmAthene closed at $1.56 on Friday.
Last September, the court ruled that SIGA breached its obligation with PharmAthene to negotiate in good faith for the smallpox drug, ST-246, to be used in case of a biological attack. The judge asked both parties to define their interpretation of net profits, which are to be split 50-50. Since SIGA and PharmAthene could not reach common ground, the judge made a decision for them.
Analyst Elemer Piros estimates that PharmAthene could derive more than $150 million in royalties from the initial 1.7 million-treatment course contract that is in place between defense agency BARDA and SIGA. “In our calculation, a further $965 million could be collected, if the government orders an additional 12 million courses,” he added.
SIGA has 30 days to appeal the judgment.