Thursday, May 10, 2007

Difference between SIGA and DNDN

Both got hammered the recent couple days.

The key to differentiate them is the downside risk of SIGA and DNDN.

DNDN's data is not all that great.It faces not small risk of FDA rejection, and that is the single drug DNDN has.

SIGA's ST-246 data has been superb, 100% effective, 100% safe (so far after first stage trial and in the going on second stage trial) also It cured a 2-yr boy with multiple organ failures. Given those facts, the downside risk of ST-246 not getting approved is really low.

Besides government/military don't need to wait FDA final approval to start stockpile if they see it is necessary.

Balance sheet wise, grants/government money keeps flowing into SIGA, "current cash/grant can last beyond the next 12months", there is no issue in the near future about the corporation financial crisis. They don't even need to do offering like other biopharms have to do to dilute the shares. HHS will even reimburse the clinic trial cost of ST-246 this summer. I couldn't be happier when I heard about this.

And according to this CC, they now have all IP right of ST-246 and their current pipeline, no need to worry about legal IP issues any more.

They have been smart to rely on government anti bio-weapon grants to design pipelines targetting much broader than just anti bio-weapons. Thus they have a serie of drugs in development not just ST-246(which is done) and ST-294(which is near done) and the whole platform for developing other drugs outside the area of anti-bioterrorism.

I certainly don't care too much about this upside potential, that's future money should be heavily discounted now. What I really like is the low downside risk for siga at current price for an investor thinking about longer holding time frame. So I am in for a long run.

As a rule of trading, don't catch falling knife, you never know if it is bottom, just wait patiently for it to stop falling and load when you see sign of uptrend momentum.

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