Delaware Chancery Court Judge Donald Parsons Jr. ruled Sept. 22 that Siga must share a possible profit of more than $400 million. Siga shares fell as much as 38 percent that day, and dropped 3.8 percent today.
Siga, which is seeking permission to re-argue the award, said in a court filing yesterday that Parsons “misapprehended both the law and the facts” in awarding a share of ST-246’s profit to PharmAthene.
Parsons said New York-based Siga breached its obligation to negotiate in good faith on the antiviral drug designed for use in case of a biological attack. He rejected PharmAthene’s claim that Siga breached a binding license agreement and also denied claims for a lump-sum award.
“There is no legal justification for the court to speculate concerning the terms on which the parties might have agreed in the ultimate negotiation,” Andre Bouchard, a lawyer for New York-based Siga, said in his motion.
“This is a common tactic employed by unsuccessful litigants, which we fully expected,” Stacey Jurchison, a spokeswoman for PharmAthene, said in an e-mailed statement. “Judge Parsons’s opinion was thorough and well-founded and PharmAthene intends to respond in opposition to the motion citing additional legal authority.”
PharmAthene sued Siga in 2006 claiming the biotechnology firm lost more than $1 billion in potential profits when its rival reneged on the licensing agreement for the smallpox drug.
Government officials awarded Siga a $433 million contract to provide ST-246 to the U.S. Department of Health and Human Services, the company said in May.
In the trial, lawyers for Siga argued that licensing talks were never completed and documents outlining proposed terms were marked as “non-binding.” A PharmAthene official said in court that the heading was left on the documents by mistake.
“There is no evidence that Siga ever offered, considered, or would have accepted a 50/50 profit split without other economic consideration,” Siga said in the filing.
Siga fell 13 cents to $3.33 at 4 p.m. New York time in Nasdaq Stock Market Trading. PharmAthene rose 14 cents, or 8.1 percent, to $1.86 in NYSE Amex trading.
The case is PharmAthene Inc. v. Siga Technologies Inc. (SIGA), CA2627, Delaware Chancery Court (Wilmington).
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