Ron Perelman Gives Siga A Boost
Ronald Perelman is getting into biowarfare defense. Through his investment vehicle MacAndrews & Forbes and TransTech Pharma (controlled by MacAndrews), Perelman will invest $10 million in Siga Technologies (SIGA ), a tiny biotech that is developing oral drugs to prevent and treat diseases, including smallpox and anthrax. The investment, which Siga shareholders have to approve, will give Perelman a 45% stake. Siga rose from 2 on Oct. 6 to 2.32 on Oct. 8 -- when the Perelman news broke. It hit 2.64 on Oct. 14 and is now 2.23.
Peter Cardillo of Global Partners Securities, which owns shares, says this link gives Siga a big boost. He figures the stock will hit 5 in 3 to 6 months. "We will act fast in producing and commercializing biowarfare drugs, which Big Pharma has paid little attention to," says Donald Drapkin, Perelman's top lieutenant and vice- chairman of MacAndrews & Forbes. Drapkin figures Siga's first drug will be out in 18 to 24 months. Last year, the U.S. military granted $1.6 million to Siga to develop a smallpox drug. Siga and TransTech are already working jointly on SARS. Siga was featured in this column on Dec. 23, when it was trading at 1.65.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial