) is not for the weak of heart. But it could become a key player in biowarfare defense. The stock's recent rise from 1 to 1.65 reflects the role of Siga, led by Chief Scientific Officer Dennis Hruby, in developing a smallpox antiviral drug. Until now, there has been no effective treatment for smallpox, and the vaccines available have serious side effects. Hruby heads a Siga-Oregon State University group working on a remedy. Its research has captured the interest of the U.S. military, which has granted $1.6 million to Siga to develop a smallpox drug, say sources close to the situation.Hruby wouldn't comment on a military contract. But Siga's animal testing will begin early next year, and a drug could be approved in two years. The Army's aim is to develop compounds that will attack an enzyme that spreads smallpox. Peter Cardillo of Global Partners Securities, who rates the stock a "speculative buy," says Siga has identified two key smallpox proteinases--and is designing inhibitors for an antiviral drug in pill form. Cardillo has a 12-month price target of 4 to 5.
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