Source: Mongkolchon Akesin / Shutterstock.com
Shares of SIGA Technologies (NASDAQ:SIGA) closed down more than 20% following the release of an update from the Food and Drug Administration (FDA). This update stated that SIGA’s antiviral drug TPOXX, or tecovirimat, has not yet been shown to be effective against monkeypox. In 2018, the FDA approved TPOXX with an indication for the treatment of smallpox. Smallpox falls with the orthopoxvirus family, such as monkeypox.
The agency added that it was “essential” to conduct “randomized controlled trials” to understand the safety and effectiveness of TPOXX in humans.
Monkeypox has taken the United States by storm as cases rise across the country. On Monday, San Francisco will become the first major US city to declare a local health emergency due to monkeypox. The city’s public health department has confirmed 261 cases of the disease, while California has reported 799 total cases. Additionally, San Francisco requested 35,000 doses of the Jynneos monkeypox vaccine, which is manufactured by Bavarian Nordic (OTCMKTS:BVNRY).
Additionally, there are currently over 21,000 confirmed cases worldwide. Of these cases, 20,804 cases are present in countries that have historically not reported cases of monkeypox.
Why is SIGA stock down 23% today?
However, TPOXX is currently available through the Center for Disease Control and Prevention (CDC) under an FDA authority called Expanded Access. Individuals can request the drugs on a case-by-case basis. The drug is available in capsule form, with each capsule containing 200 milligrams of tecovirimat.
In 2018, TPOXX was approved for the treatment of smallpox in adults and children. Since smallpox was eradicated globally, TPOXX has been approved under Animal Rule regulations. Accordingly, the effectiveness of the drug has never been tested in humans. The drug was approved for the treatment of smallpox following testing in non-human primates with monkeypox and rabbits infected with rabbitpox. Other safety data has been obtained from humans who did not carry any orthopoxviruses. However, FDA approval of TPOXX as a monkeypox vaccine was not possible due to the “pathway outlined in FDA animal regulations”.
SIGA has confirmed that it will release its second quarter results on August 4 after market close. However, the FDA update is likely to put a damper on SIGA stock in the short term.
At the date of publication, Eddie Pan did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.