Shares of SIGA Technologies (NASDAQ:SIGA) closed lower by more than 20% following the release of a Food and Drug Administration (FDA) update. That update stated that SIGA’s TPOXX, or tecovirimat, antiviral medication has not yet demonstrated any efficacy against monkeypox. In 2018, the FDA approved TPOXX with an indication for the treatment of smallpox. Smallpox falls with the orthopoxvirus family, like monkeypox.
The agency added that conducting “randomized, controlled trials” to understand TPOXX’s safety and efficacy in humans is “essential.”
Monkeypox has taken the U.S. by storm as cases rise across the country. On Monday, San Francisco will become the first major U.S. 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. Furthermore, San Francisco has requested 35,000 doses of the Jynneos monkeypox vaccine, which is made by Bavarian Nordic (OTCMKTS:BVNRY).
In addition, there are currently over 21,000 confirmed cases globally. Of those cases, 20,804 cases are present in countries that have historically not reported monkeypox cases.
Why Is SIGA Stock Down 23% Today?
Still, TPOXX is currently available through the Center for Disease Control and Prevention (CDC) under an FDA authority called Expanded Access. Individuals can request the medication on a case-by-case basis. The medication is available in a capsule form, with each capsule containing 200 milligrams of tecovirimat.
Back in 2018, TPOXX was approved for the treatment of smallpox in adults and children. Since smallpox was eradicated globally, TPOXX was approved under “Animal Rule” regulations. As a result, the efficacy of the drug was never tested in humans. The drug was approved for the treatment of smallpox following tests in non-human primates with monkeypox and rabbits infected with rabbitpox. Other safety data was obtained from humans who did not carry any orthopoxviruses. However, FDA approval for TPOXX as a monkeypox vaccine was not possible due to the “pathway described in the FDA’s Animal Rule regulations.”
SIGA has confirmed that it will report Q2 earnings on Aug. 4 after the market close. However, the FDA update is likely to put a damper on SIGA stock in the near term.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.