SIGA Technologies Inc. (SIGA) Q1 2020 Earnings Call Transcript

SIGA Technologies Inc. (SIGA -1.14%)
Q1 2020 Earnings Call
May 06, 2020, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Welcome to the SIGA business update call. [Operator instructions] Before we turn the call over to SIGA management, please note that any forward-looking statements made during this call are based on management's current expectations and observations and are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. For a discussion of factors that could cause results to differ, please see the company's filings with the Securities and Exchange Commission including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2019, and its subsequent reports on Form 10-Q and Form 8-K. I will now turn the conference over to Phil Gomez, chief executive officer of SIGA.

You may begin.

Phil Gomez -- Chief Executive Officer

Thank you for taking the time to join today's call. Today, I'm joined by Dan Luckshire, our CFO; and Dr. Dennis Hruby, our chief scientific officer. We're pleased to have this opportunity to provide a business update.

On this call, Dan will be providing an update of our Q1 financial results, recent orders for TPOXX from the Canadian military in BARDA and expectations related to these orders. Dennis will then provide an update on our postexposure prophylaxis program for TPOXX, other R&D activities and targeted regulatory submissions for TPOXX. Before I hand the call over to our CFO, Dan Luckshire, I would like to provide an update on SIGA and the impact of the COVID-19 pandemic on our business. The global pandemic of COVID-19 has reminded all of us how devastating a highly contagious infectious disease can be to both human lives, how we live and the economy.

Our thoughts are with so many that have been dramatically impacted here in New York and around the globe by this devastating disease and with our partners in the U.S. government, who are working tirelessly to develop the tools to help bring this pandemic under control. Even more so than prior outbreaks like SARS, Ebola, Zika and MERS, it reminds us as a nation that we must prepare for pandemics as it is not a question of if, but when we may be faced with the next one. As many have pointed out including Bill Gates in a recent televised discussion, we are fortunate COVID-19 is not the most deadly pandemic we could face, as smallpox would be even more destructive with a 30% fatality rate and likely higher transmissibility.

Tools like vaccines and treatments are critical to mitigating not only the health impact of infection, but also the fear of in reaction to infection that can decimate and shut down economies. As a result of this pandemic, we believe we will see renewed focus on preparedness globally including smallpox. Operationally, at SIGA, we fortunately have not been adversely impacted in any material recept by the pandemic. All of our employees are able to perform the majority of their work remotely as we have followed local guidance from New York and Oregon for social distancing and closing offices to all but essential personnel.

Our supply chain for TPOXX continues to operate with our SIGA staff overseeing manufacture remotely as our partners have implemented policies and practices to reduce infection risk at their facilities. Currently, our manufacturing time line for deliveries under the BARDA contract have not been materially impacted. Needless to say, we will continue to monitor the situation closely. For our programs that have clinical trials such as post-marketing commitments required by FDA approval for oral TPOXX, we do anticipate potential delays due to the COVID-19 pandemic based upon adjustments that must be made to protect the safety and welfare of those subjects, clinical trial sites and their partners.

Financially, our results and expectations have not been adversely impacted by the pandemic. The orders TPOXX from the Canadian military and BARDA were recently issued on the terms we expected, although the timing was likely delayed somewhat due to the focus of government staff on COVID-19 programs and responses. We have not applied for or received any funding under the CARES Act and have sufficient cash for operations and key initiatives. We will continue to closely monitor all the pandemic-related legislation to determine if any may impact SIGA as part of our multiple U.S.

government contracts. One point I would like to emphasize is that given our financial strength and discipline, we are well positioned to weather the uncertainties of the pandemic and to pursue opportunities that we expect to arrive given the heightened focus on health security and the need for preparedness. On the international front, we do anticipate the outbreak will delay near-term discussions with international governments on the sale of TPOXX as the same organizations that would buy TPOXX are usually the organizations that are responding to COVID-19. Although it is delaying immediate discussions, we believe the pandemic will ultimately raise awareness of and highlight the importance for smallpox preparedness, and in the long term, will be a driver for additional international sales.

Finally, we are also continuing to examine new opportunities to grow our business as the U.S. government expands its response to the COVID-19 pandemic. As we have said previously, we have a strong platform at SIGA for development and stockpiling of products in partnership with the U.S. government.

And we'll opportunistically look at ways to bring assets on to our platform where they could be accretive. At this point, I'll turn the call over to Dan for financial update.

Dan Luckshire -- Chief Financial Officer

Thanks Phil. For the first quarter of 2020, SIGA's revenue was approximately $2.6 million, mostly in connection with research and development activities. Pretax operating loss for the quarter was approximately $4 million and there's a loss per diluted share of $0.11. The per share calculation includes items such as adjustments to the fair value of warrants, costs in connection with the recently retired term loan and benefit from income taxes.

We ended the quarter with approximately $77 million of cash and cash equivalents. The change in the cash and cash equivalents balance for year-end were from year-end primarily reflects the repayment of the term loan in March of this year. Subsequent to the repayment of the term loan, SIGA repurchased approximately $1 million of its common stock in open market transactions. After quarter end, in April, the company made two important announcements.

First, it announced that the Canadian Department of National Defense awarded the contract representing the first international order for oral TPOXX. Second, it was announced that BARDA had exercised procurement options under the 19C contract for the delivery of approximately 363,000 courses of oral TPOXX. With respect to the Canadian Military Contract award, the Canadian Department of National Defense or CDND, will purchase up to 15,325 courses of oral TPOXX over four years for a total value of $14.3 million. This equates to approximately $930 per course, plus minor ancillary costs.

Under the Canadian contract, there is an initial purchase of 2,500 courses for $2.3 million. These courses are expected to be delivered in the second quarter of this year. The remaining purchases under the contract are at the option of the CDND, and are expected to occur after regulatory approval of oral TPOXX in Canada. As a reminder, Meridian Medical Technologies, Inc.

is the counterparty to the contract, and SIGA is responsible for manufacture and delivery of oral TPOXX. The contract award was coordinated between SIGA and Meridian under the existing International Promotion Agreement. With regard to the BARDA exercise of procurement options under the 19C BARDA contract, SIGA will deliver approximately 363,000 courses of oral TPOXX, with a value of approximately $101 million to the U.S. government.

Consistent with expectations communicated in our last investor call in March, we expect to complete the delivery of these courses by April 2021, with deliveries to the U.S. government to start in the second quarter of this year. This concludes the financial section of the call. At this point, I will turn the call over to our chief scientific officer, Dennis Hruby, who will discuss our postexposure prophylaxis program for TPOXX, other R&D activities and targeted regulatory submissions for TPOXX.

Dennis Hruby -- Chief Scientific Officer

Thank you Dan. I appreciate this opportunity to spend a few minutes updating you on some of SIGA's ongoing development and regulatory activities. Let me start by discussing postexposure prophylaxis or PEP, for oral TPOXX. As background, in 2018 oral TPOXX was approved for the therapeutic use in patients with symptomatic smallpox.

Due to the prolonged incubation period of human smallpox which is even greater than the challenges being experienced currently with COVID-19, modeling by us and others has indicated that the greatest impact that TPOXX would have on reducing morbidity and mortality would be to use it for postexposure prophylaxis. To that end, we have received a contract from the Department of Defense, Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense through the medical CBRN defense consortium to support studies necessary for regulatory filing for an expanded PEP indication. We've already had a dialogue with the FDA and believe we have an achievable road map for PEP approval. We are currently planning for a human clinical study to test how co-administration of TPOXX together with smallpox vaccine might affect acquisition of a protective immune response.

The PEP work represents an exciting opportunity. In addition to PEP, there's other work ongoing in connection with oral TPOXX. As background, with the FDA's approval in 2018, we were tasked with four post-marketing commitments which are supported by our contract with BARDA. On this score, we're making excellent progress toward accomplishing these tasks.

First, we've established a field study protocol for collecting and analyzing data in the event TPOXX is deployed and used as smallpox patients. Second, we and our colleagues at the centers for disease control, have completed genome sequencing and drug sensitivity testing on additional previously untested strains of rival virus containing variants of the TPOXX target protein. All the variants were found to be sensitive to the drug. The final report has been submitted to the FDA for their review.

Third, we've conducted and completed in vitro analysis for potential drug-drug interactions. We're now poised to expand this analysis into a clinical study and have concurrence from the FDA on a proposed medical protocol. This trial of course is on hold until the current COVID-19 pandemic is on the wane and clinical trials can safely resume. Fourth, after demonstrating that mixing TPOXX capsule ingredients with food or drink was not adequate for dosing patients under 13 kilograms, the FDA has agreed that an alternate pediatric formulation is needed.

With that in mind, we're in the early stages of developing a powder for reconstitution for this use. We believe this program has been fully funded through the NDA by BARDA through an option exercise earlier this year. Beyond clinical work, we're also very busy on the regulatory front. First, we're preparing a marketing authorization application, MAA, submission for the European Medicines Agency, the EMA.

We have a pre-submission meeting coming up shortly. And barring any unforeseen circumstances, we anticipate submitting the completed application for review under the exceptional circumstances pathway in the second half of 2020. Second, we're preparing an extraordinary use of new drug, EU&D application for submission to Health Canada. We have executed our pre-submission meeting and are on track to submit the completed application as early as Q4 2020.

Of note, both the EMA, MAA and the Health Canada, EU&D are seeking a broader indication for use against all the human orthopoxvirus pathogens, vaccinia, cowpox, monkeypox and variola. If granted, this will allow TPOXX to treat patients infected with these agents, in particular, cowpox and monkeypox which have periodic endemic outbreaks in Europe and Africa, respectively. Third and finally, we are pushing toward the finish line with the NDA submission for the IV formulation of TPOXX. We have already received our pre-NDA CMC and pre-NDA file medical meeting feedback.

We plan on filing the IV NDA in late 2020. I'd like to note that the COVID pandemic has impacted the way we work with regulatory agencies. We've had several face-to-face meetings moved to teleconferences or written correspondences. But to date, we have not seen any impact on time line or receiving the substantive feedback that we need to continue to progress our development programs.

So in summary, the R&D group at SIGA are working hard toward expanding the utility of TPOXX for new indications and formulations and to gain approval in additional jurisdictions to allow for its eventual acquisition and use in biodefense and against emerging orthopoxvirus infectious diseases. Thanks for your attention. Back to you, Phil.

Phil Gomez -- Chief Executive Officer

Thanks, Dennis. As I mentioned in my discussion of COVID-19 impact, one area that we anticipate potential impact is clinical trials. We plan to initiate our PEP study this year, but we may have to push that out given the ongoing COVID-19 infections. Fortunately, as we have discussed previously, the U.S.

government would be able to make purchases for an expanded stockpile prior to label expansion approval by FDA for the PEP indication. In other words, we would not expect temporary delays in clinical trials to materially alter PEP discussions with the U.S. government regarding potential incremental stockpiling. In summary, we will continue to drive value for our shareholders on the operating front through delivery of oral TPOXX courses with a value of approximately $101 million to the U.S.

government by April 2021, with deliveries starting this quarter of 2020. Delivery of our initial 2,500-course TPOXX order to the Canadian military, pursuit of additional international sales with Meridian, seeking approval for label expansions for PEP and other orthopoxviruses, expanding and supporting ongoing oncology collaborations for TPOXX and leveraging our capabilities for new formulations and products. Additionally, we will continue to pursue value creation through disciplined capital management, efficient operations and strategic initiatives. On the strategic front, we believe that the government's heightened focus on health security preparedness has the potential to create attractive investment opportunities for SIGA, given our capabilities and extensive expertise working with the government on public health preparedness.

This concludes our prepared remarks, and we will now begin the Q&A session.

Questions & Answers:

Operator

[Operator instructions] And our first question is from Joaquin Horton with Raymond James. Please proceed.

Joaquin Horton -- Raymond James -- Analyst

Good afternoon guys.

Phil Gomez -- Chief Executive Officer

Good afternoon Joaquin.

Joaquin Horton -- Raymond James -- Analyst

I have a question on the exercise that you just got. And it's my understanding that there is what, three more tranches of exercise on this contract, on the 19C contract?

Phil Gomez -- Chief Executive Officer

That's correct.

Joaquin Horton -- Raymond James -- Analyst

That's correct. And will the exercise of the next option will be seamless or will you have to wait a period of time because it seems that, OK, we're finished next April, but we have to wait three months or six months before the next one is exercised?

Phil Gomez -- Chief Executive Officer

So Joaquin, thanks for the question. I appreciate that. So if you look at the way our contracts structured, as you know, there's a series of options which would be allowed to be exercised when they have the funding. Historically, we've been monitoring how these options have been exercised on other contracts.

And for the most part, the option seems to be exercised pretty close to when the company is scheduled to supply product to the stockpile. I think as most people know, it takes us quite a few months in advance to be able to make TPOXX, and we've certainly communicated to our stakeholders and the government, we would prefer to have options exercised well in advance, so we can do planning and be able to have assurance when we're ready to deliver to the stockpile, the options exercise. Having said that, historically, they've also been limited by their annual funding. And so they've had to exercise them fairly routinely.

So I'd like to think with the increased focus on pandemic preparedness, we would see options exercise sooner than close to deliveries, but we really don't have an assurance of that. So we'll be having discussions with the government continuing, but I would expect, as we said, we'll continue to deliver this tranche of product through April of next year. And we'll have to continue to monitor another option, but I suspect it will probably be around that time next year when we finish this option that we would see other options come in, but we'll certainly keep everyone posted on our investor base. Thank you, Joaquin.

Joaquin Horton -- Raymond James -- Analyst

Can I ask another one?

Phil Gomez -- Chief Executive Officer

Maybe we'll give you one more, how is that, Joaquin?

Joaquin Horton -- Raymond James -- Analyst

I appreciate that. Just one, huh? OK. Because of the current pandemic with COVID-19, our first responders are on the front lines. And so what would happen if there was a smallpox outbreak, how would we protect our first responders?

Phil Gomez -- Chief Executive Officer

So it's a great question, and I think you've hit on a very key population that during a pandemic are most at risk when an infectious agent is detected and the countermeasures are not deployed, and it's a perfect example of why postexposure prophylaxis is so critical. So in the current circumstance, our product is stockpiled by the U.S. government, and they of course have plans in the event of an outbreak to deploy the drug to be able to get out to first responders and to those that might be impacted. So certainly, the government's plans would be, first and foremost, in doing that.

I think though you're probably alluding to a more broad question which is, is the stockpile the right size and can states and first responders rely on that stockpile? And I think unfortunately, in the current pandemic, I think some first responders will probably say, there's opportunities to improve that system and perhaps have forward deployed products in local jurisdictions and especially with the first responder community. So I think the world has changed with the recognition of that. And certainly, we've been looking at how we might take advantage of that and be able to provide product to folks like that in the future. So it's a really excellent question.

And one that I think in the lessons learned from this pandemic is going to be a very important point.

Joaquin Horton -- Raymond James -- Analyst

Thank you.

Phil Gomez -- Chief Executive Officer

Thank you very Joaquin.

Operator

Our next question is from Chris Thompson with Hedge Capital. Please proceed.

Paul Saunders -- Hedge Capital -- Analyst

Hey guys. This is Paul Saunders on Chris' line. Thanks very much for doing these calls. They're really helpful.

And congrats on the options exercise. That's exciting. Just a kind of a housekeeping question on that. I noticed in the balance sheet, it looks like a good portion of that option is already manufactured in inventory.

And so just in terms of the kind of delivery cadence into the stockpile, you said going to April 2021. I mean, is there any way to accelerate that at all or is that BARDA's chosen time line?

Phil Gomez -- Chief Executive Officer

Hey Paul, thanks so much for the question. I appreciate that. And as we talked about in our last call and have put in our filings, the delivery schedule is a function of a variety of things. It's a function of our production schedule.

It is a function of the expiry schedule and the stockpile in BARDA's interest in taking. And then ultimately, it is a function of the sites being able to take products. So we've given the guidance because that is how we've worked with BARDA to be able to schedule these items. Whether that could move around, it might move here and there.

But that's the overall schedule that we have based on all the factors that I described.

Paul Saunders -- Hedge Capital -- Analyst

OK. And then just one more also, if that's OK. I did -- I thought it was great to see the DoD with the additional funding. I'm personally kind of surprised at how quickly they funded the $20 million that they've granted to you.

I mean, is that an indication that things are moving faster for you guys on your side? And kind of separately unrelated to that, as you mentioned, just with the focus on preparedness, do you see a possibility that sort of an RFP for PEP is accelerated just due to the pandemic right now?

Phil Gomez -- Chief Executive Officer

Yes. So a couple of points, and then I will turn it over to Dennis to talk about PEP. And as we talked on the last call, we're very pleased with the feedback from FDA, that we're going to focus on a vaccine study. But just to answer your question on overall preparedness.

Everyone is very focused on COVID-19 right now, so we've certainly started to have PEP discussions with leadership in the U.S. government. Those are harder to have right now. But I think one of the key drivers that we know have always colored and limited, to some extent, the stockpiles that are out there were the funding constraints.

And I think one of the things that we have seen, and I think we'll continue to see is people recognize the cost of not being prepared and that economic impact can be many, many orders of magnitude above the cost of repair. So we are certainly very pleased that the duty has found the funding to do this. We work closely with them. And we think in the long run, there's opportunity for increasing preparedness.

But I'd be -- it would not be appropriate to say that we're having those discussions right now because so many of those people including DoD, are focused on COVID-19 response. So maybe I'll hand it over to Dennis. Dennis just to talk about the PEP program and next steps on that.

Dennis Hruby -- Chief Scientific Officer

Yeah. The DoD has always been an advocate for postexposure prophylaxis, and we too, are very pleased that they now are supporting this in real time. In our conversations with the FDA, this is the same drug, the same CMC, same safety. So really, we -- all we need to show is efficacy plus or minus vaccine.

The FDA has, in fact, agreed that no more animal studies are required. So we're working hard now with DoD to come up with this protocol and move it forward. So that, in fact, if approved, the drug could be acquired for that purpose.

Paul Saunders -- Hedge Capital -- Analyst

Thanks Dennis.

Operator

[Operator instructions] Our next question is from Teddy Green, private investor.

Unknown speaker

Hi guys and congrats on where you are at the company with the first option exercise from the 19C contract. This first question I think might be directed to Dan. And Dan, it's about the revenue recognition for CLIN 0009. And we had four parts, Part A which is for the purchase of the API.

The first thing I wanted to ask was, I know that that option was exercised, but did you receive the money from BARDA for the Part A of CLIN 0009 so far?

Dan Luckshire -- Chief Financial Officer

Yes. We did receive the amount. It is recorded on the balance sheet as deferred revenue because it's connected with the other options in the product delivery. What you'll see is as we deliver product, that deferred revenue will be recorded as revenue into the income statement.

Unknown speaker

OK. And then -- great. And then for Parts B, C and D, you are going to recognize revenue, is that going to be a point in time when you actually deliver the product, that's when you'll recognize the revenue for each three parts of the first option exercise?

Dan Luckshire -- Chief Financial Officer

Yes. You're correct. And that as we deliver product, it will come across as revenues as we deliver.

Unknown speaker

OK. Great. Thank you. And then could you quantify the SG&A for 2020, the run rate, will it be similar to 2019?

Dan Luckshire -- Chief Financial Officer

Right. So the way to think about that is, one part, we have our expenses, and then we do have some offset from performing on development contracts. What happened in 2019 is we did have heightened offsets to our benefit related to prior-years 2016 and 2017. So in essence, the run rate was lower than years prior.

Years prior to that, I believe, so that the net operating expenses were more closer to the slightly less than $20 million. So I do think 2019 was slightly lower than the run rate. We've had the same infrastructure that we've had over the past years of years. So I think the way to really look at it is to get as accurate look as you really look at the trend over the past three years and take an average of that.

And probably really sort of wait -- '16 -- or '17 to '18 more so than '19.

Unknown speaker

OK. Great. Thanks for that. And I have one more question for Phil.

The first option exercise, was that fund from BioShield or from the SNS?

Phil Gomez -- Chief Executive Officer

So it was a BARDA contract, and there can be movement of dollars kind of behind the scenes, but we get an order from BARDA. Historically, products post-approval are typically funded out of the strategic national stockpile and orders pre-FDA approval are done by BARDA. But there have been many products that are kind of in a bucket like ours soon after FDA approval that BARDA and SNS work together on that. So it's a BARDA contract.

We would expect in the long term, we will be working with the SNS to establish a contract with them to supply FDA approved products. And we'll certainly continue to work on that and get that in place well before we have the options under this contract to be fully executed.

Unknown speaker

OK. And then I just have one follow-up to what you just said because obviously, yes, I'm aware of that once the product is FDA-approved, there's a product transition moving from BioShield's funds to SNS funds. And I did see that ASPR, earlier this year, had projected costs for various products being transitioned from BioShield to SNS in one of the lines with smallpox antiviral and an estimate of expense from the SNS point of view of $253 million for FY 2020 and '21. So how should we look at that compared to what you as a company are looking at?

Phil Gomez -- Chief Executive Officer

So I think you're referring, there's a document that's prepared by the overall enterprise called a multiyear budget estimate. And that is an informal kind of estimate by SNS, BARDA, a variety of folks that kind of put items in there. The nice thing about that estimate is, it's not entirely limited by the president's budget. So typically, when the president issues a budget, everyone has to kind of fall under that and not have any numbers at it.

This is closer to what's called the professional judgment budget. It changes year to year, and I won't go into all the details of it. So I would think of it as something that is a bit of a guide, but the details on it changed a lot, and there's a lot of puts and takes and things going on behind it. I think what we have said is, and I think the most important guidance is that we delivered product previously on this from 2013 to 2017.

It expires between 2020, 2024. We would expect we would have to go through this entire cycle. And have that delivered for the expiring materials. And the multiyear budget here and there will change from year to year, but it's certainly on an aggregate, we view it supports that exact guidance.

So I appreciate the question.

Dan Luckshire -- Chief Financial Officer

Yeah. And I agree with that too. I mean, it gives me confidence seeing that coming from ASPR that we should expect a pretty steady of -- action of -- exercising the options like you said from 2020 to 2025. So, OK great.

That's all I have. Thanks and goodluck again guys.

Phil Gomez -- Chief Executive Officer

Thank you.

Operator

We do have a follow-up from Paul Saunders with Hutch Capital. Please proceed.

Paul Saunders -- Hedge Capital -- Analyst

Thanks guys. Yes, I just wanted to hop in the queue. Didn't get a chance to ask Dennis any questions. So I was just hoping, Dennis, I thought I heard you mentioned, I wanted to kind of clarify that you were working with the CDC on TPOXX's potential maybe with other viruses or -- I just wanted to kind of clarify that I heard that correctly.

And ask if you could sort of expound upon that, what types of things are you working on?

Dennis Hruby -- Chief Scientific Officer

Well, we're working on a number of areas, but the most important one, what you heard was that we had a post-marketing commitment to test the efficacy of our drug against additional variola variants. And as you likely know, there's only two spots in the world where this work can be done, in Russia and at the CDC BSL4 labs. And so we are fortunate enough that we have a long-standing working relationship, and we were able to execute those experiments and complete the -- we hope, the requirement. We have some other earlier stage experiments, they're more on the research side that we're working collaboratively with them.

I'm not in a position to be able to discuss those right now.

Paul Saunders -- Hedge Capital -- Analyst

OK. Very interesting. OK. That's it.

Thanks.

Operator

We also have a follow-up from Joaquin Horton with Raymond James. Please proceed.

Joaquin Horton -- Raymond James -- Analyst

Just a quick question. How would you use your free cash flow that you will have over the next five years?

Phil Gomez -- Chief Executive Officer

Hey Joaquin, thanks for the follow-up and I'm glad you got back in. I know I cut you off at two questions, so I appreciate you getting back in. As we talked about in our remarks, we think about capital allocation in terms of long-term value creation with our shareholders. So we do have an active share buyback program.

We do look at opportunistically what's available. And I think most importantly, we're very pleased to be in a position where we have a strong balance sheet which gives us the strength to be able to look at all those options on the table, and we work closely with our board and our management team to look at the best utilization for cash and for capital allocation. With the outbreak right now, I think it's important that we continue to monitor that, but we'll continue to look at that value creation as we go forward. So thanks, Joaquin.

Joaquin Horton -- Raymond James -- Analyst

All right. Thank you.

Phil Gomez -- Chief Executive Officer

I did have, operator, just -- we did have a couple of questions that came in from folks that weren't able to join. One of the questions was, with COVID-19 outbreak, we've seen FDA try and accelerate the development of drugs in new ways to expedite their development. And the question really was, is there anything in PEP that we could take advantage of with that streamlined processes that FDA is thinking about. And in the short term, I don't think there is, Dennis and I have both talked about.

They've been very good with us around the plan for PEP development. And the one thing we're monitoring closely is whether our clinical studies might be -- have to be pushed out a little bit to start that. But as I said, I just also want to reiterate, we continue to talk to the government though about procurement under PEP. And then the -- I think we talked a little bit about this already, but one of the questions was, with the refocus on preparedness, what is the likely pace of the option exercises? And I answered that one already.

But the one thing I would point out is the options are things that have to be exercised each year as we start to get the budget into BARDA to do it. But I would also point out that that option mechanism allows them to accelerate it for whatever reason they were willing or wanted to accelerate the stockpile. So certainly, we're working with them constantly and encourage them to think about increasing preparedness for a variety of reasons. And we'll continue to monitor it.

But I think as several people pointed out, they do have a multiyear plan, and we do anticipate replenishment between '20 and '24, but we'll look for opportunities to accelerate it.

Operator

We do have one question left from Scott Sibley with Equis Group. Please proceed.

Scott Sibley -- Equis Group, LLC -- Analyst

Hey guys. How you doing? I just had a question about the repurchase. It showed you guys have bought $1 million in the 8-K during the quarter, like 200,000 shares. How is it going? Are you continuing or have you guys stopped buying back in light of the COVID-19 situation?

Phil Gomez -- Chief Executive Officer

So as we indicated in the press release and the like, we're looking at a number of factors to make decisions around share repurchase, and we'll provide updates quarterly. And those items are, do we have an option exercised? What is the share price that's out there? What is our need for cash flow? So we'll continue to look at that and then provide updates at the end of each quarter as to what those share buybacks were. So appreciate the question.

Scott Sibley -- Equis Group, LLC -- Analyst

All right. Thank you.

Operator

And that concludes our question-and-answer session. I would like to turn the conference back over to Phil for closing remarks.

Phil Gomez -- Chief Executive Officer

Thanks. I'd like to thank everyone who joined our call today, and I'd like to thank all our shareholders for their support and belief in the vision that is shared by all of us at SIGA. The entire management team is excited about our future, and we look forward to providing future updates. In the meantime, we hope that everyone stays healthy and safe during these challenging times.

Thank you again, and have a good day.

Operator

[Operator signoff]

Duration: 49 minutes

Call participants:

Phil Gomez -- Chief Executive Officer

Dan Luckshire -- Chief Financial Officer

Dennis Hruby -- Chief Scientific Officer

Joaquin Horton -- Raymond James -- Analyst

Paul Saunders -- Hedge Capital -- Analyst

Unknown speaker

Scott Sibley -- Equis Group, LLC -- Analyst

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