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Why Is SIGA Technologies (SIGA) Stock Up 45% Today?

Source: luchschenF / Shutterstock.com
Today’s impressive market bounce has many investors excited once again about investing. However, for investors in SIGA Technologies (NASDAQ:SIGA) stock, it’s a day to downright celebr…

Source: luchschenF / Shutterstock.com

Today’s impressive market bounce has many investors excited once again about investing. However, for investors in SIGA Technologies (NASDAQ:SIGA) stock, it’s a day to downright celebrate.

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That’s because SIGA stock has rocketed more than 40% higher in today’s session. This move comes as the European Union (EU) announced it’s working on an agreement to help countries purchase vaccines and antiviral treatments, specifically those targeting monkeypox. SIGA is a company that happens to produce an antiviral treatment, tecovirimat, that could be used in the event of a monkeypox outbreak.

Now, everyone — investors and regulators alike — has a sour taste in their mouth from the Covid-19 outbreak. Helping align resources to defend against the next potential health problem seems like a good idea. For investors in SIGA stock, this is just the announcement many were expecting.

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That said, let’s dive into some of the details of this potential agreement and what it may mean for SIGA stock.

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SIGA Stock Soars on EU Agreement to Bolster Monkeypox Vaccines and Therapeutics

It’s worth noting that the EU is reportedly only in talks about a potential purchase agreement. Nothing is set in stone yet, so we’ll still need to wait and see how this plays out. Accordingly, there’s plenty of speculation with regard to what this agreement could entail.

Indeed, without any actual metrics to base forward-looking revenue and earnings projections on, it’s pure speculation. However, the market is doing what it does best: trying to guesstimate the impact an agreement would have on SIGA stock.

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For now, this is a useful exercise. There are strong indications that a global monkeypox outbreak could be underway. Monkeypox, typically a disease contained in central Africa, is spreading rapidly around the world. And there’s little resistance from the public on being overprepared for a potential outbreak. Thus, perhaps a deal is more likely than not to materialize.

That said, this catalyst is simply too speculative for my taste. For now, SIGA stock has a place on the watchlist. We’ll have to see if anything comes of this deal. If not, these gains today could easily evaporate in the near term.

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On the date of publication, Chris MacDonald did not have (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.

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