Lurie denied that she had spoken with or written to Rose regarding the contract, saying such contact would have been inappropriate.
But in a subsequent statement, an HHS spokeswoman acknowledged Lurie's letter to Rose, saying it "reflects the critical importance of the potential procurement to national security."
Representatives of Siga, speaking on the condition they not be identified, said the new drug has been effective in animal testing and that the company is being paid a price commensurate with its value.
Neither the HHS spokeswoman nor the Siga representatives would disclose the agreed-upon profit margin or the per-treatment price. Siga has cited terms of the contract in its public financial statements — but without those financial details.
Worst-case scenarios
Worrying about worst-case scenarios is what biodefense planners do. In the case of smallpox, millions of Americans have no immunity because the vaccination of civilians ended in 1972. And there is no way to guarantee that a rogue regime such as North Korea is not holding smallpox.
Nonetheless, no such threat has been verified. The Bush administration suspected Saddam Hussein of possessing smallpox and other biological weapons, but inspectors did not find any after the U.S. invaded Iraq in 2003.
Still, pressure to move quickly and spend more has helped shape U.S. biodefense policy since the Sept. 11, 2001, terrorist attacks and the anthrax mailings that fall.
Investors such as Perelman saw opportunity. In 2003, Perelman, through his holding company MacAndrews & Forbes Holdings Inc., invested heavily in Siga and installed a team of executives to run it.
The move seemed prescient when Bush, in June 2004, signed Project BioShield, a 10-year, $5.6-billion initiative to fund the development and stockpiling of medications to counter bioterrorism.
Two months later, Siga purchased the rights to what became known as ST-246 and other assets from a Pennsylvania company, ViroPharma Inc., for $1 million in cash and 1 million shares of Siga's common stock. Over the next three years, the National Institute of Allergy and Infectious Diseases awarded Siga two research grants and a related contract, worth a total of $23.5 million, to develop the new drug.
From the outset, there was only one potential customer: the U.S. government.
For Siga, the stakes were high. ST-246 was its most promising experimental compound.
From 2005 through September, the company has paid three lobbying firms $800,000 to represent its interests in Washington, public records show. Disclosures filed by the lobbyists said they focused on Project BioShield and "issues related to homeland security and HHS," along with "government procurement of vaccines."
Siga representatives told The Times that the company had lobbied only "generally" for biodefense spending, adding: "Neither Siga nor anyone else on Siga's behalf ever lobbied anyone to get this contract."
Perelman and others at Siga's affiliate, MacAndrews & Forbes, have long been major political donors. They gave a total of $607,550 to federal campaigns for the 2008 and 2010 elections, according to records compiled by the Center for Responsive Politics. About 65% of that money went to Democrats. Perelman donated an additional $50,000 to President Obama's inauguration.
A spokeswoman for Perelman said his contributions reflected nothing more than "his right as a citizen to support candidates he believes in."
From December 2007 to January of this year, Rose, Siga's chief executive, served on the U.S. National Biodefense Science Board, which has advised Lurie on how to respond to biological terrorism and other potential health emergencies. (Rose was appointed during the Bush administration.)
In June 2010, Siga further heightened its presence in Washington by naming to its board Andrew Stern, former head of the Service Employees International Union and a frequent visitor to the Obama White House. The union is a wellspring of campaign money and volunteers for Democratic candidates.
On Oct. 13, 2010, Siga announced that the government intended to award it a contract for ST-246 worth as much as $2.8 billion. Within days, Siga's stock price soared. In its year-end financial statement, the company said:
