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Last week we discussed the multiple setbacks experienced by SIGA Technologies in landing a BARDA contract to supply the nation's biodefense stockpiles with ST-246, a vaccine for smallpox. The usual culprit in these setbacks has been Siga-competitor Chimerix, Inc., who on multiple occasions has filed protests in order to prevent SIGA from landing the award.

Well Chimerix has now secured some high-profile support in their campaign against SIGA.

Representative Darrell Issa, a Republican from California and Chairman of the House Oversight Committee, opened an investigation last week looking to see if the White House had any involvement in landing the BARDA contract for Siga. What looked to be political posturing at the time, has proven to be even moreso.

Specifically targeted in the investigation, was the role that investor Ron Perelman played in the contract award. With his close ties to government officials, and with his holding company owning close to 30% of SIGA stock, this contract - worth as much as two billion dollars -was set to become very lucrative for Perelman, along with SIGA and its other shareholders.

The announcement of congressional attention might not have raised eyebrows at first glance, since Washington has been looking to play a larger role in the affairs of the pharmaceutical sector - evidenced by the recent cases of congressional intervention with Avanir Pharmaceutical (AVNR) and Gilead Sciences(GILD), but a deeper look into the Issa investigation indicates that there might be more to this story than meets the eye.

The theme is: big-time conflicts-of-interest, and - it's worth asking - 'Is Representative Issa Indirectly On The Chimerix Payroll?'

Let's look first at the impact of having people in high places with blatant conflicts-of-interest on their resume. Two years ago, an FDA advisory committee voted 13-4 in favor of the safety and efficacy displayed by Dendreon's (DNDN) Provenge in treating prostate cancer. Two of the four doctors that were on the 'no' side of the argument lobbied heavily against Provenge and were looked at as key in the FDA decision to delay an approval decision for another couple of years.

The Dendreon competitor ended up a flop, so you can say the two Doctors got what karma had in store for them, but the damage was done.

In the end, Dendreon rebounded and ultimately received approval for Provenge, but the proof was in the pudding that conflicts-of-interest from those in high-profile positions can significantly derail a situation.

Here's where it gets interesting for SIGA and company:

Chimerix is represented by the firm McKenna, Long, and Aldrigde (MKA). This firm also serves as Chimerix's lobbyist in Washington, according to filed documents.

In 2009 alone, McKenna, Long, and Aldridge, spent $50,000 in lobbying contributions on behalf of Chimerix, Inc.

Over the past 10 years, McKenna, Long, & Aldridge have spent nearly a million dollars on campaign contributions on behalf of Chimerix, according to stats maintained by the 'Influence Explorer' website.

So how does this apply to Issa?

Congressman Darrell Issa (yes, the guy that opened the investigation on SIGA's contract award), has been the direct recipient of some of MKS's campaign donations.

In 2008, McKenna, Long, and Aldridge gave Darrell Issa $3,500 and, according to the Center for Responsive Politics, Issa received $2,600 from MKA during the 2010 election cycle. The pattern of MKA support to Issa is well established and documented, as Issa has accepted at least 11 contributions from MKA since 2005.

CNBC has picked up on this story, and a Wedbush analyst raised the same concerns.

In the CNBC report, an Issa spokesman stated that "These issues were not a factor in the committee asking the questions."

Sound like a company line to you? And they wonder in Washington why the people have lost faith.

Want more?

Not only is MKA acting as a lawyer and a lobbyist for Chimerix, but the firm might also be on task to provide PR. MKA has, in the past, sent out an invitation for the 'BioDefense Briefing' at the National Press Club in Washington, DC, sponsored, in part and jointly, by - you guessed it - MKA and Chimerix.

While there may be merit to questions about Perelman's association with SIGA and Washington, that doesn't mean it's ok to throw stones when your House (of Representatives) is made of paper-thin glass. And the glass walls of the Issa household look to be about as thin as the reputation of his counterpart from the East Coast, Representative Anthony Weiner.

It's my opinion that SIGA will eventually land this award - and it'll stick - if only because ST-246 is ready right now to start supplying the national stockpile, but the rest of this story can't be overlooked.

As for our politicians in Washington, are they really there to serve FOR the people, as elected BY the people?

Debate it all you want, but at the end of the day, money talks. And the evidence says that this is paid support for Chimerix by the Representative Issa.

Disclosure: No positions.

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