SIGA Technologies, Inc. v. PharmAthene, Inc.

As SIGA (defendant) faced financial difficulty developing an antiviral smallpox drug, it agreed with PharmAthene (plaintiff) to pursue a merger and accepted a bridge loan, with both the merger and loan agreements incorporating a negotiated license-agreement term sheet (LATS) guaranteeing PharmAthene a license if the merger fell through; once government grants dramatically increased the drug's value, SIGA abandoned the merger and offered PharmAthene a final license far less favorable than the LATS terms. The trial court found the LATS was a type II preliminary agreement to negotiate in good faith, that a final agreement matching the LATS terms would have resulted but for SIGA's bad-faith negotiations, and awarded PharmAthene promissory-estoppel damages.