The US government said Wednesday it plans to award Siga Technologies (NASDSAQ:SIGA) a contract to deliver 1.7 million courses of its smallpox treatment for the Strategic National Stockpile.

The drug maker’s stock surged to a 52-week high on news that the deal could potentially generate as much as $2.8 billion. Shares were up more than 42% to a high of $12.39.

The US Department of Health and Human Services’ Biomedical Advanced Research and Development Authority will award the contract to Siga, which makes pharmaceutical agents to combat bio-warfare pathogens.

SIGA said the base contract, if finalized, is expected to generate revenues of $500 million, or as high as $2.8 billion from the entire contract if all options are exercised.

The deal is pending resolution of Siga issues related to the Small Business Administration involving a filing by rival Chimerix after learning from the health department that it was an unsuccessful bidder.

The department said it designated the proposed contract as a small business set-aside at the time of the original solicitation in March of last year.