PORTLAND, Ore. (AP) -- A biotech company with laboratories in Corvallis has been awarded a $55 million federal contract to expand its work on a treatment for smallpox.

The contract is the largest to date for Siga Technologies Inc., and brings the total government investment in its smallpox program to $86.5 million, the Gazette-Times newspaper reported.

The money comes from the Biomedical Advance Research and Development Authority, with the contract administered by the National Institutes of Health.

The New York City-based company employs about 50 people at its Corvallis laboratories. It has been working on a smallpox treatment for several years in partnership with the government, which consider the disease a potential terrorist threat.

Besides cash funding, Siga has received access to secure Defense Department labs to test its lead drug candidate, a pill called ST-246.

"We've got several (potential) customers here in the U.S.," said Dennis Hruby, the company's chief scientific officer. "The major customer is the U.S. government, for stockpiling for public health. We anticipate a second sale to the Department of Defense, for the troops."

Siga anticipates sales in Europe, and may also be able to market the product to major American hospitals.

Siga has gone through monkey trials and preliminary human trials with ST-246 and is proceeding toward an application for approval from the Food and Drug Administration. The latest contract will allow Siga to expand its work on ST-246 to produce a preventative form of the drug as well as an intravenous formulation that can be injected into people unable to tolerate the capsules.

"We're just getting ready to do pivotal safety trials in humans at the end of this year," Hruby said. "That should be the final human test before we go for FDA approval."