Israeli Firm Rafa Secures Up to $257 Million US Defense Contract

Israeli pharmaceutical company Rafa Laboratories has signed a five-year framework agreement with the U.S. Department of Defense's Defense Logistics Agency (DLA) to supply automatic midazolam injectors. The contract, spanning from 2026 to 2030, has a maximum potential value of $257 million.

The agreement includes a base year and four option years. The DLA's own projection estimates cumulative purchases of approximately $82.5 million over the contract period, with a lower bound of $47.5 million. Rafa, however, believes the likelihood of exercising the option years is high, based on its experience with the client.

An initial order of about $9 million has already been received. In the first year, the DLA can increase orders up to a total of $48 million. The midazolam injectors, at a 10mg dose, are designed for rapid treatment following exposure to nerve agent chemical warfare agents.

This contract is significant for Rafa, particularly its biodefense sector, which accounted for about 37% of the company's revenue in 2025. The projected $82.5 million over five years equates to roughly $16.5 million annually, similar to the pace of a previous three-year contract with the U.S. government that concluded in 2025 and was valued at $48 million. The higher potential ceiling of $257 million represents a substantial upside if demand increases significantly.

The deal comes less than three months after Rafa went public on the Tel Aviv Stock Exchange in July, with an initial valuation of around $1.6 billion. The company had previously disclosed the DLA's call for midazolam injector supplies in its prospectus, indicating this potential contract was anticipated by investors. While the agreement provides continuity for a key business segment, the ultimate value hinges on future U.S. government needs, decisions, and budget allocations.