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PharmAthene Reports First Quarter 2016
Financial and Operational Results
9, 2016 - PharmAthene, Inc. (NYSE MKT: PIP), a biodefense company developing medical countermeasures against anthrax,
today reported its financial and operational results for the first quarter of 2016.
For the three months ended March
31, 2016, PharmAthene recognized revenue of $1.0 million compared to $7.1 million for the corresponding period in 2015. The Company
recognized $1.0 million during the first quarter of both 2016 and 2015 under its contract with the National Institute of Allergy
and Infectious Diseases for the development of a next generation lyophilized anthrax vaccine. During the first quarter 2015 revenues
were higher than the same quarter in 2016 as the result of a onetime contract close-out payment from the U.S. Government.
Research and development expenses in the
first quarter of 2016 were $1.0 million compared to $1.6 million for the corresponding period in 2015. The decrease was primarily
due to the Company's restructuring and the transition to the next generation anthrax program.
Expenses associated with general and administrative
functions were $1.2 million in the first quarter of 2016 compared to $2.2 million in the first quarter of 2015. The decrease resulted
from implementation of the Company's restructuring and a reduction in legal expenses.
For the first quarter of 2016, the Company's
net loss was $1.2 million, or $(0.02) per share, compared to net income of $1.5 million, or $0.02 per share, for the corresponding
Cash at the end of the first quarter of
2016 was $14.2 million compared to a cash balance of $15.6 million at the end of fiscal year 2015.
On April 8, 2016, the U.S. Bankruptcy Court
for the Southern District of New York entered an order confirming SIGA's third amended reorganization plan (the Plan), effective
April 12, 2016. On April 12, 2016 PharmAthene received a non-refundable $5 million initial payment from SIGA.
The Plan provides that no later than October 19, 2016 SIGA
will satisfy PharmAthene's judgment against it through one of the following ways:
PharmAthene's taxable income from
receipt of the SIGA judgment is expected in part to be offset by PharmAthene's net operating loss (NOLs) carryforwards. At
December 31, 2015 PharmAthene had available $156 million in NOLs. The Company is evaluating tax effects of winding down its UK
subsidiary which it believes will increase U.S. tax NOLs by an estimated $9 million to $22 million.
If SIGA pays PharmAthene cash in full and
barring any unexpected material events, PharmAthene intends to distribute at least 90% of the after tax net cash proceeds to its
shareholders. The timing and form of distribution will depend upon PharmAthene's analysis of its current situation, applicable
corporate statutes relating to distributions and the economic consequences to its shareholders.
Concurrently, PharmAthene is developing
a transition plan and strategy for operating SIGA as a separate business in the event SIGA chooses to pay the claim by turning
over 100% of its common stock to PharmAthene.
PharmAthene is a biodefense company engaged
in the development of next generation medical countermeasures against biological threats. The Company's development portfolio includes
two next generation Anthrax vaccines that are intended to improve protection while having favorable dosage and storage requirements
compared other Anthrax vaccines.
Forward-Looking Statement Disclaimer
Except for the historical information presented
herein, matters discussed may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future
results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including
statements preceded by, followed by, or that include the words "potential"; "believe"; "anticipate";
"intend"; "plan"; "expect"; "estimate"; "could"; "may"; "should";
"will"; "project"; "potential"; or similar statements are forward-looking statements. Risks and uncertainties
include risks associated with our ability to collect a money judgment from SIGA judgment; risks relating to the timing of payments,
if any, under the SIGA litigation; our ability to make distributions of a substantial portion of the cash proceeds we may receive
from SIGA; the timing, amount and form of such a distribution; our ability to develop a successful transition plan and strategy
for operating SIGA as a separate business; risks relating to our continuing ability to recognize cost reductions; funding delays
and/or reductions or elimination of U.S. government funding and/or non-renewal of expiring funding; risks associated with our NOLs;
risks associated with our shareholders ratifying the Shareholder Rights Plans; risks associated with accomplishing any future strategic
partnerships or business combinations; and other risks detailed from time to time in PharmAthene's Forms 10-K and 10-Q under the
caption "Risk Factors" and in its other reports filed with the U.S. Securities and Exchange Commission. PharmAthene disclaims
any intent or obligation to update these forward-looking statements other than as required by law.
Copies of PharmAthene's public disclosure
filings are available on our website under the investor relations tab at www.PharmAthene.com.
UNAUDITED CONDENSED CONSOLIDATED
| March 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 14,235,621 | $ | 15,569,813 | ||||
| Billed accounts receivable | 170,323 | 511,994 | ||||||
| Unbilled accounts receivable | 1,266,820 | 963,345 | ||||||
| Prepaid expenses and other current assets | 463,873 | 181,714 | ||||||
| Total current assets | 16,136,637 | 17,226,866 | ||||||
| Property and equipment, net | 196,143 | 233,694 | ||||||
| Other long-term assets and deferred costs | 53,384 | 53,384 | ||||||
| Goodwill | 2,348,453 | 2,348,453 | ||||||
| Total assets | $ | 18,734,617 | $ | 19,862,397 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 166,357 | $ | 521,122 | ||||
| Accrued expenses and other liabilities | 1,749,899 | 1,248,708 | ||||||
| Accrued restructuring expenses - current | 255,551 | 381,950 | ||||||
| Other short-term liabilities | - | 11,250 | ||||||
| Current portion of derivative instruments | 468,304 | 16,411 | ||||||
| Total current liabilities | 2,640,111 | 2,179,441 | ||||||
| Accrued restructuring expenses - long term | 43,809 | 108,641 | ||||||
| Other long-term liabilities | 424,213 | 433,407 | ||||||
| Derivative instruments, less current portion | - | 491,791 | ||||||
| Total liabilities | 3,108,133 | 3,213,280 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.0001 par value; 100,000,000 shares authorized; 64,444,725 and 64,382,086 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 6,444 | 6,438 | ||||||
| Additional paid-in-capital | 240,570,971 | 240,366,704 | ||||||
| Accumulated deficit | (224,950,931 | ) | (223,724,025 | ) | ||||
| Total stockholders' equity | 15,626,484 | 16,649,117 | ||||||
| Total liabilities and stockholders' equity | $ | 18,734,617 | $ | 19,862,397 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
| Three months ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Contract revenue | $ | 1,005,694 | $ | 7,068,746 | ||||
| Operating expenses: | ||||||||
| Research and development | 1,029,131 | 1,613,627 | ||||||
| General and administrative | 1,193,298 | 2,196,120 | ||||||
| Restructuring expense | - | 2,060,809 | ||||||
| Depreciation | 37,701 | 37,106 | ||||||
| Total operating expenses | 2,260,130 | 5,907,662 | ||||||
| (Loss) income from operations | $ | (1,254,436 | ) | $ | 1,161,084 | |||
| Other income (expense): | ||||||||
| Interest expense, net | (1,050 | ) | (25,325 | ) | ||||
| Change in fair value of derivative instruments | 39,898 | 338,245 | ||||||
| Other income | 4,119 | 9,196 | ||||||
| Total other income | 42,967 | 322,116 | ||||||
| Net (loss) income before income taxes | (1,211,469 | ) | 1,483,200 | |||||
| Income tax provision | (15,437 | ) | (19,805 | ) | ||||
| Net (loss) income | $ | (1,226,906 | ) | $ | 1,463,395 | |||
| Basic net (loss) income per share | $ | (0.02 | ) | $ | 0.02 | |||
| Diluted net (loss) income per share | $ | (0.02 | ) | $ | 0.02 | |||
| Weighted average shares used in calculation of basic net (loss) income per share | 64,404,396 | 63,633,290 | ||||||
| Weighted average shares used in calculation of diluted net (loss) income per share | 64,404,396 | 63,979,859 |