Full Press Release Details
Phone: (410) 269-2610
PHARMATHENE REPORTS YEAR-END 2012
FINANCIAL AND OPERATIONAL RESULTS
Year-End 2012 Highlights
ANNAPOLIS, MD - March 13, 2013
- PharmAthene, Inc. (NYSE MKT: PIP), a biodefense company developing medical countermeasures against biological and
chemical threats, today reported its financial and operational results for the year ended December 31,
"During the year, the Delaware Court
of Chancery issued its final order and judgment awarding PharmAthene a significant economic interest in SIGA's smallpox antiviral
therapeutic, Arestvyr (formerly known as ST-246 )," said Eric I. Richman, President and Chief Executive
Officer. "This represented a major victory for our Company, which, if upheld by the Delaware Supreme Court, should enable
us to accelerate our profitability and generate enhanced value for PharmAthene shareholders near-term. Oral arguments on the appeal
were held in Delaware Supreme Court in January 2013 and we look forward to the Court's ruling."
"We also made important technical
progress in our next generation recombinant bioscavenger (rBChE) program and are poised to begin pharmacokinetic and non-clinical
efficacy testing in the coming months. In recognition of this progress, last year the Department of Defense exercised its option
under our current contract to accelerate funding for the rBChE program," said Mr. Richman. "Regarding our SparVax
anthrax vaccine program, we received notification from the Food and Drug Administration (FDA) that our proposed Phase II clinical
study of SparVax was being placed on clinical hold pending the provision of additional data and information to
the FDA. We have since provided some supporting data to the FDA, and are in the process of finalizing a complete response to be
submitted as soon as practicable."
Linda L. Chang, Senior Vice President and
Chief Financial Officer, commented, "In 2012 we set an aggressive goal of reducing our monthly cash usage to further optimize
our government contracting biodefense business model. We successfully met this goal while securing additional funding of $7.5 million
through a credit facility provided by GE Capital. These achievements, along with our ongoing efforts, will continue to ensure we
have the flexibility to capably manage our expenses and capital requirements in 2013."
Year-End 2012 Financial Results
For the year ended December 31, 2012, PharmAthene
recognized revenue of $25.2 million, compared to $24.3 million in 2011. Revenue in 2012 was derived primarily from development
contracts with the U.S. government for the Company's biodefense product candidates.
Revenue for the SparVax program
increased in 2012 to approximately $22.9 million, compared to $19.3 million in 2011. Revenue in 2012 was primarily attributable
to the achievement of several contract milestones, including the completion of Final Drug Product manufacture, progress in the
development of bioanalytical and analytical assays, and the execution of non-clinical studies.
Revenue for the rBChE bioscavenger program
in 2012 was approximately $1.8 million, compared to $0.7 million in 2011, corresponding with significant technical progress achieved
during the year. On July 31, 2012 the Department of Defense exercised a $2.5 million option to continue to fund the rBChE program
under its 2011 fixed price contract.
Revenue for the Valortim
program in 2012 was $0.5 million, compared to $3.7 million in 2011 as a result of the completion of the 2007 NIAID contract for
Valortim in the first quarter of 2012.
Research and development expenses in 2012
were $19.5 million, compared to $21.2 million in 2011. Research and development expenses decreased primarily as a result of a reduction
in the Company's indirect operating expenses and direct costs for the Valortim program, partially offset
by higher direct SparVax program expenses.
Expenses associated with general and administrative
functions decreased to $11.6 million from $14.3 million for the years ended December 31, 2012 and 2011, respectively. The
decrease in general and administrative expense in 2012 was primarily the result of a reduction in legal and other general and administrative
expenses, partially offset by a one-time insurance recovery.
For the year ended December 31, 2012, PharmAthene's
net loss was $4.9 million, or $0.10 per share, compared to a net loss of $3.8 million, or $0.08 per share, for the year ended December
31, 2011. The increase in net loss primarily consists of a reduction in other income/expenses of $6.4 million associated with the
change in the fair value of the Company's derivative instruments, offset by a decrease in operating expenses of $4.5 million.
Cash and Accounts Receivable
31, 2012, the Company had cash and cash equivalents, restricted cash, and U.S. government accounts receivable and unbilled accounts
receivable totaling approximately $19.2 million, compared to $18.8 million as of December 31, 2011. The year-over-year difference
was primarily a result of cash used in operations, offset by funding provided under a term loan and revolving line of credit with
GE Capital, which was completed in the first quarter of 2012.
Call and Webcast Information
management will be hosting a conference call to discuss the Company's year-end 2012 financial and operational results. The
call is scheduled to begin at 4:30 pm Eastern Time on Wednesday, March 13, 2013 and is expected to last approximately 30 minutes.
The dial-in number within the United States is 866-788-0544. The dial-in number for international callers is 857-350-1682. The
participant passcode is 83184036.
A replay of the conference call will be
available beginning at approximately 7:30 pm Eastern Time on March 13, 2013 until approximately 11:59 p.m. Eastern Time on April
15, 2013. The dial-in number to access the replay from within the United States is 888-286-8010. For international callers, the
dial-in number is 617-801-6888. The participant passcode is 32565324.
The conference call will also be webcast
and can be accessed from the Company's website at www.PharmAthene.com. A link to the webcast may be found under the Investor
Relations section of the website.
PharmAthene was formed to meet the critical needs of the United
States and its allies by developing and commercializing medical countermeasures against biological and chemical threats. PharmAthene's
lead product development programs include:
In addition, pursuant to a final judgment
issued May 31, 2012 from the Delaware Court of Chancery, PharmAthene is entitled to 50% of all net profits related to the sale
of SIGA Technologies' Arestvyr and related products for 10 years following initial commercial sale of the drug once
SIGA earns the first $40 million in net profits (as defined in the Court's final judgment) from the sale of Arestvyr
and related products. Arestvyr is a novel smallpox antiviral agent being developed by SIGA for the treatment and prevention
of morbidity and mortality associated with exposure to the causative agent of smallpox. SIGA filed an appeal of the final judgment,
which was argued before the Delaware Supreme Court in January 2013. For more information about PharmAthene, please visit www.PharmAthene.com.
Statement on Cautionary Factors
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.
PharmAthene disclaims any intent or obligation to update these forward-looking statements other than as required by law. Risks
and uncertainties include risk associated with our interest in Arestvyr , the reliability of the results of the studies relating
to human safety and possible adverse effects resulting from the administration of the Company's product candidates, unexpected
funding delays and/or reductions or elimination of U.S. government funding for one or more of the Company's development programs,
the award of government contracts to our competitors, unforeseen safety issues, challenges related to the development, scale-up,
technology transfer, and/or process validation of manufacturing processes for our product candidates, unexpected determinations
that these product candidates prove not to be effective and/or capable of being marketed as products, as well as 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 (the "SEC"). In particular, there is significant uncertainty
regarding the level and timing of sales of Arestvyr and when and whether it will be approved by the U.S. FDA and corresponding
health agencies around the world. We cannot predict with certainty if or when SIGA will begin recognizing profit on the sale thereof
and there can be no assurance that any profits received by SIGA and paid to us will be significant. Furthermore, SIGA has filed