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PHARMATHENE REPORTS YEAR-END 2011
FINANCIAL AND OPERATIONAL RESULTS
Year-End 2011 Highlights
ANNAPOLIS, MD - March 8, 2012
- PharmAthene, Inc. (NYSE Amex: 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,
"We were gratified by the favorable
ruling from the Delaware Court of Chancery in September of 2011," remarked Eric I. Richman, President and Chief Executive
Officer. "Under that ruling, the Court awarded PharmAthene the right to receive 50% of the net profits from worldwide sales
of SIGA's ST-246 smallpox antiviral therapeutic and related products over 10 years, once SIGA receives the first $40 million
in net profits. SIGA has stated publicly it anticipates deliveries of ST-246 to the government to start in the first quarter of
2013, which if achieved, will represent a near-term revenue stream for PharmAthene that allows us to accelerate our pathway to
profitability and create enhanced value for PharmAthene shareholders in the near-term."
Mr. Richman continued, "We also made
solid progress in each of our biodefense portfolio programs in 2011. We achieved important technical milestones in our SparVax
anthrax vaccine program, which included demonstration of 36 months of final product stability, completion of the technology transfer
of our manufacturing process, and manufacturing of a commercial scale cGMP production run. As a result of this progress, we are
well positioned to initiate additional Phase II clinical testing of SparVax this year."
Linda L. Chang, Senior Vice President and
Chief Financial Officer, commented, "In addition to these achievements, in late 2011 and early 2012, we took major steps
towards increasing our overall operating efficiency and reducing our net cash burn rate. Our efforts will continue in 2012,
and we expect to further reduce our monthly operating cash burn by at least 40% compared to the 2011 level, based on currently
projected activities on our contracts."
Year-End 2011 Financial Results
For the year ended December 31, 2011, PharmAthene
recognized revenue of $24.3 million, compared to $21.0 million in 2010. Revenues in 2011 were derived primarily from development
contracts with the U.S. government for the SparVax and Valortim programs.
Revenues for the SparVax program
in 2011 were $19.3 million, compared to $11.7 million in 2010, a 65% year-over-year increase. The increase in revenue was attributable
primarily to the additional work conducted for technology transfer, as well as related technical milestones achieved that totaled
$3.5 million in 2011, compared to $1.8 million in 2010.
Revenues for the Valortim
program were $3.7 million and $3.0 million in 2011 and 2010, respectively. In addition, the Company generated revenue of $0.7 million
under the $5.7 million fixed price contract awarded in 2011 from the Department of Defense for the development of an advanced expression
system for rBChE, PharmAthene's nerve agent medical countermeasure.
Research and development expenses were
essentially flat year-over-year at approximately $21.2 million in 2011, compared to $20.9 million in 2010. The year-over-year difference
in research and development expenses was due primarily to increased technical activity and the achievement of key technical milestones
in the Company's SparVax program, as well as completion of the Phase I Valortim dose escalation clinical
trial. These were offset partially by a decrease in development expenses related to the completion of the Protexia program
Expenses associated with general and administrative
functions were over 20% lower in 2011 than 2010 at approximately $14.3 million and $18.0 million for the years ended December 31,
2011 and 2010, respectively. The decrease in general and administrative expense was primarily the result of bad debt expense
recorded in 2010 and a one-time property loss insurance reimbursement in 2011 of approximately $1.4 million, which was recorded
as an offset to G&A expense and was offset partially by an increase in non-cash stock compensation expenses, taxes and other
For the year ended December 31, 2011, PharmAthene's
net loss was $3.8 million, or $0.08 per share, compared to $34.8 million, or $1.08 per share, for the year ended December 31, 2010.
The year-over-year decrease in net loss included the impact of the change in fair value of the Company's
derivative instruments, which resulted in other income of approximately $7.1 million for the year ended December 31, 2011,
compared to an expense of approximately $5.5 million for the year ended December 31, 2010. The decrease in
fair value realized as of December 31, 2011 was primarily the result of the decrease in PharmAthene's stock price from $4.23
per share on December 31, 2010 to $1.27 per share on December 31, 2011.
31, 2011, the Company had cash and cash equivalents, restricted cash, and U.S. government accounts receivables and unbilled receivables
totaling approximately $19.2 million, compared to $21.2 million as of December 31, 2010. The decrease was due primarily to a combination
of a loss from operations of $11.7 million, including $3.0 million of non cash expenses, substantially offset by net proceeds
of $5.8 million from a registered direct public offering of common stock and warrants, $1.8 million related to the sale of real
estate assets in Canada, and $1.4 million in insurance proceeds.
Conference Call and Webcast Information
PharmAthene management will be hosting
a conference call to discuss the Company's year-end 2011 financial and operational results. The call is scheduled to begin
at 4:15 pm Eastern Time on Thursday, March 8, 2012 and is expected to last approximately 30 minutes. The dial-in number within
the United States is 866-804-6920. The dial-in number for international callers is 857-350-1666. The participant passcode is 14054571.
A replay of the conference call will be
available beginning at approximately 6:30 pm Eastern Time on March 8, 2012 until approximately 11:59 p.m. Eastern Time on April
8, 2012. 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 14695588.
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.
About PharmAthene, Inc.
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 weapons. PharmAthene's
lead product development programs include:
SparVax - a second generation recombinant protective antigen (rPA) anthrax vaccine
Valortim - a fully human monoclonal antibody for the prevention and
treatment of anthrax infection
Recombinant BChE- a novel bioscavenger for the prevention and treatment of morbidity
and mortality associated with exposure to chemical nerve agents
In addition, pursuant to an opinion issued September
22, 2011 from the Delaware Court of Chancery, PharmAthene is entitled to 50% of the net profits over 10 years from all sales of
SIGA Technologies' ST-246, 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, and related products, once
SIGA receives the first $40 million in net profits from sales of ST-246. For more information about PharmAthene, please visit
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 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, challenges related to the implementation of our NYSE Amex compliance