Full Press Release Details
Phone: (410) 269-2610
PHARMATHENE REPORTS FIRST QUARTER 2012
ANNAPOLIS, MD - May 8, 2012
- PharmAthene, Inc. (NYSE Amex: PIP), a biodefense company developing medical countermeasures against biological and
chemical threats, today reported its financial results for the first quarter ended March 31, 2012.
Eric I. Richman, President and Chief Executive
Officer, commented, "We are off to a great start in 2012 in regards to accomplishing our strategic objectives and meeting
our financial goals. We are excited to continue our clinical evaluation of SparVax and are moving forward with plans to
begin a Phase II clinical trial of SparVax later this year. And, while we achieved positive cash flow from operations for
the quarter, we also bolstered our financial position by securing a $7.5 million financing from GE Capital,
Healthcare Financial Services, which further enhances our balance sheet and extends our cash runway into 2013, when we anticipate
achieving final resolution of the litigation with SIGA Technologies."
"With respect to the SIGA litigation,
we are currently awaiting final judgment from the Delaware Court of Chancery regarding its September 2011 decision to award PharmAthene
a significant stake in SIGA's smallpox antiviral, ST-246," Mr. Richman continued. "SIGA has said it expects to
begin delivery of ST-246 under its $433 million contract with the U.S. Government in the first quarter of 2013."
First Quarter 2012 Financial Results
For the first quarter ended March 31, 2012,
PharmAthene recognized revenue of $6.1 million, compared to $6.3 million for the same period in 2011. Revenue in the first quarter
of 2012 was primarily from development contracts with the U.S. government for the Company's SparVax and rBChE bioscavenger
Research and development expenses for the
three months ended March 31, 2012 were $4.7 million, compared to $5.8 million for the same period in 2011. Research and development
expenses decreased during the current period primarily as a result of the completion of the 2007 NIAID contract for Valortim
and a reduction in manufacturing-related activities under the SparVax program.
Expenses associated with general and administrative
functions were $2.9 million for the three months ended March 31, 2012 and $4.9 million for the same period in 2011. The decrease
in general and administrative expense in the first quarter of 2012 was attributable to decreased legal expenses primarily related
to the SIGA litigation of approximately $1.6 million, compared to the same period in 2011, as well as implementation of cost-cutting
initiatives identified as part of the Company's operational review.
For the first quarter of 2012, PharmAthene's
net loss attributable to common shareholders was $2.7 million, or $0.06 per share, compared to $2.1 million, or $0.04 per share,
in the same period of 2011. Included in the net loss for the quarter ended March 31, 2012, was $1.0 million of non-cash expense
related to the change in fair value of warrants outstanding, compared to a $2.5 million non-cash gain included in net loss for
the same period in 2011.
Cash Position and Accounts Receivables
As of March 31, 2012, the Company had cash
and cash equivalents and U.S. government billed and unbilled accounts receivables totaling approximately $20.7 million, compared
to $18.7 million at December 31, 2011. Cash increased from $11.2 million at the end of 2011 to $15.3 million at March 31,
2012 due to the effect of $0.8 million in positive cash flow from operations and $3.4 million in financing from GE Capital, Healthcare
Conference Call and Webcast Information
PharmAthene management will be hosting
a conference call to discuss the Company's first quarter 2012 financial and operational results. The call is scheduled to
begin at 4:30 pm Eastern Time on Tuesday, May 8, 2012 and is expected to last approximately 30 minutes. The dial-in number within
the United States is 866-804-6928. The dial-in number for international callers is 857-350-1674. The participant passcode is 17854610.
A replay of the conference call will be
available beginning at approximately 6:30 pm Eastern Time on May 8, 2012 until approximately 11:59 p.m. Eastern Time on June 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 65466037.
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
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 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 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
plan 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 ST-246 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 when SIGA will commence delivering any
product or 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 publicly stated it intends to appeal the Court of Chancery decision, and
there can be no assurances that the decision will not be reversed or that the remedy will not otherwise be modified. In addition,
to the extent that there is an appeal, we cannot predict how long that will delay the receipt of payments, if any, from SIGA. Further,
significant additional non-clinical animal studies, human clinical trials, and manufacturing development work remain to be completed
for SparVax , Valortim and our rBChE products. Copies of PharmAthene's public disclosure filings are available
from its investor relations department and our website under the investor relations tab at www.PharmAthene.com.
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2012 (Unaudited) | 2011 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 15,304,189 | $ | 11,236,771 | ||||
| Accounts receivable (billed) | 1,146,380 | 4,424,442 | ||||||
| Unbilled accounts receivable | 4,276,075 | 3,021,208 | ||||||
| Prepaid expenses and other current assets | 802,080 | 830,585 | ||||||
| Restricted cash | - | 100,000 | ||||||
| Total current assets | 21,528,724 | 19,613,006 | ||||||
| Property and equipment, net | 701,982 | 788,666 | ||||||
| Other long term assets and deferred costs | 174,525 | 53,384 | ||||||
| Goodwill | 2,348,453 | 2,348,453 | ||||||
| Total assets | $ | 24,753,684 | $ | 22,803,509 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,410,516 | $ | 1,445,700 | ||||
| Accrued expenses and other liabilities | 2,850,072 | 3,169,642 | ||||||
| Current portion of long term debt | 195,412 | - | ||||||
| Short term debt | 857,808 | - | ||||||
| Total current liabilities | 5,313,808 | 4,615,342 | ||||||
| Other long term liabilities | 555,983 | 449,709 | ||||||
| Long term debt, less current portion | 2,234,712 | - | ||||||
| Derivative instruments | 2,878,314 | 1,886,652 | ||||||
| Total liabilities | 10,982,817 | 6,951,703 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.0001 par value; 100,000,000 shares authorized; 48,314,510 and 48,236,172 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively | 4,832 | 4,824 | ||||||
| Additional paid-in-capital | 209,111,489 | 208,525,917 | ||||||
| Accumulated other comprehensive income | 1,023,891 | 1,010,522 | ||||||
| Accumulated deficit | (196,369,345 | ) | (193,689,457 | ) | ||||
| Total stockholders' equity | 13,770,867 | 15,851,806 | ||||||
| Total liabilities and stockholders' equity | $ | 24,753,684 | $ | 22,803,509 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
| Three months ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenue | $ | 6,149,052 | $ | 6,337,722 | ||||
| Operating expenses: | ||||||||
| Research and development | 4,705,357 | 5,820,374 | ||||||
| General and administrative | 2,948,481 | 4,939,654 | ||||||
| Depreciation and amortization | 85,910 | 117,629 | ||||||
| Total operating expenses | 7,739,748 | 10,877,657 | ||||||
| Loss from operations | (1,590,696 | ) | (4,539,935 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 2,988 | 3,154 | ||||||
| Interest expense | (3,028 | ) | (15,435 | ) | ||||
| Other income (expense) | 52,915 | (11,906 | ) | |||||
| Change in fair value of derivative instruments | (991,662 | ) | 2,488,465 | |||||
| Total other income (expense) | (938,787 | ) | 2,464,278 | |||||
| Net loss before income taxes | (2,529,483 | ) | (2,075,657 | ) | ||||
| Income tax expense | (150,405 | ) | - | |||||
| Net loss | $ | (2,679,888 | ) | $ | (2,075,657 | ) | ||
| Basic and diluted net loss per share | $ | (0.06 | ) | $ | (0.04 | ) | ||
| Weighted average shares used in calculation of basic and diluted net loss per share | 48,269,894 | 46,276,874 |