Stacey Jurchison PharmAthene, Inc. Phone: (410) 269-2610 Stacey.Jurchison@PharmAthene.com PHARMATHENE REPORTS SECOND QUARTER 2012 FINANCIAL RESULTS Recent Highlights PharmAthene plans to co

Phone: (410) 269-2610

PHARMATHENE REPORTS SECOND QUARTER 2012

ANNAPOLIS, MD - August 7, 2012

- PharmAthene, Inc. (NYSE Amex: PIP), a biodefense company developing medical countermeasures against biological and

chemical threats, today reported its financial results for the second quarter ended June 30, 2012.

"We continued to make progress toward

meeting our financial and business objectives in the second quarter," commented Eric I. Richman, President and Chief Executive

Officer. "During the quarter, work on our SparVax program continued as planned, and pending final consent

from the U.S. Food and Drug Administration, we hope to commence a Phase II clinical trial of SparVax later this

year. Also, we were pleased to receive a final judgment from the Delaware Court of Chancery on May 31, 2012. The Court reaffirmed

that PharmAthene would receive a 50% share of net profits on SIGA's smallpox antiviral, ST-246 , and provided

additional clarity on the payment process. The Court also awarded us $2.4 million plus interest to cover a portion of our legal

fees and expert witness and other costs."

Linda L. Chang, Senior Vice President and

Chief Financial Officer, remarked, "Current operating expenses decreased approximately $1.7 million, or 18%, during the quarter,

reflecting the benefits of a more streamlined organization. At this point we remain on track to achieve our stated objective of

reducing our cash burn this year."

Second Quarter 2012 Financial Results

For the second quarter ended June 30, 2012,

PharmAthene recognized revenue of $6.3 million, compared to $6.4 million for the same period in 2011. Revenue in the second 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

second quarter ended June 30, 2012 were $4.9 million, compared to $6.0 million for the same period in 2011. Research and development

expenses decreased during the second quarter primarily as a result of a reduction in non-government funded internal research and

development activities along with decreased costs for the Company's Valortim program.

Expenses associated with general and administrative

functions were $2.8 million for the three months ended June 30, 2012, an 18% reduction from $3.4 million for the same period in

2011. The decrease in general and administrative expense in the second quarter of 2012 was attributable to a more streamlined operation

and reduced legal and professional fees during the current period.

For the second quarter of 2012, PharmAthene's

net loss attributable to common shareholders was $0.8 million, or $0.02 per share, compared to $2.4 million, or $0.05 per share,

in the same period of 2011. Included in the net loss for the quarter ended June 30, 2012, was a $0.8 million non-cash gain related

to the change in fair value of derivative instruments, compared to a $0.7 million non-cash gain included in net loss for the same

Cash Position and Accounts Receivables

As of June 30, 2012, the Company had cash

and cash equivalents and U.S. government billed and unbilled accounts receivables totaling approximately $20.0 million, compared

to $18.7 million at December 31, 2011. The increase in cash from December 31, 2011 to June 30, 2012 was primarily a result of the

term loan with GE Capital, partially offset by cash used in operations.

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:

In addition, pursuant to a final judgment

issued May 31, 2012 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

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. 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 ST-246 , 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 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 filed an appeal with the Delaware Supreme Court challenging aspects

of 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, we cannot predict how long the appeal 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

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS