Full Press Release Details
Phone: (410) 269-2610
PHARMATHENE REPORTS FIRST QUARTER 2013
FINANCIAL AND OPERATIONAL RESULTS
ANNAPOLIS, MD - May 8, 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 first quarter of 2013.
"We made steady progress in our biodefense
programs this quarter," said Eric I. Richman, President and Chief Executive Officer. "We submitted to the U.S. Food
and Drug Administration (FDA) our complete response to the SparVax clinical hold notification and look forward
to moving ahead soon."
"Regarding our chemical and nerve
agent bioscavenger program, testing conducted by the U.S. Army Research Institute for Chemical Defense showed that our recombinant
bioscavenger successfully targets and binds to a broad spectrum of nerve agents, including sarin and tabun. These agents are believed
to be part of the Syrian chemical weapons inventory. If successful, we believe that our recombinant bioscavenger could provide
a more cost-effective solution to address the threat of chemical weapons."
Linda L. Chang, Senior Vice President and
Chief Financial Officer, commented, "We are off to a good start in 2013 meeting our financial objectives, including achieving
neutral to slightly positive cash flow in the first quarter. For the year, we anticipate relatively low cash usage overall, consistent
with the capital-efficient nature of our government contracting business model."
Additionally, oral arguments on the appeal
of the May 2012 Delaware Court of Chancery final order and judgment, awarding PharmAthene a significant economic interest in SIGA
Technologies' smallpox antiviral, Arestvyr , were heard in the Delaware Supreme Court in the first quarter. The Company
anticipates a ruling by the Supreme Court on the appeal could occur by the end of the second quarter.
First Quarter 2013 Financial Results
For the first quarter of 2013, PharmAthene
recognized revenue of $6.5 million, compared to $6.1 million for the same period in 2012. Revenue in the first quarter of 2013
was derived from development contracts with the U.S. government for the Company's biodefense product candidates.
Revenue for the SparVax program
in the first quarter of 2013 was $5.1 million compared to $5.2 million in the first quarter of 2012. Revenue for the rBChE bioscavenger
program in the first quarter of 2013 was approximately $1.4 million compared to $0.8 million for the same period in 2012.
Research and development expenses were
$5.2 million in the first quarter of 2013, compared to $4.7 million in the first quarter of 2012. Research and development expenses
increased as a result of increased costs related to the SparVax and rBChE bioscavenger programs.
Expenses associated with general and administrative
functions were $2.3 million in the first quarter of 2013 compared to $2.9 million in the first quarter of 2012. The decrease in
general and administrative expenses in the first quarter was due primarily to reduced labor costs and professional and consulting
For the first quarter of 2013, PharmAthene's
net loss was $2.1 million, or $0.04 per share, compared to a net loss of $2.7 million, or $0.06 per share during the same period
in 2012. The decrease in net loss is primarily due to increased revenue and lower overall operating expenses.
Cash, Cash Equivalents and Accounts
As of March 31, 2013, the Company had cash
and cash equivalents totaling approximately $12.9 million, compared to $12.7 million as of December 31, 2012. U.S. government billed
and unbilled accounts receivable totaled approximately $5.6 million at March 31, 2013 compared to $6.5 million at December 31,
2012. The sum total of cash and cash equivalents and U.S. government accounts receivable at March 31, 2013 was approximately $18.5
million, compared to $19.2 million as of December 31, 2012.
Conference Call and Webcast Information
PharmAthene management will be hosting
a conference call to discuss the Company's first quarter 2013 financial and operational results. The call is scheduled to
begin at 4:30 pm Eastern Time on Wednesday, May 8, 2013 and is expected to last approximately 30 minutes. The dial-in number within
the United States is 866-515-2915. The dial-in number for international callers is 617-399-5129. The participant passcode
A replay of the conference call will be
available beginning at approximately 6:30 pm Eastern Time on May 8, 2013 until approximately 11:59 p.m. Eastern Time on June 7,
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 70157811.
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 current biodefense portfolio includes the following product candidates:
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 (as defined in the Court's final judgment) over 10 years from
all sales of SIGA Technologies' Arestvyr , 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 Arestvyr . Both parties have appealed aspects of this ruling
to the Delaware Supreme Court, 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
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 all of our product
candidates. 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, 2013 (Unaudited) | December 31, 2012 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 12,873,411 | $ | 12,701,517 | ||||
| Accounts receivable (billed) | 1,865,916 | 2,432,641 | ||||||
| Unbilled accounts receivable | 3,713,797 | 4,114,442 | ||||||
| Prepaid expenses and other current assets | 614,388 | 547,245 | ||||||
| Total current assets | 19,067,512 | 19,795,845 | ||||||
| Property and equipment, net | 456,842 | 483,976 | ||||||
| Other long-term assets and deferred costs | 99,578 | 113,130 | ||||||
| Goodwill | 2,348,453 | 2,348,453 | ||||||
| Total assets | $ | 21,972,385 | $ | 22,741,404 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,289,627 | $ | 1,697,280 | ||||
| Accrued expenses and other liabilities | 3,294,315 | 2,328,877 | ||||||
| Deferred revenue | 874,404 | 1,381,755 | ||||||
| Current portion of long-term debt | 999,996 | 749,997 | ||||||
| Short-term debt | 1,329,233 | 1,330,507 | ||||||
| Total current liabilities | 7,787,575 | 7,488,416 | ||||||
| Other long-term liabilities | 580,238 | 579,427 | ||||||
| Long-term debt, less current portion | 1,460,417 | 1,704,108 | ||||||
| Derivative instruments | 2,201,390 | 1,295,613 | ||||||
| Total liabilities | 12,029,620 | 11,067,564 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.0001 par value; 100,000,000 shares authorized; 48,416,483 and 48,352,651 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively | 4,842 | 4,835 | ||||||
| Additional paid-in-capital | 210,877,892 | 210,495,905 | ||||||
| Accumulated other comprehensive loss | (219,012 | ) | (217,328 | ) | ||||
| Accumulated deficit | (200,720,957 | ) | (198,609,572 | ) | ||||
| Total stockholders' equity | 9,942,765 | 11,673,840 | ||||||
| Total liabilities and stockholders' equity | $ | 21,972,385 | $ | 22,741,404 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
| Three months ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| Contract revenue | $ | 6,475,138 | $ | 6,149,052 | ||||
| Operating expenses: | ||||||||
| Research and development | 5,233,475 | 4,705,357 | ||||||
| General and administrative | 2,279,795 | 2,948,481 | ||||||
| Depreciation and amortization | 52,602 | 85,910 | ||||||
| Total operating expenses | 7,565,872 | 7,739,748 | ||||||
| Loss from operations | (1,090,734 | ) | (1,590,696 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 783 | 2,988 | ||||||
| Interest expense | (99,791 | ) | (3,028 | ) | ||||
| Other income (expense) | (6,123 | ) | 52,915 | |||||
| Change in fair value of derivative instruments | (905,777 | ) | (991,662 | ) | ||||
| Total other income (expense) | (1,010,908 | ) | (938,787 | ) | ||||
| Net loss before income taxes | (2,101,642 | ) | (2,529,483 | ) | ||||
| Income tax expense | (9,743 | ) | (150,405 | ) | ||||
| Net loss | $ | (2,111,385 | ) | $ | (2,679,888 | ) | ||
| Basic and diluted net loss per share | $ | (0.04 | ) | $ | (0.06 | ) | ||
| Weighted average shares used in calculation of basic and diluted net loss per share | 48,359,181 | 48,269,894 |