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Phone: (410) 269-2610
PHARMATHENE REPORTS THIRD QUARTER 2013
FINANCIAL AND OPERATIONAL RESULTS
ANNAPOLIS, MD - November 7, 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 third quarter ended September
in our next generation SparVax anthrax vaccine program continued at a steady pace in the third quarter,"
commented Eric I. Richman, President and Chief Executive Officer. "PharmAthene scientists presented new analytical and non-clinical
animal data for SparVax at two important medical meetings. The data provided further confirmation of the
immunogenicity and efficacy of SparVax and demonstrated our progress in developing a newer, more robust functional
assay for anthrax vaccine development. We are also pleased to report that we are on track to initiate the planned Phase 2 clinical
trial of SparVax , which we anticipate will begin by the end of the year."
Mr. Richman continued, "Most importantly,
during the third quarter we announced our proposed merger with Theraclone Sciences, a privately-held company with impressive monoclonal
antibody (mAb) discovery and development capabilities. Following the completion of the merger, the new company will feature vaccine
and human monoclonal antibody expertise with a focus on infectious diseases and oncology and a robust pipeline with four clinical-stage
and multiple pre-clinical and discovery product candidates targeting important, high-value government and commercial markets."
"We believe that by combining PharmAthene's
vaccine and biologics development capabilities and government contracting expertise with Theraclone's proprietary monoclonal
antibody pipeline and discovery platform, we will create a premier, commercially-focused biologics organization. As a stronger
company with increased portfolio diversification, expanded access to non-dilutive government funding, and a highly-experienced
management team, the combination of PharmAthene and Theraclone represents a significant, value-creating opportunity with the potential
to generate sustainable, long-term growth and value for PharmAthene stockholders."
Third Quarter 2013 Financial Results
For the third quarter of 2013, PharmAthene
recognized revenue of $3.5 million compared to $6.7 million for the same period in 2012. Revenue in the third quarter of 2013 was
primarily derived from development contracts with the U.S. government for the Company's biodefense product candidates. The
decrease in revenue in the third quarter of 2013 is largely attributable to the substitution or completion of specific activities
designated under the SparVax contract, as well as the postponement of certain activities arising in part from the
Food and Drug Administration (FDA) clinical hold initiated in August 2012 and subsequently lifted in May 2013.
Research and development expenses were
$2.6 million in the third quarter of 2013, compared to $5.1 million in the third quarter of 2012. The decrease in the current period
resulted primarily from reduced expenses for the SparVax program related to an overall decrease in activities under
that program in 2013.
Expenses associated with general and administrative
functions were $4.1 million in the third quarter of 2013 compared to $3.3 million in the third quarter of 2012. The increase in
general and administrative expenses in the third quarter of 2013 was due primarily to an increase in merger-related transaction
For the third quarter of 2013, PharmAthene's
net loss was $3.9 million, or $0.08 per share, compared to a net loss of $0.2 million, or $0.00 per share during the same period
in 2012. The increase in net loss is primarily due to: a change in the fair value of the Company's derivative instruments,
which was largely the result of the change in the closing market price of PharmAthene's common stock; the 2012 gain
on the realization of cumulative translation adjustment; and an increase in merger-related transaction costs in the 2013 period.
Cash, Cash Equivalents and Accounts
As of September 30, 2013, the Company had
cash and cash equivalents totaling approximately $15.9 million, compared to $12.7 million as of December 31, 2012. U.S. government
billed and unbilled accounts receivable totaled approximately $1.6 million at September 30, 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 September 30, 2013 was approximately
$17.6 million, compared to $19.2 million as of December 31, 2012.
PharmAthene is a leading biodefense company
engaged in the development and commercialization of next generation medical countermeasures against biological and chemical threats.
PharmAthene's current biodefense portfolio includes the following product candidates:
In addition, in May 2013, the Delaware
Supreme Court issued its ruling on the appeal in our litigation with SIGA Technologies, affirming the Court of Chancery's
finding that SIGA was liable for breach of contract, reversing its finding of promissory estoppel, and remanding the case back
to the Court of Chancery to reconsider the appropriate remedy and award of attorney's fees and expert witness costs in light of
the Supreme Court's opinion. For more information about PharmAthene, please visit www.PharmAthene.com.
Theraclone is a biopharmaceutical company
focused on the discovery and development of novel, monoclonal antibody therapeutics for diseases that are devastating for patients
and their families and which are a significant threat to human health. Theraclone leverages its proprietary antibody discovery
technology, I-STAR (In-Situ Therapeutic Antibody Rescue), to identify rare human antibodies that may be developed into antibody
product candidates that are potentially safer and more effective than current therapies. Theraclone has a portfolio of innovative
antibodies in clinical and preclinical development targeting serious medical conditions with a significant unmet medical need and
a primary focus on infectious disease and cancer, which include:
For more information about Theraclone,
please visit www.theraclone-sciences.com. On August 1, 2013, Theraclone and PharmAthene (NYSE MKT: PIP) announced a definitive
Important Additional Information about
This communication is being made in connection
with the proposed merger involving PharmAthene and Theraclone. PharmAthene has filed with the Securities and Exchange Commission
("SEC") a Registration Statement on Form S-4 (File No. 333-191055) ("Registration Statement") that includes
a definitive proxy statement/prospectus of PharmAthene and that also includes a consent solicitation of Theraclone. The Registration
Statement was declared effective by the SEC on October 29, 2013. The definitive proxy statement/prospectus/consent solicitation
was mailed to the stockholders of PharmAthene and the stockholders of Theraclone on or about October 30, 2013. The proxy statement/prospectus/consent
solicitation contains information about PharmAthene, Theraclone, the proposed transaction and related matters. STOCKHOLDERS
ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION
THAT STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING A DECISION ABOUT THE MERGER AND RELATED MATTERS. In addition to receiving the
proxy statement/prospectus/consent solicitation by mail, stockholders may also obtain the proxy statement/prospectus/consent solicitation,
as well as other filings containing information about PharmAthene, without charge, from the SEC's website (http://www.sec.gov)
or, without charge, by contacting Stacey Jurchison at PharmAthene at (410) 269-2610.
Participants in Solicitation
PharmAthene and its executive officers
and directors may be deemed to be participants in the solicitation of proxies from PharmAthene's stockholders with respect
to the matters relating to the proposed merger. Theraclone may also be deemed a participant in such solicitation. Information regarding
the proposed merger is available in the definitive proxy statement/prospectus/consent solicitation that was included in the Registration
Statement declared effective by the SEC on October 29, 2013 and that was first mailed to stockholders on or about October 30, 2013.
Information regarding certain interests that the executive officers or directors of PharmAthene or Theraclone may have in the proposed
transaction is also set forth in the definitive proxy statement/prospectus/consent solicitation.
No Offer or Solicitation
This communication is not intended to and
does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in any jurisdiction in connection with the merger or otherwise,
nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer
of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
Forward-Looking Statements
Except for 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 "will," "hopeful," "designed,"