Full Press Release Details
| THOMSON REUTERS STREETEVENTS |
| EDITED TRANSCRIPT |
| PIP - Q2 2013 PharmAthene, Inc. Earnings Conference Call |
| EVENT DATE/TIME: AUGUST 07, 2013 / 08:30PM GMT |
CORPORATE PARTICIPANTS
Jurchison PharmAthene, Inc. - Director -- Corporate Communications
Richman PharmAthene, Inc. - President, CFO
Chang PharmAthene, Inc. - SVP, CFO
Cali Noble Financial Group - Analyst
Chen Aegis Capital - Analyst
day, ladies and gentlemen. And welcome to the Second Quarter 2013 PharmAthene Incorporated Earnings Conference Call. My name is
Shequana, and I will be your coordinator for today.
this time, all participants are in a listen-only mode. We will facilitate a question and answer sessions towards the end of this
would now like to turn the presentation over to your host for today's call, Ms. Stacey Jurchison. Please proceed.
Jurchison - PharmAthene, Inc. - Director -- Corporate Communications
you, and good afternoon everyone. Joining me on the call today are Eric Richman, President and Chief Executive Officer and Linda
Chang, Senior Vice President and Chief Financial Officer.
we begin, I would like to point out that during today's call we will be making projections and other forward-looking statements
which are based on our current beliefs and expectations.
be aware that these statements are subject to certain risks and uncertainties. We urge you to search PharmAthene's filing with
the SEC for additional information, including the Joint Proxy Statement Prospectus that PharmAthene will file with the SEC in connection
with its special meeting of stockholders relating to the proposed merger with Theraclone, as it will contain important information
addition, this communication may be deemed to be a solicitation in respect to the merger. The Directors and Executive Officers
of PharmAthene and Theraclone may be deemed to be participants in the solicitation of proxies from PharmAthene and Theraclone stock
holders in respect to this proposed transaction. We advise you to consult PharmAthene's filings with the SEC for additional information.
will now turn the call over to Eric to begin.
Richman - PharmAthene, Inc. - President, CFO
you, Stacey, and good afternoon everyone. We are pleased you could join us today for an overview of our second quarter operating
and financial results. It has been a very productive and eventful time for PharmAthene with significant positive news flow.
the quarter, we are pleased to announce the FDA's decision to lift the clinical holds previously placed on our proposed Phase II
clinical study of SparVax, our next generation recombinant anthrax vaccine.
its letter to the Company, which we received in late May, the FDA acknowledged that we had satisfactorily addressed all of the
agency's clinical hold issues and we could proceed with our proposed Phase II clinical trial.
continue to have a productive dialogue with our development partner, BARDA, regarding clinical trial design. We are also discussing
additional non-clinical studies BARDA would like us to undertake. Our plan is to commence both the Phase II clinical trial and
additional non-clinical studies in the fourth quarter.
this is the first Phase II clinical trial to use material manufactured in the United States, it will be the third clinical trial
of SparVax. As you know, SparVax has previously been studied in one Phase I and two Phase II clinical trials involving 770 subjects.
anthrax vaccines, which are based on moderate recombinant vaccine technology, offer the potential for significant advantages, including
improved convenience and cost effectiveness. And also the flexibility for rapid scale-up in production, which is important in the
event of a national emergency.
believe that SparVax has features that should make it highly desirable as a candidate for inclusion in the strategic national stockpile.
BARTA continues to be very supportive of our efforts to develop next generation anthrax vaccines to address urgent national security
imperatives. And together, we are making good progress towards this objective.
on, progress in our recombinant bioscavenger program continues to be very strong in 2013. So far this year, all technical milestones
under our contract with the Department of Defense have been reached on schedule.
I turn the call over to Linda to discuss our quarterly financial results, I would like to provide a brief update on the status
of litigation with SIGA.
you may be aware, the case has been remanded to the Delaware Chancery Court for reconsideration of the remedy. We believe we could
get a resolution from the Delaware Chancery Court, likely, by year-end.
its quarterly call with investors earlier this week, SIGA reconfirmed that they had completed delivery of approximately 590,000
treatment courses of [Arestvyr] to the government, which qualifies for payment to SIGA of approximately $79 million.
date, SIGA has billed or received payments of approximately $140 million under their current BARTA contract. Based on SIGA's most
recent public disclosures, it is expected that the full 1.7 million treatment courses under this contract will be delivered by
now turn it over to Linda Chang to proceed. Linda?
Chang - PharmAthene, Inc. - SVP, CFO
you, Eric. And thank you all for joining us today. I'll focus my comments on the highlights of our financial performance in the
quarter, and will refer you to our 10-Q and press release for more details.
start with the revenue. We recorded $4.3 of contract revenue in the current quarter, compared to $6.3 million in Q2 of last year.
Our revenue this quarter was lower than what we have recognized in recent quarter, largely as the result of the timing of the Phase
II clinical trial and related activities under our SparVax program.
the clinical hold now lifted by the FDA, we look forward to proceeding with our proposed Phase II clinical trial and related activities,
which we anticipate will commence later this year.
R&D expenses tend to move in tandem with revenue due to the cost plus fee nature of our SparVax program. In the second quarter,
R&D expenses were $3.4 million, as compared to $4.9 million for the same period in 2012.
G&A expenses decreased to $2.3 million in the current period, compared to $2.8 million in Q2 of last year due to a reduction
in labor and professional services.
in terms of cash, we ended the second quarter with approximately $15.8 million of cash, compared to $12.7 million at December 31,
2012. Our combined cash and accounts receivable balance total approximately $21 million at the end of the second quarter, as compared
to $19.2 million as of December 31, 2012.
June 30, our cash usage from operating activities was approximately $235,000, while our total cash has increased by approximately
$3 million as a result of proceeds from the use of our ATM facility.
the last year-and-a-half, PharmAthene has embarked on a path to improve upon our operational capabilities and financial position.
Today, PharmAthene is an efficient organization that is focused on execution and disciplined resource allocation.
will continue to leverage our capabilities and expand our government contracting business, while, at the same time, investing in
innovative technologies to broaden our markets and achieve greater value for shareholders.
that, I will turn the call back over to Eric.
Richman - PharmAthene, Inc. - President, CFO
you, Linda. As you've heard, we're off to a very good start in 2013, meeting our business and financial objectives.
I close, I would like to say a few words about last week's announcement regarding the proposed merger of PharmAthene and Theraclone
the past few days, we've had many discussions with investors. And I am very pleased by the positive reception, enthusiasm and support
for this transaction. Our long term strategic vision has always been focused on building a solid foundation of biodefense with
future diversification and broader commercial markets.
proposed merger with Theraclone, which we announced last week, is directly on point with this strategy.
combined company will feature a broad portfolio of promising clinical and pre-clinical product candidates with dual applications.
A prime example is Theraclone's flu antibody, which is being developed to serve both government and commercial markets.
new company will also have an innovative discovery engine based on Theraclone's I-Star proprietary monoclonal antibody platform.
I-Star will have promising potential to generate value for shareholders through both partnership funding and innovative new product
example, Theraclone's cytomegalovirus, or CMV, antibody is one of the few biologic approaches in development for the management
of CMV disease. It is currently narrowing the initiation of Phase II development and addresses a very significant market opportunity.
summary, we believe that combining PharmAthene's government contracting expertise in vaccine and monoclonal antibody development
capabilities with Theraclone's strong research and development capabilities and discovery platform is a win-win scenario that should
enable us to build shareholder value today with future up-side potential.
concludes my formal remarks today. Thank you for your continued interest in and support of our company and our plans moving forward.
will now open up the call for your questions. Operator, could you please instruct the audience on the Q&A procedure?
sir. (Operator instructions). Your first question comes from the line of Nathan Cali representing Noble Financial. Please proceed.
Cali - Noble Financial Group - Analyst
guys. Good afternoon. Thanks for taking the questions.
Richman - PharmAthene, Inc. - President, CFO
Nathan. Thank you for joining us. So just a couple of quick follow-up questions from Tuesday's call. What's the guidance to receive
additional funding for SparVax? And when do you expect the Phase III study to start? What's sort of the process there?
Richman - PharmAthene, Inc. - President, CFO
haven't provided any official guidance on that. But I can tell you in round numbers, we have approximately $20 million left on