PharmAthene Reports Third Quarter 2012 Financial Results Recent Highlights -- Providing complete response to FDA clinical hold letter for SparVax™ clinical study -- Department of Defense exercised option on rBChE bioscavenger program -- Cash management goal for 2012 remains on target -- Delaware Supreme Court sets date of January 10, 2013 to hear oral arguments in SIGA litigation appeal PR Newswire ANNAPOLIS, Md., Nov. 6, 2012 ANNAPOLIS, Md., Nov. 6, 2012 /PRNewswire/ --PharmAthene, Inc. (NYSE Amex: PIP), a biodefense company developing medical countermeasures against biological ^ and chemical threats, today reported its financial results for the third quarter ended September 30, 2012. President and Chief Executive Officer, Eric I. Richman, said, "We made steady progress in the third quarter toward meeting our objectives. Most importantly, we have worked expeditiously to address the U.S. Food and Drug Administration's (FDA) request for additional information on our SparVax™ program, and are pleased to report that we expect to submit a complete response to the FDA shortly." Mr. Richman continued, "Regarding the ongoing litigation with SIGA, we are now entering the final stages of the appeals process, as all legal briefs required from both PharmAthene and SIGA have been submitted to the Court and a date for oral argument has been set for January 10, 2013. We remain confident in the merits of our case and the decision of the Delaware Court of Chancery and look forward to a final ruling from the Delaware Supreme Court no later than the second quarter of 2013." Linda L. Chang, Senior Vice President and Chief Financial Officer, remarked, "We continue to meet our financial goals for 2012. At the end of the third quarter of 2012 we had cash and receivables totaling approximately $20.0 million compared to $18.7 million at December 31, 2011. Net cash used in operations year-to-date is approximately $178,000. At this point, we are optimistic that we will be able to meet or exceed our annual cash burn goal for 2012 of $6.0 million with cash burn defined as the change in our cash and cash equivalents." Third Quarter 2012 Financial Results Revenue For the third quarter ended September 30, 2012, PharmAthene recognized revenue of $6.7 million, compared to $5.3 million for the same period in 2011. Revenue in the third quarter of 2012 was primarily from development contracts with the U.S. government for the Company's SparVax™ and rBChE bioscavenger programs. Operating Expenses Research and development expenses for the third quarter ended September 30, 2012 were $5.1 million, compared to $4.9 million for the same period in 2011. Research and development expenses increased during the third quarter primarily as a result of higher direct expenses under the Company's SparVax™ anthrax vaccine program although there were decreased costs for the Company's Valortim^® program and a reduction in non-government funded internal research and development activities and other expenses. Expenses associated with general and administrative functions were $3.3 million for each of the three month periods ended September 30, 2012 and 2011. Net Loss For the third quarter of 2012, PharmAthene's net loss attributable to common shareholders was $0.2 million, or $0.00 per share, compared to $0.03 million, or $0.00 per share, in the same period of 2011. Included in the net loss for the nine months ended September 30, 2012 was a $1.2 million gain associated with the realization of a cumulative translation adjustment and a $0.5 million gain reflecting the change in fair value of the Company's derivative investments. Cash Position and Accounts Receivables As of September 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 September 30, 2012 was primarily a result of amounts provided under the term loan and revolving line of credit with GE Capital, partially offset by cash used in operations. Conference Call and Webcast Information PharmAthene management will be hosting a conference call to discuss the Company's third quarter 2012 financial and operational results. The call is scheduled to begin at 4:30 pm Eastern Time on Tuesday, November 6, 2012 and is expected to last approximately 30 minutes. The dial-in number within the United States is 866-713-8564. The dial-in number for international callers is 617-597-5312. The participant passcode is 39812910. A replay of the conference call will be available beginning at approximately 6:30 pm Eastern Time on November 6, 2012 until approximately 11:59 p.m. Eastern Time on December 6, 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 75262898. 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 threats. PharmAthene's lead product development programs include: oSparVax™ - a second generation recombinant protective antigen (rPA) anthrax vaccine oRecombinant BChE- a novel bioscavenger for the prevention and treatment of morbidity and mortality associated with exposure to chemical nerve agents oValortim^® - a fully human monoclonal antibody for the prevention and treatment of anthrax infection In addition, pursuant to a final judgment issued May 31, 2012 from the Delaware Court of Chancery, PharmAthene is entitled to 50% of all net profits related to the sale of SIGA Technologies' ST-246^® and related products for 10 years following initial commercial sale of the drug once SIGA earns the first $40 million in net profits from the sale of ST-246^® and related products. ST-246^® is 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. For more information about PharmAthene, please visit www.PharmAthene.com. Statement on Cautionary Factors 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 "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 all of our product candidates, and with FDA's August 2012 clinical hold of SparVax it is unclear when, if ever, we can reinitiate human clinical trials for that product candidate. 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. -- Tables Follow -- PHARMATHENE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2012 2011 (unaudited) ASSETS Current assets: Cash and cash equivalents $ $ 11,236,771 14,726,328 Accounts receivable (billed) 1,606,241 4,424,442 Unbilled accounts receivable 3,682,311 3,021,208 Prepaid expenses and other current 363,742 830,585 assets Restricted cash - 100,000 Total current assets 20,378,622 19,613,006 Property and equipment, net 553,081 788,666 Other long term assets and deferred 130,709 53,384 costs Goodwill 2,348,453 2,348,453 Total assets $ $ 22,803,509 23,410,865 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ 1,445,700 1,846,614 Accrued expenses and other 3,233,804 3,169,642 liabilities Current portion of long term debt 681,822 - Short term debt 1,208,370 - Total current liabilities 6,970,610 4,615,342 Other long term liabilities 579,707 449,709 Long term debt, less current portion 1,764,264 - Derivative instruments 1,545,534 1,886,652 Total liabilities 10,860,115 6,951,703 Stockholders' equity: Common stock, $0.0001 par value; 100,000,000 shares authorized; 48,345,984 and 48,236,172 shares issued 4,835 4,824 and outstanding at September 30, 2012 and December 31, 2011, respectively Additional paid-in-capital 210,101,716 208,525,917 Accumulated other comprehensive (215,977) 1,010,522 (loss) income Accumulated deficit (197,339,824) (193,689,457) Total stockholders' equity 12,550,750 15,851,806 Total liabilities and stockholders' $ $ 22,803,509 equity 23,410,865 PHARMATHENE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Nine months ended September 30, September 30, 2012 2011 2012 2011 Revenue $ 6,696,126 $ 5,260,057 $19,162,176 $18,026,619 Operating expenses: Research and 5,138,622 4,884,231 14,762,634 16,688,703 development General 3,275,428 3,283,246 9,004,008 11,632,272 andadministrative Depreciation and 72,453 114,494 234,811 348,813 amortization Total operating 8,486,503 8,281,971 24,001,453 28,669,788 expenses Loss from operations (1,790,377) (3,021,914) (4,839,277) (10,643,169) Other income (expense): Interest income 5,727 3,961 13,534 10,496 Interest expense (112,529) (9,932) (226,910) (40,540) Realization of cumulative 1,227,656 - 1,227,656 - translation adjustment Change in fair value of 508,971 2,898,869 341,118 6,075,555 derivative instruments Other income (31,312) 95,520 22,122 50,892 (expense) Total other income 1,598,513 2,988,418 1,377,520 6,096,403 (expense) Net loss before provision (191,864) (33,496) (3,461,757) (4,546,766) for income taxes Provision for income (22,072) - (188,610) - taxes Net loss $ (213,936) $ $(3,650,367) $(4,546,766) (33,496) $ (0.00) $ (0.00) $ (0.08) $ (0.10) Basic and diluted net loss per share Weighted average shares used 48,345,984 48,194,035 48,314,058 47,041,027 in calculation of basic and diluted net loss per share SOURCE PharmAthene, Inc. Website: http://www.pharmathene.com Contact: Stacey Jurchison of PharmAthene, Inc., +1-410-269-2610, Stacey.Jurchison@PharmAthene.com
PharmAthene Reports Third Quarter 2012 Financial Results
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