PharmAthene Reports Third Quarter 2012 Financial Results

           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


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

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

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 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

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

-- Tables Follow --

                                           September 30,    December 31,
                                           2012             2011
Current assets:
 Cash and cash equivalents                 $          $   11,236,771
 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
 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
Goodwill                                   2,348,453        2,348,453
Total assets                               $          $   22,803,509
Current liabilities:
 Accounts payable                          $         $    1,445,700
 Accrued expenses and other                3,233,804        3,169,642
 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

                          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
   General                3,275,428    3,283,246    9,004,008     11,632,272
   Depreciation and       72,453       114,494      234,811       348,813
Total operating           8,486,503    8,281,971    24,001,453    28,669,788
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
                          1,227,656    -            1,227,656     -
   Change in fair value
                          508,971      2,898,869    341,118       6,075,555
   Other income           (31,312)     95,520       22,122        50,892
Total other income        1,598,513    2,988,418    1,377,520     6,096,403
Net loss before
provision                 (191,864)    (33,496)     (3,461,757)   (4,546,766)

for income taxes
   Provision for income   (22,072)     -            (188,610)     -
Net loss                  $ (213,936)  $           $(3,650,367)  $(4,546,766)

                          $ (0.00)    $ (0.00)     $   (0.08)  $  (0.10)
Basic and diluted net
loss per share

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.

Contact: Stacey Jurchison of PharmAthene, Inc., +1-410-269-2610,
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