PharmAthene Reports Year-End 2012 Financial And Operational Results

     PharmAthene Reports Year-End 2012 Financial And Operational Results

PR Newswire

ANNAPOLIS, Md., March 13, 2013

ANNAPOLIS, Md., March 13, 2013 /PRNewswire/ --

Year-End 2012 Highlights

  oReceived favorable final order and judgment from Delaware Chancery Court
    against SIGA Technologies
  oAccelerated funding for bioscavenger program under Department of Defense
    contract
  oStrengthened financial position and secured $7.5 million credit facility
  oAchieved 70% year-over-year reduction in operating cash usage

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 year ended December 31, 2012.

"During the year, the Delaware Court of Chancery issued its final order and
judgment awarding PharmAthene a significant economic interest in SIGA's
smallpox antiviral therapeutic, Arestvyr™ (formerly known as ST-246^®)," said
Eric I. Richman, President and Chief Executive Officer. "This represented a
major victory for our Company, which, if upheld by the Delaware Supreme Court,
should enable us to accelerate our profitability and generate enhanced value
for PharmAthene shareholders near-term. Oral arguments on the appeal were held
in Delaware Supreme Court in January 2013 and we look forward to the Court's
ruling."

"We also made important technical progress in our next generation recombinant
bioscavenger (rBChE) program and are poised to begin pharmacokinetic and
non-clinical efficacy testing in the coming months. In recognition of this
progress, last year the Department of Defense exercised its option under our
current contract to accelerate funding for the rBChE program," said Mr.
Richman. "Regarding our SparVax^® anthrax vaccine program, we received
notification from the Food and Drug Administration (FDA) that our proposed
Phase II clinical study of SparVax^® was being placed on clinical hold pending
the provision of additional data and information to the FDA. We have since
provided some supporting data to the FDA, and are in the process of finalizing
a complete response to be submitted as soon as practicable."

Linda L. Chang, Senior Vice President and Chief Financial Officer, commented,
"In 2012 we set an aggressive goal of reducing our monthly cash usage to
further optimize our government contracting biodefense business model. We
successfully met this goal while securing additional funding of $7.5 million
through a credit facility provided by GE Capital. These achievements, along
with our ongoing efforts, will continue to ensure we have the flexibility to
capably manage our expenses and capital requirements in 2013."

Year-End 2012 Financial Results

Revenue

For the year ended December 31, 2012, PharmAthene recognized revenue of $25.2
million, compared to $24.3 million in 2011. Revenue in 2012 was derived
primarily from development contracts with the U.S. government for the
Company's biodefense product candidates.

Revenue for the SparVax^® program increased in 2012 to approximately $22.9
million, compared to $19.3 million in 2011. Revenue in 2012 was primarily
attributable to the achievement of several contract milestones, including the
completion of Final Drug Product manufacture, progress in the development of
bioanalytical and analytical assays, and the execution of non-clinical
studies.

Revenue for the rBChE bioscavenger program in 2012 was approximately $1.8
million, compared to $0.7 million in 2011, corresponding with significant
technical progress achieved during the year. On July 31, 2012 the Department
of Defense exercised a $2.5 million option to continue to fund the rBChE
program under its 2011 fixed price contract.

Revenue for the Valortim^® program in 2012 was $0.5 million, compared to $3.7
million in 2011 as a result of the completion of the 2007 NIAID contract for
Valortim^® in the first quarter of 2012.

Operating Expenses

Research and development expenses in 2012 were $19.5 million, compared to
$21.2 million in 2011. Research and development expenses decreased primarily
as a result of a reduction in the Company's indirect operating expenses and
direct costs for the Valortim^® program, partially offset by higher direct
SparVax^® program expenses.

Expenses associated with general and administrative functions decreased to
$11.6 million from $14.3 million for the years ended December 31, 2012
and2011, respectively. The decrease in general and administrative expense in
2012 was primarily the result of a reduction in legal and other general and
administrative expenses, partially offset by a one-time insurance recovery.

Net Loss

For the year ended December 31, 2012, PharmAthene's net loss was $4.9 million,
or $0.10 per share, compared to a net loss of $3.8 million, or $0.08 per
share, for the year ended December 31, 2011. The increase in net loss
primarily consists of a reduction in other income/expenses of $6.4 million
associated with the change in the fair value of the Company's derivative
instruments, offset by a decrease in operating expenses of $4.5 million.

Cash and Accounts Receivable

As of December 31, 2012, the Company had cash and cash equivalents, restricted
cash, and U.S. government accounts receivable and unbilled accounts receivable
totaling approximately $19.2 million, compared to $18.8 million as of December
31, 2011. The year-over-year difference was primarily a result of cash used in
operations, offset by funding provided under a term loan and revolving line of
credit with GE Capital, which was completed in the first quarter of 2012.

Conference Call and Webcast Information

PharmAthene management will be hosting a conference call to discuss the
Company's year-end 2012 financial and operational results. The call is
scheduled to begin at 4:30 pm Eastern Time on Wednesday, March 13, 2013 and is
expected to last approximately 30 minutes. The dial-in number within the
United States is 866-788-0544. The dial-in number for international callers
is 857-350-1682. The participant passcode is 83184036.

A replay of the conference call will be available beginning at approximately
7:30 pm Eastern Time on March 13, 2013 until approximately 11:59 p.m. Eastern
Time on April 15, 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 32565324.

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
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 next 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' Arestvyr™ and related products for
10 years following initial commercial sale of the drug once SIGA earns the
first $40 million in net profits (as defined in the Court's final judgment)
from the sale of Arestvyr™ and related products. Arestvyr™ 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. SIGA filed an appeal of the final judgment, 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
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 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 ourproduct candidates, and with FDA's
August 2012 clinical hold of SparVax^®, it is unclear when, if ever, we can
re-initiate 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.
CONSOLIDATED BALANCE SHEETS
                                               December 31,
                                               2012             2011
ASSETS
Current assets:
 Cash and cash equivalents                     $  12,701,517  $  11,236,771
 Accounts receivable (billed)                  2,432,641        4,424,442
 Unbilled accounts receivable                  4,114,442        3,021,208
 Prepaid expenses and other current assets     547,245          830,585
 Restricted cash                               -                100,000
Total current assets                           19,795,845       19,613,006
Property and equipment, net                    483,976          788,666
Other long-term assets and deferred costs      113,130          53,384
Goodwill                                       2,348,453        2,348,453
Total assets                                   $  22,741,404   $  22,803,509
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                              $  1,697,280   $  1,445,700
 Accrued expenses and other liabilities        2,328,877        2,655,330
 Deferred revenue                              1,381,755        514,312
 Current portion of long-term debt             749,997          -
 Short-term debt                               1,330,507        -
Total current liabilities                      7,488,416        4,615,342
Other long-term liabilities                    579,427          449,709
Long-term debt, less current portion           1,704,108        -
Derivative instruments                         1,295,613        1,886,652
Total liabilities                              11,067,564       6,951,703
Stockholders' equity:
 Common stock, $0.0001 par value; 100,000,000
 shares authorized; 48,352,651 and 48,236,172  4,835            4,824
 shares issued and outstanding at December 31,
 2012 and 2011, respectively
 Additional paid-in-capital                    210,495,905      208,525,917
 Accumulated other comprehensive (loss) income (217,328)        1,010,522
 Accumulated deficit                           (198,609,572)    (193,689,457)
Total stockholders' equity                     11,673,840       15,851,806
Total liabilities and stockholders' equity     $ 22,741,404    $ 22,803,509



PHARMATHENE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
                                        Year Ended December 31,
                                        2012               2011
Revenue                                 $ 25,175,887       $ 24,266,274
Operating expenses:
    Research and development            19,509,629         21,219,853
    General and administrative          11,628,732         14,311,079
    Depreciation and amortization       303,916            461,073
Total operating expenses                31,442,277         35,992,005
Loss from operations                    $ (6,266,390)      $ (11,725,731)
Other income (expense):
    Interest income                     17,808             16,660
    Interest expense                    (342,561)          (54,573)
    Gain on the sale of assets held for -                  781,760
    sale
    Realization of cumulative           1,227,656          -
    translation adjustment
    Change in fair value of derivative  591,039            7,144,983
    instruments
    Other income, net                   47,862             39,328
Total other income (expense)            1,541,804          7,928,158
Net loss before income taxes            (4,724,586)        (3,797,573)
    Provision for income taxes          (195,529)          -
Net loss                                $ (4,920,115)      $ (3,797,573)
Basic and diluted net loss per share    $     (0.10)  $      (0.08)
Weighted average shares used in
calculation of basic and diluted net    48,323,067         47,331,763
loss per share



SOURCE PharmAthene, Inc.

Website: http://www.pharmathene.com
Contact: Stacey Jurchison, PharmAthene, Inc., +1(410) 269-2610,
Stacey.Jurchison@PharmAthene.com
 
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