Recent Financing Strengthens Balance Sheet and Eliminates Short Term Debt
ANNAPOLIS, Md., Aug. 13 /PRNewswire-FirstCall/ -- PharmAthene, Inc. (NYSE
Amex: PIP), a biodefense company developing medical countermeasures against
biological and chemical threats, today reported financial and operational
results for the second quarter and six months ended June 30, 2009.
For the second quarter of 2009, PharmAthene recognized revenues of $8.1
million compared to $11.7 million in the same period of 2008. For the six
months ended June 30, 2009 and 2008, the Company reported revenues of $13.6
million and $17.5 million, respectively. Revenues for the three and six month
periods ended June 30, 2009 consisted primarily of contract funding from the
U.S. government for the development of Protexia , SparVax™ and Valortim .
Research and development expenses were $9.5 million and $12.3 million for
the quarter ended June 30, 2009 and 2008, respectively. For the six months
ended June 30, 2009 and 2008, research and development expenses were $15.2
million and $18.2 million, respectively. Expenses for each period consisted
primarily of research and development activities related to programs for
Valortim and Protexia , and for the three month period ended June 30, 2009
also reflect activities related to the SparVax™, RypVax™ and the
Company's third generation rPA anthrax vaccine programs.
General and administrative expenses for the Company were $4.4 million and
$4.6 million for the quarter ended June 30, 2009 and 2008, respectively. For
the six months ended June 30, 2009 and 2008, general and administrative
expenses were $9.6 million and $9.0 million, respectively. General and
administrative expenses were essentially flat for the three months ended June
30, 2009 and increased by approximately $600,000 in the first six months of
2009, compared to the same period last year. The year to date increase was
primarily due to increased consulting and legal services associated with
compliance requirements related to operating as a publicly traded entity,
costs related to preparing and submitting various bids and proposals and
litigation efforts, along with increased non-cash, stock-based compensation
costs. These increases were partially offset by reduced travel and other
administrative overhead costs.
For the second quarter of 2009, PharmAthene's net loss attributable to
common shareholders was $6.6 million or $0.24 per share, compared to $21.6
million or $0.98 per share in the same period of 2008. For the six months
ended June 30, 2009, the Company's net loss attributable to common
shareholders was $12.6 million or $0.47 per share, compared to $26.3 million
or $1.19 per share in the same period of 2008.
As of June 30, 2009, available cash, cash equivalents and short term
investments were $15.5 million, excluding restricted cash totaling $1.5
million.
Subsequent to the second quarter and effective July 28, 2009, PharmAthene
issued 2-year, 10% unsecured senior convertible notes and common stock
purchase warrants in a private placement totaling approximately $19.3 million.
In connection with the private placement, the Company received gross cash
proceeds of approximately $10.5 million from new investors, including an
aggregate of approximately $8.5 million from unaffiliated investors, and also
canceled approximately $8.8 million in outstanding principal and unpaid
accrued interest under the Company's 8% senior unsecured convertible notes
originally issued in August 3, 2007 and due August 3, 2009. The Company
estimates that at its currently projected rate of cash consumption, the net
proceeds from this financing, along with existing sources of cash, will be
sufficient to fund operations through the end of 2010.
David P. Wright, President and Chief Executive Officer of PharmAthene
commented, "The second quarter was a period of continued momentum for the
Company. Of note, in response to the latest amendments to the RFP issued by
the U.S. Department of Health and Human Services to develop and deliver up to
25 million doses of a recombinant protective antigen (rPA) anthrax vaccine for
the Strategic National Stockpile, in late May, we submitted our regulatory
strategy to the U.S. Food and Drug Administration (FDA), outlining our
non-clinical and clinical development plans for licensure of SparVax™.
Just after quarter end, in early July, we announced that the FDA had completed
its review of our development plan. We have since submitted the FDA's feedback
to the Biomedical Advance Research and Development Authority (BARDA) and are
currently in the process of updating our proposal for submission to BARDA."
Mr. Wright continued, "In the meantime, development activities for
SparVax™ continue pursuant to our existing development contract, which was
transferred from the National Institutes of Health to BARDA on April 1, 2009.
We are also making progress in the development of Valortim , our fully human
monoclonal antibody for the prevention and treatment of anthrax infection.
During the quarter, we received an additional $2 million under the current
contract with the National Institute of Allergy and Infectious Diseases to
perform certain manufacturing and non-clinical activities. Additionally, we
submitted to BARDA our full proposal in response to a Broad Agency
Announcement (BAA) for anthrax anti-toxins and therapeutics. Specifically, we
have proposed a development program of an IV formulation of Valortim for the
treatment of anthrax and will also be developing a lyophilized formulation.
We have requested substantial funding to support these activities. The
government has indicated that contracts under the BAA will be awarded by the
end of the third quarter."
Conference Call and Webcast Information
PharmAthene management will host a conference call to discuss the
Company's second quarter and six month financial and operational results today
at 11:00 a.m., E.T. The dial-in number for U.S. callers is 800-706-7748 and
for international callers is 617-614-3473. The participant passcode is
28915363.
A replay of the conference call will be available beginning at
approximately 2:00 p.m. Eastern Time on August 13, 2009 until approximately
11:59 p.m. Eastern Time September 11, 2009. The dial-in number from within the
United States is 888-286-8010. For international callers, the dial-in number
is 617-801-6888. The participant passcode is 35226593.
The webcast of the conference call will be available until September 13,
2009 and can be accessed from the company's website at
http://www.pharmathene.com. A link to the webcast may be found on 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 weapons. PharmAthene's lead product development
programs include:
- SparVax™ - a second generation recombinant protective antigen (rPA)
anthrax vaccine
- Third generation rPA anthrax vaccine
- Valortim - a fully human monoclonal antibody for the prevention and
treatment of anthrax infection
-
Protexia - a novel bioscavenger for the prevention and treatment of
morbidity and mortality associated with exposure to chemical nerve
agents
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"; or similar statements are forward-looking statements. PharmAthene
disclaims, however, any intent or obligation to update these forward-looking
statements. Risks and uncertainties include risk associated with 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, including without limitation our bid related to SparVax™ under
the DHHS Request for Proposals for an Anthrax Recombinant Protective Antigen
(rPA) Vaccine for the Strategic National Stockpile, 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, unexpected financial obligations that could
increase the rate of our cash consumption 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"). We have based our projection of future cash needs on
the Company's current and anticipated operations, which do not take into
account any potential future government contracts that may be awarded to the
Company, merger & acquisition or corporate partnering activities, or
unexpected financial obligations.
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.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
(unaudited) (unaudited)
Contract revenue $8,071,211 $11,703,448 $13,593,114 $17,522,502
Other revenue - - - 21,151
8,071,211 11,703,448 13,593,114 17,543,653
Operating expenses:
Research and development 9,464,629 12,274,553 15,159,955 18,203,872
General and
Administrative 4,416,248 4,605,791 9,562,247 8,963,750
Acquired in-process
research and development - 15,906,002 - 15,906,002
Depreciation and
amortization 199,699 239,914 392,177 436,017
Other expense 760,720 - 884,561 -
Total operating expenses 14,841,296 33,026,260 25,998,940 43,509,641
Loss from operations (6,770,085)(21,322,812)(12,405,826)(25,965,988)
Other income (expense)
Interest income 92,853 362,170 197,098 833,935
Interest expense (598,395) (651,778) (1,200,510) (1,318,775)
Change in market value of
derivative instruments 643,702 26,263 764,291 115,543
Total other income
(expense) 138,160 (263,345) (239,121) (369,297)
Net loss (6,631,925)(21,586,157)(12,644,947)(26,335,285)
Basic and diluted net
loss per share $ (0.24) $ (0.98) $ (0.47) $ (1.19)
Weighted average shares
used in calculation of
basic and diluted net
loss per share 28,056,824 22,087,121 27,038,761 22,087,121
PHARMATHENE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2009 2008
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 9,272,803 $ 19,752,404
Restricted cash 1,500,000 12,000,000
Short-term investments 6,177,616 3,190,912
Accounts receivable 2,438,415 8,890,077
Other receivables (including unbilled
receivables) 13,594,575 1,391,512
Prepaid expenses and other current assets 594,690 917,125
Total current assets 33,578,099 46,142,030
Long-term restricted cash - 1,250,000
Property and equipment, net 5,909,053 5,313,219
Patents, net 908,374 925,489
Other long-term assets 252,974 220,531
Deferred costs 23,845 37,092
Goodwill 2,348,453 2,502,909
Total assets $ 43,020,798 $ 56,391,270
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,573,453 $ 3,870,871
Accrued expenses and other liabilities 11,318,882 14,624,757
Convertible notes 14,300,517 13,377,505
Current portion of derivative instruments 69,021 -
Current portion of long-term debt 2,955,264 4,000,000
31,217,137 35,873,133
Other long-term liabilities 426,874 626,581
Derivative instruments 1,045,770 -
Long-term debt - 928,117
Total liabilities 32,689,781 37,427,831
Stockholders' equity:
Common stock, $0.0001 par value;
100,000,000 shares authorized;
28,070,663 and 25,890,143 shares issued
and outstanding, respectively 2,807 2,589
Additional paid-in-capital 147,396,332 142,392,163
Accumulated other comprehensive (loss)
income (392,293) 386,351
Accumulated deficit (136,675,829)(123,817,664)
Total stockholders' equity 10,331,017 18,963,439
Total liabilities and stockholders' equity $ 43,020,798 $ 56,391,270
SOURCE: PharmAthene, Inc.
CONTACT:
Stacey Jurchison of PharmAthene, Inc.
+1-410-269-2610
Stacey.Jurchison@PharmAthene.com
Web Site:
http://www.pharmathene.com
