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PharmAthene, Inc. Provides Third Quarter 2014 Operational And Financial Update

Published: Nov 07, 2014

ANNAPOLIS, Md., Nov. 6, 2014 /PRNewswire/ --

Recent Operational Highlights

  • Awarded NIAID contract for next generation anthrax vaccine program valued up to $28.1 million
  • Presented new non-clinical data for SparVax® anthrax vaccine program
  • Formed new strategic alliance with Nanotherapeutics to advance biodefense products
  • Awarded lump sum expectation damages and pre-judgment interest by the Delaware Court of Chancery in ongoing litigation against SIGA Technologies

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 third quarter of 2014.

Mr. Eric I. Richman, President and Chief Executive Officer, commented, "PharmAthene remains committed to advancing next generation medical countermeasures solutions that offer potential improvements in cost, efficacy and safety for our Nation. We made important advances in our biodefense programs during the third quarter. In September, we were awarded a contract from the National Institute of Allergy and Infectious Diseases (NIAID) to develop a thermostable next generation anthrax vaccine that could be effective in fewer doses a key advantage for deployment in the civilian Strategic National Stockpile.  This contract is valued at up to $28.1 million if all contract options are exercised.  Additionally, new non-clinical data from our SparVax® program were presented demonstrating equivalent protection to BioThrax®, the currently licensed anthrax vaccine.  We also announced a strategic alliance with Nanotherapeutics, Inc., to potentially advance the development of certain medical countermeasures. "

"Finally, with regard to the litigation against SIGA, proceedings in the Delaware Court of Chancery resumed in the third quarter following a partial modification of the automatic stay by the United States Bankruptcy Court.  As a result, we submitted our proposed order to the Delaware Court of Chancery and look forward to a final order being entered by the Court," said Mr. Richman.

Third Quarter Financial Results

For the three months ended September 30, 2014, PharmAthene recognized revenue of approximately $1.0 million, compared to approximately $3.5 million for the corresponding period in 2013. The decrease in revenue in the third quarter of 2014 is primarily attributable to a reduction in activity under the Company's SparVax® anthrax vaccine contract as a result of its partial termination, as previously reported.

Research and development expenses in the third quarter of 2014 were approximately $1.7 million, compared to approximately $2.6 million for the corresponding period in 2013. The decrease is primarily due to reduced activity under the Company's SparVax® contract, and corresponds with the Company's transition to its next generation, lyophilized rPA anthrax vaccine program.

Expenses associated with general and administrative functions were approximately $3.2 million in the third quarter of 2014, compared to approximately $4.1 million for the same period in 2013. 

For the third quarter of 2014, PharmAthene's net loss was $4.6 million, or $0.08 per share, compared to a net loss of $3.9 million, or $0.08 per share, for the corresponding period in 2013.

At September 30, 2014, PharmAthene had cash and cash equivalents totaling approximately $19.6 million, compared to approximately $10.5 million at December 31, 2013.  The increase in cash year-to-date is the result of proceeds from the sale of $15.5 million of the Company's common stock under a Controlled Equity Offering Agreement, offset by net cash used in operations of $5.0 million, and $1.2 million used for other financing activities.

About PharmAthene

PharmAthene is a biodefense company engaged in the development and commercialization of next generation medical countermeasures against biological and chemical threats. PharmAthene's current biodefense portfolio includes the following product candidates:

  • SparVax® - a next generation recombinant protective antigen (rPA) anthrax vaccine (liquid and lyophilized formulations)
  • rBChE bioscavenger - a medical countermeasure for nerve agent poisoning by organophosphorous compounds, including nerve gases and pesticides
  • Valortim® - a fully human monoclonal antibody for the prevention and treatment of anthrax infection

In August 2014, the Delaware Court of Chancery issued a Memorandum Opinion and Order and awarded to PharmAthene lump sum expectation damages for the value of PharmAthene's lost profits for SIGA Technologies, Inc.'s smallpox antiviral, Tecovirimat, also known as ST-246® (formerly referred to as "Arestvyr" and referred to by SIGA in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 as "Tecovirimat"). In addition, the Court of Chancery ordered SIGA to pay pre-judgment interest and varying percentages of PharmAthene's reasonable attorneys' and expert witness fees.  A judgment specifying the damages amount and fees payable to PharmAthene is expected to be issued by the Court of Chancery later this year, and will remain subject to appeal.

Forward-Looking Statement Disclaimer

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 risks associated with our interest in Tecovirimat, also known as ST-246® (formerly referred to as "Arestvyr" and referred to by SIGA in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 as "Tecovirimat"); risks 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; funding delays and/or reductions or elimination of U.S. government funding and/or non-renewal of expiring funding for one or more of the Company's development programs, such as BARDA's recent decision to de-scope the current SparVax® anthrax vaccine contract through a partial termination for convenience, or a decision by NIAID not to exercise its options under our September 2014 contract after we receive funding of approximately $5.2 million over the base period; risks associated with our common stock, risks associated with the GE Loan Agreement, risks associated with our net operating loss carryforwards, or NOLs, risks associated with the award of government contracts to our competitors or delays caused by third parties challenging government contract awards to us; risks associated with unforeseen safety and efficacy issues; risks associated with challenges related to the development, technology transfer, scale-up, and/or process validation of manufacturing processes for our product candidates; risks associated with unexpected determinations that these product candidates prove not to be effective and/or capable of being marketed as products; risks associated with accomplishing any future strategic acquisitions or business combinations; and other 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. Further, at this point, future government funding to support the development of Valortim®, rBChE and SparVax® is unlikely.  Even if we received such funding, significant additional non-clinical animal studies, human clinical trials, and manufacturing development work remain to be completed for all of our product candidates. In its August 2014 decision, the Delaware Court of Chancery awarded to PharmAthene lump sum expectation damages for the value of PharmAthene's lost profits for Tecovirimat, but the court did not specify an amount of damages, and such amount is subject to dispute between the parties.  The amount of the award remains subject to further calculation and approval by the Delaware Court of Chancery and there may be further proceedings before the final amount is approved by the Delaware Court of Chancery, which determination, along with the decision itself, will remain subject to appeal by SIGA to the Delaware Supreme Court.  As a result, the decision could be reversed, remanded or otherwise changed. There can be no assurances if and when PharmAthene will receive any payments from SIGA as a result of the decision. 

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