PharmAthene, Inc. Reports First Quarter 2012 Financial Results
5/8/2012 2:16:49 PM
ANNAPOLIS, Md., May 8, 2012 /PRNewswire/ -- PharmAthene, Inc. (NYSE Amex: PIP), a biodefense company developing medical countermeasures against biologicaland chemical threats, today reported its financial results for the first quarter ended March 31, 2012.
Eric I. Richman, President and Chief Executive Officer, commented, "We are off to a great start in 2012 in regards to accomplishing our strategic objectives and meeting our financial goals. We are excited to continue our clinical evaluation of SparVax and are moving forward with plans to begin a Phase II clinical trial of SparVax later this year. And, while we achieved positive cash flow from operations for the quarter, we also bolstered our financial position by securing a $7.5 million financing from GE Capital, Healthcare Financial Services, which further enhances our balance sheet and extends our cash runway into 2013, when we anticipate achieving final resolution of the litigation with SIGA Technologies."
"With respect to the SIGA litigation, we are currently awaiting final judgment from the Delaware Court of Chancery regarding its September 2011 decision to award PharmAthene a significant stake in SIGA's smallpox antiviral, ST-246," Mr. Richman continued. "SIGA has said it expects to begin delivery of ST-246 under its $433 million contract with the U.S. Government in the first quarter of 2013."
First Quarter 2012 Financial Results
For the first quarter ended March 31, 2012, PharmAthene recognized revenue of $6.1 million, compared to $6.3 million for the same period in 2011. Revenue in the first quarter of 2012 was primarily from development contracts with the U.S. government for the Company's SparVax and rBChE bioscavenger programs.
Research and development expenses for the three months ended March 31, 2012 were $4.7 million, compared to $5.8 million for the same period in 2011. Research and development expenses decreased during the current period primarily as a result of the completion of the 2007 NIAID contract for Valortim® and a reduction in manufacturing-related activities under the SparVax program.
Expenses associated with general and administrative functions were $2.9 million for the three months ended March 31, 2012 and $4.9 million for the same period in 2011. The decrease in general and administrative expense in the first quarter of 2012 was attributable to decreased legal expenses primarily related to the SIGA litigation of approximately $1.6 million, compared to the same period in 2011, as well as implementation of cost-cutting initiatives identified as part of the Company's operational review.
For the first quarter of 2012, PharmAthene's net loss attributable to common shareholders was $2.7 million, or $0.06 per share, compared to $2.1 million, or $0.04 per share, in the same period of 2011. Included in the net loss for the quarter ended March 31, 2012, was $1.0 million of non-cash expense related to the change in fair value of warrants outstanding, compared to a $2.5 million non-cash gain included in net loss for the same period in 2011.
Cash Position and Accounts Receivables
As of March 31, 2012, the Company had cash and cash equivalents and U.S. government billed and unbilled accounts receivables totaling approximately $20.7 million, compared to $18.7 million at December 31, 2011. Cash increased from $11.2 million at the end of 2011 to $15.3 million at March 31, 2012 due to the effect of $0.8 million in positive cash flow from operations and $3.4 million in financing from GE Capital, Healthcare Financial Services.
Conference Call and Webcast Information
PharmAthene management will be hosting a conference call to discuss the Company's first quarter 2012 financial and operational results. The call is scheduled to begin at 4:30 pm Eastern Time on Tuesday, May 8, 2012 and is expected to last approximately 30 minutes. The dial-in number within the United States is 866-804-6928. The dial-in number for international callers is 857-350-1674. The participant passcode is 17854610.
A replay of the conference call will be available beginning at approximately 6:30 pm Eastern Time on May 8, 2012 until approximately 11:59 p.m. Eastern Time on June 8, 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 65466037.
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 weapons. PharmAthene's lead product development programs include:
- SparVax - a second generation recombinant protective antigen (rPA) anthrax vaccine
- Valortim® - a fully human monoclonal antibody for the prevention and treatment of anthrax infection
- Recombinant BChE- a novel bioscavenger for the prevention and treatment of morbidity and mortality associated with exposure to chemical nerve agents
In addition, pursuant to an opinion issued September 22, 2011 from the Delaware Court of Chancery, PharmAthene is entitled to 50% of the net profits over 10 years from all sales of SIGA Technologies' ST-246, 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, and related products, once SIGA receives the first $40 million in net profits from sales of ST-246. 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 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, challenges related to the implementation of our NYSE Amex compliance plan 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 publicly stated it intends to appeal 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, to the extent that there is an appeal, we cannot predict how long that 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 SparVax , Valortim® and our rBChE products. 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 --
CONDENSED CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Accounts receivable (billed)
Unbilled accounts receivable
Prepaid expenses and other current assets
Total current assets