ANNAPOLIS, Md., March 31 /PRNewswire-FirstCall/ -- PharmAthene, Inc. a biodefense company developing medical countermeasures against biological and chemical threats, today reported financial results for the year ended December 31, 2007.
David P. Wright, President and Chief Executive Officer commented, “In 2007 we continued to advance both our corporate and product development objectives and achieved a number of important milestones which included, obtaining additional contract and appropriations funding for Valortim(TM) and Protexia(R) and generating promising new data in each of these programs. We also completed a merger with Healthcare Acquisition Corp. which provided a stronger financial foundation with enhanced access to capital with which to pursue our business objectives. Our goal was to use these resources to accelerate our growth, which was recently demonstrated by the execution of an agreement for the acquisition of Avecia’s biodefense vaccines.”
Current and Full Year 2007 Highlights
In addition to the recently announced sale and purchase agreement signed with Avecia, PharmAthene also demonstrated significant achievements in 2007, including:
Financial Highlights
For the year ended December 31, 2007, PharmAthene recognized revenues of $14.6 million compared to $1.7 million for the period ended December 31, 2006. The Company’s revenues consist primarily of contract and grant funding from the U.S. government. The increase in revenue in 2007 is primarily attributable to revenues of $14.6 million provided under the Department of Defense advanced development and procurement contract for Protexia(R), which was executed in September 2006.
PharmAthene’s research and development expenses were $16.6 million for the year ended December 31, 2007 and $7.3 million for the same period in 2006. Research and development expense increased $9.3 million in 2007 compared to 2006 primarily as a result of increased process development and manufacturing activities related to Protexia(R) and Valortim(TM) of $9.2 million, and employee-related expenses, including stock compensation expense of $1.8 million. These increases were partially offset by reduced preclinical and clinical activities related mostly to the Valortim(TM) clinical trial program.
General and administrative expenses for the Company in 2007 were $13.9 million compared to $8.5 million for the same period in 2006. The increase in general and administrative costs in 2007 was attributable to increased employee costs, a related increase in travel expense, increased stock compensation expense, and increased facilities costs as PharmAthene relocated its corporate headquarters in 2007 to larger facilities in Annapolis.
PharmAthene’s net loss attributable to common shareholders for the year ended December 31, 2007 was $17.7 million or $1.88 per basic and diluted share. Non-cash adjustments for the year ended December 31, 2007 included a $2.4 million credit that resulted from the cancellation of former PharmAthene preferred stock warrants, a $0.9 million gain on the extinguishment of debt, and stock compensation expense of $1.7 million.
As of December 31, 2007, cash, cash equivalents and short term investments were $52.7 million, compared to $5.1 million at December 31, 2006. The $47.6 million increase in cash, cash equivalents and short term investments from December 31, 2006 is primarily attributable to the August 2007 merger with HAQ, which resulted in net cash proceeds of $57.9 million and to the March 2007 $10.0 million credit facility, partially offset by the funding of operations for fiscal year 2007.
On March 20, 2008, PharmAthene announced that the Company had signed a sale and purchase agreement with Avecia. Under the agreement PharmAthene will acquire the assets related to Avecia’s biodefense vaccines business unit, including a recombinant Protective Antigen (rPA) anthrax vaccine, a novel dual antigen plague vaccine, RypVax(TM), and third generation anthrax vaccine technology.
On March 28, 2008, Avecia received a letter from the Defence Science and Technology Lab, a branch of the UK Ministry of Defence, advising Avecia of the recent resource allocation decision of the US Department of Defense (DoD) and that the DoD had decided not to fund Avecia’s plague vaccine candidate beyond the current contractual commitments. The parties are engaged in discussions to amend the terms of the sale and purchase agreement to accommodate this change in circumstances. The Company is still working towards closing in early April.
Conference Call and Webcast
PharmAthene management will host a conference call to discuss the Company’s year-end 2007 financial results. The call will take place beginning at 4:30 p.m., Eastern Time on March 31, 2008. The dial-in number within the United States is 866-700-6979. The dial-in number for international callers is 617-213-8836. The participant passcode is 29363875.
A replay of the conference call will be available for 30 days, beginning at approximately 6:30 p.m. Eastern Time on March 31, 2008 until approximately 11:50 p.m. Eastern Time April 30, 2008. 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 76157985.
The conference call will also be webcast and can be accessed from the company’s website at http://www.pharmathene.com. A link to the webcast may be found on both the Home Page and also under the Investor Relations section of the website. The webcast will be available for 30 days, or until approximately April 30, 2008.
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 programs include Valortim(TM) for the prevention and treatment of anthrax infection and Protexia(R) for the prevention and treatment of morbidity and mortality associated with exposure to chemical nerve agents. For more information on PharmAthene, please visit http://www.PharmAthene.com.
Forward Looking Statements
Except for the historical information presented herein, matters described in this press release, including but not limited to statements with regard to our growth, access to procurement opportunities, new data and applicability thereof to eventual product development, effectiveness of potential products, and matters relating to the proposed acquisition of the assets of Avecia, etc. may constitute forward-looking statements which are within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Such forward- looking statements are based upon current expectations or beliefs of management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward- looking statements including, but not limited to, risks associated with obtaining regulatory approvals, unforeseen technical difficulties, dependencies on certain customers or products, market acceptance and competition, ability to receive grant and contract revenue and procurement funding, ability to identify any additional strategic acquisitions or other opportunities to accelerate growth, cash at the end of the year, as well as other risks described in the Company’s filings with the Securities and Exchange Commission, in conference calls and in other communications.
CONTACT: Stacey Jurchison of PharmAthene, Inc., +1-410-269-2610,
JurchisonS@PharmAthene.com
Web site: http://www.pharmathene.com/
