Pharmathene reports Q2 2009 financials

Aug 14 2009

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((R)), SparVax(TM) and Valortim((R)).

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((R)) and Protexia((R)), and for the three month period ended June 30, 2009 also reflect activities related to the SparVax(TM), RypVax(TM) 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(TM). 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(TM) 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((R)), 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((R)) 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."

www.pharmathene.com