On Track to Reach Significant Milestones in Second Half 2008
ANNAPOLIS, Md., Aug. 12 /PRNewswire-FirstCall/ -- PharmAthene, Inc. (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, 2008. Operational highlights during, and subsequent to, the quarter included:
-- Submitted response to a Request for Proposals (RFP) issued by the Department of Health and Human Services (DHHS) for an "Anthrax Recombinant Protective Antigen (rPA) Vaccine for the Strategic National Stockpile"
-- Completed acquisition and integration of Avecia's biodefense vaccines business unit creating a diverse biodefense medical countermeasures product pipeline positioned for near-term revenue growth
-- Completed preclinical requirements to commence a Phase I human safety clinical trial of Protexia(R)
-- Initiated commercial scale cGMP manufacturing of Valortim(R)
"The second quarter continued to be a highly productive period for PharmAthene, and sets the stage for a very exciting time for our Company," said David P. Wright, President and Chief Executive Officer. "Over the next several months, we expect to achieve a number of significant milestones which builds value for our stockholders."
"On July 31st 2008 we submitted a response to a Request for Proposals issued by the Department of Health and Human Services, seeking procurement of 25 million doses of a second generation recombinant protective antigen (rPA) anthrax vaccine for inclusion in the Strategic National Stockpile -- the Nation's civilian stockpile of biodefense medical countermeasures," said Mr. Wright.
"Judging from prior contracts of this magnitude, we estimate the potential value of an rPA vaccine contract could range from between $350 - $600 million, and we believe that our product, SparVax(TM), is well positioned to capture a meaningful share of this contract. Phase II clinical trials have already been completed in over 700 healthy subjects and demonstrate that SparVax(TM) is well tolerated and induces an immune response in humans," continued Mr. Wright.
"In addition to our focus on SparVax(TM), we also anticipate a decision from the National Institutes of Health regarding development funding for a third generation rPA anthrax vaccine; and next month we expect to begin a Phase I trial of Protexia(R), our nerve agent countermeasure, which we believe will provide pre- and post-exposure prophylaxis against chemical nerve agents. With the addition of Avecia's vaccine business, we have created one of the industry's most robust biodefense portfolios, firmly establishing PharmAthene as a leading developer of urgently needed medical countermeasures to the United States government and foreign Allies," commented Mr. Wright. "We look forward to keeping the investment community apprised of our progress during this exciting time for our Company."
Pending 2008 Milestones
-- Decision anticipated from DHHS for procurement award for second generation rPA anthrax vaccine by year end
-- Decision anticipated from NIH for development contract award for third-generation rPA anthrax vaccine by year end
-- Company to file Investigational New Drug (IND) Application with the United States Food and Drug Administration (FDA) for Protexia(R) and plans to initiate Phase I clinical trial in September 2008
For the second quarter of 2008, PharmAthene recognized revenues of $10.9 million compared to $2.3 million in the same period of 2007. For the six months ended June 30, 2008 and 2007, the Company reported revenues of $16.8 million and $5.3 million, respectively. Revenues for both periods of 2008 consisted primarily of contract funding from the U.S. government for the advanced development of Protexia(R) for treatment of nerve agent poisoning. With the Avecia acquisition, in the second quarter of 2008 revenues for the three and six month periods ended June 30, 2008 also resulted from the acquired government contracts supporting the development of SparVax(TM), a second generation anthrax recombinant protective antigen (rPA) vaccine, as well as RypVax(TM), the Company's recombinant dual antigen plague vaccine.
Research and development expenses were $11.2 million and $4.0 million for the quarter ended June 30, 2008 and 2007, respectively. For the six months ended June 30, 2008 and 2007, research and development expenses were $17.1 million and $7.1 million, respectively. These expenses resulted from research and development activities related to programs for Valortim(R) and for Protexia(R), as well as expenses related to the SparVax(TM) and RypVax(TM) programs which were acquired in the second quarter of 2008. The increase in research and development expenses is primarily due to process development, manufacturing activities and clinical development related to our programs.
General and administrative expenses for the Company were $5.2 million and $3.0 million for the quarter ended June 30, 2008 and 2007, respectively. For the six months ended June 30, 2008 and 2007, general and administrative expenses were $9.9 million and $5.5 million, respectively. Expenses associated with general and administrative functions for the Company increased $4.4 million, excluding PharmAthene UK costs of approximately $0.7 million for the six months ended June 2008 as compared to the same period last year, primarily due to increased employee costs, stock compensation expense and consulting and legal services costs associated with compliance, public entity activities and bid and proposal efforts.
For the second quarter of 2008 PharmAthene's net loss attributable to common shareholders was $21.9 million or $0.99 per share, compared to $7.0 million or $11.25 per share in the same period of 2007. For the six months ended June 30, 2008, the Company's net loss attributable to common shareholders was $26.9 million or $1.22 per share, compared to $11.7 million or $18.75 per share in the same period of 2007.
As of June 30, 2008, available cash, cash equivalents and short term investments were $19.0 million, excluding restricted cash totaling $15.8 million.
Conference Call and Webcast Information
PharmAthene management will host a conference call to discuss the Company's second quarter and six month results on August 12, 2008, at 4:30 p.m., E.T. The dial-in number for U.S. callers is 800-706-7741 and for international callers is 617-614-3471. The participant passcode is 48062719.
A replay of the conference call will be available for 30 days, beginning at approximately 6:30 p.m. E.T. on August 12, 2008 until approximately 11:50 p.m. E.T. September 9, 2008. The dial-in number for U.S. callers is 888-286-8010, and for international callers is 617-801-6888. The participant passcode is 76313724.
The webcast of the conference call 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. The webcast will be available for 30 days, or until September 9, 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 product development programs include:
-- SparVax(TM) -- a second generation recombinant protective antigen (rPA) anthrax vaccine
-- Valortim(R) -- a fully human monoclonal antibody for the prevention and treatment of anthrax infection
-- Protexia(R) -- a novel bioscavenger for the prevention and treatment
of morbidity and mortality associated with exposure to chemical nerve
-- RypVax(TM) -- a recombinant dual antigen vaccine for plague
-- a third generation rPA anthrax vaccine.
For more information about PharmAthene, please visit http://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,
the award of government contracts to our competitors, unforeseen safety
issues, unexpected determinations that these product candidates prove not
to be effective and/or capable of being marketed as products, as well as
risks detailed from time to time in PharmAthene's Form 10-K under the
caption "Risk Factors" and in its other reports filed with the U.S.
Securities and Exchange Commission (the "SEC"). Copies of PharmAthene's
public disclosure filings are available from its investor relations
department and our website under the investor relations tab at
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
Cash and cash equivalents $14,152,390 $40,582,643
Restricted cash 5,000,000 -
Short-term investments 4,813,365 12,153,945
Accounts receivable 8,162,565 5,245,763
Prepaid expenses 733,564 476,511
Other current assets 15,783 15,783
Total current assets 32,877,667 58,474,645
Long-term restricted cash 10,750,302 -
Property and equipment, net 6,386,079 6,571,024
Patents, net 1,197,659 1,312,991
Other long-term assets 183,588 183,588
Deferred costs 52,988 68,884
Goodwill 2,308,106 -
Total assets $53,756,389 $66,611,132
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $3,721,012 $1,393,664
Accrued expenses and other liabilities 7,696,786 3,602,886
Current portion of long-term debt 4,000,000 4,000,000
Total current liabilities 15,417,798 8,996,550
Other long-term liabilities 8,216,073 374,040
Long-term debt 15,397,575 16,668,458
Total liabilities 39,031,446 26,039,048
Common stock, $0.0001 par value;
100,000,000 shares authorized;
22,138,723 and 22,087,121 shares
issued and outstanding; respectively,
at June 30, 2008 and December 31, 2007 2,209 2,209
Additional paid-in capital 127,797,490 126,490,647
Accumulated other comprehensive income 1,198,580 1,481,779
Accumulated deficit (114,273,336) (87,402,551)
Total stockholders' equity 14,724,943 40,572,084
Total liabilities and stockholders' equity $53,756,389 $66,611,132
Three months ended June 30, Six months ended June 30,
2008 2007 2008 2007
Contract revenue $10,914,448 $2,339,427 $16,733,502 $5,301,186
Other revenue - - 21,151 7,000
10,914,448 2,339,427 16,754,653 5,308,186
development 11,184,288 3,995,359 17,061,343 7,086,963
administrative 5,174,056 2,974,426 9,852,780 5,454,251
development 15,906,002 - 15,906,002 -
amortization 239,914 162,160 436,017 309,293
expenses 32,504,260 7,131,945 43,256,141 12,850,507
Loss from operations (21,589,812) (4,792,518) (26,501,488) (7,542,321)
Interest income 362,170 93,597 833,935 149,213
Interest expense (651,778) (529,492) (1,318,775) (771,273)
Change in market
value of derivative
instruments 26,263 (14,455) 115,543 (6,829)
Total other expense (263,345) (450,350) (369,297) (628,889)
Net loss (21,853,157) (5,242,868) (26,870,785) (8,171,210)
stock to redemptive
value - (1,748,261) - (3,480,536)
Net loss attributable
shareholders $(21,853,157) $(6,991,129) $(26,870,785) $(11,651,746)
Basic and diluted
net loss per share $(0.99) $(11.25) $(1.22) $(18.75)
shares used in
basic and diluted
net loss per share 22,087,121 621,343 22,087,121 621,321
|SOURCE PharmAthene, Inc.|
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