ANNAPOLIS, Md., May 7, 2015 /PRNewswire/ -- 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 first
quarter of 2015. Highlights during and subsequent to the quarter
include:
- Delaware Court of Chancery
issues final judgment granting lump sum award to PharmAthene
totaling approximately $195
million
- Implementation of Realignment Plan to maximize the value of any
proceeds from its litigation with SIGA Technologies, Inc. and its
existing biodefense assets
- Recorded revenue of $5.8 million
related to the BARDA audit
For the three months ended March 31,
2015, PharmAthene recognized revenue of $7.1 million compared to $3.7 million for the corresponding period in
2014. The increase was primarily due to revenue recognition of a
one-time payment of $5.8 million
related to the audit by BARDA of indirect costs or rates charged by
PharmAthene on the SparVax® contract for the years 2008
through 2013. The $5.8 million
represented the difference between actual rates (i.e., actual cost
to PharmAthene) and the provisional rates used to calculate
previously billed and recognized revenue. The difference was
invoiced in March of 2015 and was paid by BARDA in April of
2015.
Research and development expenses in the first quarter of 2015
were $1.6 million compared to
$3.4 million for the corresponding
period in 2014. Research and development expenses decreased
primarily as a result of reduced activity under the Company's
biodefense contracts.
Expenses associated with general and administrative functions
were $2.2 million in the first
quarter of 2015 compared to $2.7
million in the first quarter of 2014. The decrease was
primarily due to a reduction in labor and stock option expenses
related to the Realignment Plan.
For the first quarter of 2015, the Company reported
restructuring expense of $2.1 million
relating to the Realignment Plan implemented during the same
quarter. Of the restructuring expense, $2.0
million was attributable to severance expense.
For the first quarter of 2015, the Company's net income was
$1.3 million, or $0.02 per share, compared to a net loss of
$2.3 million, or $0.04 per share, for the corresponding period in
2014.
At March 31, 2015, PharmAthene had
cash and cash equivalents totaling $15.7
million compared to $18.6
million at December 31, 2014.
U.S. government billed and unbilled accounts receivable totaled
$6.6 million at March 31, 2015, compared to $0.4 million at December
31, 2014. The increase in receivables was mainly due to the
$5.8 million invoice to BARDA. The
sum total of cash and cash equivalents and U.S. government accounts
receivable at March 31, 2015 was
$22.3 million compared to
$19.1 million at December 31, 2014.
During March 2015, the Company
implemented a Realignment Plan and reduced its workforce by
two-thirds in an effort to maximize the value of any proceeds from
its litigation with SIGA and its existing biodefense assets. The
Company expects its cost-saving initiatives will preserve and
maximize cash and cash equivalents sufficient to finance its
operations beyond the adjudication of the appeal of the decision of
the Delaware Chancery Court
awarding PharmAthene $195 million
plus post-judgment interest. PharmAthene has maintained the
resources necessary to execute under its current government
contract with NIAID and to seek partners, co-developers or
acquirers for its other biodefense programs.
About PharmAthene
Since 2001, PharmAthene has been a biodefense company engaged in
the development of next generation medical countermeasures against
biological and chemical threats. During this time, it has devoted
substantial effort and resources to the development of medical
countermeasures for the prevention and treatment of anthrax
infection and the prevention of nerve agent poisoning.
PharmAthene's biodefense portfolio includes Anthrax vaccines -
including SparVax®, a second generation liquid
recombinant protective antigen (rPA) anthrax vaccine, and a next
generation lyophilized anthrax vaccine containing rPA;
On January 15, 2015, the
Delaware Court of Chancery issued
its Final Order and Judgment in PharmAthene's litigation against
SIGA. The Court of Chancery awarded to PharmAthene lump sum
expectation damages for the value of PharmAthene's lost profits for
SIGA's smallpox antiviral, Tecovirimat, also known as
ST-246® (formerly referred to as "Arestvyr™" and
referred to by SIGA in its recent SEC filings 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. SIGA has filed a notice of
appeal with the Delaware Supreme Court and PharmAthene has filed a
notice of cross-appeal.
The court's determination of the final amount of the award,
along with the decision itself, will remain subject to appeal by
SIGA to the Delaware Supreme Court and PharmAthene's ability to
collect a monetary judgment from SIGA remains subject to that
appeal and further proceedings in the Bankruptcy Court.
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 the
judgment relating to Tecovirimat, also known as ST-246®
(formerly referred to as "Arestvyr™" and referred to by SIGA in its
recent SEC filings as "Tecovirimat") (including the risk that we
will not be able to collect any amounts related thereto); risks
relating to our continuing ability to recognize cost reductions;
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 under our
September 2014 contract with NIAID
after we receive funding of approximately $5.2 million over the base period (if all
technical milestones are met); 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 delays caused by third parties challenging
government contract awards to us; risks associated with unforeseen
safety and efficacy issues;; risks associated with our realignment
plan; risks associated with accomplishing any future strategic
partnerships or business combinations; risks associated with
continuing funding requirements and dilution related thereto; risks
relating to our ability to continue to satisfy the listing
requirements of the NYSE MKT; 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. On January 15, 2015, the Delaware Court of Chancery issued its Final
Order and Judgment in PharmAthene's litigation against SIGA. The
Court of Chancery awarded to PharmAthene lump sum expectation
damages for the value of PharmAthene's lost profits for SIGA's
smallpox antiviral, 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.
Under the Final Order and Judgment, PharmAthene is also
entitled to post-judgment simple interest. PharmAthene's
entitlement to interest from and after SIGA's bankruptcy filing (as
described below) may be negatively impacted by the Bankruptcy
Code. SIGA has filed a notice of appeal with the Delaware
Supreme Court in which it challenges various findings of the Court
of Chancery and seeks to set aside the Final Order and Judgment,
and we have filed a notice of cross-appeal.
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. SIGA has stated publicly that it does not currently
have cash sufficient to satisfy the award. It is also uncertain
whether SIGA will have such cash in the future. PharmAthene's
ability to collect the Judgment depends upon a number of factors,
including SIGA's financial and operational success, which is
subject to a number of significant risks and uncertainties (certain
of which are outlined in SIGA's filings with the SEC), as to which
we have limited knowledge and which we have no ability to control,
mitigate or fully evaluate. Furthermore, because SIGA has
filed for protection under the federal bankruptcy laws, PharmAthene
is automatically stayed from taking any enforcement action in the
Delaware Court of Chancery. By
agreement of the parties, and with the approval of the Bankruptcy
Court, the automatic stay has been lifted for the sole purpose of
allowing the Delaware Court of
Chancery to enter a money judgment and to allow the parties to
exercise their appellate rights. Our ability to collect a money
judgment from SIGA remains subject to further proceedings in the
Bankruptcy Court. 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. It is also uncertain whether any of
our product candidates will be shown to be safe and effective and
approved by regulatory authorities for use in humans.
Finally, PharmAthene can offer no assurances that it has
correctly estimated the resources necessary to execute under its
NIAID contract and seek partners, co-developers or acquirers for
its other programs under its realignment plan. If a larger
workforce or one with a different skillset is ultimately required
to implement the realignment plan successfully, or if PharmAthene
inaccurately estimated the cash and cash equivalents necessary to
finance its operations until SIGA's appeal has been adjudicated and
it has received SIGA's payment, its business, results of
operations, financial condition and cash flows may be materially
and adversely affected.
Copies of PharmAthene's public disclosure filings are available
on our website under the investor relations tab at
www.PharmAthene.com.
PHARMATHENE,
INC.
|
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
15,724,956
|
|
$
18,643,351
|
|
Billed accounts
receivable
|
5,973,988
|
|
110,656
|
|
Unbilled accounts
receivable
|
594,259
|
|
297,431
|
|
Prepaid expenses and
other current assets
|
446,240
|
|
199,194
|
Total current
assets
|
22,739,443
|
|
19,250,632
|
|
|
|
|
|
Property and
equipment, net
|
324,018
|
|
325,772
|
Other long-term
assets and deferred costs
|
53,384
|
|
53,384
|
Goodwill
|
2,348,453
|
|
2,348,453
|
Total
assets
|
$
25,465,298
|
|
$
21,978,241
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
536,994
|
|
$
391,396
|
|
Accrued expenses and
other liabilities
|
1,451,506
|
|
1,195,412
|
|
Accrued restructuring
expenses
|
1,927,877
|
|
-
|
|
Current portion of
long-term debt
|
498,203
|
|
746,146
|
|
Other short-term
liabilities
|
72,674
|
|
70,326
|
|
Current portion of
derivative instruments
|
49,463
|
|
178,509
|
Total current
liabilities
|
4,536,717
|
|
2,581,789
|
|
|
|
|
|
Other long-term
liabilities
|
485,365
|
|
493,137
|
Derivative
instruments, less current portion
|
419,971
|
|
629,170
|
Total
liabilities
|
5,442,053
|
|
3,704,096
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.0001
par value; 100,000,000 shares authorized; 63,674,326 and 63,603,303
shares issued and outstanding at March 31, 2015 and December 31,
2014, respectively
|
6,367
|
|
6,360
|
|
Additional
paid-in-capital
|
239,064,585
|
|
238,780,633
|
|
Accumulated other
comprehensive loss
|
(227,782)
|
|
(229,528)
|
|
Accumulated
deficit
|
(218,819,925)
|
|
(220,283,320)
|
Total stockholders'
equity
|
20,023,245
|
|
18,274,145
|
Total liabilities and
stockholders' equity
|
$
25,465,298
|
|
$
21,978,241
|
|
PHARMATHENE,
INC.
|
|
|
|
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UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
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|
|
|
|
|
|
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|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Contract
revenue
|
$
7,068,746
|
|
$
3,742,525
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
1,613,627
|
|
3,427,000
|
|
General and
administrative
|
2,196,120
|
|
2,677,452
|
|
Restructuring
expense
|
2,060,809
|
|
-
|
|
Depreciation
|
37,106
|
|
39,939
|
Total operating
expenses
|
5,907,662
|
|
6,144,391
|
|
|
|
|
|
Income (loss) from
operations
|
$
1,161,084
|
|
$
(2,401,866)
|
Other income
(expense):
|
|
|
|
|
Interest expense,
net
|
(25,325)
|
|
(69,872)
|
|
Change in fair value
of derivative instruments
|
338,245
|
|
242,641
|
|
Other
income
|
9,196
|
|
362
|
Total other
income
|
322,116
|
|
173,131
|
|
|
|
|
|
Net income (loss)
before income taxes
|
1,483,200
|
|
(2,228,735)
|
|
Income tax
provision
|
(19,805)
|
|
(29,705)
|
Net income
(loss)
|
$
1,463,395
|
|
$
(2,258,440)
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
1,277,017
|
|
$
(2,258,440)
|
|
|
|
|
|
Basic net income
(loss) per share
|
$
0.02
|
|
$
(0.04)
|
Diluted net income
(loss) per share
|
$
0.02
|
|
$
(0.04)
|
Weighted average
shares used in calculation of basic net income (loss) per
share
|
63,633,290
|
|
53,044,119
|
Weighted average
shares used in calculation of diluted net income (loss) per
share
|
63,979,859
|
|
53,044,119
|
|
The accompanying
notes are an integral part of the unaudited condensed consolidated
financial statements.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pharmathene-reports-first-quarter-2015-financial-and-operational-results-300079928.html
SOURCE PharmAthene, Inc.