ANNAPOLIS, Md., Aug. 5, 2015 /PRNewswire/ -- PharmAthene,
Inc. (NYSE MKT: PIP), a biodefense company developing medical
countermeasures against biological threats, today reported its
financial and operational results for the second quarter of
2015.
For the three months ended June 30,
2015, PharmAthene recognized revenue of $1.1 million compared to $3.7 million for the corresponding period in
2014. The decrease was primarily due to an overall reduction in
development activity in the Company's biodefense programs,
including the de-scoping of the SparVax® anthrax vaccine
contract.
Research and development expenses in the second quarter of 2015
were $1.2 million compared to
$2.4 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, including the de-scoping of our
SparVax® anthrax vaccine contract.
Expenses associated with general and administrative functions
were $1.8 million in the second
quarter of 2015 compared to $2.4
million for the same period in 2015. The decrease was
primarily due to a reduction in labor and stock option expenses
related to the Company's realignment plan, the implementation of
which reduced its workforce by approximately two-thirds.
For the second quarter of 2015, the Company reported a net loss
of $2.3 million, or $0.04 per share, compared to a net loss of
$0.4 million, or $0.01 per share, for the corresponding period in
2014.
At June 30, 2015, PharmAthene had
cash and cash equivalents totaling $18.4
million compared to $18.6
million at December 31, 2014.
U.S. Government billed and unbilled accounts receivable totaled
$1.2 million at June 30, 2015, compared to approximately
$0.4 million at December 31, 2014. The increase in receivables
was mainly due to an increase in the amount due from the U.S.
Government under the Company's anthrax vaccine development contract
with the National Institutes of Allergy and Infectious Diseases
(NIAID). The sum total of cash and cash equivalents and U.S.
Government accounts receivable at June 30,
2015 was $19.6 million
compared to $19.1 million at
December 31, 2014.
During March 2015, the Company
implemented its 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. SIGA disclosed in its Current Report on Form 8-K
filed April 29, 2015 that it entered
into a modification to its contract with BARDA on April 29, 2015 to increase the provisional dosage
of Tecovirimat and extend the delivery schedule. 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, if any,
remains subject to further proceedings in the Bankruptcy Court.
Further, at this point, future government funding to support the
development of 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, if PharmAthene prevails on appeal,
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.
Tables Follow
PHARMATHENE,
INC.
|
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
18,411,839
|
|
$
18,643,351
|
|
Billed accounts
receivable
|
387,635
|
|
110,656
|
|
Unbilled accounts
receivable
|
790,185
|
|
297,431
|
|
Prepaid expenses and
other current assets
|
316,014
|
|
199,194
|
Total current
assets
|
19,905,673
|
|
19,250,632
|
|
|
|
|
|
Property and
equipment, net
|
308,256
|
|
325,772
|
Other long-term
assets and deferred costs
|
53,384
|
|
53,384
|
Goodwill
|
2,348,453
|
|
2,348,453
|
Total
assets
|
$
22,615,766
|
|
$
21,978,241
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
208,456
|
|
$
391,396
|
|
Accrued expenses and
other liabilities
|
1,904,387
|
|
1,195,412
|
|
Accrued restructuring
expenses
|
790,617
|
|
-
|
|
Short-term
debt
|
249,491
|
|
746,146
|
|
Other short-term
liabilities
|
74,233
|
|
70,326
|
|
Current portion of
derivative instruments
|
108,302
|
|
178,509
|
Total current
liabilities
|
3,335,486
|
|
2,581,789
|
|
|
|
|
|
Other long-term
liabilities
|
462,621
|
|
493,137
|
Derivative
instruments, less current portion
|
481,747
|
|
629,170
|
Total
liabilities
|
4,279,854
|
|
3,704,096
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.0001
par value; 100,000,000 shares authorized; 63,912,193 and
63,603,303
shares issued and
outstanding at June 30, 2015 and December 31, 2014,
respectively
|
6,391
|
|
6,360
|
|
Additional
paid-in-capital
|
239,490,378
|
|
238,780,633
|
|
Accumulated other
comprehensive loss
|
-
|
|
(229,528)
|
|
Accumulated
deficit
|
(221,160,857)
|
|
(220,283,320)
|
Total stockholders'
equity
|
18,335,912
|
|
18,274,145
|
Total liabilities and
stockholders' equity
|
$
22,615,766
|
|
$
21,978,241
|
|
|
|
|
|
PHARMATHENE,
INC.
|
|
|
|
|
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Contract
revenue
|
$
1,149,570
|
|
$
3,658,933
|
|
$
8,218,316
|
|
$
7,401,458
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
1,222,527
|
|
2,372,687
|
|
2,836,154
|
|
5,799,687
|
|
General and
administrative
|
1,819,241
|
|
2,419,909
|
|
4,015,361
|
|
5,097,361
|
|
Restructuring
expense
|
35,982
|
|
-
|
|
2,096,791
|
|
-
|
|
Depreciation
|
36,687
|
|
36,208
|
|
73,793
|
|
76,147
|
Total operating
expenses
|
3,114,437
|
|
4,828,804
|
|
9,022,099
|
|
10,973,195
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
$
(1,964,867)
|
|
$
(1,169,871)
|
|
$
(803,783)
|
|
$
(3,571,737)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(13,279)
|
|
(56,554)
|
|
(38,604)
|
|
(126,426)
|
|
Realization of
cumulative translation adjustment
|
(229,192)
|
|
-
|
|
(229,192)
|
|
-
|
|
Change in fair value
of derivative instruments
|
(120,615)
|
|
782,549
|
|
217,630
|
|
1,025,190
|
|
Other income
(expense)
|
(1,911)
|
|
(1,912)
|
|
7,285
|
|
(1,550)
|
Total other income
(expense)
|
(364,997)
|
|
724,083
|
|
(42,881)
|
|
897,214
|
|
|
|
|
|
|
|
|
|
Net loss before
income taxes
|
(2,329,864)
|
|
(445,788)
|
|
(846,664)
|
|
(2,674,523)
|
|
Income tax
(provision) benefit
|
(11,068)
|
|
6,668
|
|
(30,873)
|
|
(23,037)
|
Net loss
|
$
(2,340,932)
|
|
$
(439,120)
|
|
$
(877,537)
|
|
$
(2,697,560)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
$
(0.04)
|
|
$
(0.01)
|
|
$
(0.01)
|
|
$
(0.05)
|
Weighted average
shares used in calculation of basic and
diluted net loss per
share
|
63,745,834
|
|
54,670,870
|
|
63,691,214
|
|
53,861,988
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pharmathene-reports-second-quarter-2015-financial-and-operational-results-300124284.html
SOURCE PharmAthene, Inc.