UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): August 12,
2010
PHARMATHENE,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
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001-32587
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20-2726770
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||
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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One Park Place, Suite 450, Annapolis,
Maryland
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21401
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number including area code: (410) 269-2600
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition.
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On August 12, 2010, PharmAthene, Inc. issued a press release announcing its
financial and operational results for the quarter ended June 30, 2010. A
copy of the press release is furnished as Exhibit 99.1 to this
report.
In accordance with General Instruction
B.2. of Form 8-K, the information in this Current Report on Form 8-K,
including Exhibit 99.1, shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liabilities of that section, and
shall not be incorporated by reference into any registration statement or other
document filed under the Securities Act of 1933, as amended, or the Exchange
Act, except as shall be expressly set forth by specific reference in such
filing.
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Item
9.01
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Financial
Statements and Exhibits.
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(d) Exhibits
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No.
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Description
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99.1
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Press
release, dated August 12, 2010, issued by
PharmAthene, Inc.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PHARMATHENE,
INC.
(Registrant)
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|||
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Date: August
12, 2010
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By:
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/s/
Charles A. Reinhart III
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| Charles A. Reinhart III | |||
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Senior
Vice President,
Chief
Financial Officer
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|||
Contact:
Stacey
Jurchison
PharmAthene,
Inc.
Phone:
410-269-2610
Stacey.Jurchison@PharmAthene.com
PHARMATHENE
REPORTS SECOND QUARTER 2010
FINANCIAL
AND OPERATIONAL RESULTS
ANNAPOLIS, MD – August 12,
2010 – 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, 2010.
For the
second quarter of 2010, PharmAthene recognized revenues of $4.8 million compared
to $8.1 million in the same period of 2009. For the six months ended
June 30, 2010 and 2009, respectively, PharmAthene recognized revenues of $7.9
million and $13.6 million. Revenues for the most recent quarter and
six months ended June 30, 2010 consisted primarily of contract funding from the
U.S. government for the development of Protexia®,
SparVax™ and Valortim®. The
decline in revenue in the second quarter of 2010 and first six months of 2010
compared to 2009, is primarily attributable to the completion in the third
quarter of 2009 of the first phase of development activities under the Company’s
existing contract with the Department of Defense (DoD) for Protexia®.
Research
and development expenses were $5.9 million and $10.2 million for the quarter
ended June 30, 2010 and 2009, respectively. Research and development
expenses were $10.9 million and $16.0 million for the six months ended June 30,
2010 and 2009, respectively. Research and development expenses
decreased in the second quarter and first six months of 2010 compared to the
prior year period primarily as the result of a $3.0 million one-time termination
fee to Avecia, incurred in the second quarter of 2009.
Expenses
associated with general and administrative functions were $4.1 million in the
second quarter of 2010 compared to $4.4 million in the same period in
2009. Expenses associated with general and administrative functions
were $9.4 million and $9.6 million for the six months ended June 30, 2010 and
2009, respectively. General and administrative expenses decreased
$0.3 million for the three months ended June 30, 2010 and $0.1 million for the
six months ended June 30, 2010, as compared to the prior year periods, due to
the recording of a bad debt expense in the amount of approximately $1.1 million
in the second quarter of 2010 and $1.6 million for the first six months of 2010,
primarily associated with an invoice to the Company’s government customer
related to rPA anthrax vaccine development work performed at Avecia prior to the
transfer of development activities to a U.S-based manufacturer, and the novation
of the Company’s government contract for the advanced development of its rPA
anthrax vaccine candidate from NIH to BARDA. These expenses were more than
offset by reduced accruals for bonuses, salaries, stock compensation,
recruiting, relocation, and travel expenses.
For the
second quarter of 2010, PharmAthene's net loss attributable to common
shareholders was $6.4 million or $0.22 per share, compared to $6.6 million or
$0.24 per share in the same period of 2009. For the six months ended
June 30, 2010, the Company's net loss attributable to common shareholders was
$14.3 million or $0.50 per share, compared to $12.6 million or $0.47 per share
in the same period of 2009.
As of
June 30, 2010, the Company had cash and cash equivalents, restricted cash,
short-term investments, and US government account receivables and other
receivables totaling approximately $13.7 million as compared to $23.2 million at
December 31, 2009. In July 2010, PharmAthene completed a public
sale of approximately 2.8 million shares of the Company’s common stock and
6-year warrants for approximately 1.3 million shares of common stock, generating
gross proceeds of $3.9 million.
“We
continued to make solid progress in our biodefense programs in the second
quarter,” commented Eric I. Richman, President and Interim Chief Executive
Officer. “In June we were pleased to be informed that the U.S.
Government Accountability Office had denied a competitor’s protest challenging a
previously announced contract modification for up to $78.4 million for our rPA
anthrax vaccine program. Funding under the contract modification has
since resumed and we are moving forward with additional development activities
for this program. We continue to work closely with our partners at
the National Institutes of Health (NIH) and the Biomedical Advanced Research and
Development Authority (BARDA) to advance these important medical countermeasures
to protect Americans at home and on the battlefield.”
Mr.
Richman continued, “We also made important advancements in the development of a
lyophilized, or freeze dried, version of our rPA vaccine. Preliminary
studies suggest that our lyophilized rPA formulation is structurally stable and
potent at temperatures up to 70ºC. If successfully developed, a
lyophilized rPA-based vaccine could meet the requirements for a cold-chain-free
vaccine, an important advantage for the Strategic National Stockpile and the
foundation of Project BioShield, which was established to encourage the
development and acquisition of next generation medical countermeasures based on
modern technologies, which offer improvements in safety, convenience, cost, and
effectiveness.”
Conference
Call and Webcast Information
PharmAthene
management will host a conference call to discuss the Company's second quarter
financial and operational results today at 4:30 pm E.T. The dial-in number for
U.S. callers is 888-396-2356 and for international callers is
617-847-8709. The participant passcode is 49692735.
A replay
of the conference call will be available beginning at approximately 7:00 p.m.
E.T. on August 12, 2010 until approximately 11:59 p.m. Eastern Time September
12, 2010. 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 57845576.
A webcast
of the conference call will be available until September 12, 2010 and 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.
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:
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·
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SparVax™
- a second generation recombinant protective antigen (rPA) anthrax
vaccine
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·
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Valortim® -
a fully human monoclonal antibody for the prevention and treatment of
anthrax infection
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·
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Protexia® -
a novel bioscavenger for the prevention and treatment of morbidity and
mortality associated with exposure to chemical nerve
agents
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For more
information about PharmAthene, please visit 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, challenges
related to the development, scale-up, technology transfer, and/or process
validation of manufacturing processes for our product candidates, unexpected
determinations that these product candidates prove not to be effective and/or
capable of being marketed as products, unexpected financial obligations that
could increase the rate of our cash consumption, challenges related to our plan
to regain NYSE Amex compliance, as well as 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 (the
"SEC"). We have based our projection of future cash needs on the Company's
current and anticipated operations, which do not take into account any potential
future government contracts that may be awarded to the Company, merger &
acquisition or corporate partnering activities, or unexpected financial
obligations. Further, significant additional non-clinical animal studies, human
clinical trials, and manufacturing development work remain to be completed for
both our lyophilized rPA anthrax vaccine candidate and SparVax™. At this point
there can be no assurance that either of these product candidates will be shown
to be safe and effective and approved by regulatory authorities for use in
humans.
Copies of
PharmAthene's public disclosure filings are available from its investor
relations department and our website under the investor relations tab at www.PharmAthene.com.
-- Tables
Follow --
PHARMATHENE,
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three
months ended
June
30,
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Six
months ended
June
30,
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|||||||||||||||
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2010
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2009
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2010
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2009
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|||||||||||||
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Contract
revenue
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$ | 4,779,591 | $ | 8,071,211 | $ | 7,896,144 | $ | 13,593,114 | ||||||||
| 4,779,591 | 8,071,211 | 7,896,144 | 13,593,114 | |||||||||||||
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Operating
expenses:
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||||||||||||||||
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Research
and development
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5,940,360 | 10,225,349 | 10,892,753 | 16,044,516 | ||||||||||||
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General
and administrative
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4,121,822 | 4,416,248 | 9,447,244 | 9,562,247 | ||||||||||||
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Depreciation
and amortization
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254,440 | 199,699 | 499,698 | 392,177 | ||||||||||||
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Total
operating expenses
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10,316,622 | 14,841,296 | 20,839,695 | 25,998,940 | ||||||||||||
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Loss
from operations
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(5,537,031 | ) | (6,770,085 | ) | (12,943,551 | ) | (12,405,826 | ) | ||||||||
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Other
income (expenses):
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||||||||||||||||
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Interest
income
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2,582 | 92,853 | 6,065 | 197,098 | ||||||||||||
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Interest
expense
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(921,465 | ) | (598,395 | ) | (1,869,615 | ) | (1,200,510 | ) | ||||||||
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Loss
on early extinguishment of debt
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||||||||||||||||
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Other
income (expense)
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29,752 | - | 169,174 | - | ||||||||||||
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Change
in market value of derivative instruments
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33,470 | 643,702 | 300,966 | 764,291 | ||||||||||||
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Total
other income (expenses)
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(855,661 | ) | 138,160 | (1,393,410 | ) | (239,121 | ) | |||||||||
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Net
loss
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(6,392,692 | ) | (6,631,925 | ) | (14,336,961 | ) | (12,644,947 | ) | ||||||||
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Basic
and diluted net loss per share
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(0.22 | ) | (0.24 | ) | (0.50 | ) | (0.47 | ) | ||||||||
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Weighted
average shares used in calculation of basic and diluted net loss per
share
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29,619,193 | 28,056,824 | 28,900,882 | 27,038,761 | ||||||||||||
PHARMATHENE,
INC.
CONSOLIDATED
BALANCE SHEETS
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Unaudited
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||||||||
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June
30
2010
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December
31
2009
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|||||||
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ASSETS
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||||||||
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 682,001 | $ | 2,673,567 | ||||
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Restricted
Cash
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100,000 | - | ||||||
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Short-term
investments
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- | 3,137,071 | ||||||
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Accounts
receivable, net
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8,630,362 | 8,866,346 | ||||||
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Other
receivables (including unbilled receivables)
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4,303,312 | 8,566,425 | ||||||
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Prepaid
expenses and other current assets
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660,476 | 973,214 | ||||||
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Total
current assets
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$ | 14,376,151 | $ | 24,216,623 | ||||
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Long-term
restricted cash
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$ | - | $ | - | ||||
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Property
and equipment, net
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6,182,007 | 6,262,388 | ||||||
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Patents,
net
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855,417 | 928,577 | ||||||
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Other
long-term assets and deferred costs
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102,244 | 308,973 | ||||||
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Goodwill
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2,348,453 | 2,348,453 | ||||||
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Total
assets
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$ | 23,864,272 | $ | 34,065,014 | ||||
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LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
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Current
liabilities:
|
||||||||
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Accounts
payable
|
$ | 8,402,535 | $ | 1,934,119 | ||||
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Accrued
expenses and other liabilities
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4,288,188 | 11,532,101 | ||||||
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Total
current liabilities
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$ | 12,690,723 | $ | 13,466,220 | ||||
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Other
long-term liabilities
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$ | 459,850 | $ | 452,618 | ||||
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Derivative
instruments
|
1,150,134 | 835,299 | ||||||
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Long-term
debt
|
19,160,935 | 17,426,513 | ||||||
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Total
liabilities
|
$ | 33,461,642 | $ | 32,180,650 | ||||
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Stockholders'
equity (deficit):
|
||||||||
|
Common
stock, $0.0001 par value; 100,000,000 shares authorized; 29,857,288 and
28,130,284 shares issued and outstanding at June 30, 2010 and December 31,
2009, respectively
|
$ | 2,986 | $ | 2,813 | ||||
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Additional
paid-in-capital
|
159,998,323 | 157,004,037 | ||||||
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Accumulated
other comprehensive income
|
1,048,924 | 1,188,156 | ||||||
|
Accumulated
deficit
|
(170,647,603 | ) | (156,310,642 | ) | ||||
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Total
stockholders' equity (deficit)
|
$ | (9,597,370 | ) | $ | 1,884,364 | |||
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Total
liabilities and stockholders' equity (deficit)
|
$ | 23,864,272 | $ | 34,065,014 | ||||