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): March 23, 2010
PHARMATHENE,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-32587
|
20-2726770
|
||
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
One Park Place, Suite 450, Annapolis,
Maryland
|
21401
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
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:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
|
Item
2.02
|
Results
of Operations and Financial
Condition.
|
On March
23, 2010, PharmAthene, Inc. issued a press release announcing its financial
and operational results for the year ended December 31, 2009. 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.
|
Item
9.01
|
Financial
Statements and Exhibits.
|
(d) Exhibits
|
No.
|
Description
|
|
|
99.1
|
Press
release, dated March 23, 2010, issued by
PharmAthene, Inc.
|
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.
|
PHARMATHENE,
INC.
(Registrant)
|
||
|
Date: March
23, 2010
|
By:
|
/s/
Charles A. Reinhart III
|
|
Charles
A. Reinhart III
Senior
Vice President,
Chief
Financial Officer
|
||
FOR IMMEDIATE
RELEASE
Contact:
Stacey
Jurchison
PharmAthene,
Inc.
Phone:
410-269-2610
Stacey.Jurchison@PharmAthene.com
PHARMATHENE
REPORTS YEAR-END 2009 FINANCIAL AND OPERATIONAL RESULTS AND PROVIDES UPDATE
ON ONGOING LITIGATION WITH SIGA TECHNOLOGIES
ANNAPOLIS, MD – March 23, 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 year ended December 31, 2009.
For the
year ended December 31, 2009 PharmAthene recognized revenues of $27.5 million
compared to $32.9 million for the year ended December 31, 2008. Revenues for
both periods consisted primarily of contract funding from the U.S. government
for the development of Protexia®,
SparVax™ and Valortim®. The
decrease in revenue in 2009 is primarily attributable to the shift of the
Protexia® program
from broad pre-clinical development efforts, including manufacturing, in 2008 to
a focus on clinical evaluation in 2009, as well as the completion, during the
third quarter of 2009, of all work and related funding under the initial phase
of the Company’s contract with the Department of Defense for Protexia®.
Research
and development expenses for the years ended December 31, 2009 and 2008 were
$30.2 million and $31.8 million, respectively. Research and development expenses
for 2009 consisted primarily of research and development activities related to
the Company’s Valortim® and
Protexia®
development programs as well as to the SparVax™, RypVax™
and third generation anthrax vaccine programs. The $1.6 million decrease in
research and development expenses was primarily due to a reduction in
preclinical development costs for the Protexia® program
as the Company progressed in its clinical evaluation phase, and a reduction in
development costs for its plague vaccine program, partially offset by increased
preclinical development costs associated with the Company’s anthrax-related
therapeutics and vaccines programs.
General
and administrative expenses were $22.4 million and $19.4 million for the years
ended December 31, 2009 and 2008, respectively. The increase in general and
administrative expenses was primarily due to costs associated with transitioning
the Company’s development and manufacturing activities for the SparVax™ and
third generation anthrax vaccine programs, along with other general and
administrative functions from the UK to the United States, and with preparing
and submitting various bids and proposals, along with increased non-cash,
stock-based compensation costs during 2009.
PharmAthene
Reports Year End 2009 Financial Results
Page
2
For the
year ended December 31, 2009, PharmAthene's net loss was $32.3 million, or $1.17
per share, compared to $36.4 million, or $1.59 per share, in the same period of
2008.
As of
December 31, 2009, the Company had cash and cash equivalents, short-term
investments, and US government account receivables and unbilled receivables
totaling approximately $22.8 million. We expect that these liquid
assets are adequate to fund the Company’s current operations through the
end of 2010.
In
February 2010, the Company and the Department of Health and Human Services
(HHS), through the Biomedical Advanced Research and Development Authority
(BARDA) entered into a modification of the parties’ existing research and
development contract providing for up to a total of $78.4 million in additional
funding, provided that certain milestones are achieved and that all contract
options and extensions are exercised by the government, to support the continued
advanced development of SparVax™. A
competitor of the Company filed a protest claiming that the modification should
have been subject to competitive bidding. In response, on March 19,
2010 HHS suspended performance under the contract modification, pending a ruling
on the protest, which is expected by June 11, 2010.
Also in
February 2010 PharmAthene submitted a White Paper seeking further development
funding for SparVax™, in response to a Broad Agency Announcement (Solicitation
Number: BAA-BARDA-09-34).
“PharmAthene ended the year with a
solid biodefense portfolio having made progress in all areas of our business,”
said David P. Wright, President and Chief Executive Officer. “The additional development funding
for our SparVax™ anthrax vaccine program announced in February could allow us to offer a promising
improved alternative to existing anthrax vaccine options. Phase I clinical trial results for
Protexia® provided important confirmation of its
safety and lack of immunogenicity in humans. These results, along
with accumulating data in animal models, which have shown that
Protexia® is capable of preventing toxicity from exposure to
chemical nerve agents,
suggest an important role for Protexia® in preventing or possibly treating the
toxic effects of nerve agents. Finally, recent non-clinical data from
our Valortim® program demonstrate a novel ability to
potentially
augment the immune system’s response to anthrax
bacteria, an exciting finding, which we continue to explore in greater
depth. We enter 2010
with significant momentum
and the potential to achieve significant additional contract funding for our
biodefense
programs.”
Mr.
Wright continued, “Regarding the Company’s ongoing litigation with SIGA
Technologies, discovery in the case was completed in February. On
March 19th SIGA
filed a motion for summary judgment. PharmAthene’s reply brief and
any cross motions for summary judgment are due in April, and we believe we have
several persuasive counter-arguments. All other summary judgment related briefs
are due from both parties in May. We anticipate the court will hold a
hearing on the motions in June or July. Thereafter, once the court
rules on the motions for summary judgment, and assuming no open issues remain in
the case, the parties can then ask the court to set a trial date. We
continue to believe that our case has merit and intend to pursue it
vigorously.”
PharmAthene
Reports Year End 2009 Financial Results
Page
3
Conference
Call and Webcast Information
PharmAthene
management will host a conference call to discuss the Company’s year-end
financial results. The call is scheduled to begin at 4:30 p.m.
Eastern Time on Tuesday, March 23, 2010, and is expected to last approximately
45 minutes.
The
dial-in number within the United States is 800-659-1942. The dial-in
number for international callers is 617-614-2710. The participant
passcode is 35720559.
A replay
of the conference call will be available for 30 days, beginning at approximately
7:30 p.m. Eastern Time on Tuesday, March 23, 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 63696931.
The
conference call will also be webcast and can be accessed from the company’s
website at www.pharmathene.com. A link to the webcast may be found
under 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:
|
·
|
SparVax™
- a second generation recombinant protective antigen (rPA) anthrax
vaccine
|
|
·
|
Third
generation rPA anthrax vaccine
|
|
·
|
Valortim® -
a fully human monoclonal antibody for the prevention and treatment of
anthrax infection
|
|
·
|
Protexia® - a
novel bioscavenger for the prevention and treatment of morbidity and
mortality associated with exposure to chemical nerve
agents
|
For more
information about PharmAthene, please visit www.PharmAthene.com.
PharmAthene
Reports Year End 2009 Financial Results
Page
4
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";
“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 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, 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"). In
particular, while the Company believes that the protest to the recent
modification to the Company’s existing contract with BARDA for the research and
development of SparVax™ is
unlikely to be sustained, if the GAO were to rule in favor of the protestor,
such a ruling could have a material adverse effect on the financial position and
operations of the Company.
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
Reports Year End 2009 Financial Results
Page
5
|
PHARMATHENE,
INC.
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
December
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 2,673,567 | $ | 19,752,404 | ||||
|
Restricted
cash
|
- | 12,000,000 | ||||||
|
Short-term
investments
|
3,137,071 | 3,190,912 | ||||||
|
Accounts
receivable
|
8,866,346 | 3,800,840 | ||||||
|
Other receivables (including
unbilled receivables)
|
8,566,425 | 6,480,749 | ||||||
|
Prepaid expenses and other
current assets
|
973,214 | 917,125 | ||||||
|
Total
current assets
|
24,216,623 | 46,142,030 | ||||||
|
Long-term
restricted cash
|
- | 1,250,000 | ||||||
|
Property
and equipment, net
|
6,262,388 | 5,313,219 | ||||||
|
Patents,
net
|
928,577 | 925,489 | ||||||
|
Other
long-term assets and deferred costs
|
308,973 | 257,623 | ||||||
|
Goodwill
|
2,348,453 | 2,502,909 | ||||||
|
Total
assets
|
$ | 34,065,014 | $ | 56,391,270 | ||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 1,934,119 | $ | 3,870,871 | ||||
|
Accrued expenses and other
liabilities
|
11,532,101 | 14,624,757 | ||||||
|
Convertible
notes
|
- | 13,377,505 | ||||||
|
Current portion of long-term
debt
|
- | 4,000,000 | ||||||
|
Total
current liabilities
|
13,466,220 | 35,873,133 | ||||||
|
Other
long-term liabilities
|
452,618 | 626,581 | ||||||
|
Derivative
instruments
|
835,299 | - | ||||||
|
Convertible
notes and other debt, net of discount of $2,705,440 in
2009
|
17,426,513 | 928,117 | ||||||
|
Total
liabilities
|
32,180,650 | 37,427,831 | ||||||
|
Stockholders'
equity:
|
||||||||
|
Common
stock, $0.0001 par value; 100,000,000 shares
|
||||||||
|
authorized;
28,130,284 and 25,890,143 shares issued and
|
||||||||
|
outstanding at December 31, 2009
and 2008
|
2,813 | 2,589 | ||||||
|
Additional
paid-in-capital
|
157,004,037 | 142,392,163 | ||||||
|
Accumulated other comprehensive
income
|
1,188,156 | 386,351 | ||||||
|
Accumulated
deficit
|
(156,310,642 | ) | (123,817,664 | ) | ||||
|
Total
stockholders' equity
|
1,884,364 | 18,963,439 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 34,065,014 | $ | 56,391,270 | ||||
PharmAthene
Reports Year End 2009 Financial Results
Page
6
|
PHARMATHENE,
INC.
|
||||||||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||
|
Year
ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Contract
revenue
|
$ | 27,549,978 | $ | 32,821,526 | ||||
|
Other
revenue
|
- | 89,802 | ||||||
| 27,549,978 | 32,911,328 | |||||||
|
Operating
expenses:
|
||||||||
|
Research and
development
|
30,219,758 | 31,812,431 | ||||||
|
General and
administrative
|
22,432,585 | 19,397,532 | ||||||
|
Acquired in-process research and
development
|
- | 16,131,002 | ||||||
|
Depreciation and
amortization
|
872,304 | 813,891 | ||||||
|
Total
operating expenses
|
53,524,647 | 68,154,856 | ||||||
|
Loss
from operations
|
(25,974,669 | ) | (35,243,528 | ) | ||||
|
Other
income (expenses):
|
||||||||
|
Interest
income
|
269,133 | 1,225,471 | ||||||
|
Loss on early extinguishment of
debt
|
(4,690,049 | ) | - | |||||
|
Interest
expense
|
(2,837,302 | ) | (2,573,406 | ) | ||||
|
Other income
(expense)
|
(90,655 | ) | 58,106 | |||||
|
Change in market value of
derivative instruments
|
1,043,782 | 118,244 | ||||||
|
Total
other income (expenses)
|
(6,305,091 | ) | (1,171,585 | ) | ||||
|
Net
loss
|
$ | (32,279,760 | ) | $ | (36,415,113 | ) | ||
|
Basic
and diluted net loss per share
|
$ | (1.17 | ) | $ | (1.59 | ) | ||
|
Weighted
average shares used in calculation of basic and diluted
|
||||||||
|
net
loss per share
|
27,575,332 | 22,944,066 | ||||||