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): November 11,
2010
PHARMATHENE,
INC.
(Exact
name of registrant as specified in its charter)
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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 November 11, 2010, PharmAthene, Inc. issued a press release announcing
its financial and operational results for the quarter ended September 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 November 11, 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: November
11, 2010
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By:
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/s/ Charles A. Reinhart | |
| 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 THIRD QUARTER 2010
FINANCIAL
AND OPERATIONAL RESULTS
Recent
Financing Strengthens PharmAthene’s Balance Sheet
ANNAPOLIS, MD – November 11,
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 third quarter and nine
months ended September 30, 2010.
For the
third quarter of 2010, PharmAthene recognized revenues of $6.2 million compared
to $6.8 million in the same period of 2009. For the nine months ended
September 30, 2010 and 2009, respectively, PharmAthene recognized revenues of
$14.1 million and $20.4 million. Revenues for the most recent quarter
and nine months ended September 30, 2010 consisted primarily of contract funding
from the U.S. government for the development of SparVax™, Valortim®,
and Protexia®.
The
decline in revenue in the third quarter and first nine months of 2010 compared
to 2009 is attributable to (i) the completion of activities under the Company’s
existing Department of Defense (DoD) contract for Protexia®, which
concluded in the third quarter of 2009, partially offset by modest funding from
the DoD for this program in the second and third quarters of 2010, and (ii)
reduced activity in the Company’s Valortim® program,
(iii) the completion of all activities in the Company’s plague program during
early 2010, (iv) partially offset by increased revenues under the Company’s
SparVax™ program.
Research
and development expenses were $6.2 million and $7.9 million for the quarter
ended September 30, 2010 and 2009, respectively. Research and
development expenses were $17.1 million and $23.9 million for the nine months
ended September 30, 2010 and 2009, respectively.
Research
and development expenses decreased in the third quarter and first nine months of
2010 compared to the prior year period as a result of decreased activity in the
Company’s Valortim® anthrax
anti-toxin and chemical nerve agent bioscavenger programs, as well as the
completion of all activities in the Company’s plague program, partially offset
by increased activity under the SparVax™ anthrax vaccine program. In
addition, the decrease in research and development costs for the nine months
ended September 30, 2010 also reflects the inclusion of a one-time $3.0 million
Avecia termination fee in the second quarter of 2009.
1
Expenses
associated with general and administrative functions were $3.2 million in the
third quarter of 2010 compared to $6.2 million in the same period in
2009. Expenses associated with general and administrative functions
were $12.6 million and $15.8 million for the nine months ended September 30,
2010 and 2009, respectively.
General
and administrative expenses decreased approximately $3.0 million for the three
months ended September 30, 2010, and approximately $3.2 million for the nine
months ended September 30, 2010, as compared to the prior year
periods. These decreases were the net result of a corporate wide cost
reduction program which included reductions in personnel expenses, professional
services, and non cash stock-based compensation.
For the
third quarter of 2010, PharmAthene's net loss attributable to common
shareholders was $4.3 million or $0.14 per share, compared to $14.0 million or
$0.50 per share in the same period of 2009. For the nine months ended
September 30, 2010, the Company's net loss attributable to common shareholders
was $18.7 million or $0.62 per share, compared to $26.6 million or $0.97 per
share in the same period of 2009.
As of
September 30, 2010, the Company had cash and cash equivalents, restricted cash,
short-term investments, and US government account receivables and other
receivables totaling approximately $11.5 million as compared to $23.2 million at
December 31, 2009. In November 2010, PharmAthene completed a
registered public offering of approximately 4.3 million shares of the Company’s
common stock at a price to the public of $3.50 per share, which generated
estimated net proceeds of $14.1 million before
expenses. Simultaneously with the closing, certain of the Company’s
10% senior convertible note holders converted their notes into an aggregate
of approximately 3.4 million shares of the Company’s common stock.
“This
financing, in combination with the conversion of certain of our senior
convertible notes, has significantly strengthened the Company’s cash position
and reduced our current debt. Combined with our ongoing expense
reduction plan and streamlined operations, we believe PharmAthene is now well
capitalized through the balance of 2011,” commented Eric I. Richman, President
and Chief Executive Officer of PharmAthene.
Conference
Call and Webcast Information
PharmAthene
management will be hosting a conference call to discuss the Company’s third
quarter 2010 financial results. The call is scheduled to begin at
4:30 p.m. Eastern Time on Thursday, November 11, 2010, and is expected to last
approximately 30 minutes. The dial-in number within the United States is
800-299-0148. The dial-in number for international callers is
617-801-9711. The participant passcode is 56373544.
A replay
of the conference call will be available beginning at approximately 7:30 p.m.
Eastern Time on November 11, 2010 until approximately 11:59 p.m. Eastern Time on
December 11, 2010. The dial-in number to access the reply from within
the United States is 888-286-8010. For international callers,
the dial-in number is 617-801-6888. The participant passcode is
23749330.
2
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:
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·
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SparVax™
- a second generation recombinant protective antigen (rPA) anthrax vaccine
and a third generation anthrax vaccine with potential for improved potency
and stability
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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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rBChE
- recombinant butyrylcholinesterase bioscavanger: Protexia® and a
second generation Advanced Expression System ("AES") countermeasures for
nerve agent poisoning by organophosphate compounds, including nerve gases
and pesticides
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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, challenges related to the implementation of our NYSE Amex compliance
plan, (for example, if the Exchange deems PharmAthene’s progress toward
compliance inadequate or if PharmAthene does not satisfy the NYSE Amex
continuing listing standards by January 26, 2012), 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"). 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 --
3
PHARMATHENE,
INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three
months ended
September
30,
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Nine
months ended
September
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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$ | 6,243,567 | $ | 6,830,399 | $ | 14,139,711 | $ | 20,423,513 | ||||||||
| 6,243,567 | 6,830,399 | 14,139,711 | 20,423,513 | |||||||||||||
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Operating
expenses:
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||||||||||||||||
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Research
and development
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6,172,147 | 7,883,799 | 17,064,900 | 23,928,315 | ||||||||||||
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General
and administrative
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3,177,888 | 6,224,868 | 12,625,132 | 15,787,115 | ||||||||||||
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Depreciation
and amortization
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258,231 | 247,747 | 757,929 | 639,924 | ||||||||||||
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Total
operating expenses
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9,608,266 | 14,356,414 | 30,447,961 | 40,355,354 | ||||||||||||
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Loss
from operations
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(3,364,699 | ) | (7,526,015 | ) | (16,308,250 | ) | (19,931,841 | ) | ||||||||
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Other
income (expenses):
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||||||||||||||||
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Interest
income
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184 | 61,743 | 6,249 | 258,841 | ||||||||||||
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Interest
expense
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(946,023 | ) | (748,892 | ) | (2,815,638 | ) | (1,949,402 | ) | ||||||||
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Loss
on early extinguishment of debt
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- | (4,690,049 | ) | - | (4,690,049 | ) | ||||||||||
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Other
income (expense)
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(93,260 | ) | - | 75,914 | - | |||||||||||
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Change
in market value of derivative instruments
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75,594 | (1,059,509 | ) | 376,560 | (295,218 | ) | ||||||||||
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Total
other income (expenses)
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(963,505 | ) | (6,436,707 | ) | (2,356,915 | ) | (6,675,828 | ) | ||||||||
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Net
loss
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(4,328,204 | ) | (13,962,722 | ) | (18,665,165 | ) | (26,607,669 | ) | ||||||||
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Basic
and diluted net loss per share
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(0.14 | ) | (0.50 | ) | (0.62 | ) | (0.97 | ) | ||||||||
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Weighted
average shares used in calculation of basic and diluted net loss per
share
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31,946,696 | 28,077,348 | 29,927,310 | 27,388,761 | ||||||||||||
4
PHARMATHENE,
INC.
CONSOLIDATED
BALANCE SHEETS
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Unaudited
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||||||||
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September
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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$ | 2,717,779 | $ | 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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4,764,159 | 8,866,346 | ||||||
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Other
receivables (including unbilled receivables)
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3,898,062 | 8,566,425 | ||||||
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Prepaid
expenses and other current assets
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821,992 | 973,214 | ||||||
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Total
current assets
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$ | 12,301,992 | $ | 24,216,623 | ||||
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Property
and equipment, net
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$ | 6,042,375 | $ | 6,262,388 | ||||
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Patents,
net
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832,766 | 928,577 | ||||||
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Other
long-term assets and deferred costs
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89,071 | 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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$ | 21,614,657 | $ | 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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||||||||
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Accounts
payable
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$ | 6,731,715 | $ | 1,934,119 | ||||
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Accrued
expenses and other liabilities
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3,242,922 | 11,532,101 | ||||||
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Current
portion of long-term debt
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20,057,953 | - | ||||||
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Total
current liabilities
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$ | 30,032,590 | $ | 13,466,220 | ||||
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Other
long-term liabilities
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$ | 460,854 | $ | 452,618 | ||||
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Derivative
instruments
|
2,528,885 | 835,299 | ||||||
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Long-term
debt
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- | 17,426,513 | ||||||
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Total
liabilities
|
$ | 33,022,329 | $ | 32,180,650 | ||||
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Stockholders'
equity (deficit):
|
||||||||
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Common
stock, $0.0001 par value; 100,000,000 shares authorized; 32,643,252 and
28,130,284 shares issued and outstanding at September 30, 2010 and
December 31, 2009, respectively
|
$ | 3,264 | $ | 2,813 | ||||
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Additional
paid-in-capital
|
162,437,392 | 157,004,037 | ||||||
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Accumulated
other comprehensive income
|
1,127,480 | 1,188,156 | ||||||
|
Accumulated
deficit
|
(174,975,808 | ) | (156,310,642 | ) | ||||
|
Total
stockholders' equity (deficit)
|
$ | (11,407,672 | ) | $ | 1,884,364 | |||
|
Total
liabilities and stockholders' equity (deficit)
|
$ | 21,614,657 | $ | 34,065,014 | ||||
5