As filed with the Securities and Exchange Commission on September 9, 2013

Registration No. 333-        

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

 

PHARMATHENE, INC.

(Exact name of registrant as specified in its Certificate of Incorporation)

 

Delaware		2384		20-2726770
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

One Park Place Suite 450
Annapolis, MD 21401
(410) 269-2600

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Eric I. Richman
Chief Executive Officer
PharmAthene, Inc.
One Park Place
Suite 450
Annapolis, MD 21401
(410) 269-2600

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

Jeffrey A. Baumel, Esq. Dentons US LLP 1221 Avenue of the Americas New York, New York 10020-1089 (212) 768-6700		Stephen M. Graham, Esq. Fenwick & West LLP 1191 Second Avenue, 10th Floor Seattle, Washington 98101 (206) 389-4510

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement and upon completion of the merger described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered(1)		Amount to be registered(2)				Proposed maximum offering price per unit				Proposed maximum aggregate offering price(3)				Amount of registration fee(4)
Common stock, par value $0.0001 per share			60,316,126				N/A			$	18,010			$	2.46

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this proxy statement/prospectus/consent solicitation is not complete and may be changed. A registration statement relating to the securities described in this proxy statement/prospectus/consent solicitation has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy these securities be accepted until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus/consent solicitation is not an offer to sell nor is it soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED SEPTEMBER 9, 2013

PharmAthene is furnishing this proxy statement/prospectus/consent solicitation to the holders of common stock of PharmAthene, Inc., or PharmAthene, and to the holders of capital stock of Theraclone Sciences, Inc., or Theraclone.

As previously announced, the boards of directors of PharmAthene and Theraclone have each unanimously approved the Agreement and Plan of Merger, dated as of July 31, 2013, or the Merger Agreement, by and among PharmAthene, Theraclone, Taurus Merger Sub, Inc., or Merger Sub, a wholly owned subsidiary of PharmAthene and Steven Gillis, Ph.D., as Securityholders’ Representative, pursuant to which Merger Sub will merge with and into Theraclone and Theraclone will survive the merger as a wholly owned subsidiary of PharmAthene. Upon completion of the merger, the PharmAthene security holders will own 50% of the outstanding equity of the combined company, and Theraclone security holders will own 50% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis but excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share. Based on the number of outstanding securities of each company as of September 3, 2013, (i) if no PharmAthene or Theraclone options or warrants are exercised prior to the completion of the merger, PharmAthene and Theraclone security holders would own, respectively, approximately 54.1% and 45.9% of the outstanding shares of common stock of the combined company and (ii) if PharmAthene warrants and options with an exercise price of more than $2.50 per share are exercised, to the extent such exercises occur, PharmAthene and Theraclone security holders could own, respectively, between approximately 51.5% and 50.0% and 48.5% and 50.0% of the outstanding equity of the combined company, on a fully diluted basis.

PharmAthene is soliciting proxies for use at a special meeting of stockholders to consider and vote upon the following proposals: (i) to approve the issuance of shares of PharmAthene common stock in the merger; (ii) to approve an amendment to PharmAthene’s Certificate of Incorporation to increase the number of shares of common stock that PharmAthene may issue; (iii) to elect nine persons to serve on the Board of Directors of PharmAthene until PharmAthene’s next annual meeting of stockholders; (iv) to adopt an amendment to PharmAthene’s Bylaws to require, for a period to expire no later than July 31, 2015, the approval of at least 66 2/3% of PharmAthene’s Board of Directors to remove Clifford J. Stocks, the expected Chief Executive Officer of the combined company; and (v) to adjourn the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of any of the proposals.

Theraclone is soliciting written consents from its stockholders to consider and vote on a proposal to approve the merger and adopt and approve the Merger Agreement and the other transactions contemplated thereby.

PharmAthene’s common stock is listed on the NYSE MKT LLC under the symbol “PIP”. On            , 2013, the last trading day before the date of this proxy statement/prospectus/consent solicitation, the closing sales price per share of PharmAthene’s common stock was $    . Theraclone is a privately-held company, and there is currently no public market for its securities.

This proxy statement/prospectus/consent solicitation provides you with detailed information about PharmAthene, Theraclone, the merger and the Merger Agreement. Please give all of the information in this proxy statement/ prospectus/consent solicitation your careful attention. Please pay particular attention to the section entitled “RISK FACTORS” beginning on page 35 for a discussion of the risks related to the merger, the combined company following completion of the merger, and the business and operations of each of PharmAthene and Theraclone.

PharmAthene and Theraclone are excited about the opportunities that the proposed merger brings to both PharmAthene and Theraclone stockholders and thank you for your consideration and continued support.

Eric I. Richman Chief Executive Officer PharmAthene, Inc.		Clifford J. Stocks Chief Executive Officer Theraclone Sciences, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the PharmAthene common stock to be issued pursuant to the merger or determined if this proxy statement/prospectus/consent solicitation is truthful or complete. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus/consent solicitation is dated            , 2013 and is first being mailed or otherwise delivered to stockholders of PharmAthene and Theraclone on or about            , 2013.

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REFERENCES TO ADDITIONAL INFORMATION

PharmAthene has supplied all information contained in this proxy statement/prospectus/consent solicitation relating to PharmAthene and Theraclone has supplied all information contained in this proxy statement/prospectus/consent solicitation relating to Theraclone. This proxy statement/prospectus/consent solicitation incorporates or refers to important business and financial information about PharmAthene that is not included in or delivered with this proxy statement/prospectus/consent solicitation. Such information is available without charge to stockholders of PharmAthene upon written request at the following address: PharmAthene, Inc., One Park Place, Annapolis, MD 21401, c/o Corporate Secretary, or by telephone (410) 269-2600. If you would like to request documents from Theraclone, please send a request to: Theraclone Sciences, Inc., Seattle Life Sciences Building, 1124 Columbia Street, Suite 300, Seattle, WA 98104, Attention: Chief Financial Officer, or by telephone at (206) 805-1600.

If you would like to request documents from PharmAthene, please do so at least five business days before the PharmAthene special meeting, or by            , 2013, in order to receive them before the PharmAthene special meeting. If you would like to request documents from Theraclone, please do so at least five business days before you deliver your written consent, which must be delivered to Theraclone by            , 2013. See the section entitled “WHERE YOU CAN FIND ADDITIONAL INFORMATION.”

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PharmAthene, Inc.
 
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On            , 2013

Dear PharmAthene Stockholder:

A special meeting of the stockholders of PharmAthene, Inc. will be held on            , 2013 at     , local time, at the offices of Dentons US LLP at 1301 K Street, NW, Suite 600, East Tower, Washington, DC 20005 for the following purposes:

Stockholders also will consider and act on any other matters that may properly come before the special meeting or any adjournment or postponement thereof, including any procedural matters incident to the conduct of the special meeting.

PharmAthene’s Board of Directors has fixed            , 2013 as the record date for the determination of PharmAthene stockholders entitled to notice of, and to vote at, the PharmAthene special meeting or any adjournments or postponements of the PharmAthene special meeting. Only holders of record of PharmAthene common stock at the close of business on the PharmAthene record date are entitled to notice of, and to vote at, the PharmAthene special meeting. At the close of business on the record date, PharmAthene had      shares of common stock outstanding and entitled to vote.

Your vote is important. The affirmative vote of the holders of a majority of the PharmAthene common stock outstanding, entitled to vote on the proposal and present in person or represented by proxy, is required for the approval of PharmAthene Proposal Nos. 1, 4 and 5. The affirmative vote of the holders of a majority of the PharmAthene common stock outstanding and entitled to vote on the proposal is required for the approval of PharmAthene Proposal No. 2. The affirmative vote of holders of a plurality of the votes cast of the PharmAthene shares of common stock outstanding, entitled to vote on the proposal and present in person or represented by proxy, is required for the election of directors set forth in PharmAthene Proposal No. 3.

Even if you plan to attend the PharmAthene special meeting in person, PharmAthene requests that you complete, sign and return the enclosed proxy card or otherwise provide your proxy and thus ensure that your shares will be represented at the PharmAthene special meeting if you are unable to attend. If you sign, date and mail your proxy card or otherwise provide your proxy without indicating how you wish to vote, your proxy will be counted as a vote in favor of PharmAthene Proposals Nos. 1, 2, 4, and 5 and for each of the nominees set forth in PharmAthene, Proposal No. 3. If you fail to return your proxy card, or otherwise provide your proxy the effect will be that your shares will not be counted for

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purposes of determining whether a quorum is present at the PharmAthene special meeting. If you do attend the PharmAthene special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

The PharmAthene Board of Directors has determined that each of the Proposals noted above is advisable and in the best interest of PharmAthene and its stockholders and has unanimously approved each Proposal. The Board of Directors of PharmAthene unanimously recommends that PharmAthene stockholders vote “FOR” PharmAthene Proposals Nos. 1, 2, 4, and 5 and “FOR” each of the nominees set forth in PharmAthene Proposal No. 3.

By Order of the Board of Directors,

Jordan P. Karp
Corporate Secretary
Annapolis, Maryland
           , 2013

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Theraclone Sciences, Inc.
Seattle Life Sciences Building
1124 Columbia Street, Suite 300
Seattle, WA 98104

NOTICE OF SOLICITATION OF WRITTEN CONSENT

Dear Theraclone Stockholder:

Theraclone Sciences, Inc., a Delaware of corporation, has entered into an Agreement and Plan of Merger dated as of July 31, 2013, by and among PharmAthene, Inc., Taurus Merger Sub, Inc., Theraclone Sciences, Inc. and Steven Gillis, Ph.D., as Securityholders’ Representative, a copy of which is attached as Annex A to this proxy statement/prospectus/consent solicitation, pursuant to which Merger Sub would merge with and into Theraclone, with Theraclone surviving the merger as a wholly owned subsidiary of PharmAthene, and pursuant to which PharmAthene would issue shares of common stock to Theraclone’s stockholders.

This proxy statement/prospectus/consent solicitation is being delivered to you on behalf of Theraclone’s Board of Directors to request (i) that holders of Theraclone common stock and preferred stock as of            , 2013, or the record date, execute and return written consents to approve the merger and adopt and approve the Merger Agreement and the transactions contemplated thereby and (ii) that holders of Theraclone preferred stock as of the record date, execute and return written consents to approve the conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis.

As a record holder of outstanding Theraclone common stock or preferred stock on the record date, you are urged to complete, date and sign the enclosed written consent and promptly return it to Theraclone. Theraclone’s Board of Directors has set            , 2013 as the target final date for receipt of written consents. Theraclone reserves the right to extend the final date for receipt of written consents without any prior notice to stockholders.

This proxy statement/prospectus/consent solicitation describes the merger agreement and the actions to be taken in connection with the merger and provides additional information about the parties involved. Please give this information your careful attention. A summary of the appraisal rights that may be available to you is provided in the section entitled “THE MERGER — Appraisal Rights.”

Written consents are required from (i) the holders of at least (a) a majority of the outstanding shares of Theraclone common stock and preferred stock, voting together as a single class on an as-converted-to-common stock basis and (b) a majority of the outstanding shares of the Theraclone preferred stock, voting together as a single class on an as-converted-to-common stock basis each outstanding on the applicable record date, for the merger, the Merger Agreement and the transactions contemplated thereby and (ii) the holders of at least a majority of the outstanding shares of Theraclone preferred stock for the conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis.

Regardless of the number of shares you own, your written consent is important. Please complete, date and sign the written consent furnished with this proxy statement/prospectus/consent solicitation and return it promptly to Theraclone by one of the means described in “MATTERS TO BE PRESENTED TO THERACLONE’S STOCKHOLDERS — Submission of Consents.” You may change or revoke your consent to the proposal at any time before the consents of holders of a sufficient number of shares to approve and adopt such proposal have been filed with Theraclone’s Corporate Secretary.

THE THERACLONE BOARD OF DIRECTORS HAS CAREFULLY CONSIDERED THE MERGER AND THE TERMS OF THE MERGER AGREEMENT AND HAS DETERMINED THAT THE MERGER IS FAIR, ADVISABLE AND IN THE BEST INTERESTS OF THERACLONE AND ITS STOCKHOLDERS. ACCORDINGLY, THE THERACLONE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THERACLONE STOCKHOLDERS APPROVE THE MERGER AND ADOPT AND APPROVE THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND THERACLONE PREFERRED STOCKHOLDERS APPROVE THE CONVERSION OF THE SHARES OF THERACLONE PREFERRED STOCK INTO SHARES OF THERACLONE COMMON STOCK ON A ONE-FOR-ONE BASIS BY EXECUTING AND DELIVERING THE WRITTEN CONSENT FURNISHED WITH THIS PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION.

BY ORDER OF THE BOARD OF DIRECTORS
 
Russ Hawkinson
Corporate Secretary

Seattle, Washington
            , 2013

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QUESTIONS AND ANSWERS ABOUT THE MERGER			1
Questions and Answers Regarding the Merger			1
Questions and Answers for PharmAthene Stockholders			5
Questions and Answers for Theraclone Stockholders			6
SUMMARY			10
The Companies			10
The Merger			11
Reasons for the Merger			11
Risks Related to the Merger			12
Opinion of PharmAthene’s Financial Advisor			13
Overview of the Merger Agreement			13
PharmAthene Voting Agreement			16
Theraclone Voting Agreement			16
Stockholder Approval of the Merger			16
Directors and Officers of PharmAthene Following the Merger			17
Interests of PharmAthene’s Directors and Officers in the Merger			17
Interests of Theraclone’s Directors and Officers in the Merger			19
Assumption of Theraclone Stock Options and Warrants and Theraclone 2004 Option Plan			19
Material U.S. Federal Income Tax Consequences of the Merger			20
Regulatory Approvals			20
Anticipated Accounting Treatment			20
Appraisal Rights			21
Comparison of Stockholder Rights			21
SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA			22
Selected Historical Financial Data of PharmAthene			22
Selected Historical Financial Data of Theraclone			24
Selected Unaudited Pro Forma Condensed Combined Financial Data of PharmAthene and Theraclone			25
Comparative Historical and Unaudited Pro Forma Per Share			32
MARKET PRICE AND DIVIDEND INFORMATION			33
PharmAthene			33
Theraclone			33
Dividends			34

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RISK FACTORS			35
Risks Related to the Proposed Merger			35
Risks Related to the Combined Company Following the Merger			38
Risks Related to PharmAthene			41
Risks Related to Theraclone			56
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			69
MARKET AND INDUSTRY DATA			71
THE SPECIAL MEETING OF PHARMATHENE STOCKHOLDERS			72
General			72
Date, Time and Place			72
Purposes of the PharmAthene Special Meeting			72
Recommendations of the PharmAthene Board of Directors			72
Record Date and Voting Power			73
Voting and Revocation of Proxies			73
Quorum and Required Vote			74
Solicitation of Proxies			74
Other Matters			74
MATTERS BEING SUBMITTED TO A VOTE OF PHARMATHENE STOCKHOLDERS			75
PharmAthene Proposal No. 1 — The Issuance of Shares of PharmAthene Common Stock in the Merger			75
PharmAthene Proposal No. 2 — Approval of an Amendment to PharmAthene’s Certificate of Incorporation to Increase the Number of Shares of Common Stock That PharmAthene May Issue			76
PharmAthene Proposal No. 3 — Election of Directors			77
PharmAthene Proposal No. 4 — Amendment to Bylaws Limiting the Ability of the Board of Directors to Remove the Chief Executive Officer			78
PharmAthene Proposal No. 5 — Approval of Possible Adjournment of the PharmAthene Special Meeting			79
MATTERS TO BE PRESENTED TO THERACLONE’S STOCKHOLDERS			81
Theraclone Stockholder Action by Written Consent			81
Shares Entitled to Consent and Consent Required			81
Submission of Consents			81
Executing Consents; Revocation of Consents			82
Solicitation of Consents; Expense			82
Recommendation of the Theraclone Board			82
Voting and Other Agreements			82

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THE MERGER			83
General			83
Background of the Merger			84
PharmAthene Reasons for the Merger			89
Theraclone Reasons for the Merger			93
Opinion of Leerink Swann			94
Interests of PharmAthene’s Directors and Officers in the Merger			100
Employment Agreements and Severance and Change in Control Agreements			102
Interests of Theraclone’s Directors and Officers in the Merger			109
Regulatory Approvals			111
NYSE MKT Listing of PharmAthene Common Stock			111
Material U.S. Federal Income Tax Consequences of the Merger			111
Anticipated Accounting Treatment			111
Appraisal Rights			111
THE MERGER AGREEMENT			115
General			115
Effective Time of the Merger			115
Merger Consideration			115
Indemnification Obligations			117
Directors and Officers of PharmAthene following the Merger			117
Conditions to Completion of the Merger			118
No Solicitation			119
Stockholder Approval			121
Covenants; Conduct of Business Pending the Merger			121
Other Agreements			124
Termination			125
Termination Fee			126
Representations and Warranties			127
Amendment			128
VOTING AND OTHER AGREEMENTS			129
Voting and Lock-up Agreements			129
Theraclone Post-Closing Lock-up Agreement			129
Board Composition Agreement			130
MANAGEMENT OF THE COMBINED COMPANY			131
Executive Officers			131
Non-Employee Directors			132
Key Employee			134

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PRINCIPAL STOCKHOLDERS OF PHARMATHENE			135
PRINCIPAL STOCKHOLDERS OF THERACLONE			138
PRINCIPAL STOCKHOLDERS OF THE COMBINED COMPANY			140
RELATED PARTY TRANSACTIONS			142
PharmAthene Transactions			142
Theraclone Transactions			142
Series B Convertible Preferred Stock Financing			143
Series B-1 Convertible Preferred Stock Financing			143
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			144
PHARMATHENE’S BUSINESS			147
Overview			147
Background of PharmAthene			147
Business Concept and Strategy			148
Process and Analytical Development, and Manufacturing			159
Intellectual Property			160
Competition			161
U.S. Government Contracts			162
Employees			163
Financial Information by Geographic Area			163
Research and Development			163
Properties			163
Legal Proceedings			163
PHARMATHENE MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			165
Overview			165
Critical Accounting Policies			165
Results of Operations			167
Liquidity and Capital Resources			173
Off-Balance Sheet Arrangements			177
Contractual Obligations			177
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT THE MARKET RISK OF PHARMATHENE			178
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION			179
PharmAthene’s Retiring Directors and Executive Officers			179
PharmAthene’s Executive Compensation			181
Grants of Plan-Based Awards			188
Outstanding Equity Awards at Fiscal Year-End			189
Option Exercises and Stock Awards Vested			192

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Equity Compensation Plan Information			192
Theraclone’s Executive Compensation			193
Theraclone’s Director Compensation			195
PharmAthene’s Director Compensation			196
General Policy Regarding Compensation of Directors			197
CORPORATE GOVERNANCE			197
THERACLONE’S BUSINESS			202
Overview			202
Market for Antibodies as Therapeutics			203
Theraclone’s Strategy			203
Products Under Development			204
Intellectual Property			214
Manufacturing			215
Government Regulation			216
Reimbursement			219
Competition			219
Employees			220
Facility			220
Legal Proceedings			220
THERACLONE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			221
Overview			221
Critical Accounting Policies and Significant Judgments and Estimates			222
Financial Operations Overview			224
Results of Operations			225
Liquidity and Capital Resources			228
Related-Party Transactions			231
Off-Balance Sheet Arrangements			231
DESCRIPTION OF PHARMATHENE CAPITAL STOCK			232
Common Stock			232
Preferred Stock			232
Anti-Takeover Effects of Provisions of PharmAthene’s Certificate of Incorporation and Bylaws and Delaware Law			233
COMPARISON OF RIGHTS OF STOCKHOLDERS			234
LEGAL MATTERS			250
EXPERTS			250
WHERE YOU CAN FIND ADDITIONAL INFORMATION			250
OTHER MATTERS			250
Stockholder Proposals for 2014 Annual Meeting			250

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HOUSEHOLDING OF PROXY MATERIALS			251
INDEX TO PHARMATHENE FINANCIAL STATEMENTS			F-1
INDEX TO THERACLONE FINANCIAL STATEMENTS			F-44
ANNEXES
ANNEX A: AGREEMENT AND PLAN OF MERGER, AMONG PHARMATHENE, INC., TAURUS MERGER SUB INC., THERACLONE SCIENCES, INC., AND STEVEN GILLIS, PH.D., AS SECURITYHOLDERS’ REPRESENTATIVE, DATED AS OF JULY 31, 2013			A-1
ANNEX B: FORM OF PHARMATHENE VOTING AND LOCK-UP AGREEMENT			B-1
ANNEX C: FORM OF THERACLONE VOTING AND LOCK-UP AGREEMENT			C-1
ANNEX D: FORM OF BOARD COMPOSITION AGREEMENT			D-1
ANNEX E: FORM OF POST-MERGER LOCK-UP AGREEMENT			E-1
ANNEX FA: OPINION OF LEERINK SWANN LLC			FA-1
ANNEX G: SECTION 262 OF THE DELAWARE GENERAL CORPORATE LAW			G-1
ANNEX H: CERTIFICATE OF AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF PHARMATHENE, INC.			H-1

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following section provides answers to frequently asked questions about the merger and the effect of the merger on holders of PharmAthene securities and Theraclone securities, the PharmAthene special meeting of stockholders and the Theraclone stockholder action by written consent. This section, however, only provides summary information. PharmAthene and Theraclone urge you to read carefully the remainder of this proxy statement/prospectus/consent solicitation, including the annexes to this proxy statement/prospectus/ consent solicitation, because the information in this section does not provide much of the information that might be important to you regarding the merger and the other matters being considered at the PharmAthene special meeting of stockholders and by the Theraclone stockholder action by written consent.

As used in this proxy statement/prospectus/consent solicitation, references to PharmAthene refer to PharmAthene, Inc., a Delaware corporation, references to Theraclone refer to Theraclone Sciences, Inc., a Delaware corporation, references to Merger Sub refer to Taurus Merger Sub, Inc., a Delaware corporation, references to the combined company refer collectively to PharmAthene and its subsidiaries following the proposed transaction described in this proxy statement/prospectus/consent solicitation, references to the Merger Agreement refer to the Agreement and Plan of Merger dated as of July 31, 2013 by and among PharmAthene, Merger Sub, Theraclone and Steven Gillis, Ph.D., as Securityholders’ Representative, a copy of which is attached as Annex A to this proxy statement/prospectus/consent solicitation, references to merger refer to the merger of merger sub with and into Theraclone, with Theraclone as the surviving, wholly owned subsidiary of PharmAthene as contemplated under the Merger Agreement, and references to the Effective Time refer to the Effective Time of the merger as contemplated under the Merger Agreement.

Questions and Answers Regarding the Merger

Q:  What is the transaction?

A:  PharmAthene, Merger Sub, a wholly owned subsidiary of PharmAthene, Theraclone and Steven Gillis, Ph.D., as Securityholders’ Representative have entered into the Merger Agreement that contains the terms and conditions of the proposed business combination of PharmAthene and Theraclone. Pursuant to the terms and conditions of the Merger Agreement, the Merger Sub will merge with and into Theraclone, with Theraclone surviving the merger as a wholly owned subsidiary of PharmAthene.

All outstanding shares of Theraclone preferred stock will be converted into shares of Theraclone common stock on a one-for-one basis immediately prior to the Effective Time. At the Effective Time, all outstanding shares of Theraclone common stock will be converted into shares of PharmAthene common stock. Upon completion of the merger, the PharmAthene security holders will own 50% of the outstanding equity of the combined company, and Theraclone security holders will own 50% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis but excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share. Based on the number of outstanding securities of each company as of September 3, 2013, (i) if no PharmAthene or Theraclone options or warrants are exercised prior to the completion of the merger, PharmAthene and Theraclone security holders would own, respectively, approximately 54.1% and 45.9% of the outstanding shares of common stock of the combined company and (ii) if PharmAthene warrants and options with an exercise price of more than $2.50 per share are exercised, to the extent such exercises occur, PharmAthene and Theraclone security holders could own, respectively, between approximately 51.5% and 50.0% and 48.5% and 50.0% of the outstanding equity of the combined company, on a fully diluted basis.

Q:  Why am I receiving this proxy statement/prospectus/consent solicitation?

A:  You are receiving this proxy statement/prospectus/consent solicitation because you have been identified as a stockholder of PharmAthene or Theraclone. If you are a stockholder of record of PharmAthene as of the record date, you are entitled to vote at PharmAthene’s special meeting of stockholders. If you are a stockholder of Theraclone as of the record date, you are entitled to vote by executing the Theraclone stockholder action by written consent. This document serves as a proxy statement of PharmAthene, used to solicit proxies for PharmAthene’s special meeting of stockholders, as a consent solicitation of Theraclone, and as a prospectus of PharmAthene to offer shares of PharmAthene common stock to Theraclone security holders in exchange for securities of Theraclone pursuant to the terms of the Merger Agreement. This document

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contains important information about the merger, the shares of PharmAthene common stock to be issued in the merger, the special meeting of PharmAthene stockholders, and the written consent sought from the Theraclone stockholders and should be read carefully in its entirety.

Q:  What are the expected advantages of the proposed merger of the two companies?

A:  The combined company will have several potential advantages, including:

Q:  Who is paying for this proxy solicitation and consent solicitation?

A:  PharmAthene is conducting this proxy solicitation and Theraclone is conducting this consent solicitation and each will bear their own costs of the solicitations, including the preparation, assembly, printing and mailing of this proxy statement/prospectus/consent solicitation, the proxy card and any additional information furnished to PharmAthene and Theraclone stockholders. PharmAthene and Theraclone will each bear its own legal expenses. PharmAthene may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their costs of forwarding proxy materials to beneficial owners of its common stock.

Q:  What is required to consummate the merger?

A:  To consummate the merger, PharmAthene stockholders must approve: (i) the issuance of shares of PharmAthene common stock in the merger; (ii) an increase in the number of shares of common stock that PharmAthene may issue; (iii) the election of nine directors to PharmAthene’s Board of Directors, including four nominees designated by Theraclone; (iv) the amendment of PharmAthene’s Bylaws to limit the ability of PharmAthene’s Board of Directors for a period to expire no later than July 31, 2015 to remove Clifford J. Stocks, the expected Chief Executive Officer of the combined company, and (v) a proposal to adjourn the PharmAthene Special Meeting, if necessary, to solicit additional proxies. In addition, Theraclone stockholders must approve the merger and adopt and approve the Merger Agreement.

The amendment to PharmAthene’s Certificate of Incorporation increasing the authorized number of shares of common stock requires the affirmative vote of the holders of a majority of the PharmAthene common stock outstanding and entitled to vote on the proposal. The approval of the proposals to issue shares of PharmAthene common stock in the merger, to amend the Bylaws of PharmAthene to limit the ability of the combined company’s Board of Directors to remove Clifford J. Stocks as the expected Chief Executive Officer of the combined company and to adjourn the meeting, if necessary, to solicit additional proxies, requires the affirmative vote of the holders of a majority of the PharmAthene common stock outstanding, entitled to vote on the proposal and present in person or represented by proxy. The election of nine persons to serve on the Board of Directors of PharmAthene requires the affirmative vote of holders of a plurality of PharmAthene common stock outstanding, present in person or represented by proxy and entitled to vote on the proposal. For more information, please see the section entitled “MATTERS BEING SUBMITTED TO A VOTE OF PHARMATHENE STOCKHOLDERS.”

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The approval by the stockholders of Theraclone requires (i) the holders of at least (a) a majority of the outstanding shares of Theraclone common stock and preferred stock, voting together as a single class on an as-converted-to-common stock basis and (b) a majority of the outstanding shares of the Theraclone preferred stock, voting together as a single class on an as-converted-to-common stock basis each outstanding on the applicable record date, for the merger, the Merger Agreement and the transactions contemplated thereby and (ii) holders of at least a majority of the outstanding shares of Theraclone preferred stock for the conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis. For more information, please see the section entitled “MATTERS TO BE PRESENTED TO THERACLONE’S STOCKHOLDERS.”

Concurrently and in connection with the execution of the Merger Agreement, PharmAthene’s directors and executive officers, as well as a key employee, who beneficially owned approximately 7.5% of the outstanding shares of PharmAthene common stock as of July 31, 2013, entered into a voting agreement with Theraclone, pursuant to which each such stockholder agreed to vote its shares of PharmAthene common stock in furtherance of the transactions contemplated by the Merger Agreement and against any amendment of PharmAthene’s Certificate of Incorporation or Bylaws or any other proposal or transaction, the effect of which amendment or other proposal is to delay, impair, prevent or nullify the merger or the transaction contemplated by the Merger Agreement.

In addition, concurrently with and in connection with execution of the Merger Agreement, certain of Theraclone’s stockholders, who in the aggregate held approximately 75% of the outstanding shares of Theraclone capital stock as of July 31, 2013, entered into a voting agreement with PharmAthene, pursuant to which each stockholder agreed to vote its shares of Theraclone capital stock (i) in favor of the adoption of the Merger Agreement and any actions required in furtherance thereof, (ii) in favor of the conversion of all outstanding shares of Theraclone preferred stock into Theraclone common stock on a one-for-one basis (as of immediately prior to the Effective Time and contingent upon the merger occurring) pursuant to Theraclone’s restated Certificate of Incorporation, (iii) against any other proposal or transaction involving Theraclone, the effect of which amendment or other proposal or transaction would be to delay, impair, prevent or nullify the merger or the transactions contemplated by the Merger Agreement, (iv) against any amendment of Theraclone’s Certificate of Incorporation or Bylaws that changes in any manner the voting rights of any capital stock of Theraclone (other than the conversion of Theraclone preferred stock into Theraclone common stock), and (v) against any other action or agreement that would result in a breach in any material respect of any covenant, representation or warranty of the Merger Agreement.

In addition to the requirement of obtaining such stockholder approvals and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived. For a more complete description of the closing conditions under the Merger Agreement, please see the section entitled “THE MERGER AGREEMENT — Conditions to Completion of the Merger.”

Q:  When do PharmAthene and Theraclone expect to complete the merger?

A:  PharmAthene and Theraclone are working to complete the merger during the fourth quarter of 2013, or as soon as reasonably possible. PharmAthene and Theraclone must first obtain the necessary approvals, including the approval of each company’s stockholders, and satisfy the closing conditions described in the Merger Agreement. Neither PharmAthene nor Theraclone can assure you as to whether all the conditions to the merger will be met nor can PharmAthene or Theraclone predict the exact timing of the completion of the merger. It is possible PharmAthene and Theraclone will not complete the merger.

Q:  What are the material U.S. federal income tax consequences of the merger to me?

A:  The merger has been structured to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or the Code, and Treasury Regulations promulgated thereunder. As a result of the merger’s qualification as a reorganization, it is anticipated that Theraclone stockholders will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of shares of Theraclone common and preferred stock for shares of PharmAthene common stock, except with respect to cash received in lieu of fractional shares of PharmAthene common stock and except for Theraclone stockholders who exercise their appraisal rights with respect to the merger.

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Tax matters are very complicated, and the tax consequences of the merger to a particular stockholder will depend in part on such stockholder’s circumstances. Accordingly, you should consult your tax advisor for a full understanding of the tax consequences of the merger to you, including the applicability and effect of federal, state, local and foreign income and other tax consequences. For more information, please see the section entitled “MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER.”

Q:  Who will be the directors of the combined company following the merger?

A:  Pursuant to a related Board of Directors composition agreement between PharmAthene and certain former stockholders of Theraclone, which is expected to be entered into at completion of the merger and is referred to as the Board Composition Agreement, the nine-member Board of Directors of the combined company will consist of five directors designated by PharmAthene and four directors designated by Theraclone. Those members designated by PharmAthene will initially be Mitchel Sayare, Ph.D., Eric I. Richman, John M. Gill, Brian A. Markison and Derace L. Schaffer, M.D. and those members designated by Theraclone will initially be Steven Gillis, Ph.D., Wende S. Hutton, Clifford J. Stocks and           .

Under the Board Composition Agreement, the executive officers and directors, as well as a key employee, of PharmAthene, the directors of Theraclone and their affiliates, and certain holders of 5% or more of Theraclone’s capital stock will agree to vote all shares owned by such holders, or over which such holders have voting control, as necessary to ensure that the PharmAthene and Theraclone designees are elected to the combined company’s Board of Directors at each annual or special meeting of stockholders of PharmAthene at which directors are elected or through any action taken by written consent of the stockholders of PharmAthene by which directors are elected. These stockholders will also agree to cause the resignation of one of PharmAthene’s designees upon the earlier of (i) the full settlement or final, non-appealable resolution of PharmAthene’s civil action against SIGA, which is referred to as the SIGA Determination Date, and (ii) the second anniversary of the completion of the merger, but not prior to the first anniversary of the completion of the merger. PharmAthene and Theraclone refer to this date as the Designee Resignation Date. The Board Composition Agreement will terminate on the earliest to occur of the fifth anniversary of the date of the Board Composition Agreement and the SIGA Determination Date, but not prior to the first anniversary of completion of the merger. The signing stockholders may sell their shares free of the rights and obligations under the Board Composition Agreement.

Q:  Who will be the executive officers of the combined company following the merger?

A:  Following the merger, Theraclone’s current Chief Executive Officer, Clifford J. Stocks, is expected to serve as the Chief Executive Officer of the combined company, and Theraclone’s current Chief Financial Officer, Russ Hawkinson, is expected to serve as its Chief Financial Officer. Additionally, Theraclone's current Chief Medical Officer, Eleanor Ramos, M.D., and current Chief Scientific Officer, Kristine Swiderek, Ph.D., are expected to serve as the combined company’s Chief Medical Officer and Chief Scientific Officer, respectively. PharmAthene’s Senior Vice President, Policy and Government Affairs, Francesca M. Cook and Senior Vice President and General Counsel, Jordan P. Karp, are expected to remain in their positions at the combined company. Under the Merger Agreement, PharmAthene agreed to amend its Bylaws to provide that Clifford J. Stocks may not be removed from his position as Chief Executive Officer of the combined company without the approval of at least 66 2/3% of PharmAthene’s Board of Directors, until the earliest of (a) July 31, 2015, (b) such time as there is a period longer than 30 days in which less than five PharmAthene Board Designees serve on the combined company’s Board of Directors, and (c) the full settlement or final, non-appealable resolution of PharmAthene’s civil action against SIGA, or the SIGA Resolution; provided, however, that, in the event that the SIGA Resolution occurs prior to the first anniversary of the completion of the Merger, the SIGA Resolution will be deemed to have occurred on the first anniversary of the closing of the merger.

Q:  What risks should I consider in deciding whether to vote in favor of the proposals?

A:  You should carefully review the section of this proxy statement/prospectus/consent solicitation entitled “RISK FACTORS,” which sets forth certain risks and uncertainties related to the merger, risks and uncertainties to which the combined company’s business will be subject, and risks and uncertainties to which each of PharmAthene and Theraclone, as an independent company, is subject.

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Q: Who can help answer my questions?

A:  If you are a PharmAthene stockholder and would like additional copies, without charge, of this proxy statement/prospectus/consent solicitation or if you have questions about the merger, including the procedures for voting your shares, please direct your request to: PharmAthene, Inc., One Park Place, Annapolis, MD 21401, c/o Corporate Secretary, or call PharmAthene at: (410) 269-2600.

If you are a Theraclone stockholder and would like additional copies, without charge, of this proxy statement/prospectus/consent solicitation or if you have questions about the merger, including the procedures for signing the stockholder action by written consent, you should contact: Theraclone Sciences, Inc., Seattle Life Sciences Building, 1124 Columbia Street, Suite 300, Seattle, WA 98104, c/o Chief Financial Officer, or call Theraclone at (206) 805-1600.

You may also obtain additional information about PharmAthene from documents filed with the Securities and Exchange Commission by following the instructions in the section entitled “WHERE YOU CAN FIND ADDITIONAL INFORMATION.”

Questions and Answers for PharmAthene Stockholders

Q:  What do PharmAthene stockholders need to do now?

A:  You should read this proxy statement/prospectus/consent solicitation carefully, including its annexes, and consider how the merger affects you and then vote your shares either in person at the PharmAthene special meeting or by proxy.

If you are a PharmAthene stockholder on the record date, you may provide your proxy instructions in one of three different ways. First, you can mail your signed proxy card in the enclosed return envelope. Alternatively, if you are a registered stockholder of PharmAthene, you can provide your proxy instructions via the toll-free call center set up for this purpose by calling the toll-free number on your proxy card and following the instructions. Please have your proxy card available when you call. You will be prompted to enter the control number from your proxy card that will identify you as a stockholder of record. If you vote by telephone, you do not need to return your proxy card. Finally, if you are a registered stockholder of PharmAthene, you can provide your proxy instructions via the Internet at the web address shown on your proxy card by following the on-screen instructions. Please have your proxy card available when you access the web page. You will be prompted to enter the control number from your proxy card that will identify you as a stockholder of record. If you vote over the Internet, you do not need to return your proxy card. Please provide your proxy instructions only once and as soon as possible so that your shares can be voted at the PharmAthene special meeting. PharmAthene stockholders may also attend the PharmAthene special meeting in person. PharmAthene urges you to vote by proxy to ensure your vote is counted. You may still attend the PharmAthene special meeting and vote in person even if you have already voted by proxy.

Q:  As a PharmAthene stockholder, how does PharmAthene’s Board of Directors recommend that I vote?

A:  After careful consideration, PharmAthene’s Board of Directors unanimously recommends that PharmAthene stockholders vote:

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Q:  What happens if I do not return a PharmAthene proxy card or otherwise provide proxy instructions?

A:  If you are a PharmAthene stockholder, the failure to return your proxy card or otherwise provide proxy instructions will have the same effect as voting against Proposal No. 2. An abstention has the same effect as a vote against the proposal. The approval of each of Proposal Nos. 1, 2, 3 and 4 is required to complete the merger.

Q:  May I vote in person?

A:  If your shares of PharmAthene common stock are registered directly in your name with PharmAthene’s transfer agent, you are considered, with respect to those shares, the stockholder of record, and the proxy materials and proxy card are being sent directly to you. If you are a PharmAthene stockholder of record as of            , 2013, you may attend the PharmAthene special meeting to be held on            , 2013 and vote your shares in person, rather than signing and returning your proxy card or otherwise providing proxy instructions. However, PharmAthene urges you to return your proxy voting instructions in any event, just in case your plans should change.

If your shares of PharmAthene common stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the PharmAthene special meeting. Since a beneficial owner is not the stockholder of record, however, you may not vote these shares in person at the special meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting.

Q:  If my shares are held in “street name” by my broker, will my broker vote my PharmAthene shares for me?

A:  Unless your broker has discretionary authority to vote on the matters, your broker will not be able to vote your shares of PharmAthene common stock without instruction forms from you. Brokers are not expected to have discretionary authority to vote for any of the PharmAthene Proposals. If you do not provide instructions forms with respect to these proposals, your broker, must deliver a proxy card to PharmAthene expressly indicating that it is not voting your shares, which is referred to as a “broker non-vote.” Broker non-votes will not count for purposes of determining the number of votes cast. To make sure your vote is counted, you should instruct your broker as to how to vote your shares, following the instructions contained in the voting instructions card that your broker provides to you.

Q:  May I change my vote after I have provided proxy instructions?

A:  Yes, except for those stockholders who have executed a voting agreement and irrevocable proxy. If you have not voted through your broker, there are three ways for you to revoke your proxy and change your vote. First, you may send a written notice to PharmAthene’s Corporate Secretary stating that you would like to revoke your proxy. Second, you may complete and submit a new proxy card, but it must bear a later date than the original proxy. Third, you may attend and vote in person at the special meeting of PharmAthene stockholders. Your attendance alone will not revoke your proxy. If you have instructed a broker to vote your shares, you must follow the directions you receive from your broker to change your vote. Your last vote will be the vote that is counted. If you have executed a voting agreement and irrevocable proxy, you may not revoke your proxy instructions.

Q:  Are PharmAthene stockholders entitled to appraisal rights?

A:  PharmAthene stockholders do not have any appraisal rights in connection with the merger.

Questions and Answers for Theraclone Stockholders

Q:  What do Theraclone stockholders need to do now?

A:  You should read this proxy statement/prospectus/consent solicitation carefully, including its annexes, and consider how the merger affects you. Theraclone stockholders are being asked to sign and return the

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written consent. Theraclone is not asking Theraclone stockholders for a proxy and Theraclone stockholders are not requested to send Theraclone a proxy. If you hold shares of Theraclone common stock or preferred stock as of the record date and you wish to give your written consent, you must complete the enclosed written consent, date and sign it, and promptly return it to Theraclone. Once you have completed, dated and signed the written consent, you may deliver it to Theraclone by faxing it to Theraclone’s legal counsel, Fenwick & West LLP, Attention: Ellen Welichko, at (206) 389-4511, by emailing a .pdf copy of your written consent to ewelichko@fenwick.com, or by mailing your written consent to Fenwick & West LLP at 1191 Second Avenue, 10th Floor, Seattle, Washington 98101, Attention: Ellen Welichko.

Q:  What am I being asked to approve?

A:  You are being asked to approve (i) the merger and adopt and approve the Merger Agreement and the transactions contemplated thereby and (ii) the conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis.

Q:  What options do I have with respect to the Theraclone proposal?

A:  With respect to the shares of Theraclone common stock or preferred stock that you hold, you may execute a written consent to approve the merger and the terms of the Merger Agreement proposal (which is equivalent to a vote for the proposal) or to disapprove such proposal (which is equivalent to a vote against the proposal). If you fail to execute and return your written consent, it has the same effect as voting against the proposal.

Q:  As a Theraclone stockholder, how does Theraclone’s Board of Directors recommend that I vote?

A:  After careful consideration, Theraclone’s Board of Directors unanimously recommends that Theraclone’s stockholders vote to approve the merger and adopt and approve the Merger Agreement and the transactions contemplated thereby and to approve the conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis.

Q:  Who is entitled to give a written consent?

A:  Theraclone’s Board of Directors has set            , 2013 as the record date for determining holders of Theraclone common stock or preferred stock entitled to execute and deliver written consent with respect to this solicitation. Holders of Theraclone common stock or preferred stock on the record date will be entitled to give a consent using the written consent furnished with this proxy statement/prospectus/consent solicitation. If you are a Theraclone stockholder on the record date, you will be able to give or withhold consent, or abstain, on each proposal on which you are entitled to vote, using the written consent furnished with this proxy statement/prospectus/consent solicitation.

Q:  Who is soliciting my written consent?

A:  Theraclone’s Board of Directors is providing these consent solicitation materials to you. These materials constitute a prospectus with respect to the PharmAthene common stock issuable to Theraclone’s stockholders in the merger.

Q:  How can I return my Theraclone written consent?

A:  If you hold shares of Theraclone common stock or preferred stock as of the record date and you wish to submit your consent, you must fill out the enclosed written consent, date and sign it, and promptly return it to Theraclone. Once you have completed, dated and signed your written consent, deliver it to Theraclone by faxing it to Theraclone’s legal counsel, Fenwick & West LLP, Attention: Ellen Welichko, at (206) 389-4511, by emailing a .pdf copy of your written consent to ewelichko@fenwick.com, or by mailing your written consent to Fenwick & West LLP at 1191 Second Avenue, 10th Floor, Seattle, Washington 98101, Attention: Ellen Welichko.

Theraclone will not be holding a stockholders’ meeting to consider these proposals, and therefore you will be unable to vote by attending a stockholders’ meeting.

Q:  What happens if I do not return my Theraclone written consent?

A:  If you are a record holder of shares of Theraclone common stock or preferred stock and you do not return your written consent, that will have the same effect as a vote against the proposals.

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Q:  Will my rights as a PharmAthene stockholder be different from my rights as a Theraclone stockholder?

A:  Yes. Upon completion of the merger, each stockholder of Theraclone, will become a stockholder of PharmAthene. There are important differences between the rights of stockholders of PharmAthene and stockholders of Theraclone. Please carefully review the description of these differences in the section of this proxy statement/prospectus/consent solicitation entitled “COMPARISON OF RIGHTS OF STOCKHOLDERS.”

Q:  Should I send in my stock certificates now?

A:  No. If you are a Theraclone stockholder, after the merger is consummated, you will receive written instructions from the exchange agent for exchanging your certificates representing shares of Theraclone capital stock for certificates representing shares of PharmAthene common stock.

Q:  Are Theraclone stockholders entitled to appraisal rights?

A:  Under Delaware law, holders of Theraclone common stock or preferred stock are entitled to appraisal rights in connection with the merger. If you do not wish to accept shares of PharmAthene common stock in the merger and you do not approve the merger in the Theraclone stockholder action by written consent, you have the right under Delaware law to seek from Theraclone the “fair value” of your shares in lieu of the PharmAthene common stock you would receive if the merger is completed. Theraclone refers you to the information under the heading “THE MERGER — Appraisal Rights” and to the applicable Delaware statute attached as Annex G to this proxy statement/prospectus/consent solicitation for information on how to exercise your appraisal rights. Failure to follow all of the steps required under the Delaware law will result in the loss of your appraisal rights.

Q:  What will Theraclone stockholders receive in the merger?

A:  PharmAthene has agreed to issue, and Theraclone stockholders will have the right to receive, for each share of Theraclone common stock they hold, that number of shares of PharmAthene common stock, as determined pursuant to the Exchange Ratio described in the Merger Agreement and in the section entitled “THE MERGER AGREEMENT — Merger Consideration.” If the merger is consummated, each share of Theraclone common stock and Theraclone preferred stock will convert into the right to receive that number of shares of PharmAthene common stock equal to the Exchange Ratio. The Exchange Ratio is a formula set forth in the Merger Agreement and described in this proxy statement/prospectus/consent solicitation under the heading “THE MERGER AGREEMENT — Merger Consolidation.” Based on PharmAthene’s and Theraclone’s outstanding securities as of September 3, 2013, the Exchange Ratio would have been 1.116. Upon completion of the merger, the PharmAthene security holders will own 50% of the outstanding equity of the combined company, and Theraclone security holders will own 50% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis but excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share. Based on the number of outstanding securities of each company as of September 3, 2013, (i) if no PharmAthene or Theraclone options or warrants are exercised prior to the completion of the merger, PharmAthene and Theraclone security holders would own, respectively, approximately 54.1% and 45.9% of the outstanding shares of common stock of the combined company and (ii) if PharmAthene warrants and options with an exercise price of more than $2.50 per share are exercised, to the extent such exercises occur, PharmAthene and Theraclone security holders could own, respectively, between approximately 51.5% and 50.0% and 48.5% and 50.0% of the outstanding equity of the combined company, on a fully diluted basis.

Q:  Is any portion of the merger consideration being set aside as an escrow?

A:  Yes. Upon the completion of the merger, five percent of the merger consideration issuable to the stockholders of Theraclone will be held in escrow as security for indemnification claims under the Merger Agreement. The shares of PharmAthene common stock will be held in the escrow fund until the date that is nine months from the date of completion of the merger, subject to any unresolved indemnification claims.

Q:  How will the merger affect stock options and warrants for Theraclone capital stock?

A:  PharmAthene will assume options and warrants to purchase shares of Theraclone common stock and Theraclone preferred stock, which will become exercisable for shares of PharmAthene common stock with the

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same terms, exercisability, vesting schedule and other provisions, but with the number of shares and exercise price being appropriately adjusted to reflect the Exchange Ratio between PharmAthene common stock and Theraclone common stock and preferred stock determined in accordance with the Merger Agreement and described above.

Q:  What if I am a record holder and I don’t indicate a decision with respect to the proposals?

A:  If you are a record holder on the record date of shares of Theraclone common stock or Theraclone preferred stock and you return a signed written consent without indicating your decision on a proposal, you will have given your consent to approve (i) the merger and adopt and approve the Merger Agreement and the transactions contemplated thereby and (ii) the conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis.

Q:  What is the deadline for returning my written consent?

A:  The Theraclone Board of Directors has set          , 2013 as the targeted final date for receipt of written consents. Theraclone reserves the right to extend the final date for receipt of written consents beyond          , 2013 in the event that consents approving the merger and adopting and approving the Merger Agreement and the transactions contemplated thereby have not been obtained by that date from holders of a sufficient number of shares of Theraclone common stock and Theraclone preferred stock to satisfy the conditions to the merger. Any such extension may be made without notice to stockholders. Once all conditions to the merger have been satisfied or waived, the consent solicitation will conclude.

Q:  Can I change or revoke my written consent?

A:  Yes, if you are a record holder on the record date of shares of Theraclone common stock or preferred stock, you may change or revoke your consent to a proposal at any time before the consents of a sufficient number of shares to approve and adopt such proposal have been filed with the corporate secretary of Theraclone. If you wish to change or revoke your consent before that time, you may do so by sending in a new written consent with a later date or delivering a notice of revocation to the corporate secretary of Theraclone.

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SUMMARY

The Companies

PharmAthene, Inc.

PharmAthene is a leading biodefense company engaged in the development and commercialization of next generation medical countermeasures against biological and chemical threats. PharmAthene’s current biodefense portfolio includes the following product candidates:

In addition, in May 2013, the Delaware Supreme Court affirmed a September 2011 ruling of the Delaware Court of Chancery that SIGA had breached certain contractual obligations to PharmAthene. The matter is on remand to the Delaware Court of Chancery to determine a remedy in light of the Delaware Supreme Court’s decision. Previously the Delaware Court of Chancery had awarded PharmAthene the right to receive 50% of all net profits (as defined in the court’s final judgment) related to the sale of SIGA’s Arestvyr^TM (formerly known as ST-246®) and related products for 10 years following initial commercial sale of the drug once SIGA earns $40.0 million in net profits from the sales of Arestvyr^TM and related products and a portion of PharmAthene’s attorney’s fees and expert witness and other costs. There can be no assurance that the Delaware Court of Chancery will re-instate its prior remedy or order another remedy for PharmAthene, that SIGA will not appeal any subsequent decision by the Delaware Court of Chancery, or that SIGA will not be successful in any subsequent appeal.

PharmAthene’s goal is to become one of the leading companies specializing in the development and commercialization of best-in-class prophylactic and therapeutic drugs for defense against biological and chemical threats and emerging infectious diseases worldwide.

PharmAthene is headquartered in Annapolis, Maryland and was incorporated in Delaware in April 2005. PharmAthene’s principal offices are located at One Park Place, Suite 450, Annapolis, Maryland 21401 and its telephone number is (410) 269-2600. PharmAthene’s principal website is www.pharmathene.com. The information contained on or connected to PharmAthene’s website is expressly not incorporated by reference into this proxy statement/prospectus/consent solicitation. For additional information about PharmAthene, see the sections entitled “PharmAthene’s Business” and “PHARMATHENE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and PharmAthene’s financial statements included elsewhere in this proxy statement/prospectus/consent solicitation.

Theraclone Sciences, Inc.

Theraclone is a biopharmaceutical company focused on the discovery and development of novel, monoclonal antibody therapeutics for diseases that are devastating for patients and their families and which are a significant threat to human health. Theraclone leverages its proprietary antibody discovery technology, I-STAR (In-Situ Therapeutic Antibody Rescue), to identify rare human antibodies that may be developed into antibody product candidates that are potentially safer and more effective than current therapies. Theraclone has a portfolio of innovative antibodies in clinical and preclinical development targeting serious medical conditions with a significant unmet medical need and a primary focus on infectious disease and cancer, which include:

Theraclone is also working to identify additional fully human antibodies to expand its discovery pipeline of potential product candidates targeting infectious disease and oncology indications.

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Theraclone’s strategy is to advance clinical development of its lead product candidates, TCN-032 and TCN-202; utilize the I-STAR technology and its antibody discovery capabilities to identify new product candidates; form strategic alliances to help fund research and development operations and accelerate the development of its product candidates; and pursue funding through partnerships with the U.S. government.

Theraclone is headquartered in Seattle, Washington and was incorporated in Delaware in March 2004. Theraclone’s principal offices are located at Seattle Life Sciences Building, 1124 Columbia Street, Suite 300, Seattle, WA 98104, and its telephone number is (206) 805-1600. Theraclone’s principal website is www.theraclone-sciences.com. The information contained on or connected to Theraclone’s website is expressly not incorporated by reference into this proxy statement/prospectus/consent solicitation. For additional information about Theraclone, see the sections entitled “THERACLONE’S BUSINESS” and “THERACLONE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and Theraclone’s financial statements included elsewhere in this proxy statement/prospectus/consent solicitation.

Taurus Merger Sub, Inc.

Taurus Merger Sub, Inc. is a wholly owned subsidiary of PharmAthene that was incorporated in Delaware on July 31, 2013. Merger Sub does not engage in operations and exists solely to facilitate the merger. If the merger is completed, Merger Sub will cease to exist following its merger with and into Theraclone.

Merger Sub’s principal offices are located at One Park Place, Suite 450, Annapolis, Maryland 21401 and its telephone number is (410) 269-2600.

The Merger

If the merger is completed, Merger Sub will merge with and into Theraclone, with Theraclone surviving the merger as a wholly owned subsidiary of PharmAthene. After the merger, PharmAthene and its wholly owned subsidiary, Theraclone, will operate as a combined company.

All outstanding shares of Theraclone preferred stock will be converted into shares of Theraclone common stock on a one-for-one basis immediately prior to the Effective Time, subject to the approval of such conversion by Theraclone’s preferred stockholders. At the Effective Time, all outstanding shares of Theraclone common stock will be converted into shares of PharmAthene common stock. Upon completion of the merger, the PharmAthene security holders will own 50% of the outstanding equity of the combined company, and Theraclone security holders will own 50% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis but excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share. Based on the number of outstanding securities of each company as of September 3, 2013, (i) if no PharmAthene or Theraclone options or warrants are exercised prior to the completion of the merger, PharmAthene and Theraclone security holders would own, respectively, approximately 54.1% and 45.9% of the outstanding shares of common stock of the combined company and (ii) if PharmAthene warrants and options with an exercise price of more than $2.50 per share are exercised, to the extent such exercises occur, PharmAthene and Theraclone security holders could own, respectively, between approximately 51.5% and 50.0% and 48.5% and 50.0% of the outstanding equity of the combined company, on a fully diluted basis.

A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus/consent solicitation and is incorporated by reference herein. You are encouraged to read the Merger Agreement in its entirety because it is the legal document that governs the merger. For a more complete discussion of the merger, see the sections entitled “THE MERGER” and “THE MERGER AGREEMENT.”

Reasons for the Merger

The combined company will be a fully integrated, commercially-focused biologics company. PharmAthene and Theraclone both believe that the combination of the two companies will be able to create more value than either company could achieve individually.

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Each of the boards of directors of PharmAthene and Theraclone also considered other reasons for the merger, as described herein. For example, the PharmAthene Board of Directors considered, among other reasons:

In addition, the Theraclone Board of Directors considered, among other reasons, the following:

For a more complete discussion of PharmAthene’s and Theraclone’s reasons for the merger, see the sections entitled “THE MERGER — PharmAthene Reasons for the Merger” and “THE MERGER — Theraclone Reasons for the Merger.”

Risks Related to the Merger

Both PharmAthene and Theraclone are subject to various risks associated with their respective businesses and financial condition. In addition, the merger, as well as the possibility that the merger may not be completed, pose a number of risks to PharmAthene and Theraclone and their respective stockholders, including the following risks:

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In addition, PharmAthene, Theraclone and the combined company are subject to various risks associated with their respective businesses. These risks are discussed in greater detail in the section entitled “RISK FACTORS.” PharmAthene and Theraclone both encourage you to read and consider all of these risks carefully.

Opinion of PharmAthene’s Financial Advisor

In connection with the merger, the PharmAthene Board of Directors received a written opinion, dated July 31, 2013, of PharmAthene’s financial advisor, Leerink Swann LLC, also referred to as PharmAthene’s financial advisor or Leerink, as to the fairness, from a financial point of view and as of the date of the opinion, to PharmAthene of the Exchange Ratio used in the merger. The full text of Leerink’s written opinion, dated July 31, 2013, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement/prospectus/consent solicitation as Annex F. Leerink provided its opinion for the benefit and use of PharmAthene’s Board of Directors in its consideration of the transaction, and its opinion is directed only to the fairness, from a financial point of view, to the holders of PharmAthene common stock (other than Theraclone and its affiliates) of the Exchange Ratio, as of the date of the opinion. The Leerink opinion does not constitute an opinion as to the merits of the merger or the prices at which shares of PharmAthene common stock will trade at any time, and is not a recommendation to any holder of PharmAthene common stock as to how such holder should vote with respect to the merger, or any other matter. For a more complete discussion of Leerink’s opinion, see the section entitled “THE MERGER — Opinion of Leerink Swann.”

Overview of the Merger Agreement

Pursuant to the Merger Agreement, Merger Sub, will merge with and into Theraclone, with Theraclone as the surviving wholly owned subsidiary of the combined company.

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Pursuant to the terms of the Merger Agreement, at the Effective Time, each outstanding share of capital stock of Theraclone will be converted into the right to receive a number of shares of PharmAthene common stock equal to the quotient obtained by dividing the fully diluted equity (as defined below) of PharmAthene by the fully diluted equity of Theraclone, or the Exchange Ratio, less a pro rata share of PharmAthene common stock representing five percent of the merger consideration issuable to the stockholders of Theraclone, or the Escrow Shares. The Merger Agreement defines “fully diluted equity” to mean, with respect to PharmAthene, the total number of shares outstanding of PharmAthene common stock assuming full conversion or exercise of all then outstanding options and warrants, which, in each case, have an exercise price less than or equal to $2.50 per share, and convertible securities. With respect to Theraclone, “fully diluted equity” means the total number of shares outstanding of Theraclone common stock, assuming full conversion or exercise of all then-outstanding options and warrants and all convertible securities. Based on PharmAthene’s and Theraclone’s outstanding securities as of September 3, 2013, the Exchange Ratio would have been 1.116. Holders of Theraclone common stock will receive cash in lieu of fractional shares. In addition, all outstanding Theraclone options, as well as Theraclone’s 2004 Option Plan, will be assumed by PharmAthene. Each option or warrant to purchase one share of Theraclone common stock or preferred stock will be converted into an option or warrant, as the case may be, to purchase a number of shares of PharmAthene common stock representing the number of Theraclone shares of common stock or preferred stock for which the exchanged option or warrant was exercisable multiplied by the Exchange Ratio. The exercise price would be proportionately adjusted.

Upon completion of the merger, the PharmAthene security holders will own 50% of the outstanding equity of the combined company, and Theraclone security holders will own 50% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis but excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share. Based on the number of outstanding securities of each company as of September 3, 2013, (i) if no PharmAthene or Theraclone options or warrants are exercised prior to the completion of the merger, PharmAthene and Theraclone security holders would own, respectively, approximately 54.1% and 45.9% of the outstanding shares of common stock of the combined company and (ii) if PharmAthene warrants and options with an exercise price of more than $2.50 per share are exercised, to the extent such exercises occur, PharmAthene and Theraclone security holders could own, respectively, between approximately 51.5% and 50.0% and 48.5% and 50.0% of the outstanding equity of the combined company, on a fully diluted basis. The Escrow Shares described above, which will serve to secure the Theraclone stockholders’ indemnification obligations under the Merger Agreement, will be deposited with Citibank, N.A., as escrow agent under a separate escrow agreement to be entered into prior to the completion of the merger. The escrow period will expire nine months from the date of completion of the merger.

Completion of the merger is subject to a number of conditions, including, but not limited to (i) approval of the issuance of shares of PharmAthene common stock in connection with the merger, and approval of an increase in the authorized number of shares of common stock by PharmAthene’s stockholders and the adoption and approval of the Merger Agreement and the transactions contemplated thereby by Theraclone’s stockholders; (ii) the effectiveness of the registration statement of which this proxy statement/prospectus/ consent solicitation forms a part; (iii) approval for listing on the NYSE MKT LLC, or NYSE MKT, of the shares of PharmAthene common stock to be issued in connection with the merger; (iv) execution of the Board Composition Agreement; (v) exercise of appraisal rights by no more than 5% of PharmAthene’s stockholders (PharmAthene stockholders do not have appraisal rights in this merger); (vi) the amendment of PharmAthene’s Bylaws to require, for a period to expire no later than July 31, 2015, the approval of at least 66 2/3% of the Board of Directors of the combined company to remove Clifford J. Stocks, the expected Chief Executive Officer of the combined company; (vii) the delivery to Theraclone of all $8,000,000 of capital committed to Theraclone pursuant to its Series B-1 Preferred Stock and Warrant Purchase and Exchange Agreement and (viii) other customary closing conditions.

Each of PharmAthene and Theraclone have made customary representations, warranties and covenants in the Merger Agreement, including among others, covenants that (i) each party will conduct its business in the ordinary course consistent with past practice during the interim period between execution of the Merger Agreement and completion of the merger; (ii) each party will not engage in certain kinds of transactions or take certain actions during such period (including, but not limited to, the issuance and sale of its securities and

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the incurrence of debt, with certain exceptions); (iii) Theraclone will solicit approval by its stockholders of the Merger Agreement and the transactions contemplated thereby and the Board of Directors of Theraclone will recommend that its stockholders adopt and approve the Merger Agreement, subject to certain exceptions; and (iv) PharmAthene will convene and hold a meeting of its stockholders for the purpose of considering the approval of the issuance of shares of PharmAthene common stock in connection with the merger, the election of the PharmAthene and Theraclone Board Designees, the authorization of additional shares of common stock, and the amendment to PharmAthene’s Bylaws to require, for a period to expire no later than July 31, 2015, the approval of at least 66 2/3% of the Board of Directors of the combined company to remove Clifford J. Stocks, the expected Chief Executive Officer of the combined company, the Board of Directors of PharmAthene will recommend that its stockholders adopt and approve such proposals, subject to certain exceptions. PharmAthene also has agreed not to solicit proposals relating to alternative business combination transactions or enter into discussions or an agreement concerning any proposals for alternative business combination transactions, subject to exceptions in the event of its receipt of a “superior proposal,” as defined in the Merger Agreement. All representations and warranties of Theraclone (but not PharmAthene) included in the Merger Agreement will survive the completion of the merger and remain in full force and effect until nine months after the closing date.

The Merger Agreement contains termination rights in favor of each of PharmAthene and Theraclone in certain circumstances. If PharmAthene terminates the Merger Agreement pursuant to its superior proposal termination right, it is obligated to pay to Theraclone a break-up fee of $3,500,000. If the PharmAthene Board of Directors changes its voting recommendations to PharmAthene stockholders as a result of a Transaction Event (as defined below) and Theraclone terminates as a result of such change in recommendation, or if PharmAthene terminated the Merger Agreement as a result of a Transaction Event, then PharmAthene is obligated to pay Theraclone a break-up fee of $4,500,000. A Transaction Event is defined to occur if the Court of Chancery of the State of Delaware renders a substantive decision on the merits in PharmAthene’s civil case against SIGA and within 20 business days thereafter the PharmAthene Board of Directors determines, in its reasonable discretion, that, as a result of such decision, it can no longer consider the merger a merger of equals. In addition, either party may terminate the Merger Agreement if (i) the merger has not been completed by January 31, 2014, or the Outside Termination Date, provided that, if the registration statement of which this proxy statement/prospectus/consent solicitation forms a part is not declared effective by October 4, 2013, then either party is generally entitled to extend the Outside Termination Date by 60 days, or (ii) the PharmAthene stockholders fail to approve the issuance of shares in the merger, the increase in authorized shares of common stock or the election of the PharmAthene or Theraclone board designees. If (a) the Merger Agreement is terminated because the merger has not been completed prior to the Outside Termination Date or the PharmAthene special meeting (including any postponements or adjournments thereof) shall have concluded and the PharmAthene stockholders fail to approve the issuance of shares in the merger, the increase in authorized shares of common stock or the election of the PharmAthene or Theraclone board designees, (b) a takeover approval was announced prior to the PharmAthene stockholder meeting with respect to the merger and (c) within nine months after the date of the termination of the Merger Agreement, PharmAthene enters into an agreement or understanding with respect to any takeover proposal that is subsequently completed, then PharmAthene is obligated to pay to Theraclone a break-up fee of $3,500,000. In certain other circumstances, PharmAthene will be obligated to reimburse Theraclone for expenses incurred in connection with the merger, not to exceed $1,000,000.

The Merger Agreement contains certain indemnification provisions, which, among other things, provide that Theraclone stockholders are not obligated, absent fraud or willful misconduct, to indemnify PharmAthene or its affiliates unless and until the aggregate amount of indemnification claims brought against them by PharmAthene and its affiliates is at least $1,000,000, and if triggered the indemnity covers amounts in excess of the $1,000,000 threshold. In addition, no Theraclone stockholder has an obligation, absent fraud or willful misconduct of Theraclone, to indemnify PharmAthene or its affiliates for an amount in excess of such Theraclone stockholder’s pro rata share of the Escrow Shares. The Merger Agreement appointed Steven Gillis, Ph.D. as the agent for and on behalf of the Theraclone stockholders with respect to the Merger Agreement and escrow agreement, as well as related matters.

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PharmAthene Voting Agreement

Concurrently and in connection with the execution of the Merger Agreement, certain of PharmAthene’s stockholders, who beneficially own approximately 7.5% of the outstanding shares of PharmAthene common stock as of July 31, 2013, entered into a voting agreement with Theraclone, or the PharmAthene Voting Agreement, pursuant to which each stockholder agreed to vote its shares of PharmAthene common stock in furtherance of the transactions contemplated by the Merger Agreement and against any amendment of PharmAthene’s Certificate of Incorporation or Bylaws or any other proposal or transaction, the effect of which amendment or other proposal is to delay, impair, prevent or nullify the merger or the transaction contemplated by the Merger Agreement.

The PharmAthene Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or termination of the Merger Agreement. For a more complete discussion of the PharmAthene Voting Agreement, see the section entitled “VOTING AND OTHER AGREEMENTS — Voting and Lock-Up Agreements.” A copy of the PharmAthene Voting Agreement is attached as Annex B to this proxy statement/prospectus/consent solicitation.

Theraclone Voting Agreement

Concurrently and in connection with the execution of the Merger Agreement, certain of Theraclone’s stockholders, who in the aggregate held approximately 75% of the outstanding shares of Theraclone capital stock as of July 31, 2013, entered into a voting agreement with PharmAthene, or the Theraclone Voting Agreement, pursuant to which each stockholder agreed to vote its shares of Theraclone capital stock (i) in favor of the adoption of the Merger Agreement and any actions required in furtherance thereof, (ii) in favor of the conversion of all outstanding shares of Theraclone preferred stock into Theraclone common stock on a one-for-one basis (as of immediately prior to the Effective Time and contingent upon the merger occurring) pursuant to Theraclone’s restated Certificate of Incorporation, (iii) against any other proposal or transaction involving Theraclone, the effect of which amendment or other proposal or transaction would be to delay, impair, prevent or nullify the merger or the transactions contemplated by the Merger Agreement, (iv) against any amendment of Theraclone’s Certificate of Incorporation or Bylaws that changes in any manner the voting rights of any capital stock of Theraclone (other than the conversion of Theraclone preferred stock into Theraclone common stock), and (v) against any other action or agreement that would result in a breach in any material respect of any covenant, representation or warranty of the merger Agreement.

The Theraclone Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or termination of the Merger Agreement. For a more complete discussion of the Theraclone Voting Agreement, see the section entitled “VOTING AND OTHER AGREEMENTS — Voting and Lock-Up Agreements.” A copy of the Theraclone Voting Agreement is attached as Annex C to this proxy statement/ prospectus/consent solicitation.

Stockholder Approval of the Merger

As of September 3, 2013, all directors and executive officers of PharmAthene, together with their affiliates, beneficially owned approximately 7.32% of the shares of PharmAthene common stock. The amendment to PharmAthene’s Certificate of Incorporation increasing the authorized number of shares of common stock requires the affirmative vote of the holders of a majority of the PharmAthene common stock outstanding and entitled to vote on the proposal. The approval of the issuance of shares of PharmAthene common stock in the merger, the approval of the proposal to amend the Bylaws of PharmAthene to limit the ability of the Board of Directors to remove Clifford J. Stocks, the expected Chief Executive Officer of the combined company, and the proposal to adjourn the meeting, if necessary, to solicit additional proxies, each requires the affirmative vote of the holders of a majority of the shares of PharmAthene common stock outstanding, entitled to vote on the proposal and present at the PharmAthene special meeting in person or by proxy. The election of nine persons to serve on the Board of Directors of PharmAthene requires the affirmative vote of holders of a plurality of PharmAthene common stock, entitled to vote on the proposal and present at the PharmAthene special meeting in person or by proxy. All PharmAthene officers and directors, and their affiliates, have entered into the PharmAthene Voting Agreement in connection with the merger. For a more complete discussion of the PharmAthene Voting Agreement, see the section entitled “VOTING AND OTHER AGREEMENTS — Voting and Lock-Up Agreements.”

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As of September 3, 2013, all directors and executive officers of Theraclone, together with their affiliates, beneficially owned, in the aggregate, approximately 67% of the shares of Theraclone capital stock. Written consents are required from (i) the holders of at least (a) a majority of the outstanding shares of Theraclone common stock and preferred stock, voting together as a single class on an as-converted-to-common stock basis and (b) a majority of the outstanding shares of the Theraclone preferred stock, voting together as a single class on an as-converted-to-common stock basis each outstanding on the applicable record date, for the merger, the Merger Agreement and the transactions contemplated thereby and (ii) holders of at least a majority of the outstanding shares of Theraclone preferred stock for conversion of the shares of Theraclone preferred stock into shares of Theraclone common stock on a one-for-one basis. All Theraclone officers and directors, and their affiliates, have entered into the Theraclone Voting Agreement in connection with the merger. For a more complete discussion of the Theraclone Voting Agreement, see the section entitled “VOTING AND OTHER AGREEMENTS — Voting and Lock-Up Agreements.”

Directors and Officers of PharmAthene Following the Merger

Following the merger, and pursuant to the Board Composition Agreement expected to be entered into upon the completion of the merger, the Board of Directors of the combined company will be comprised of nine members, including five current members of the PharmAthene Board of Directors and three current members of the Theraclone Board of Directors and one additional member designated by Theraclone, as follows:

Name		Current Principal Affiliation
Mitchel B. Sayare, Ph.D.		PharmAthene
John M. Gill		PharmAthene
Steven Gillis, Ph.D.		Theraclone
Wende S. Hutton		Theraclone
Brian A. Markison		PharmAthene
Eric I. Richman		PharmAthene
Derace L. Schaffer, M.D.		PharmAthene
Clifford J. Stocks		Theraclone
		To Be Determined

Following the merger, the executive officers of the combined company will be as follows:

For a more complete discussion of the management of the combined company after the merger, see the section entitled “MANAGEMENT OF THE COMBINED COMPANY.” A copy of the form of Board Composition Agreement is attached as Annex D to this proxy statement/prospectus/consent solicitation.

Interests of PharmAthene’s Directors and Officers in the Merger

In considering the recommendation of the PharmAthene Board of Directors to PharmAthene stockholders to vote in favor of the issuance of shares of PharmAthene common stock in the merger, and the other matters to be acted upon by PharmAthene stockholders at the PharmAthene special meeting, PharmAthene stockholders should be aware that members of the PharmAthene Board of Directors and PharmAthene’s officers have interests in the merger that may be different from, or in addition to, or conflict with, the interests of PharmAthene stockholders.

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Interests of the PharmAthene directors and officers relate to the continuing service of Mitchel Sayare, Ph.D., John M. Gill, Brian A. Markison, Eric I. Richman, and Derace L. Schaffer, M.D., as directors of the combined company following completion of the merger and the payment of cash and equity compensation in consideration for such service, as described in more detail in the section entitled “Management of the Combined Company.”

On July 31, 2013, PharmAthene’s Board of Directors approved amendments to the employment agreements of PharmAthene’s Chief Executive Officer and Chief Financial Officer that will become effective immediately upon completion of the merger (and only if the merger is completed) and which will provide substantially the same benefits that Mr. Richman and Ms. Chang would have been entitled to receive under the severance plan adopted for all of PharmAthene’s executive officers in May 2012, or the PharmAthene Severance Plan, upon termination without cause or resignation for good reason within 12 months of a change of control of PharmAthene. Please see “THE MERGER — Employment Agreements and Severance and Change in Control Agreements — Termination Without Cause/For Good Reason After a Change of Control” for a description of such benefits. In addition to such benefits, the amendment will provide for acceleration of vesting of all outstanding equity-based awards held by Mr. Richman and Ms. Chang, and extend the exercise period applicable to their outstanding stock options until the third anniversary following their departure from service with PharmAthene and Linda Chang will also receive an additional lump sum payment for the costs associated with 18 months use of an automobile.

The following table sets forth the amount of potential payments and value of benefits that Mr. Richman and Ms. Chang would have received if their employment had been terminated in connection with the merger, assuming the merger had been completed on September 3, 2013.

Name		Cash Payments(1)				Value of Benefits(2)				Value of Options(3)				Excise Tax Gross Up(4)				Total
Eric I. Richman		$	1,459,798			$	54,000			$	194,000			$	599,144			$	2,306,942
Linda L. Chang		$	620,100			$	19,000			$	114,000			$	0			$	753,100

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In addition, on July 31, 2013, the PharmAthene Board of Directors agreed to terminate the Severance Plan effective upon completion of the merger. The employment agreements of all other PharmAthene executive officers will be amended to increase the duration of the period during which the executives would receive severance benefits following a termination without cause or for good reason from six months to twelve months. Finally, the PharmAthene Board of Directors determined that all current members of the Board of Directors who would resign at the completion of the merger will receive director fees at current levels for one full quarter beyond the date of termination. The amendments to the employment agreements and the change in the fees payable to resigning directors will not become effective if the merger does not close.

The PharmAthene Board of Directors was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, including the issuance of shares of PharmAthene common stock, and to recommend that PharmAthene stockholders approve the issuance of shares of PharmAthene common stock in the merger and related matters. Other than full disclosure of these potential conflicts of interest, the PharmAthene Board of Directors did not take any other steps to alleviate such potential conflicts of interest since it did not consider such potential conflicts of interest to be material in connection with its decision to approve the Merger Agreement and the transactions contemplated thereby, including the issuance of shares of PharmAthene common stock.

For a more complete discussion of the interests of the directors and executive officers of PharmAthene in the merger, see the section entitled “THE MERGER — Interests of PharmAthene’s Directors and Executive Officers in the Merger.”

Interests of Theraclone’s Directors and Officers in the Merger

In considering the recommendation of the Theraclone Board of Directors to Theraclone stockholders to approve the merger and to adopt and approve the Merger Agreement, and the other matters to be acted upon by Theraclone stockholders in the Theraclone written consent, Theraclone stockholders should be aware that members of the Theraclone Board of Directors and Theraclone’s officers have interests in the merger that may be different from, in addition to, or may conflict with the interests of Theraclone stockholders.

These interests include the beneficial ownership interests of Theraclone directors and officers in shares of Theraclone capital stock and securities to be converted to PharmAthene common stock and rights to purchase PharmAthene common stock in the merger, the assumption of all stock options held by the Theraclone executive officers and board members upon the completion of the merger, the agreement that Steven Gillis, Ph.D., Wende S. Hutton and Clifford J. Stocks, each a Theraclone director, will continue to serve on the Board of Directors of the combined company following the consummation of the merger, the agreement that Mr. Stocks, Russ Hawkinson, Eleanor Ramos, M.D., and Kristine Swiderek, Ph.D., each a Theraclone executive officer, will continue to serve as executive officers of the combined company following the consummation of the merger and the continued indemnification of former Theraclone executive officers and board members.

As of September 3, 2013, directors and executive officers of Theraclone, together with their respective affiliates, owned and were entitled to vote, in the aggregate, 24,552,617 shares of Theraclone capital stock, or approximately 62% of the shares of Theraclone capital stock outstanding on that date. For a more complete discussion of the interests of the directors and executive officers of Theraclone in the merger, see the section entitled “THE MERGER — Interests of Theraclone’s Directors and Officers in the Merger.”

Assumption of Theraclone Stock Options and Warrants and Theraclone 2004 Option Plan

All outstanding Theraclone options, as well as Theraclone’s 2004 Option Plan, will be assumed by PharmAthene following the merger. Each option or warrant to purchase shares of Theraclone common stock or preferred stock will be converted into an option or warrant, as the case may be, to purchase a number of

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shares of PharmAthene common stock representing the number of Theraclone shares of common stock or preferred stock for which the exchanged option or warrant was exercisable multiplied by the Exchange Ratio. The exercise price will be proportionately adjusted. PharmAthene will assume Theraclone’s 2004 Option Plan, and the terms and conditions of all Theraclone options and warrants exchanged in the merger for PharmAthene options and warrants will be unchanged.

For a more complete discussion of the treatment of Theraclone options and warrants, see the section entitled “THE MERGER AGREEMENT — Merger Consideration.”

Material U.S. Federal Income Tax Consequences of the Merger

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and Treasury Regulations promulgated thereunder. As a result of the “reorganization,” Theraclone stockholders generally will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their shares of Theraclone common stock for shares of PharmAthene common stock in connection with the merger. However, if a Theraclone stockholder receives cash in lieu of a fractional share of PharmAthene common stock, then such stockholder generally will recognize gain or loss in an amount equal to the difference between such stockholder’s adjusted tax basis in the fractional share and the amount of cash received. Moreover, a Theraclone stockholder who perfects appraisal rights and receives cash in exchange for such stockholder’s shares of Theraclone capital stock will recognize gain or loss measured by the difference between the amount of cash received and such stockholder’s adjusted tax basis in those shares. PharmAthene stockholders generally will not recognize gain or loss for U.S. federal income tax purposes as a result of the merger.

Tax matters are very complicated, and the tax consequences of the merger to a particular PharmAthene or Theraclone stockholder will depend in part on such stockholder’s circumstances. Accordingly, PharmAthene and Theraclone urge you to consult your own tax advisor for a full understanding of the tax consequences of the merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws. For a more complete discussion of the material U.S. federal income tax consequences of the merger, see the section entitled “MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER.”

Regulatory Approvals

Neither PharmAthene nor Theraclone is required to make any filings or to obtain any approvals or clearances from any antitrust regulatory authorities in the United States or other countries to consummate the merger. In the United States, PharmAthene must comply with applicable federal and state securities laws and rules and regulations of the NYSE MKT in connection with the issuance and listing of shares of PharmAthene common stock in the merger, including the filing with the Securities and Exchange Commission, or SEC, of the registration statement of which this proxy statement/prospectus/consent solicitation is a part. For a more complete discussion of the regulatory approvals required in connection with the merger, see the section entitled “THE MERGER — Regulatory Approvals.”

Anticipated Accounting Treatment

Under U.S. Generally Accepted Accounting Principles, or the U.S. GAAP, Accounting Standards Codification 805 “Business Combinations,” or ASC 805, the merger is expected to be accounted for using acquisition accounting pursuant to which PharmAthene is considered the acquiring entity for accounting purposes. As such, PharmAthene expects to allocate the total purchase consideration to Theraclone’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values at the date of the completion of the merger. The allocation reflected in the unaudited pro forma condensed combined financial information included in this prospectus is preliminary and subject to change.

For a more complete discussion of the anticipated accounting treatment of the merger, see the sections entitled “The Merger — Anticipated Accounting Treatment” and “SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION.”

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Appraisal Rights

If the merger is completed, Theraclone stockholders are entitled to appraisal rights under Section 262 of the Delaware General Corporation Law, or the DGCL. PharmAthene stockholders are not entitled to appraisal rights in connection with the merger. For a more complete discussion of the appraisal rights, see the provisions of Section 262 of the DGCL, referred to as Section 262, and attached to this proxy statement/prospectus/consent solicitation as Annex G, and the section entitled “THE MERGER — Appraisal Rights.”

Comparison of Stockholder Rights

Both PharmAthene and Theraclone are incorporated under the laws of the State of Delaware, accordingly the rights of the stockholders of each company are currently, and will continue to be, governed by the DGCL and their respective Certificates of Incorporation and Bylaws. If the merger is completed, Theraclone stockholders will become stockholders of PharmAthene, and their rights will be governed by the DGCL, the Certificate of Incorporation of PharmAthene and the Bylaws of PharmAthene. The rights of PharmAthene contained in the Certificate of Incorporation and Bylaws of PharmAthene differ from the rights of Theraclone stockholders under the Certificate of Incorporation and Bylaws of Theraclone, as more fully described under the section entitled “COMPARISON OF RIGHTS OF STOCKHOLDERS.”

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SELECTED HISTORICAL AND UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL DATA

Selected Historical Financial Data of PharmAthene

You should read the following selected consolidated financial data together with PharmAthene’s consolidated financial statements and the related notes included elsewhere in this proxy statement/prospectus/consent solicitation and with the section entitled “PHARMATHENE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.”

PharmAthene has derived the consolidated statement of operations data for the years ended December 31, 2010, 2011 and 2012 and the consolidated balance sheet data as of December 31, 2011 and 2012 from PharmAthene’s audited consolidated financial statements, which are included elsewhere in this proxy statement/prospectus/consent solicitation. PharmAthene has derived the consolidated statements of operations data for the years ended December 31, 2008 and 2009 and the consolidated balance sheet data as of December 31, 2008, 2009 and 2010 from PharmAthene’s audited consolidated financial statements, which are not included elsewhere in this proxy statement/prospectus/consent solicitation. PharmAthene has derived the consolidated statement of operations data for the three and six months ended June 30, 2012 and 2013 and the consolidated balance sheet data as of June 30, 2012 and 2013 from PharmAthene’s unaudited consolidated financial statements, which are included elsewhere in this proxy statement/prospectus/consent solicitation. PharmAthene’s historical results for any prior period are not necessarily indicative of results to be expected in any future period.

		Years Ended December 31,																				Six Months Ended June 30,
		2008				2009				2010				2011				2012				2012				2013
Statements of operations data:
Revenue		$	34,179,363			$	27,549,978			$	20,993,605			$	24,266,274			$	25,175,887			$	12,466,060			$	10,770,538
Operating expenses:
Research and development			31,812,431				30,219,758				20,875,536				21,219,853				19,509,629				9,624,012				8,636,020
General and administrative			19,397,532				22,432,585				18,015,761				14,311,079				11,628,732				5,728,580				4,612,525
Acquired in-process research and development			16,131,002				—				—				—				—				—				—
Depreciation and amortization (including $4,635,489 impairment charges in 2010)			813,891				872,304				5,655,865				461,073				303,916				162,358				94,456
Total operating expenses			68,154,856				53,524,647				44,547,162				35,992,005				31,442,277				15,514,950				13,343,001
Loss from operations			(33,975,493	)			(25,974,669	)			(23,553,557	)			(11,725,731	)			(6,266,390	)			(3,048,900	)			(2,572,463	)
Other income (expense):
Interest income			1,225,471				269,133				6,955				16,660				17,808				7,807				2,439
Interest expense			(2,573,406	)			(2,837,302	)			(5,936,480	)			(54,573	)			(342,561	)			(114,381	)			(199,818	)
Change in fair value of derivative instruments			118,244				1,043,782				(5,457,550	)			7,144,983				591,039				(167,853	)			(552,953	)
Other income (expense)			58,106				(90,655	)			91,355				39,328				47,862				53,434				(4,013	)
Realization of cumulative translation adjustment			—				—				—				—				1,227,656				—				—
Gain on the sale of assets held for sale			—				—				—				781,760				—				—				—
Loss on the early extinguishment of debt			—				(4,690,049	)			—				—				—				—				—
Total other income (expense)			(1,171,585	)			(6,305,091	)			(11,295,720	)			7,928,158				1,541,804				(220,993	)			(754,345	)
Net loss before income taxes			(35,147,078	)			(32,279,760	)			(34,849,277	)			(3,797,573	)			(4,724,586	)			(3,269,893	)			(3,326,808	)
Provision for income taxes			—				—				—				—				(195,529	)			(166,538	)			(20,949	)
Net loss		$	(35,147,078	)		$	(32,279,760	)		$	(34,849,277	)		$	(3,797,573	)		$	(4,920,115	)			(3,436,431	)			(3,347,757	)
Basic and diluted net loss per share		$	(1.53	)		$	(1.17	)		$	(1.08	)		$	(0.08	)		$	(0.10	)			(0.07	)			(0.07	)
Weighted average shares used in calculation of basic and diluted net loss per share			22,944,066				27,575,332				32,309,621				47,331,763				48,323,067				48,297,919				49,058,014

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		As of December 31,																				As of June 30,
		2008				2009				2010				2011				2012				2013
Balance Sheet Data:
Cash and cash equivalents		$	19,752,404			$	2,673,567			$	11,785,327			$	11,236,771			$	12,701,517			$	15,789,909
Working capital			11,536,932				12,018,438				17,420,242				14,997,664				12,307,429				13,970,065
Total assets			57,659,305				35,333,049				27,199,045				22,803,509				22,741,404				24,586,911
Total long-term liabilities			1,554,698				18,714,430				8,824,853				2,336,361				3,579,148				3,644,082
Total stockholders' equity			20,231,474				3,152,399				12,210,705				15,851,806				11,673,840				13,220,444

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Selected Historical Financial Data of Theraclone

The selected statement of operations data for the years ended December 31, 2011 and 2012 and the selected balance sheet data as of December 31, 2011 and 2012 are derived from Theraclone’s audited financial statements included elsewhere in this proxy statement/prospectus/consent solicitation. The selected statement of operations data for the years ended December 31, 2008, 2009 and 2010 and the selected balance sheet data as of December 31, 2008, 2009 and 2010 are derived from Theraclone’s audited financial statements which are not included in this proxy statement/prospectus/consent solicitation.

The selected statement of operations data for the six months ended June 30, 2012 and 2013 and the selected balance sheet data as of June 30, 2013 have been derived from Theraclone’s unaudited condensed financial statements included elsewhere in this proxy statement/prospectus/consent solicitation. The unaudited interim financial information has been prepared on the same basis as the annual financial statements and, in the opinion of Theraclone’s management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly Theraclone’s financial position as of June 30, 2013 and the results of operations for the six months ended June 30, 2012 and 2013.

Historical results are not necessarily indicative of the results that may be expected in the future and interim results are not necessarily indicative of results to be expected for the full year. You should read the selected historical financial data below in conjunction with the section titled “Theraclone’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included elsewhere in this proxy statement/prospectus/consent solicitation.

		Years Ended December 31,																				Six Months Ended June 30,
		2008				2009				2010				2011				2012				2012				2013
		(in thousands, except per share data)
Statement of Operations Data
Revenue		$	385			$	738			$	4,591			$	8,384			$	19,360			$	4,167			$	4,495
Operating expenses:
Research and development			9,354				7,316				10,293				14,816				19,611				6,594				5,608
General and administrative			2,654				1,924				1,949				1,827				2,461				1,100				1,390
Total operating expenses			12,008				9,240				12,242				16,643				22,072				7,694				6,998
Loss from operations			(11,623	)			(8,502	)			(7,651	)			(8,259	)			(2,712	)			(3,527	)			(2,503	)
Other income (expense):
Change in fair value of financial instruments			25				7				(22	)			4				3				—				228
Interest income			388				7				2				1				—				—				—
Interest expense			(200	)			(217	)			(147	)			(104	)			(69	)			(37	)			(107	)
Grant income			—				—				978				—				—				—				—
Net loss			(11,410	)			(8,705	)			(6,840	)			(8,358	)			(2,778	)			(3,564	)			(2,382	)
Comprehensive loss			(11,410	)			(8,705	)			(6,840	)			(8,358	)			(2,778	)			(3,564	)			(2,382	)
Accretion of redeemable convertible preferred stock			(2,071	)			(2,064	)			(2,136	)			(2,381	)			(2,826	)			(1,417	)			(1,429	)
Net loss attributable to common stockholders		$	(13,481	)		$	(10,769	)		$	(8,976	)		$	(10,739	)		$	(5,604	)		$	(4,981	)		$	(3,811	)
Net loss per share attributable to common stockholders – basic and diluted		$	(11.46	)		$	(8.46	)		$	(6.96	)		$	(8.07	)		$	(4.16	)		$	(3.70	)		$	(1.98	)
Weighted average common shares outstanding basic and diluted			1,176,527				1,272,915				1,289,687				1,330,968				1,346,898				1,346,898				1,919,767

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		As of December 31,																				As of June 30,
		2008				2009				2010				2011				2012				2013
		(amounts in thousands)
Selected Balance Sheet Data
Cash and cash equivalents		$	15,630			$	9,022			$	9,146			$	15,799			$	5,426			$	7,215
Working capital			13,850				5,167				2,348				4,367				774				4,630
Total assets			18,734				11,586				15,157				18,474				8,975				9,533
Notes payable			2,058				1,478				829				1,104				812				3,465
Redeemable convertible preferred stock warrant liability			17				10				32				51				48				175
Redeemable convertible preferred stock			37,916				39,980				43,216				57,182				60,008				63,996
Accumulated deficit			(22,958	)			(33,547	)			(42,442	)			(53,015	)			(58,444	)			(61,024	)
Total stockholders' deficit			(22,957	)			(33,546	)			(42,441	)			(53,014	)			(58,443	)			(61,022	)

Selected Unaudited Pro Forma Condensed Combined Financial Data of PharmAthene and Theraclone

The following unaudited pro forma condensed combined balance sheet as of June 30, 2013 and the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2013 and the year ended December 31, 2012 are based on the historical financial statements of PharmAthene and Theraclone after giving effect to the merger. The merger will be accounted for using the acquisition method of accounting.

The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2013 gives effect to the merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 gives effect to the merger as if it had occurred on January 1, 2012. The unaudited pro forma condensed combined balance sheet as of June 30, 2013 assumes that the merger took place on June 30, 2013.

The unaudited pro forma condensed combined financial statements are provided for informational purposes only, are subject to a number of uncertainties and assumptions, do not purport to represent what the companies’ actual performance or financial position would have been had the merger occurred on the dates indicated and do not purport to indicate the financial position or results of operations as of any future date or for any future period. The unaudited pro forma condensed combined balance sheet and statement of operations as of and for the six months ended June 30, 2013 was derived from (i) PharmAthene’s unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2013 as included in this proxy statement/prospectus/consent solicitation and (ii) Theraclone’s unaudited financial statements as of and for the six month period ended June 30, 2013 as included in this proxy statement/prospectus/consent solicitation. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 was derived from (i) PharmAthene’s audited consolidated financial statements as of and for the year ended December 31, 2012 as included in this proxy statement/prospectus/consent solicitation and (ii) Theraclone’s audited financial statements as of and for the year ended December 31, 2012 as included in this proxy statement/prospectus/consent solicitation.

The pro forma condensed combined financial statements reflect the best estimate by PharmAthene’s management of the fair value of the tangible and intangible assets acquired and liabilities assumed based on estimates prepared by PharmAthene’s and Theraclone’s management and based on information currently available. Upon completion of the merger, and as third-party valuations are performed, increases or decreases in the fair value of assets acquired and liabilities assumed will result in adjustments, which may be material to the balance sheet and/or statement of operations.

As required, the unaudited pro forma condensed combined financial data includes adjustments which give effect to the events that are directly attributable to the merger, expected to have a continuing impact and factually supportable. Accordingly, any planned adjustments affecting the balance sheet, statement of operations or changes in common stock outstanding, subsequent to the assumed closing date of the merger, are not included.

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PharmAthene, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2013

		Historical												Pro Forma Adjustments				Combined Pro Forma
		PharmAthene				Theraclone
Current assets
Cash and cash equivalents		$	15,790,000			$	7,215,000				E			$	4,000,000			$	27,005,000
Billed accounts receivable			1,540,000				608,000								—				2,148,000
Unbilled accounts receivable			3,695,000				—								—				3,695,000
Prepaid expenses and other current assets			668,000				262,000								—				930,000
Redeemable convertible preferred stock forward contract			—				53,000				C				(53,000	)			—
Total current assets			21,693,000				8,138,000								3,947,000				33,778,000
Property and equipment, net			460,000				1,267,000								—				1,727,000
Other long term assets and deferred costs			86,000				128,000								—				214,000
Identifiable intangible assets			—				—				B				44,625,000				44,625,000
Goodwill			2,348,000				—				B				33,676,000				36,024,000
Total Assets		$	24,587,000			$	9,533,000							$	82,248,000			$	116,368,000
Current liabilities
Accounts payable		$	2,993,000			$	181,000				D			$	5,170,000			$	10,494,000
											F				2,150,000
Accrued expenses and other liabilities			2,054,000				1,419,000								—				3,473,000
Deferred revenue			508,000				916,000								—				1,424,000
Current portion of long-term debt			1,000,000				992,000								—				1,992,000
Short-term debt			1,168,000				—								—				1,168,000
Total current liabilities			7,723,000				3,508,000								7,320,000				18,551,000
Other long-term liabilities			578,000				403,000				H				(403,000	)			578,000
Long-term debt, less current portion			1,218,000				2,473,000								—				3,691,000
Derivative instruments			1,848,000				175,000				C				(831,000	)			1,848,000
											E				656,000
Total liabilities			11,367,000				6,559,000								6,742,000				24,668,000
Redeemable convertible preferred stock
Redeemable convertible preferred stock			—				63,996,000				C				(63,996,000	)			—
											C				(4,000,000	)
											E				4,000,000
Stockholders' equity
Common stock			5,000				2,000				C				(2,000	)			9,000
											A				4,000
Additional paid-in-capital			215,393,000				—				C				656,000				301,539,000
											A				69,096,000
											A				8,300,000
											A				1,275,000
											A				7,125,000
											E				(656,000	)
											F				350,000
Accumulated other comprehensive loss			(220,000	)			—												(220,000	)
Accumulated deficit			(201,958,000	)			(61,024,000	)			C				61,024,000				(209,628,000	)
											D				(5,170,000	)
											F				(2,500,000	)
Total stockholders' equity (deficit)			13,220,000				(61,022,000	)							139,502,000				91,700,000
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)		$	24,587,000			$	9,533,000							$	82,248,000			$	116,368,000

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PharmAthene, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the six months ended June 30, 2013

		Historical												Pro Forma Adjustments				Combined Pro Forma
		PharmAthene				Theraclone
Revenue
Revenue		$	10,771,000			$	4,495,000							$	—			$	15,266,000
Operating expenses:
Research and development			8,636,000				5,325,000				G				345,000				14,327,000
											H				21,000
General and administrative including transaction fees			4,613,000				1,384,000				D				(230,000	)			6,364,000
											G				593,000
											H				4,000
Depreciation			94,000				289,000								—				383,000
Total operating expenses			13,343,000				6,998,000								733,000				21,074,000
Loss from operations			(2,572,000	)			(2,503,000	)							(733,000	)			(5,808,000	)
Other income (expense):
Interest income			2,000				—								—				2,000
Interest expense			(200,000	)			(107,000	)							—				(307,000	)
Change in fair value of derivative instruments			(553,000	)			228,000				C				(228,000	)			(553,000	)
Other income (expense), net			(4,000	)			—								—				(4,000	)
Total other income (expense)			(755,000	)			121,000								(228,000	)			(862,000	)
Net loss before provision for income taxes			(3,327,000	)			(2,382,000	)							(961,000	)			(6,670,000	)
Provision for income taxes			(21,000	)			—								—				(21,000	)
Net loss			(3,348,000	)			(2,382,000	)							(961,000	)			(6,691,000	)
Accretion of redeemable convertible preferred stock			—				(1,429,000	)			C				1,429,000				—
Net loss attributable to common stockholders – basic and diluted		$	(3,348,000	)		$	(3,811,000	)						$	468,000			$	(6,691,000	)
Earnings per share
Basic		$	(0.07	)							I							$	(0.07	)
Diluted		$	(0.07	)							I							$	(0.07	)
Weighted average outstanding shares – basic			49,058,014																92,519,650
Weighted average outstanding shares – diluted			49,058,014																92,519,650

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PharmAthene, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 2012

		Historical												Pro Forma Adjustments				Combined Pro Forma
		PharmAthene				Theraclone
Revenue
Revenue		$	25,176,000			$	19,360,000							$	—			$	44,536,000
Operating expenses
Research and development			19,509,000				18,797,000				G				687,000				39,090,000
											H				97,000
General and administrative			11,629,000				2,439,000				G				1,183,000				15,270,000
											H				19,000
Depreciation			304,000				836,000								—				1,140,000
Total operating expenses			31,442,000				22,072,000								1,986,000				55,500,000
Loss from operations			(6,266,000	)			(2,712,000	)							(1,986,000	)			(10,964,000	)
Other income (expense):
Interest income			18,000				—								—				18,000
Interest expense			(343,000	)			(69,000	)							—				(412,000	)
Change in fair value of derivative instruments			591,000				3,000				C				(3,000	)			591,000
Realization of cumulative translation adjustment			1,228,000				—								—				1,228,000
Other income (expense), net			48,000				—								—				48,000
Total other income (expense)			1,542,000				(66,000	)							(3,000	)			1,473,000
Net loss before provision for income taxes			(4,724,000	)			(2,778,000	)							(1,989,000	)			(9,491,000	)
Provision for income taxes			(196,000	)			—								—				(196,000	)
Net loss			(4,920,000	)			(2,778,000	)							(1,989,000	)			(9,687,000	)
Accretion of redeemable convertible preferred stock			—				(2,826,000	)			C				2,826,000				—
Net loss attributable to common stockholders – basic and diluted		$	(4,920,000	)		$	(5,604,000	)						$	837,000			$	(9,687,000	)
Earnings per share
Basic		$	(0.10	)							I							$	(0.11	)
Diluted		$	(0.10	)							I							$	(0.11	)
Weighted average outstanding shares – basic			48,323,067																91,784,703
Weighted average outstanding shares – diluted			48,323,067																91,784,703

Notes to Unaudited Condensed Combined Pro Forma Financial Statements

Note 1. Description of the Merger

PharmAthene and its wholly owned merger subsidiary entered into an Agreement and Plan of Merger with Theraclone, a Delaware corporation, and Steven Gillis, Ph.D., as Securityholders’ Representative, dated July 31, 2013, referred to as the Merger Agreement. Pursuant to the terms of the Merger Agreement, at closing PharmAthene will acquire all of the issued and outstanding common stock and equity-linked securities of Theraclone in a transaction structured as a tax-free exchange. Theraclone will become a wholly owned subsidiary of PharmAthene.

The Merger Agreement is subject to numerous closing conditions, including but not limited to:

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The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2013 gives effect to the merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 gives effect to the merger as if it had occurred on January 1, 2012. The unaudited pro forma condensed combined balance sheet as of June 30, 2013 assumes that the merger took place on June 30, 2013.

Purchase Consideration

Prior to the merger, Theraclone’s preferred stockholders will convert such holdings into shares of Theraclone’s common stock on a one-for-one basis. In addition, Theraclone’s outstanding stock purchase warrants to purchase preferred stock will be exchanged into stock purchase warrants to purchase common stock.

PharmAthene will issue, as consideration for the merger, shares of its common stock in exchange for shares of Theraclone’s common stock, on a formulaic basis as outlined in the Merger Agreement. As of June 30, 2013, the Exchange Ratio was estimated to be approximately 1.096 shares of PharmAthene common stock for every share of Theraclone common stock outstanding. Based on this Exchange Ratio, and the number of outstanding shares as of June 30, 2013, PharmAthene estimated it would issue a total of 43,461,636 shares of its common stock in exchange for all of the outstanding common stock of Theraclone.

In addition, PharmAthene is contractually obligated to issue new options to acquire its common stock, or the Replacement Options, and new warrants to acquire its common stock, or the Replacement Warrants, to the holders of Theraclone’s stock options and stock purchase warrants, in exchange for such options and warrants, using the same Exchange Ratio. The Replacement Options and Replacement Warrants will have the same terms and conditions as those that existed with Theraclone, except that the number of shares of common stock to be acquired, and the exercise prices, will be adjusted based on the Exchange Ratio. Based on the Exchange Ratio, and the number of outstanding stock options and stock purchase warrants as of June 30, 2013, PharmAthene estimated it would issue a total of 9,615,618 Replacement Options and 6,144,026 Replacement Warrants in exchange for all of the outstanding options and warrants of Theraclone.

A portion of the Replacement Options is tied to future employment by PharmAthene and vest during a post-combination service period and will be expensed during such service period.

Note 2. Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial statements have been prepared based on PharmAthene’s and Theraclone’s historical financial information. Certain disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted as permitted by SEC rules and regulations. Certain amounts contained in Theraclone’s financial statements have been reclassified to conform to PharmAthene’s financial statement presentation; these reclassifications related to depreciation expense and had no effect on Theraclone’s net loss for the six months ended June 30, 2013 or year ended December 31, 2012.

The fair value of PharmAthene’s common stock was calculated using the closing stock price for PharmAthene’s common stock at June 30, 2013 which was $1.59. The fair values of the Replacement Warrants and the vested Replacement Options were calculated using the Black-Scholes option pricing model, and includes the use of unobservable inputs such as the expected term, anticipated volatility and expected dividends.

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Note 3. Acquisition Method of Accounting

The unaudited pro forma condensed combined financial statements reflect accounting for the merger in accordance with the acquisition method of accounting. Under the acquisition method, the purchase consideration is allocated to the assets acquired and the liabilities assumed based on their estimated fair values, with any excess of the purchase consideration over the estimated fair values of the identifiable net assets acquired being recorded as goodwill.

The following table demonstrates the allocation of the purchase consideration to the assets acquired and liabilities assumed on June 30, 2013, based on their estimated fair values:

		Estimated Fair Value
Purchase Consideration:
Common Stock		$	69,100,000
Replacement Warrants			9,575,000
Replacement Options			7,125,000
Total Consideration		$	85,800,000
Tangible Assets Acquired:
Cash		$	11,215,000
Receivables			608,000
Property and Equipment, Net			1,267,000
Other			390,000
Net Deferred Tax Assets			—
Identifiable Intangible Assets Acquired:
IPR&D Technology			44,625,000
Liabilities Assumed:
Accounts Payable and Accrued Expenses			1,600,000
Note Payable			3,465,000
Deferred Revenue			916,000
Goodwill			33,676,000
		$	85,800,000

Based on a preliminary assessment, which may change once additional information is obtained and final valuations are performed, the identifiable intangible assets that PharmAthene has identified relate to in-process research and development, or IPR&D, associated with Theraclone’s two lead product candidates TCN-032 and TCN-202. Identifiable intangible assets associated with IPR&D are initially classified as indefinite lived; such classification will be reassessed every reporting period based on the status of the research and development projects. Goodwill is also considered an indefinite lived asset. Acquired deferred tax assets, net of deferred tax liabilities have been reduced by a full valuation allowance for this amount given management’s assessment of the likelihood that the deferred assets will be realized; these amounts are reflected on a net basis in the above table.

Note 4. Pro Forma Assumptions and Adjustments

The following assumptions and adjustments apply to the unaudited pro forma condensed combined financial statements:

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		Basic and Diluted
		Six Months Ended June 30, 2013				Year Ended December 31, 2012
Net loss available to common stockholders, as originally reported		$	(3,348,000	)		$	(4,920,000	)
Pro forma net loss available to common stockholders		$	(6,691,000	)		$	(9,687,000	)
Weighted Average outstanding shares for the period, as originally reported			49,058,014				48,323,067
Pro forma adjustments:
Common shares issued to Theraclone stockholders			43,461,636				43,461,636
Pro forma weighted average outstanding shares for the period			92,519,650				91,784,703
Earnings loss per share basic and diluted, as originally reported		$	(0.07	)		$	(0.10	)
Pro forma earnings loss per share basic and diluted		$	(0.07	)		$	(0.11	)

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Comparative Historical and Unaudited Pro Forma Per Share

The information below reflects:

You should read the tables below in conjunction with the respective audited and unaudited financial statements of PharmAthene and Theraclone and related notes, and the unaudited pro forma condensed financial information and related notes included elsewhere in this proxy statement/prospectus/consent solicitation.

		As of and for the Year Ended December 31, 2012				As of and for the Six Months Ended June 30, 2013
PharmAthene Historical Data
Basic and diluted net loss per common share:		$	(.10	)		$	(.07	)
Book value per share						$	.26
Theraclone Historical Data
Basic and diluted net loss per common share:		$	(4.16	)		$	(1.98	)
Book value per share						$	(26.80	)
Combined Company Pro Forma Data
Basic and diluted net loss per common share:		$	(.11	)		$	(.07	)
Book value per share							.97
PharmAthene Pro Forma Equivalent Data(1)
Basic and diluted net loss per common share:		$	(.12	)		$	(.08	)
Book value per share						$	1.06

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MARKET PRICE AND DIVIDEND INFORMATION

PharmAthene

PharmAthene’s common stock trades on the NYSE MKT (formerly NYSE Amex) under the symbol “PIP”. The following table sets forth the range of high and low sales prices per share of PharmAthene’s common stock on the NYSE MKT for the past two years during the periods shown.

Fiscal Year 2013		High				Low
3rd Quarter Ended September 30 (through September 3)		$	2.42			$	1.53
2nd Quarter Ended June 30		$	2.20			$	1.47
1st Quarter Ended March 31		$	2.05			$	1.02

Fiscal Year 2012		High				Low
4th Quarter Ended December 31		$	1.47			$	.98
3rd Quarter Ended September 30		$	1.70			$	1.13
2nd Quarter Ended June 30		$	1.89			$	1.18
1st Quarter Ended March 31		$	2.10			$	1.20

Fiscal Year 2011		High				Low
4th Quarter Ended December 31		$	1.88			$	1.07
3rd Quarter Ended September 30		$	3.35			$	1.74
2nd Quarter Ended June 30		$	4.08			$	2.41
1st Quarter Ended March 31		$	4.58			$	3.01

On July 31, 2013, the last trading day prior to announcement of the merger, the last reported sale price of PharmAthene common stock was $1.77, for an aggregate market value of PharmAthene of approximately $92.6 million, or approximately $106.8 million on a fully diluted basis (excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share). Upon completion of the merger, assuming it was completed on July 31, 2013 and an aggregate of 60,316,126 shares of PharmAthene common stock were issued, the market value attributable to the Theraclone capital stock of the outstanding equity of the combined company calculated on a fully diluted basis, which would represent approximately 50% (excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share), would equal approximately $106.8 million. On September 3, 2013, the latest practicable date before the filing of this proxy statement/prospectus/consent solicitation, the last reported sale price of PharmAthene common stock was $2.17, for an aggregate market value of PharmAthene of approximately $113.5 million, or approximately $130.9 million on a fully diluted basis (excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share). Upon completion of the merger, assuming it was completed on September 3, 2013 and an aggregate of 60,316,126 shares of PharmAthene common stock were issued, the market value attributable to the Theraclone capital stock of the outstanding equity of the combined company calculated on a fully diluted basis, which would represent approximately 50% (excluding PharmAthene warrants and options with an exercise price of more than $2.50) would equal approximately $130.9 million.

Holders

As of September 3, 2013, PharmAthene had 73 record holders of its common stock. The number of record holders is based on the actual number of holders registered on the books of PharmAthene’s transfer agent and does not reflect holders of shares in “street name” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.

Theraclone

Theraclone is a privately-held company, and there is no established trading market for its securities. As of September 3, 2013, there were 2,335,152 shares of Theraclone common stock outstanding, 4,765,145 shares of Theraclone Series A-1 convertible preferred stock outstanding and 32,608,456 shares of Theraclone Series B-1 convertible preferred stock outstanding, and there were approximately 35 holders of record of Theraclone capital stock.

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Dividends

PharmAthene has not paid any dividends on its common stock in 2013, 2012 and 2011 and does not intend to declare any dividends in the foreseeable future. While subject to periodic review, the current policy of the PharmAthene Board of Directors is to retain all earnings, if any, primarily to finance future growth. The Loan and Security Agreement, dated as of March 30, 2012 (as amended, restated, supplemented or otherwise modified from time to time), among General Electric Capital Corporation, the Lenders (as defined therein), PharmAthene, Inc., and any other Loan Parties (as defined therein), or the GE Loan Agreement, entered into in March 2012 specifically restricts the declaration or payment of any dividends. PharmAthene makes no assurances that it will ever pay dividends, cash or otherwise. Whether PharmAthene pays any dividends in the future will depend on its financial condition, results of operations, general business conditions and any other factors that the PharmAthene Board of Directors will consider.

Theraclone has never declared or paid any cash dividends on its capital stock nor does it intend to do so in the foreseeable future. Theraclone’s credit and loan agreements restrict the payment of any cash dividends.

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RISK FACTORS

Stockholders and potential investors should carefully consider the risks described below relating to the Merger, an investment in PharmAthene’s common stock and the business of PharmAthene and Theraclone. The risks and uncertainties described below are not the only ones PharmAthene and Theraclone face. Additional risks and uncertainties not presently known to PharmAthene or Theraclone that they currently consider immaterial may also impair their business operations. If any of the following risks actually occur, PharmAthene’s and Theraclone’s business, financial conditions and/or results of operations could be materially adversely affected, the trading price of PharmAthene’s common stock could decline and a stockholder could lose all or part of his or her investment.

Risks Related to the Proposed Merger

The issuance of shares of PharmAthene common stock to Theraclone stockholders in the merger will dilute substantially the voting power of current PharmAthene stockholders.

Pursuant to the terms of the Merger Agreement, at the Effective Time, all outstanding shares of Theraclone common stock will be converted into shares of PharmAthene common stock. Upon completion of the merger, the PharmAthene security holders will own 50% of the outstanding equity of the combined company, and Theraclone security holders will own 50% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis but excluding PharmAthene warrants and options with an exercise price of more than $2.50 per share. Based on the number of outstanding securities of each company as of September 3, 2013, (i) if no PharmAthene or Theraclone options or warrants are exercised prior to the completion of the merger, PharmAthene and Theraclone security holders would own, respectively, approximately 54.1% and 45.9% of the outstanding shares of common stock of the combined company and (ii) if PharmAthene warrants and options with an exercise price of more than $2.50 per share are exercised, to the extent such exercises occur, PharmAthene and Theraclone security holders could own, respectively, between approximately 51.5% and 50.0% and 48.5% and 50.0% of the outstanding equity of the combined company, on a fully diluted basis. Accordingly, the issuance of shares of PharmAthene common stock to Theraclone stockholders in the merger will reduce significantly the relative voting power of each share of PharmAthene common stock held by current PharmAthene stockholders. Consequently, PharmAthene stockholders as a group will have significantly less influence over the management and policies of the combined company after the merger than prior to the merger.

There is no assurance when or even if the merger will be completed. Failure to obtain required approvals necessary to satisfy closing conditions may delay or prevent completion of the merger.

Completion of the merger is subject to the satisfaction or waiver of a number of conditions, including the requisite approvals by the stockholders of PharmAthene and the stockholders of Theraclone. There can be no assurance that PharmAthene or Theraclone will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived.

Because the lack of a public market for Theraclone’s outstanding shares makes it difficult to evaluate the fairness of the merger, Theraclone stockholders may receive consideration in the merger that is greater than or less than the fair market value of the Theraclone shares.

The outstanding capital stock of Theraclone is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of Theraclone shares. Since the percentage of PharmAthene’s equity to be issued to Theraclone stockholders was determined based on negotiations between the parties, it is possible that the value of the PharmAthene common stock to be issued in connection with the merger will be greater than the fair market value of Theraclone shares. Alternatively, it is possible that the value of the shares of PharmAthene common stock to be issued in connection with the merger will be less than the fair market value of Theraclone shares.

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Because the merger will be completed after the date of the PharmAthene special meeting of stockholders and the Theraclone written consent of stockholders, at the time of the special meeting or written consent, you will not know the exact number of shares of PharmAthene common stock that the Theraclone stockholders will receive upon completion of the merger.

Subject to the terms of the Merger Agreement, at the Effective Time, each share of Theraclone common stock and preferred stock issued and outstanding immediately prior to the merger will be canceled, extinguished and automatically converted into the right to receive that number of shares of PharmAthene common stock as determined pursuant to the Exchange Ratio. The Exchange Ratio depends on the fully diluted equity of both companies (but excluding options or warrants of PharmAthene with an exercise price of more than $2.50 per share). See the sections entitled “THE MERGER AGREEMENT — Merger Consideration.” Accordingly, the exact number of shares of PharmAthene common stock that Theraclone stockholders will receive upon completion of the merger will not be available at the time of the PharmAthene special meeting and the Theraclone written consent of stockholders.

PharmAthene and Theraclone officers and directors may have interests in the merger that are different from, or in addition to, those of PharmAthene stockholders and Theraclone stockholders generally.

The officers and directors of PharmAthene and Theraclone may have interests in the merger that are different from, or are in addition to, those of PharmAthene stockholders and Theraclone stockholders generally. The directors of the combined company will consist of five current directors from PharmAthene’s Board of Directors, three current directors from Theraclone’s Board of Directors, and one new director appointed by Theraclone. Current members of PharmAthene’s Board of Directors who resign upon the completion of the merger will receive director fees at current levels until the end of 2013, even though they may not remain on the combined company’s Board of Directors through that date. Theraclone’s executive officers will continue to serve as executive officers of the combined company. Further, certain PharmAthene executive officers will receive change in control payments in connection with the merger. In addition, the directors and executive officers of PharmAthene and Theraclone also have certain rights to indemnification and to directors’ and officers’ liability insurance that will be provided by the combined company following completion of the merger. See the sections entitled “THE MERGER — Interests of PharmAthene’s Executive Officers and Directors in the Merger” and “THE MERGER — Interests of Theraclone’s Directors and Executive Officers in the Merger.”

The announcement and pendency of the merger could have an adverse effect on the trading price of PharmAthene common stock and the business, financial condition, results of operations or business prospects for PharmAthene, Theraclone and the combined company.

While there have been no significant adverse effects to date, the announcement and pendency of the merger could disrupt PharmAthene’s and Theraclone’s businesses in the following ways, including:

Should they occur, any of these matters could adversely affect the trading price of PharmAthene common stock or harm the financial condition, results of operations or business prospects of PharmAthene, Theraclone and the combined company.

During the pendency of the merger, PharmAthene and Theraclone may be unable to enter into a business combination with another party because of restrictions in the Merger Agreement.

The Merger Agreement restricts the ability of PharmAthene and Theraclone to make acquisitions or complete other transactions during the pendency of the merger. While the Merger Agreement is in effect, subject to limited exceptions, each party is prohibited from soliciting, initiating, encouraging or taking actions

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designed to facilitate any inquiries or the making of any proposal or offer that could lead to such party entering into certain extraordinary transactions with any third party, such as a sale of assets, an acquisition of equity interest, a tender offer for capital stock or a merger or other business combination outside the ordinary course of business. Any such transactions could be favorable to PharmAthene stockholders or Theraclone stockholders. See the sections entitled “THE MERGER AGREEMENT — No Solicitation,” “THE MERGER AGREEMENT — Stockholders Approval” and “THE MERGER AGREEMENT — Termination.”

In addition, certain of PharmAthene stockholders, who in the aggregate beneficially own approximately 7.5% of the outstanding shares of PharmAthene common stock, entered into the PharmAthene Voting Agreement, pursuant to which each stockholder agreed to, among other things, vote its shares of PharmAthene common stock in furtherance of the transactions contemplated by the Merger Agreement. Certain of Theraclone’s stockholders, who in the aggregate held approximately 75% of the outstanding shares of Theraclone capital stock as of July 31, 2013, entered into the Theraclone Voting Agreement, pursuant to which each stockholder agreed to, among other things, vote its shares of Theraclone capital stock in favor of the approval and the adoption of the Merger Agreement and any actions required in furtherance thereof. See the section entitled “THE MERGER — Voting Agreement and Other Agreements.”

These provisions might discourage an otherwise interested third party from considering or proposing an acquisition of PharmAthene or Theraclone, even one that may be deemed of greater value than the merger to PharmAthene stockholders or Theraclone stockholders, as applicable.

The merger may be completed even though material adverse changes may result from the announcement of the merger, industry-wide changes or other causes.

In general, either party can refuse to complete the merger if there is a material adverse change affecting the other party between July 31, 2013, the date of the Merger Agreement, and the closing of the merger. However, some types of changes do not permit either party to refuse to complete the merger, even if such changes would have a material adverse effect on PharmAthene or Theraclone. If adverse changes occur but PharmAthene and Theraclone must still complete the merger, the combined company’s stock price may suffer.

The rights of Theraclone stockholders who become PharmAthene stockholders in the merger will be governed by PharmAthene’s Certificate of Incorporation and Bylaws.

Theraclone stockholders who receive shares of PharmAthene common stock in the merger will become PharmAthene stockholders. As a result, Theraclone stockholders who become stockholders in PharmAthene will be governed by PharmAthene’s Certificate of Incorporation and PharmAthene’s Bylaws, rather than being governed by Theraclone’s Certificate of Incorporation and Theraclone’s Bylaws. At the Effective Time, the outstanding shares of Theraclone capital stock will be converted into the right to receive shares of PharmAthene common stock. Theraclone preferred stock will in effect be exchanged for PharmAthene common stock so certain dividend, liquidation, redemption, voting, and protective rights held by holders of Theraclone’s preferred stock pursuant to Theraclone’s Certificate of Incorporation will no longer be applicable. For more information, please see the section entitled “COMPARISON OF RIGHTS OF STOCKHOLDERS.”

If the merger does not qualify as a reorganization under Section 368(a) of the Code or is otherwise taxable to U.S. holders of Theraclone common stock, then such holders may be required to pay substantial U.S. Federal income taxes.

As a condition to the completion of the merger, each of Fenwick & West LLP, tax counsel to Theraclone, and Dentons US LLP, tax counsel to PharmAthene, will have delivered an opinion, dated as of the closing date of the merger, that the merger will be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. These opinions will be based on certain assumptions and representations as to factual matters from Theraclone, PharmAthene and the Merger Sub, as well as certain covenants and undertakings by Theraclone, PharmAthene and the Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate or is violated in any material respect, the validity of the conclusions reached by counsel in their opinions would be jeopardized. Additionally, an opinion of counsel represents counsel’s best legal judgment but is not binding on the United States Internal Revenue Service, or IRS, or any court, so there can be no certainty that the IRS will not

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challenge the conclusions reflected in the opinions or that a court will not sustain such a challenge. If the IRS or a court determines that the merger should not be treated as a reorganization, a holder of Theraclone common stock would recognize taxable gain or loss upon the exchange of Theraclone common stock for PharmAthene common stock pursuant to the merger. See the section entitled “THE MERGER — Material U.S. Federal Income Tax Consequences of the Merger.”

PharmAthene and Theraclone have incurred and will continue to incur significant transaction costs in connection with the merger. PharmAthene and Theraclone estimate that they will incur aggregate direct transaction costs of approximately $5.4 million associated with the merger, including costs incurred through August 30, 2013, and additional costs associated with the commencement of the combined company’s operation as a public company, which cannot be estimated accurately at this time. The costs associated with the merger may increase if any Theraclone stockholders elect to dissent from the merger and seek payment of the fair value of their shares as permitted by Delaware law. If the total costs of the merger exceed PharmAthene’s and Theraclone’s estimates, the ability of the combined company to achieve its business plan will be adversely affected.

The anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

The merger involves the integration of two companies that have previously operated independently with principal offices in two distinct locations. Due to legal restrictions, PharmAthene and Theraclone are able to conduct only limited planning regarding the integration of the two companies prior to completion of the merger. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company’s business, financial results, financial condition, and stock price following the merger. Even if the combined company were able to integrate the business operations successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, innovation and operational efficiencies that may be possible from this integration and that these benefits will be achieved within a reasonable period of time.

Risks Related to the Combined Company Following the Merger

The trading price of the combined company’s common stock may be subject to significant fluctuations and volatility, and the stockholders of the combined company may be unable to resell their shares at a profit.

There has not been a public market for the combined company’s common stock. The market price of the combined company’s common stock could be subject to significant fluctuation following the merger. Market prices for securities of early-stage pharmaceutical, medical device, biotechnology and other life science companies have historically been particularly volatile. Some of the factors that may cause the market price of the combined company’s common stock to fluctuate include:

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In addition, if securities class action litigation is initiated against the combined company, it would incur substantial costs and its management’s attention would be diverted from operations. All of these factors could cause the price of the combined company’s common stock to decline, and you may lose some or all of your investment.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the combined company’s common stock.

Future results of the combined company may differ materially from the unaudited pro forma financial statements presented in this proxy statement/prospectus/consent solicitation.

The future results of the combined company may be materially different from those shown in the unaudited pro forma condensed combined financial statements presented in this proxy statement/prospectus/consent solicitation, which show only a combination of the historical results of PharmAthene and Theraclone. PharmAthene and Theraclone expect to incur significant costs associated with completion of the merger and combining the operations of the two companies. Furthermore, these costs may decrease the capital that the combined company could use for continued development of the combined company’s business in the future or may cause the combined company to seek to raise new capital sooner than expected.

The combined company plans to issue additional equity securities in the future, which may result in dilution to existing investors.

To the extent the combined company raises additional capital by issuing equity securities, including in a debt financing where the combined company issues convertible notes or notes with warrants, the combined company’s stockholders may experience substantial dilution. The combined company may, from time to time, sell common stock in one or more transactions at prices and in a manner it determines. If the combined company sells common stock, existing stockholders may be materially diluted. In addition, new investors could gain rights superior to existing stockholders, such as liquidation and other preferences. In addition, the number of shares available for future grant under PharmAthene’s equity compensation plans may be increased in the future. In addition, the combined company will also have warrants outstanding to purchase shares of capital stock. The combined company’s stockholders will incur dilution upon exercise of any outstanding stock options or warrants.

All of PharmAthene’s outstanding shares of common stock are, and any shares that are issued in the merger will be, freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares subject to stockholder agreements with lock-up provisions executed in connection with the merger and any shares held by affiliates, as defined in Rule 144 under the Securities Act. Rule 144 defines an affiliate as a person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the combined company and would include persons such as the combined company’s directors and executive officers.

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The concentration of the capital stock ownership with insiders of the combined company will likely limit the ability of the stockholders of the combined company to influence corporate matters.

Following the merger, the executive officers, directors, five percent or greater stockholders, and their respective affiliated entities of the combined company will in the aggregate beneficially own approximately 48.1% of the combined company’s outstanding common stock. As a result, these stockholders, acting together, have control over most matters that require approval by the combined company’s stockholders, including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a corporate transaction that other stockholders may view as beneficial.