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PharmAthene Reports Year End 2008 Financial Results

Date Posted: Wednesday, April 01, 2009

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For the years ended December 31, 2008 and 2007, the Company reported revenues of $32.9 million and $14.6 million, respectively. Revenues for the full year 2008 consisted primarily of contract funding from the U.S. government for the development of the Company's medical countermeasures, Protexia®, SparVax™ and RypVax™. Revenues for the year ended December 31, 2008 increased by $11.9 million as a result of the Avecia vaccines acquisition in the second quarter of 2008, and particularly the acquired U.S. government contracts supporting the development of SparVax™, our third generation rPA anthrax vaccine candidate, and RypVax™.

Research and development expenses for the years ended December 31, 2008 and 2007 were $31.8 million and $16.6 million, respectively. Expenses in 2008 resulted from research and development activities related to programs for Valortim® and Protexia® as well as from activities related to the SparVax™ and RypVax™ programs, which were acquired in the second quarter of 2008. The increase in research and development expenses in 2008 is primarily due to programs acquired as a result of the Avecia acquisition, as well as process development, manufacturing and increased clinical activities during the year, partially offset by reduced internal resource costs.

General and administrative expenses for the years ended December 31, 2008 and 2007 were $19.4 million and $13.9 million, respectively. General and administrative expenses increased as a result of additional employee costs due to the increase in headcount following the Avecia acquisition, as well as increased travel expenses, non-cash stock compensation expense, and legal and consulting expenses.

For the year ended December 31, 2008, the Company's net loss attributable to common shareholders was $36.4 million or $1.59 per share, compared to net loss attributable to common shareholders of $17.7 million or $1.88 per share in the same period of 2007.

As of December 31, 2008, available cash, cash equivalents and short term investments totaled $22.9 million, excluding restricted cash totaling $13.3 million. In addition, on March 27, 2009, the Company closed on the public sale of an aggregate of 2,116,055 newly issued shares of its common stock at $2.60 per share and warrants to purchase an aggregate of 705,354 shares of its common stock at an exercise price of $3.00 per share, resulting in aggregate gross proceeds of approximately $5.5 million.

"The past year represented an important phase in the Company's growth cycle, during which time we successfully executed on our milestones with the goal of transitioning from a product development company to one emphasizing procurement and delivery of next-generation medical countermeasures to the Strategic National Stockpile," said David P. Wright, President and Chief Executive Officer of PharmAthene.

"Our acquisition of Avecia's biodefense vaccines portfolio, completed in April 2008, created an expanded product portfolio that now includes five potential best-in-class, next generation product candidates, and important critical mass - particularly with respect to our anthrax franchise," continued Mr. Wright.

"We anticipate achieving important milestones in 2009 in each of these programs. We expect our on-going Phase I clinical trial of Protexia® to be completed this year. In addition, we also expect to commence a Phase I clinical trial of Valortim® in combination with antibiotics. Notably, we should also hear whether SparVax™, our novel second generation recombinant protective antigen vaccine candidate, has been selected by the Biomedical Advanced Research and Development Authority (BARDA) to receive an advanced development and procurement contract," said Mr. Wright. In 2008 the Department of Health and Human Services issued a formal solicitation, to which PharmAthene responded, requesting advanced development and procurement of 25 million doses of a recombinant protective antigen vaccine for the Strategic National Stockpile.

Further Information: http://www.pharmathene.com/