PR Newswire

PharmAthene Reports Third Quarter 2016 Financial and Operational Results

Friday, Nov 04, 2016

ANNAPOLIS, Md., Nov. 4, 2016 /PRNewswire/ -- PharmAthene, Inc. (NYSE MKT: PIP), a biodefense company developing medical countermeasures against anthrax, today reported its financial and operational results for the third quarter of 2016. 

PharmAthene received $122.5 million from SIGA Technologies, Inc. during the nine months ended September 30, 2016, comprised of principle payments of $115 million (which amount is creditable against final satisfaction of the judgment in PharmAthene's favor and is not refundable), and $7.5 million of payments calculated by SIGA as interest on the judgment. On October 6, 2016, SIGA paid PharmAthene an additional $10 million. Following this payment, $83.7 million remains due under the total award amount of approximately $208.7 million.

On July 20, 2016, PharmAthene and SIGA filed a Joint Motion which sought approval of amendments to SIGA's Reorganization Plan to extend the deadline for SIGA to satisfy the judgment owed to PharmAthene from October 19, 2016 to November 30, 2016, conditioned on SIGA's payment to PharmAthene of $100 million in aggregate (including prior payments of principal and interest) on or prior to October 19, 2016, such amount to be applied against PharmAthene's judgment. Interest on any unpaid balance will continue to accrue at 8.75% per year and be paid monthly to PharmAthene by SIGA. The Joint Motion was approved by the Bankruptcy Court on August 18, 2016.

PharmAthene anticipates that eventual receipt of the full award from SIGA could generate substantial taxable income, which PharmAthene expects to partially offset through its tax NOL carry forwards. The Company filed its tax returns during the third quarter of 2016 for the tax year ended December 31, 2015. On that return, it recognized a worthless stock deduction and bad debt deduction related to its investment in its UK subsidiary of approximately $13.9 million and $4.0 million, respectively. The NOL reported for 2015 was approximately $21.5 million which, when added to the losses carried forward from previous years, gives the Company approximately $176.1 million in cumulative NOLs available to offset the income received related to the SIGA settlement. As of the end of the third quarter of 2016, the Company estimates that it has used approximately $114 million of the $176.1 million in cumulative NOLs.

For the three months ended September 30, 2016, PharmAthene recognized revenue of $1.0 million compared to $1.2 million for the corresponding period in 2015.  This revenue was recognized under the Company's contract with the NIAID for the development of a next generation lyophilized anthrax vaccine.

Research and development expenses in the third quarter of 2016 and 2015 were $1.2 million and $1.1 million, respectively. These expenses resulted from research and development activities related primarily to the Company's anthrax vaccine programs.

Expenses associated with general and administrative functions were $3.7 million in the third quarter of 2016 compared to $1.2 million in the third quarter of 2015. The $2.5 million increase over the corresponding period in 2015 was primarily due to an increase in stock compensation expense and expenses related to the preparation of the proposal and protest to DHHS in response to the request for a next generation anthrax vaccine.

For the third quarter of 2016, the Company's net income was $109.2 million, or $1.67 per diluted share, compared to net loss of $1.3 million, or $(0.02) per diluted share, for the corresponding period in 2015.

Cash and short term investments at the end of the third quarter of 2016 were $135.9 million compared to a cash balance of $15.6 million at the end of fiscal year 2015.

If SIGA pays PharmAthene cash in full on the judgment, and barring any unexpected material events, PharmAthene intends to distribute at least 90% of the after tax net cash proceeds of such payment to its shareholders. The timing and form of such a potential distribution will depend upon PharmAthene's analysis of its current situation, applicable corporate statutes relating to distributions, and the economic consequences to its shareholders.

About PharmAthene

PharmAthene is a biodefense company engaged in the development of next generation medical countermeasures against biological threats. The Company's development portfolio includes one next generation anthrax vaccine that is intended to improve protection while having favorable dosage and storage requirements compared to other anthrax vaccines.

Forward-Looking Statement Disclaimer

Except for the historical information presented herein, matters discussed may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements preceded by, followed by, or that include the words "potential"; "believe"; "anticipate"; "intend"; "plan"; "expect"; "estimate"; "could"; "may"; "should"; "will"; "project"; or similar statements are forward-looking statements. Risks and uncertainties include risks associated with our ability to fully collect a money judgment from SIGA; risks relating to the timing of payments, if any, under the SIGA litigation; our ability to make distributions of a substantial portion of the cash proceeds we may receive from SIGA; the timing, amount and form of such a distribution; risks relating to our continuing ability to recognize cost reductions; risks associated with the amount of taxable income actually generated upon the receipt of a full award from SIGA; risks associated with the availability of our NOLs, the amounts of available NOLs and any increases thereof and preservation of such NOLs; and other risks detailed from time to time in PharmAthene's Forms 10-K and 10-Q under the caption "Risk Factors" and in its other reports filed with the U.S. Securities and Exchange Commission. PharmAthene disclaims any intent or obligation to update these forward-looking statements other than as required by law.

Copies of PharmAthene's public disclosure filings are available on our website under the investor relations tab at www.PharmAthene.com.

Tables Follow

PHARMATHENE, INC.













UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS































September 30,



December 31,







2016



2015













ASSETS









Current assets:











Cash and cash equivalents



$     69,106,979



$    15,569,813



Short-term investments



66,841,690



-



Billed accounts receivable



665,659



511,994



Unbilled accounts receivable



912,126



963,345



Prepaid expenses and other current assets



509,857



181,714

Total current assets



138,036,311



17,226,866













Property and equipment, net



153,823



233,694

Other long-term assets and deferred costs



-



53,384

Goodwill



2,348,453



2,348,453

Total assets



$   140,538,587



$    19,862,397













LIABILITIES AND STOCKHOLDERS' EQUITY





















Current liabilities:











Accounts payable



$          614,543



$         521,122



Accrued expenses and other liabilities



1,778,193



1,248,708



Accrued restructuring expenses - current



173,301



381,950



Other short-term liabilities



11,588



11,250



Current portion of derivative instruments



1,150,845



16,411

Total current liabilities



3,728,470



2,179,441













Accrued restructuring expenses, less current portion



-



108,641

Other long-term liabilities



427,077



433,407

Derivative instruments, less current portion



-



491,791

Total liabilities



4,155,547



3,213,280













Stockholders' equity:











Common stock, $0.0001 par value; 100,000,000 shares authorized;

66,423,033 and 64,382,086 shares issued and outstanding at

September 30, 2016 and December 31, 2015, respectively

6,642



6,438



Additional paid-in-capital



244,035,496



240,366,704



Accumulated other comprehensive income



12,346



-



Accumulated deficit



(107,671,444)



(223,724,025)

Total stockholders' equity



136,383,040



16,649,117

Total liabilities and stockholders' equity



$   140,538,587



$    19,862,397













 

 

PHARMATHENE, INC.





















UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS















































Three months ended September 30,



Nine months ended September 30,







2016



2015



2016



2015





















Contract revenue



$         993,885



$     1,155,839



$      4,110,833



$      9,374,155





















Operating expenses:



















Research and development

1,236,692



1,125,865



3,409,005



3,962,019



General and administrative

3,714,747



1,231,035



6,343,426



5,246,396



Restructuring expense

-



422,482



-



2,519,273



Depreciation



32,235



35,005



110,371



108,798

Total operating expenses



4,983,674



2,814,387



9,862,802



11,836,486





















Loss from operations



$    (3,989,789)



$   (1,658,548)



$    (5,751,969)



$    (2,462,331)

Other income:



















Interest income (expense), net

25,186



(9,888)



25,614



(48,492)



Realization of cumulative translation adjustment

-



-



-



(229,192)



Change in fair value of derivative instruments

(352,057)



359,796



(642,643)



577,426



Other income - litigation



113,566,451



-



122,461,489



-



Other income (expense)



659



(691)



6,400



6,594

Total other income



113,240,239



349,217



121,850,860



306,336





















Net income (loss) before income taxes

109,250,450



(1,309,331)



116,098,891



(2,155,995)



Income tax provision



(15,437)



(15,437)



(46,310)



(46,310)

Net income (loss)



$  109,235,013



$   (1,324,768)



$  116,052,581



$    (2,202,305)





















Basic net income (loss) per share

$               1.68



$            (0.02)



$               1.79



$             (0.03)

Diluted net income (loss) per share

$               1.67



$            (0.02)



$               1.79



$             (0.03)

Weighted average shares used in calculation of

basic net income (loss) per share

65,001,584



64,187,618



64,715,647



63,858,500

Weighted average shares used in calculation of

diluted net income (loss) per share

65,814,765



64,187,618



65,322,158



63,858,500









































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SOURCE PharmAthene, Inc.

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