PharmAthene, Inc. (NYSE Amex: PIP), a biodefense company developing medical countermeasures against biological and chemical threats, today reported financial and operational results for the third quarter and nine months ended September 30, 2010.
For the third quarter of 2010, PharmAthene recognized revenues of $6.2 million compared to $6.8 million in the same period of 2009. For the nine months ended September 30, 2010 and 2009, respectively, PharmAthene recognized revenues of $14.1 million and $20.4 million. Revenues for the most recent quarter and nine months ended September 30, 2010 consisted primarily of contract funding from the U.S. government for the development of SparVax™, Valortim®, and Protexia®.
The decline in revenue in the third quarter and first nine months of 2010 compared to 2009 is attributable to (i) the completion of activities under the Company's existing Department of Defense (DoD) contract for Protexia®, which concluded in the third quarter of 2009, partially offset by modest funding from the DoD for this program in the second and third quarters of 2010, and (ii) reduced activity in the Company's Valortim® program, (iii) the completion of all activities in the Company's plague program during early 2010, (iv) partially offset by increased revenues under the Company's SparVax™ program.
Research and development expenses were $6.2 million and $7.9 million for the quarter ended September 30, 2010 and 2009, respectively. Research and development expenses were $17.1 million and $23.9 million for the nine months ended September 30, 2010 and 2009, respectively.
Research and development expenses decreased in the third quarter and first nine months of 2010 compared to the prior year period as a result of decreased activity in the Company's Valortim® anthrax anti-toxin and chemical nerve agent bioscavenger programs, as well as the completion of all activities in the Company's plague program, partially offset by increased activity under the SparVax™ anthrax vaccine program. In addition, the decrease in research and development costs for the nine months ended September 30, 2010 also reflects the inclusion of a one-time $3.0 million Avecia termination fee in the second quarter of 2009.
Expenses associated with general and administrative functions were $3.2 million in the third quarter of 2010 compared to $6.2 million in the same period in 2009. Expenses associated with general and administrative functions were $12.6 million and $15.8 million for the nine months ended September 30, 2010 and 2009, respectively.
General and administrative expenses decreased approximately $3.0 million for the three months ended September 30, 2010, and approximately $3.2 million for the nine months ended September 30, 2010, as compared to the prior year periods. These decreases were the net result of a corporate wide cost reduction program which included reductions in personnel expenses, professional services, and non cash stock-based compensation.
For the third quarter of 2010, PharmAthene's net loss attributable to common shareholders was $4.3 million or $0.14 per share, compared to $14.0 million or $0.50 per share in the same period of 2009. For the nine months ended September 30, 2010, the Company's net loss attributable to common shareholders was $18.7 million or $0.62 per share, compared to $26.6 million or $0.97 per share in the same period of 2009.
As of September 30, 2010, the Company had cash and cash equivalents, restricted cash, short-term investments, and US government account receivables and other receivables totaling approximately $11.5 million as compared to $23.2 million at December 31, 2009. In November 2010, PharmAthene completed a registered public offering of approximately 4.3 million shares of the Company's common stock at a price to the public of $3.50 per share, which generated estimated net proceeds of $14.1 million before expenses. Simultaneously with the closing, certain of the Company's 10% senior convertible note holders converted their notes into an aggregate of approximately 3.4 million shares of the Company's common stock.
"This financing, in combination with the conversion of certain of our senior convertible notes, has significantly strengthened the Company's cash position and reduced our current debt. Combined with our ongoing expense reduction plan and streamlined operations, we believe PharmAthene is now well capitalized through the balance of 2011," commented Eric I. Richman, President and Chief Executive Officer of PharmAthene.
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