Business context and reporting period
This is PharmAthene, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2013—not a filing under the name Altimmune, Inc. PharmAthene was a biodefense company developing SparVax, rBChE and Valortim, with revenue primarily from U.S. government contracts.
Financial results and liquidity
| Metric | Q1 2013 | Q1 2012 / comparison |
|---|---|---|
| Contract revenue | $6.48 million | $6.15 million; filing reports 6.6% growth |
| Operating expenses | $7.57 million | $7.74 million |
| Operating loss | $1.09 million | $1.59 million |
| Net loss | $2.11 million | $2.68 million |
| Net loss per share | $0.04 | $0.06 |
| Cash from operations | $0.26 million | $0.79 million |
Cash and cash equivalents were $12.87 million at quarter-end, versus $12.70 million at December 31, 2012. Current assets were $19.07 million and current liabilities $7.79 million. Total debt was approximately $3.79 million, including $1.33 million outstanding on the revolving facility. The term loan bears 10.14% fixed interest; the revolver rate was 6.5% and variable. The company reported no separate gross-margin figure.
Material changes versus prior period
Revenue increased, mainly as rBChE contract revenue rose to $1.4 million from $0.8 million; SparVax revenue edged down to $5.1 million from $5.2 million. R&D expense rose 10.6% to $5.23 million, while G&A fell to $2.28 million from $2.95 million. Net loss narrowed, but operating cash generation declined. A $0.91 million noncash loss from revaluing warrant-related derivative liabilities contributed to other expense.
Outlook, risks and unusual items
No numerical earnings or revenue guidance was provided. Management said future capital needs depend on development costs, government contract funding and the outcome and potential proceeds of the SIGA litigation; it expects to continue relying on financing. The financial statements assume continuation as a going concern. Government funding for Valortim was described as unlikely, and FDA’s clinical hold on SparVax left timing of any resumed human trials uncertain. The company had a $15 million at-the-market equity sales agreement; after quarter-end it sold 1,030,870 shares for approximately $1.63 million net.
PharmAthene’s appeal and SIGA’s cross-appeal remained pending after January 2013 oral argument. The trial court award could entitle PharmAthene to 50% of defined Arestvyr profits for 10 years after SIGA first earns $40 million in net profits, plus approximately $2.4 million in fees and interest; no amount was recorded as receivable. A separate vendor dispute concerned mishandled biological materials and competing lawsuits. Government contract payments are subject to audit.
Important facts for investors to verify
- Confirm the issuer identity: the supplied filing names PharmAthene, Inc., although the request identifies Altimmune, Inc.
- Check subsequent developments in the SIGA appeal and the timing or likelihood of any related recovery.
- Verify SparVax clinical-hold status and the availability of government funding and contract renewals.
- Review cash needs, debt repayment obligations and potential dilution from the equity offering and outstanding warrants.
- Monitor the vendor litigation and any government contract audit adjustments.