PharmAthene Reports Second Quarter 2008 Financial and Operational Results

Wednesday, August 13, 2008 General News
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ANNAPOLIS, Md., Aug. 12 PharmAthene, Inc.(Amex: PIP), a biodefense company developing medical countermeasures againstbiological and chemical threats, today reported financial and operationalresults for the second quarter and six months ended June 30, 2008.Operational highlights during, and subsequent to, the quarter included:

-- Submitted response to a Request for Proposals (RFP) issued by theDepartment of Health and Human Services (DHHS) for an "Anthrax RecombinantProtective Antigen (rPA) Vaccine for the Strategic National Stockpile"

-- Completed acquisition and integration of Avecia's biodefense vaccinesbusiness unit creating a diverse biodefense medical countermeasures productpipeline positioned for near-term revenue growth

-- Completed preclinical requirements to commence a Phase I human safetyclinical trial of Protexia(R)

-- Initiated commercial scale cGMP manufacturing of Valortim(R)

"The second quarter continued to be a highly productive period forPharmAthene, and sets the stage for a very exciting time for our Company,"said David P. Wright, President and Chief Executive Officer. "Over the nextseveral months, we expect to achieve a number of significant milestones whichbuilds value for our stockholders."

"On July 31st 2008 we submitted a response to a Request for Proposalsissued by the Department of Health and Human Services, seeking procurement of25 million doses of a second generation recombinant protective antigen (rPA)anthrax vaccine for inclusion in the Strategic National Stockpile -- theNation's civilian stockpile of biodefense medical countermeasures," said Mr.Wright.

"Judging from prior contracts of this magnitude, we estimate the potentialvalue of an rPA vaccine contract could range from between $350 - $600 million,and we believe that our product, SparVax(TM), is well positioned to capture ameaningful share of this contract. Phase II clinical trials have already beencompleted in over 700 healthy subjects and demonstrate that SparVax(TM) iswell tolerated and induces an immune response in humans," continued Mr. Wright.

"In addition to our focus on SparVax(TM), we also anticipate a decisionfrom the National Institutes of Health regarding development funding for athird generation rPA anthrax vaccine; and next month we expect to begin aPhase I trial of Protexia(R), our nerve agent countermeasure, which we believewill provide pre- and post-exposure prophylaxis against chemical nerve agents.With the addition of Avecia's vaccine business, we have created one of theindustry's most robust biodefense portfolios, firmly establishing PharmAtheneas a leading developer of urgently needed medical countermeasures to theUnited States government and foreign Allies," commented Mr. Wright. "We lookforward to keeping the investment community apprised of our progress duringthis exciting time for our Company."

Pending 2008 Milestones

-- Decision anticipated from DHHS for procurement award for secondgeneration rPA anthrax vaccine by year end

-- Decision anticipated from NIH for development contract award forthird-generation rPA anthrax vaccine by year end

-- Company to file Investigational New Drug (IND) Application with theUnited States Food and Drug Administration (FDA) for Protexia(R) and plans toinitiate Phase I clinical trial in September 2008

Financial Results

For the second quarter of 2008, PharmAthene recognized revenues of $10.9million compared to $2.3 million in the same period of 2007. For the sixmonths ended June 30, 2008 and 2007, the Company reported revenues of $16.8million and $5.3 million, respectively. Revenues for both periods of 2008consisted primarily of contract funding from the U.S. government for theadvanced development of Protexia(R) for treatment of nerve agent poisoning.With the Avecia acquisition, in the second quarter of 2

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