PharmAthene (PIP) Updates Status of BARDA rPA Contract Discussions

ANNAPOLIS, Md., Jan. 5 /PRNewswire-FirstCall/ — PharmAthene, Inc. (NYSE Amex: PIP) a biodefense company specializing in the development and commercialization of medical countermeasures against chemical and biological threats, today commented on a Special Notice published by the US Department of Health and Human Services (DHHS), Assistant Secretary for Preparedness and Response, Biomedical Advanced Research and Development Authority (BARDA) on December 29, 2009.  This Special Notice, Solicitation Number: HHSO100200900103C announced BARDA’s intentions to negotiate a contract modification with PharmAthene Inc. for continued development of the Company’s recombinant protective rPA anthrax vaccine candidate, SparVax™.

“We look forward to working closely with BARDA to meet their needs and the critical needs of the Strategic National Stockpile as quickly as possible,” said David P. Wright, PharmAthene’s President and Chief Executive Officer.  “We believe the Special Notice reflects BARDA’s commitment to work with companies to provide funding to advance the development of rPA vaccines and ensure the maintenance of the timeline set under RFP BARDA 08-15 as if a contract had been awarded for our rPA anthrax vaccine candidate under that solicitation.”

This Special Notice appears to be consistent with BARDA’s stated intention to develop and eventually procure a second generation recombinant anthrax vaccine (rPA) for the Strategic National Stockpile, and is consistent with the remarks made by Mr. Wright in an investor teleconference on December 9, 2009 where he described BARDA’s intention to develop and stockpile improved anthrax vaccines as demonstrated by the Special Notice and the ability of PharmAthene to submit a proposal under BARDA Broad Agency Announcement (BAA-09-34).

This Special Notice was published by DHHS as a procedural matter prior to a contract modification.  The Special Notice states, “PharmAthene Inc. has been under contract with the US government since 2003 to develop an rPA vaccine via Contract N01-AI-30052. These development activities were transferred to BARDA as of April 1, 2009 (HHSO100200900103C). This product has matured as demonstrated by successful clinical and non clinical studies. Many of the (R&D) activities that are currently being executed have a direct impact on the government’s urgent need to devise effective measures to protect US citizens from harmful effects of anthrax spores used as instruments of terror.  This contracts increased level of effort does not represent a material difference between the modified contract and the contract that was originally awarded.”  According to the BARDA Special Notice, an amended contract scope of activities include manufacturing activities such as process scale-up and validation, assay validation, and non-clinical safety assessment and study plans.

BARDA announced on December 7, 2009, it has amended an existing Broad Agency Announcement (BAA-09-34) to accommodate proposals for rPA-based vaccine development.  If awarded, the Company’s expectation is that the funding under a BAA contract would be sufficient to advance the rPA vaccine program to the stage of a procurement solicitation.    PharmAthene plans to submit a white paper as required under the BAA instructions by February 1, 2010.

About SparVax™

SparVax™ is a novel second generation recombinant protective (rPA) anthrax vaccine being developed for administration by intramuscular injection.  Phase I and Phase II clinical trials involving more than 700 healthy human subjects have been completed and demonstrated that SparVax™ appears to be well tolerated and induces an immune response in humans.  These studies suggest that three doses of SparVax™, administered several weeks apart, should be sufficient to induce protective immunity.  In preclinical studies SparVax™ has also demonstrated the capability to protect rabbits and non-human primates against a lethal aerosol spore challenge of the anthrax Ames strain.

About PharmAthene, Inc.

PharmAthene was formed to meet the critical needs of the United States and its allies by developing and commercializing medical countermeasures against biological and chemical weapons.  PharmAthene’s lead product development programs include (1) SparVax™ – a second generation recombinant protective antigen (rPA) anthrax vaccine, (2) Valortim® – a fully human monoclonal antibody for the prevention and treatment of anthrax infection, (3) Protexia® – a novel bioscavenger for the prevention and treatment of morbidity and mortality associated with exposure to chemical nerve agents, and (4) a third generation rPA anthrax vaccine.

Statement on Cautionary Factors

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 “appears”; “potential”; “believe”; “anticipate”; “intend”; “intention”; “plan”; “expect”; “estimate”; “could”; “may”; “should”; or similar statements are forward-looking statements. PharmAthene disclaims, however, any intent or obligation to update these forward-looking statements. Risks and uncertainties include risk associated with the reliability of the results of the studies relating to human safety and possible adverse effects resulting from the administration of the Company’s product candidates, unexpected funding delays and/or reductions or elimination of U.S. government funding for one or more of the Company’s development programs, the award of government contracts to our competitors, unforeseen safety issues, challenges related to the development, scale-up, and/or process validation of manufacturing processes for our product candidates, unexpected determinations that these product candidates prove not to be effective and/or capable of being marketed as products, as well as 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 (the “SEC”). In particular, there can be no assurance that the Company will be awarded further government funding to support development of its second generation anthrax vaccine.