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.