Pharmathene Conference Call to provide an update on its rPA program Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Elemer Piros - Rodman & Renshaw - Analyst : What I find peculiar, David, is it took them a year and a half or more to find out that the proposals that were submitted would not lead to licensure within an eight-year time period. In your proposal, did you highlight a more expeditious route than eight years?

Question: Elemer Piros - Rodman & Renshaw - Analyst : Now, you mentioned that you just met with BARDA this Monday. There was no room for questions at that time? Did they just hand you down the verdict and off you go?

Question: Elemer Piros - Rodman & Renshaw - Analyst : Okay. Now, under the BAA regime, do I understand it correctly, or correct me if I'm wrong, that funding for this project would be coming in a more of a piecemeal fashion, i.e., they wouldn't make a commitment for the entire stretch and value the project (technical difficulty) issue the project at once or the contract at once, but they would fund phases, then they would sit down again with you and see what the next phase would be, you send in another proposal and then they make a decision for the next stage of funding? Am I correct in viewing this or not?

Question: Elemer Piros - Rodman & Renshaw - Analyst : This is essentially a delay. But at the end, God knows when, in 2010, you could be facing the same sort of a contract in terms of dollar value, time period to complete, etc., than you would have under an RFP?

Question: Elemer Piros - Rodman & Renshaw - Analyst : I see. And my last question is, historically during this RFP process, you were conjoined with one of your competitors by the hip. And the case as it appears from the outside was treated as one and simultaneously. Do you think that under the BAA, the situation, would it be more separate, or they would still look at the two things side by side?

Question: Elemer Piros - Rodman & Renshaw - Analyst : But this could be to your advantage, actually?

Question: Elemer Piros - Rodman & Renshaw - Analyst : One last question, I'm sorry. If you look at the financial health of the Company, before this announcement you suggested that you have enough cash and receivables to last until the end of 2010. How did that change in order to reaffirm that guidance that you gave a few months ago?

Question: Debra Fiakas - Crystal Equity - Analyst : I wanted to ask about your comments that you may apply for a change in the parameters of your existing SparVax contract. Could you perhaps describe for us how this process has impacted the flow of work? Your work on SparVax has continued. How has this decision changed the actual

Question: Debra Fiakas - Crystal Equity - Analyst : Okay. So you -- can I infer from that that, in terms of just the actual work itself, there has been no real setback in terms of your progress toward achieving FDA approval?

Question: Debra Fiakas - Crystal Equity - Analyst : Okay. And then I guess the other question also relates to questions about adequate financial resources and adequacy of financial resources. Given what has transpired, you do not anticipate that you would need to make adjustments in your staffing levels?

Question: Bal Sorecano - Griffin Securities - Analyst : Good morning, David. How are you?

Question: Bal Sorecano - Griffin Securities - Analyst : I know in prior discussions, I do believe that over the longer term, as you pointed out, with your -- I know we have discussed before, with the Company's ability to navigate the political landscape and to have the right friends, if you will, in the right places within government, over time potentially this can be turned into, I think, something to your advantage because of your ability to win contracts and because of your friends, potentially, within the biodefense space. And so I do see that potential as you continue to walk through the new plan with them and clarify what the new guidelines might be and outline that, because those channels are already open. So I'm confident in that. Secondly, sort of in the moderate term, does the Company now start to think about, I guess, diversifying, if you will, or accelerating, perhaps, some seed initiatives or some earlier-stage initiatives to make certain that you are more diversified? Obviously, there's a number of programs underway, obviously, but I mean from your own perspective, to make certain that potentially maybe the Company has a slightly different look or feel over the moderate to longer term? Is that something that might be something to consider later on?

Question: Steve Brozak - WBB Securities - Analyst : Having just been to the BARDA conference -- and frankly, they didn't really telegraph any of these changes. So I have to assume that this is a pretty fluid situation and is probably -- they are thinking things through. So I assume that you're going to come back at them and say, gentlemen, we just heard and saw something at a conference that really didn't telegraph what you're doing right now. What kind of dual tracks -- I know that you intimated that you are going to go sit down with Robin Robinson again. But what kind of dual tracks are you going to go back at, given the fact that this is not just a message to you, but it's a message to everyone that does business with government that there has to be some type of orderly concept to sending out contracts, to defining contracts, and frankly, to making sure that there's enough notice? What would you say your two takeaway points would be as far as that goes? And I've got one follow-up question after that.

Question: Steve Brozak - WBB Securities - Analyst : Okay. So to reiterate on that, your approach will be and has always been and will continue to be collegial with them, and see about trying to expedite what's best for both BARDA and the PharmAthene shareholders. That would be, I guess, as concise as possible?

Question: Steve Brozak - WBB Securities - Analyst : Okay. Yes, no, I mean, that's what everyone is looking for. Okay. So we're looking at a situation where we looked at it and said that this was pretty much -- and we've described it as a bifurcation process where they seem to have bifurcated the development model from the awarding model. But from what we looked at, we saw that we thought that it would require the same amount of funds, ultimately, as far as the expenditures from the government. Would you be in agreement with that?

Question: Steve Brozak - WBB Securities - Analyst : Okay. And just up until this moment, there had been no signals sent by BARDA or anyone else, for instance at FDA, that said that you were out of compliance with what you were being asked to deliver on in terms of timeliness and/or any kind of scientific merit?