Pharmathene Q4 2008 Earnings Conference Call Transcript

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

Question: Debra Fiakas - Crystal Equity Research - Analyst : Thank you. I was wondering could you tell us what the cash usage by operations was for the year 2008?

Question: Debra Fiakas - Crystal Equity Research - Analyst : Cash usage -- what were the cash flows from operations? I assume it was a cash usage. What was that for the year?

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay. Thank you. And also, could you maybe give us a recap on -- the Avecia transaction required some subsequent payments. Could you give us a recap on the payments that might still be due to Avecia?

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay. So you still have some time even, and it's -- there's not a date firm. It's the contract signing itself, not another date firm as an earlier date. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay. And then you mentioned -- I think David mentioned during his prepared remarks that you've received or earned or won over $0.5 billion in contracts and funding for various projects. I wondered could you give us some idea what is left on those contracts that has not yet been completed?

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay. And I would imagine that a portion of that 55% is also contingent on the achievement of milestones and the exercise of some additional options. Could you maybe split out that 55% between what has already been awarded and you're already currently -- or you're currently working toward it and those that are -- that which is subject to additional options?

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay. Excellent. Thank you. And then one last question. Of the Phase I clinical trial for Valortim, do you have a timing? Could you indicate what the timing might be for that, or is it yet unscheduled?

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay.

Question: Debra Fiakas - Crystal Equity Research - Analyst : Okay. Very good. That does help clarify it. Thank you very much.

Question: Elemer Piros - Rodman & Renshaw - Analyst : Good afternoon, gentlemen. My question, David, is if you could -- I understand you can't really disclose too much about your final steps of negotiating the government. However, we had a sense towards the end of the last year that you were down to the final inning and the final negotiations of the contract. Did the arrival of the new administration reinitiate some of those talks? And have you seen any significant change in terms of what the current government would think about the final outcome of this procurement grant?

Question: Elemer Piros - Rodman & Renshaw - Analyst : So just as a follow-up, David, so I take that you would think -- you still believe that there will be two actual contracts that would be awarded. Now is it possible that each would be awarded 25 million doses or 12.5 million? And, what do you think is thinking there?

Question: Elemer Piros - Rodman & Renshaw - Analyst : Okay.

Question: Elemer Piros - Rodman & Renshaw - Analyst : 25 million.

Question: Elemer Piros - Rodman & Renshaw - Analyst : Yes. Understood. And maybe a question to Chris. Chris, irrespective of whether this contract is awarded during the next several weeks, do you see 2009 cash usage, cash burn on a monthly basis, still in the $1 million to $1.5 million range? Hello?

Question: Elemer Piros - Rodman & Renshaw - Analyst : Yes, I can.

Question: Elemer Piros - Rodman & Renshaw - Analyst : Okay. Thank you so much, David.

Question: Daniel Mallin - WBB Securities - Analyst : Hi, David. That's WBB Securities. I'm just correcting a minor mistake from the operator and plugging my firm. I guess there's clearly two contenders here. And I know that you can't really comment about what's happening at the other contender that's for SparVax here on these pending anthrax rPA contracts. But I want to ask you a couple of questions about FDA protocol and procedures that might help to clarify why I feel that you guys perhaps have a competitive advantage. My question to you is when you signed the Avecia deal, you basically signed a deal in which they will continue to be the provider of the protein. In other words, the protein that has been produced and developed to date by Avecia and used in the Phase II programs will continue to be utilized in -- manufacturing in the existing facilities that have already been used for the prior trials. Is that correct?

Question: Daniel Mallin - WBB Securities - Analyst : Well, let me try and cut to the chase here and ask the real question here. If you had purchased the program outright from Avecia with the intention of relocating that and having it manufactured at a different facility, do you think that the FDA would require an additional Phase II trial for the new protein produced at the new facility? Or, would you be able to -- as you seem to be able to, move directly to a Phase III trial?

Question: Daniel Mallin - WBB Securities - Analyst : Would it be likely that an additional bridging study would have been required had you chosen in between Phase II and Phase III to manufacture this at a completely different facility?

Question: Daniel Mallin - WBB Securities - Analyst : Thanks. That's very helpful. And just a quick update, if you will, on the Protexia program, which I think you were studying for Parkinson's, I believe. Is there any update there in terms of an IND filing?

Question: Daniel Mallin - WBB Securities - Analyst : Oh, okay. I apologize.

Question: Daniel Mallin - WBB Securities - Analyst : Thank you. That's all very helpful. I look forward to your coming press releases.

Question: Ryan Lang - Emory Asset Management - Analyst : Hi, David. How are you?

Question: Ryan Lang - Emory Asset Management - Analyst : So we've touched on this question a bit from some of the other folks that asked questions. But my understanding is that the government is going to issue two contracts here, both for $25 million?

Question: Ryan Lang - Emory Asset Management - Analyst : Is that still our understanding? And can you tell us a little bit about that?

Question: Ryan Lang - Emory Asset Management - Analyst : Yes. That was my next question. So they will step up for the performing party the balance of the contract?

Question: Ryan Lang - Emory Asset Management - Analyst : Okay. That's helpful. Thank you. Did we find Chris?

Question: Ryan Lang - Emory Asset Management - Analyst : All right. Good luck.

Question: Peter Smith - News Times - Analyst : Hey, Dave. Well, I'm not going to congratulations yet, but I hope everything works out over the next few weeks.

Question: Peter Smith - News Times - Analyst : I have a question for you regarding the -- what will happen with the warrant on the PharmAthene stock that will -- that's expected -- that expire in July of this year? Any insight on that?

Question: Peter Smith - News Times - Analyst : All right. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Matt Duffy - BDR Research Group, LLC - Analyst : Hi. Thanks for taking my question. David, I apologize if you guys have already covered this. I jumped on a minute late. But could you talk about what timing of payments might look like under the second generation anthrax contract if it is awarded -- what timing in terms of procurement -- of development and then procurement?

Question: Matt Duffy - BDR Research Group, LLC - Analyst : Okay. That's helpful, though.

Question: Matt Duffy - BDR Research Group, LLC - Analyst : No. That's it. Thank you.