Stock Alert for PharmAthene Inc. (PIP)

PharmAthene Inc. (PIP) is a biodefense company engaged in the development and commercialization of medical countermeasures against biological and chemical weapons. The Company’s lead product development programs include: SparVax, a second generation recombinant protective antigen (rPA) anthrax vaccine and a third generation anthrax vaccine with potential for improved potency and stability; Valortim, a fully human monoclonal antibody for the prevention and treatment of anthrax infection; and rBChE (recombinant butyrylcholinesterase), which countermeasures for nerve agent poisoning by organophosphorous compounds, including nerve gases and pesticides.

PIP was incorporated in 2005 and is based in Annapolis, Maryland.

Share Statistics (21-June-11) FY 

2009

FY 

2010

%  

Chg

Q1 

2010

Q1 

2011

%  

Chg

Symbol PIP Revenue, $Mn 27.55 20.99 -23.8% 3.12 6.34 103.2%
Current price $3.04 Gross marg. 100.0% 100.0% 100.0% 100.0%
52wk Range: $1.26-$4.96 Oper. margin -112.2% -71.6%
Avg Vol (3m): 494,397 Net margin -117.2% -166.0% 41.6% -254.5% -32.8% -87.1%
Market Cap. 140.93M
Shares Outstanding 46.36M EPS, $ -1.00 -0.94 -6.0% -0.28 -0.04 -85.7%

Source: Reuters.com, SEC Filings.

Investment Highlights

Shares of the biodefense company spiked more than 26% in Tuesday’s trading, a day after the Company was highlighted in a SeekingAlpha report, which suggests that a lawsuit it is involved in with Siga Technologies (NASDAQ: SIGA) will likely be ruled in its favor.

PIP added $0.63 to close the session at $3.04.  In the past 52 weeks, PIP has traded between a low of $1.26 and a high of $4.96.  Approximately 2.65 million shares have traded hands during the session, versus the average daily volume of 1.01 million.  PIP remains below its 50-day and 200-day moving averages of $3.54 and $3.46, respectively.

The company last week announced the completion of a previously announced registered direct offering, which raised gross proceeds of about $6.5 million. Approximately $5.8 million worth of net proceeds remain from its offering, after placement agent fees and other offering expenses, which PIP intends to use for general corporate purposes.

PIP posted revenue of $6.3 million for the first quarter of 2011, compared with $3.1 million in the same period of 2010. It said the higher revenue was a result of increased revenue for the SparVax program, which totaled $5.4 million for the three months ended March 31, 2011, as against $2.1 million for the same period in 2010.  PIP attributed SparVax program’s higher revenue to additional work completed during the quarter in relation to the Company’s manufacturing platform for SparVax and the establishment of analytical and stability-indicating assays for characterization of the product.  The Company recognized $0.8 million of revenue for its Valortim program for each of the three months ended March 31, 2011 and 2010, respectively.

The Company’s research and development expenses increased to $5.8 million for the period ended March 31, 2011, compared to $5.0 million in the same period of 2010.  These expenses resulted from research and development activities related to the Company’s Valortim and SparVax programs, and to a lesser extent, expenses related to the Protexia bioscavenger program.  Research and development expenses increased for the period ended March 31, 2011, compared to the prior year period, primarily due to increased activity under the Company’s SparVax program and the completion of patient dosing in the Phase I Valortim dose escalation clinical trial, partially offset by the decrease in development expenses related to the Protexia bioscavenger program, which was completed in 2010.

PIP posted a net loss of $2.1 million, or $(0.04) per share, for the first quarter of 2011, narrowing the year-ago quarter’s loss of $7.9 million, or $(0.28) per share, in the same period of 2010.  The year-over-year decrease in net loss includes the impact of the change in fair value of the Company’s derivative instruments, which was $2.5 million for the three months ended March 31, 2011, compared to $0.3 million for the three months ended March 31, 2010. The decrease in fair value, which became a source of other income, was primarily associated with a decrease in PIP’s stock price from December 31, 2010, to March 31, 2011.

The Company’s cash and cash equivalents, short-term investments, and net U.S. government accounts receivables and other receivables, including unbilled receivables, totaled approximately $18.7 million as of March 31, 2011, down from $21.6 million at December 31, 2010.  PIP attributed the decline to the net impact of cash used to fund operations.

The Company’s next earnings report is expected on August 08, 2011.

Visit PIP at www.pharmathene.com

Financial Strength (21-June-2011) Company Industry Sector S&P 500
Quick Ratio (MRQ) 2.23 2.08 0.71
Current Ratio (MRQ) 3.05 2.78 2.62 1.03
LT Debt to Equity (MRQ) 0.00 10.86 23.29 136.13
Total Debt to Equity (MRQ) 0.00 14.97 29.46 181.83
Interest Coverage (TTM) -17.85 0.20 1.61 18.15

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among three polled investment analysts. Against the Pharmathene Inc company.

Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
Latest 0 2 0 1 0 0
4 weeks ago 0 2 0 1 0 0
2 months ago 0 2 0 1 0 0
3 months ago 0 2 0 1 0 0
Last year 0 0 1 0 0 0

The four analysts offering 12-month price targets for PIP have a median target of 6.50, with a high estimate of 20.00 and a low estimate of 2.50. The median estimate represents a 169.71% increase from the last price of 2.41.

Source: markets.ft.com

Consensus Estimates Analysis

# of Estimates Mean High Low 1 Year Ago
SALES (in millions)
Quarter Ending Jun-11 3 6.67 7.50 6.00
Quarter Ending Sep-11 3 9.50 10.50 8.00
Year Ending Dec-11 4 35.88 45.00 30.00 41.50
Year Ending Dec-12 3 55.25 80.00 11.75 11.75
EARNINGS (per share)
Quarter Ending Jun-11 3 -0.11 -0.09 -0.14
Quarter Ending Sep-11 3 -0.07 -0.04 -0.10
Year Ending Dec-11 3 -0.30 -0.27 -0.32 -0.47
Year Ending Dec-12 2 -0.01 0.34 -0.36 -0.53

Technical Analysis

Source: http://stockcharts.com

Comparative Analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S
June21-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
diaDexus Inc. DDXS 0.31 16.45M n/a n/a n/a n/a
Emergent BioSolutions Inc. EBS 22.36 793.76M 19.11 16.09 2.43 2.30
AVANIR Pharmaceuticals AVNR 3.41 422.54M n/a n/a 43.70 9.51
Human Genome Sciences Inc. HGSI 25.53 4.84B n/a n/a 28.98 10.32
Biotechnology Median 19.23 n/a 10.27 n/a
PharmAthene Inc. PIP 3.03 140.47M n/a 8.91 4.28 1.90

Source: Thomson Financial

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