PharmAthene, Inc. (PIP) reported third quarter 2010 net loss of 14 cents per share beating the Zacks Consensus Estimate of net loss of 19 cents per share and up 72% from the same quarter prior year.
Net revenue decreased 8.8% from year ago quarter to $6.2 million, below the Zacks Consensus Estimate of $8 million.
Factors responsible for the revenue decline included the completion of activities under the company’s existing Department of Defence contract, which concluded in third quarter of previous year and was partially offset by funding from the Defence department in the second and third quarters of 2010. Also, overall reduced activities and completion of all activities in the plague program early this year led to a revenue drop.
Both Research and Develepment (R&D) expenses and General and Administrative (G&A) expenses reduced from prior year quarter significantly.
R&D expenses dropped 21.5% to $6.2 million and G&A expense decreased 48.4% to $3.2 million compared to the prior-year quarter.
Overall decreased activity levels, particularly the completion of various programs, including the plague program, resulted in the decline of the R&D outlays. G&A expenses decreased due to cost reduction in personnel expenses, professional services and non cash stock-based compensation.
At the end of the quarter, the company had cash and cash equivalents of $2.7 million and no long-term debt. This month PharmAthene also completed a registered public offering of 4.3 million shares at a price of $3.50 per share and generated approximately $14.1 million of proceeds, before expenses. Management expects that the ongoing cost controls and other measures will leave the company well capitalized for the following quarters.
Zacks Consensus Estimate for the quarter had remained stable in the run up to the earnings release, but estimates for the current and next year have gone up in the last 30 days. Estimates for current year went up to net loss of 81 cents from 85 cents as 2 analysts raised their estimates. One positive revision for next year resulted in a rarrowing of the loss estimate for next year to 61 cents from 63 cents per share.
We currently have a Zacks #2 Rank for PharmAthene, which translates to a Buy rating on short term basis.
