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Organization and Business
9 Months Ended
Sep. 30, 2014
Organization and Business [Abstract]  
Organization and Business

Note 1 - Organization and Business

 

We are a biodefense company engaged in the development and commercialization of next generation medical countermeasures against biological and chemical threats. We are subject to those risks associated with any biopharmaceutical company that has substantial expenditures for research and development and whose products require review and approval by the U.S. Food and Drug Administration ("FDA"). There can be no assurance that our research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, we operate in an environment of rapid technological change and are largely dependent on the services and expertise of our employees, consultants and other third parties.

 

Historically, we have performed under government contracts and grants and raised funds from investors (through equity and debt issuance) to sustain our operations. We have spent and will continue to spend substantial funds in the research, development, clinical and preclinical testing in excess of revenues, to support our product candidates with the goal of ultimately obtaining approval from the FDA, to market and sell our products. We have incurred losses in each year since inception, and had an accumulated deficit of $217.7 million as of September 30, 2014. Our cash and cash equivalents balance as of September 30, 2014 was $19.6 million, our accounts receivable (billed and unbilled) was $0.3 million, and our current liabilities were $3.9 million. We anticipate that our current cash and cash equivalents as well as cash to be collected from expected revenue under contracts currently in place, will be sufficient to fund our operations through 2015. If our current expectations and estimates about future operating costs prove to be incorrect, or if our expenses related to the SIGA litigation are greater than anticipated, we may need to raise additional capital in 2015.  With the de-scoping by the Biomedical Advanced Research and Development Authority ("BARDA"), of the current SparVax® anthrax vaccine contract in April 2014, we expect revenue to decline significantly from historical levels. While we have undertaken efforts to reduce expenses, we expect increased losses in the future. The need to raise additional capital will depend on many factors, including, but not limited to, our future cash requirements, future contract funding, the ongoing proceedings in our litigation with SIGA Technologies, Inc., or SIGA, (See Note 4-Commitments and Contingencies), the timing, amount, and profitability of sales of Tecovirimat, also known as ST-246® (formerly referred to as “Arestvyr™” and  referred to by SIGA in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 as “Tecovirimat”), if any, and the amount of the award to which we are entitled under the August 8, 2014 order of the Delaware Court of Chancery. In addition, there are other factors, including, but not limited to, our ability to collect amounts due from SIGA, the final judgment and order from the Delaware Court of Chancery in response to SIGA's appeal of the Chancery Court's original decision, SIGA's filing for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York, and future funding required to develop SparVax® in light of the notice we received from BARDA advising us of its decision to de-scope the current SparVax® anthrax vaccine contract through a partial termination for convenience. There can be no assurance that we will be able to raise additional capital in the future. We do not expect that we will receive additional significant funding from BARDA for the further development of SparVax®; however, we are pursuing other potential funding sources.

 

On September 9, 2014, we signed an agreement with the National Institute of Allergy and Infectious Diseases (“NIAID”), a part of the National Institutes of Health, for the development of a next generation anthrax vaccine based on the Company's proprietary rPA anthrax vaccine technology platform. The agreement is incrementally funded. Over the base period of the agreement, we were awarded initial funding of approximately $5.2 million, which includes a cost reimbursement component and a fixed fee component payable upon achievement of certain milestone events. The agreement has a total value of up to approximately $28.1 million, assuming all development milestones are met and all eight contract options are exercised by NIAID, at its sole discretion. If NIAID elects to exercise all options, the contract would continue approximately five years. 

 

We are currently working on an approximately $1.0 million fixed price order under an indefinite delivery, indefinite quantity (“IDIQ”) contract awarded by BARDA in 2013 for Valortim®. Delivery under the contract is expected in the fourth quarter of 2014.

 

During the third quarter of 2014 we formed a strategic alliance with Nanotherapeutics, Inc., a company that has extensive manufacturing and formulation capabilities. Under the strategic alliance agreement, each company will contribute its specific expertise and resources with the objective of advancing biodefense products to be agreed to under individual project plans.