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PharmAthene Contract Modification Subject to Suspension Pending Ruling on Competitor Protest

David P. Wright, President & Chief Executive Officer, commented "We are confident that BARDA has complied with all applicable legal and contractual requirements in entering into the modifications with PharmaAthene and that the contract modification for SparVax(TM) will be upheld once a ruling on the protest is issued. In the meantime, funding under the original NIH contract transferred to BARDA in April 2009 will continue to support ongoing advanced development activities for SparVax(TM) until a decision is reached. We are disappointed that a competitor - whose primary motivation should be protecting our citizens from bioterrorist threats - has chosen to pursue a path intended to delay development of a key medical countermeasure for our nation's biodefense arsenal."

The rPA contract modification was announced via a Special Notice (Solicitation Number: HHSO100200900103C) rPA Anthrax Vaccine Advance Development, issued by HHS on December 29, 2009. The original development contract for rPA vaccine (N01-Al-30052) was issued in 2003 and transferred to BARDA on April 1, 2009.

About SparVax(TM)

SparVax(TM) is a novel second generation recombinant protective (rPA) anthrax vaccine being developed for pre and post exposure protection against anthrax infection. SparVax(TM) is a highly purified, well characterized, sub unit vaccine comprised of a single protein (recombinant PA) manufactured in E.coli. Phase I and Phase II clinical trials involving 770 healthy human subjects have been completed and showed that SparVax(TM) appears to be well tolerated and immunogenic in humans. These studies suggest that three doses of SparVax(TM), administered several weeks apart, should be sufficient to induce protective immunity. In non-clinical studies SparVax(TM) has also demonstrated the capability to protect rabbits and non-human primates against a lethal aerosol spore challenge of the anthrax Ames strain.

About PharmAthene, Inc.

PharmAthene was formed to meet the critical needs of the United States and its allies by developing and commercializing medical countermeasures against biological and chemical weapons. PharmAthene's lead product development programs include:

    --  SparVax((TM)) - a second generation recombinant protective antigen (rPA)
        anthrax vaccine
    --  Third generation rPA anthrax vaccine
    --  Valortim(®) - a fully human monoclonal antibody for the prevention and
        treatment of anthrax infection
    --  Protexia(®) - a novel bioscavenger for the prevention and treatment of
        morbidity and mortality associated with exposure to chemical nerve
        agents

For more information about PharmAthene, please visit www.PharmAthene.com.

Statement on Cautionary Factors

Except for the historical information presented herein, matters discussed may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements preceded by, followed by, or that include the words "potential"; "believe"; "anticipate"; "intend"; "plan"; "expect"; "estimate"; "could"; "may"; "should"; or similar statements are forward-looking statements. PharmAthene disclaims, however, any intent or obligation to update these forward-looking statements. Risks and uncertainties include risks associated with the reliability of the results of the studies relating to human safety and possible adverse effects resulting from the administration of the Company's product candidates, unexpected funding delays and/or reductions or elimination of U.S. government funding for one or more of the Company's development programs, the award of government contracts to our competitors, unforeseen safety issues, challenges related to the development, scale-up, and/or process validation of manufacturing processes for our product candidates, unexpected determinations that these product candidates prove not to be effective and/or capable of being marketed as products as well as risks detailed from time to time in PharmAthene's Form 10-K and 10-Q under the caption "Risk Factors" and in its other reports filed with the U.S. Securities and Exchange Commission (the "SEC"). In particular, while the Company believes that the protest to the recent modification to the Company's existing contract with BARDA for the research and development of SparVax((TM)) is unlikely to be sustained, if the GAO were to rule in favor of the protestor, such a ruling could have a material adverse effect on the financial position and operations of the Company. Copies of PharmAthene's public disclosure filings are available from its investor relations department and our website under the investor relations tab at www.PharmAthene.com.

SOURCE PharmAthene, Inc.