As filed with the Securities and Exchange Commission on February 3, 2017

Registration No. 333-      

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

 

PHARMATHENE, INC.

(Exact name of registrant as specified in its Certificate of Incorporation)

 

Delaware		2384		20-2726770
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

One Park Place Suite 450
Annapolis, MD 21401
(410) 269-2600

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

 

John M. Gill
Chief Executive Officer
PharmAthene, Inc.
One Park Place
Suite 450
Annapolis, MD 21401
(410) 269-2600

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to :

Jeffrey A. Baumel, Esq. Asim Grabowski-Shaikh, Esq. Ilan Katz, Esq. Dentons US LLP 1221 Avenue of the Americas New York, New York 10020-1089 (212) 768-6700		Ori Solomon, Esq. Proskauer Rose LLP One International Place Boston, MA 02110-2600 (617) 526-9600

 

Approximate date of commencement of proposed sale to the public : As soon as practicable after the effective date of this registration statement and upon completion of the merger described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered		Amount to be registered (1)				Proposed maximum offering price per unit				Proposed maximum aggregate offering price (2)				Amount of registration fee (3)
Common stock, par value $0.0001 per share			4,907,288				N/A			$	797,963.96			$	92.48

(1)

Represents the estimated maximum number of shares of common stock, par value $0.0001 per share, of PharmAthene, Inc. (“PharmAthene”), issuable to holders of securities of Altimmune, Inc. (“Altimmune”) upon completion of the mergers (the “mergers”) of Mustang Merger Sub Corp I Inc., a wholly owned subsidiary of PharmAthene, with and into Altimmune, with Altimmune surviving such merger, and immediately thereafter, the merger of Altimmune with and into Mustang Merger Sub II LLC, a wholly owned subsidiary of PharmAthene (“Merger Sub LLC”), with Merger Sub LLC as the surviving entity in such merger, as described in the proxy statement/prospectus/consent solicitation contained herein. The amount of PharmAthene common stock to be registered is based on the estimated number of shares of PharmAthene common stock that are expected to be issued pursuant to the mergers, based on the amount of PharmAthene common stock outstanding as of February 3, 2017, assuming i) PharmAthene security holders will hold approximately 41.8% of the outstanding equity of the combined company following the completion of the mergers, and ii) an assumed reverse stock split of 1-for-20 effected immediately prior to the mergers. The estimated exchange ratio calculation contained herein is subject to adjustment prior to the closing of the mergers and is based upon expected shares of capital stock of PharmAthene and Altimmune outstanding as of the closing of the mergers.

(2)

Estimated solely for purposes of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”), and computed pursuant to Rule 457(f)(2) of the Securities Act. Altimmune is a private company, no market exists for Altimmune's securities and Altimmune has an accumulated capital deficit. Therefore, the proposed maximum aggregate offering price is one third of the aggregate par value of the Altimmune securities expected to be exchanged in the proposed mergers, as of immediately prior to the mergers (which such calculation takes into effect a new investment of approximately $3.5 million in Altimmune which is expected to occur following the date hereof and prior to the consummation of the mergers).

(3)

Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $115.90 per $1,000,000 of the proposed maximum aggregate offering price.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this proxy statement/prospectus/consent solicitation is not complete and may be changed. A registration statement relating to the securities described in this proxy statement/prospectus/consent solicitation has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy these securities be accepted until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus/consent solicitation is not an offer to sell nor is it soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED FEBRUARY 3, 2017

PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT

PharmAthene, Inc. (“PharmAthene”) is furnishing this proxy statement/prospectus/consent solicitation to the holders of common stock of PharmAthene and Altimmune, Inc. (“Altimmune”) is furnishing this proxy statement/prospectus/consent solicitation to the holders of capital stock of Altimmune.

As previously announced, the boards of directors of PharmAthene and Altimmune have each unanimously approved the Agreement and Plan of Merger and Reorganization, dated as of January 18, 2017, (as amended from time to time, the “Merger Agreement”) by and among PharmAthene, Mustang Merger Sub Corp I Inc., a Delaware corporation and a direct wholly owned subsidiary of PharmAthene (“Merger Sub Corp”), Mustang Merger Sub II LLC, a Delaware limited liability company and a direct wholly owned subsidiary of PharmAthene (“Merger Sub LLC”), Altimmune, and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as a representative of certain security holders of Altimmune, pursuant to which Merger Sub Corp will merge with and into Altimmune, with Altimmune surviving such merger (“Merger 1”), and immediately thereafter, Altimmune will merge with and into Merger Sub LLC, with Merger Sub LLC as the surviving entity in such merger (“Merger 2” and together with Merger 1, the “Mergers”). Upon consummation of the Mergers, Merger Sub Corp and Altimmune will cease to exist, and Merger Sub LLC will continue as a direct wholly owned subsidiary of PharmAthene. Upon completion of the Mergers, the PharmAthene security holders will own approximately 41.8% of the outstanding equity of the combined company, and Altimmune security holders will own approximately 58.2% of the outstanding equity of the combined company, in each case, on an as converted and fully diluted basis. Pursuant to the Merger Agreement, PharmAthene will assume outstanding options and warrants to purchase shares of Altimmune capital stock, if any.

PharmAthene is soliciting proxies for use at a special meeting of stockholders to consider and vote upon the following proposals: (i) to approve the issuance of shares of PharmAthene common stock in the Mergers; (ii) to approve and adopt the Merger Agreement; (iii) to approve an amendment of PharmAthene's Certificate of Incorporation, to effect a reverse stock split prior to the effective time of the Mergers at a ratio (the “Reverse Ratio”) of not less than 1-for-10 and not more than 1-for-75, with the exact Reverse Ratio to be finally determined and mutually agreed to by the PharmAthene and Altimmune Boards of Directors (iv) to approve the 2017 Omnibus Incentive Plan; and (v) to adjourn the special meeting, if necessary or advisable, to solicit additional proxies if there are not sufficient votes in favor of any of the proposals.

Altimmune is soliciting written consents from its stockholders to consider and vote on a proposal to approve the Mergers and adopt and approve the Merger Agreement and the other transactions contemplated thereby.

PharmAthene's common stock is listed on the NYSE MKT LLC under the symbol “PIP”. On February [•], 2017, the last trading day before the date of this proxy statement/prospectus/consent solicitation, the closing sales price per share of PharmAthene's common stock was $[•]. Altimmune is a privately-held company, and there is currently no public market for its securities.

This proxy statement/prospectus/consent solicitation provides you with detailed information about PharmAthene, Altimmune, the Mergers and the Merger Agreement. Please give all of the information in this proxy statement/prospectus/consent solicitation your careful attention. Please pay particular attention to the section entitled “Risk Factors” beginning on page 29 for a discussion of the risks related to the Mergers, the combined company following completion of the Mergers, and the business and operations of each of PharmAthene and Altimmune.

PharmAthene and Altimmune are excited about the opportunities that the proposed Mergers bring to both PharmAthene and Altimmune stockholders and thank you for your consideration and continued support.

John M. Gill Chief Executive Officer PharmAthene, Inc.		Bill Enright Chief Executive Officer Altimmune, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the PharmAthene common stock to be issued pursuant to the Mergers or determined if this proxy statement/prospectus/consent solicitation is truthful or complete. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus/consent solicitation is dated February [•], 2017 and is first being mailed or otherwise delivered to stockholders of PharmAthene and Altimmune on or about February [•], 2017.

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PharmAthene, Inc.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On March 20, 2017

Dear PharmAthene Stockholder:

A special meeting of the stockholders of PharmAthene, Inc. (“PharmAthene”) will be held on March 20, 2017 at 9:00 a.m., local time, at the offices of PharmAthene at One Park Place, Annapolis, MD 21401 for the following purposes:

Stockholders also will consider and act on any other matters that may properly come before the special meeting or any adjournment or postponement thereof, including any procedural matters incident to the conduct of the special meeting.

PharmAthene's Board of Directors has fixed February 10, 2017 as the record date for the determination of PharmAthene stockholders entitled to notice of and to vote at the PharmAthene special meeting or any adjournments or postponements of the PharmAthene special meeting. Only holders of record of PharmAthene common stock at the close of business on the record date are entitled to notice of and to vote at the PharmAthene special meeting. At the close of business on the record date, PharmAthene had [•] shares of common stock outstanding and entitled to vote.

Your vote is important. The affirmative vote of the holders of a majority of the PharmAthene common stock outstanding, entitled to vote on the proposal and present in person or represented by proxy, is required for the approval of PharmAthene Proposal Nos. 1, 2, 4 and 5. The affirmative vote of the holders of a majority of the PharmAthene common stock outstanding and entitled to vote on the proposal is required for the approval of PharmAthene Proposal No. 3.

Even if you plan to attend the PharmAthene special meeting in person, PharmAthene requests that you complete, sign and return the enclosed proxy card or otherwise provide your proxy and thus ensure that your shares will be represented at the PharmAthene special meeting if you are unable to attend. If you sign, date and mail your proxy card or otherwise provide your proxy without indicating how you wish to vote, your proxy will be counted as a vote in favor of PharmAthene proposals Nos. 1, 2, 3, 4, and 5. If you fail to return your proxy card or otherwise provide your proxy, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the

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PharmAthene special meeting. If you do attend the PharmAthene special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

The PharmAthene Board of Directors has determined that each of the Proposals noted above is advisable and in the best interest of PharmAthene and its stockholders and has unanimously approved each Proposal. The Board of Directors of PharmAthene unanimously recommends that PharmAthene stockholders vote “FOR” PharmAthene Proposals Nos. 1, 2, 3, 4, and 5.

By Order of the Board of Directors,

Philip MacNeill
Corporate Secretary
Annapolis, Maryland
February [•], 2017

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Altimmune, Inc.
19 Firstfield Road
Gaithersburg, MD 20878

NOTICE OF SOLICITATION OF WRITTEN CONSENT

Dear Altimmune Stockholder:

On January 18, 2017, Altimmune, Inc. (“Altimmune”) entered into an agreement and plan of merger and reorganization (the “Merger Agreement”), pursuant to which it will merge into Mustang Merger Sub Corp I Inc., the wholly-owned subsidiary of PharmAthene, Inc. (“PharmAthene”) with Altimmune as the surviving subsidiary (“Merger 1”), and immediately thereafter, Altimmune will be merged with and into Mustang Merger Sub II LLC, a wholly owned subsidiary of PharmAthene, with Mustang Merger Sub II LLC as the surviving entity in such merger (“Merger 2”, and together with Merger 1, the “Mergers”). Following the consummation of the Mergers, PharmAthene will change its name to Altimmune.

This proxy statement/prospectus/consent solicitation is being delivered to holders of shares of Altimmune's Class A common stock (“Class A Common Stock”) and Class B preferred stock (“Preferred Stock”) on behalf of Altimmune's Board of Directors to request your written consent approving and adopting the Mergers, the Merger Agreement and the transactions contemplated by the Merger Agreement. As a record holder of outstanding Altimmune Class A Common Stock or Preferred Stock on the record date, you are urged to complete, date and sign the enclosed written consent and promptly return the completed and executed consent to Altimmune's Board of Directors by one of the means described in the section entitled “Matters to be Presented to Altimmune's Stockholders — Submission of Consents” beginning on page 100 of the enclosed proxy statement/prospectus/consent solicitation. Altimmune's Board of Directors has set             , 2017 as the target final date for receipt of written consents. Altimmune reserves the right to extend the final date for receipt of written consents without any prior notice to stockholders.

This proxy statement/prospectus/consent solicitation describes the Merger Agreement and the actions to be taken in connection with the Mergers and provides additional information about the parties involved, and includes, as Annex A, the complete text of the Merger Agreement. Please give this information your careful attention. You are entitled to the right to seek appraisal of the fair value of your shares of Altimmune capital stock, as determined by the Delaware Court of Chancery with respect to the Mergers under Section 262 of the Delaware General Corporation Law. A summary of the appraisal rights that may be available to you is provided in the section entitled “The Mergers — Appraisal Rights” beginning on page 130 of the enclosed proxy statement/prospectus/consent solicitation. An Altimmune stockholder of record who wishes to exercise appraisal rights, or preserve the ability to do so, must not deliver a signed written consent approving the Mergers and the Merger Agreement or deliver a signed written consent without indicating a decision on the Merger Agreement proposal. Any signed written consent returned without indicating a decision on the Merger Agreement will be counted as approving the Merger Agreement proposal. You must take all other steps necessary to perfect your appraisal rights.

Written consents are required from the holders of (i) at least 65% of the outstanding shares of Altimmune Class A Common Stock and Preferred Stock, voting together as a single class on an as-converted basis, and (ii) a majority of the Class A Common Stock in order to approve and adopt the Mergers, the Merger Agreement and the transactions contemplated thereby. In connection with the execution of the Merger Agreement, certain of the officers, directors and 5% stockholders of Altimmune entered into voting agreements with Altimmune. These stockholders hold a sufficient number of shares of Altimmune capital stock to approve the Mergers, the Merger Agreement and the transactions contemplated thereby, and no meeting of Altimmune stockholders will be held to approve such matters. Nevertheless, all Altimmune stockholders will have the opportunity to adopt the Merger Agreement and approve the Mergers and related transactions, by signing and returning to Altimmune a written consent.

Regardless of the number of shares you own, your written consent is important. Please complete, date and sign the written consent furnished with this proxy statement/prospectus/consent solicitation and return it promptly to Altimmune by one of the means described in the section entitled “Matters to be Presented to Altimmune's Stockholders — Submission of Consents” beginning on page 100 of the enclosed proxy statement/prospectus/consent solicitation. You may change or revoke your consent to the proposal at any time

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before the consents of holders of a sufficient number of shares to approve and adopt such proposal have been delivered to Altimmune's Corporate Secretary.

THE ALTIMMUNE BOARD OF DIRECTORS HAS CAREFULLY CONSIDERED THE MERGERS AND THE TERMS OF THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND HAS DETERMINED THAT THE MERGERS AND THE MERGER AGREEMENT ARE FAIR, ADVISABLE AND IN THE BEST INTERESTS OF ALTIMMUNE AND ITS STOCKHOLDERS. ACCORDINGLY, THE ALTIMMUNE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALTIMMUNE STOCKHOLDERS APPROVE THE MERGERS AND ADOPT AND APPROVE THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY BY EXECUTING AND DELIVERING THE WRITTEN CONSENT FURNISHED WITH THIS PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION.

By Order Of The Board Of Directors
 
Elizabeth Czerepak
Corporate Secretary

Gaithersburg, Maryland
February [•], 2017

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QUESTIONS AND ANSWERS ABOUT THE MERGERS			1
Questions and Answers Regarding the Mergers			2
Questions and Answers for PharmAthene Stockholders			5
Questions and Answers for Altimmune Stockholders			7
SUMMARY			10
The Companies			10
The Mergers			11
Reasons for the Mergers			12
Risks Related to the Proposed Mergers			13
Opinion of the Financial Advisor to PharmAthene			14
Overview of the Merger Agreement			14
Altimmune Financing Agreement			16
PharmAthene Voting Agreement			16
Altimmune Voting Agreement			17
Lock-Up Agreements			17
Stockholder Approval of the Mergers			18
Directors and Officers of PharmAthene Following the Mergers			18
Interests of PharmAthene's Directors and Executive Officers in the Mergers			18
Interests of Altimmune's Directors and Executive Officers in the Mergers			19
Assumption of Altimmune Stock Options and Warrants and Altimmune Option Plan			20
Certain Material U.S. Federal Income Tax Consequences of the Mergers			20
Regulatory Approvals			20
Anticipated Accounting Treatment			20
Appraisal Rights			21
Comparison of Stockholder Rights			21
SELECTED HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA			22
Selected Historical Financial Data of PharmAthene			22
Selected Historical Financial Data of Altimmune			23
Selected Unaudited Pro Forma Condensed Combined Financial Data of PharmAthene and Altimmune			25
COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA			27
MARKET PRICE AND DIVIDEND INFORMATION			28
PharmAthene			28
Altimmune			28
Dividends			28
RISK FACTORS			29
Risks Related to the Proposed Mergers			29
Risks Related to the Combined Company Following the Mergers			34

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Risks Relating to PharmAthene's Business			38
Risks Related to Altimmune			38
Risks Related to Altimmune’s Business, Product Development and Clinical Trials			39
Risks Related to the Regulatory Approval Process			48
Risks Related to Altimmune’s Intellectual Property			54
Risks Related to Commercialization of Altimmune’s Product Candidates			59
Risks Related to Altimmune’s Acquisition of Altimmune UK			65
Risks Related to Altimmune’s BARDA Contract and Other Government Programs			67
Risks Related to Reimbursement and Government Regulation			70
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			79
THE SPECIAL MEETING OF PHARMATHENE STOCKHOLDERS			81
General			81
Date, Time and Place			81
Purposes of the PharmAthene Special Meeting			81
Recommendations of the PharmAthene Board of Directors			81
Record Date and Voting Power			81
Voting and Revocation of Proxies			82
Quorum and Required Vote			82
Solicitation of Proxies			83
Other Matters			83
MATTERS BEING SUBMITTED TO A VOTE OF PHARMATHENE STOCKHOLDERS			84
PharmAthene Proposal No. 1 — The Issuance of Shares of PharmAthene Common Stock in the Mergers			84
PharmAthene Proposal No. 2 — Approval and Adoption of the Merger Agreement			84
PharmAthene Proposal No. 3 — Approval of Charter Amendment for a Reverse Stock Split			85
PharmAthene Proposal No. 4 — Approval of the 2017 Omnibus Incentive Compensation Plan			91
PharmAthene Proposal No. 5 — Approval of Possible Adjournment of the PharmAthene Special Meeting			99
MATTERS TO BE PRESENTED TO ALTIMMUNE'S STOCKHOLDERS			100
Altimmune Stockholder Action by Written Consent			100
Shares Entitled to Consent and Consent Required			100
Submission of Consents			100
Executing Consents; Revocation of Consents			101
Solicitation of Consents; Expense			101
Recommendation of the Altimmune Board			101
Voting and Other Agreements			101
THE PARTIES TO THE MERGERS			102
THE MERGERS			104

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General			104
Background of the Merger			104
PharmAthene Reasons for the Mergers			109
Altimmune Reasons for the Mergers			112
Opinion of the Financial Advisor to PharmAthene			114
Interests of PharmAthene's Directors and Executive Officers in the Merger			126
Interests of Altimmune's Directors and Officers in the Mergers			127
Regulatory Approvals			129
NYSE MKT Listing of PharmAthene Common Stock			130
Certain Material U.S. Federal Income Tax Consequences of the Mergers			130
Anticipated Accounting Treatment			130
Appraisal Rights			130
THE MERGER AGREEMENT			134
Explanatory Note Regarding the Merger Agreement			132
General			132
Effective Time of the Merger			134
Merger Consideration			134
Fractional Shares			135
Treatment of Options and Warrants			135
Exchange of Stock Certificates			135
Indemnification Obligations			135
Dissenters’ Rights			136
Directors and Executive Officers of PharmAthene following the Merger			136
Representations and Warranties			137
Covenants; Conduct of Business Pending the Merger			138
No Solicitation			140
PharmAthene Stockholder Approval			144
Altimmune Stockholder Approval			144
Conditions to Completion of the Mergers			145
Termination			146
Termination Fee			147
Amendment			148
Remedies			148
VOTING AND OTHER AGREEMENTS			149
Pharmathene Voting Agreement			149
Altimmune Voting Agreement			149
Altimmune Financing Agreement			149
PharmAthene and Altimmune Post-Closing Lock-up Agreements			150
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA OF PHARMATHENE AND ALTIMMUNE			151

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MANAGEMENT OF THE COMBINED COMPANY			166
Executive Officers, Significant Employees and Directors of the Combined Company Following the Mergers			166
Management			166
Significant Employees			167
Directors			168
EXECUTIVE AND DIRECTOR COMPENSATION			170
PRINCIPAL STOCKHOLDERS OF PHARMATHENE			182
PRINCIPAL STOCKHOLDERS OF ALTIMMUNE			184
RELATED PARTY TRANSACTIONS OF ALTIMMUNE			187
Financing Agreement			187
Stock Purchase Agreement			187
Guaranty of Promissory Note Issued to the Regional Planning commission of Greater Birmingham			188
Certain Material U.S. Federal Income Tax Consequences of the Mergers			189
ALTIMMUNE'S BUSINESS			193
ALTIMMUNE'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			232
COMPARISON OF RIGHTS OF STOCKHOLDERS			257
LEGAL MATTERS			272
EXPERTS			272
WHERE YOU CAN FIND ADDITIONAL INFORMATION			273
OTHER MATTERS			274
HOUSEHOLDING OF PROXY MATERIALS			275
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF ALTIMMUNE			F-1
ANNEXES
ANNEX A: AGREEMENT AND PLAN OF MERGER, DATED AS OF JANUARY 18, 2017, BY AND AMONG PHARMATHENE, INC., MUSTANG MERGER SUB CORP I INC., MUSTANG MERGER SUB II LLC, ALTIMMUNE INC. AND SHAREHOLDER REPRESENTATIVE SERVICES LLC, AS SECURITYHOLDERS’ REPRESENTATIVE			A-1
ANNEX B: FORM OF PHARMATHENE, INC. VOTING AGREEMENT			B-1
ANNEX C: FORM OF PHARMATHENE, INC. LOCK-UP AGREEMENT			C-1
ANNEX D: FORM OF ALTIMMUNE, INC. VOTING AGREEMENT			D-1
ANNEX E: FORM OF ALTIMMUNE, INC. LOCK-UP AGREEMENT			E-1
ANNEX FA: OPINION OF HOULIHAN LOKEY CAPITAL, INC.			FA-1
ANNEX G: SECTION 262 OF THE DELAWARE GENERAL CORPORATE LAW			G-1
ANNEX H: 2017 OMNIBUS INCENTIVE PLAN			H-1

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Questions and Answers Regarding the Mergers

Q:   What is the transaction?

A:   PharmAthene, Merger Sub Corp and Merger Sub LLC, each a wholly owned subsidiary of PharmAthene, on the one hand, and Altimmune and Shareholder Representative Services LLC as Securityholders' Representative of certain Altimmune securityholders, on the other hand, have entered into the Merger Agreement that contains the terms and conditions of the proposed business combination of PharmAthene and Altimmune. Pursuant to the terms and subject to the conditions of the Merger Agreement, Merger Sub Corp will merge with and into Altimmune, with Altimmune surviving such merger, and immediately thereafter, Altimmune will merge with and into Merger Sub LLC, with Merger Sub LLC surviving the merger as a wholly owned subsidiary of PharmAthene. Thereafter, PharmAthene intends to change its name to Altimmune.

In addition, to induce PharmAthene, Merger Sub Corp and Merger Sub LLC to enter into the Merger Agreement and to cause the mergers to be consummated, Altimmune entered into the Altimmune Financing Agreement with certain Altimmune Stockholders who irrevocably committed to participate in: (i) the Altimmune Private Placement, such that not less than $3.5 million of gross proceeds for Altimmune are received by Altimmune prior to the Effective Time and (ii) the Post-Closing Private Placement, such that not less than $5.0 million of gross proceeds are received by the combined company from such Altimmune stockholders within 135 days of the closing date of the mergers. If the combined company completes a public offering of common stock during such 135-day period, then the purchase price of the shares acquired in the Post-Closing Private Placement will be at the same price as the shares sold in such public offering.

At the Effective Time, all outstanding shares of Altimmune common stock and preferred stock will be converted solely into the right to receive a number of shares of PharmAthene common stock such that the holders of outstanding equity of Altimmune immediately prior to the Effective Time, including vested and unvested stock options and warrants, if any, will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time in each case on a fully diluted basis, which ratio we refer to herein as the “Exchange Ratio.”

As of January 31, 2017, there were 9,195,109 shares of Altimmune Class A Common Stock, 38,836 shares of Altimmune Class B Common Stock and 800,000 shares of Altimmune Series B Convertible Preferred Stock for an aggregate of 10,033,945 shares of common stock (assuming conversion of all Class B Common Stock and Series B Convertible Preferred Stock into Class A Common Stock on a 1-for-1 basis, and re-designation of Altimmune’s Class A Common Stock as “common stock”). Upon the conversion of the convertible securities to be issued in the Altimmune Private Placement prior to the Effective Date, there will be an additional 527,057 shares of Altimmune Class A Common Stock outstanding that will be converted into the right to receive the merger consideration.

Q:   Why am I receiving this proxy statement/prospectus/consent solicitation?

A:   You are receiving this proxy statement/prospectus/consent solicitation because you have been identified as a stockholder of PharmAthene or Altimmune. If you are a stockholder of record of PharmAthene as of the record date, you are entitled to vote at PharmAthene's special meeting of stockholders. If you are a stockholder of Altimmune as of the record date, you are entitled to vote by executing the Altimmune stockholder action by written consent. This document serves as a proxy statement of PharmAthene, used to solicit proxies for PharmAthene's special meeting of stockholders, as a consent solicitation of Altimmune, and as a prospectus of PharmAthene to offer shares of PharmAthene common stock to Altimmune security holders in exchange for securities of Altimmune pursuant to the terms of the Merger Agreement. This document contains important information about the mergers, the shares of PharmAthene common stock to be issued in connection with the mergers, the special meeting of PharmAthene stockholders and the written consent sought from the Altimmune stockholders, and should be read carefully in its entirety.

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Q:   What are the expected advantages of the proposed mergers?

A:   The combined company will have several potential advantages, including, a diversified portfolio of product candidates with two platform technologies, which position the company for future growth, and programs outside of the biodefense area, including potential applications in the influenza, Hepatitis B and Immuno-oncology markets. The combined company will have a strong competitive position in the anthrax vaccine market with two complementary government funded clinical stage next generation anthrax vaccines. In addition, the combined company will be able to leverage each others expertise in vaccine development and government contracting expertise providing current and near term revenue.

Q:   Who is paying for this proxy solicitation and consent solicitation?

A:   PharmAthene is conducting this proxy solicitation and Altimmune is conducting this consent solicitation and each will bear its own costs of its own solicitation, including the joint preparation, assembly, printing and mailing of this proxy statement/prospectus/consent solicitation, the proxy card, written consent card, and any additional information furnished to PharmAthene and Altimmune stockholders. PharmAthene and Altimmune will each bear its own legal expenses. PharmAthene may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their costs of forwarding proxy materials to beneficial owners of its common stock.

Q:   What is required to consummate the mergers?

A:   To consummate the mergers, PharmAthene stockholders must approve: (i) the issuance of shares of PharmAthene common stock in the mergers; (ii) the Merger Agreement; (iii) the amendment of PharmAthene's Certificate of Incorporation to effect a reverse stock split. In addition, PharmAthene stockholders are being asked to approve (iv) the 2017 omnibus incentive plan of PharmAthene; and (v) a proposal to adjourn the PharmAthene special meeting, if necessary or advisable, to solicit additional proxies. In addition, Altimmune stockholders must approve the mergers and adopt and approve the Merger Agreement.

The amendment of PharmAthene's Certificate of Incorporation to effect a reverse stock split requires the affirmative vote of the holders of a majority of the PharmAthene common stock outstanding and entitled to vote on the proposal. The approval of the proposals to issue shares of PharmAthene common stock in the mergers, to approve the Merger Agreement, to adopt the 2017 omnibus incentive plan, and to adjourn the meeting, if necessary, to solicit additional proxies, requires the affirmative vote of the holders of a majority of the PharmAthene common stock outstanding, entitled to vote on the proposal and present in person or represented by proxy. For more information, please see the section of this proxy statement/prospectus/consent solicitation entitled “Matters Being Submitted to a Vote of PharmAthene Stockholders.”

The approval by the stockholders of Altimmune requires the affirmative vote of: (i) the holders of 65% of the Altimmune Class A common stock and Altimmune preferred stock, voting together as a single class (on an as-converted to Altimmune common stock basis), and (ii) the holders of a majority of the outstanding shares of Altimmune's Class A common stock. For more information, please see the section of this proxy statement/prospectus/consent solicitation entitled “Matters to be Presented to Altimmune's Stockholders.”

Concurrently and in connection with the execution of the Merger Agreement, certain of PharmAthene's stockholders, who beneficially own approximately 4,861,743 of the outstanding shares of PharmAthene common stock, entered into a voting agreement in favor of Altimmune (the “PharmAthene Voting Agreements”), pursuant to which such PharmAthene stockholders have agreed to vote their shares of PharmAthene common stock in favor of the adoption of the Merger Agreement and against any amendment of PharmAthene's certificate of incorporation or bylaws or any other proposal or transaction involving PharmAthene, the effect of which amendment or other proposal or transaction is to delay, impair, prevent or nullify the mergers or the transactions contemplated by the Merger Agreement or change in any manner the voting rights of any capital stock of PharmAthene. The signatories thereto may not sell or transfer their shares other than under specified circumstances pursuant to the PharmAthene Voting Agreement. The PharmAthene Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or termination of the Merger Agreement.

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In addition to the requirement of obtaining such stockholder approvals and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived. For a more complete description of the closing conditions under the Merger Agreement, please see the section of this proxy statement/prospectus/consent solicitation entitled “The Merger Agreement — Conditions to Completion of the Mergers.”

Q:   When do PharmAthene and Altimmune expect to complete the mergers?

A:   PharmAthene and Altimmune are working to complete the mergers during the first or second quarter of 2017, or as soon as reasonably possible. PharmAthene and Altimmune must first obtain the necessary approvals, including the approval of their respective stockholders, and satisfy the closing conditions described in the Merger Agreement. Neither PharmAthene nor Altimmune can assure you as to whether all the conditions to the mergers will be met nor can PharmAthene or Altimmune predict the exact timing of the completion of the mergers. It is possible PharmAthene and Altimmune will not complete the mergers.

Q:   What will I receive if the mergers are completed?

A:   If the mergers are completed, each outstanding share of Altimmune common stock and preferred stock, respectively, will be converted into the right to receive a number of shares of PharmAthene common stock such that, pursuant to the Exchange Ratio, the holders of outstanding equity of Altimmune immediately prior to the Effective Time, including vested and unvested stock options and warrants, if any, will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time in each case on a fully diluted basis. No fractional shares of PharmAthene common stock will be issued in connection with the mergers as a result of the conversion described above, and any fractional share of PharmAthene common stock that would thereby be issuable will be rounded up to the next whole share.

Q:   Is the Exchange Ratio subject to adjustment based on changes in the prices of PharmAthene and/or Altimmune common stock?

A:   No. The Exchange Ratio is fixed and no adjustments to the Exchange Ratio will be made based on changes in the price of either PharmAthene common stock or Altimmune common stock prior to the completion of the mergers. As a result of any such changes in stock price, the aggregate market value of the shares of PharmAthene common stock that an Altimmune stockholder is entitled to receive at the time that the mergers are completed could vary significantly from the value of such shares on the date of this proxy statement/prospectus/consent solicitation, the date of the Altimmune stockholder consents, or the date on which such Altimmune stockholder actually receives its shares of PharmAthene common stock.

Q:   What are the material U.S. federal income tax consequences of the mergers to me?

A:   The mergers have been structured to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury regulations promulgated thereunder. As a result of the mergers' qualification as a reorganization, it is anticipated that Altimmune stockholders will not recognize gain or loss for U.S. federal income tax purposes upon the exchange of shares of Altimmune common stock or preferred stock for shares of PharmAthene common stock, except with respect to any gain that may be realized in connection with the receipt of one additional share in lieu of a fractional share of PharmAthene common stock and except for Altimmune stockholders who exercise their appraisal rights with respect to the mergers.

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Tax matters are very complicated, and the tax consequences of the mergers to a particular stockholder will depend in part on such stockholder's circumstances. Accordingly, you should consult your tax advisor for a full understanding of the tax consequences of the mergers to you, including the applicability and effect of federal, state, local and foreign income and other tax consequences. For more information, please see the section of this proxy statement/prospectus/consent solicitation entitled “Certain Material U.S. Federal Income Tax Consequences of the Mergers.”

Q:   Who will be the directors of the combined company following the mergers?

A:   Immediately following the mergers, the board of directors of the combined company is expected to be composed of seven directors, four to be designated by Altimmune, consisting of William Enright, David J. Drutz, Philip Hodges and Klaus Schafer, and three to be designated by PharmAthene, consisting of Mitchel Sayare, Derace L. Schaffer and John M. Gill.

Q:   Who will be the executive officers of the combined company following the mergers?

A:   Immediately following the mergers, the executive management team of the combined company is expected to be composed solely of the members of the Altimmune executive management team prior to the mergers, as set forth below:

Name		Title
William Enright		Chief Executive Officer
Elizabeth A. Czerepak		Chief Financial Officer
M. Scot Roberts, Ph.D.		Chief Scientific Officer
Sybil Tasker, M.D., M.P.H.		Senior Vice President of Clinical Research and Development

Q:   What risks should I consider in deciding whether to vote in favor of the proposals?

A:   You should carefully review the section of this proxy statement/prospectus/consent solicitation entitled “Risk Factors,” which sets forth certain risks and uncertainties related to the mergers, risks and uncertainties to which the combined company's business will be subject, and risks and uncertainties to which each of PharmAthene and Altimmune, as an independent company, is subject.

Q:   Who can help answer my questions?

A:   If you are a PharmAthene stockholder and would like additional copies, without charge, of this proxy statement/prospectus/consent solicitation or if you have questions about the mergers, including the procedures for voting your shares, please direct your request to: PharmAthene, Inc., One Park Place, Annapolis, MD 21401, c/o Corporate Secretary, or call PharmAthene at: (410) 269-2600.

If you are a Altimmune stockholder and would like additional copies, without charge, of this proxy statement/prospectus/consent solicitation or if you have questions about the merger, including the procedures for signing the stockholder action by written consent, you should contact: Altimmune, Inc., 19 Firstfield Road, Suite 200, Gaithersburg, MD 20878, c/o Chief Financial Officer, or call Altimmune at (240)-654-1450.

You may also obtain additional information about PharmAthene in documents PharmAthene files with the Securities and Exchange Commission (the “SEC”). Please see the section of this proxy statement/prospectus/consent solicitation entitled “Where You Can Find Additional Information” beginning on page 273 .

Questions and Answers for PharmAthene Stockholders

Q:   What do PharmAthene stockholders need to do now?

A:   You should read this proxy statement/prospectus/consent solicitation carefully, including its annexes and the documents incorporated herein by reference, and consider how the mergers affect you and then vote your shares either in person at the PharmAthene special meeting or by proxy.

If you are a PharmAthene stockholder on the record date, you may provide your proxy instructions in one of three different ways. First, you can mail your signed and completed proxy card in the enclosed return envelope. Second, you can provide your proxy instructions via the toll-free call center set up for this purpose

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by calling the toll-free number on your proxy card and following the instructions. Please have your proxy card available when you call. You will be prompted to enter the control number from your proxy card that will identify you as a stockholder of record. If you vote by telephone, you do not need to return your proxy card. Finally, if you are a registered stockholder of PharmAthene, you can provide your proxy instructions via the Internet at the web address shown on your proxy card by following the on-screen instructions. Please have your proxy card available when you access the web page. You will be prompted to enter the control number from your proxy card that will identify you as a stockholder of record. If you vote over the Internet, you do not need to return your proxy card. Please provide your proxy instructions as soon as possible so that your shares can be voted at the PharmAthene special meeting. PharmAthene stockholders may also attend the PharmAthene special meeting in person. PharmAthene urges you to vote by proxy to ensure your vote is counted . You may still attend the PharmAthene special meeting and vote in person even if you have already voted by proxy.

Q:   If my shares are held in “street name” by my broker, will my broker vote my PharmAthene shares for me?

A:   Unless your broker has discretionary authority to vote on the matters, your broker will not be able to vote your shares of PharmAthene common stock without instruction from you. Brokers are not expected to have discretionary authority to vote for any of the PharmAthene proposals. If you do not provide voting instructions to your broker or other nominee with respect to these proposals, your broker, must deliver a proxy card to PharmAthene expressly indicating that it is not voting your shares, which is referred to as a “broker non-vote.” Broker non-votes will not count for purposes of determining the number of votes cast. To make sure your vote is counted, you should instruct your broker as to how to vote your shares, following the instructions contained in the voting instructions card that your broker provides to you. A broker non-vote will be counted as a vote “AGAINST” the proposal to approve an amendment and restatement of PharmAthene's Certificate of Incorporation (which is a condition to the mergers), but will have no effect on any other proposal.

Q:   As a PharmAthene stockholder, how does PharmAthene's Board of Directors recommend that I vote?

A:   After careful consideration, PharmAthene's Board of Directors unanimously recommends that PharmAthene stockholders vote:

Q:   What happens if I do not return a PharmAthene proxy card or otherwise provide proxy instructions?

A:   If you are a PharmAthene stockholder, the failure to return your proxy card or otherwise provide proxy instructions will have the same effect as voting against Proposal No. 3. An abstention has the same effect as a vote against the proposal. The approval of each of Proposal Nos. 1, 2, 3, 4, and 5 is required to complete the mergers.

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Q:   May I vote in person?

A:   If your shares of PharmAthene common stock are registered directly in your name with PharmAthene's transfer agent, you are considered, with respect to those shares, the stockholder of record, and the proxy materials and proxy card are being sent directly to you if you are a stockholder of record as of the record date. If you are a PharmAthene stockholder of record as of February 10, 2017, you may attend the PharmAthene special meeting to be held on March 20, 2017 and vote your shares in person, rather than signing and returning your proxy card or otherwise providing proxy instructions. However, PharmAthene urges you to return your proxy card in any event, just in case your plans to attend the special meeting should change.

If your shares of PharmAthene common stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the PharmAthene special meeting. Since a beneficial owner is not the stockholder of record, however, you may not vote these shares in person at the special meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the special meeting.

Q:   May I change my vote after I have provided proxy instructions?

A:   Yes (except for those stockholders who have executed a voting agreement and irrevocable proxy). If you have not voted through your broker, there are three ways for you to revoke your proxy and change your vote. First, you may send a written notice to PharmAthene's Corporate Secretary stating that you would like to revoke your proxy. Second, you may complete and submit a new proxy card, but it must bear a later date than the original proxy. Third, you may attend and vote in person at the special meeting of PharmAthene stockholders. Your attendance alone will not revoke your proxy. If you have instructed a broker to vote your shares, you must follow the directions you receive from your broker to change your vote. Your last vote will be the vote that is counted. If you have executed a voting agreement and irrevocable proxy, you may not revoke your proxy instructions.

Q:   Are PharmAthene stockholders entitled to appraisal rights?

A:   PharmAthene stockholders do not have any appraisal rights in connection with the mergers.

Questions and Answers for Altimmune Stockholders

Q:   What do Altimmune stockholders need to do now?

A:   You should read this proxy statement/prospectus/consent solicitation carefully, including its annexes, and consider how the mergers affect you. Altimmune stockholders are being asked to sign and return the written consent. Altimmune is not asking Altimmune stockholders for a proxy and Altimmune stockholders are not requested to send Altimmune a proxy. If you hold shares of Altimmune common stock or preferred stock as of the record date and you wish to give your written consent, you must complete the enclosed written consent, date and sign it, and promptly return it to Altimmune. Once you have completed, dated and signed the written consent, you may deliver it to Altimmune by faxing it to (855) 557-1369, by emailing a.pdf copy of your written consent to consents@altimmune.com, or by mailing your written consent to 19 Firstfield Road, Gaithersburg, Maryland 20878.

Q:   What am I being asked to approve?

A:  You are being asked to approve the mergers and adopt and approve the Merger Agreement and the transactions contemplated thereby.

Q:   What options do I have with respect to the Altimmune proposal?

A:   With respect to the shares of Altimmune common stock or preferred stock that you hold, you may execute a written consent to approve the mergers and the terms of the Merger Agreement proposal (which is equivalent to a vote for the proposal) or to disapprove such proposal (which is equivalent to a vote against the proposal). If you fail to execute and return your written consent, it has the same effect as voting against the proposal.

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Q:   As an Altimmune stockholder, how does Altimmune's Board of Directors recommend that I vote?

A:   After careful consideration, Altimmune's Board of Directors unanimously recommends that Altimmune's stockholders vote to approve the mergers and adopt and approve the Merger Agreement and the transactions contemplated thereby.

Q:   Who is entitled to give a written consent?

A:   Altimmune's Board of Directors has set            , 2017 as the record date for determining holders of Altimmune common stock or preferred stock entitled to execute and deliver written consent with respect to this solicitation. Holders of Altimmune common stock or preferred stock on the record date will be entitled to give a consent using the written consent furnished with this proxy statement/prospectus/consent solicitation. If you are an Altimmune stockholder on the record date, you will be able to give or withhold consent, or abstain, on each proposal on which you are entitled to vote, using the written consent furnished with this proxy statement/prospectus/consent solicitation.

Q:   Who is soliciting my written consent?

A:   Altimmune's Board of Directors is providing these consent solicitation materials to you. These materials also constitute a prospectus with respect to the PharmAthene common stock issuable to Altimmune's stockholders in the merger.

Q:   Will Altimmune hold a stockholders' meeting?

Altimmune will not be holding a stockholders' meeting to consider these proposals, and therefore you will be unable to vote by attending a stockholders' meeting.

Q:   What happens if I do not return my Altimmune written consent?

A:   If you are a record holder of shares of Altimmune common stock or preferred stock and you do not return your written consent, that will have the same effect as a vote against the proposal.

Q:   Will my rights as a PharmAthene stockholder be different from my rights as an Altimmune stockholder?

A:   Yes. Upon completion of the mergers, each stockholder of Altimmune, will become a stockholder of PharmAthene. There are important differences between the rights of stockholders of PharmAthene and stockholders of Altimmune. Please carefully review the description of these differences in the section of this proxy statement/prospectus/consent solicitation entitled “Comparison of Rights of Stockholders.”

Q:   Should I send in my stock certificates now?

A:   No. If you are a Altimmune stockholder, after the mergers are consummated, you will receive written instructions from the exchange agent for exchanging your certificates representing shares of Altimmune capital stock for certificates representing shares of PharmAthene common stock.

Q:   Are Altimmune stockholders entitled to appraisal rights?

A:   Under Delaware law, holders of Altimmune common stock or preferred stock are entitled to appraisal rights in connection with the mergers. If you do not wish to accept shares of PharmAthene common stock in the mergers and you do not approve the mergers in the Altimmune stockholder action by written consent, you have the right under Delaware law to seek from Altimmune the “fair value” of your shares in lieu of the PharmAthene common stock you would receive if the mergers are completed. Altimmune refers you to the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Appraisal Rights” and to the applicable Delaware statute attached as Annex G to this proxy statement/prospectus/consent solicitation for information on how to exercise your appraisal rights. Failure to follow all of the steps required under the Delaware law will result in the loss of your appraisal rights.

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Q:   What will Altimmune stockholders receive in the mergers?

A:   PharmAthene has agreed to issue, and Altimmune stockholders will have the right to receive, for each share of Altimmune capital stock they hold, that number of shares of PharmAthene common stock, as determined pursuant to the Exchange Ratio described in the Merger Agreement and in the section entitled “The Merger Agreement — Merger Consideration” of this proxy statement/prospectus/consent solicitation. If the mergers are consummated, each share of Altimmune common stock and Altimmune preferred stock will convert into the right to receive that number of shares of PharmAthene common stock as determined by the Exchange Ratio, including all shares issued and outstanding at the time of mergers in connection with the Financing Agreement. Upon completion of the mergers, the PharmAthene security holders will own 41.8% of the outstanding equity of the combined company, and Altimmune security holders will own 58.2% of the outstanding equity of the combined company in each case on a fully diluted basis.

Q:   Is any portion of the merger consideration being set aside as an escrow?

A:   Yes. Upon the completion of the merger, ten percent of the merger consideration issuable to the stockholders of Altimmune will be held in escrow as security for indemnification claims under the Merger Agreement. The shares of PharmAthene common stock will be held in the escrow fund until the date that is twelve months from the date of completion of the mergers, subject to any unresolved indemnification claims made prior to that date.

During this escrow period, Altimmune stockholders will be entitled to vote such escrow shares but will not be permitted to sell or otherwise transfer such escrow shares.

Q:   How will the mergers affect stock options and warrants for Altimmune capital stock?

A:   PharmAthene will assume options and warrants to purchase shares of Altimmune common stock, which will become exercisable for shares of PharmAthene common stock with the same terms, exercisability, vesting schedule and other provisions, but with the number of shares and exercise price being appropriately adjusted to reflect the Exchange Ratio between PharmAthene common stock and Altimmune common stock determined in accordance with the Merger Agreement and described above. There currently are no outstanding options or warrants to purchase shares of Altimmune preferred stock.

Q:   What if I am a record holder and I don't indicate a decision with respect to the proposals?

A:   If you are a record holder on the record date of shares of Altimmune common stock or Altimmune preferred stock and you return a signed written consent without indicating your decision on the proposal, you will have given your consent to approve the mergers and adopt and approve the Merger Agreement and the transactions contemplated thereby.

Q:   What is the deadline for returning my written consent?

A:   The Altimmune Board of Directors has set            , 2017 as the targeted final date for receipt of written consents. Altimmune reserves the right to extend the final date for receipt of written consents beyond            , 2017 in the event that consents approving the mergers and adopting and approving the Merger Agreement and the transactions contemplated thereby have not been obtained by that date from holders of a sufficient number of shares of Altimmune common stock and Altimmune preferred stock to satisfy the conditions to the mergers. Any such extension may be made without notice to stockholders. Once all conditions to the merger have been satisfied or waived, the consent solicitation will conclude.

Q:   Can I change or revoke my written consent?

A:   Yes, if you are a record holder on the record date of shares of Altimmune common stock or preferred stock, you may change or revoke your consent to a proposal at any time before the consents of a sufficient number of shares to approve and adopt such proposal have been delivered to the corporate secretary of Altimmune. If you wish to change or revoke your consent before that time, you may do so by sending in a new written consent with a later date or delivering a notice of revocation to the corporate secretary of Altimmune.

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Altimmune was incorporated in the state of Delaware under the name Vaxin Pharmaceuticals, Inc. in December 1997, and subsequently changed its name to Vaxin Inc. in November 2003 and to Altimmune, Inc. in August 2015. Altimmune's principal executive offices are located at 19 Firstfield Road, Suite 200, Gaithersburg, Maryland 20878, and its telephone number is (240) 654-1450. Altimmune's Internet website is www.altimmune.com . The information on, or that can be accessed through, Altimmune's website is not part of this proxy statement/prospectus/consent solicitation, and you should not rely on any such information in making the decision whether to purchase our common stock.

“Altimmune,” the Altimmune logo and other trademarks, trade names or service marks of Altimmune appearing in this proxy statement/prospectus/consent solicitation, including NasoVAX, HepTcell, RespirVec, Densigen, NasoShield and Oncosyn, are the property of Altimmune. The other trademarks, trade names and service marks appearing in this proxy statement/prospectus/consent solicitation are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus/consent solicitation may appear without the® or TM symbols.

Mustang Merger Sub Corp I Inc.

Mustang Merger Sub Corp I Inc. is a wholly owned subsidiary of PharmAthene that was incorporated in Delaware on January 6, 2017. Merger Sub Corp does not engage in operations and exists solely to facilitate the mergers. If the merger, are completed, Merger Sub Corp will cease to exist following its merger with and into Altimmune.

Merger Sub Corp's principal offices are located at One Park Place, Suite 450, Annapolis, Maryland 21401 and its telephone number is (410) 269-2600.

Mustang Merger Sub II LLC

Mustang Merger Sub II LLC is a wholly owned subsidiary of PharmAthene that was organized in Delaware on January 6, 2017. Merger Sub LLC does not engage in operations and exists solely to facilitate the mergers. If the mergers are completed, Altimmune will merge with and into Merger Sub II LLC, and Altimmune will cease to exist following such merger.

Merger Sub's principal offices are located at One Park Place, Suite 450, Annapolis, Maryland 21401 and its telephone number is (410) 269-2600..

The Mergers

If the mergers are completed, Merger Sub Corp will merge with and into Altimmune, with Altimmune surviving such merger, and immediately thereafter, Altimmune will merge with and into Merger Sub LLC, with Merger Sub LLC as the surviving entity in such merger. After the mergers, PharmAthene and its wholly owned surviving subsidiary, Merger Sub LLC (then, to be renamed Altimmune LLC), will operate as a combined company. Upon the consummation of the mergers, PharmAthene will change its name to Altimmune.

In addition, to induce PharmAthene, Merger Sub Corp and Merger Sub LLC to enter into the Merger Agreement and to cause the mergers to be consummated, Altimmune entered into the Altimmune Financing Agreement with certain Altimmune Stockholders who irrevocably committed to participate in: (i) the Altimmune Private Placement, such that not less than $3.5 million of gross proceeds for Altimmune are received by Altimmune prior to the Effective Time and (ii) the Post-Closing Private Placement (together with the Altimmune Private Placement, the “Private Placements”), such that not less than $5.0 million of gross proceeds are received by the combined company from such Altimmune stockholders within 135 days of the closing date of the mergers. If the combined company completes a public offering of common stock during such 135-day period, then the purchase price of the shares acquired in the Post-Closing Private Placement will be at the same price as the shares sold in such public offering.

At the Effective Time, and in accordance with the Exchange Ratio, each of Altimmune's outstanding shares of common stock and preferred stock (excluding Altimmune treasury shares, shares of Altimmune owned by PharmAthene or its subsidiaries or dissenting shares), including vested and unvested stock options, and warrants, if any, will be converted into the right to receive a number of shares of PharmAthene common

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stock such that the holders of outstanding equity of Altimmune immediately prior to the Effective Time will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time in each case on a fully diluted basis.

As of January 31, 2017, there were 9,195,109 shares of Altimmune Class A Common Stock, 38,836 shares of Altimmune Class B Common Stock and 800,000 shares of Altimmune Series B Convertible Preferred Stock for an aggregate of 10,033,945 shares of common stock (assuming conversion of all Class B Common Stock and Series B Convertible Preferred Stock into Class A Common Stock on a 1-for-1 basis, and re-designation of Altimmune’s Class A Common Stock as “common stock”). Upon the conversion of the convertible securities to be issued in the Altimmune Private Placement prior to the Effective Date, there will be an additional 527,057 shares of Altimmune Class A Common Stock outstanding that will be converted into the right to receive the merger consideration.

A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus/consent solicitation and is incorporated by reference herein. You are encouraged to read the Merger Agreement in its entirety because it is the legal document that governs the mergers. For a more complete discussion of the mergers, see the sections of this proxy statement/prospectus/consent solicitation entitled “The Mergers” and “The Merger Agreement.”

Reasons for the Mergers

The combined company will be a fully integrated, commercially-focused immunotherapeutics company. PharmAthene and Altimmune both believe that the two companies combined will be able to create more value than either company could achieve individually.

Each of the boards of directors of PharmAthene and Altimmune also considered other reasons for the mergers, as described herein. For example, the PharmAthene Board of Directors considered, among other reasons, the following:

In addition, the Altimmune Board of Directors considered, among other reasons, the following:

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For a more complete discussion of PharmAthene's and Altimmune's reasons for the mergers, see the sections of this proxy statement/prospectus/consent solicitation entitled “The Mergers — PharmAthene Reasons for the Mergers” and “The Mergers — Altimmune Reasons for the Mergers.”

Risks Related to the Proposed Mergers

Both PharmAthene and Altimmune are subject to various risks associated with their respective businesses and financial condition. In addition, the mergers, as well as the possibility that the mergers may not be completed, pose a number of risks to PharmAthene and Altimmune and their respective stockholders, including the following risks:

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In addition, PharmAthene, Altimmune and the combined company are subject to various risks associated with their respective businesses and the mergers. See the section of this proxy statement/prospectus/consent solicitation entitled “Risk Factors,” and see also the documents that PharmAthene has filed with the SEC that are incorporated by reference in this proxy statement/prospectus/consent solicitation.

Opinion of the Financial Advisor to PharmAthene

On January 18, 2017, Houlihan Lokey Capital, Inc. (“Houlihan Lokey”), verbally rendered its opinion to PharmAthene's Board of Directors (which was subsequently confirmed in writing by delivery of Houlihan Lokey's written opinion addressed to PharmAthene's Board of Directors dated January 18, 2017), as to the fairness to PharmAthene, from a financial point of view, of the Exchange Ratio provided for pursuant to the Merger Agreement.

Houlihan Lokey's opinion was directed to PharmAthene's Board of Directors (in its capacity as such) and only addressed the fairness to PharmAthene, from a financial point of view, of the Exchange Ratio provided for pursuant to the Merger Agreement and did not address any other aspect or implication of the mergers and the Private Placements (collectively, the “Transaction”) or any other agreement, arrangement or understanding. The summary of Houlihan Lokey's opinion in this proxy statement/prospectus/consent solicitation is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex FA to this proxy statement/prospectus/consent solicitation and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus/consent solicitation are intended to be, and do not constitute, advice or a recommendation to PharmAthene's Board of Directors, any security holder of PharmAthene or any other person as to how to act or vote with respect to any matter relating to the Transaction. Please see the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Opinion of the Financial Advisor to PharmAthene.”

Overview of the Merger Agreement

Pursuant to the Merger Agreement, Merger Sub Corp will merge with and into Altimmune, with Altimmune surviving such merger, and immediately thereafter, Altimmune will merge with and into Merger Sub LLC, a direct wholly owned subsidiary of PharmAthene, with Merger Sub LLC as the surviving entity in such merger.

Pursuant to the terms of the Merger Agreement, at the Effective Time, each outstanding share of Altimmune's common stock and preferred stock (other than shares owned by dissenting stockholders) will be converted into the right to receive a number of shares of PharmAthene common stock such that the holders of outstanding equity of Altimmune immediately prior to the Effective Time will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of

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PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time, in each case, on a fully diluted basis. At the Effective Time, ten percent of the shares of PharmAthene common stock issued to the stockholders of Altimmune at the Effective Time will be deposited with Continental Stock Transfer & Trust Company, as escrow agent under a separate escrow agreement to be entered into prior to the completion of the mergers (the “Escrow Shares”). These Escrow Shares will be held in escrow for a period of twelve months after the closing date and will serve to secure the sole source of Altimmune's stockholders' indemnification obligations under the Merger Agreement. During this escrow period, Altimmune stockholders will be entitled to vote such escrow shares but will not be permitted to sell or otherwise transfer such escrow shares.

Each of PharmAthene and Altimmune have made customary representations, warranties and covenants in the Merger Agreement, including among others covenants that: (i) each party will conduct its business in the ordinary course consistent with past practice during the interim period between execution of the Merger Agreement and completion of the mergers; (ii) each party will not engage in certain kinds of transactions or take certain actions during such period (including, but not limited to, the issuance and sale of its securities and the incurrence of debt, with certain exceptions); (iii) Altimmune will solicit approval by its stockholders of the Merger Agreement and the transactions contemplated thereby and the Altimmune Board of Directors will recommend that its stockholders adopt and approve the Merger Agreement, subject to certain exceptions; and (iv) PharmAthene will convene and hold a meeting of its stockholders for the purpose of considering, among other things, the approval of the issuance of shares of PharmAthene common stock in connection with the mergers, and the PharmAthene Board of Directors will recommend that its stockholders adopt and approve such proposals, subject to certain exceptions. PharmAthene also has agreed not to solicit proposals relating to alternative business combination transactions or enter into discussions or an agreement concerning any proposals for alternative business combination transactions, subject to exceptions in the event of its receipt of a “superior proposal,” as defined in the Merger Agreement. All representations and warranties of Altimmune (but not PharmAthene) included in the Merger Agreement will survive the completion of the mergers and remain in full force and effect until 12 months after the closing date.

Completion of the mergers are subject to a number of conditions, including: (i) stockholders of Altimmune must have approved and adopted the Merger Agreement and the mergers; (ii) stockholders of PharmAthene must have approved and adopted the Merger Agreement, the mergers, issuance of PharmAthene common stock in the mergers and an amendment to PharmAthene's certificate of incorporation to effect a reverse stock split; (iii) $3.5 million of capital committed to Altimmune will have been received by Altimmune in connection with the Altimmune Private Placement; (iv) the total amount of indebtedness and certain outstanding specified liabilities of Altimmune as of the Effective Time, will not exceed $2.5 million and all excess indebtedness and liabilities of Altimmune will have been repaid, settled or otherwise extinguished; (v) PharmAthene and Altimmune will have agreed in good faith on a final flu clinical development plan in accordance with the terms of the Merger Agreement; (vi) the net cash of PharmAthene will not be less than $10.25 million; (vii) the shares of PharmAthene common stock to be issued in the mergers must be approved for listing on the NYSE MKT LLC (“NYSE MKT”) subject to official notice of issuance; and (viii) other customary closing conditions.

The Merger Agreement contains termination rights in favor of each of PharmAthene and Altimmune in certain circumstances. If PharmAthene terminates the Merger Agreement pursuant to its superior proposal termination right, it is obligated to pay to Altimmune a break-up fee of $2,000,000. In addition, either party may terminate the Merger Agreement if: (i) the mergers have not been completed by June 30, 2017; or (ii) the stockholders of PharmAthene have not approved the issuance of the shares pursuant to the Merger Agreement at the PharmAthene special meeting or any adjournments or postponements thereof. Altimmune must reimburse PharmAthene for the actual and verifiable out-of-pocket costs and expenses of PharmAthene in connection with the Merger Agreement and the transactions contemplated thereby, up to $1 million in the aggregate, if a court of competent jurisdiction has issued an order, decree or ruling that restrains, enjoins or otherwise prohibits the mergers on the grounds that it violates the terms of the Delaware General Corporation Law (“DGCL”) in response to any action initiated by any stockholder of Altimmune and such order, decree or ruling, or other action has not been reversed prior to June 30, 2017. In certain other circumstances,

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PharmAthene and Altimmune may be obligated to reimburse the other for expenses incurred in connection with the mergers, not to exceed $250,000.

The Merger Agreement contains certain indemnification provisions, which, among other things, provide that Altimmune stockholders are obligated to indemnify and hold harmless PharmAthene and its directors, officers, stockholders, employees, agents, subsidiaries and affiliates, and will reimburse such persons for, any loss, liability, damage or expense, including reasonable out-of-pocket costs of investigation and defense of claims and reasonable attorneys' fees and expenses incurred by such persons arising for any breach of any representation, warranty covenant, or agreement of Altimmune in the Merger Agreement for a period of twelve months after the closing date. The indemnification obligations will not apply to any loss that is less than $50,000 and unless all losses for all indemnification claims made by such persons exceeds $1 million in the aggregate, in which event the Altimmune stockholders will be liable for all losses from the first dollar in excess of $1 million. Such thresholds may be increased from $1 million to $2 million for certain breaches. At the Effective Time, ten percent of the shares of PharmAthene common stock issuable to the stockholders of Altimmune will be deposited with Continental Stock Transfer and Trust Company, as escrow agent under a separate escrow agreement to be entered into prior to the completion of the mergers. These Escrow Shares will serve to secure the Altimmune's stockholders' indemnification obligations under the Merger Agreement. No Altimmune stockholder will be liable for any losses in excess of their pro rata share of the Escrow Shares. Neither PharmAthene nor the surviving subsidiary will have any obligation to indemnify the Altimmune stockholders for any breach of any representation or warranty made by, or any covenant or agreement of, PharmAthene, Merger Sub Corp or Merger Sub LLC under the Merger Agreement.

The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Annex A hereto, and which is incorporated herein by reference.

Altimmune Financing Agreement

In addition, to induce PharmAthene, Merger Sub Corp and Merger Sub LLC to enter into the Merger Agreement and to cause the mergers to be consummated, Altimmune entered into the Altimmune Financing Agreement with certain Altimmune Stockholders who irrevocably committed to participate in: (i) the Altimmune Private Placement, such that not less than $3.5 million of gross proceeds for Altimmune are received by Altimmune prior to the Effective Time and (ii) the Post-Closing Private Placement, such that not less than $5.0 million of gross proceeds are received by the combined company from such Altimmune stockholders within 135 days of the closing date of the mergers. If the combined company completes a public offering of common stock during such 135-day period, then the purchase price of the shares acquired in the Post-Closing Private Placement will be at the same price as the shares sold in such public offering.

As of January 31, 2017, there were 9,195,109 shares of Altimmune Class A Common Stock, 38,836 shares of Altimmune Class B Common Stock and 800,000 shares of Altimmune Series B Convertible Preferred Stock for an aggregate of 10,033,945 shares of common stock (assuming conversion of all Class B Common Stock and Series B Convertible Preferred Stock into Class A Common Stock on a 1-for-1 basis, and re-designation of Altimmune’s Class A Common Stock as “common stock”). Upon the conversion of the convertible securities to be issued in the Altimmune Private Placement prior to the Effective Date, there will be an additional 527,057 shares of Altimmune Class A Common Stock outstanding that will be converted into the right to receive the merger consideration.

PharmAthene Voting Agreement

Concurrently and in connection with the execution of the Merger Agreement, certain of PharmAthene's stockholders, who beneficially own approximately 4,861,743, or approximately 7.04%, of the outstanding shares of PharmAthene common stock, entered into the PharmAthene Voting Agreements in favor of Altimmune, pursuant to which such PharmAthene stockholders agreed to vote their shares of PharmAthene common stock in favor of the adoption of the Merger Agreement the issuance of PharmAthene shares of common stock to Altimmune stockholders and against any amendment of PharmAthene's certificate of incorporation or bylaws or any other proposal or transaction involving PharmAthene, the effect of which amendment or other proposal or transaction is to delay, impair, prevent or nullify the mergers or the transactions contemplated by the Merger Agreement or change in any manner the voting rights of any capital

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stock of PharmAthene. The signatories thereto may not sell or transfer their shares other than under specified circumstances pursuant to the PharmAthene Voting Agreement. The PharmAthene Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or termination of the Merger Agreement.

For a more complete discussion of the PharmAthene Voting Agreements, see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — PharmAthene Voting Agreement.” The foregoing description of the PharmAthene Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the form of PharmAthene Voting Agreement attached as Annex B to this proxy statement/prospectus/consent solicitation.

Altimmune Voting Agreement

On January 19, 2017, certain of Altimmune's stockholders, who beneficially own approximately 68% of the outstanding shares of Altimmune capital stock, entered into a voting agreement in favor of PharmAthene (the “Altimmune Voting Agreement”), pursuant to which such Altimmune stockholders agreed to vote their shares of Altimmune capital stock in favor of the adoption of the Merger Agreement and against any amendment of Altimmune's certificate of incorporation or bylaws or any other proposal or transaction involving Altimmune, the effect of which amendment or other proposal or transaction would be to delay, impair, prevent or nullify the mergers or the transactions contemplated by the Merger Agreement or change in any manner the voting rights of any capital stock of Altimmune.

The Altimmune Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or the termination of the Merger Agreement. The signatories thereto may not sell or transfer their shares other than under specified circumstances pursuant to the Altimmune Voting Agreement.

For a more complete discussion of the Altimmune Voting Agreements, see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — Altimmune Voting Agreement.” The foregoing description of the Altimmune Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Altimmune Voting Agreement attached as Annex D to this proxy statement/prospectus/consent solicitation.

Lock-Up Agreements

Concurrently and in connection with the execution of the Merger Agreement, certain of the officers, directors and stockholders of PharmAthene, who in the aggregate beneficially held approximately 7.04% of the outstanding shares of PharmAthene capital stock as of January 18, 2017, (approximately 2.9% of the shares that will be outstanding of the combined company immediately following the Effective Time) entered into post-closing lock-up agreements (the “PharmAthene Lock-up Agreements”). Pursuant to the PharmAthene Lock-up Agreements, each such stockholder will be subject to lock-up restrictions on the sale of PharmAthene common stock owned by them. Such restrictions will begin at the Effective Time and end 180 days after the Effective Time.

Concurrently and in connection with the execution of the Merger Agreement, certain of the officers, directors and stockholders of Altimmune, who in the aggregate held approximately 68% of the outstanding shares of Altimmune capital stock as of January 18, 2017 (approximately 39.6% of the shares that will be outstanding of the combined company immediately following the Effective Time), entered into post-closing lock-up agreements with PharmAthene (the “Altimmune Lock-up Agreements”). Pursuant to the Altimmune Lock-up Agreements, each such stockholder will be subject to lock-up restrictions on the sale of PharmAthene common stock acquired in the mergers. Such restrictions will begin at the Effective Time and end 180 days after the Effective Time.

For a more complete discussion of each of the Altimmune Lock-Up Agreements and PharmAthene Lock-Up Agreements, see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — PharmAthene and Altimmune Post-closing Lock-up Agreements.” The foregoing description of each of the PharmAthene Lock-Up Agreements and Altimmune Lock-Up Agreements does not purport to be complete and is qualified in its entirety by reference to the forms of Lock-Up Agreements, which are filed as Annexes C and E, respectively, and which are incorporated herein by reference.

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Stockholder Approval of the Mergers

As of February 2, 2017, all directors and executive officers, as well as a key employee, of PharmAthene, together with their affiliates, beneficially owned approximately 6.8% of the shares of PharmAthene common stock outstanding on and issuable within 60 days of February 10, 2017. The amendment to PharmAthene's Certificate of Incorporation to authorize the reverse-split of common stock requires the affirmative vote of the holders of a majority of the PharmAthene common stock outstanding and entitled to vote on the proposal. The approval of the issuance of shares of PharmAthene common stock in the mergers, the approval of the proposal to approve the Merger Agreement, the approval of the proposal to approve the 2017 omnibus incentive plan, and the proposal to adjourn the meeting, if necessary or advisable, to solicit additional proxies, each requires the affirmative vote of the holders of a majority of the shares of PharmAthene common stock outstanding, entitled to vote on the proposal and present at the PharmAthene special meeting in person or by proxy. All PharmAthene officers and directors, and their affiliates as noted above, have entered into the PharmAthene Voting Agreement in connection with the merger. For a more complete discussion of the PharmAthene Voting Agreement, see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — PharmAthene Voting Agreement.”

As of February 2, 2017, all directors and executive officers of Altimmune, together with their affiliates, held, in the aggregate, approximately 68% of the outstanding shares of Altimmune capital stock, consisting of 6,124,026 Class A shares, or approximately 66% of the outstanding shares of Class A Common Stock and 674,300 Series B shares, or approximately 84% of the outstanding shares of Series B Preferred Stock. Written consents are required from the holders of at least (i) 65% of the outstanding shares of Altimmune Class A Common Stock and Preferred Stock, voting together as a single class on an as-converted basis, and (ii) a majority of the Class A Common Stock. All Altimmune officers and directors, and their affiliates, have entered into the Altimmune Voting Agreement in connection with the mergers. For a more complete discussion of the Altimmune Voting Agreement, see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — Altimmune Voting Agreement.”

Directors and Officers of PharmAthene Following the Mergers

At the Effective Time of the mergers, PharmAthene is initially expected to have a seven member board of directors, comprised of William Enright, David J. Drutz, Philip Hodges, Klaus Schafer, Mitchel Sayare, Derace L. Schaffer and John M. Gill.

William Enright, David J. Drutz, Philip Hodges and Klaus Schafer are directors of Altimmune prior to the Effective Time of the mergers and are expected to become directors of PharmAthene at the Effective Time of the mergers. Mitchel Sayare, Derace L. Schaffer and John M. Gill are directors of PharmAthene prior to the Effective Time of the mergers and are expected to continue in such capacity after the Effective Time of the mergers, until the next annual meeting of the stockholders of the combined company. David J. Drutz will serve as Chairman of the Board of the combined company.

Immediately following the mergers, the executive management team of PharmAthene is expected to be composed solely of the members of the Altimmune executive management team prior to the mergers, as set forth below:

Name		Title
William Enright		Chief Executive Officer
Elizabeth A. Czerepak		Chief Financial Officer
M. Scot Roberts, Ph.D.		Chief Scientific Officer
Sybil Tasker, M.D., M.P.H.		Senior Vice President of Clinical Research and Development

Bertrand Georges, Ph.D., Altimmune’s Chief Technology Officer, is expected to continue to serve as a significant employee of the combined company.

Interests of PharmAthene's Directors and Executive Officers in the Mergers

In considering the recommendation of the PharmAthene Board of Directors to PharmAthene stockholders to vote in favor of the issuance of shares of PharmAthene common stock in the mergers, and the other matters to be acted upon by PharmAthene stockholders at the PharmAthene special meeting, PharmAthene

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stockholders should be aware that members of the PharmAthene Board of Directors and PharmAthene's executive officers have interests in the mergers that may be different from, or in addition to, or conflict with, the interests of PharmAthene stockholders.

Interests of the PharmAthene directors and executive officers relate to the continuing service of John M. Gill, Mitchel Sayare, Ph.D., and Derace Schaffer, M.D., as directors of the combined company following completion of the mergers and payment of cash and equity compensation in such capacity, and, with respect to Mr. Gill, severance payments in connection with the mergers pursuant to Mr. Gill's employment agreement as CEO of PharmAthene.

The employment agreement with Mr. Gill, specifically provides for a payment to him upon the closing of the mergers, upon which he will receive, if terminated without cause or for “good reason” or upon a written notice of non-extension, his target bonus of 50%, or $153,150, of his base salary. Mr. MacNeill will be eligible to receive: (i) a severance payment in the amount of $93,094 if Mr. MacNeill remains employed with PharmAthene through the closing of the mergers and the preparation of PharmAthene's 2016 annual report and proxy statement for the PharmAthene 2017 annual meeting of stockholders and (ii) a bonus payment in the amount of $67,235 if he remains employed through the closing of the mergers. Each payment will become due and payable upon a termination by PharmAthene without cause. Please see section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Potential Payments upon Termination or Change of Control” for a description of such benefits.

The PharmAthene Board of Directors was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, including the issuance of shares of PharmAthene common stock in the mergers, and to recommend that PharmAthene stockholders approve the issuance of shares of PharmAthene common stock in the mergers and related matters. Other than undertaking to provide full disclosure of these potential conflicts of interest, the PharmAthene Board of Directors did not take any other steps to alleviate such potential conflicts of interest since it did not consider such potential conflicts of interest to be material in connection with its decision to approve the Merger Agreement and the transactions contemplated thereby, including the issuance of shares of PharmAthene common stock.

For a more complete discussion of the interests of the directors and executive officers of PharmAthene in the merger, please see the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Interests of PharmAthene's Directors and Executive Officers in the Mergers.”

Interests of Altimmune's Directors and Executive Officers in the Mergers

In considering the recommendation of the Altimmune Board of Directors to Altimmune stockholders to approve the mergers and to adopt and approve the Merger Agreement, and the other matters to be acted upon by Altimmune stockholders in the Altimmune written consent, Altimmune stockholders should be aware that members of the Altimmune Board of Directors and Altimmune's executive officers have interests in the mergers that may be different from, in addition to, or may conflict with the interests of Altimmune stockholders.

These interests include the beneficial ownership interests of Altimmune directors and executive officers in shares of Altimmune capital stock and securities to be converted to PharmAthene common stock and rights to purchase PharmAthene common stock in the merger, the assumption of all stock options held by the Altimmune executive officers and board members upon the completion of the mergers, whether vested or unvested, the agreement that William Enright, David J. Drutz, Philip Hodges and Klaus Schafer, each an Altimmune director, will continue to serve on the Board of Directors of the combined company following the consummation of the mergers, the agreement that William Enright, Elizabeth Czerepak, Scot Roberts and Sybil Tasker, each an Altimmune executive officer, will continue to serve as executive officers of the combined company following the consummation of the mergers and the continued indemnification of former Altimmune executive officers and board members.

As of February 2, 2017, directors and executive officers of Altimmune, together with their respective affiliates, owned and were entitled to vote, in the aggregate, approximately 6.1 million shares of Altimmune capital stock, or approximately 68% of the shares of Altimmune capital stock outstanding on that date and

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held approximately 73% on a fully diluted basis. For a more complete discussion of the interests of the directors and executive officers of Altimmune in the mergers, please see the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Interests of Altimmune's Directors and Executive Officers in the Mergers.”

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and identifiable intangible assets acquired and liabilities assumed based on their fair values at the date of the completion of the mergers. The allocation reflected in the unaudited pro forma condensed combined financial information included in this proxy statement/prospectus/consent solicitation is preliminary and subject to change.

For a more complete discussion of the anticipated accounting treatment of the mergers, please see the sections of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Anticipated Accounting Treatment” and “Selected Historical and Unaudited Pro Forma Condensed Combined Financial Data.”

Appraisal Rights

If the mergers are completed, Altimmune stockholders are entitled to appraisal rights under Section 262 of the DGCL. PharmAthene stockholders are not entitled to appraisal rights in connection with the mergers. For a more complete discussion of the appraisal rights, see the provisions of Section 262 of the DGCL (“Section 262”), and attached to this proxy statement/prospectus/consent solicitation as Annex G, and the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Appraisal Rights.”

Comparison of Stockholder Rights

Both PharmAthene and Altimmune are Delaware corporations subject to the DGCL. The rights of PharmAthene stockholders are governed by the DGCL, PharmAthene's Certificate of Incorporation, as amended (the “PharmAthene Articles”), and bylaws (the “PharmAthene Bylaws”). The rights of Altimmune stockholders are governed by the DGCL, Altimmune's Certificate of Incorporation, as amended (the “Altimmune Articles”), and bylaws (the “Altimmune Bylaws”). If the mergers are completed, Altimmune stockholders will become stockholders of PharmAthene, and their rights will be governed by the DGCL, the PharmAthene Articles and the PharmAthene Bylaws. The rights of PharmAthene stockholders contained in the PharmAthene Articles and PharmAthene Bylaws differ from the rights of Altimmune stockholders under the Altimmune Articles and Altimmune Bylaws, as more fully described under of this proxy statement/prospectus/consent solicitation entitled “Comparison of Rights of Stockholders.”

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SELECTED HISTORICAL AND UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL DATA

Selected Historical Financial Data of PharmAthene

The following table presents selected historical consolidated financial data for PharmAthene as of and for the fiscal years ended December 31, 2015, 2014, 2013, 2012 and 2011 and as of and for the nine months ended September 30, 2016 and 2015. The balance sheet data as of December 31, 2015 and 2014 and the statement of income data for the fiscal years ended December 31, 2015, 2014 and 2013 have been obtained from PharmAthene's audited consolidated financial statements included in PharmAthene's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which is incorporated by reference into this proxy statement/prospectus/consent solicitation. The balance sheet data as of December 31, 2013 and 2012 and the statement of income data for the fiscal years ended December 31, 2012 and 2011 have been derived from PharmAthene's audited consolidated financial statements included in PharmAthene's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which has not been incorporated into this document by reference. The balance sheet data as of December 31, 2011 has been derived from PharmAthene's audited consolidated financial statements included in PharmAthene's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which has not been incorporated into this document by reference. The balance sheet data as of September 30, 2016 and the statement of income data for the nine months ended September 30, 2016 and 2015 have been obtained from PharmAthene's unaudited condensed consolidated financial statements included in PharmAthene's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2016, which is incorporated by reference into this proxy statement/prospectus/consent solicitation. The balance sheet data as of September 30, 2015 has been derived from PharmAthene's unaudited condensed consolidated financial statements included in PharmAthene's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015, which has not been incorporated into this document by reference.

The information set forth below is not necessarily indicative of future results and should be read together with the other information contained in PharmAthene's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and PharmAthene's Quarterly Report on Form 10-Q for the nine months ended September 30, 2016, including the sections entitled “Management's Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes therein. See the section of this proxy statement/prospectus/consent solicitation entitled “Where You Can Find Additional Information” beginning on page 273 .

		Nine Months Ended September 30,								Year Ended December 31,
		2016				2015				2015				2014				2013				2012				2011
Statements of operations data:
Revenue		$	4,110,833			$	9,374,155			$	10,640,660			$	10,190,205			$	17,912,607			$	25,175,887			$	24,266,274
Operating expenses:
Research and development			3,409,005				3,962,019				5,133,512				9,319,828				15,290,142				19,509,629				21,219,853
General and administrative			6,343,426				5,246,396				6,222,185				10,911,724				13,279,186				11,628,732				14,311,079
Restructuring expense			—				2,519,273				2,546,159				—				—				—				—
Depreciation and amortization			110,371				108,798				141,604				149,958				182,487				303,916				461,073
Total operating expenses			9,862,802				11,836,486				14,043,460				20,381,510				28,751,815				31,442,277				35,992,005
Loss from operations			(5,751,969	)			(2,462,331	)			(3,402,800	)			(10,191,305	)			(10,839,208	)			(6,266,390	)			(11,725,731)

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		Nine Months Ended September 30,								Year Ended December 31,
		2016				2015				2015				2014				2013				2012				2011
Other income (expense):
Interest income (expense), net			25,614				(48,492	)			(54,581	)			(210,399	)			(366,706	)			(324,753	)			(37,913	)
Realization of cumulative translation adjustment			—				(229,192	)			(229,192	)			—				—				1,227,656				—
Change in fair value of derivative instruments			(642,643	)			577,426				299,477				508,817				(444,622	)			591,039				7,144,983
Other income-litigation			122,461,489				—				—				—				—				—				—
Other income (expense)			6,400				6,594				8,137				(762	)			(6,071	)			47,862				39,328
Gain on the sale of assets held for sale			—				—				—				—				—				—				781,760
Total other income (expense)			121,850,860				306,336				23,841				297,656				(817,399	)			1,541,804				7,928,158
Net loss before income taxes			116,098,891				(2,155,995	)			(3,378,959	)			(9,893,649	)			(11,656,607	)			(4,724,586	)			(3,797,573	)
Provision for income taxes			(46,310	)			(46,310	)			(61,746	))			(61,746	)			(61,746	)			(195,529	))			—
Net income (loss)		$	116,052,581			$	(2,202,305	)		$	(3,440,705	)		$	(9,955,395	)		$	(11,718,353	)		$	(4,920,115	)		$	(3,797,573	)
Basic net income (loss) per share		$	1.79			$	(0.03	)		$	(0.05	)		$	(0.17	)		$	(0.23	)		$	(0.10	)		$	(0.08	)
Diluted net income (loss) per share		$	1.79			$	(0.03	)		$	(0.05	)		$	(0.17	)		$	(0.23	)		$	(0.10	)		$	(0.08	)
Weighted average shares used in calculation of basic net income (loss) per share			64,715,647				63,858,500				63,986,013				57,535,325				50,659,116				48,323,067				47,331,763
Weighted average shares used in calculation of diluted net income (loss) per share			65,322,158				63,858,500				63,986,013				57,535,325				50,659,116				48,323,067				47,331,763

		Nine Months Ended September 30,								As of December 31,
		2016				2015				2015				2014				2013				2012				2011
Balance sheet data:
Cash and cash equivalents		$	69,106,979			$	17,389,409			$	15,569,813			$	18,643,351			$	10,480,979			$	12,701,517			$	11,236,771
Working capital			134,307,841				15,864,781				15,047,425				16,668,843				7,543,127				12,307,429				14,997,664
Total assets			140,538,587				20,895,657				19,862,397				21,978,241				17,139,289				22,741,404				22,803,509
Total long-term liabilities			427,077				842,931				1,033,839				1,122,307				3,007,596				3,579,148				2,336,361
Total stockholders' equity			136,383,040				17,671,957				16,649,117				18,274,145				7,335,712				11,673,840				15,851,806

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The following summary consolidated financial data for the years ended December 31, 2014 and 2015 are derived from Altimmune's audited consolidated financial statements included elsewhere in this proxy statement/prospectus/consent solicitation. The summary consolidated financial data as of September 30, 2016 and for the nine months ended September 30, 2015 and 2016 have been derived from Altimmune's unaudited condensed consolidated financial statements included elsewhere in this proxy statement/prospectus/consent solicitation. These unaudited condensed consolidated financial statements have been prepared on a basis consistent with Altimmune's audited consolidated financial statements and, in Altimmune's opinion, contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such consolidated financial data. Altimmune's historical results are not necessarily indicative of its future results, and are not necessarily indicative of the results that may be expected for any interim periods, or any future year or period.

		Nine Months Ended September 30,								Year Ended December 31,
		2015				2016				2014				2015
Statements of Operations Data:
License revenue		$	792,343			$	168,341			$	19,753			$	630,952
Research grants and contracts			3,011,288				1,983,574				5,528,450				4,023,516
Total revenue and grants and contracts			3,803,631				2,151,915				5,548,203				4,654,468
Operating expenses:
Research and development			3,519,478				4,845,045				4,265,070				5,063,650
General and administrative			5,168,245				5,301,444				1,181,294				6,178,829
Total operating expenses			8,687,723				10,146,489				5,446,364				11,242,479
Income (loss) from operations			(4,884,092	)			(7,994,574	)			101,839				(6,588,011	)
Other expense			(52,065	)			(30,411	)			(59,572	)			(60,891	)
Net income (loss)			(4,936,157	)			(8,024,985	)			42,267				(6,648,902	)
Accumulated dividends on preferred stock			(120,473	)			(247,562	)			(636,163	)			(138,555	)
Net loss attributable to common stockholders		$	(5,056,630	)		$	(8,272,547	)		$	(593,896	)		$	(6,787,457	)
Weighted-average common shares, basic and diluted			7,168,523				9,226,152				1,121,018				7,688,651
Net loss per share attributable to common stockholders basic and diluted		$	(0.71	)		$	(0.90	)		$	(0.53	)		$	(0.88	)

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		As of September 30, 2016
		Actual
Balance Sheet Data:
Cash		$	5,103,612
Working capital			1,755,737
Total assets			42,497,037
Notes payable			1,098,584
Series B Preferred Stock			8,000
Common stock			—
Class A Common Stock			91,879
Class B Common Stock			388
Additional paid-in capital			70,560,407
Accumulated deficit			(28,197,621	)
Accumulated other comprehensive loss			(5,890,441	)
Total stockholders' equity			36,572,612

Selected Unaudited Pro Forma Condensed Combined Financial Data of PharmAthene and Altimmune

On January 18, 2017, PharmAthene, Inc., a Delaware corporation (“PharmAthene” or the “Company”), its wholly owned acquisition subsidiaries Mustang Merger Sub Corp I Inc. and Mustang Merger Sub II LLC (the “Merger Subs”), agreed to acquire 100% of the outstanding capital stock of Altimmune, Inc., a Delaware corporation (“Altimmune”), in a reverse triangular merger and reorganization pursuant to section 368(a) of the Internal Revenue Code (the “Merger”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). Consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, among other things, obtaining the requisite approvals of the stockholders of the Company and Altimmune, including the approval of the charter amendments by the Company’s stockholders, the Company having a minimum level of cash of $10.25 million at the time of closing, the completion of the Altimmune Private Placement of at least $3.5 million of gross proceeds prior to closing, a reverse stock split in a manner to be determined prior to closing, and the effectiveness of a registration statement on Form S-4 relating to the shares of PharmAthene common stock to be issued to Altimmune stockholders pursuant to the Merger Agreement. It is currently anticipated that the Merger will close during the first or second quarter of 2017.

On March 10, 2015, Altimmune acquired 100% of the outstanding ordinary shares of Immune Targeting Systems Limited, a United Kingdom entity (“ITS”) in a share exchange transaction (the “Acquisition”). In anticipation of the Acquisition, Altimmune recapitalized its equity securities that included (i) the conversion of all outstanding preferred stock into common stock; (ii) the conversion of all preferred stock warrants into common stock warrants; (iii) a reverse stock split of all outstanding and converted common stock, common stock warrants, and common stock options at a 6.27-to-1 ratio; and (iv) the issuance of a common stock dividend to preferred stockholders in lieu of cash payments to settle accrued preferred dividends. Following the Acquisition, the Altimmune’s only outstanding class of capital stock was common stock, designated as Class A Common Stock and Class B Common Stock.

The selected unaudited pro forma condensed combined financial data presented below is based on, and should be read in conjunction with, the historical financial statements of PharmAthene, Altimmune and ITS that are incorporated by reference or that appear elsewhere herein and the unaudited pro forma condensed combined financial statements that appear elsewhere herein. See the sections entitled, “Where You Can Find More Information” and “Unaudited Pro Forma Condensed Combined Financial Statements,” for additional information.

The following selected unaudited pro forma condensed combined balance sheet data as of September 30, 2016 and the selected unaudited pro forma condensed combined statements of operations data for the nine months ended September 30, 2016 and for the year ended December 31, 2015 are based on the historical financial statements of PharmAthene, Altimmune and ITS after giving effect to the Acquisition and Merger.

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The Acquisition will be accounted for as business combination using the purchase method of accounting; the Merger will be accounted for as a reverse acquisition business combination, using the purchase method of accounting.

The following selected unaudited pro forma condensed combined statements of operations data for the nine months ended September 30, 2016 and for the year ended December 31, 2015 give effect to the Acquisition and Merger as if they had occurred on January 1, 2015. The selected unaudited pro forma condensed combined balance sheet data as of September 30, 2016 assumes that the Merger took place on that date; the Acquisition is included in Altimmune’s historical balance sheet as of September 30, 2016.

These selected unaudited pro forma condensed combined financial data are provided for informational purposes only and is subject to a number of uncertainties and assumptions and do not purport to represent what the companies’ actual performance or financial position would have been had the Acquisition and the Merger occurred on the dates indicated and does not purport to indicate the financial position or results of operations data as of any future date or for any future period.

Unaudited Pro Forma Condensed Combined Statements of Operations, Balance Sheet and Other Data:

		Nine Months Ended September 30, 2016				Year Ended December 31, 2015
Statement of Operations Data:
Total revenue		$	6,262,748			$	15,296,128
Operating loss		$	(13,746,543	)		$	(9,782,811	)
Net income (loss)		$	108,027,596			$	(9,882,607	)
Net loss attributed to common stockholders		$	108,027,596			$	(9,882,607	)
Basic net income (loss) per share		$	16.09			$	(1.56	)
Diluted net income (loss) per share		$	14.59			$	(1.56	)

		As of September 30, 2016
Balance Sheet Data:
Cash and cash equivalents		$	18,820,612
Working capital		$	11,406,909
Total assets		$	88,513,984
Long-term liabilities		$	19,767,544
Total stockholders' equity		$	69,284,612

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following unaudited pro forma per share information as of and for the nine months ended September 30, 2016 and as of and for the year ended December 31, 2015 reflects the Acquisition and Merger and related transactions as if they had occurred on January 1, 2015. The information in the table is based on, and should be read together with, the historical financial statements of PharmAthene, Altimmune and ITS that appear elsewhere herein, the unaudited pro forma condensed combined financial statements that appear elsewhere herein, including the notes thereto and the information incorporated by reference herein. See the sections entitled, “Where You Can Find More Information” and “Unaudited Pro Forma Condensed Combined Financial Statements.”

The unaudited pro forma per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial position or results of operations that would have been realized if the Acquisition and Merger had been completed as of the dates indicated.

		For the Year Ended December 31, 2015				As of and for the Nine Months Ended September 30, 2016
PharmAthene
Book value per share –  historical		$	0.26			$	2.11
Basic net income (loss) per share – historical		$	(0.05	)		$	1.79
Diluted net income (loss) per share – historical		$	(0.05	)		$	1.78
Altimmune (a)
Book value per share – historical		$	5.61			$	3.96
Basic net income (loss) per share – historical		$	(0.88	)		$	(0.90	)
Diluted net income (loss) per share – historical		$	(0.88	)		$	(0.90	)
Pro Forma Combined
Book value per share						$	10.32
Basic net income (loss) per share		$	(1.56	)		$	16.09
Diluted net income (loss) per share		$	(1.56	)		$	14.59

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MARKET PRICE AND DIVIDEND INFORMATION

PharmAthene

PharmAthene's common stock trades on the NYSE MKT under the symbol “PIP”. The following table sets forth the range of high and low sales prices per share of PharmAthene's common stock on the NYSE MKT during the periods shown.

Fiscal Year 2017		High				Low
1 st Quarter (as of February 2)		$	3.40			$	3.10

Fiscal Year 2016		High				Low
4 th Quarter Ended December 31		$	3.25			$	2.75
3 rd Quarter Ended September 30		$	2.91			$	2.43
2 nd Quarter Ended June 30		$	2.49			$	1.96
1 st Quarter Ended March 31		$	1.97			$	1.56

Fiscal Year 2015		High				Low
4 th Quarter Ended December 31		$	1.95			$	1.33
3 rd Quarter Ended September 30		$	1.93			$	1.30
2 nd Quarter Ended June 30		$	1.84			$	1.55
1 st Quarter Ended March 31		$	1.77			$	1.49

Fiscal Year 2014		High				Low
4 th Quarter Ended December 31		$	1.84			$	1.55
3 rd Quarter Ended September 30		$	2.38			$	1.26
2 nd Quarter Ended June 30		$	1.79			$	1.38
1 st Quarter Ended March 31		$	2.09			$	1.80

The closing price of Pharmathene common stock on January 18, 2017, the last trading day before the public announcement of the Merger Agreement, was $3.40 per share. The closing price of Pharmathene common stock on February 2, 2017, the last practicable trading day prior to the date of this registration statement, was $3.10 per share.

As of February 10, 2017, there were       record holders of PharmAthene common stock. The number of record holders is based on the actual number of holders registered on the books of PharmAthene's transfer agent and does not reflect holders of shares in “street name” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.

Altimmune

Altimmune is a privately-held company, and there is no established trading market for its securities. As of February 2, 2017, there were of 9,195,109 shares of its Class A Common Stock, 38,836 shares of its Class B Common Stock and 800,000 shares of its Series B Convertible Preferred Stock outstanding, and there were approximately 111 holders of record of Altimmune capital stock.

Upon the conversion of the convertible securities to be issued in the Altimmune Private Placement prior to the Effective Date, there will be an additional 527,057 shares of Altimmune Class A Common Stock outstanding.

Dividends

Other than for the PharmAthene Board of Directors' declaration of a special one-time cash dividend of $2.91 per share of PharmAthene common stock payable on February 3, 2017 to holders of record as of January 24, 2017, PharmAthene has never paid any dividends on its common stock.

Altimmune has never declared or paid any cash dividends on its capital stock nor does it intend to do so in the foreseeable future.

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The market price for PharmAthene common stock may be affected by factors different from those that historically have affected the valuation of Altimmune.

Upon completion of the mergers, Altimmune stockholders will become PharmAthene stockholders. PharmAthene's business differs from that of Altimmune, and accordingly the results of operations of PharmAthene will be affected by certain factors that are different from those currently affecting the results of operations of Altimmune. For a discussion of the businesses of PharmAthene and Altimmune and of some important factors to consider in connection with those businesses, see the sections of this proxy statement/prospectus/consent solicitation entitled “Altimmune's Business” and “Where You Can Find Additional Information” beginning on page 273 for the location of information incorporated by reference herein.

In the event that the combined company fails to satisfy any of the listing requirements of the NYSE MKT, a condition to the mergers will not be satisfied.

The obligation of Altimmune to effect the mergers is conditioned on the combined company’s common stock being listed on the NYSE MKT. For listing on the NYSE MKT, the combined company will be required to satisfy the initial listing criteria and thereafter comply with the continued listing requirements, including the minimum market capitalization standard set forth in applicable NYSE MKT rules, the requirement that the combined company’s shares not trade “for a substantial period of time at a low price per share” or that the combined company not dispose of its principal operating assets or discontinue a substantial portion of the combined company’s operations, among other requirements.

The issuance of shares of PharmAthene common stock to Altimmune stockholders in the mergers will dilute substantially the voting power of current PharmAthene stockholders.

Pursuant to the terms of the Merger Agreement and Exchange Ratio, holders of outstanding equity of Altimmune immediately prior to the Effective Time will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time, in each case, on a fully diluted basis.

Accordingly, the issuance of shares of PharmAthene common stock to Altimmune stockholders in the mergers will reduce significantly the relative voting power of each share of PharmAthene common stock held by current PharmAthene stockholders. Consequently, PharmAthene stockholders as a group will have significantly less influence over the management and policies of the combined company after the mergers than prior to the mergers.

There is no assurance when or even if the mergers will be completed. Failure to obtain required approvals necessary to satisfy closing conditions may delay or prevent completion of the mergers.

Completion of the mergers is subject to the satisfaction or waiver of a number of conditions, including the requisite approvals by the stockholders of PharmAthene and the stockholders of Altimmune. There can be no assurance that PharmAthene or Altimmune will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived. If the mergers are not completed, PharmAthene will need to consider other strategic alternatives to grow and diversify its business to enhance stockholder value.

Because the lack of a public market for Altimmune's outstanding shares makes it difficult to evaluate the fairness of the mergers, Altimmune stockholders may receive consideration in the mergers that is greater than or less than the fair market value of the Altimmune shares.

The outstanding capital stock of Altimmune is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of Altimmune shares. Since the percentage of PharmAthene's equity to be issued to Altimmune stockholders was determined based on negotiations between the parties, it is possible that the value of the PharmAthene common stock to be issued in connection with the mergers will be greater than the fair market value of Altimmune shares. Alternatively, it is possible that the value of the shares of PharmAthene common stock to be issued in connection with the mergers will be less than the fair market value of Altimmune shares.

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Because the mergers will be completed after the date of the PharmAthene special meeting of stockholders and the Altimmune written consent of stockholders, at the time of the special meeting or written consent, you will not know the exact number of shares of PharmAthene common stock that the Altimmune stockholders will receive upon completion of the mergers.

Subject to the terms of the Merger Agreement, holders of outstanding equity of Altimmune immediately prior to the Effective Time will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time, in each case, on a fully diluted basis. Please see the section of this proxy statement/prospectus/consent solicitation entitled “The Merger Agreement —  Merger Consideration.” Accordingly, the exact number of shares of PharmAthene common stock that Altimmune stockholders will receive upon completion of the mergers will not be available at the time of the PharmAthene special meeting and the Altimmune written consent of stockholders.

PharmAthene and Altimmune executive officers and directors may have interests in the mergers that are different from, or in addition to, those of PharmAthene stockholders and Altimmune stockholders generally.

The executive officers and directors of PharmAthene and Altimmune may have interests in the mergers that are different from, or are in addition to, those of PharmAthene stockholders and Altimmune stockholders generally. The directors of the combined company will consist of three current directors from PharmAthene's Board of Directors, and four current directors from Altimmune's Board of Directors. Altimmune's executive officers will continue to serve as executive officers of the combined company. Further, certain PharmAthene executive officers may receive change in control payments in connection with the mergers. In addition, the directors and executive officers of PharmAthene and Altimmune also have certain rights to indemnification and to directors' and officers' liability insurance that will be provided by the combined company following completion of the mergers. Please see the sections of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Interests of PharmAthene's Executive Officers and Directors in the Mergers” and “The Mergers — Interests of Altimmune's Directors and Executive Officers in the Mergers.”

The pendency of the mergers could have an adverse effect on the trading price of PharmAthene common stock and the business, financial condition, results of operations or business prospects for PharmAthene, Altimmune and the combined company.

While there have been no significant adverse effects to date, the pendency of the mergers could disrupt PharmAthene's and Altimmune's businesses in the following ways, including:

Should they occur, any of these matters could adversely affect the trading price of PharmAthene common stock or harm the financial condition, results of operations or business prospects of PharmAthene, Altimmune and the combined company.

During the pendency of the mergers, PharmAthene and Altimmune may be unable to enter into a business combination with another party because of restrictions in the Merger Agreement.

The Merger Agreement restricts the ability of PharmAthene to make acquisitions or complete other transactions during the pendency of the mergers. While the Merger Agreement is in effect, subject to limited exceptions, PharmAthene is prohibited from soliciting, initiating, encouraging or taking actions designed to facilitate any inquiries or the making of any proposal or offer that could lead to such party entering into certain extraordinary transactions with any third party, such as a sale of assets, an acquisition of equity

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interest, a tender offer for capital stock or a merger or other business combination outside the ordinary course of business. Any such transactions could be favorable to PharmAthene stockholders. Please see the sections of this proxy statement/prospectus/consent solicitation entitled “The Merger Agreement — No Solicitation,” “The Merger Agreement — PharmAthene Stockholder Approval,” “The Merger Agreement — Altimmune Stockholder Approval” and “The Merger Agreement — Termination.”

In addition, certain of PharmAthene stockholders, who beneficially own approximately 4,861,743 of the outstanding shares of PharmAthene common stock ([•]% of the outstanding stock as of [•], 2017) entered into the PharmAthene Voting Agreement, pursuant to which such PharmAthene stockholders will agree to vote their shares of PharmAthene common stock in favor of the adoption of the Merger Agreement and against any amendment of PharmAthene's certificate of incorporation or bylaws or any other proposal or transaction involving PharmAthene, the effect of which amendment or other proposal or transaction is to delay, impair, prevent or nullify the mergers or the transactions contemplated by the Merger Agreement or change in any manner the voting rights of any capital stock of PharmAthene. The signatories thereto may not sell or transfer their shares other than under specified circumstances pursuant to the PharmAthene Voting Agreement. The PharmAthene Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or termination of the Merger Agreement. Please see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — PharmAthene Voting Agreement.”

These provisions might discourage an otherwise interested third party from considering or proposing an acquisition of PharmAthene, even one that may be deemed of greater value than the mergers to PharmAthene stockholders.

The mergers may be completed even though material adverse changes may result from the announcement of the mergers, industry-wide changes or other causes.

In general, either party can refuse to complete the mergers if there is a material adverse change affecting the other party between January 18, 2017, the date of the Merger Agreement, and the closing of the mergers. However, some types of changes do not permit either party to refuse to complete the mergers, even if such changes would have a material adverse effect on PharmAthene or Altimmune. If adverse changes occur but PharmAthene and Altimmune must still complete the mergers, the combined company's stock price may suffer.

The rights of Altimmune stockholders who become PharmAthene stockholders in the mergers will be governed by PharmAthene's Certificate of Incorporation and Bylaws.

Altimmune stockholders who receive shares of PharmAthene common stock in the mergers will become PharmAthene stockholders. As a result, Altimmune stockholders who become stockholders in PharmAthene will be governed by PharmAthene's Certificate of Incorporation (as proposed to be amended) and PharmAthene's Bylaws, rather than being governed by Altimmune's Certificate of Incorporation and Altimmune's Bylaws. At the Effective Time, the outstanding shares of Altimmune capital stock will be converted into the right to receive shares of PharmAthene common stock. For more information, please see the section of this proxy statement/prospectus/consent solicitation entitled “Comparison of Rights of Stockholders.”

If the mergers do not qualify as a reorganization under Section 368(a) of the Code or are otherwise taxable to U.S. holders of Altimmune capital stock, then such holders may be required to pay substantial U.S. Federal income taxes.

Each of Proskauer Rose LLP, tax counsel to Altimmune, and Dentons US LLP, tax counsel to PharmAthene, will have delivered an opinion that the mergers will be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. These opinions are based on certain assumptions and representations as to factual matters from Altimmune, PharmAthene, Merger Sub Corp and Merger Sub LLC, as well as certain covenants and undertakings by Altimmune, PharmAthene and Merger Sub Corp and Merger Sub LLC. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate or is violated in any material respect, the validity of the conclusions reached by counsel in their opinions would be jeopardized. Additionally, an opinion of counsel represents

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counsel's best legal judgment but is not binding on the United States Internal Revenue Service (“IRS”) or any court, so there can be no certainty that the IRS will not challenge the conclusions reflected in the opinions or that a court will not sustain such a challenge. If the IRS or a court determines that the mergers should not be treated as a reorganization, a holder of Altimmune capital stock would recognize taxable gain or loss upon the exchange of Altimmune capital stock for PharmAthene common stock pursuant to the mergers. Please see the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Certain Material U.S. Federal Income Tax Consequences of the Mergers.”

PharmAthene and Altimmune have incurred and will continue to incur significant transaction costs in connection with the mergers.

PharmAthene and Altimmune have incurred and will continue to incur significant transaction costs in connection with the mergers. PharmAthene and Altimmune estimate that they will incur aggregate direct transaction costs of approximately $[•] million associated with the mergers, including costs incurred through [•  ], 2017, and additional costs associated with the commencement of the combined company's operation as a public company, which cannot be estimated accurately at this time. The costs associated with the mergers may increase if any Altimmune stockholders elect to dissent from the mergers and seek payment of the fair value of their shares as permitted by Delaware law. If the total costs of the mergers exceed PharmAthene's and Altimmune's estimates, the ability of the combined company to achieve its business plan will be adversely affected.

The combined company's ability to utilize PharmAthene's or Altimmune's net operating loss and tax credit carryforwards in the future may be subject to substantial limitations and may be further limited as a result of the mergers.

Under Section 382 of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percent change (by value) in its equity ownership over a three-year period), the corporation's ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. Further, if the historic business of PharmAthene or Altimmune is not treated as being continued by the combined entity for the two-year period beginning on the date of the mergers (referred to as the “continuity of business requirement”), the pre-transaction net operating loss carryforward deductions of PharmAthene or Altimmune (as the case may be) may become substantially reduced or unavailable for use by the combined company. Prior to the mergers, each of PharmAthene and Altimmune may have undergone an “ownership change”, and it is expected that the mergers will likely result in an “ownership change” of each of PharmAthene and Altimmune. A corporation that experiences an ownership change will generally be subject to an annual limitation on its use of pre-ownership change net operating loss carryforwards (and certain other pre-change tax attributes) equal to, in general, the product of the long-term tax-exempt rate (as published by the IRS for the month in which the ownership change occurs, which rate is 2.09% for February 2017) and the value of the corporation's outstanding stock immediately before the ownership change (subject to certain adjustments), increased by certain built-in gains held by the corporation at the time of the ownership change that are recognized in the five-year period after the ownership period. Accordingly, the combined company's ability to utilize PharmAthene's and Altimmune's pre-merger net operating loss and tax credit carryforwards, which for PharmAthene was, as of December 31, 2016, approximately $1 million, which itself is subject to a previous ownership change of PharmAthene, and for Altimmune was, as of September 30, 2016, approximately $16.8 million, may be substantially limited. Altimmune’s U.S. federal net operating loss carryforwards of approximately $16.8 million will begin to expire in various years beginning in 2020. Altimmune also has approximately $10.4 million of state net operating loss carryforwards that will begin to expire in 2030. As of September 30, 2016, Altimmune also had UK and France net operating losses of $23.8 million and $928,000, respectively. Although not subject to expiration so long as Altimmune UK and Altimmune France continue in the same trade or business, pre-acquisition UK and France net operating losses could be limited under certain circumstances, as determined under applicable tax laws in the United Kingdom and France. These limitations, in turn, could result in increased future tax payments for the combined company, which could have a material adverse effect on the business, financial condition or results of operations of the combined company.

Under Section 384 of the Code, available net operating loss carryovers of PharmAthene or Altimmune may not be available to offset certain gains arising after the mergers from assets held by the other corporation

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at the Effective Time of the mergers. This limitation will apply to the extent that the gain is attributable to an unrealized built-in-gain in the assets of PharmAthene or Altimmune existing at the Effective Time of the mergers. To the extent that any such gains are recognized in the five-year period after the mergers upon the disposition of any such assets, the net operating loss carryovers of the other corporation will not be available to offset such gains (but the net operating loss carryovers of the corporation that owned such assets will not be limited by Section 384 of the Code although they may be subject to other limitations under Section 382 of the Code as described above).

The anticipated benefits of the mergers may not be realized fully or at all or may take longer to realize than expected.

The mergers involve the integration of two companies that have previously operated independently with principal offices in two distinct locations. Due to legal restrictions, PharmAthene and Altimmune are able to conduct only limited planning regarding the integration of the two companies prior to completion of the mergers. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company's business, financial results, financial condition, and stock price following the mergers. Even if the combined company were able to integrate the business operations successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, innovation and operational efficiencies that may be possible from this integration and that these benefits will be achieved within a reasonable period of time.

Certain events could reduce PharmAthene’s expected tax refunds, which could have a material adverse effect on the cash flow and operations of PharmAthene and its subsidiaries

PharmAthene expects to receive a refund of U.S. federal and state income taxes that were paid for the 2016 taxable year, which refund could be up to approximately $8,000,000 in cash that would be received over the twenty-four (24) months following the mergers. The refund would be attributable to the carryback of net operating losses generated by PharmAthene and its subsidiaries after the closing of the mergers. If future net operating losses are less than anticipated, or if the IRS makes an upward adjustment to PharmAthene’s taxable income for 2016 or prior periods, the refund may be substantially less than is expected. This could have a material adverse effect on the cash flow and operations of PharmAthene and its subsidiaries.

Risks Related to the Combined Company Following the Mergers

The trading price of the combined company's common stock may be subject to significant fluctuations and volatility, and the stockholders of the combined company may be unable to resell their shares at a profit.

While PharmAthene's common stock has an observable trading history, PharmAthene's common stock, on a post mergers basis, may be expected to trade as if there had never been a public market for the combined company's common stock. The market price of the combined company's common stock could be subject to significant fluctuation following the mergers. Market prices for securities of early-stage pharmaceutical, medical device, biotechnology and other life science companies have historically been particularly volatile. Some of the factors that may cause the market price of the combined company's common stock to fluctuate include:

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In addition, if securities class action litigation is initiated against the combined company, it would incur substantial costs and its management's attention would be diverted from operations. All of these factors could cause the price of the combined company's common stock to decline, and you may lose some or all of your investment.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the combined company's common stock.

Future results of the combined company may differ materially from the unaudited pro forma financial statements presented in this proxy statement/prospectus/consent solicitation.

The future results of the combined company may be materially different from those shown in the unaudited pro forma condensed combined financial statements presented in this proxy statement/prospectus/consent solicitation, which show only a combination of the historical results of PharmAthene and Altimmune. PharmAthene and Altimmune expect to incur significant costs associated with completion of the mergers and combining the operations of the two companies. Furthermore, these costs may decrease the capital that the combined company could use for continued development of the combined company's business in the future or may cause the combined company to seek to raise new capital sooner than expected.

The combined company plans to issue additional equity securities in the future, which may result in dilution to existing investors.

Within 135 days of the date of the closing of the mergers, certain Altimmune stockholders have irrevocably committed to participate in the Post-Closing Private Placement, in which not less than an aggregate of $5.0 million in gross proceeds are to be received by the combined company. If the combined company completes a public offering of common stock during such 135-day period, then the purchase price of the shares acquired in the Post-Closing Private Placement will be at the same price as the shares sold in such public offering. Such an equity offering will result in dilution to holders of PharmAthene common stock immediately prior to the Effective Time.

To the extent the combined company raises additional capital by issuing equity securities, including in a debt financing where the combined company issues convertible notes or notes with warrants, the combined company's stockholders may experience substantial dilution. The combined company may, from time to time, sell common stock in one or more transactions at prices and in a manner it determines. If the combined company sells common stock, existing stockholders may be materially diluted. In addition, new investors could gain rights superior to existing stockholders, such as liquidation and other preferences. In addition, the number of shares available for future grant under PharmAthene's equity compensation plans may be increased in the future. In addition, the combined company will also have warrants outstanding to purchase shares of capital stock. The combined company's stockholders will incur dilution upon exercise of any outstanding stock options or warrants.

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All of PharmAthene's outstanding shares of common stock are, and any shares that are issued in the mergers will be, freely tradable without restrictions or further registration under the Securities Act of 1933, as amended (the “Securities Act”), except for any shares subject to stockholder agreements with lock-up provisions executed in connection with the mergers and any shares held by affiliates, as defined in Rule 144 under the Securities Act. Rule 144 defines an affiliate as a person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the combined company and would include persons such as the combined company's directors and executive officers.

The concentration of the capital stock ownership with insiders of the combined company will likely limit the ability of the stockholders of the combined company to influence corporate matters.

Based on information available to PharmAthene as of [•  ], 2017, following the mergers, the executive officers, directors, five percent or greater stockholders, and their respective affiliated entities of the combined company are expected to beneficially own, in the aggregate, approximately [•]% of the combined company's outstanding common stock. As a result, these stockholders, acting together, have control over most matters that require approval by the combined company's stockholders, including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a corporate transaction that other stockholders may view as beneficial.

If securities analysts do not publish research or reports about the business of the combined company, or if they publish negative evaluations, the price of the combined company's common stock could decline.

The trading market for the combined company's common stock may be impacted by the availability or lack of research and reports that third-party industry or financial analysts publish about the combined company. There are many large, publicly traded companies active in the biopharmaceutical industry, which may mean it will be less likely that the combined company receives widespread analyst coverage. Furthermore, if one or more of the analysts who do cover the combined company downgrade its stock, its stock price would likely decline. If the combined company does not receive adequate coverage by reputable analysts that have an understanding of the combined company's business and industry, it could fail to achieve visibility in the market, which in turn could cause its stock price to decline.

Anti-takeover provisions under Delaware law could make an acquisition of the combined company, which may be beneficial to the stockholders of the combined company, more difficult and may prevent attempts by the stockholders to replace or remove management.

The combined company will be subject to the Delaware laws regulating corporate takeovers, which, with limited exceptions, prohibit a “target corporation” from engaging in certain “significant business transactions” for a period of five years after the share acquisition by an acquiring person, unless (i) the prohibited transaction or the acquiring person's purchase of shares was approved by a majority of the members of the target corporation's Board of Directors prior to the acquiring person's share acquisition or (ii) the prohibited transaction was both approved by the majority of the members of the target corporation's board and authorized at a stockholder meeting by at least two-thirds of the outstanding voting shares (excluding the acquiring person's shares) at or subsequent to the acquiring person's share acquisition. An “acquiring person” is defined as a person or group of persons that beneficially owns 10% or more of the voting securities of the target corporation. Such prohibited transactions include, among other things:

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After the five-year period, certain “significant business transactions” are permitted, as long as they comply with certain “fair price” provisions of the Delaware statute or are approved by a majority of the outstanding shares other than those of which the acquiring person has beneficial ownership. A corporation may not “opt out” of this statute.

As such, these laws could prohibit or delay mergers or a change in control and may discourage attempts by other companies to acquire the combined company.

In addition, following the merger, the combined company's Certificate of Incorporation and Bylaws will contain provisions, such as undesignated preferred stock, that could make it more difficult for a third party to acquire the combined company without the consent of its Board of Directors. Further, the combined company's Bylaws require advance notice of stockholder proposals and nominations and impose restrictions on the persons who may call special stockholder meetings. These provisions may have the effect of preventing or hindering any attempts by the stockholders of the combined company to replace its Board of Directors or management.

Although PharmAthene and Altimmune expect that the mergers will result in benefits to the combined company, the combined company may not realize those benefits because of various challenges.

PharmAthene and Altimmune may not be able to fully realize the anticipated benefits of the mergers. PharmAthene and Altimmune believe that the mergers will result in greater returns for the PharmAthene and Altimmune stockholders than if each company remained as a standalone entity. However, the integration of a new company is a complex, costly and time-consuming process. This process may disrupt the business of either or both of the companies, and may not result in the full benefits expected by PharmAthene and Altimmune. Delays in the integration process could adversely affect the combined company’s business, financial results, financial condition, and stock price following the mergers. There can be no assurance that the combination of PharmAthene and Altimmune will result in the realization of the anticipated benefits from the mergers.

Subsequent to the consummation of the mergers, the combined company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

Although PharmAthene and Altimmune have conducted due diligence on each other, there can be no assurances that their diligence revealed all material issues that may be present in the other company’s business, that all material issues through a customary amount of due diligence will be uncovered, or that factors outside of PharmAthene’s and Altimmune’s control will not later arise. As a result, the combined company may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses. Even if due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with each company’s preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on liquidity, the fact that the combined company reports charges of this nature could contribute to negative market perceptions about PharmAthene or its securities. In addition, charges of this nature may make future financing difficult to obtain on favorable terms or at all.

The combined company may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002 that will be applicable to the combined company after the mergers.

Altimmune is not currently subject to Section 404 of the Sarbanes-Oxley Act of 2002. However, following the mergers, the combined company will be subject to Section 404 of the Sarbanes-Oxley Act of 2002. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act of 2002 are significantly more stringent than those required of Altimmune as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to the combined company after the mergers. If management is not able to implement the additional requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner or with adequate compliance, it may not be able to assess

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whether its internal control over financial reporting is effective, which may subject the combined company to adverse regulatory consequences and could harm investor confidence and the market price of the combined company’s common stock.

If the mergers are consummated, the business operations, strategies and focus of PharmAthene will fundamentally change, and these changes may not result in an improvement in the value of its common stock.

Following the mergers, it is expected that the combined company’s primary products will be Altimmune’s product candidates, NasoVAX, HepTcell, NasoShield and SparVax-L. Consequently, if the mergers are consummated, an investment in PharmAthene’s common stock will primarily represent an investment in the business operations, strategies and focus of Altimmune. All of Altimmune’s product candidates are still under development and may never be approved for sale or successfully commercialized. The failure to successfully commercialize one or more of Altimmune’s current product candidates will significantly diminish the anticipated benefits of the mergers and have a material adverse effect on the business of the combined company. We cannot assure you that Altimmune’s business operations, strategies or focus will be successful following the mergers, and the mergers could depress the value of PharmAthene’s common stock.

The pro forma financial statement included in this proxy statement/prospectus/consent solicitation is presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the completion of the mergers.

The pro forma financial statement contained in this proxy statement/prospectus/consent solicitation is presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the completion of the mergers or reflecting the ITS acquisition for several reasons. See “Selected Unaudited Pro Forma Condensed Combined Financial Data of PharmAthene and Altimmune.” For example, the pro forma financial statement have been derived from Altimmune’s and ITS’s historical financial statements and PharmAthene’s historical financial statements, and certain adjustments and assumptions have been made regarding the combined company after giving effect to the ITS acquisition and the mergers. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the actual financial condition and results of operations of the combined company following the completion of the mergers may not be consistent with, or evident from, this pro forma financial statement.

In addition, the assumptions used in preparing the pro forma financial statement may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the completion of the mergers. Any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the stock price of the combined company.

Risks Relating to PharmAthene's Business

You should read and consider risk factors specific to PharmAthene's business that will also affect the combined company after the merger. These risks are described in the section entitled “Risk Factors” in PharmAthene's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in the forward-looking statements sections in PharmAthene's Quarterly Report on Form 10-Q for the period ended September 30, 2016 and in other documents incorporated by reference into this proxy statement/prospectus/consent solicitation. Please see the section entitled “Where You Can Find Additional Information” on page 273 of this proxy statement/prospectus/consent solicitation for the location of information incorporated by reference herein.

Risks Related to Altimmune

You should consider the following factors in evaluating whether to approve the proposals described in this proxy statement/prospectus/consent solicitation. These factors should be considered in conjunction with the other information included by PharmAthene and Altimmune in this proxy statement/prospectus/consent solicitation. The risk factors relating to Altimmune will also apply to the combined company going forward because a substantial portion of the business of the combined company will be Altimmune's business.

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Risks Related to Altimmune's Business, Product Development and Clinical Trials

Altimmune has incurred significant losses since its founding and anticipates that it will continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.

Altimmune is a clinical-stage biotechnology company and it has not yet generated revenues from product sales. To date, substantially all of Altimmune's revenues have been derived from grants and contracts with governmental agencies, primarily its BARDA contract for its anthrax vaccine product candidate. Altimmune has incurred net losses in most periods since its inception, including a net loss of $6.6 million for the year ended December 31, 2015 and a net loss of $8.0 million for nine months ended September 30, 2016. As of September 30, 2016, Altimmune had an accumulated deficit of $28.2 million. To date, Altimmune has not received regulatory approvals for any products or generated any revenues from the sale of products, and Altimmune does not expect to generate any product revenues in the foreseeable future. Altimmune does not know whether or when it will generate product revenues or become profitable.

Altimmune has devoted most of its financial resources to research and development, including preclinical and clinical development of its product candidates. Altimmune has not completed pivotal clinical trials for any product candidate. Altimmune's leading product candidates remain in early stage clinical development, and it will be several years, if ever, before Altimmune has a product candidate ready for commercialization. Even if Altimmune obtains regulatory approval to market a product candidate, its future revenues will depend upon the size of any markets in which its product candidates have received approval, its ability to achieve sufficient market acceptance, reimbursement from third-party payers and other factors.

The net losses Altimmune incurs may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of its results of operations may not be a good indication of its future performance. In any particular quarter or quarters, Altimmune's operating results could be below the expectations of securities analysts or investors, which could cause its stock price to decline.

Altimmune's profitability depends on its ability to develop and commercialize its current and future product candidates.

To become and remain profitable, Altimmune must succeed in developing and eventually commercializing products that generate significant revenue. This will require Altimmune to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of its product candidates, discovering additional product candidates, obtaining regulatory approval for these product candidates, forming strategic partnerships and alliances with third parties and manufacturing, marketing and selling any products for which Altimmune may obtain regulatory approval. Altimmune is only in the preliminary stages of most of these activities. Altimmune may never succeed in these activities and, even if it does, it may never generate revenues that are significant enough to achieve profitability. If some or all of Altimmune's product candidates do not prove to be safe, pure and efficacious, then Altimmune may have to abandon those product candidates altogether and it will be unable to generate revenues from sales of such products.

Altimmune expects to continue to incur significant expenses and increasing operating losses for the foreseeable future. Altimmune anticipates that its expenses will increase significantly if and as it:

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Because of the numerous risks and uncertainties associated with pharmaceutical product development, Altimmune is unable to accurately predict the timing or amount of increased expenses or when, or if, it will be able to achieve profitability. If Altimmune is required by the United States Food and Drug Administration (“FDA”) or other regulatory authorities to perform studies in addition to those currently expected, or if there are any delays in completing Altimmune's clinical trials or the development of any of its product candidates, its expenses could increase.

Even if Altimmune does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis. Altimmune's failure to become and remain profitable would depress the value of its company and could impair its ability to raise capital, expand its business, maintain its research and development efforts, diversify its product offerings or even continue its operations. A decline in the value of Altimmune could also cause you to lose part or all of your investment.

Because Altimmune's product candidates are in an early stage of development, there is a high risk of failure, and Altimmune may never succeed in developing marketable products or generating product revenue.

Altimmune's preclinical and clinical results are not necessarily predictive of the final results of its ongoing or future clinical trials. Altimmune has completed early, small, proof-of-concept clinical trials with its NasoVAX influenza vaccine, is in Phase 1 clinical development with HepTcell and is in late-stage preclinical development with its NasoShield program. Success in preclinical studies may not be predictive of similar results in humans during clinical trials, and successful results from early or small clinical trials of a vaccine candidate may not be replicated in later and larger clinical trials. Clinical trials are expensive, time consuming and uncertain as to outcome, and Altimmune cannot guarantee that any of these activities will be successful. If the results of Altimmune's ongoing or future clinical trials are inconclusive with respect to the efficacy of its product candidates, if Altimmune does not meet its clinical endpoints with statistical significance or if there are safety concerns or adverse events associated with its product candidates, Altimmune may be prevented or delayed in obtaining marketing approval for its product candidates, or Altimmune may determine to suspend development of or abandon specific product candidates. For example, Altimmune suspended the development of a Densigen platform-based product candidate, Flunisyn, which was being developed as a T cell vaccine for the treatment of influenza, in favor of NasoVAX. Clinical trials with this product candidate showed that it was well tolerated and able to induce robust T cell responses against the viral sequences represented, but a comparison of the entire study population in later-stage clinical trials showed no statistical differences between the vaccinated and placebo groups for several measures of protection.

Altimmune's product candidates, all of which are biological drug candidates, are subject to extensive governmental regulations relating to, among other things, research, clinical trials, manufacturing, import, export and commercialization. Furthermore, the timing of Altimmune's marketing approval for its NasoShield product candidate is subject to its obtaining continued funding and consent from BARDA, which is uncertain. In order to obtain regulatory approval for the commercial sale of any product candidate, Altimmune must demonstrate through extensive preclinical studies and clinical trials that the product candidate is safe and effective for use in each target indication. Even if Altimmune obtains regulatory approval, that approval may be for indications or patient populations that are not as broad as intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. Also, Altimmune may gain regulatory approval for its leading product candidates or its other preclinical product candidates in some but not all of the jurisdictions Altimmune seeks to obtain regulatory approval. For example, failure to obtain

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regulatory approval of Altimmune's products in any of the U.S., European or Japanese markets would materially adversely affect Altimmune. Failure to obtain regulatory approval of some but not all of the target indications may result in limited commercial opportunity for the approved product. Altimmune may never obtain regulatory approval for these product candidates in any jurisdiction. Altimmune also may be required to perform additional or unanticipated clinical trials to obtain approval or be subject to additional post-marketing testing requirements to maintain regulatory approval. In addition, regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy.

Altimmune is heavily dependent on the success of its leading product candidates, NasoVAX and HepTcell. If Altimmune ultimately is unable to develop, obtain regulatory approval for or commercialize NasoVAX, HepTcell or any other product candidate, its business will be substantially harmed.

Altimmune currently has no products approved for commercial distribution. Altimmune's business strategy is to build a pipeline of product candidates using its proprietary RespirVec and Densigen platforms, including its leading product candidates, NasoVAX and HepTcell, and to progress those product candidates through clinical development for the treatment of different types of diseases. Altimmune may not be able to develop products that are safe and effective for all or any of the indications that it targets. Even if Altimmune is successful in building a product pipeline, the potential product candidates that Altimmune identifies may not be suitable for clinical development for a number of reasons, including causing harmful side effects or demonstrating other characteristics that indicate a low likelihood of receiving marketing approval or achieving market acceptance. If Altimmune's methods of identifying potential product candidates fail to produce a pipeline of potentially viable product candidates, then its success as a business will be dependent on the success of fewer potential product candidates, which introduces risks to its business model and potential limitations to any success it may achieve.

Because Altimmune has limited financial and managerial resources, it must focus on a limited number of research programs and product candidates and on specific indications. As a result, it may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Altimmune's resource allocation decisions may cause it to fail to capitalize on viable commercial products or profitable market opportunities. Altimmune's spending on current and future discovery and preclinical development programs and product candidates for specific indications may not yield any commercially viable products. Furthermore, until such time as Altimmune is able to build a broader product candidate pipeline, if ever, any adverse developments with respect to its leading product candidates, NasoVAX and HepTcell, would have a more significant adverse effect on its overall business than if it maintained a broader portfolio of product candidates.

Altimmune's ability to continue as a going concern will require it to obtain additional financing to fund its current operations, which may be unavailable on acceptable terms, or at all.

Altimmune's recurring operating losses and its current operating plans raise substantial doubt about its ability to continue as a going concern. Altimmune expects to incur additional losses in the future in connection with its research and development activities. As a result, its independent registered public accounting firm included an explanatory paragraph in its report on its consolidated financial statements as of and for the years ended December 31, 2014 and 2015 with respect to this uncertainty. Altimmune's ability to continue as a going concern will require it to obtain additional financing to fund its current operating plans. There can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to Altimmune. Altimmune believes that the net proceeds from the mergers and its existing cash will be sufficient to fund its projected operating requirements through at least the first quarter of 2018. Altimmune has based these estimates, however, on assumptions that may prove to be wrong, and Altimmune could spend its available financial resources much faster than it currently expects and need to raise additional funds sooner than it anticipates. If Altimmune is unable to raise capital when needed or on acceptable terms, it would be forced to delay, reduce or eliminate its research and drug development programs or commercialization efforts.

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Altimmune will require substantial additional financing to achieve its goals, and a failure to obtain this necessary capital when needed would force it to delay, limit, reduce or terminate its product development or commercialization efforts.

Altimmune does not expect to generate revenue from product sales, licensing fees, royalties, milestones, contract research or other sources in an amount sufficient to fully fund its operations for the foreseeable future. Therefore, Altimmune will use its existing cash resources, together with funding received from BARDA, and expects to require additional funds to maintain its operations, continue its research and development programs, commence future preclinical studies and clinical trials, seek regulatory approvals and manufacture and market its products. In addition, to induce PharmAthene, Merger Sub Corp and Merger Sub LLC to enter into the Merger Agreement and to cause the mergers to be consummated, Altimmune entered into the Altimmune Financing Agreement with certain Altimmune Stockholders who irrevocably committed to participate in: (i) the Altimmune Private Placement, such that not less than $3.5 million of gross proceeds for Altimmune are received by Altimmune prior to the Effective Time and (ii) the Post-Closing Private Placement, such that not less than $5.0 million of gross proceeds are received by the combined company from such Altimmune stockholders within 135 days of the closing date of the mergers, the proceeds of which may be available to Altimmune for such purposes. However, if the combined company completes a public offering of common stock during such 135-day period, then the purchase price of the shares acquired in the Post-Closing Private Placement will be at the same price as the shares sold in such public offering. As of September 30, 2016, Altimmune's cash balance was $5.1 million. Based on its current operating plan, Altimmune believes that the net proceeds it received from the Altimmune Financing Agreement and its existing cash will be sufficient to fund its projected operating expenses and capital expenditure requirements through at least the first quarter of 2018. However, Altimmune does not expect that these funds will be sufficient to enable it to complete the clinical trials needed to seek marketing approval or commercialize any of its product candidates. Furthermore, Altimmune's operating plan may change as a result of many factors currently unknown to it, and it may need additional funds sooner than planned.

Altimmune believes that it will continue to expend substantial resources for the foreseeable future developing its product candidates. These expenditures will include costs associated with research and development, maintaining its intellectual property estate, potentially acquiring new technologies, obtaining regulatory approvals and manufacturing products, forming partnerships and strategic alliances, as well as marketing and selling products approved for sale, if any. In addition, other unanticipated costs may arise. Because the outcome of its planned and anticipated clinical trials is highly uncertain, Altimmune cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of its product candidates.

Altimmune's future capital requirements depend on many factors, including:

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Altimmune may also seek additional capital due to favorable market conditions or strategic considerations even if it believes it has sufficient funds for its current or future operating plans. Additional funds may not be available when Altimmune needs them on terms that are acceptable to it, or at all. If adequate funds are not available to it when needed, Altimmune may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of its product candidates or delay, limit, reduce or terminate its establishment of sales and marketing capabilities or other activities that may be necessary to commercialize its product candidates.

Raising additional capital may cause dilution to Altimmune's existing stockholders, restrict its operations or require it to relinquish rights to its technologies or product candidates on unfavorable terms to it.

Until such time, if ever, as Altimmune can generate substantial product revenues, it expects to finance its cash needs through a combination of public or private equity offerings, the Altimmune Financing Agreement, debt financings, BARDA funding, and license and development agreements through strategic partnerships with third parties. To the extent that it raises additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting Altimmune's ability to take certain actions, such as incurring additional debt, making capital expenditures or declaring dividends. If Altimmune raises additional funds through strategic partnerships with third parties, it may have to relinquish valuable rights to its technologies or product candidates, future revenue streams, research programs or product candidates, or otherwise grant licenses on terms that are not favorable to it. If Altimmune is unable to raise additional capital when needed, it may be required to delay, limit, reduce or terminate its product development or commercialization efforts for its leading product candidates or its preclinical product candidates, or grant rights to develop and market product candidates that it would otherwise prefer to develop and market itself.

Altimmune may encounter substantial delays in its clinical trials, or its clinical trials may fail to demonstrate the safety and efficacy of its product candidates to the satisfaction of applicable regulatory authorities.

Before obtaining marketing approval from regulatory authorities for the sale of its product candidates, Altimmune must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. Clinical testing is expensive, time consuming and uncertain as to outcome. Altimmune cannot guarantee that clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:

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Delays, including delays caused by the above factors, can be costly and could negatively affect Altimmune's ability to complete a clinical trial. For example, Altimmune has had delays in previous clinical trials, including those conducted for NasoVAX, as a result of clinical holds imposed by the FDA or other regulatory authorities and requests for additional or new information on vaccine product testing in connection with an Investigational New Drug Application (“IND”) submitted to the FDA.

Altimmune cannot give any assurance that it will be able to resolve any future clinical holds imposed by the FDA or other regulatory authorities outside of the United States, or any delay caused by other factors described above or any other factors, on a timely basis or at all. If Altimmune is not able to successfully initiate and complete subsequent clinical trials, Altimmune will not be able to obtain regulatory approval and will not be able to commercialize its product candidates.

Altimmune may find it difficult to enroll patients in its clinical trials, which could delay or prevent clinical trials of its product candidates.

Identifying and qualifying patients to participate in clinical trials of its product candidates is critical to Altimmune's success. The timing of Altimmune's clinical trials depends on the speed at which it can recruit patients to participate in testing its product candidates. If patients are unwilling to participate in Altimmune's trials because of negative publicity from adverse events in the biotechnology industries, public perception of vaccine safety issues or for other reasons, including competitive clinical trials for similar patient populations, the timeline for recruiting patients, conducting studies and obtaining regulatory approval of potential products

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may be delayed. These delays could result in increased costs, delays in advancing Altimmune's product development, delays in testing the effectiveness of its technology or termination of the clinical trials altogether.

Altimmune may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a trial, to complete its clinical trials in a timely manner. Patient enrollment is affected by several factors, including:

Altimmune may not be able to initiate or continue clinical trials if it cannot enroll a sufficient number of eligible patients to participate in the clinical trials required by regulatory agencies.

Even if Altimmune enrolls a sufficient number of eligible patients to initiate its clinical trials, it may be unable to maintain participation of these patients throughout the course of the clinical trial as required by the clinical trial protocol, in which event Altimmune may be unable to use the research results from those patients. For example, Altimmune may face difficulties in identifying patient populations with active disease to enroll in its HBV product clinical trial for HepTcell. Other clinical trials involving patients with active HBV have sometimes faced difficulties in working with these patient populations, which may include significant numbers of individuals with difficulties with treatment compliance, such as active drug users. While Altimmune is developing strategies to address this issue, there is no guarantee that these strategies will prove successful.

If Altimmune has difficulty enrolling, and maintaining the enrollment of, a sufficient number of patients to conduct its clinical trials as planned, it may need to delay, limit or terminate ongoing or planned clinical trials, any of which would have an adverse effect on its business.

It may be difficult for Altimmune to predict the time and cost of product development. Unforeseen problems may prevent further development or approval of its product candidates.

Altimmune's product candidates, including its vaccines and immunotherapies, involve novel approaches to activate the immune system. Consequently, it may be difficult for Altimmune to predict the time and cost of product development. For example, Altimmune's RespirVec platform involves intranasally administered adenovectored vaccines and its Densigen platform involves synthetic peptide T cell vaccines. Unforeseen problems with its approaches to vaccines and immunotherapy may prevent further development or approval of Altimmune's product candidates. Because of the novelty of Altimmune's approaches, there may be unknown safety risks associated with the vaccines that it develops or the clinical endpoints that it establishes in its trials may not be generally accepted by regulatory agencies, which may therefore require it to perform large field studies to demonstrate efficacy. There can be no assurance that any development problems Altimmune may experience in the future will not cause significant delays or unanticipated costs, or that such development problems can be solved.

In addition, novel vaccine adjuvants, which are included in HepTcell and Oncosyn, Altimmune's product candidates based on its Densigen technology, may pose an increased safety risk to patients. Adjuvants are compounds that are added to vaccine antigens to enhance the activation and improve immune response and

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efficacy of vaccines. Development of vaccines with novel adjuvants requires evaluation in larger numbers of patients prior to approval than would be typical for therapeutic drugs. Guidelines for evaluation of vaccines with novel adjuvants have been established by the FDA and other regulatory bodies and expert committees. The safety of any vaccine, because of the presence of an adjuvant, may have side effects considered to pose too great a risk to patients to warrant approval of the vaccine. Traditionally, regulatory authorities have required extensive study of novel adjuvants because vaccines typically get administered to healthy populations, in particular infants, children and the elderly, rather than in people with disease. As a result, although it is anticipated that HepTcell and Oncosyn are intended for the treatment of patients suffering from a disease, regulatory agencies such as the FDA may nevertheless require Altimmune to conduct extensive safety testing prior to approval to demonstrate a low risk of rare and severe adverse events caused by its product candidates that include novel vaccine adjuvants.

If approved, the novel mechanism of action of the vaccines may adversely affect physician and patient perception and acceptance of Altimmune's products. Public perception of vaccine safety issues, including adoption of novel vaccine mechanisms of action, may adversely influence willingness of subjects to participate in clinical trials, or if approved, to prescribe and receive novel vaccines. For example, GlaxoSmithKline (“GSK”) pulled from the market an approved vaccine to prevent Lyme disease (Lymerix) in February 2002 after anecdotal evidence of joint pain resulted in subjects' unwillingness to receive the vaccine. The FDA found no evidence that the vaccine caused a safety risk; however, GSK pulled the vaccine due to low sales resulting from the negative public perception associated with the reports on joint pain. In addition, parental aversion to new vaccines or vaccines in general may adversely influence later stage clinical trials of Altimmune's influenza product candidate or, if approved, its commercial success.

Altimmune relies, and expects to continue to rely, on third parties to conduct preclinical studies and clinical trials for its product candidates, and if they do not properly and successfully perform their obligations to it, Altimmune may not be able to obtain regulatory approvals for its product candidates.

Altimmune relies, and expect to continue to rely, on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators to assist in managing, monitoring and otherwise carrying out its clinical trials. Altimmune competes with many other companies for the resources of these third parties. The third parties on whom it relies generally may terminate their engagements at any time, and having to enter into alternative arrangements would delay development and commercialization of its product candidates.

Altimmune's reliance on these third parties for research and development activities will reduce its control over these activities but will not relieve it of its responsibilities. For example, the FDA and foreign regulatory authorities require compliance with applicable law, regulations and standards, including GCP, for designing, conducting, monitoring, recording, analyzing and reporting the results of clinical trials to assure that the data and results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Although Altimmune relies on third parties to conduct its clinical trials, it is responsible for ensuring that each of these clinical trials is conducted in accordance with applicable law, regulations and standards, including its general investigational plan and protocol.

Furthermore, if these third parties do not successfully carry out their duties under their agreements, if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to clinical trial protocols or to regulatory requirements, or if they otherwise fail to comply with clinical trial protocols or meet expected deadlines, then the clinical trials of Altimmune's product candidates may not meet regulatory requirements. If clinical trials do not meet regulatory requirements or if these third parties need to be replaced, then preclinical development activities or clinical trials may be extended, delayed, suspended or terminated. If any of these events occur, Altimmune may not be able to obtain regulatory approval of its product candidates on a timely basis or at all.

Altimmune also expects to rely on other third parties to store and distribute drug supplies for its clinical trials. Any performance failure on the part of its distributors could delay clinical development or marketing approval of Altimmune's product candidates or commercialization of its products, producing additional losses and depriving Altimmune of potential product revenue.

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Altimmune faces substantial competition from other pharmaceutical and biotechnology companies, which may result in others discovering, developing or commercializing products before, or more successfully, than Altimmune does .

The development and commercialization of new drug products is highly competitive. Altimmune's future success depends on its ability to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of its product candidates. Altimmune's objective is to design, develop and commercialize new products with superior efficacy, convenience, tolerability and safety. In many cases, the products that Altimmune commercializes will compete with existing market-leading products.

Many of Altimmune's potential competitors have significantly greater financial, manufacturing, marketing, drug development, technical and human resources than it does. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and manufacturing pharmaceutical products. Large and established companies such as AstraZeneca, GSK, Johnson & Johnson and Sanofi Pasteur, among others, compete in the influenza vaccine market. These companies have greater experience and expertise in securing government contracts and grants to support their research and development efforts, conducting testing and clinical trials, obtaining regulatory approvals to market products, manufacturing such products on a broad scale and marketing approved products. These companies also have significantly greater research and marketing capabilities than Altimmune does and may also have products that have been approved or are in late stages of development, and have collaborative arrangements in Altimmune's target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product that Altimmune develops obsolete.

Altimmune also faces competition from smaller companies such as Protein Sciences, which markets a recombinant influenza vaccine; Inovio Pharmaceuticals, which is developing an HBV therapeutic vaccine; Emergent Biosolutions, which manufactures the existing anthrax vaccine; and PaxVax, which is developing an anthrax vaccine. Any of these smaller companies may develop competing products more rapidly than Altimmune does. A number of companies of varying sizes are also pursuing the development of a “universal” flu vaccine. In addition, Altimmune has substantial competition for government funding, particularly for its anthrax vaccine program. See “Altimmune’s Business — Competition” elsewhere in this proxy statement/prospectus/consent solicitation. As a result of all of these factors, Altimmune's competitors may succeed in obtaining patent protection and/or FDA approval or discovering, developing and commercializing products before it does. In addition, any new product that Altimmune develops that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. If Altimmune is not able to compete effectively against potential competitors, its business will not grow and its financial condition and operations will suffer.

Altimmune may not be able to comply with the requirements of foreign jurisdictions in conducting trials within the United Kingdom or any other foreign country.

Altimmune is currently conducting a clinical trial in the United Kingdom for HepTcell, and future clinical trials may be conducted in other foreign jurisdictions. Altimmune's ability to successfully initiate, enroll and complete a clinical trial in the United Kingdom or any other foreign country is subject to numerous risks unique to conducting business in foreign countries, including:

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If Altimmune fails to successfully meet requirements for the conduct of clinical trials outside of the United States, it may be delayed in obtaining, or be unable to obtain, regulatory approval for its product candidates in the United States or in countries outside of the United States.

If Altimmune fails to attract and keep senior management and key scientific personnel, it may be unable to successfully develop its products, conduct its clinical trials and commercialize its product candidates.

Altimmune is highly dependent on members of its senior management, including William Enright, its Chief Executive Officer, Dr. Sybil Tasker, its Senior Vice President of Clinical Research and Development, Dr. M. Scot Roberts, its Chief Scientific Officer, and Dr. Bertrand Georges, its Chief Technology Officer. Although Altimmune has entered into employment agreements with each of these members of senior management, the loss of the services of any of these persons could impede the achievement of its research, development and commercialization objectives. Altimmune maintains keyman insurance policies on Mr. Enright and Dr. Georges for $2.0 million and £500,000, respectively, but not for any other member of its senior management.

Recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing personnel will also be critical to Altimmune's success. The loss of the services of its executive officers or other key employees could impede the achievement of Altimmune's research, development and commercialization objectives and seriously harm its ability to successfully implement its business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in Altimmune's industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products. Competition to hire from this limited pool is intense, and Altimmune may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. Altimmune also experiences competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, it relies on consultants and advisors, including scientific and clinical advisors, to assist it in formulating its research and development and commercialization strategy. Altimmune's consultants and advisors may be employed by employers other than Altimmune and may have commitments under consulting or advisory contracts with other entities that may limit their availability to it. If Altimmune is unable to continue to attract and retain high quality personnel, its ability to pursue its growth strategy will be limited.

Risks Related to the Regulatory Approval Process

If Altimmune is not able to obtain required regulatory approvals, it will not be able to commercialize its product candidates and its ability to generate revenue will be materially impaired.

Altimmune's product candidates and the activities associated with their development and commercialization, including their design, research, testing, manufacture, safety, efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and foreign jurisdictions. Failure to obtain marketing approval for its product candidates will prevent Altimmune from commercializing them in those markets.

Altimmune has not received approval from regulatory authorities to market any product candidate in any jurisdiction, and it is possible that neither its current product candidates nor any product candidates that it may seek to develop in the future will ever obtain the appropriate regulatory approvals necessary for Altimmune to commence product sales.

Altimmune expects to rely on third-party CROs and consultants to assist it in filing and supporting the applications necessary to gain marketing approvals. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication of each of Altimmune's product candidates to establish its product candidates' safety and efficacy for such indications. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, regulatory authorities.

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The pathway to regulatory approvals is time consuming and unpredictable, involves substantial costs and consumes management time and attention. It is not possible to predict the timing or success of obtaining regulatory approvals with any degree of certainty, and as a result, it is difficult for Altimmune to forecast its future financial results or prospects. Any unexpected development in the regulatory approval process, including delays or denials of regulatory approvals or significant modifications to Altimmune's product candidates required by its regulators, could materially and adversely affect Altimmune's business, results of operations and financial condition, and could substantially harm its stock price.

Altimmune's product candidates may cause undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercial potential.

Undesirable side effects caused by Altimmune's product candidates or even competing products in development that utilize a common mechanism of action could cause Altimmune or regulatory authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval by the FDA or other regulatory authorities and potential product liability claims. Serious adverse events deemed to be caused by Altimmune's product candidates could have a material adverse effect on the development of its product candidates and its business as a whole. The most common adverse events in the clinical trials evaluating the safety and tolerability of Altimmune's NasoVAX influenza vaccine have been headache, runny noses and sore throats. The most common adverse events observed in clinical trials for product candidates developed using the Densigen platform include injection site reactions, headache, malaise and fatigue.

Altimmune's understanding of the relationship between its product candidates and these events, as well as its understanding of adverse events reported in future clinical trials of other product candidates, may change as Altimmune gathers more information, and additional unexpected adverse events may be observed. In addition, the side effect profile of pharmaceutical drugs cannot be fully established based on preapproval clinical trials involving a limited number of patients. Routine review and analysis of post-marketing safety surveillance and clinical trials will provide additional information, for example, potential evidence of rare, population-specific or long-term adverse reactions, and may adversely affect the commercialization of the product, and even lead to the suspension or withdrawal of product marketing authorization.

If Altimmune or others identify undesirable side effects caused by its product candidates either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:

Any of these events could prevent Altimmune from achieving or maintaining marketing approvals for and market acceptance of its product candidates and could have a material adverse effect on its business and financial results.

If Altimmune fails to obtain regulatory approval in non-U.S. jurisdictions, it will not be able to market its products in those jurisdictions.

Altimmune intends to market certain of its product candidates, if approved, in the United Kingdom and other international markets, in addition to the United States. Such marketing will require separate regulatory approvals in each market and compliance with numerous and varying regulatory requirements. The approval procedures vary among countries and may involve requirements for additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval. In addition, in many countries outside

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the United States, such as certain countries of the European Union, a vaccine must be approved for reimbursement, including the price that can be charged, before it can be approved for sale in that country. In these countries, pricing discussions with governmental authorities can take considerable time after the receipt of marketing approval for a product, and additional clinical research may be required to enable comparison of the cost effectiveness of Altimmune's product candidate to other available alternatives. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. However, the failure to obtain approval in one jurisdiction may compromise Altimmune's ability to obtain approval elsewhere. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. Altimmune may not obtain foreign regulatory approvals on a timely basis, if at all. v may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize its products in any market.

Even if Altimmune receives regulatory approval for its product candidates, such products will be subject to ongoing regulatory review, which may result in significant additional expense and other restrictions.

Any regulatory approvals that Altimmune receives for its product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to conditions of approval. Altimmune may also be required to conduct post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product potentially over many years. If the FDA or other regulatory authority approves any of Altimmune's product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practice (“cGMP”), and compliance with cGMP and GCP for any clinical trials that Altimmune conducts post-approval. Any such restrictions may result in significant additional expense or could limit sales of the approved product.

Later discovery of previously unknown problems with an approved product, including adverse events of unanticipated severity or frequency, or with manufacturing operations or processes, may result in, among other things:

In addition, applicable regulatory policies of governmental authorities, such as the FDA, may change and additional government regulations may be enacted that could affect any regulatory approval that Altimmune may receive for its product candidates. Altimmune cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If Altimmune is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or not able to maintain regulatory compliance, it may lose any marketing approval that may have been obtained and it may not achieve or sustain profitability, which would adversely affect its business.

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If the FDA or comparable foreign regulatory authorities approve generic or biosimilar versions of any of Altimmune's products that receive marketing approval, or if any product approvals it obtains do not provide it with the exclusivity periods it hopes to achieve, the sales of Altimmune's products could be adversely affected.

As part of the ongoing efforts of governmental authorities to lower health care costs by facilitating generic competition to pharmaceutical products, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) enacted as part of the Health Care Reform Law, created a new abbreviated regulatory approval pathway in the United States for biological products that are found to be biosimilar” to or “interchangeable” with a biological “reference product” previously licensed under a BLA. This abbreviated approval pathway is intended to permit a biosimilar to come to market more quickly and less expensively by relying to some extent on the data generated by the reference product's sponsor and the FDA's previous review and approval of the reference product. Under the BPCIA, a biosimilar sponsor's ability to seek or obtain approval through the abbreviated pathway is limited by periods of exclusivity granted by the FDA to the holder of the reference product's BLA, and no biosimilar application may be accepted by the FDA for review until four years after the date the reference product was first licensed by the FDA, and no biosimilar application, once accepted, may receive final approval until 12 years after the reference product was first licensed by the FDA . See “Altimmune's Business — United States Government Regulation — Certain U.S. Regulatory Incentives and Other Programs — Marketing Exclusivity for Reference Biological Products.”

Once approved, biosimilars likely would compete with, and in some circumstances may be deemed under applicable laws to be “interchangeable with,” the previously approved reference product. To date, only four biosimilars have been licensed under the BPCIA framework, and the extent to which a biosimilar, once approved, will be substituted for any one of Altimmune's product candidates, if approved, in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. Although there is uncertainty regarding the impact of this new program, it seems likely that if any of Altimmune's product candidates are approved by the FDA, there is risk that the approval of a biosimilar competitor to one of its products could have an adverse impact on its business. In particular, a biosimilar could be significantly less costly to bring to market and priced significantly lower than Altimmune's product, if approved by the FDA.

Altimmune may also be subject to competition from biosimilar products in Europe. To date, 27 biosimilar products have been authorized by the European Medicines Agency (“EMA”). As in the United States the regulatory approval pathway for biosimilar products in Europe is abbreviated. A biosimilar sponsor must however still provide all of the preclinical and clinical data required to demonstrate the similarity of their product with the reference product. The level of data required is assessed on a case by case basis but it will be less than that required for an original biological product. The pathway is more complex than the abridged procedure that may be followed to obtain authorization of a generic version of a non-biological product but it would still allow the biosimilar product to be brought to market more quickly and less expensively than Altimmune's original product. That said, in Europe applications for marketing authorizations in relation to biosimilar products are subject to the same data and market exclusivity as apply to generic non-biologic products so no biosimilar product could be approved or placed on the market during the periods such exclusivity applies to Altimmune's product. See “Altimmune's Business — Non-U.S. Government Regulations — Data and Market Exclusivity in the European Union.” Marketing authorization of a biosimilar product in Europe does not guarantee that the biosimilar product may be substituted for the reference product. Interchangeability of a biosimilar product with the reference product is not assessed by the EMA but this determination is left to each of the member states. Altimmune cannot know at this stage the extent to which any biosimilar product would be interchangeable with its reference product, and this may vary between member states.

Pediatric exclusivity is another type of regulatory market exclusivity Altimmune’s competitors may pursue. In the United States, the FDA has the authority to award additional exclusivity for approved products where the sponsor conducts specified testing on pediatric or adolescent populations upon the written request of the FDA. If granted, pediatric exclusivity adds six months to existing exclusivity periods applicable to biological products under the BPCIA — namely, the four year period during which the FDA will not consider an applicable for a biosimilar product, and the twelve-year period during which the FDA will not approve a

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biosimilar application. This six month exclusivity, which runs from the end of these exclusivity protection periods, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “written request” for such trial. See “Altimmune's Business — United States Government Regulation —  Certain U.S. Regulatory Incentives and Other Programs — Pediatric Exclusivity.” In Europe, as well, pediatric studies are incentivized by the reward of additional exclusivity. Pediatric Investigation Plans, or PIPs, are determined by the Pediatric Committee of the EMA. Where an application for a marketing authorization is submitted in respect of a medicinal product designated as an orphan medicinal product and that application contains the results of the PIP studies, market exclusivity for that orphan medicinal product is extended by two years if the product is authorized across Europe. See “Altimmune's Business — Non-U.S. Government Regulations — Orphan Designation in the European Union.” Altimmune may pursue pediatric exclusivity for one or more of its product candidates but may not succeed in obtaining it. There is also a risk that a competitor may achieve pediatric exclusivity that would delay any potential approvals of Altimmune’s product candidates.

Orphan drug designation presents yet another regulatory incentive that may be available to Altimmune and its competitors. As explained in “Altimmune's Business — United States Government Regulation — Certain U.S. Regulatory Incentives and Other Programs — Orphan Drug Designation,” the FDA may grant orphan drug designation to products intended to treat a “rare disease or condition” that affects fewer than 200,000 individuals in the United States, or affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug. Organ drug designation must be requested before submitting an application for marketing approval. Orphan drug designation can provide opportunities for grant funding towards clinical trial costs, tax advantages and FDA user fee exemptions. In addition, if a product that has an orphan drug designation subsequently receives FDA approval for the indication for which it has such designation, the product may be entitled to orphan drug exclusivity, which means the FDA would not approve any other application to marke the same drug for a period of 7 years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or a meaningfully different mode of administration.

In the European Union, orphan drug status offers similar but not identical benefits as those in the United States. See “Altimmune's Business — Non-U.S. Government Regulations — Orphan Designation in the European Union.” Altimmune may pursue orphan drug designation for one or more of its product candidates but obtaining such designation cannot be assured. Additionally, should a competitor receive orphan drug designation for a product to treat the same disease and same indication as one of Altimmune’s product candidates, there is a risk that the FDA or a comparable European regulatory body could delay approving Altimmune’s product candidate.

Developing a drug product, such as NasoShield, to address biological warfare involves special considerations, including compliance with the “Animal Rule,” that may increase drug development delays and costs, and result in a longer and more uncertain regulatory approval process.

Under a special FDA procedure available for studying certain biological warfare products, such as NasoShield, Altimmune’s anthrax vaccine product candidate, the FDA makes available a research pathway known as the “Animal Rule,” which permits the conduct of clinical trials without exposing human subjects to deadly substances, such as anthrax. These regulations, discussed in more detail under the caption “Altimmune's Business — United States Government Regulation”, authorize the FDA to rely on evidence from animal studies to provide evidence of a product’s effectiveness under circumstances where there is a reasonably well-understood mechanism for the toxicity of the agent. Under these requirements, and with the FDA’s prior agreement, biologics used to reduce or prevent the toxicity of chemical, biological, radiological or nuclear substances may be approved for use in humans based on evidence of effectiveness derived from appropriate animal studies and any additional supporting data. Products evaluated for effectiveness under this rule are evaluated for safety under preexisting requirements for establishing the safety of new drug and biological products, including Phase 1 through Phase 2 clinical trials. Under certain circumstances a single animal species may be acceptable if that animal model is sufficiently well-characterized for predicting a response in humans. The animal study endpoint must be clearly related to the desired benefit in humans and the information obtained from animal studies must allow for selection of an effective dose in humans. The

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Animal Rule also requires post-marketing studies, such as field studies, to verify and describe the product’s clinical benefit and assess its safety should an exigency exist that leads to the product being used in humans; the nature of these studies will be discussed with FDA as part of the BLA process. Products approved under the Animal Rule are subject to additional requirements, such as restrictions imposed on marketing or distribution or requirements to provide information to patients.

Compliance with the Animal Rule, would generally require Altimmune to utilize animal model studies for efficacy and provide certain animal and human safety data in order to obtain FDA approval for its anthrax vaccine product candidate. The Animal Rule drug development pathway typically involves costs and delays in excess of what would be expended in conducting human vaccine clinical trials not requiring compliance with the Animal Rule. Although there is an alternative regulatory pathway available for biological warfare drug candidates, called Emergency Use Authorization, which avoids the Animal Rule’s reliance on animal models focused on efficacy, there can be no assurance that this alternative model will apply to Altimmune’s anthrax vaccine product candidate.

Developing appropriate animal models in compliance with the Animal Rule is a time-consuming and expensive research effort. Further, Altimmune may not be able to sufficiently demonstrate the animal correlation to the satisfaction of the FDA, as these corollaries are difficult to establish and are often unclear. The FDA may decide that Altimmune’s data are insufficient for approval and require additional non-clinical, clinical or other studies, refuse to approve its products, or place restrictions on its ability to commercialize those products. As a general matter, complying with the Animal Rule involves a more uncertain pathway to regulatory approval, as relatively few products have been approved in this manner. This means that it may be particularly difficult for Altimmune to predict the timing or ultimate success of receiving FDA approval for NasoShield. Further, other countries have not, at this time, established criteria for review and approval of these types of products outside their normal review process; i.e., there is no Animal Rule equivalent, and consequently there can be no assurance that Altimmune will be able to make a submission for marketing approval in foreign countries based on such animal data.

Additionally, few facilities in the United States and internationally have the capability to perform animal testing with anthrax or otherwise assist Altimmune in qualifying the requisite animal models. Altimmune competes with other biodefense companies for access to this limited pool of highly specialized resources. Altimmune therefore may not be able to secure contracts to conduct testing of its anthrax vaccine product candidate in a predictable timeframe or at all.

Additionally, under the Project BioShield Act of 2004, or Project BioShield, the Secretary of HHS may, with the concurrence of the Secretary of the Department of Homeland Security, or DHS, and upon the approval of the President, contract to purchase unapproved medical countermeasures for the Strategic National Stockpile, or SNS, in specified circumstances. The U.S. Congress is notified of a recommendation for a stockpile purchase after Presidential approval. Project BioShield specifies that a company supplying the countermeasure to the SNS is paid on delivery of a substantial portion of the countermeasure. To be eligible for purchase under these provisions, the Secretary of HHS must determine that there are sufficient and satisfactory clinical results or research data, including data, if available, from preclinical studies and clinical trials, to support a reasonable conclusion that the countermeasure will qualify for approval or licensing within eight years. The legislation also allows unlicensed products to be procured for the SNS so that they are available at the time an emergency is declared.

Project BioShield also allows the Secretary of HHS to authorize the emergency use of medical products that have not yet been approved by the FDA. To exercise this authority, the Secretary of HHS must conclude that:

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Although this provision permits the Secretary of HHS to circumvent the FDA approval process, its use would be limited to rare circumstances. Altimmune’s product candidates will be eligible both for consideration for procurement into the SNS and for use in the event of an emergency, although there is no guarantee that its product candidates will meet the criteria set forth by HHS or the FDA for procurement and Emergency use Authorization, respectively. Both Altimmune’s NasoShield anthrax vaccine product candidate and its NasoVAX pandemic influenza vaccine product candidate may potentially be eligible for the SNS under Project BioShield.

Risks Related to Market Volatility and the Referendum of the United Kingdom’s Membership of the European Union

The United Kingdom held a referendum on June 23, 2016 in which a majority voted for the United Kingdom's withdrawal from the European Union (referred to as “Brexit”). As a result of this vote, negotiations are expected to commence to determine the terms of the United Kingdom's withdrawal from the European Union as well as its relationship with the European Union going forward, including the terms of trade between the United Kingdom and the European Union. The effects of Brexit have been and are expected to continue to be far-reaching. Brexit and the perceptions as to its impact may adversely affect business activity and economic conditions in Europe and globally and could continue to contribute to instability in global financial and foreign exchange markets. Brexit could also have the effect of disrupting the free movement of goods, services and people between the United Kingdom and the European Union; however, the full effects of Brexit are uncertain and will depend on any agreements the United Kingdom may make to retain access to European Union markets.

In addition, we expect that Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which European Union laws to replicate or replace. If the United Kingdom were to significantly alter its regulations affecting our industry, we could face significant new costs. It may also be time-consuming and expensive for us to alter our internal operations in order to comply with new regulations. Altered regulations could also add time and expense to the process by which our product candidates receive regulatory approval in the United Kingdom and European Union. Similarly, it is unclear at this time what Brexit's impact will have on our intellectual property rights and the process for obtaining, maintaining and defending such rights. It is possible that certain intellectual property rights, such as trademarks, granted by the European Union will cease being enforceable in the United Kingdom absent special arrangements to the contrary, and we are required to refile our trademarks and other intellectual property applications domestically in the United Kingdom.

Lastly, as a result of the Brexit, other European countries may seek to conduct referenda with respect to their continuing membership in the European Union. Given these possibilities and others we may not anticipate, as well as the lack of comparable precedent, the full extent to which our business, results of operations and financial condition could be adversely affected by Brexit is uncertain.

Risks Related to Altimmune's Intellectual Property

It is difficult and costly to protect Altimmune's proprietary rights, and Altimmune may not be able to ensure their protection. If Altimmune's patent position and other intellectual property rights do not adequately protect its product candidates, others could compete against it (including directly), which could materially harm its business, results of operations and financial condition.

Altimmune relies upon a combination of patents, patent applications, trade secret protection and confidentiality agreements to protect the intellectual property related to its product candidates, platform technology and know-how. The patent position of biotechnology companies is generally uncertain, because it involves complex legal and factual considerations. The standards applied by the United States Patent and Trademark Office (“USPTO”) and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in biotechnology patents. In addition, some countries do not grant patent claims directed to methods of treating humans, and in these countries patent protection may not be available at all to

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protect Altimmune's product candidates. The patent applications that Altimmune owns or in-licenses may fail to result in issued patents with claims that cover its product candidates in the United States or in other countries.

The patent prosecution process is expensive and time consuming, and Altimmune's current or future licensors, licensees or collaborators may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Moreover, in some circumstances, Altimmune may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that it licenses from or license to third parties, making it reliant on its licensors, licensees or collaborators. Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of Altimmune's business. If Altimmune's current or future licensors, licensees or collaborators fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be lost or impaired. If Altimmune's licensors, licensees or collaborators are not fully cooperative or disagree with it as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.

If patent applications Altimmune holds or has in-licensed with respect to its product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for its product candidates, it could dissuade companies from collaborating with it. Altimmune and its licensors have filed several patent applications covering aspects of its product candidates. Altimmune cannot offer any assurance about which, if any, patents will issue, the breadth of any such patents or whether any issued patents will be found invalid or unenforceable, or will be successfully challenged by third parties.

Patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued. Altimmune cannot be certain that its licensors were the first to satisfy the requirements necessary to secure patent rights relating to any particular invention. Furthermore, if third parties have filed such patent applications, an interference proceeding in the United States can be initiated by such third party, or by the USPTO itself, to determine who was the first to invent any of the subject matter covered by the patent claims of Altimmune's patent applications.

Even if patents do successfully issue and even if such patents cover Altimmune's product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated. Any successful challenge to Altimmune's patents or patent applications, or to any other patents or patent applications owned by or licensed to it, could deprive it of the rights necessary to prevent competition from third parties, which may impair the commercial success of any product candidate that it may develop. There is no assurance that all potentially relevant prior art relating to Altimmune's patents and patent applications or those of its licensors has been found, and prior art that Altimmune has not identified could be used by a third party to invalidate a patent or prevent a patent from issuing from a pending patent application. Furthermore, even if they are unchallenged, Altimmune's patents and patent applications, or those of its licensors, may not adequately protect its technology, provide exclusivity for its product candidates, prevent others from designing around its patents with similar products, or prevent others from operating in jurisdictions in which it did not pursue patent protection. Any of these outcomes could impair Altimmune's ability to prevent competition from third parties, which may have an adverse impact on its business.

Any loss of, or failure to obtain, patent protection could have a material adverse impact on Altimmune's business. Altimmune may be unable to prevent competitors from entering the market with a product that is similar to or the same as its products.

Altimmune may not be able to protect its intellectual property rights throughout the world.

Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and Altimmune's intellectual property rights in some countries outside the United States may be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, Altimmune may not be able to prevent third parties from practicing its inventions in all countries outside the United States, or from selling or importing products made using its inventions in and into the United States or other jurisdictions. Competitors may use Altimmune's technologies in jurisdictions where it has not obtained patent protection to develop their own products and, further, may

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export otherwise infringing products to territories where it has patent protection, but enforcement rights are not as strong as those in the United States. These products may compete with Altimmune's product candidates and its patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in some foreign jurisdictions. The legal systems of certain countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for Altimmune to stop the infringement of its patents generally. Proceedings to enforce Altimmune's patent rights in foreign jurisdictions could result in substantial costs and divert its efforts and attention from other aspects of its business, could put its patents at risk of being invalidated or interpreted narrowly and its patent applications at risk of not issuing, and could provoke third parties to assert claims against it. Altimmune may not prevail in any lawsuits that it initiates and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, Altimmune's efforts to enforce its intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that it develops or licenses. The earliest any of Altimmune's patents are scheduled to expire is 2018. For more information regarding Altimmune's intellectual property rights, see “Altimmune's Business — Intellectual Property.”

Patent terms may be inadequate to protect Altimmune's competitive position on its products for an adequate amount of time.

Patents have a limited lifespan. In most countries, including the United States, the natural expiration of a patent is 20 years from the date that the application for the patent is filed. In some cases, the term of a U.S. patent is shortened by a terminal disclaimer that reduces its term to that of an earlier-expiring patent. Various extensions of patent term may be available in particular countries; however, in all circumstances the life of a patent, and the protection it affords, has a limited term. If Altimmune encounter delays in obtaining regulatory approvals, the period of time during which it could market a product under patent protection could be reduced. Altimmune expects to seek extensions of patent terms where these are available in any countries where it is prosecuting patents. Such possible extensions include those permitted under the Drug Price Competition and Patent Term Restoration Act of 1984 in the United States, which permits a patent term extension of up to five years to cover an FDA-approved product. The actual length of the extension will depend on the amount of patent term lost while the product was in clinical trials. However, the applicable authorities, including the USPTO and FDA in the United States, and any equivalent regulatory authority in other countries, may not agree with Altimmune's assessment of whether such extensions are available, and may refuse to grant extensions to its patents, or may grant more limited extensions than it requests. If this occurs, Altimmune's competitors may be able to take advantage of its investment in development and clinical trials by referencing its clinical and preclinical data, and then may be able to launch their product earlier than might otherwise be the case.

Altimmune may become involved in lawsuits to protect or enforce its intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe Altimmune's patents or misappropriate or otherwise violate its intellectual property rights. To counter infringement or unauthorized use, litigation may be necessary to enforce or defend Altimmune's intellectual property rights, to protect its trade secrets and/or to determine the validity and scope of its own intellectual property rights or the proprietary rights of others. Such litigation can be expensive and time consuming, which could divert management resources and harm Altimmune's business and financial results. Many of Altimmune's current and potential competitors have the ability to dedicate substantially greater resources to litigate intellectual property rights than its can. Accordingly, despite its efforts, Altimmune may not be able to prevent third parties from infringing upon or misappropriating its intellectual property.

Patent assertion, including initiating a litigation, increases the likelihood that the accused third party will seek to narrow or invalidate Altimmune's asserted patent. The scope and validity of Altimmune's asserted patent may be challenged in a variety of post-grant proceedings before the USPTO and foreign patent offices. In addition, in an infringement proceeding, a court may decide that Altimmune's asserted patent is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that its patents do not cover the technology in question. An adverse result in any litigation proceeding or other legal

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proceeding could therefore put one or more of Altimmune's patents at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of Altimmune's confidential information could be compromised by disclosure during this type of litigation.

Third-party claims of intellectual property infringement or misappropriation may prevent or delay Altimmune's development and commercialization efforts.

Altimmune's commercial success depends in part on its ability to develop, manufacture, market and sell its product candidates, and to use its or its licensors' proprietary technologies without infringing the patents and proprietary rights of third parties. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which Altimmune is developing and may develop its product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that Altimmune's product candidates may be subject to claims of infringement of the patent rights of third parties. Altimmune may not have identified all U.S. and foreign patents or published patent applications that affect its business either by blocking its ability to commercialize its product candidates or by covering similar technologies that affect its market.

Third parties may assert that Altimmune is employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims, for example, to materials, formulations, methods of manufacture, methods of analysis and/or methods for treatment related to the use or manufacture of Altimmune's product candidates. In some cases, Altimmune may have failed to identify such relevant third-party patents or patent applications. For example, patent applications filed before November 29, 2000 and certain patent applications filed after that date that will not be filed outside the United States remain confidential until issued as patents. Except for the preceding exceptions, patent applications in the United States and elsewhere are generally published only after a waiting period of approximately 18 months after the earliest filing. Therefore, patent applications covering Altimmune's platform technology or its product candidates could have been filed by others without its knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover Altimmune's platform technologies or product candidates and/or the use, analysis and/or manufacture of its product candidates.

If any third-party patents are held by a court of competent jurisdiction to cover aspects of Altimmune's materials, formulations, methods of manufacture, methods of analysis and/or methods for treatment, the holders of any such patents may be awarded monetary damages, obtain injunctive or other equitable relief, or both. An award of monetary damages may be substantial and may include treble damages and attorneys' fees for willful infringement. An award of injunctive relief could block Altimmune's ability to develop and commercialize the applicable product candidate until such patent expired or unless it obtains a license. Such licenses may not be available on acceptable terms, if at all. Even if Altimmune were able to obtain a license, the rights may be non-exclusive, which could result in its competitors gaining access to the same intellectual property. Ultimately, Altimmune could be forced to redesign an infringing product, prevented from commercializing a product, or forced to cease some aspect of its business operations, if, as a result of actual or threatened patent infringement claims, Altimmune is unable to enter into licenses on acceptable terms.

Defending against claims of patent infringement or misappropriation of trade secrets could be costly and time consuming, regardless of the outcome. Thus, even if Altimmune were to ultimately prevail, or to settle at an early stage, such litigation could burden it with substantial unanticipated costs. In addition, litigation or threatened litigation could result in significant demands on the time and attention of Altimmune's management team, distracting them from the pursuit of other company business.

Altimmune may face a claim of misappropriation if a third party believes that it inappropriately obtained and used trade secrets of such third party. If Altimmune is found to have misappropriated a third party's trade secrets, it may be prevented from further using such trade secrets, limiting its ability to develop its product candidates, and Altimmune may be required to pay damages.

During the course of any patent or other intellectual property litigation, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors regard these announcements as negative, the perceived value of Altimmune's

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product candidates, platform technology or intellectual property could be diminished. Accordingly, the market price of Altimmune's common stock may decline. In addition, the uncertainties associated with litigation could have an adverse effect on Altimmune's ability to raise the funds necessary to continue its clinical trials, continue its research programs, license necessary technology from third parties or enter into development partnerships that would help Altimmune bring its product candidates to market.

Altimmune may be subject to claims that its employees, independent contractors or consultants have wrongfully used or disclosed alleged trade secrets of their former employers, or its employees may challenge the inventorship of its patents.

As is common in the biotechnology and pharmaceutical industry, Altimmune employs individuals who were previously employed at other biotechnology or pharmaceutical companies, including its competitors or potential competitors. Some of these individuals, including members of Altimmune's senior management, executed proprietary rights, non-disclosure and non-competition agreements, or similar agreements, in connection with such previous employment. Although Altimmune uses reasonable efforts to ensure that its employees, independent contractors and consultants do not use the proprietary information or know-how of others in their work for Altimmune, Altimmune may be subject to claims that it or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such third party.

Altimmune may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing its product candidates. In addition, Altimmune may be subject to claims that former employees, collaborators or other third parties have an interest in its patents or other intellectual property as an inventor or co-inventor. Litigation may be necessary to defend against these claims. If Altimmune fails in defending any such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel. Such intellectual property rights could be awarded to a third party, and Altimmune could be required to obtain a license from such third party to commercialize its technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if Altimmune is successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

Altimmune has in-licensed a portion of its intellectual property, and, if it fails to comply with its obligations under these arrangements, it could lose such intellectual property rights or owe damages to the licensor of such intellectual property.

Altimmune is a party to a number of license agreements that are important to its business, and it may enter into additional license agreements in the future. Certain of Altimmune's in-licensed intellectual property covers, or may cover, RespirVec and certain of its product candidates. See “Altimmune's Business — Intellectual Property — Patent Rights and In-License Agreements” for a description of Altimmune's license agreements.

Altimmune's existing license agreements impose, and Altimmune expects that future license agreements will impose, various diligence, milestone payment, royalty and other obligations on it. If there is any conflict, dispute, disagreement or issue of non-performance between Altimmune and its licensing partners regarding Altimmune's rights or obligations under the license agreements, including any such conflict, dispute or disagreement arising from Altimmune's failure to satisfy payment obligations under any such agreement, Altimmune may owe damages, its licensor may have a right to terminate the affected license, and its ability to utilize the affected intellectual property in its product discovery and development efforts and its ability to enter into collaboration or marketing agreements for an affected product candidate may be adversely affected.

Altimmune may need to license certain intellectual property from third parties, and such licenses may not be available on commercially reasonable terms or at all.

A third party may hold intellectual property, including patent rights, that is important or necessary to the development or commercialization of Altimmune's product candidates. If the patented or proprietary technology of third parties is necessary for Altimmune to commercialize its product candidates, Altimmune would be required to obtain a license from these third parties. Such a license may not be available on commercially reasonable terms or at all, which could materially harm Altimmune's business.

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Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of proprietary information.

In addition to the protection afforded by patents, Altimmune relies on confidentiality agreements to protect trade secrets and proprietary know-how that may not be patentable or that Altimmune may elect not to patent, processes for which patents are difficult to enforce and any other elements of Altimmune's technology and development processes that involve proprietary know-how, information or technology that is not covered by patents. In particular, Altimmune seeks to protect its proprietary technology and processes, in part, by entering into confidentiality agreements with its employees, consultants, outside scientific advisors, contractors and collaborators. These agreements require that all confidential information developed by the individual or made known to the individual by Altimmune during the course of the individual's relationship with Altimmune be kept confidential and not disclosed to third parties. Altimmune also enters into agreements with its employees that provide that any inventions conceived by the individual in the course of rendering services to Altimmune shall be Altimmune's exclusive property. However, Altimmune may not obtain these agreements in all circumstances, and individuals with whom it has these agreements may not comply with their terms. Although Altimmune uses reasonable efforts to protect its know-how, its employees, consultants, contractors or outside scientific advisors might intentionally or inadvertently disclose its know-how or other proprietary information to competitors. In addition, competitors may otherwise gain access to Altimmune's know-how or independently develop substantially equivalent information and techniques.

Enforcing a claim that a third party illegally obtained and is using any of Altimmune's know-how is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States sometimes are less willing than U.S. courts to protect know-how. Misappropriation or unauthorized disclosure of Altimmune's know-how could impair its competitive position and may have a material adverse effect on its business.

If Altimmune trademarks and trade names are not adequately protected, then it may not be able to build name recognition in its markets of interest and its business may be adversely affected.

Altimmune's registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks. Altimmune may not be able to protect its rights to these trademarks and trade names, which it needs to build name recognition among potential partners or customers in its markets of interest. At times, competitors may adopt trade names or trademarks similar to those of Altimmune, thereby impeding Altimmune's ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of Altimmune's registered or unregistered trademarks or trade names. For example, Altimmune has experienced threatened or actual opposition for two trademarks that it was pursuing. Altimmune decided to discontinue its use of one of those trademarks, and the other matter was resolved on favorable terms. Although these matters have been resolved on terms that do not materially harm company, Altimmune may become subject to other trademark challenges in the future. If Altimmune is unable to establish long-term name recognition based on its trademarks and trade names, then it may not be able to compete effectively and its business may be adversely affected.

Risks Related to Commercialization of Altimmune's Product Candidates

Altimmune's future commercial success depends upon attaining significant market acceptance of its product candidates, if approved, among physicians, patients, third-party payers and others in the medical community.

Even if Altimmune obtains marketing approval for its product candidates, or any other product candidates that it may develop or acquire in the future, the product may not gain market acceptance among physicians, third-party payers, patients and others in the medical community. Market acceptance of any approved products depends on a number of other factors, including:

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Market acceptance is critical to Altimmune's ability to generate significant revenue. Any product candidate, if approved and commercialized, may be accepted in only limited capacities or not at all. If any approved products are not accepted by the market to the extent that Altimmune expects, Altimmune may not be able to generate significant revenue and its business would suffer.

Altimmune relies on, and expect to continue to rely on, third parties to manufacture its product candidates and related materials for its clinical trials and preclinical studies, and these third parties may not perform satisfactorily.

Altimmune does not have any manufacturing facilities or personnel and it relies on, and expect to continue to rely on, third-party manufacturers and suppliers to manufacture and supply vaccines for its preclinical studies and clinical trials, and on related materials, such as anthrax, influenza and HBV products. Altimmune relies on a small number of third-party manufacturers and suppliers to manufacture and supply bulk drug substance and fill finished vaccines for its initial clinical trials. This reliance on a small number of third parties increases the risk that Altimmune will not have sufficient quantities of its product candidates or other products needed for its preclinical studies and clinical trials, or such quantities at an acceptable cost or quality, which could delay, prevent or impair its development or commercialization efforts.

Any of these third parties that Altimmune relies upon may terminate their engagement with it at any time. If Altimmune needs to enter into alternative arrangements, it could delay its product development activities. In addition, Altimmune's reliance on these third parties for manufacturing activities will reduce its control over these activities but will not relieve Altimmune of its responsibility to ensure compliance with all required regulations regarding manufacturing.

Reliance on third-party manufacturers entails risks to which Altimmune would not be subject if it manufactured the product candidates itself, including:

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Any of these events could lead to preclinical and clinical trial delays or failure to obtain regulatory approval, or affect Altimmune's ability to successfully commercialize future products. Some of these events could be the basis for FDA or other regulatory authority action, including clinical holds, fines, injunctions, civil penalties, license revocations, recall, seizure, total or partial suspension of production, or criminal penalties.

In addition, Altimmune's product candidates involve technically complex manufacturing processes, and even slight deviations at any point in the production process may lead to production failures, and may cause the production of its products to be disrupted, potentially for extended periods of time. Third-party manufacturers may not be able to comply with applicable cGMP, regulations or similar regulatory requirements outside the United States. Altimmune's failure, or the failure of its third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on it, including clinical holds, fines, injunctions, civil penalties, delays, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of its product candidates.

Altimmune's product candidates and any products that it may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for Altimmune. Any performance failure on the part of Altimmune's existing or future manufacturers could delay clinical development or marketing approval. Altimmune has limited arrangements in place for redundant supply or a second source for bulk drug substance. If Altimmune's current contract manufacturers cannot perform as agreed, it may be required to replace such manufacturers, and it may prove very difficult and time consuming to identify potential alternative manufacturers who could manufacture its product candidates. Accordingly, Altimmune may incur added costs and delays in identifying and qualifying any such replacement.

Altimmune's current and anticipated future dependence upon others for the manufacture of its product candidates or products may adversely affect its future profit margins and its ability to commercialize any products that receive marketing approval on a timely and competitive basis.

If Altimmune is unable to manufacture its products in sufficient quantities, or at sufficient yields, or are unable to obtain regulatory approvals for a manufacturing facility for its products, it may experience delays in product development, clinical trials, regulatory approval and commercial distribution.

Completion of Altimmune's clinical trials and commercialization of its product candidates require access to, or development of, facilities to manufacture its product candidates at sufficient yields and at commercial scale, and this manufacturing involves a complicated process with which it has limited experience. Even if clinical trials are successful, Altimmune still may be unable to commercialize a product due to difficulties in obtaining regulatory approval for its engineering processes or problems in scaling that process to commercial production. Altimmune has no experience manufacturing, or managing third parties in manufacturing, any of its product candidates in the volumes that will be necessary to support large-scale clinical trials or commercial sales. Efforts to establish these capabilities may not meet initial expectations as to scheduling, scale-up, reproducibility, yield, purity, cost, potency or quality.

Altimmune expects to rely on third parties for the manufacture of clinical and, if approved for marketing, commercial quantities of its product candidates. These third-party manufacturers must also receive FDA or other applicable governmental authority approval before they can produce clinical material or commercial products. Altimmune's products may be in competition with other products for access to these facilities and may be subject to delays in manufacture if third parties give other products greater priority. Altimmune may not be able to enter into any necessary third-party manufacturing arrangements on acceptable terms, or on a timely basis. In addition, Altimmune may have to enter into technical transfer agreements and share its know-how with the third-party manufacturers, which can be time consuming and may result in delays.

No known manufacturer has received FDA clearance to manufacture large scale quantities of commercial products with the modified version of adenovirus used in the production of product candidates based on Altimmune's proprietary RespirVec technology. Altimmune or its contract manufacturers therefore will need to develop a scalable manufacturing process for any product candidates that it may develop and commercialize that use its RespirVec technology. Altimmune's contract manufacturing organizations (“CMOs”) may

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encounter technical or scientific issues related to development or manufacturing that Altimmune may be unable to resolve in a timely manner or with available funds. If Altimmune or its manufacturing partners are unable to scale the manufacturing process to produce commercial quantities of its product candidates, or its manufacturing partners do not pass required regulatory pre-approval inspections, its commercialization efforts may be adversely affected.

Altimmune's reliance on contract manufacturers may adversely affect its operations or result in unforeseen delays or other problems beyond its control. Because of contractual restraints and the limited number of third-party manufacturers with the expertise, required regulatory approvals and facilities to manufacture Altimmune's products on a commercial scale, replacement of a manufacturer may be expensive and time consuming and may cause interruptions in the production of its product candidates. A third-party manufacturer may also encounter difficulties in production. These problems may include:

Any delay or interruption in the manufacture of Altimmune's products could have a material adverse effect on its business, financial condition, results of operations and cash flows.

If Altimmune is unable to establish sales, marketing and distribution capabilities, it may not be successful in commercializing its product candidates if and when they are approved.

Altimmune does not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any product for which it obtains marketing approval, and for which it decides to independently commercialize, Altimmune will need to establish a sales and marketing organization.

In the future, Altimmune may build a focused sales and marketing infrastructure to market or co-promote some of its product candidates in the United States and in Europe, if and when they are approved. There are risks involved with Altimmune's establishing its own sales, marketing and distribution capabilities. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which Altimmune recruits a sales force and establishes marketing capabilities is delayed or does not occur for any reason, Altimmune would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and Altimmune's investment would be lost if it cannot retain or reposition its sales and marketing personnel.

Factors that may inhibit Altimmune's efforts to commercialize its products on its own include:

If Altimmune does not establish its own sales, marketing and distribution capabilities and instead enters into arrangements with third parties to perform these services, its product revenues and its profitability, if any, could be lower than if Altimmune were to market, sell and distribute any products that it develops itself. In

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addition, Altimmune may not be successful in entering into arrangements with third parties to sell, market and distribute its product candidates or may be unable to do so on terms that are favorable to it. Altimmune likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market its products effectively. If it does not establish sales, marketing and distribution capabilities successfully, either on its own or in collaboration with third parties, Altimmune will not be successful in commercializing its product candidates.

Altimmune may encounter difficulties in managing its growth and expanding its operations successfully.

As it seeks to advance its product candidates through clinical trials and commercialization, Altimmune will need to expand its development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for it. As Altimmune's operations expand, it expects that it will need to manage additional relationships with various strategic partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management. Altimmune's future financial performance and its ability to commercialize its product candidates and to compete effectively will depend, in part, on its ability to manage any future growth effectively. To that end, Altimmune must be able to manage its development efforts and clinical trials effectively and hire, train and integrate additional management, administrative and, if necessary, sales and marketing personnel. Altimmune may not be able to accomplish these tasks, and its failure to accomplish any of them could prevent it from successfully growing its business.

Altimmune may not be successful in establishing and maintaining strategic partnerships, which could adversely affect its ability to develop and commercialize products.

A key part of Altimmune's strategy is to seek strategic partnerships in the future, including potentially with major biotechnology or pharmaceutical companies for late-stage development and commercialization of its product candidates. Altimmune faces significant competition in seeking appropriate partners for its product candidates, and the negotiation process is time consuming and complex. In order for Altimmune to successfully partner its product candidates, potential partners must view these product candidates as economically valuable in markets they determine to be attractive in light of the terms that it is seeking and other products available for licensing from other companies. Even if Altimmune is successful in its efforts to establish strategic partnerships, the terms that it agrees upon may not be favorable to it, and it may not be able to maintain such strategic partnerships if, for example, development or approval of a product is delayed or sales of an approved product are disappointing. Any delay in entering into strategic partnership agreements related to its product candidates could delay the development and commercialization of Altimmune's product candidates and reduce their competitiveness even if they reach the market.

In addition, any future partnerships Altimmune may enter into pose a number of risks, including that its partners may breach their agreements with Altimmune, and it may not be able to adequately protect its rights under these agreements. Furthermore, prospective partners will likely negotiate for certain rights to control decisions regarding the development and commercialization of its product candidates, if approved, and may not conduct those activities in the same manner as Altimmune would.

If Altimmune fails to establish and maintain strategic partnerships related to its product candidates, it will bear all of the risk and costs related to the development of any such product candidate, and it may need to seek additional financing, hire additional employees and otherwise develop expertise which it does not have and for which it has not budgeted. This could negatively affect the development of any unpartnered product candidate.

Altimmune may acquire other businesses, form joint ventures or make investments in other companies or technologies that could negatively affect its operating results, dilute its stockholders' ownership, increase its debt or cause it to incur significant expense.

As part of its business strategy, Altimmune may pursue acquisitions of assets or licenses of assets, including preclinical, clinical or commercial stage products or product candidates, businesses, strategic alliances, joint ventures and collaborations, to expand its existing technologies and operations. For example, Altimmune acquired ITS in March 2015, and a description of specific risks related to that transaction are discussed below under “— Risks Related to the Acquisition of Altimmune UK.”

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In the future, Altimmune may not be able to find suitable partners or acquisition candidates, and it may not be able to complete such transactions on favorable terms, if at all. If Altimmune makes any acquisitions, it may not be able to integrate these acquisitions successfully into its existing business, and it could assume unknown or contingent liabilities. Any future acquisitions also could result in the incurrence of debt, contingent liabilities or future write-offs of intangible assets or goodwill, any of which could have a negative impact on Altimmune's cash flows, financial condition and results of operations. Integration of an acquired company also may disrupt ongoing operations and require management resources that Altimmune would otherwise focus on developing its existing business. Altimmune may experience losses related to investments in other companies, which could harm its financial condition and results of operations. Altimmune may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and Altimmune may not realize the anticipated benefits of any acquisition, license, strategic alliance or joint venture.

To finance such a transaction Altimmune may choose to issue shares of its common stock as consideration, which would dilute the ownership of its stockholders. If the price of Altimmune's common stock is low or volatile, Altimmune may not be able to acquire other companies or fund a joint venture project using its stock as consideration. Alternatively, it may be necessary for Altimmune to raise additional funds for these activities through public or private financings or through the issuance of debt. Additional funds may not be available on terms that are favorable to Altimmune, or at all, and any debt financing may involve covenants limiting or restricting its ability to take certain actions.

If product liability lawsuits are brought against Altimmune, it may incur substantial liabilities and may be required to limit commercialization of its product candidates.

Altimmune faces an inherent risk of product liability as a result of the clinical testing of its product candidates and will face an even greater risk if it commercializes any products. For example, Altimmune may be sued if any product it develops allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If Altimmune cannot successfully defend itself against product liability claims, it may incur substantial liabilities or be required to limit commercialization of its product candidates.

Altimmune believes its anthrax countermeasures are covered under the general immunity provisions of the U.S. Public Readiness and Emergency Preparedness Act, or Public Readiness Act, but this cannot be assured. Also, there can be no assurance that the Secretary of the Department of Health and Human Services (“HHS”) will make other declarations in the future that cover any of its other product candidates or that the U.S. Congress will not act in the future to reduce coverage under the Public Readiness Act or to repeal it altogether. Additionally, Altimmune is considering applying for liability protection under the U.S. Support Anti-terrorism by Fostering Effective Technologies (SAFETY) Act of 2002 (the “SAFETY Act”) which may limit the claims and damages potentially faced by companies who provide certain “qualified” anti-terrorism products. However, Altimmune cannot be certain that it will be able to obtain or maintain coverage under the SAFETY Act.

Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

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Failure to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products Altimmune develops. Altimmune currently carries liability insurance covering residual liability related to previously completed clinical trials in the amount of $5.0 million in the U.S., product liability insurance covering its clinical trials in the UK in the amount of €5.0 million in the aggregate, clinical trial liability insurance covering its clinical trials in South Korea in the amount of $1.0 million, and a global master insurance policy in the amount of $1.0 million. Although Altimmune maintains product liability insurance, any claim that may be brought against it could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by its insurance or that is in excess of the limits of its insurance coverage. Altimmune's insurance policies also have various exclusions, and it may be subject to a product liability claim for which it has no coverage. Altimmune will have to pay any amounts awarded by a court or negotiated in a settlement that exceed its coverage limitations or that are not covered by its insurance, and it may not have, or be able to obtain, sufficient capital to pay such amounts.

A breakdown in Altimmune's information technology systems could result in a significant disruption to its business.

Altimmune's operations and those of its business partners, such as CROs and others that manage sensitive data, are highly dependent on information technology systems, including Internet-based systems, which may be vulnerable to breakdown, wrongful intrusions, data breaches and malicious attack. Information security risks have generally increased in recent years. Altimmune's systems, and those of its third-party providers, are potentially vulnerable to data security breaches or cyberattack, whether by employees or others, which may expose sensitive data to unauthorized persons. A data security breach could lead to the loss of trade secrets or other intellectual property, the value of which may be contingent upon maintaining its confidentiality, or could lead to the public exposure of personal information (including sensitive personal medical information) of clinical trial participants, Altimmune's employees and others, or adversely impact the conduct of scientific research and clinical trials, including the submission of research results to support marketing authorizations. This could require Altimmune to expend significant efforts and resources or incur significant expense to eliminate these problems and address related security concerns. In addition, procedures and safeguards must continually evolve to meet new data security challenges, and enhancing protections, and conducting investigations and remediation, may impose additional costs on Altimmune. If Altimmune were to suffer a breakdown in its systems, storage, distribution or tracing, it could experience significant disruptions affecting its business, reputational harm or claims against it by private parties and/or governmental agencies.

Risks Related to Altimmune's Acquisition of Altimmune UK

If Altimmune is unable to successfully integrate Altimmune UK into its business, its business, financial condition and results of operations may be negatively impacted.

Altimmune acquired ITS on March 10, 2015 and subsequently renamed it Altimmune UK Limited. By acquiring Altimmune UK, Altimmune gained access to the Densigen technology and product candidates based on the Densigen platform, including HepTcell and Oncosyn. Altimmune is in the process of integrating Altimmune UK into its existing business. Successful integration will depend on its ability to effect any required changes in operations or personnel which may entail unforeseen liabilities. The integration of Altimmune UK may expose Altimmune to certain risks, including difficulty in integrating Altimmune UK in a cost-effective manner, including the establishment of effective management information and financial control systems; unforeseen legal, regulatory, contractual, employment or other issues arising out of the combination; combining corporate cultures; inability to maintain employee morale and retain key employees; potential disruptions to Altimmune's ongoing business caused by its senior management's focus on integrating Altimmune UK; and performance of the combined assets not meeting its expectations or plans. A failure to properly integrate Altimmune UK could have a corresponding material adverse effect on Altimmune's business, results of operations, financial condition or prospects.

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Expanding Altimmune's operations internationally adds complexity to its operations and poses additional risks to its business.

Altimmune historically has been engaged in business activities principally in the United States. Altimmune UK, together with its subsidiary, Altimmune France, marks Altimmune's first significant direct entry into a foreign market (other than its joint ventures). Altimmune's business or financial performance may be adversely affected due to the risks of operating internationally, including but not limited to economic and political instability, failure to comply with foreign laws and regulations and adverse changes in the health care policies of the United Kingdom and European Union, adverse changes in law and regulations affecting the operations of Altimmune UK and Altimmune France going forward and difficulties and costs of staffing and managing Altimmune's new operations in the United Kingdom and France. If any of these events were to materialize, they could lead to disruption of Altimmune's business, significant expenditures and/or damages to its reputation, which could have a material adverse effect on its results of operations, financial condition or prospects.

Altimmune's acquisition of Altimmune UK may expose it to unknown or contingent liabilities for which it will not be indemnified.

Altimmune's acquisition of Altimmune UK was effected through a share exchange agreement, pursuant to which it acquired all the outstanding capital shares of ITS. The assets that Altimmune acquired as a result of this acquisition may have unknown or contingent liabilities, including, but not limited to, liabilities for uncertain tax positions, for failure to comply with health care laws and regulations and for unresolved litigation or regulatory reviews. Therefore, Altimmune may incur material liabilities for the past activities of ITS and its facilities. Such liabilities and related legal or other costs and/or resulting damage to a facility's reputation could negatively impact Altimmune's business, financial condition or results of operations.

Foreign currency exchange rate fluctuations could materially impact Altimmune's consolidated financial position and results of operations.

As a result of the expansion of Altimmune's operations to the United Kingdom and France through its acquisition of Altimmune UK, a portion of its expenses and revenues are derived from operations in the United Kingdom and European Union, principally with respect to salaries and related personnel expenses associated with its research and development operations. Altimmune translates financial results denominated in foreign currency, primarily British pounds and Euros, into U.S. dollars for its consolidated financial statements. During periods of a strengthening U.S. dollar, Altimmune reported revenues and net income could be reduced because foreign currencies may translate into fewer U.S. dollars. To date, Altimmune has not engaged in any hedging strategies, and any such strategies related to transaction exposures, such as forward contracts, options and foreign exchange swaps, that Altimmune implements to mitigate this risk may not eliminate its exposure to foreign exchange fluctuations.

In all jurisdictions in which Altimmune operates, it is also subject to laws and regulations that govern foreign investment, foreign trade and currency exchange transactions. These laws and regulations may limit Altimmune's ability to repatriate cash as dividends or otherwise to the United States and may limit its ability to convert foreign currency cash flows into U.S. dollars.

Altimmune is subject to taxation in certain foreign jurisdictions due to the ITS acquisition. Any adverse development in the tax laws of such jurisdictions or any disagreement with its tax positions could have a material adverse effect on its business, financial condition or results of operations. In addition, Altimmune's effective tax rate could change materially as a result of certain changes in its mix of U.S. and foreign earnings and other factors, including changes in tax laws.

Altimmune is subject to taxation in, and to the tax laws and regulations of, certain foreign jurisdictions as a result of the ITS acquisition. Adverse developments in these tax laws or regulations, or any change in position regarding the application, administration or interpretation thereof, in any applicable jurisdiction, could have a material adverse effect on Altimmune's business, financial condition or results of operations. In addition, the tax authorities in any applicable jurisdiction may disagree with the tax treatment or characterization of any of Altimmune's transactions, which, if successfully challenged by such tax authorities,

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could have a material adverse effect on its business, financial condition or results of operations. Certain changes in the mix of Altimmune's earnings between jurisdictions and assumptions used in the calculation of income taxes, among other factors, could have a material adverse effect on Altimmune's overall effective tax rate. In addition, legislative proposals to change the U.S. taxation of foreign earnings could also increase Altimmune's effective tax rate.

Risks Related to Altimmune's BARDA Contract and Other Government Programs

Without the BARDA anthrax contract award, Altimmune would only be able to move forward with the NasoShield program at its own risk and without BARDA reimbursement, and may therefore suspend or terminate it.

In recent financial periods, a significant portion of Altimmune's revenues have been derived from its BARDA contract. For the years ended December 31, 2014 and 2015, BARDA funding for the development of NasoShield accounted for approximately 98% and 86% of Altimmune's total consolidated revenue and grants and contracts, respectively. There are significant uncertainties and risks associated with Altimmune's BARDA contract for its NasoShield anthrax vaccine program. Although in July 2016 Altimmune received a new BARDA contract that will fund its NasoShield anthrax vaccine program for the next five years, the majority of the funds will be received during the final three years of the contract and are dependent on achieving positive clinical results during the initial two year period.

Altimmune's BARDA contracts are cost-plus-fixed-fee contracts that only reimburse certain specified activities.

Altimmune's BARDA contracts are cost-plus-fixed-fee contracts that only reimburse certain specified activities related to its anthrax vaccine program that have been previously authorized by BARDA. There is no guarantee that additional activities will not be needed and, if so, that BARDA will reimburse Altimmune for these activities. There are also significant requirements associated with operating as a federal government contractor, which include having appropriate accounting, project tracking and earned-value management systems implemented and operational, and Altimmune may not be able to consistently meet these requirements. Performance under the BARDA contracts requires that Altimmune comply with appropriate regulations and operational mandates, which require it to engage internal and external expertise for compliance. Altimmune's ability to be regularly and fully reimbursed for its activities depends and will depend on its ability to comply and demonstrate compliance with such requirements. In the past, Altimmune has experienced delays in reimbursements under a BARDA contract on account of compliance issues, which it has had to dedicate substantial time and resources to remedy, including through modifications to its statement of work related to the program. In addition, under certain circumstances, BARDA may advise Altimmune to delay certain activities and invest additional time and resources before proceeding. If Altimmune follows such BARDA advice, overall program delays and costs associated with additional resources for which it had not planned may result. The costs associated with following such advice may or may not be reimbursed by BARDA under its contract. Altimmune may decide not to follow the advice provided by BARDA and instead pursue activities that it believes are in the best interest of its anthrax vaccine program and its business as a whole, even if BARDA would not reimburse Altimmune under its contract.

Most of Altimmune's immediately foreseeable future revenues are contingent upon grants, contracts and loans from the U.S. and other governments, non-profit entities and academic institutions, and it may not achieve sufficient revenues from these sources either to maintain operations or eventually attain profitability.

Substantially all of Altimmune's revenues to date have been derived from U.S. and European government grants, contracts and loans (such as its current BARDA contract), and from time to time, it may apply for additional contracts, grants or loans from government agencies, non-profit entities and academic institutions. Such contracts, grants or loans can be highly attractive, because they provide additional capital to fund the ongoing development of Altimmune's technologies and product candidates without diluting its stockholders. However, there is often significant competition for these contracts, grants and loans, and the process of obtaining government and other contracts, grants and loans is lengthy and uncertain. Entities offering contracts, grants or loans may have requirements to apply for or to otherwise be eligible to receive certain

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contracts, grants or loans that Altimmune's competitors may be able to satisfy that it cannot. In addition, such entities may make arbitrary decisions as to whether to offer contracts or make grants or loans, to whom the contracts, grants or loans will be awarded and the size of the contracts, grants or loans to each awardee. Even if Altimmune is able to satisfy the award requirements, there is no guarantee that it will be a successful awardee. Therefore, Altimmune may not be able to win any contracts, grants or loans in a timely manner, if at all, and there can be no assurance that existing government or other contracts, grants or loans will be renewed or that Altimmune can enter into new contracts or receive new grants or loans.

With respect to the BARDA funding Altimmune receives for its anthrax vaccine product candidate, if the U.S. government makes significant contract awards to its competitors, rather than to Altimmune, Altimmune's business will be harmed and it is unlikely that Altimmune would ultimately be able to supply that particular treatment or product either in the United States or to foreign governments or other third parties. Further, changes in government budgets and agendas, funding strategies, cost overruns in Altimmune's programs, or advances by its competitors, may result in changes in the timing of funding for, a decreased and de-prioritized emphasis on, or termination of, government contracts that support the development and/or procurement of the biodefense product Altimmune is developing. For example, the outbreak of Ebola in 2014 changed the near-term focus and priorities of BARDA to ensure sufficient progress was being made on a solution for that disease. This resulted in a delay of funding to some non-Ebola programs until Congress appropriated additional funds to BARDA specific for this purpose.

U.S. government funding is also subject to Congressional appropriations generally made on an annual basis even for multi-year contracts. More generally, due to the ongoing economic and political uncertainty, the U.S. government may reduce or delay spending in the biodefense field or eliminate funding of certain programs altogether, which could decrease the likelihood of future government contract awards or that the government would procure products from Altimmune. Future funding levels for BARDA for the advanced development and procurement of medical countermeasures are uncertain, and may be subject to budget cuts and/or government shutdowns as the U.S. Congress and the President look to reduce the U.S. budget deficit. Potential reductions in funding could severely limit Altimmune's ability to maintain, renew or enter into new contracts and therefore materially adversely impact its business. A government shutdown could result in a suspension or delayed funding, which may materially adversely affect its ability to continue its anthrax program.

Further, the 21 ^st Century Cures Act, or Cures Act, was signed into law on December 13, 2016 and, among other things, includes a provision requiring timely and accurate recommended utilization guidelines for qualified Medical Countermeasures, or MCMs, including for products in the Strategic National Stockpile. The Cures Act requires HHS to report to the appropriate committees of Congress when funding in the BioShield Special Reserve Fund, or SRF, available to procurement of MCMs falls below $1.5 billion and how the amount of funding will impact identified MCM priorities. The Cures Act ensures coordinated and efficient processes for executing MCM development and procurement programs by clarifying that the Director of BARDA carry out the programs funded by the SRF, as well as the procurement contracts, grants, and cooperative agreements under BARDA.

U.S. government agencies have special contracting requirements that give them the ability to unilaterally control contracts such as Altimmune's BARDA contract.

U.S. government contracts, such as Altimmune's BARDA contract, typically contain unilateral termination provisions for the government and are subject to audit and modification by the government at its sole discretion, which will subject Altimmune to additional risks during the term of such contracts. These risks include the ability of the U.S. government unilaterally to:

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The U.S. government will be able to terminate any of its contracts with Altimmune, including its BARDA contract, either for its convenience or if it defaults by failing to perform in accordance with the contract schedule and terms. Termination-for-convenience provisions generally enable Altimmune to recover only its costs incurred or committed, settlement expenses, and profit on the work completed prior to termination. Termination-for-default provisions do not permit these recoveries and would make Altimmune liable for excess costs incurred by the U.S. government in procuring undelivered items from another source.

The U.S. government's determination to award any contracts may be challenged by an interested party, such as another bidder, at the U.S. Government Accountability Office (“GAO”) or in federal court. If such a challenge is successful, a contract award may be re-evaluated and terminated.

The laws and regulations governing the procurement of goods and services by the U.S. government provide procedures by which other bidders and other interested parties may challenge the award of a government contract. Such challenges or protests could be filed with respect to any U.S. government contract awarded to Altimmune, including its BARDA contract, even if there are not any valid legal grounds on which to base the protest. If any such protests are filed, the government agency may decide, and in certain circumstances will be statutorily required, to suspend Altimmune's performance under the contract while such protests are being considered by the GAO or the applicable federal court, thus potentially delaying delivery of goods and services and payment. In addition, Altimmune could be forced to expend considerable funds to defend any potential award. If a protest is successful, the government may be ordered to terminate Altimmune's contract and re-evaluate bids. The government could even be directed to award a potential contract to one of the other bidders.

Altimmune's business is subject to audit by the U.S. government, and may be subject to audit by foreign governments. A negative audit could adversely affect its business.

Altimmune's business is subject to audit by the U.S. government in part because of the funding it receives for its anthrax vaccine program under its BARDA contract. U.S. government agencies such as the Defense Contract Audit Agency (“DCAA”) routinely audit and investigate government contractors. These agencies review a contractor's performance under its contracts, cost structure and compliance with applicable laws, regulations and standards.

The DCAA also reviews the adequacy of, and a contractor's compliance with, its internal control systems and policies, including the contractor's purchasing, property, estimating, compensation and management information systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed, while such costs already reimbursed must be refunded. If an audit uncovers improper or illegal activities, it may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from conducting business with the U.S. government. In addition, could suffer serious reputational harm if allegations of impropriety were made against it.

In the future, Altimmune may also be subject to audits by foreign governments, as Altimmune from time to time receives funding from non-U.S. government sources.

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Laws and regulations affecting government contracts make it more costly and difficult for Altimmune to successfully conduct its business.

Altimmune's business plan includes the continued development of its anthrax vaccine candidate, NasoShield, pursuant to its BARDA contract in addition to its applying for additional contracts, grants or loans from government agencies, non-profit entities and academic institutions. Altimmune must comply with numerous laws and regulations relating to the formation, administration and performance of government contracts, which can make it more difficult for Altimmune to retain its rights under these contracts. These laws and regulations affect how Altimmune conducts business with government agencies. Among the most significant government contracting regulations that affect Altimmune's business are:

Foreign governments typically also have laws and regulations governing contracts with their respective agencies. These foreign laws and regulations affect how Altimmune and its customers conduct business and, in some instances, impose added costs on its business. Any changes in applicable laws and regulations could restrict Altimmune's ability to maintain its existing contracts and obtain new contracts, which could limit its ability to conduct its business and materially adversely affect its revenues and results of operations.

Risks Related to Reimbursement and Government Regulation

Coverage and reimbursement may be limited or unavailable in certain market segments for its product candidates, if they are approved, which could make it difficult for Altimmune to sell its products profitably.

Market acceptance and sales of any approved products will depend significantly on the availability of adequate coverage and reimbursement from third-party payers and may be affected by existing and future health care reform measures. Third-party payers, such as government health care programs, and private health insurers and health plans, decide which drugs they will provide coverage for and establish reimbursement levels. Coverage and reimbursement decisions by a third-party payer may depend upon a number of factors, including the third-party payer's determination that use of a product is:

Third-party payers, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling health care costs. Coverage and reimbursement can vary significantly from payer to payer. As a result, obtaining coverage and reimbursement approval for any approved product from each government and other third-party payer may require Altimmune to provide supporting scientific, clinical and cost-effectiveness data for the use of such products to each payer separately, with no assurance that it will be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. Altimmune cannot be sure that coverage or adequate reimbursement will be available for any of its product candidates, and it cannot be sure that coverage determinations or reimbursement amounts will not reduce the demand for, or the price of, its products. If reimbursement is not available or is available

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only to limited levels, Altimmune may not be able to commercialize certain of its products, even if they are approved by the FDA or other regulatory authorities. In addition, in the United States third-party payers are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement of new drugs. As a result, significant uncertainty exists as to whether and how much third-party payers will reimburse patients for their use of newly approved drugs, which in turn will put pressure on the pricing of drugs.

Price controls may be imposed, which may adversely affect Altimmune's future profitability.

In international markets, reimbursement and health care payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In some countries, particularly member states of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on coverage, prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after coverage and reimbursement has been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce revenues. In some countries, additional clinical research may be required to enable comparison of the cost-effectiveness of Altimmune's product candidates, if they are approved, to other available vaccines in order to obtain or maintain coverage, reimbursement or pricing approval. Publication of discounts by third-party payers or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. In the United States, concerns about drug pricing have been expressed by members of Congress and President Trump. There can be no assurance that Altimmune's product candidates, if approved, will be considered cost-effective by third-party payers, that an adequate level of reimbursement will be available or that the third-party payers' reimbursement policies will not adversely affect Altimmune's ability to sell its products profitably. If reimbursement of Altimmune's products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, Altimmune's business could be adversely affected.

Altimmune is subject to multiple and substantial federal and state health care and other laws, and the complexity of its regulatory compliance obligations is likely to increase in the event its product candidates are commercialized.

Altimmune's business operations and activities may be directly or indirectly subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act. See “Altimmune's Business — United States Government Regulation” elsewhere in this proxy statement/prospectus/consent solicitation. If Altimmune obtains FDA approval for any of its product candidates and begin commercializing those products in the United States, its potential exposure under such laws will increase significantly, and its costs associated with compliance with such laws are also likely to increase. These laws may impact, among other things, its current activities with principal investigators and research subjects, as well as proposed and future sales, marketing and education programs.

In addition, Altimmune may be subject to patient privacy regulation by the federal government and state governments in which it conducts its business. In addition to the measures discussed in “Altimmune's Business —  United States Government Regulation” such as the Anti-Kickback Statute, False Claims Act and Physician Payments Sunshine Act, the laws that may affect Altimmune's ability to operate include, but are not limited to:

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In addition, the regulatory approval and commercialization of any of Altimmune's product candidates outside the United States will also subject Altimmune to foreign equivalents of the health care laws mentioned above, among other foreign laws, as well as compliance with the codes of practice of certain associations within such countries (for example, the Association of the British Pharmaceutical Industry (ABPI) in the United Kingdom).

Efforts to ensure that Altimmune's business arrangements will comply with applicable health care laws and codes of practice may involve substantial costs. Altimmune has adopted policies and practices that are designed to help ensure that Altimmune, its employees, officers, agents, intermediaries and other third parties comply with applicable laws, but it is not always possible to assure compliance with applicable requirements, and the precautions Altimmune takes to achieve compliance may not be effective in controlling unknown or unmanaged risks or losses or in protecting it from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. It is possible that governmental and enforcement authorities will conclude that Altimmune's business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other health care laws and regulations. If Altimmune's operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to it, it may be subject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal health care programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of Altimmune's operations.

The impact of recent health care reform legislation and other changes in the health care industry and in health care spending on Altimmune is currently unknown, and may adversely affect its business model.

Altimmune’s financial prospects could be affected by changes in health care spending and policy in the United States and abroad. Altimmune operates in a highly regulated industry and new laws or judicial

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decisions, or new interpretations of existing laws or decisions, related to health care availability, the method of delivery or payment for health care products and services could negatively impact its business, operations and financial condition.

For example, in the United States there is significant interest in promoting health care reform, as evidenced by the enactment in the United States of the Patient Protection and Affordable Care Act and the companion Health Care and Education Reconciliation Act in 2010, or the Health Care Reform Law. The Health Care Reform Law increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage.

The Health Care Reform Law has also imposed substantial changes to the U.S. system for paying for health care, including programs to extend medical benefits to millions of individuals who have lacked insurance coverage. Generally, implementation of the Health Care Reform Law has thus far included significant cost-saving, revenue and payment reduction measures with respect to, for example, several government health care programs that might cover Altimmune’s products in the United States, should they be commercialized, including Medicaid and Medicare. Additional downward pricing pressure associated with the Health Care Reform Law includes that the Health Care Reform Law established and provided significant funding for a Patient-Centered Outcomes Research Institute to coordinate and fund Comparative Effectiveness Research, as those terms are defined in the Health Care Reform Law. While the stated intent of Comparative Effectiveness Research is to develop information to guide providers to the most efficacious therapies, outcomes of Comparative Effectiveness Research could influence the reimbursement or coverage for therapies that are determined to be less cost effective than others. Should any of Altimmune’s products be approved for sale, but then determined to be less cost effective than alternative therapies, the levels of reimbursement for these products, or the willingness to reimburse at all, could be impacted, which could materially impact its financial results.

Following President Trump's inauguration on January 20, 2017, he signed an Executive Order commanding federal agencies to try to waive or delay requirements of the Healthcare Reform Law that impose economic or regulatory burdens on states, families, the health-care industry and others. The Executive Order also declares that the administration will seek the “prompt repeal'' of the law and that the government should prepare to “afford the states more flexibility and control to create a more free and open healthcare market.” The uncertain status of the Health Care Reform Law limits Altimmune’s ability to forecast changes that may occur in the future, which may have a negative impact on its business.

Another provision of the Health Care Reform Law, generally referred to as the Physician Payment Sunshine Act or Open Payments Program, has imposed new reporting and disclosure requirements for pharmaceutical and medical device manufacturers and distributions with certain FDA-approved products, such as approved vaccines, with regard to payments or other transfers of value made to certain U.S. health care practitioners, such as physicians and academic medical centers, and with regard to certain ownership interests held by physicians in reporting entities. The Centers for Medicare & Medicaid Services, or CMS, publishes information from these reports on a publicly available website, including amounts transferred and the physician and teaching hospital identities.

Under the Physician Payment Sunshine Act, Altimmune is required to collect and report detailed information regarding certain financial relationships it has with physicians and teaching hospitals. Altimmune’s compliance with these rules may also impose additional costs. It is difficult to predict how the new requirements, which also preempt similar state law reporting requirements, may impact Altimmune’s relationships between pharmaceutical companies and physicians or teaching hospitals.

It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing health care legislation. Altimmune cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified. The continuing efforts of the government, insurance companies, managed care organizations and other payers of health care services to contain or reduce costs of health care may adversely affect:

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Certain business practices associated with the commercialization of pharmaceutical products are subject to scrutiny by regulatory authorities, as well as to lawsuits brought by private citizens under federal and state laws. Failure to comply with applicable law or an adverse decision in lawsuits may result in adverse consequences to Altimmune.

The laws that would govern Altimmune’s conduct in the United States upon the commercialization of its product candidates are enforceable by criminal, civil and administrative penalties. Violations of laws such as the Federal Food, Drug and Cosmetic Act, or the FDCA, the Federal False Claims Act, or the FCA, the Public Health Service Act, or PHS Act, or provisions of the U.S. Social Security Act known as the “Anti-Kickback Law” and the “Civil Monetary Penalties Law,” or any regulations promulgated under their authority, may result in jail sentences, fines or exclusion from federal and state programs, as may be determined by Medicare, Medicaid, the Department of Defense, other regulatory authorities and the courts. There can be no assurance that Altimmune’s activities will not come under the scrutiny of regulators and other government authorities or that its practices will not be found to violate applicable laws, rules and regulations or prompt lawsuits by private citizen “relators” under federal or state false claims laws.

Some of these laws, referred to as “false claims laws,” prohibit the submission or causing the submission of false or fraudulent claims for reimbursement to federal, state and other health care payers and programs. Other laws, referred to as “anti-kickback laws,” prohibit soliciting, offering, receiving or paying remuneration in order to induce the referral of a atient or ordering, purchasing, leasing or arranging for, or recommending ordering, purchasing or leasing of, items or services that are paid for by federal, state and other health care payers and programs. For example, the federal Anti-Kickback Law prohibits companies such as Altimmune from directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or orders for services or items covered by a government health care program. Many states have enacted similar laws. Courts have interpreted this law very broadly, including by holding that a violation has occurred if even one purpose of the remuneration is to generate referrals, even if there are other lawful purposes. There are statutory and regulatory exceptions, or safe harbors, that outline arrangements that are deemed lawful. However, the fact that an arrangement does not fall within a safe harbor does not necessarily render the conduct illegal under the Anti-Kickback Law. In sum, even common business arrangements, such as discounted terms and volume incentives for customers in a position to recommend or choose drugs for patients, such as physicians and hospitals, can result in substantial legal penalties, including, among others, exclusion from Medicare and Medicaid programs, and arrangements with referral sources must be structured with care to comply with applicable requirements. Also, certain business practices, such as payment of consulting fees to health care providers, sponsorship of educational or research grants, charitable donations, interactions with health care providers that prescribe products for uses not approved by the FDA and financial support for continuing medical education programs, must be conducted within narrowly prescribed and controlled limits to avoid the possibility of wrongfully influencing health care providers to prescribe or purchase particular products or as a reward for past prescribing. Violations of the Anti-Kickback Law may be punished by civil and criminal penalties or exclusion from participation in federal health care programs, including Medicare and Medicaid.

The FCA is violated by any entity that “presents or causes to be presented” knowingly false claims for payment to the federal government. In addition, the Health Care Reform Law amended the FCA to create a cause of action against any person who knowingly makes a false statement material to an obligation to pay money to the government or knowingly conceals or improperly decreases an obligation to pay or transmit money or property to the government. For the purposes of these recent amendments, an “obligation” includes an identified overpayment, which is defined broadly to include “any funds that a person receives or retains under Medicare and Medicaid to which the person, after applicable reconciliation, is not entitled…”

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The FCA is commonly used to sue those who submit allegedly false Medicare or Medicaid claims, as well as those who induce or assist others to submit a false claim. “False claims” can result not only from non-compliance with the express requirements of applicable governmental reimbursement programs, such as Medicare or Medicaid, but also from non-compliance with other laws, such as the Anti-Kickback Law, FDA laws on off-label promotion, or laws that require quality care in service delivery. The fraud and abuse regulations have been subject to varying interpretations, as well as heightened enforcement activity over the past few years. Significant enforcement activity has been the result of actions brought by relators, who file complaints in the name of the United States (and if applicable, particular states) under federal and state False Claims Act statutes. The qui tam and whistleblower provisions of the FCA allow private individuals to bring actions on behalf of the government alleging that the government was defrauded, with tremendous potential financial gain (up to 30% of the government’s recovery plus legal fees) to private citizens who prevail. Also, violations of the FCA can result in treble damages and civil penalties ranging from $10,781 to $21,563 per claim. Most states have adopted similar state false claims laws, and these state laws have their own penalties which may be in addition to federal FCA penalties.

The bringing of any FCA action, even if unsuccessful, could require Altimmune to devote resources to investigate and defend the action, as well as result in reputational harm. Failure to comply with the fraud and abuse laws could result in significant civil and criminal penalties and costs, including the loss of licenses and the ability to participate in federal and state health care programs, and could have a material adverse effect on Altimmune’s business. In addition, many of these laws are vague or indefinite and have not been interpreted by the courts, and have been subject to frequent modification and varied interpretation by prosecutorial and regulatory authorities, increasing the risk of noncompliance. Antimmune cannot predict whether changes in applicable law, or interpretation of laws, or changes in its services or marketing practices in response to changes in applicable law or interpretation of laws could have a material adverse effect on its business.

The FDA and comparable foreign regulatory authorities, in addition to prohibiting the promotion of the safety or effectiveness of product candidates not yet approved for commercialization, an act known as pre-approval promotion, also generally restrict companies from promoting approved products for indications other than those indications for which a product is approved, which is also referred to as off-label use. This means, for example, that Altimmune may not make claims about the use of its products, should they be approved for sale, outside of their approved indications, and Altimmune may not proactively discuss or provide information regarding any of their off-label uses subject to very specific and limited exceptions. In the United States, pharmaceutical companies have, to a limited extent, been recognized by the FDA as permitted to disseminate to physicians certain truthful and accurate information regarding unapproved uses of approved products, or results of studies involving investigational products.

If Altimmune or its business partners fail to comply with applicable laws and regulations governing off-label uses of its product candidates, if approved, then Altimmune could be subject to administrative or judicially imposed sanctions, including, but not limited to: (i) enforcement proceedings by regulatory agencies; (ii) reduced demand for its products; and (iii) civil or criminal sanctions. Furthermore, actions under the FCA have recently been brought against companies for allegedly promoting off-label uses of drugs, because such promotion induces the use and subsequent claims for reimbursement under Medicare and other federal programs. Similar actions for off-label promotion have been initiated by several states for Medicaid fraud. The Health Care Reform Law significantly strengthened provisions of the FCA, Medicare and Medicaid Anti-Kickback provisions, and other health care fraud provisions, leading to the possibility of greatly increased qui tam suits by relators for perceived violations. Violations or allegations of violations of the foregoing restrictions could materially and adversely affect Altimmune’s business.

If Altimmune’s product candidates are commercialized, then it would also be required to report detailed and complex pricing information, net of included discounts, rebates and other concessions, to CMS for the purpose of calculating national reimbursement levels, certain federal prices and certain federal and state rebate obligations, and it would need to develop the expertise, as well as the systems for collecting and reporting this data accurately to CMS and have instituted a compliance program to assure that the information collected is complete in all respects. Companies that fail to accurately report this kind of pricing information to the U.S. government could be subject to fines and other sanctions (including potential False Claims Act liability) that could adversely affect their business.

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Altimmune must comply with data privacy and security laws and regulations, and failure to comply with these laws and regulations could expose it to significant liabilities.

Altimmune must operate in compliance with various data privacy and security regulations in the United States by both the federal government and the states in which Altimmune conducts its business, as well as in other jurisdictions outside of the United States, such as the United Kingdom, where it conducts clinical trials. For example, the federal law, HIPAA, as amended by the Health Information Technology Clinical Health Act, or HITECH, and its implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information, such as information that identifies individuals who participate in Altimmune’s clinical trials as research subjects. HIPAA requires, among other things, the implementation of various recordkeeping, operational, notice and other practices intended to safeguard protected health information, limit its use to allowed purposes, and notify individuals in the event of privacy and security breaches. Failure to comply with these laws and regulations can result in substantial penalties and other liabilities. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same requirements, thus complicating compliance efforts.

In the United Kingdom, the collection and use of “personal data” is primarily governed by the Data Protection Act 1998, or DPA, which implemented the EU Directive (95/46/EEC) on data protection. Breach of the UK data protection laws can result in criminal as well as civil liability. The DPA applies to the “processing” of personal data, or individually identifiable data relating to living individuals. All obligations under the DPA fall on the “data controller” who determines the purposes for which and the manner in which any personal data is, or is to be, processed. A person may be a data controller even if the information is held by a third party. If Altimmune is the data controllers for any personal data, including, for example, with respect to clinical trials carried out in the United Kingdom, it will need to comply with the DPA to ensure compliance by any third party who holds any relevant personal data.

Altimmune is subject to extensive government regulatory compliance and ethics oversight, and it will need to develop more extensive compliance and ethics policies in the future.

Altimmune’s business is subject to extensive government regulation and ethics oversight, which will become more complex and extensive if it succeeds in commercializing products. Altimmune has enacted various compliance policies and procedures that govern its business practices as appropriate for a company in its stage of development. These policies and procedures are implemented through education, training and monitoring of Altimmune’s employees, distributors and suppliers. However, Altimmune’s adoption and enforcement of these various policies and procedures does not ensure that it will avoid investigation or the imposition of penalties by applicable government agencies.

In addition, to enhance compliance with applicable health care laws and mitigate potential liability in the event of non-compliance, regulatory authorities, such as the Office of the Inspector General, or OIG, of the HHS have recommended the adoption and implementation of a comprehensive health care compliance program that generally contains the elements of an effective compliance and ethics program described in Section 8B2.1 of the U.S. Sentencing Commission Guidelines Manual. Increasing numbers of U.S.-based pharmaceutical companies have such programs. Although Altimmune believes its existing compliance policies and procedures are adequate for its current operations, these policies and procedures would not be considered a comprehensive health care compliance program consistent with the HHS OIG’s recommendations. Depending upon the nature of its future operations, Altimmune anticipates developing a more extensive compliance program in the future.

Altimmune’s employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

Altimmune is exposed to the risk of fraudulent or other illegal activity by its employees, independent contractors, principal investigators, consultants, commercial partners and vendors. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to comply with the laws of the FDA and similar foreign regulatory bodies; fails to comply with manufacturing standards Altimmune has established, or

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with federal, state and foreign health care fraud and abuse laws and regulations; fails to report financial information or data accurately, including to Altimmune’s regulators, such as the FDA and similar foreign regulatory bodies; or fails to disclose unauthorized activities to Altimmune. In particular, the promotion, sale and marketing of health care items and services, as well as certain business arrangements in the health care industry are subject to extensive laws and regulations intended to prevent misconduct, including fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and, structuring and commission(s), certain customer incentive programs and other business arrangements. See “— Risks Related to Reimbursement and Government Regulation — Certain business practices associated with the commercialization of pharmaceutical products are subject to scrutiny by regulatory authorities, as well as to lawsuits brought by private citizens under federal and state laws. Failure to comply with applicable law or an adverse decision in lawsuits may result in adverse consequences to Altimmune.” Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. Altimmune has adopted a Code of Business Conduct and Ethics Policy and other policies and practices that are designed to help ensure that it, its employees, officers, agents, intermediaries and other third parties comply with applicable laws, but it is not always possible to identify and deter such misconduct, and the precautions it takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting Altimmune from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against Altimmune, and in some cases regardless of the merits of those actions, those actions could have a significant impact on Altimmune’s business, including the costs of investigation, settlement arrangements, imposition of civil, criminal and administrative penalties (such as Corporate Integrity Agreements and other arrangements, damages, monetary fines, disgorgement, and possible exclusion from participation in Medicare, Medicaid and other federal health care programs), contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of Altimmune’s operations, any of which could adversely affect its ability to operate its business and its results of operations.

In the United States, legislation limiting or restricting liability for medical products used to fight bioterrorism is new, and it cannot be certain that any such protection will apply to Altimmune’s product candidates or if applied what the scope of any such coverage will be.

The Public Readiness Act creates general immunity for manufacturers of drug products used to address bioterrorism attacks, when the Secretary of HHS issues a declaration for their manufacture, administration or use. The declaration is meant to provide general immunity from all claims under state or federal law for loss arising out of the administration or use of a covered drug product, generally referred to as a “countermeasure.” Manufacturers are excluded from this protection in cases of willful misconduct. Although Altimmune believes that its anthrax vaccine product candidate is covered under the general immunity provisions of the Public Readiness Act, there can be no assurance that this coverage will continue, or that the Secretary of HHS will make other declarations in the future that would cover any of Altimmune’s other product candidates, or that the U.S. Congress will not act in the future to reduce coverage under the Public Readiness Act or to repeal it altogether.

In addition, under the Public Readiness Act, upon a declaration by the Secretary of HHS, a compensation fund would be created to provide “timely, uniform, and adequate compensation to eligible individuals for covered injuries directly caused by the administration or use of a covered countermeasure.” The “covered injuries” to which the program applies are defined as serious physical injuries or death. Individuals are permitted to bring a willful misconduct action against a manufacturer after they have exhausted their remedies under the compensation program. However, there is no assurance that the Secretary of HHS would issue under this act a declaration to establish a compensation fund.

Additionally, Altimmune is considering applying for liability protection under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002, or the SAFETY Act, which provides certain protections that would limit the damages potentially faced by companies who provide certain “qualified” anti-terrorism products. However, Altimmune cannot be certain that it will be able to obtain or maintain coverage under the SAFETY Act. If the U.S. Department of Homeland Security limits the scope of any coverage awarded to Altimmune, denies it coverage or continued coverage for a particular product or product candidate, or delays in making decisions about whether to grant it coverage, it may become exposed to legal claims.

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Altimmune is required to comply with certain export control laws which may limit its ability to sell its products to non-U.S. persons and may subject it to regulatory requirements that may delay or limit its ability to develop and commercialize its products.

Altimmune’s product candidates are subject to the Export Administration Regulations, or EAR, administered by the U.S. Department of Commerce and are, in certain instances subject to the International Traffic in Arms Regulations, or ITAR, administered by the U.S. Department of State. EAR restricts the export of dual-use products and technical data to certain countries, while ITAR restricts the export of defense products, technical data and defense services. In addition, EAR and ITAR may also regulate the disclosure to certain foreign nationals in the United States, such as research staff, of technical data about controlled commodities. The U.S. government agencies responsible for administering EAR and ITAR have significant discretion in the interpretation and enforcement of these regulations. Failure to comply with these regulations can result in criminal and civil penalties and may harm Altimmune’s ability to enter into contracts with the U.S. government. It is also possible that these regulations could adversely affect Altimmune’s ability to sell its products to non-U.S. customers.

Altimmune’s product candidates may also be subject to export control laws within the United Kingdom and European Union resulting in the need for authorization from customs authorities before they can leave the United Kingdom or European Union customs territories and restrictions on export from these territories to certain countries. Again, such laws could adversely affect Altimmune’s ability to sell to customers in certain countries and non-compliance can result in civil and criminal penalties. Such restrictions exist across the European Union and within its member states individually and may vary between member states.

Altimmune must comply with environmental laws and regulations, and failure to comply with these laws and regulations could expose it to significant liabilities.

Altimmune uses hazardous chemicals and biological materials in certain aspects of its business and is subject to a variety of federal, state and local laws and regulations governing the use, generation, manufacture, distribution, storage, handling, treatment and disposal of these materials. Altimmune cannot eliminate the risk of accidental injury or contamination from the use, manufacture, distribution, storage, handling, treatment or disposal of hazardous materials. In the event of contamination or injury, or failure to comply with environmental, occupational health and safety and export control laws and regulations, Altimmune could be held liable for any resulting damages and any such liability could exceed its assets and resources. In addition, Altimmune may be required to pay damages or civil judgments related to third-party claims, for which it is uninsured, including those relating to personal injury (including exposure to hazardous chemicals and biological materials), product quality issues, property damage or contribution to remedial obligations.

If Altimmune uses biological and hazardous materials in a manner that causes contamination or injury or violates laws, it may be liable for damages.

Altimmune’s research and development activities and clinical trials involve the use of potentially harmful biological materials, including anthrax, as well as hazardous materials and chemicals. Altimmune cannot completely eliminate the risk of accidental contamination or injury from the distribution, use, storage, handling or disposal of these materials. In the event of contamination or injury, Altimmune could be held liable for damages that result, and any liability could exceed its available financial resources. Altimmune, its collaborative partners, the third parties that conduct clinical trials on its behalf, and its third-party manufacturers are subject to federal, state, local or foreign laws and regulations governing the use, storage, handling and disposal of these materials and waste products. The cost of compliance with these laws and regulations could be significant. The failure to comply with any of these laws and regulations could result in significant fines and work stoppages.

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We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this proxy statement/prospectus/consent solicitation in the case of forward-looking statements contained in this proxy statement/prospectus/consent solicitation, or the dates of the documents incorporated by reference in this proxy statement/prospectus/consent solicitation in the case of forward-looking statements made in those incorporated documents. Except as may be required by law, neither PharmAthene nor Altimmune has any obligation to update or alter these forward-looking statements, whether as a result of new information, future events or otherwise.

All of the forward-looking statements PharmAthene makes in this document are qualified by the information contained or incorporated by reference into this proxy statement/prospectus/consent solicitation, including, but not limited to (i) the information contained under this heading and (ii) the information discussed under the sections entitled “Risk Factors” in PharmAthene's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, PharmAthene's Quarterly Report on Form 10-Q for the period ended September 30, 2016 and the risk factors contained in this proxy statement/prospectus/consent solicitation. Please the section entitled “Where You Can Find Additional Information” beginning on page 273 of this proxy statement/prospectus/consent solicitation.

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THE SPECIAL MEETING OF PHARMATHENE STOCKHOLDERS

General

This proxy statement/prospectus/consent solicitation is being furnished to PharmAthene stockholders on or about February [•], 2017. PharmAthene is sending this proxy statement/prospectus/consent solicitation to its stockholders in connection with the solicitation of proxies by the PharmAthene Board of Directors for use at the PharmAthene special meeting and any adjournments or postponements of the meeting.

Date, Time and Place

The PharmAthene special meeting will be held at 9 a.m, local time, on March 20, 2017, at PharmAthene's office at One Park Place, Annapolis, MD 21401.

Purposes of the PharmAthene Special Meeting

PharmAthene stockholders also will consider and act on any other matters as may properly come before the PharmAthene special meeting or any adjournment or postponement of the meeting, including any procedural matters incident to the conduct of the meeting.

Recommendations of the PharmAthene Board of Directors

The PharmAthene Board of Directors has determined and believes that the mergers and all related transactions, including the issuance of shares of PharmAthene common stock in the mergers, is advisable, fair to, and in the best interests of PharmAthene and its stockholders. The PharmAthene Board of Directors unanimously recommends that PharmAthene stockholders vote:

Record Date and Voting Power

The close of business on February 10, 2017 has been fixed as the record date for determination of PharmAthene stockholders entitled to notice of, and to vote at, the PharmAthene special meeting or any adjournments or postponements of the meeting. Only holders of record of PharmAthene common stock at the

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close of business on the record date are entitled to notice of, and to vote at, the PharmAthene special meeting. At the close of business on the record date, PharmAthene had [•] shares of common stock outstanding and entitled to vote. Each share of PharmAthene common stock entitles the holder thereof to one vote on each matter submitted for stockholder approval. Please see the section of this proxy statement/prospectus/consent solicitation entitled “Principal Stockholders of PharmAthene” for information regarding persons known to management of PharmAthene to be the beneficial owners of more than five percent of the outstanding shares of PharmAthene common stock.

Voting and Revocation of Proxies

The proxy accompanying this proxy statement/prospectus/consent solicitation is solicited on behalf of the PharmAthene Board of Directors for use at the PharmAthene special meeting. If you are a PharmAthene stockholder of record as of the record date for the PharmAthene special meeting, you may vote in person at the PharmAthene special meeting or vote by proxy over the Internet, by telephone or by using the enclosed proxy card. Whether or not you plan to attend the PharmAthene special meeting, PharmAthene urges you to vote by proxy to ensure your vote is counted. You still may attend the PharmAthene special meeting and vote in person if you already have voted by proxy.

PharmAthene stockholders that hold shares in a brokerage account or by another nominee are considered the beneficial owner of shares held in “street name” and will receive instructions from such nominee that must be followed in order to vote shares at the PharmAthene special meeting. Stockholders that hold their shares in “street name” and that wish to attend and vote in person at the PharmAthene special meeting must contact their broker, bank or other nominee to obtain evidence of ownership of PharmAthene common stock, such as a legal proxy, as of the record date for the special meeting. Stockholders that hold PharmAthene shares in “street name” may have their shares voted by their bank, broker or other nominee even if they do not attend the PharmAthene special meeting, but only with respect to “routine” proposals. None of the proposals being presented to PharmAthene stockholders at the PharmAthene special meeting is a routine matter. Accordingly, brokers, banks or other nominees cannot vote shares on any such proposal without specific instructions from the beneficial owner of the shares. If any PharmAthene stockholder fails to provide instructions with respect to these proposals, the stockholder's broker, bank or other nominee must deliver a proxy card to PharmAthene expressly indicating that it is NOT voting the beneficial holder's shares, which is referred to as a “broker non-vote.” See the section below entitled “— Quorum and Required Vote” for details regarding the impact of broker non-votes on the proposals being considered at the PharmAthene special meeting. A beneficial owner of PharmAthene common stock that holds shares in “street name” must follow directions received from the bank, broker or other nominee that holds the shares to change its voting instructions.

All properly executed proxies that are not revoked will be voted at the PharmAthene special meeting and at any adjournments or postponements of the meeting in accordance with the instructions contained in the proxy. If a holder of PharmAthene common stock executes and returns a proxy and does not specify otherwise, the shares represented by that proxy will be voted “ FOR ” each of the five proposals. Any PharmAthene stockholder of record voting by proxy, other than those stockholders who have executed the PharmAthene Voting Agreement, has the right to revoke the proxy at any time before the polls close at the PharmAthene special meeting by sending a written notice stating that it would like to revoke its proxy to the corporate secretary of PharmAthene, by voting again or by providing a duly executed proxy card bearing a later date than the proxy being revoked or by attending the PharmAthene special meeting and voting in person. Attendance alone at the PharmAthene special meeting will not revoke a proxy.

Quorum and Required Vote

A quorum is the number of shares that must be represented in person or by proxy in order for business to be transacted at the PharmAthene special meeting. A quorum will be present at the PharmAthene special meeting if holders of a majority of the shares of PharmAthene's common stock entitled to vote at the PharmAthene special meeting are present in person or by proxy. Abstentions and broker non-votes will count as present for the purpose of establishing a quorum. If there are not sufficient votes in favor of any proposal, the holders of a majority of the shares entitled to vote at the PharmAthene special meeting who are present in person or represented by proxy may adjourn the PharmAthene special meeting to another date.

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A description of the vote required to approve each proposal being submitted to a vote of PharmAthene stockholders is included with the description of each proposal. If shares are held in “street name” and stockholders holding such shares do not direct their brokers how to vote with respect to any of the proposals, their brokers may not exercise discretion and may not vote their shares on that proposal. For purposes of Proposal Nos. 1 through 5, broker non-votes are considered to be shares represented by proxy at the PharmAthene special meeting but are not considered to be shares “entitled to vote” at the meeting. As such, a broker non-vote will have no effect on the outcome of Proposal Nos. 1, 2, 4, and 5. Broker non-votes will have the effect of a vote “Against” Proposal No. 3. Proxies marked “Abstain” will be counted in determining the total number of shares “entitled to vote” on each of the proposals being submitted to a vote of PharmAthene stockholders and will have the effect of a vote “Against” all of the proposals.

Concurrently and in connection with the execution of the Merger Agreement, certain PharmAthene stockholders who beneficially own approximately 4,861,743 of the outstanding shares of PharmAthene common stock, entered into the PharmAthene Voting Agreement, pursuant to which such PharmAthene stockholders agreed to vote their shares of PharmAthene common stock in favor of the adoption of the Merger Agreement and against any amendment of PharmAthene's certificate of incorporation or bylaws or any other proposal or transaction involving PharmAthene, the effect of which amendment or other proposal or transaction is to delay, impair, prevent or nullify the mergers or the transactions contemplated by the Merger Agreement or change in any manner the voting rights of any capital stock of PharmAthene. The signatories thereto may not sell or transfer their shares other than under specified circumstances pursuant to the PharmAthene Voting Agreement. The PharmAthene Voting Agreement will terminate upon, among other things, the earlier of the Effective Time or termination of the Merger Agreement. Please see the section of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — PharmAthene Voting Agreement.”

Solicitation of Proxies

In addition to solicitation by mail, the directors, officers, employees and agents of PharmAthene may solicit proxies from PharmAthene stockholders by personal interview, telephone, telegram or other electronic means. PharmAthene will bear the costs of the solicitation of proxies by PharmAthene from PharmAthene stockholders. Arrangements also will be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of PharmAthene common stock for the forwarding of solicitation materials to the beneficial owners of PharmAthene common stock. PharmAthene will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. PharmAthene has retained [•], a proxy solicitation firm, to assist in the solicitation of proxies for the matters being submitted to PharmAthene stockholders for a fee of approximately $[•].

Other Matters

As of the date of this proxy statement/prospectus/consent solicitation, the PharmAthene Board of Directors does not know of any business to be presented at the PharmAthene special meeting other than as set forth in the notice accompanying this proxy statement/prospectus/consent solicitation. If any other matters should properly come before the PharmAthene special meeting, or any adjournment or postponement of the PharmAthene special meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the best judgment of the person(s) voting the proxies, pursuant to the discretionary authority granted to such person(s).

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MATTERS BEING SUBMITTED TO A VOTE OF PHARMATHENE STOCKHOLDERS

PharmAthene Proposal No. 1 — The Issuance of Shares of PharmAthene Common Stock in the Mergers

At the PharmAthene special meeting, PharmAthene stockholders will be asked to approve the issuance of shares of PharmAthene common stock in the mergers. Pursuant to the terms of the Merger Agreement and Exchange Ratio, upon completion of the mergers, each of Altimmune's outstanding shares of common stock and preferred stock (excluding Altimmune treasury shares, shares of Altimmune owned by PharmAthene or its subsidiaries or dissenting shares) will be converted into the right to receive a number of shares of PharmAthene common stock such that the holders of outstanding equity of Altimmune immediately prior to the Effective Time will own 58.2% of the outstanding equity of PharmAthene immediately following the Effective Time and holders of outstanding equity of PharmAthene immediately prior to the Effective Time will own 41.8% of the outstanding equity of PharmAthene immediately following the Effective Time in each case, on a fully diluted basis. For additional details, please see the section of this proxy statement/prospectus/consent solicitation entitled “The Merger Agreement — Merger Consideration.”

If the mergers had been completed on February 10, 2017, the record date for the PharmAthene special meeting, an aggregate of approximately [•] million shares of PharmAthene common stock would have been issuable to Altimmune stockholders upon completion of the mergers, not including [•] shares of PharmAthene common stock issuable upon exercise of Altimmune options assumed by PharmAthene in the mergers and not including [•] shares of PharmAthene common stock issuable upon exercise of Altimmune warrants assumed by PharmAthene in the mergers. PharmAthene stockholder approval of this Proposal No. 1 is required as a condition to the mergers; accordingly, even if PharmAthene stockholders approve the other proposals, the mergers will not be completed unless this Proposal No. 1 is also approved.

PharmAthene's Board of Directors believes that the issuance of shares of PharmAthene common stock in the mergers is in the best interests of PharmAthene and its stockholders. If PharmAthene's stockholders do not approve this Proposal No. 1, the mergers cannot be completed and PharmAthene would be required to seek other strategic opportunities to deliver stockholder value.

The terms of, reasons for and other aspects of the Merger Agreement, the mergers and the issuance of shares of PharmAthene common stock in the mergers are described in detail in the other sections of this proxy statement/prospectus/consent solicitation. The full text of the Merger Agreement is attached to this proxy statement/prospectus/written consent as Annex A.

Vote Required; Recommendation of the PharmAthene Board of Directors

The affirmative vote of the holders of a majority of the shares of PharmAthene common stock entitled to vote on the proposal and present in person or represented by proxy, is required for approval of PharmAthene Proposal No. 1. Each of PharmAthene’s Proposals Nos. 1, 2, and 3 are conditioned upon each other. Therefore, the Mergers cannot be consummated without the approval of PharmAthene’s Proposals Nos. 1, 2 and 3.

A failure to vote by proxy or in person at the PharmAthene special meeting or a “broker non-vote” will have no effect on the outcome of PharmAthene Proposal No. 1. For purposes of the vote on this PharmAthene Proposal No. 1, an abstention will have the same effect as a vote “AGAINST” such proposal.

The PharmAthene Board of Directors unanimously recommends that PharmAthene stockholders vote “FOR” PharmAthene's Proposal No. 1 to approve the issuance of shares of PharmAthene common stock in the mergers.

PharmAthene Proposal No. 2 — Approval and Adoption of the Merger Agreement

PharmAthene stockholders are asked to approve and adopt the Merger Agreement on substantially the terms and conditions set forth in the Merger Agreement. For a summary and detailed information regarding the proposal to approve and adopt the Merger Agreement, see the information about the Merger Agreement and the mergers throughout this proxy statement/prospectus/consent solicitation, including the information set forth in sections entitled “The Mergers” beginning on page [•] and “The Merger Agreement” beginning on page [•]. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus/consent solicitation.

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Pursuant to the Merger Agreement, approval and adoption of the Merger Agreement is a condition to the closing of the mergers. If this PharmAthene Proposal No. 2 is not approved, the mergers will not be completed even if the other proposals related to the mergers are approved.

Vote Required; Recommendation of the PharmAthene Board of Directors

The mergers between (i) Merger Sub Corp with and into Altimmune, with Altimmune surviving such merger and (ii) immediately thereafter, Altimmune with and into Merger Sub LLC, with Merger Sub LLC as the surviving entity in such merger, cannot be completed without the approval of the Merger Agreement by the affirmative vote of the holders of a majority of the shares of PharmAthene common stock entitled to vote on the proposal and present in person or represented by proxy. A failure to vote or a “broker non-vote” will not have any effect on the proposal to approve and adopt the Merger Agreement and provided that a quorum is present at the PharmAthene special meeting. For purposes of the vote on this Proposal No. 2, an abstention will have the same effect as a vote “AGAINST” such proposal. Each of PharmAthene’s Proposals Nos. 1, 2, and 3 are conditioned upon each other. Therefore, the Mergers cannot be consummated without the approval of PharmAthene’s Proposals Nos. 1, 2 and 3.

The PharmAthene Board of Directors after due and careful discussion and consideration, has (i) approved and declared advisable the Merger Agreement, the mergers and all of the other transactions contemplated by the Merger Agreement and (ii) declared that it is in the best interests of PharmAthene and its stockholders that PharmAthene enter into the Merger Agreement and consummate the mergers and all of the other transactions contemplated by the Merger Agreement.

The PharmAthene Board of Directors unanimously recommends that PharmAthene stockholders vote “FOR” the PharmAthene Proposal No. 2 to approve and adopt the Merger Agreement.

PharmAthene Proposal No. 3 — Approval of Charter Amendment for a Reverse Stock Split

At the PharmAthene special meeting, PharmAthene stockholders will be asked to approve an amendment of PharmAthene's Certificate of Incorporation (the “Charter Amendment”) to permit the PharmAthene Board of Directors to effect a reverse stock split of PharmAthene's issued and outstanding common stock immediately prior to the Effective Time of the mergers (the “Reverse Split Amendment”).

To enable PharmAthene to effect the mergers, PharmAthene's Board of Directors has adopted resolutions recommending that the stockholders grant authority to PharmAthene's Board of Directors to effect a reverse stock split of PharmAthene's issued and outstanding shares of common stock (the “Reverse Split”) immediately prior to the Effective Time (provided the Merger Agreement has not been terminated) at a ratio (the “Reverse Ratio”) of not less than 1-for-10 and not more than 1-for-75, with the exact Reverse Ratio to be finally determined and mutually agreed to by the PharmAthene and Altimmune Boards of Directors and publicly announced.

Since the Reverse Split will not reduce the number of shares of authorized PharmAthene common stock provided in the certificate of incorporation, as amended, the Reverse Split would also result in a significant increase in the number of authorized and unissued shares of PharmAthene common stock. This will facilitate PharmAthene's ability to issue the merger consideration due to Altimmune security holders in connection with the mergers, as Altimmune stockholders will have the right to receive, for each share of Altimmune common stock and preferred stock they hold, that number of shares of PharmAthene common stock, as determined pursuant to the Exchange Ratio described in the Merger Agreement and in the section of this proxy statement/prospectus/consent solicitation entitled “The Merger Agreement — Merger Consideration.”

The Reverse Stock Split will be effectuated pursuant to the Reverse Split Amendment to PharmAthene's Certificate of Incorporation, substantially in the form which has been attached hereto as Annex H, if at all and at the rate to be determined by the PharmAthene and Altimmune Boards to be publicly announced.

Effects of Reverse Split

Following the effectiveness, if any, of a Reverse Split if approved by PharmAthene's stockholders, holders of PharmAthene common stock immediately prior to the Effective Time will hold fewer shares of PharmAthene common stock, with such number of shares dependent on the Reverse Ratio ratified by

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PharmAthene's Board of Directors in consultation with Altimmune. For example, if PharmAthene's Board of Directors, approves of a 1-for-50 Reverse Split, a PharmAthene stockholder owning 1,000 shares of common stock prior to such Reverse Split would hold 20 shares of common stock following such Reverse Split. THE HIGHER THE REVERSE RATIO (1-FOR-50 BEING HIGHER THAN 1-FOR-20 FOR EXAMPLE), THE GREATER THE REDUCTION OF RELATED SHARES EACH EXISTING STOCKHOLDER, POST REVERSE SPLIT, WILL EXPERIENCE.

In deciding whether to implement the Reverse Split and the Reverse Ratio to be used, PharmAthene's Board of Directors will consider, primarily, satisfaction of the condition to the Merger Agreement to effect the Reverse Split, and the combined company's satisfaction of the initial listing requirements of NYSE MKT. PharmAthene's Board of Directors and Altimmune may also consider among other things: (i) the market price of PharmAthene's common stock at the time of the Reverse Split; (ii) the number of shares that will be outstanding immediately following the Reverse Spit but prior to the Effective Time; (iii) the number of PharmAthene shares to be issued in accordance with the Exchange Ratio pursuant to the Merger Agreement; (iv) market conditions; (v) the shares of common stock available to the combined company for issuance in the future; and (vi) existing and expected trading prices. PharmAthene's Board of Directors maintains the right to elect not to proceed with the Reverse Split if the Merger Agreement is terminated, at its sole discretion.

The amendment will not change the terms of PharmAthene's common stock, or reduce the number of shares of common stock authorized under PharmAthene's certificate of incorporation. After the Reverse Split, the shares of common stock will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to the common stock now authorized. Each stockholder's percentage ownership of the new common stock will not be altered except for the effect of eliminating fractional shares and the mergers. The common stock issued pursuant to the Reverse Split will remain fully paid and non-assessable. The Reverse Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Exchange Act. Following the Reverse Split, we will issue the merger consideration required by the Exchange Ratio set forth in the Merger Agreement, and will still be subject to the periodic reporting requirements of the Exchange Act.

Purposes of the Reverse Split

The Merger Agreement requires PharmAthene to effect the Reverse Split prior to the Effective Time, as a condition to the closing of the mergers. Accordingly, the purpose of the Reverse Split, among others, is to satisfy this closing condition so that the mergers may be completed. If this PharmAthene Proposal No. 3 is not approved, the mergers will not be completed even if the other proposals related to the mergers are approved. In addition to satisfying the condition of the Merger Agreement requiring the Reverse Split, the Reverse Split will also ensure that PharmAthene will, immediately prior to the Effective Time, have a sufficient number of authorized shares of its common stock to issue to Altimmune security holders, in such amount as required by the Exchange Ratio in the Merger Agreement. The amendment to authorize the Reverse Split is also expected to benefit the combined company, on a post-mergers basis, by providing it with needed and appropriate flexibility to issue shares for future corporate and financing needs, and to facilitate the ability of the combined company to satisfy the NYSE MKT's initial listing criteria. Since the Reverse Split will not reduce the number of authorized shares of common stock, it will act to increase the number of available shares of authorized common stock that may be issued by the combined company's Board of Directors in its discretion, subject to any further stockholder action required in the case of any particular issuance, including under the organizational documents of the combined company, applicable law, agreements or contracts, regulatory authorities, and the rules of the NYSE MKT. The increased number of authorized but unissued shares of common stock available would be issuable for any proper corporate purpose, including without limitation, in the mergers, in future capital raising transactions of equity or convertible debt securities, or upon exercise of warrants or, upon future acquisitions or other investment opportunities, in connection with stock dividends, or under current or future equity compensation plans.

PharmAthene's Board of Directors believes the future amendment will allow PharmAthene to (i) consummate the mergers contemplated by the Merger Agreement; (ii) facilitate the combined company's ability to successfully list on NYSE MKT, create a marketplace for its shares and increase its visibility, encourage investor interest and improve the marketability of the combined company's common stock to a broader range of investors, and thus improve liquidity; (iii) create a capital structure that better reflects a

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potentially profitable combined company; (iv) better enable the combined company to raise funds to finance its business operations; and (v) facilitate higher levels of institutional stock ownership in the combined company where investment policies may otherwise prohibit investments in lower-priced securities.

Risks Associated with the Reverse Split

Stockholders should note that the effect of the Reverse Split upon the market price for the combined company's common stock cannot be predicted accurately. In particular, we cannot assure you that prices for shares of the combined company's common stock after the Reverse Split will be proportional to the Reverse Ratio based on the prices for shares of PharmAthene's common stock immediately prior to the Reverse Split. The market price of the combined company's common stock may also be affected by other factors which may be unrelated to the Reverse Split, the mergers or the number of shares outstanding. Furthermore, even if the market price of the combined company's common stock does rise following the Reverse Split, we cannot assure you that the market price of the combined company's common stock immediately after the proposed Reverse Split will be maintained for any period of time. Even if an increased per-share price can be maintained, the Reverse Split may not achieve the desired results that have been outlined above. Moreover, because some investors may view the Reverse Split negatively, we cannot assure you that the Reverse Split will not adversely impact the market price of the combined company's common stock.

PharmAthene common stock is currently listed on the NYSE MKT. PharmAthene intends to file an initial listing application with NYSE MKT to seek listing on the NYSE MKT upon the closing of the mergers. According to applicable NYSE MKT market rules, an issuer must apply for initial listing following a transaction in which the issuer combines with a non-NYSE MKT listed entity, resulting in a change of control of the issuer and potentially allowing the non-listed entity to obtain a NYSE MKT listing. Furthermore, the listing standards of NYSE MKT will require the combined company to have, among other things, a $2.00 or $3.00 per share minimum bid price upon the closing of the mergers, depending on which listing standard the combined company seeks to satisfy.

The PharmAthene board of directors expects that a reverse stock split of PharmAthene common stock will increase the market price of PharmAthene common stock so that PharmAthene is able to satisfy compliance with the relevant NYSE MKT listing requirements upon completion of the mergers. While PharmAthene believes that the combined company will satisfy the initial listing criteria, we cannot assure you that the combined company will be successful in doing so, or if it does satisfy the initial listing criteria, that it will continue to meet all requisite continued listing criteria in the future.

We believe that the Reverse Split may result in greater liquidity for the combined company's stockholders. However, it is also possible that such liquidity could be adversely affected by the reduced number of shares outstanding after the Reverse Split, and the issuance of additional shares following the mergers, particularly if the share price does not increase as a result of the Reverse Split.

If the Reverse Split is implemented, some stockholders may consequently own less than 100 shares of common stock. A purchase or sale of less than 100 shares (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own less than 100 shares following the Reverse Split may be required to pay higher transaction costs if they sell their shares in the Combined Company.

Anti-takeover effects of a Reverse Split

Release No. 34-15230 of the staff of the SEC requires disclosure and discussion of the effects of any action, including the proposals discussed herein, that may be used as an anti-takeover mechanism. Even though the Reverse Split is not accompanied by a reduction in the number of the authorized shares of PharmAthene common stock, depending on the Reverse Ratio effected by PharmAthene's Board of Directors, the amendment may result in a relative increase in the number of authorized but unissued shares of PharmAthene common stock vis-à-vis the outstanding shares of PharmAthene common stock and, could, under certain circumstances, have an anti-takeover effect, although this is not the purpose or intent of PharmAthene's Board of Directors. The purpose and intent of PharmAthene's Board of Directors is to comply with the closing conditions of the mergers as required by the Merger Agreement, have sufficient authorized shares available for the issuance of the merger consideration in accordance with the Exchange Ratio and

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facilitate the ability of the combined company to have its shares of common stock listed on the NYSE MKT. An increase in the authorized number of shares of PharmAthene common stock could have other effects on PharmAthene's or Altimmune's stockholders, depending upon the exact nature and circumstances of any actual issuances of authorized but unissued shares. An increase in outstanding shares of PharmAthene common stock could potentially deter takeovers, including takeovers that PharmAthene's Board of Directors has determined are not in the best interest of PharmAthene stockholders, in that additional shares could be issued (within the limits imposed by applicable law and limitations of the Merger Agreement) in one or more transactions that could make a change in control or takeover more difficult. For example, if Altimmune consented or the Merger Agreement were terminated, PharmAthene could issue additional shares so as to dilute the stock ownership or voting rights of persons seeking to obtain control without PharmAthene's agreement. Similarly, the issuance of additional shares to certain persons allied with PharmAthene management could have the effect of making it more difficult to remove PharmAthene's current management by diluting the stock ownership or voting rights of persons seeking to cause such removal. The Reverse Split therefore may have the effect of discouraging unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover attempts, the Reverse Split may limit the opportunity for PharmAthene stockholders to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. However, PharmAthene's Board of Directors is not aware of any attempt to take control of PharmAthene's business and PharmAthene's Board of Directors has not considered the Reverse Split to be a tool to be utilized as a type of anti-takeover device.

Exchange of Certificate and Elimination of Fractional Share Interests

Upon the effectiveness of the Reverse Split, a certain number of shares of PharmAthene common stock (depending on the Reverse Ratio is chosen) will automatically be changed into one share of PharmAthene common stock. Holders of PharmAthene common stock will not be required to exchange their certificates representing shares of common stock held prior to the Reverse Split for new certificates representing shares of common stock. Therefore, it is not necessary for you to send PharmAthene your stock certificates. If, however, a stockholder wishes to exchange such stockholder's certificates, the stockholder may do so by surrendering its certificate to the combined company's transfer agent after the Effective Time, with a request for a replacement certificate and the appropriate stock transfer fee.

Fractional Shares

No fractional shares of PharmAthene common stock will be issued as a result of the Reverse Split. Stockholders of record who otherwise would be entitled to receive fractional shares will be entitled to receive cash (without interest and subject to applicable withholding taxes) in lieu of such fractional shares. The total amount of cash that will be paid to holders of fractional shares following the Reverse Split will be an amount equal to the net proceeds (after customary brokerage commissions, other expenses and applicable withholding taxes) attributable to the sale of such fractional shares following the aggregation and sale by PharmAthene or its agent of all fractional interests otherwise issuable. Holders of fractional interests as a result of the Reverse Split will be paid such proceeds on a pro rata basis, depending on the fractional interests that they owned.

No Dissenters Rights

In connection with the approval of the Reverse Split, stockholders of PharmAthene immediately prior to the Reverse Split will not have a right to dissent and obtain payment for their shares under the DGCL, certificate of incorporation or bylaws.

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this summary. This summary is not binding on the Internal Revenue Service (the “ IRS ”), and there can be no assurance that the IRS (or a court, in the event of an IRS challenge) will agree with the conclusions stated herein.

This discussion does not address all of the U.S. federal income tax consequences of the Reverse Split that may be relevant to PharmAthene stockholders in light of their particular circumstances and does not apply to stockholders that are subject to special treatment under U.S. federal income tax laws, including, without limitation:

In addition, the following discussion does not address:

The opinion of counsel will not bind the courts, nor will it preclude the IRS from adopting a position contrary to those expressed in the opinion. PharmAthene does not intend to obtain a ruling from the IRS with respect to the U.S. federal income tax consequences of the Reverse Split.

Accordingly, PharmAthene stockholders are advised and expected to consult their own tax advisors regarding the U.S. federal income tax consequences of the Reverse Split in light of their personal circumstances and the consequences of the Reverse Split under U.S. federal non-income tax laws and state, local and non-U.S. tax laws.

This discussion does not address the tax consequences to holders who are not U.S. holders.

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Subject to the qualifications, assumptions and limitations in the opinion of Dentons US LLP, the statements of law and legal conclusions set forth in this section “ Certain Material U.S. Federal Income Tax Consequences of the Reverse Split ” represent the opinion of Dentons US LLP. The Reverse Split is expected to qualify as a “recapitalization” within the meaning of Section 368(a) of the Code. Assuming that the Reverse Split so qualifies, the following U.S. federal income tax consequences will result to U.S. holders and PharmAthene:

No gain or loss will be recognized by PharmAthene as a result of the Reverse Split;

Cash Received In Lieu of a Fractional Share

A U.S. holder who receives cash in lieu of a fractional share of post-Reverse Split shares should be treated as having received the fractional share of post-Reverse Split shares pursuant to the Reverse Split and then as having exchanged the fractional share of post-Reverse Split shares for cash in a redemption by PharmAthene. In general, this deemed redemption should be treated as a sale or exchange, provided the redemption is “not essentially equivalent to a dividend” as discussed below. Gain or loss generally would be recognized based on the difference between the amount of cash received and the portion of the U.S. holder’s adjusted tax basis of the pre-Reverse Split shares exchanged in the Reverse Split which is allocable to such fractional share. Such gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for such pre-Reverse Split shares is more than one year as of the effective date of the Reverse Split, and otherwise will be short-term capital gain or loss. The deductibility of capital losses is subject to limitations.

The receipt of cash is “not essentially equivalent to a dividend” if the reduction in a U.S. holder’s proportionate interest in PharmAthene resulting from the Reverse Split (taking into account for this purpose shares of common stock and other shares of stock of PharmAthene which such holder is considered to own under certain attribution rules) is considered a “meaningful reduction” given such U.S. holder’s particular facts and circumstances. Although not clear, the IRS has ruled that a small reduction by a minority stockholder whose relative stock interest is minimal and who exercises no control over the affairs of a corporation can satisfy this test. If the receipt of cash in lieu of a fractional share is not treated as capital gain or loss under the test described above, it will be treated first as dividend income to the extent of a U.S. holder’s ratable share of PharmAthene’s current and accumulated earnings and profits, then as a tax-free return of capital to the extent of the U.S. holder’s adjusted tax basis of the pre-Reverse Split shares which is allocable to such fractional share, and any remaining amount will be treated as capital gain. Any remaining tax basis should be added to the post-Reverse Split shares held by the U.S. holder.

Information Reporting and Backup Withholding

Payment of cash in lieu of fractional shares within the United States may be subject to both backup withholding (currently at a rate of 28 percent) and information reporting. However, backup withholding will not apply to a holder who furnishes a valid taxpayer identification number and complies with certain certification procedures or otherwise establishes an exemption from backup withholding. Backup withholding is not an additional U.S. federal income tax. Any amounts so withheld will be allowed as a refund or credit

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against the PharmAthene stockholder’s U.S. federal income tax liability (if any), provided that the PharmAthene stockholder timely furnishes the required information to the IRS.

The foregoing summary of material U.S. federal income tax consequences is not intended to be a complete analysis or description of all potential U.S. federal income tax consequences of the Reverse Split. In addition, the summary does not address tax consequences that may vary with, or are contingent on, individual circumstances. Moreover, the summary does not address any U.S. federal non-income tax or any non-U.S., state or local tax consequences of the Reverse Split, nor any tax consequences of any transaction other than the Reverse Split. Accordingly, each PharmAthene stockholder is strongly urged to consult his, her or its own tax advisor to determine the particular federal, state, local, or non-U.S. income or other tax consequences of the Reverse Split to such PharmAthene stockholder.

Vote Required for Charter Amendment; Recommendation of the PharmAthene Board of Directors

The Delaware General Corporation Law provides that the Charter Amendment Proposal to approve the Reverse Split Amendment must be approved by the affirmative vote of the holders of a majority of the issued and outstanding PharmAthene common stock as of the Record Date entitled to vote at the annual meeting.

A failure to vote by proxy or in person at the PharmAthene special meeting or a “broker non-vote” will have the effect of a vote “AGAINST” PharmAthene Proposal No. 3. For purposes of the vote on this PharmAthene Proposal No. 3, an abstention will have the same effect as a vote “AGAINST” such proposal. Each of PharmAthene’s Proposals Nos. 1, 2, and 3 are conditioned upon each other. Therefore, the Mergers cannot be consummated without the approval of PharmAthene’s Proposals Nos. 1, 2 and 3.

PharmAthene's Board of Directors believes that the Reverse Split contemplated by the Charter Amendment is in the best interests of PharmAthene and its stockholders. If PharmAthene's stockholders do not approve this Proposal No. 3, the mergers may not be effected and PharmAthene would be required to seek other strategic opportunities to deliver stockholder value.

The PharmAthene Board of Directors unanimously recommends that PharmAthene stockholders vote “FOR” PharmAthene's Proposal No. 3 to approve an amendment of PharmAthene's Certificate of Incorporation.

PharmAthene Proposal No. 4 — Approval of the 2017 Omnibus Incentive Plan

The board of directors of PharmAthene approved the adoption of the 2017 Omnibus Incentive Plan, or the 2017 Incentive Plan, subject to approval by PharmAthene’s stockholders. PharmAthene’s board of directors is requesting shareholders approve the 2017 Incentive Plan.

Approval of 2017 Incentive Plan by PharmAthene stockholders is required, among other things, in order to: (i) comply with NYSE rules requiring stockholder approval of equity compensation plans; (ii) allow the grant of incentive stock options to participants in the 2017 Incentive Plan; and (iii) give the compensation committee of the combined company the ability to grant awards intended to qualify as “performance-based compensation,” thereby potentially preserving the company’s tax deduction under Code Section 162(m).

The discussion that follows is qualified in its entirety by the terms of the 2017 Incentive Plan, a copy of which is attached as Annex to the proxy statement/prospectus/consent solicitation. Stockholders should refer to the 2017 Incentive Plan for more complete and detailed information about the terms and conditions of the 2017 Incentive Plan.

If this PharmAthene Proposal No. 4 is approved by PharmAthene stockholders, the 2017 Incentive Plan will become effective as of the date of the closing of the Mergers, and no further grants will be made under the PharmAthene, Inc. Amended and Restated 2007 Long-Term Incentive Compensation Plan, or the 2007 Plan, or under the Altimmune, Inc. 2001 Employee Stock Option Plan, or the 2001 Employee Plan, or the Altimmune, Inc. 2001 Non-Employee Director Stock Option Plan, or the 2001 Non-Employee Plan. In the event that PharmAthene stockholders do not approve this proposal, the 2017 Incentive Plan will not become effective and the 2007 Plan will continue to be effective in accordance with their terms and the combined company may continue to make awards under such plan, subject to the limits thereunder.

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Approval of the 2017 Incentive Plan by PharmAthene stockholders will allow the combined company to grant stock options, restricted stock, other stock-based awards and performance-based cash awards at levels determined appropriate by its board of directors or compensation committee following the closing of the Mergers. The 2017 Incentive Plan will also allow the combined company to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of its stockholders following the closing of the Mergers.

PharmAthene believes approval of the 2017 Incentive Plan will allow the combined company to remain competitive with comparable companies in its industry by giving it the resources to attract and retain talented individuals to continue to achieve its business objectives and build stockholder value. Approval of the 2017 Incentive Plan will also provide the combined company with the flexibility it needs to use equity compensation and other incentive awards to attract, retain and motivate talented employees, directors and independent contractors who are important to the combined company’s long-term growth and success.

Best Practices Integrated into the 2017 Incentive Plan

The 2017 Incentive Plan includes provisions that are designed to protect the interests of the stockholders of the combined company and to reflect corporate governance best practices including:

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Approval of Section 162(m) Performance Goals

Approval of the 2017 Incentive Plan will constitute approval of the material terms of the performance goals under the 2017 Incentive Plan. Approval of the material terms of the performance goals under the 2017 Incentive Plan is intended to enable the combined company to grant awards under the 2017 Incentive Plan that are intended to satisfy the performance-based compensation requirements under Section 162(m) of the Code. Section 162(m) of the Code generally limits the federal income tax deduction for compensation paid to any person who serves as chief executive officer or who is one of the three other most highly compensated executive officers, other than the chief financial officer, of a publicly held corporation to $1.0 million per year, with an exception for qualified performance-based compensation.

Under Section 162(m) of the Code, for compensation to qualify as “performance-based compensation,” among other things, the following terms must be disclosed to and approved by the stockholders before the compensation is paid: (i) a description of the employees eligible to receive such awards; (ii) a per-person limit on the number of shares subject to stock options and other stock-based awards containing performance criteria and the amount of cash subject to performance-based cash awards that may be granted to any employee under the plan in any year; and (iii) a description of the business criteria upon which the performance goals for performance-based awards may be granted (or become vested or exercisable). Accordingly, PharmAthene is requesting that stockholders approve the 2017 Incentive Plan, which includes terms and conditions regarding eligibility for awards, annual per-person limits on awards and the business criteria for performance-based awards granted under the 2017 Incentive Plan (as described in the summary below).

Description of the 2017 Omnibus Incentive Plan

The material features of the 2017 Incentive Plan are described below. The following description of the 2017 Incentive Plan is a summary only and is qualified in its entirety by reference to the complete text of the 2017 Incentive Plan. Stockholders are urged to read the actual text of the 2017 Incentive Plan in its entirety.

Purpose of the 2017 Incentive Plan .  The purpose of the 2017 Incentive Plan is to: (i) attract, retain and reward employees, consultants and non-employee directors; (ii) strengthen the mutuality of interests between such individuals and the combined company’s stockholders; and (iii) enhance the profitability and value of the combined company for the benefit of its stockholders by enabling the combined company to offer incentive awards to employees, consultants and non-employee directors.

Administration of the Plan.   The board of directors has appointed the compensation committee to administer the 2017 Incentive Plan. The compensation committee is authorized to grant awards to eligible employees and consultants. The full board of directors will administer the 2017 Incentive Plan for purposes of granting awards to non-employee directors. To the extent required, all members of the compensation committee are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act, “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, and “independent directors” under applicable NYSE rules.

Number of Authorized Shares and Award Limits.   Share amounts referenced below have been appropriately adjusted to reflect the Exchange Ratio between PharmAthene common stock and Altimmune common stock determined in accordance with the Merger Agreement and described above, but do not reflect

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any Reverse Stock Split adjustments. The aggregate number of the combined company’s shares of common stock that may be issued or used for reference purposes under the 2017 Incentive Plan may not exceed 15,000,000 shares (subject to adjustment pursuant to the terms of the 2017 Incentive Plan as described below). Beginning on January 1, 2018 and ending on and including January 1, 2027, the number of shares reserved for issuance under the 2017 Incentive Plan will be increased by a number of shares of our Class A common stock equal in an amount equal to the least of: (i) 10,000,000 shares of common stock, (ii) four percent (4%) of the total number of shares of common stock outstanding on a fully diluted basis as of December 31 of the immediately preceding calendar year, and (iii) such number of shares of common stock, if any, determined by the combined company’s board of directors. Shares of common stock that are subject to awards will be counted against the overall limit as one share for every share granted. If any award is cancelled, expires or terminates unexercised for any reason, the shares covered by such award will again be available for the grant of awards under the 2017 Incentive Plan, except that any shares that are not issued as the result of a net settlement or that are used to pay any exercise price or tax withholding obligation will not be available for the grant of awards. Shares of common stock that are repurchased on the open market with the proceeds of an option exercise price also will not be available for the grant of awards.

The maximum number of shares of common stock that may be subject to any award of stock options, any restricted stock or other stock-based award denominated in shares that may be granted under the 2017 Incentive Plan during any fiscal year to each employee or consultant is 8,000,000 shares per type of award, provided that the maximum number of the combined company’s shares of common stock for all types of awards during any fiscal year does not exceed 8,000,000 shares per each employee or consultant. In addition, the maximum value at grant of any other stock-based award denominated in cash and any performance-based cash award that may be granted during any fiscal year to an employee or consultant is $5,000,000. Also, the 2017 Incentive Plan limits the number of shares that may be granted to non-employee directors during any fiscal year to 5,000,000 shares.

Eligibility and Participation.   All current and prospective eligible employees and consultants of the combined company and its affiliates, and all of the combined company’s non-employee directors, are eligible to be granted non-qualified stock options, restricted stock awards, performance-based cash awards and other stock-based awards under the 2017 Incentive Plan. However, only employees of the combined company and its subsidiaries are eligible to be granted incentive stock options, or ISOs, under the 2017 Incentive Plan. Eligibility for awards under the 2017 Incentive Plan is determined by the compensation committee in its sole discretion.

Types of Awards

Stock Options .  The 2017 Incentive Plan authorizes the compensation committee to grant ISOs to eligible employees and non-qualified stock options to purchase shares to eligible employees, consultants and non-employee directors, who are referred to as participants. The compensation committee will determine the number of shares of common stock subject to each option, the term of each option, the exercise price (which may not be less than the fair market value of the shares of the combined company’s common stock at the time of grant or, in the case of ISOs granted to ten-percent stockholders, 110% of the fair market value), the vesting schedule and the other terms and conditions of each option. Options will be exercisable at such times and subject to such terms and conditions as are determined by the compensation committee at grant. The maximum term of options under the 2017 Incentive Plan is ten years (or five years in the case of ISOs granted to 10% stockholders). Upon the exercise of an option, the participant must make payment of the full exercise price (i) in cash or by check, bank draft or money order, (ii) solely to the extent permitted by law, through the delivery of irrevocable instructions to a broker (reasonably acceptable to the combined company) to promptly deliver an amount equal to the aggregate exercise price, and/or (iii) on such other terms and conditions as may be acceptable to the compensation committee (including, without limitation, the relinquishment of options or by payment in full or in part in the form of shares of the combined company’s common stock owned by the participant). Unless otherwise determined by the compensation committee, the 2017 Incentive Plan provides that options vested and exercisable as of the date of a participant’s termination of employment, consultancy or directorship (as applicable) will remain exercisable for the following periods following the date of termination: (i) if such termination is due to the participant’s death or “disability” (as defined in the 2017 Incentive Plan), one year; (ii) if such termination is by the combined company without

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“cause” (as defined in the 2017 Incentive Plan), 90 days; and (iii) if such termination is voluntary, 30 days. Upon an employment termination by the combined company for cause or a voluntary resignation following an event that would be grounds for termination for cause, the options will terminate and expire on the date of employment termination. Unless otherwise determined by the compensation committee, upon any employment termination, unvested options will terminate and expire on the date of employment termination.

Restricted Stock .  The 2017 Incentive Plan authorizes the compensation committee to grant restricted stock awards to eligible participants. Recipients of restricted stock awards enter into an agreement subjecting the restricted stock awards to transfer and other restrictions and providing the criteria or dates on which such awards vest and such restrictions lapse. The restrictions on restricted stock awards may lapse and the awards may vest over time, based on performance criteria or other factors (including, without limitation, performance goals that are intended to comply with the performance-based compensation exception under Section 162(m) of the Code, as discussed below), as determined by the compensation committee at grant. Except as otherwise determined by the compensation committee, a holder of a restricted stock award has all of the attendant rights of a stockholder, including the right to vote. However, such holder does not have the right to tender shares of the restricted stock and any dividends or other distributions payable on the restricted stock will not be paid unless and until the underlying shares of restricted stock vest and are no longer subject to restrictions.

Other Stock-Based Awards .  The 2017 Incentive Plan authorizes the compensation committee to grant awards of shares of common stock and other awards to eligible participants that are valued in whole or in part by reference to, or are payable in or otherwise based on, shares of the combined company’s common stock, including, but not limited to: (i) shares of common stock awarded purely as a bonus in lieu of cash and not subject to any restrictions or conditions; (ii) shares of common stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the combined company or an affiliate; (iii) stock appreciation rights; (iv) stock equivalent units; (v) restricted stock units; (vi) performance awards entitling participants to receive a number of shares of the combined company’s common stock (or cash in an equivalent value) or a fixed dollar amount, payable in cash, stock or a combination of both, with respect to a designated performance period; or (vii) awards valued by reference to book value of the combined company’s shares of common stock.

Certain Performance-Based Awards.   The 2017 Incentive Plan authorizes the compensation committee to grant performance-based stock-based and cash awards. Performance-based awards granted under the 2017 Incentive Plan that are intended to satisfy the performance-based compensation exception under Section 162(m) of the Code will vest based on attainment of specified performance goals established by the compensation committee. These performance goals will be based on the attainment of a certain target level of, or a specified increase in (or decrease where noted), criteria selected by the compensation committee. Such performance goals may be based upon the attainment of specified levels of company, subsidiary, division or other operational unit performance under one or more of the measures described above relative to the performance of other companies. The compensation committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria, to the extent permitted by Section 162(m) of the Code. Such performance goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including dispositions and acquisitions) and other similar events or circumstances.

The performance criteria under the 2017 Incentive Plan include: (i) enterprise value or value creation targets; (ii) income or net income; operating income; net operating income or net operating income after tax; operating profit or net operating profit; (iii) cash flow including, but not limited to, from operations or free cash flow; (iv) specified objectives with regard to limiting the level of increase in all or a portion of bank debt or other long-term or short-term public or private debt or other similar financial obligations, or other capital structure improvements, which may be calculated net of cash balances or other offsets and adjustments as may be established by the compensation committee; (v) net sales, revenues, net income or earnings before income tax or other exclusions; (vi) operating margin; return on operating revenue or return on operating profit; (vii) return measures (after tax or pre-tax), including return on capital employed, return on invested capital; return on equity, return on assets, return on net assets; (viii) market capitalization, earnings per share, fair market value of the shares of the combined company’s common stock, franchise value (net of debt), economic value added; (ix) total stockholder return or growth in total stockholder return (with or without dividend

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reinvestment); (x) financing and other capital raising transactions; (xi) proprietary investment results; (xii) estimated market share; (xiii) expansion of sales in additional geographies or markets; (xiv) expense management/control or reduction (including without limitation, compensation and benefits expense); (xv) customer satisfaction; (xvi) technological improvements/implementation, new product innovation; (xvii) collections and recoveries; (xviii) property/asset purchases; (xix) litigation and regulatory resolution/implementation goals; (xx) leases, contracts or financings (including renewals, overhead, savings, G&A and other expense control goals); (xxi) risk management/implementation; (xxii) development and implementation of strategic plans or organizational restructuring goals; (xxiii) development and implementation of risk and crisis management programs; compliance requirements and compliance relief; productivity goals; workforce management and succession planning goals; (xxiv) employee satisfaction or staff development; (xxv) formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance revenue or profitability or to enhance the customer base; (xvi) licensing or partnership arrangements; (xvii) progress of partnered programs and partner satisfaction; (xviii) progress of internal research or development programs; (xxix) submission of a new drug application (“NDA”) or the approval of the NDA by the U.S. Food and Drug Administration (“FDA”); (xxx) submission of an investigational new drug application (“IND”) or the approval of the IND by the FDA; (xxxi) submission of a therapeutic biologics license application (“BLA”) or the approval of the BLA by the FDA; (xxxii) submission to, or approval by, a foreign regulatory body of an applicable filing or a product; (xxxiii) strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); (xxxiv) the achievement of a launch of a new drug; (xxxv) the initiation or completion of a clinical trial phase; (xxxvi) implementation or completion of critical projects; (xxxvii) achievement of specified milestones in the discovery and development of one or more of the combined company’s products; (xxxviii) achievement of specified milestones in the commercialization of one or more of the combined company’s products; (xxxix) achievement of specified milestones in the manufacturing of one or more of the combined company’s products; (xl) the achievement of specified regulatory milestones relating to one or more of the combined company’s products; or (xli) completion of a merger, acquisition or any transaction that results in the sale of all or substantially all of the stock or assets.

Effect of Detrimental Activity.   Unless otherwise determined by the compensation committee, the 2017 Incentive Plan provides that, in the event a participant engages in “detrimental activity” (as defined in the 2017 Incentive Plan), all unexercised options held by the participant will terminate and expire and all unvested restricted stock and other stock-based awards will be immediately forfeited. As a condition to the exercise of an option, a participant is required to certify that he or she is in compliance with the terms and conditions of the 2017 Incentive Plan and that he or she has not engaged in, and does not intend to engage in, any detrimental activity. If the participant engages in a detrimental activity within one year following the exercise of an option, or if earlier, within one year following the date of the participant’s employment termination, the combined company is entitled to recover from the participant, at any time within one year after such date, any gain realized from the exercise of such option. If the participant engages in a detrimental activity within one year following the vesting date of a restricted stock award or other stock-based award, the combined company is entitled to recover from the participant, at any time within one year after such detrimental activity, the fair market value on the vesting date of any restricted stock award, and any gain realized from the vesting of any other stock-based award, that vested during such period.

Unless otherwise determined by the compensation committee, the foregoing provisions related to detrimental activity will cease to apply upon a change in control (as defined in the 2017 Incentive Plan and described below).

Effect of Certain Transactions; Change in Control.   In the event of a change in control, except as otherwise provided by the compensation committee in an award agreement, unvested awards will not vest. Instead, the compensation committee may, in its sole discretion provide for outstanding awards to be treated in accordance with one or more of the following methods: (i) awards (whether or not vested) may be continued, assumed or substituted for; (ii) awards may be purchased for an amount of cash equal to the change in control price per share; and/or (iii) stock options or other stock-based appreciation awards may be cancelled if the change in control price is less than the applicable exercise price. However, the compensation committee may in its sole discretion provide for the acceleration of vesting and lapse of restrictions of an award at any time.

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For the purposes of the foregoing, a “change in control” generally means the occurrence of one of the following events:

In addition, upon the occurrence of an acquisition event (as defined below), the compensation committee may terminate all outstanding and unexercised options (or any other stock-based awards that are subject to exercise by the holder thereof), which are referred to as exercisable awards, effective as of the date of the acquisition event, by delivering a termination notice to each participant at least 20 days prior to the date of the acquisition event. During the period after which notice is provided, each participant may exercise all of his or her then-outstanding and vested exercisable awards, subject to the occurrence of the acquisition event. Any exercisable award that has an exercise price that is equal to or greater than the fair market value of the combined company’s common stock on the date of the acquisition event may be canceled by the compensation committee without consideration. Under the 2017 Incentive Plan, an “acquisition event” means (i) a merger or consolidation in which the combined company is not the surviving entity, (ii) any transaction that results in the acquisition of all or substantially all of the combined company’s outstanding common stock by a single person or group of persons, or (iii) the sale or transfer of all or substantially all of the combined company’s assets.

Adjustments .  In the event of a stock split, reverse stock split, dividend, recapitalization, merger, consolidation, spin off, reorganization, sale or transfer of all or part of the combined company’s assets or business, or other certain corporate transactions having a similar effect to the foregoing, the board of directors will make such adjustments to the aggregate number of shares may be issued, the number of shares or other property subject to an award, the purchase or exercise price of awards, or the individual participant limits discussed above as are determined to be necessary or advisable to prevent substantial dilution or enlargement of the rights of participants under the 2017 Incentive Plan.

Non-Transferability of Awards.   Except as the compensation committee may permit, at the time of grant or thereafter, awards granted under the 2017 Incentive Plan are generally not transferable by a participant other than by will or the laws of descent and distribution. Shares of the combined company’s common stock acquired by a permissible transferee will continue to be subject to the terms of the 2017 Incentive Plan and the applicable award agreement.

Term.   Awards under the 2017 Incentive Plan may not be made after the tenth anniversary of the effective date, but awards granted prior to such date may extend beyond that date. The combined company may seek stockholder re-approval of the performance goals in the 2017 Incentive Plan and, to the extent that such stockholder approval is obtained on or after the first stockholders’ meeting in the fifth year following the year of the last stockholder approval of the performance goals in the 2017 Incentive Plan, awards under the 2017 Incentive Plan may be made based on such performance goals in order to qualify for the “performance-based compensation” exception under Section 162(m) of the Code.

Amendment and Termination.   Subject to the rules referred to in the balance of this paragraph, the combined company’s board of directors may at any time amend, in whole or in part, any or all of the provisions of the 2017 Incentive Plan, or suspend or terminate it entirely, retroactively or otherwise. Except as required to comply with applicable law, no such amendment may reduce the rights of a participant with respect to awards previously granted without the consent of such participant. In addition, without the approval of stockholders, no amendment may be made that would: (i) increase the aggregate number of shares of the combined company’s common stock that may be issued under the 2017 Incentive Plan; (ii) increase the maximum individual participant share limitations for a fiscal year or year of a performance period; (iii) change maximum option term; (v) alter the performance criteria; (vi) amend the terms of any outstanding stock option

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or other stock appreciation award to reduce the exercise price thereof (i.e., reprice); (vii) cancel any outstanding “in-the-money” stock option or other stock appreciation award in exchange for cash, other awards or stock option or other stock appreciation award with a lower exercise price; (viii) require stockholder approval in order for the 2017 Incentive Plan to continue to comply with Section 162(m) of the Code or Section 422 of the Code; or (ix) require stockholder approval under the rules of any exchange or system on which the combined company’s securities are listed or traded.

The combined company intends to file a registration statement on Form S-8 under the Securities Act to register the full number of shares of common stock that will be available for issuance under the 2017 Incentive Plan, as described in the section titled “— Number of Authorized Shares and Award Limits” above.

Federal Income Tax Implications of the 2017 Incentive Plan.   The federal income tax consequences arising with respect to awards granted under the 2017 Incentive Plan will depend on the type of award. From the recipients' standpoint, as a general rule, ordinary income will be recognized at the time of payment of cash, or delivery of actual shares. Future appreciation on shares held beyond the ordinary income recognition event will be taxable at capital gains rates when the shares are sold. The combined company, as a general rule, will be entitled to a tax deduction that corresponds in time and amount to the ordinary income recognized by the recipient, and the combined company will not be entitled to any tax deduction in respect of capital gain income recognized by the recipient. Exceptions to these general rules may arise under the following circumstances: (i) if shares, when delivered, are subject to a substantial risk of forfeiture by reason of failure to satisfy any employment or performance-related condition, ordinary income taxation and the combined company’s tax deduction will be delayed until the risk of forfeiture lapses (unless the recipient makes a special election to ignore the risk of forfeiture); (ii) if an employee is granted an ISO, no ordinary income will be recognized, and the combined company will not be entitled to any tax deduction, if shares acquired upon exercise of the ISO are held longer than the later of one year from the date of exercise and two years from the date of grant; (iii) the combined company may not be entitled to a tax deduction for compensation attributable to awards granted to the combined company’s named executive officers (other than the chief financial officer), if and to the extent such compensation does not qualify as “performance-based” compensation under Section 162(m) of the Code, and such compensation, along with any other non-performance-based compensation paid in the same calendar year, exceeds $1 million; and (iv) an award may be taxable at 20% above ordinary income tax rates at the time it becomes vested, even if that is prior to the delivery of the cash or stock in settlement of the award, if the award constitutes “deferred compensation” under Section 409A of the Code, and the requirements of Section 409A of the Code are not satisfied.

The foregoing provides only a general description of the application of federal income tax laws to certain awards under the 2017 Incentive Plan, and is not intended as tax guidance to participants in the 2017 Incentive Plan, as the tax consequences may vary with the types of awards made, the identity of the recipients and the method of payment or settlement. This summary does not address the effects of other federal taxes (including possible “golden parachute” excise taxes) or taxes imposed under state, local, or non-U.S. tax laws.

New Plan Benefits

Pursuant to the employment agreement between Altimmune and William J. Enright, the combined company anticipates granting Mr. Enright an option to purchase a number of shares of common stock of the combined company equal to 1% of the fully diluted capitalization of the combined company. The option will have an exercise price equal to the closing price of the combined company’s common stock on the NYSE MKT on the date the merger becomes effective.

Except as set forth above, for all other participants under the 2017 Incentive Plan, the benefits or amounts that will be received by or allocated to each named executive officer, all current executive officers as a group, all directors who are not executive officers as a group, and all employees who are not executive officers as a group under the 2017 Incentive Plan are not presently determinable.

Required Vote

Approval of the 2017 Incentive Plan requires the affirmative “FOR” vote of the holders of a majority of the shares of PharmAthene’s common stock present in person or represented by proxy at the Special Meeting and entitled to vote thereon.

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Recommendation of PharmAthene Board of Directors

PharmAthene strongly believes that the approval of the 2017 Incentive Plan is essential to the success of the combined company. Awards under the 2017 Incentive Plan are vital to attract, motivate and retain outstanding and highly skilled individuals. For the reasons stated above, PharmAthene’s stockholders are being asked to approve the 2017 Incentive Plan.

The PharmAthene Board of Directors unanimously recommends that PharmAthene stockholders vote “FOR” PharmAthene’s Proposal No. 4 to approve the PharmAthene, Inc. 2017 Omnibus Incentive Plan.

PharmAthene Proposal No. 5 — Approval of Possible Adjournment of the PharmAthene Special Meeting

PharmAthene is asking its stockholders to consider and vote upon a proposal to approve one or more adjournments of the PharmAthene special meeting, if necessary or advisable.

If the number of shares of PharmAthene common stock present in person or represented by proxy at the PharmAthene special meeting voting in favor of each of PharmAthene Proposal Nos. 1 through 4 is insufficient to approve such proposal at the time of the PharmAthene special meeting, then PharmAthene may move to adjourn the PharmAthene special meeting in order to enable the PharmAthene Board of Directors to solicit additional proxies in respect of the proposal. In that event, PharmAthene stockholders may be asked to vote only upon the adjournment proposal, PharmAthene Proposal No. 5, and not on any other proposal.

In this proposal, PharmAthene is asking its stockholders to authorize the holder of any proxy solicited by the PharmAthene Board of Directors to grant discretionary authority to the proxy or attorney-in-fact to adjourn the PharmAthene special meeting one or more times for the purpose of soliciting additional proxies. If PharmAthene stockholders approve this PharmAthene Proposal No. 5, PharmAthene could adjourn the PharmAthene special meeting and any adjourned session of the PharmAthene special meeting and use the additional time to solicit additional proxies, including from PharmAthene stockholders that previously have returned properly executed proxies or authorized a proxy by using the Internet or telephone. Among other things, approval of PharmAthene Proposal No. 5 could mean that, even if PharmAthene has received proxies representing more votes against the approval of each of PharmAthene Proposal Nos. 1 through 4 than in favor of such proposals PharmAthene could adjourn the PharmAthene special meeting without a vote on such proposal and seek to obtain sufficient votes in favor of such proposal to obtain approval of that proposal.

PharmAthene currently does not intend to propose adjournment at the PharmAthene special meeting if there are sufficient votes to approve PharmAthene Proposal Nos. 1 through 4.

Vote Required; Recommendation of the PharmAthene Board of Directors

The affirmative vote of the holders of a majority of the shares of PharmAthene common stock entitled to vote on the proposal and present in person or represented by proxy, is required for approval of PharmAthene Proposal No. 5.

A failure to vote by proxy or in person at the PharmAthene special meeting or a “broker non-vote” will have no effect on the outcome of PharmAthene Proposal No. 5. For purposes of the vote on this PharmAthene Proposal No. 5, an abstention will have the same effect as a vote “AGAINST” such proposal.

The PharmAthene Board of Directors unanimously recommends that PharmAthene stockholders vote “FOR” PharmAthene Proposal No. 5 to adjourn the PharmAthene special meeting, if necessary or advisable, to solicit additional proxies if there are not sufficient votes in favor of PharmAthene Proposal Nos. 1 through 4.

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MATTERS TO BE PRESENTED TO ALTIMMUNE'S STOCKHOLDERS

Altimmune Stockholder Action by Written Consent

Altimmune's Board of Directors is providing this consent solicitation and the accompanying consent solicitation materials to its stockholders and asking its stockholders to execute and deliver the written consent furnished with this proxy statement/prospectus/consent solicitation to approve the mergers and adopt and approve the Merger Agreement and the transactions contemplated thereby, including the Certificate of Merger to be filed with the Secretary of State of the State of Delaware referenced in the Merger Agreement.

The Merger Agreement provides that Altimmune will be merged with and into Merger Sub Corp, a wholly-owned subsidiary of PharmAthene, with Altimmune as the surviving entity, and immediately thereafter, Altimmune will be merged with and into Merger Sub LLC, a wholly-owned subsidiary of PharmAthene, with Merger Sub LLC as the surviving entity in such merger. Following the consummation of the mergers, PharmAthene will change its name to “Altimmune, Inc.” In connection with the mergers, shares of Altimmune common and preferred stock issued and outstanding immediately prior to the Effective Time of the mergers will be converted into the right to receive shares of PharmAthene common stock, at the Exchange Ratio described in the Merger Agreement. For a summary of and detailed information regarding the merger consideration, see “The Merger Agreement — Merger Consideration” beginning on page 134 of this proxy statement/prospectus/consent solicitation.

Shares Entitled to Consent and Consent Required

Only Altimmune stockholders of record at the close of business on          , 2017 will be notified of and be entitled to execute and deliver a written consent. On the record date, the outstanding securities of Altimmune eligible to consent with respect to the proposals consisted of 9,195,109 shares of Altimmune's Class A Common Stock and 800,000 shares of its Series B Convertible Preferred Stock.

Under Altimmune's Amended and Restated Certificate of Incorporation, as amended, each holder of Altimmune Class A Common Stock is entitled to one vote for each share of common stock held of record and each holder of Altimmune Series B Convertible Preferred Stock is entitled to one vote for each share of common stock into which such share of preferred stock held of record is convertible. Each share of Altimmune Series B Convertible Preferred Stock is currently convertible into one share of Altimmune Class A Common Stock.

Approval is required from the holders of at least (i) 65% of the outstanding shares of Altimmune common stock and preferred stock, voting together as a single class on an as-converted-to-common stock basis, and (ii) the majority of the outstanding Altimmune common stock for the mergers, the Merger Agreement and the transactions contemplated thereby.

As of the record date, the directors and executive officers of Altimmune held, in the aggregate, approximately 68% of the outstanding shares of Altimmune capital stock on an as-converted-to-common stock basis entitled to execute and deliver the written consent. On January 19, 2017, the officers, directors and major stockholders of Altimmune who owned approximately 6.1 million shares, or approximately 68% of the outstanding shares of Altimmune common stock on as-converted-to-common stock basis, solely in their capacity as Altimmune stockholders, entered into the Altimmune Voting Agreement with PharmAthene in connection with the Merger Agreement.

Submission of Consents

You may consent to the proposal with respect to your shares by completing and signing the written consent furnished with this consent solicitation and solicitation materials and returning it to Altimmune on or before           , 2017, the date Altimmune's Board of Directors has set as the targeted final date for receipt of written consents. Altimmune reserves the right to extend the final date for receipt of written consents beyond           , 2017. Any such extension may be made without notice to stockholders.

If you hold shares of Altimmune common stock or preferred stock as of the record date and you wish to give your written consent, you must complete the enclosed written consent, date and sign it, and promptly return it to Altimmune. Once you have completed, dated and signed the written consent, you may deliver it to Altimmune by faxing it to (855) 557-1369, by emailing a.pdf copy of your written consent to consents@altimmune.com, or by mailing your written consent to 19 Firstfield Road, Gaithersburg, Maryland 20878.

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Executing Consents; Revocation of Consents

You may execute a written consent to approve the proposal to approve the mergers, approve and adopt the Merger Agreement and related transactions (which is equivalent to a vote for the proposal) or disapprove the proposal (which is equivalent to a vote against the proposal). If you do not return your written consent, it will have the same effect as a vote against the proposal. If you are a record holder and you return a signed written consent without indicating your decision on the proposal, you will have given your consent to approve the mergers and adopt and approve the Merger Agreement and the transactions contemplated thereby.

Your consent to the proposal may be changed or revoked at any time before the consents of a sufficient number of shares to approve and adopt such proposal have been received by Altimmune and delivered to Altimmune's corporate secretary. If you wish to change or revoke a previously delivered consent before that time, you may do so by delivering a notice of revocation to 19 Firstfield Road, Gaithersburg, Maryland 20878, in the method specified above or by delivering a new written consent with a later date.

Solicitation of Consents; Expense

The expense of preparing, printing and mailing these consent solicitation materials is being borne by Altimmune. Altimmune's officers and employees may solicit consents by telephone and personally, in addition to solicitation by mail. These persons will receive their regular salaries but no special compensation for soliciting consents.

Recommendation of the Altimmune Board

The Altimmune Board of Directors recommends that Altimmune stockholders approve the mergers and adopt and approve the Merger Agreement and the transactions contemplated thereby by executing and delivering the written consent furnished with this consent solicitation and accompanying solicitation materials. Altimmune's Board of Directors believes the merger consideration to Altimmune's stockholders is fair, advisable and in the best interests of Altimmune and its stockholders. Please see the section of this proxy statement/prospectus/consent solicitation entitled “The Merger — Altimmune Reasons for the Merger.”

Voting and Other Agreements

Following PharmAthene's and Altimmune's entering into the Merger Agreement, on          , 2017, certain stockholders, directors and officers of Altimmune, holding, in the aggregate, approximately 68% of the outstanding shares of Altimmune capital stock, entered into the Altimmune Voting Agreement whereby they have agreed to vote their Altimmune shares in favor of the mergers, and a lock-up agreement pursuant to which they have agreed to refrain from selling any of the PharmAthene common stock they receive in the mergers for 60 days following the Effective Time of the mergers. For a more detailed discussion of these stockholder agreements see the sections of this proxy statement/prospectus/consent solicitation entitled “Voting and Other Agreements — Altimmune Voting Agreement” and “Voting and Other Agreements — Altimmune Post-Closing Lock-up Agreement.”

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THE PARTIES TO THE MERGERS

Altimmune, Inc.
19 Firstfield Road
Gaithersburg, MD 20878
(240) 654-1450

Altimmune is a clinical stage immunotherapeutics biotechnology company located in Montgomery County, MD with additional operating sites in London, UK and Strasbourg, France. By leveraging the complementary attributes of its two innovative vaccine delivery platforms, RespirVec ^TM and Densigen ^TM , Altimmune is able to design and develop immunotherapeutic products tailored to address a wide range of disease indications including acute respiratory infections, chronic viral infections and cancer, with the potential for fundamental advantages over competing products.

Altimmune is headquartered in Gaithersburg, MD. Altimmune's principal offices are located at 19 Firstfield Road Gaithersburg, MD 20878 and its phone number is (240) 654-1450. Altimmune's principal website is www.altimmune.com .

Altimmune is a private company and its stock is not listed on a securities exchange.

For more information about Altimmune, please visit Altimmune's Internet website at www.altimmune.com . Altimmune's Internet website address is provided as an inactive textual reference only. The information contained on Altimmune's Internet website is not incorporated into, and does not form a part of, this proxy statement/prospectus/consent solicitation or any other report or document on file with or furnished to the SEC. Additional information about Altimmune is included in this proxy statement/prospectus/consent solicitation. See the section entitled “Altimmune's Business” of this proxy statement/prospectus/consent solicitation.

PharmAthene, Inc.
One Park Place, Suite 450
Annapolis, Maryland
(410) 269-2600

PharmAthene, a Delaware corporation, is a biodefense company engaged in developing a next generation anthrax vaccine. The next generation vaccine is intended to have more rapid time to protection, fewer doses for protection and less stringent requirements for temperature controlled storage and handling than the currently used vaccine.

PharmAthene's executive offices are located at One Park Place, Suite 450, Annapolis, Maryland 21401 and its telephone number is (410) 269-2600. PharmAthene's principal website is www.pharmathene.com .

PharmAthene common stock is listed on the NYSE MKT under the symbol “PIP.”

For more information about PharmAthene, please visit PharmAthene's Internet website at www.pharmathene.com . PharmAthene's Internet website address is provided as an inactive textual reference only. The information contained on PharmAthene's Internet website is not incorporated into, and does not form a part of, this proxy statement/prospectus/consent solicitation or any other report or document on file with or furnished to the SEC. Additional information about PharmAthene is included in the documents incorporated by reference into this proxy statement/prospectus/consent solicitation. Please the section entitled “Where You Can Find Additional Information” beginning on page 273 of this proxy statement/prospectus/consent solicitation.

Mustang Merger Sub Corp I Inc.
One Park Place, Suite 450
Annapolis, Maryland
(410) 269-2600

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Merger Sub Corp, a Delaware corporation and a wholly owned subsidiary of PharmAthene, was formed solely for the purpose of facilitating the mergers, and in particular, Merger 1. Merger Sub Corp has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by Merger 1 under the Merger Agreement. By operation of Merger 1, Merger Sub will be merged with and into Altimmune, with Altimmune surviving the merger as a wholly owned subsidiary of PharmAthene.

Mustang Merger Sub II LLC
One Park Place, Suite 450
Annapolis, Maryland
(410) 269-2600

Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of PharmAthene, was formed solely for the purpose of facilitating the mergers, and in particular, Merger 2. Merger Sub LLC has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by Merger 2 under the Merger Agreement. By operation of Merger 2, immediately after Merger 1, Altimmune will be merged with and into Merger Sub LLC, with Merger Sub LLC surviving the merger as a wholly owned subsidiary of PharmAthene.

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In addition, PharmAthene terminated development of SparVax® to focus PharmAthene's resources on development of its next generation Anthrax vaccine, SparVax-L®. SparVax® was a liquid Recombinant Protective Antigen (“rPA”) anthrax vaccine designed to protect against inhalational anthrax, the most lethal form of B. anthracis infection in humans. PharmAthene’s next generation Anthrax vaccines, SparVax-L® uses rPA, rPA manufacturing processes and development technologies produced in the SparVax® program to develop a vaccine intended to significantly improve time to protection, dosing schedules, administration convenience and handling requirements compared to SparVax®.

On November 17, 2016, the PharmAthene Board of Directors declared a cash dividend on PharmAthene common stock of $2.91 per share or approximately $200 million in the aggregate payable in February 2017. At the same time, PharmAthene communicated to the marketplace that, after distributing the cash proceeds, it would seek a strategic transaction to maximize the value of its anthrax vaccine programs.

An important area of interest to PharmAthene during the portion of the process that involved evaluating potential acquisition targets was identifying targets having business lines that would maximize the opportunities for the continuing development of PharmAthene's existing products. In particular, PharmAthene's management was seeking to identify companies with expertise in vaccine development, developing biodefense products and companies that did business with BARDA. These types of companies were considered to be a strong fit for PharmAthene due to their ability to maximize the value of the PharmAthene assets and develop products having potential applications to both commercial and government markets. PharmAthene identified several target candidates that met these criteria including Altimmune.

Since Altimmune's inception, its Board of Directors and management team have been regularly evaluating its business and operations, long-term strategic goals and alternatives, and prospects as an independent company. Altimmune's Board of Directors and management team regularly review and assess trends and conditions impacting Altimmune and its industry, changes in the marketplace and applicable law, the competitive environment and Altimmune's future prospects. As part of the ongoing review of Altimmune and its position in its industry, Altimmune's Board of Directors also regularly reviews the strategic alternatives available to Altimmune, including possible strategic combinations, acquisitions and divestitures.

As part of this review, Altimmune began preparing for a potential initial public offering in the second quarter of 2015. Altimmune was prepared to launch its initial public offering in the first quarter of 2016, but determined that the market was not favorable to initial public offerings at that time. Over the course of 2016, Altimmune continued to evaluate all different strategic options for additional financing, including an initial public offering, a reverse merger, a private placement and other strategic transactions. Altimmune evaluated numerous public company entities and participated in several auction processes for merger partners.

From October 2015 to November 2016, members of management and other representatives of PharmAthene contacted various companies identified as either having vaccine businesses that might be compatible with that of PharmAthene, that had contracts with BARDA or otherwise did business with the U.S. government, and PharmAthene engaged in discussions regarding a potential strategic transaction with three of these companies. PharmAthene entered into confidentiality agreements with these companies and conducted due diligence on the target companies. One of the target companies submitted a preliminary proposal to PharmAthene, but the PharmAthene Board of Directors determined, after additional due diligence, that this target company was not a good fit.

Following an informal lunch on October 22, 2015 that included Eric Richman, a PharmAthene Director, Elizabeth Czerepak, Altimmune's Chief Financial Officer and Executive Vice President of Corporate Development and William Enright, Altimmune's President and Chief Executive Officer, an introduction was made to John Gill, PharmAthene’s President and Chief Executive Officer via email. As part of its review of potential strategic alternatives, on October 27, 2015, John Gill, spoke with Mr. Enright, and Elizabeth Czerepak, on the telephone to discuss a strategic transaction between PharmAthene and Altimmune.

After an extended period of time and following the resolution of certain matters in the litigation with SIGA, providing for certainty as to the receipt of the final award from SIGA, Mr. Gill and Mr. Enright spoke on the telephone on July 21, 2016 regarding operations at their respective companies.

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On August 16, 2016, Mr. Gill and Jeffrey B. Steinberg, PharmAthene’s Vice President of Corporate and Business Development, met in Annapolis, Maryland at the headquarters of PharmAthene with Mr. Enright and Ms. Czerepak to discuss a potential transaction between PharmAthene and Altimmune. PharmAthene and Altimmune also entered into a confidentiality agreement on August 16, 2016 to allow mutual technical and legal due diligence. During this meeting, there were detailed discussions relating to the possible benefits of combining the two companies. Virtual data rooms were established to permit both sides to review documents in key areas of their respective businesses.

From August 16, 2016 through August 29, 2016, Mr. Gill and Mr. Steinberg on the one hand, and Mr. Enright and Ms. Czerepak on the other hand, had several telephone conferences to review various scenarios for a transaction between PharmAthene and Altimmune. The parties agreed during the August 16, 2016 meeting to further consider a potential business transaction between the two companies and to speak again within the coming weeks.

On August 30, 2016, John Troyer, Vice President of Product Development of PharmAthene and Scot Roberts, Ph.D., Chief Scientific Officer of Altimmune, spoke on the telephone, during which Dr. Roberts provided a technical and business overview of Altimmune. During this conversation, Dr. Roberts provided an update of the status of Altimmune's influenza program, and the other product candidates in Altimmune's pipeline.

On September 21, 2016, PharmAthene engaged each of Sol Langermann, Ph.D., Senior Vice President and Chief Scientific Officer of Amplimmune, Inc., Arthur Elliott, Ph,D., a consultant and Peter A. Patriarca, M.D., Senior Clinical Consultant at Biologics Consulting Group, Inc., to assist PharmAthene in conducting due diligence. Dr. Langermann has expertise in vaccines, biologics flu and immunology. Dr. Elliott possesses expertise in biologics, vaccine development and BARDA. Dr. Patriarca possesses expertise in vaccines, flu and regulatory affairs.

From September 2016 to November 2016, each of Drs. Langermann, Elliott and Patriarca met with representatives from Altimmune, reviewed documentation, clinical information and reports prepared by representatives of Altimmune, among other things, in conducting due diligence evaluations for the benefit of PharmAthene.

From September 2016 to November 2016, PharmAthene, Altimmune and their respective advisors conducted technical, business, intellectual property, financial and legal due diligence. As part of this mutual diligence process, multiple meetings took place between PharmAthene and Altimmune management and their respective advisors.

On September 22, 2016, PharmAthene received a non-binding acquisition proposal from Altimmune.

On September 28, 2016, Mr. Gill, Mr. Steinberg, Mr. Enright and Ms. Czerepak discussed the strategic rationale for a potential business combination between PharmAthene and Altimmune.

Mr. Gill conferred initially with Mitchel Sayare, Ph.D., the Chairman of the PharmAthene Board of Directors, regarding the draft terms in the non-binding letter of interest and thereafter conveyed the contents of the draft terms to the other members of PharmAthene’s Board of Directors. On October 6, 2016, following conversations with the members of the Board of Directors of PharmAthene, Mr. Steinberg delivered a revised letter of intent to Mr. Enright.

From October 6, 2016 through November 16, 2016, Mr. Gill, Mr. Steinberg, Mr. Enright and Ms. Czerepak, as well as legal counsel for each of PharmAthene and Altimmune had numerous telephone conversations. Mr. Gill, Mr. Steinberg, Mr. Enright and Ms. Czerepak met in person on November 10, 2016 in Gaithersburg, Maryland to discuss the continuing operation of the businesses, the financial requirements of the combined company and the various terms of the letter of intent. In addition, numerous revised drafts of the letter of intent were exchanged between the parties.

On November 16, 2016, during a telephonic meeting of the PharmAthene Board of Directors, PharmAthene's management updated the PharmAthene Board of Directors on its progress in evaluating a potential merger with Altimmune. Management reported to the Board on the background of the proposed transaction, including the processes and history of activity leading up to negotiating a term sheet with

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Altimmune. Management reported on the process of meeting with venture capital funds in Spring 2016, exploring targets conveyed through attorneys and other professional contacts, PharmAthene's efforts to perform diligence on potential targets with similar businesses (such as those with Anthrax products and BARDA contracts), and management's focus on exploring opportunities that would value PharmAthene's assets and attributes. Management reported that following preliminary due diligence efforts, PharmAthene engaged in serious discussions with three potential targets, and that after performing further scientific due diligence, management eliminated two of the three prospective targets with which it had been in discussions. Management reported that it believed that Altimmune presented the best value for PharmAthene’s stockholders.

Management of PharmAthene presented an overview of the proposed transaction with Altimmune to the PharmAthene Board, provided an overview of Altimmune’s business, including its product candidates and platform technologies; its experienced management team; the proposed timing of its pipeline and clinical milestones; a proposed timeline of the merger; the material terms of the proposed merger (including post-closing ownership, cash position, composition of management and board of directors; the escrow of certain consideration; the absence of a requirement for PharmAthene’s to provide indemnification; lock-ups and exclusivity); the perceived positives and negatives of the proposed transaction; the availability of continued investment and support from existing Altimmune stockholders; and the proposed timing of the transaction.

Management of PharmAthene reported further on the findings and conclusions of the three outside consultants engaged by PharmAthene to evaluate the technology platform and program review for Altimmune’s product pipeline and reported further that the reviewers saw the proposed transaction as favorable for PharmAthene.

A discussion then ensued regarding the proposed transaction, including with respect to its terms, the importance of the ownership interest to be retained by the shareholders of PharmAthene after the proposed merger among other things. The PharmAthene Board of Directors, after discussions, authorized PharmAthene’s management and financial and legal advisors to continue discussions and negotiations with Altimmune. The PharmAthene Board of Directors approved the non-binding letter of intent and directed management to complete diligence and negotiate a merger agreement.

On November 17, 2016, the PharmAthene and Altimmune signed the non-binding letter of intent.

On November 29, 2016, PharmAthene’s outside counsel, Dentons US LLP, sent Altimmune and its outside counsel, Proskauer Rose LLP, a draft merger agreement. The parties engaged in preliminary negotiations concerning the draft merger agreement.

On November 30, 2016, certain of the members of the Boards of Directors of PharmAthene and Altimmune met at a restaurant in New York City for dinner. Conversations during dinner were informal and related to management of the combined business following the proposed merger, among other things.

From November 2016 through January 2017, PharmAthene and Altimmune, together with their respective outside legal counsel and financial advisors, engaged in negotiations regarding the terms of the merger agreement and the ancillary transaction agreements, including the percentage of the combined company to be owned by PharmAthene’s and Altimmune’s stockholders. Altimmune’s indemnification obligations, an additional financing by Altimmune’s existing stockholders, non-solicitation provisions, management of the combined company, treatment of stock options and warrants in the mergers, conditions to each party’s obligation to consummate the mergers, termination rights and termination fees, and representations, warranties and covenants of the PharmAthene and Altimmune. Final agreement on these and other issues was reached over the course of numerous discussions involving members of Altimmune and PharmAthene management and their legal teams as well as certain of the stockholders of Altimmune. During this period, the Altimmune board of directors had a standing weekly call in which most or all of the directors of Altimmune participated, to receive updates from management team regarding the status of the negotiations and to discuss strategy and next steps.

On December 6, 2016, Mr. Enright and Ms. Czerepak made a presentation to the members of the Board of Directors of PharmAthene, in Philadelphia, Pennsylvania, following which, they attended a dinner with the

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members of the Board of Directors of PharmAthene. During the dinner, the members of the Board of Directors of PharmAthene asked questions of Mr. Enright relating to the clinical programs for Altimmune, the progress of the studies and the budget for future development, among other things.

PharmAthene’s Board of Directors met the next day, on December 7, 2016 in Philadelphia, Pennsylvania, and discussed extensively the status of the proposed transaction with Altimmune and negotiations related to the proposed merger. The discussions included a final technical diligence report, updates on the proposed business and financial terms of the merger, the composition of the board of directors of the combined company, the companies respective financial strength and the desire that the existing stockholders of Altimmune invest at least $8.0 million of additional capital (that had been previously committed) into Altimmune prior to the consummation of the mergers. The PharmAthene Board of Directors provided instructions to its legal advisor with respect to specific negotiating positions.

From January 2, 2017 through January 17, 2017, representatives of Altimmune and PharmAthene reviewed issues relating to the commitment of certain stockholders of Altimmune to invest $8.0 million in Altimmune prior to the Effective Time. As a result of an agreement to allow $3.5 million to be invested prior to the Closing and a commitment to invest an additional $5.0 million after the Closing, an adjustment to the exchange ratio was extensively discussed and, after such discussion, was determined to be agreeable.

On January 6, 2017, the Altimmune board of directors held a special telephonic meeting to consider the proposed merger between PharmAthene and Altimmune. Representatives of Proskauer also responded to questions from members of the Altimmune Board of Directors. Following these discussions and after review and discussion among the members of Altimmune’s board of directors, Altimmune’s board of directors unanimously determined, among other things, that the Merger Agreement and the proposed mergers contemplated thereby were advisable and in the best interest of Altimmune and its stockholders and resolved to recommend that Altimmune finalize the last details of the Merger Agreement and related agreements. On January 16, 2017, a final version of the Merger Agreement and a summary of changes to the Merger Agreement since the January 6, 2017 draft were circulated via email together with a written consent in lieu of special meeting of the Altimmune Board of Directors. Signed written consents were received by all Altimmune board members to approve and adopt the Merger Agreement and related matters.

On January 18, 2017, the PharmAthene Board of Directors held a special telephonic meeting to consider the proposed merger between PharmAthene and Altimmune and to vote on the Merger Agreement and related agreements. Representatives of Dentons US LLP reminded the members of PharmAthene's Board of Directors of previous discussions relating to their fiduciary duties in evaluating the mergers and provided a detailed summary of the terms of the proposed Merger Agreement and related agreements. Representatives of Dentons also responded to questions from members of the PharmAthene Board of Directors. At the meeting, a representative from Houlihan Lokey reviewed and discussed certain of Houlihan Lokey's financial analyses and thereafter, verbally rendered Houlihan Lokey's opinion to the PharmAthene Board of Directors (which was subsequently confirmed in writing by delivery of Houlihan Lokey's written opinion delivered to the PharmAthene Board of Directors dated January 18, 2017) as to the fairness of the Exchange Ratio provided for in Merger 1 pursuant to the Merger Agreement to PharmAthene, from a financial point of view. The written opinion of Houlihan Lokey is attached to this joint proxy statement/prospectus/consent solicitation as Annex FA. Following these discussions and after review and discussion among the members of PharmAthene's Board of Directors, PharmAthene's Board of Directors unanimously determined, among other things, that the Merger Agreement and the proposed mergers contemplated thereby were advisable and in the best interest of PharmAthene and its stockholders and resolved to recommend that PharmAthene stockholders approve and adopt the Merger Agreement, the issuance of shares of PharmAthene common stock in connection with the proposed mergers and all other actions required or contemplated be taken by the Merger Agreement.

Following the meeting of the Board of Directors of PharmAthene, the parties executed the Merger Agreement, certain PharmAthene stockholders executed voting agreements with Altimmune and certain PharmAthene stockholders and Altimmune stockholders executed lock-up agreements.

On January 19, 2017, certain Altimmune stockholders executed the Altimmune Voting Agreements.

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PharmAthene Reasons for the Mergers

In evaluating the mergers and the Merger Agreement, the PharmAthene Board of Directors consulted with PharmAthene's management and legal, financial and other advisors and, in reaching its decision to approve the mergers and enter into the Merger Agreement, the PharmAthene Board of Directors considered a number of factors, including the following material factors which the PharmAthene Board of Directors viewed as supporting its decision to approve the mergers and the Merger Agreement:

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The PharmAthene Board of Directors weighed the factors described above, which the PharmAthene Board of Directors viewed generally as supporting its decision to approve the mergers and the Merger Agreement, against a number of other factors identified in its deliberations weighing negatively against the mergers, including, without limitation, the following material factors:

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After consideration of these factors, the PharmAthene Board of Directors determined that these risks could be mitigated or managed by PharmAthene or Altimmune or by the combined company following the mergers, were reasonably acceptable under the circumstances or, in light of the anticipated benefits, that these risks were unlikely to have a materially adverse impact on the mergers or on the combined company following the mergers, and that, overall, these risks were significantly outweighed by the potential benefits of the mergers.

Although this discussion of the information and factors considered by the PharmAthene Board of Directors is believed to include the material factors considered by the PharmAthene Board of Directors, it is not intended to be exhaustive and may not include all of the factors considered by the PharmAthene Board of Directors. In reaching its determination to approve the mergers and adopt and approve the Merger Agreement, the PharmAthene Board of Directors did not find it useful and did not attempt to quantify or assign any

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relative or specific weights to the various factors that it considered in reaching its determination that the mergers and the Merger Agreement are advisable and fair to and in the best interests of PharmAthene and its stockholders. Rather, the PharmAthene Board of Directors based its position and determination on the totality of the information presented to and factors considered by it. In addition, individual members of the PharmAthene Board of Directors may have given differing weights to different factors.

In considering the determination by the PharmAthene Board of Directors that the mergers and the Merger Agreement are advisable and fair to and in the best interests of PharmAthene and its stockholders, stockholders should be aware that certain PharmAthene directors and officers have arrangements that may cause them to have interests in the transaction that are different from, in addition to, or may conflict with the interests of PharmAthene stockholders generally. Please see the section of this proxy statement/prospectus/consent solicitation entitled “The Mergers — Interests of PharmAthene's Directors and Officers in the Merger.”

Altimmune Reasons for the Mergers

Altimmune's Board of Directors approved the mergers with PharmAthene based on a number of factors, including the following:

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In the course of its deliberations, Altimmune's Board of Directors also considered a variety of risks and other countervailing factors related to entering into the Merger Agreement, including:

The foregoing information and factors considered by Altimmune's Board of Directors are not intended to be exhaustive but are believed to include all of the material factors considered by Altimmune's Board of Directors. Altimmune's Board of Directors conducted an overall analysis of the factors described above, including thorough discussions with Altimmune's legal and financial advisors, and considered the factors overall to be favorable to, and to support, its determination to approve the mergers and to recommend that Altimmune's stockholders approve the mergers with PharmAthene and the related transactions.

In considering the determination by the Altimmune Board of Directors that the mergers and the Merger Agreement are advisable and fair to and in the best interests of Altimmune and its stockholders, stockholders should be aware that certain Altimmune directors and officers have arrangements that may cause them to have

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interests in the transaction that are different from, in addition to, or may conflict with the interests of Altimmune stockholders generally. See the section entitled “The Merger — Interests of Altimmune’s Directors and Officers in the Merger.”

Opinion of the Financial Advisor to PharmAthene

On January 18, 2017, Houlihan Lokey verbally rendered its opinion to PharmAthene's Board of Directors (which was subsequently confirmed in writing by delivery of Houlihan Lokey's written opinion addressed to PharmAthene's Board of Directors dated January 18, 2017), as to the fairness to PharmAthene, from a financial point of view, of the Exchange Ratio provided for in Merger 1 pursuant to the Merger Agreement.

Houlihan Lokey's opinion was directed to PharmAthene's Board of Directors (in its capacity as such) and only addressed the fairness to PharmAthene, from a financial point of view, of the Exchange Ratio provided for in Merger 1 pursuant to the Merger Agreement and did not address any other aspect or implication of the Transaction or any other agreement, arrangement or understanding. The summary of Houlihan Lokey's opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex FA to this proxy statement/prospectus and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, advice or a recommendation to PharmAthene's Board of Directors, any security holder of PharmAthene or any other person as to how to act or vote with respect to any matter relating to the Transaction.

In arriving at its opinion, Houlihan Lokey, among other things:

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Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and did not assume any responsibility with respect to such data, material and other information. In addition, managements of PharmAthene and Altimmune advised Houlihan Lokey, and Houlihan Lokey assumed, that the financial projections reviewed by Houlihan Lokey had been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such managements as to the future financial results and condition of PharmAthene and Altimmune, and Houlihan Lokey expressed no opinion with respect to such projections or the assumptions on which they were based. In particular, managements of PharmAthene and Altimmune advised Houlihan Lokey, and Houlihan Lokey assumed, that each management's expectations regarding the (i) development schedule for existing product candidates and future products, (ii) costs associated with such development (including the risks associated with the successful development, testing, receipt of government approval and marketing of such products and product candidates) and (iii) potential for, and timing of, any commercial opportunities for such product candidates and future products, in each case, had been reasonably developed, in good faith, on bases reflecting the best currently available estimates and judgments of such managements as to such matters, and Houlihan Lokey expressed no opinion with respect to such matters or any assumptions on which they were based. Furthermore, upon the advice of the management of PharmAthene, Houlihan Lokey assumed that the estimated Synergies reviewed by Houlihan Lokey had been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the management of PharmAthene and that the Synergies would be realized in the amounts and the time periods indicated thereby, and Houlihan Lokey expressed no opinion with respect to such Synergies or the assumptions on which they were based. Houlihan Lokey relied upon and assumed, without independent verification, that there had been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of PharmAthene or Altimmune since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would have been material to Houlihan Lokey's analyses or its opinion, and that there was no information or any facts that would have made any of the information reviewed by Houlihan Lokey incomplete or misleading.

In reaching its conclusion in its opinion, (i) Houlihan Lokey did not perform a discounted cash flow analysis because, for each of PharmAthene and Altimmune, Houlihan Lokey was not provided with financial information and financial projections that contained sufficient financial metrics to be able to perform such analyses (in particular, such projections were not of a sufficient length so as to reflect any revenue expected to be generated by the development of each company's product candidates), (ii) Houlihan Lokey's comparisons of certain public companies and certain transactions did not consist of a comparison of certain financial metrics of such companies and transactions with those of PharmAthene, Altimmune and the Mergers (in light of the lack of financial metrics for each of PharmAthene and Altimmune). Rather, Houlihan Lokey's comparisons related to a review of the enterprise and equity values of such companies and transactions so as to form a view as to the possible enterprise and equity values of each of PharmAthene and Altimmune, and (iii) Houlihan Lokey analyzed the impact of the Transaction on PharmAthene based on a Minimum Ownership Percentage of 39.6%, as opposed to the Exchange Ratio. Accordingly, Houlihan Lokey assumed that the Post-Closing Private Placement, if any, would be priced at the Pro Forma Valuation Floor. Houlihan Lokey expressed no opinion as to the fairness of the Exchange Ratio in the event that any Post-Closing Private Placement is priced at an aggregate implied equity valuation of PharmAthene common stock of less than the Pro Forma Valuation Floor, such that the percentage ownership of PharmAthene common stock by the holders of PharmAthene common stock immediately prior to Merger 1, pro forma for such private placement, would be less than the Minimum Ownership Percentage.

Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the Merger Agreement and Altimmune Financing Agreement and all other

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related documents and instruments that are referred to therein were true and correct, (b) each party to all such agreements and such other related documents and instruments would fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the Transaction would be satisfied without waiver thereof, including, without limitation, the consummation of the Private Placements, and (d) the Transaction would be consummated in a timely manner in accordance with the terms described in all such agreements and such other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also assumed, with the consent of PharmAthene, that the mergers would qualify as tax-free transactions. Houlihan Lokey relied upon and assumed, without independent verification, that (i) the Transaction would be consummated in a manner that complies in all respects with all applicable federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Transaction would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would result in the disposition of any assets of PharmAthene or Altimmune, or otherwise have an effect on the Transaction, PharmAthene or Altimmune or any expected benefits of the Transaction that would be material to Houlihan Lokey's analyses or its opinion. Houlihan Lokey also relied upon and assumed, without independent verification, at the direction of PharmAthene, that any adjustments to the Exchange Ratio pursuant to the Merger Agreement would not be material to Houlihan Lokey's analyses or its opinion. In addition, Houlihan Lokey relied upon and assumed, without independent verification, that the final forms of any draft documents identified above would not differ in any material respect from the drafts of said documents.

Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of PharmAthene, Altimmune or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey undertook no independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which PharmAthene or Altimmune is or may be a party or is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which PharmAthene or Altimmune is or may be a party or is or may be subject.

Houlihan Lokey was not requested to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications of interest from, third parties with respect to the Transaction, the securities, assets, businesses or operations of PharmAthene or any other party, or any alternatives to the Transaction, (b) negotiate the terms of the Transaction, or (c) advise PharmAthene's Board of Directors or any other party with respect to alternatives to the Transaction. The opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, the date of the opinion. Houlihan Lokey did not undertake, and was under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey's attention after the date of the opinion. Houlihan Lokey did not express any opinion as to what the value of the PharmAthene common stock actually would be when issued pursuant to Merger 1 or the price or range of prices at which PharmAthene common stock may be purchased or sold, or otherwise be transferable, at any time. Houlihan Lokey assumed that the PharmAthene common stock to be issued in Merger 1 to the holders of the Altimmune preferred stock and the Altimmune common stock would be listed on the NYSE MKT.

Houlihan Lokey's opinion was furnished for the use of PharmAthene's Board of Directors (in its capacity as such) in connection with its evaluation of the Transaction and may not be used for any other purpose without Houlihan Lokey's prior written consent. Houlihan Lokey's opinion was not intended to be, and does not constitute, a recommendation to PharmAthene's Board of Directors, any security holder or any other party as to how to act or vote with respect to any matter relating to the Transaction or otherwise.

Houlihan Lokey was not requested to opine as to, and its opinion did not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of PharmAthene's Board of Directors, PharmAthene, Altimmune, their respective security holders or any other party to proceed with or effect the Transaction, (ii) the terms of any arrangements, understandings, agreements or documents related to,

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or the form, structure or any other portion or aspect of, the Transaction or otherwise (other than the Exchange Ratio to the extent expressly specified in its opinion), (iii) the fairness of any portion or aspect of the Transaction to the holders of any class of securities, creditors or other constituencies of PharmAthene, Altimmune or to any other party, except if and only to the extent expressly set forth in the last sentence of its opinion, (iv) the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available for PharmAthene, Altimmune or any other party, (v) the fairness of any portion or aspect of the Transaction to any one class or group of PharmAthene's, Altimmune's or any other party's security holders or other constituents vis-à-vis any other class or group of PharmAthene's, Altimmune's or such other party's security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the PharmAthene, Altimmune, their respective security holders or any other party is receiving or paying reasonably equivalent value in the Transaction, (vii) the solvency, creditworthiness or fair value of PharmAthene, Altimmune or any other participant in the Transaction, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Transaction, any class of such persons or any other party, relative to the Exchange Ratio or otherwise. Furthermore, no opinion, counsel or interpretation was intended by Houlihan Lokey in matters that would require legal, regulatory, accounting, insurance, tax or other similar professional advice. Houlihan Lokey assumed that such opinions, counsel or interpretations had been or would be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of PharmAthene's Board of Directors, on the assessments by PharmAthene and its advisors, as to all legal, regulatory, accounting, insurance and tax matters with respect to PharmAthene, Altimmune and the Transaction or otherwise. The issuance of Houlihan Lokey's opinion was approved by a committee authorized to approve opinions of such nature.

In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, transaction or business used in Houlihan Lokey's analyses for comparative purposes is identical to PharmAthene or the proposed Transaction and an evaluation of the results of those analyses is not entirely mathematical. As a consequence, mathematical derivations (such as the high, low, mean and median) of financial data are not by themselves meaningful and in selecting the ranges of multiples to be applied were considered in conjunction with experience and the exercise of judgment. The estimates contained in the financial forecasts prepared by the management of PharmAthene and the implied reference range values indicated by Houlihan Lokey's analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of PharmAthene. Much of the information used in, and accordingly the results of, Houlihan Lokey's analyses are inherently subject to substantial uncertainty.

Houlihan Lokey's opinion was only one of many factors considered by PharmAthene's Board of Directors in evaluating the proposed Transaction. Neither Houlihan Lokey's opinion nor its analyses were determinative of the Exchange Ratio or of the views of PharmAthene's Board of Directors or management with respect to the Transaction or the Exchange Ratio. Under the terms of its engagement by PharmAthene, neither Houlihan Lokey's opinion nor any other advice or services rendered by it in connection with the proposed Transaction or otherwise, should be construed as creating, and Houlihan Lokey should not be deemed to have, any fiduciary duty to, or agency relationships with, PharmAthene's Board of Directors, PharmAthene, Altimmune, any security holder or creditor of PharmAthene or Altimmune or any other person, regardless of any prior or ongoing advice or relationships. The type and amount of consideration payable in the Transaction were determined through negotiation between PharmAthene and Altimmune, and the decision to enter into the Merger Agreement was solely that of PharmAthene's Board of Directors.

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Financial Analyses

In preparing its opinion to PharmAthene's Board of Directors, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey's analyses is not a complete description of the analyses underlying Houlihan Lokey's opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither Houlihan Lokey's opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching Houlihan Lokey's overall conclusion with respect to fairness, Houlihan Lokey did not make separate or quantifiable judgments regarding individual analyses. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying Houlihan Lokey's analyses and opinion.

The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with the preparation of its opinion and reviewed with PharmAthene's Board of Directors on January 18, 2017. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey's analyses.

For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of PharmAthene common stock and the common stock of the selected companies and selected initial public offering (“IPO”) companies listed below as of January 11, 2017, and transaction values for the selected transactions analysis described below were calculated on an Enterprise Value basis based on the announced transaction equity price and other public information available at the time of the announcement. The calculations of equity value set forth below (i) for PharmAthene were based on (a) estimated cash and cash equivalents at the time of consummation of the mergers of $10.3 million, and (b) estimated present value of potential tax refund benefits generated by taxes paid by PharmAthene in 2016 that are expected to be offset by 2017 and 2018 operating losses of PharmAthene of $2.8 million, (ii) for Altimmune were based on (a) estimated cash and cash equivalents at the time of consummation of the mergers of $3.5 million, and (b) estimated total debt of $1.1 million, and (iii) for the combined company were based on (a) estimated cash and cash equivalents of $13.8 million, (b) estimated present value of potential tax refund benefits generated by taxes paid by PharmAthene in 2016 that are expected to be offset by 2017 and 2018 operating losses of the combined company of $8.3 million, (c) estimated total debt of $1.1 million, and (d) range of estimated present value of Synergies of $5.2 to $5.3 million. In addition, for purposes of certain analyses described below, the “Post-Closing Private Placement” is based on an assumed Post-Closing Private Placement of $5 million of combined company common stock at an implied pre-money combined company equity value of $90 million.

Qualitative Considerations.   Houlihan Lokey, in conducting its financial analyses, considered certain qualitative considerations that Houlihan Lokey deemed relevant. In particular, Houlihan Lokey noted that

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PharmAthene as of January 11, 2017 traded at an implied enterprise value of operations of approximately $12.3 million and had an implied cash runway of approximately 2.4 years (after adjusting for the announced special dividend of approximately $200 million), based on PharmAthene management projections. Although PharmAthene shareholders will give up approximately 60% of their current equity value in the Transaction and the combined company’s cash runway will decline to approximately 1 year, management believes, and Houlihan Lokey took into consideration, that the Transaction provide meaningful upside for shareholders based on a number of strategic considerations, including the following:

Selected Public Companies Analysis .  Houlihan Lokey reviewed equity market values and Enterprise Values for two selected biopharmaceutical companies with a single product and six selected biopharmaceutical companies with more than one product, which, in each case, have publicly traded equity securities and that Houlihan Lokey deemed relevant.

In selecting such publicly traded companies, Houlihan Lokey considered companies with Enterprise Values greater than $20 million and less than $1 billion, as well as the following quantitative and qualitative attributes:

In addition, Houlihan Lokey considered the following:

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Houlihan Lokey bifurcated the selected companies into two groups as follows:

The selected public companies and corresponding number of products in development, product phases of development and therapeutic categories were as follows:

Single Product Companies

Company Name		Products in Development		Phase		Therapeutic Category
Flex Pharma, Inc.		1		Submitting IND/ Phase 2 in 2017		Neuromuscular
Galmed Pharmaceuticals Ltd.		1		Phase 2		Non-Alcoholic Fatty Liver Disease

More than One Product in Development & Anti-Infective Focus

Company Name		Products in Development		Phase		Therapeutic Category
ABIVAX S.A.		6		Phase 2		HIV
Genocea Biosciences, Inc.		8		Phase 2		Genital Herpes
Idera Pharmaceuticals, Inc.		8		Phase 2		Dermatomyositis
Pfenex Inc.		10		Phase 2		Retinal Diseases
SCYNEXIS, Inc.		3		Phase 2		Fungal Infections
Seres Therapeutics, Inc.		6		Phase 2		Clostridium Difficile

The related low, high, mean and median (in the case of selected public companies with more than one product) equity market values and Enterprise Values for the selected public companies were as follows:

		Equity Market Value				Enterprise Value
		(in millions)				(in millions)
Single Product Companies
Low		$	50.6			$	23.8
High		$	91.1			$	32.3
Mean		$	70.9			$	28.1
More than One Product in Development and Anti-Infective Focus
Low		$	65.3			$	36.1
High		$	436.2			$	232.9
Median		$	169.5			$	93.4
Mean		$	204.0			$	116.8