##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from          to
 Commission File Number: 000-51709
 Iomai Corporation
 (exact name of registrant as specified in its charter)
 Delaware
    
    52-2049149(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 20 Firstfield Road, Gaithersburg, Maryland 20878  (Address of principal executive offices including zip code)
 Registrants telephone number, including area code:
(301) 556-4500
 Securities registered pursuant to Section 12(b) of the Act:
 Common Stock, $.01 Par Value Per Share
    
    The NASDAQ Global Market(Title of each Class)
    
    (Name of each exchange on which registered)
 Securities registered pursuant to Section 12(g) of the Act:
None
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



TABLE OF CONTENTS
 PagePART IITEM 1.
    
    BUSINESS
    
    
    1Overview
    
    
    1Our Goals for TCI
    
    
    3Market Overview
    
    
    4The TCI Solution
    
    
    6Products in Development
    
    
    8Intellectual Property and Proprietary Technology
    
    
    13Manufacturing and Commercial Supply
    
    
    16Competition
    
    
    17Government Regulation
    
    
    18Sales and Marketing
    
    
    20Employees
    
    
    20Corporate Information
    
    
    20Availability of Periodic SEC Reports
    
    
    21ITEM 1A.
    
    RISK FACTORS
    
    
    21ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
    
    
    39ITEM 2.
    
    PROPERTIES
    
    
    39ITEM 3.
    
    LEGAL PROCEEDINGS
    
    
    39ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    39PART IIITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    41ITEM 6.
    
    SELECTED FINANCIAL DATA
    
    
    42ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    43ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    53ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    53ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    53ITEM 9A.
    
    CONTROLS AND PROCEDURES
    
    
    53ITEM 9B.
    
    OTHER INFORMATION
    
    
    54PART IIIITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    55ITEM 11.
    
    EXECUTIVE COMPENSATION
    
    
    55ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    55ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    55ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    55PART IVITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    5515(a) (1) Financial Statements
    
    
    5515(a) (2) Financial Statement Schedules
    
    
    5515(a) (3) Exhibits
    
    
    5515(b) Exhibits
    
    
    55




---



##### 



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
  
    
    the implementation of our corporate strategy;
    
    our future financial performance and projected expenditures;
    
    our ability to enter into future collaborations with pharmaceutical, biopharmaceutical and
biotechnology companies and academic institutions or to obtain funding from government agencies;
    
    our product research and development activities, including the timing and progress of our clinical
trials, and projected expenditures;
    
    our technologys potential efficacy, advantages over current approaches to vaccination and broad
applicability to infectious diseases;
    
    our ability to receive regulatory approvals to develop and commercialize our product candidates;
    
    our ability to increase our manufacturing capabilities for our product candidates;
    
    our ability to develop or obtain funding for our immunostimulant patch for pandemic flu applications;
    
    our projected markets and growth in markets;
    
    our product formulations and patient needs and potential funding sources;
    
    our staffing needs; and
    
    our plans for sales and marketing.
   
 ® tm tm




---



##### 



PART I
 
 Item 1. Business
 
 OVERVIEW
   
    
    Needle-free travelers diarrhea vaccine patch.We are developing a needle-free
travelers diarrhea vaccine patch. In September 2007, we presented data from a Phase 2
field trial of the travelers vaccine at the Interscience Conference on Antimicrobial
Agents and Chemotherapy that indicated that people who received the vaccine before
traveling to Mexico or Guatemala were significantly less likely to report clinically
significant diarrhea. Of the 59 individuals who received the vaccine, only three suffered
moderate or severe diarrhea, while 23 of the 111 who received a placebo suffered moderate
or severe diarrhea, a 75 percent reduction (p=0.007). One of the 59 volunteers in the
vaccine group reported severe diarrhea, compared with 12 of the 111 in the placebo group,
an 84 percent reduction (p=0.033). In February 2008, we announced that interim results of
a study that showed a robust immune response when the second dose of the two-dose regimen
for our travelers diarrhea vaccine patch was self-applied by subjects outside of a
clinical setting. Four groups of forty subjects each were evaluated: two groups received
both doses of the vaccine from a medical professional and two other groups of volunteers
administered the second vaccine patch themselves. All groups had robust responses to the
vaccine, and a statistical analysis of immune parameters following vaccination showed no
significant differences between treatment groups at measured time points. These results
confirm our belief that the Iomai patch can be effectively used by patients without a
health care provider present, potentially removing the need for a second trip to a travel
clinic. We look to complete our Phase 2 program in 2008 and plan to conduct a Phase 3
efficacy study during summer of 2009 when the travelers diarrhea season in Latin America
is at its peak. This year, approximately 55 million international travelers will visit
countries where bacteria that cause travelers diarrhea are endemic, particularly Africa,
Asia and Latin America, and about 20 million of those travelers will develop travelers
diarrhea. A recently completed market study we commissioned suggests that there is a large
market for an effective travelers diarrhea vaccine, potentially between approximately $660
million and $800 million in annual sales ex-manufacturer. If approved, our vaccine may be
the first vaccine for travelers diarrhea available in the United States. We are currently
evaluating potential collaborations for our needle-free travelers diarrhea vaccine.
 1




---



##### 




    
    IS patch for pandemic flu program.We are developing an IS patch that, when used in
conjunction with an injectable flu vaccine, is designed to stimulate an immune response to
even small doses of vaccine, thereby allowing public health officials to extend vaccine
supply in the event of an influenza pandemic. In January 2007, the Department of Health and
Human Services, or HHS, awarded us a five-year, cost-plus reimbursement contract to fund
our development of a dose-sparing patch for use with a pandemic flu vaccine. If the product
is developed through licensure, the total cost reimbursed by HHS, plus a fixed fee, is
estimated to be $128 million. During the first 15 months of the contract, HHS has allotted
approximately $14.5 million for us to assess the safety and adjuvant effect of the IS patch
in an initial clinical trial and to develop plans on how we would produce 150 million IS
patches in a six-month period, as required under the contract. If we are able to
demonstrate the safety and dose-sparing capability of our IS patch, we hope to sell up to
150 million IS patches to the United States government for its stockpile of pandemic flu
products. In April 2007, we submitted our first milestone under this contract in the form
of a product development plan; in July 2007, we submitted our second milestone in the form
of a clinical and regulatory development plan; and in January 2008, we submitted our third
milestone in the form of a production plan that describes a facility, processes, and plans
to produce 150 million doses of the IS patches in a six-month period. In March 2008, we
announced the interim results from the 500-subject Phase 1/2 trial to assess the safety and
adjuvant effect of the IS patch. The trial met a key endpoint, demonstrating a clinically
relevant adjuvant effect when our IS patch was used with a single dose of the 45-microgram
H5N1 vaccine. The trial found that a single 45-microgram dose of an H5N1 influenza vaccine,
coupled with a single 50-microgram IS patch, was sufficient to provide an immune response
considered protective in 73 percent of those tested, a statistically significant
improvement over those who received the H5N1 influenza vaccine alone. This is one of the
first trials to demonstrate that a single dose of pandemic influenza vaccine may meet the
level of protection suggested in U.S. Food and Drug Administration guidance, which
recommends that a pandemic vaccine achieve immune response levels considered protective in
70 percent or more of vaccine recipients. We have shared the data with HHS and are now
working with them to determine possible next steps. Upon completion of its review of the
data, HHS will make a determination as to whether and, if so, how to continue the
development of this product.
    
    Needle-free flu vaccine patch.We are developing a needle-free flu vaccine patch that
combines flu antigens with an adjuvant in a single patch. In late May 2007, we announced
interim results from the Phase 1 clinical trial of our needle-free vaccine for seasonal
influenza. The study compared the immune responses generated by our needle-free vaccine
patch and an injected intramuscular vaccine. Both vaccines contained the same three flu
antigens from a split-virus influenza vaccine. The trial showed that our needle-free
vaccine patch stimulated an immune response to each of the three antigens in a
dose-dependent manner and that an adjuvant effect was seen; however, the injected vaccine
prompted a greater immune response than our patch vaccine. While use of a split-virus is
the traditional approach for injected flu vaccines, we believe that the method by which
split-virus antigens are processed can result in highly crossed-linked antigens prone to
aggregation, which may be difficult to efficiently deliver in a skin patch. Antigens in
this form may not be best suited for patch application, so we are now working on a
preclinical program that is exploring other methods of formulating flu antigens that may be
a better match for our needle-free patch. Preliminary research suggests that modification
of patch formulation or flu antigens into discrete particles may be better suited for TCI
administration, and we are adjusting our development and partnering plan accordingly. The
timing of any future trials of our needle-free seasonal flu vaccine will be determined in
part by the availability of antigens from either our internal programs or in collaboration
with a partner. Each flu season, approximately 15 million to 60 million people in the
United States become ill with influenza. This infection rate results in approximately
36,000 deaths and approximately 200,000 hospitalizations in the United States annually.
Approximately 80 million people in the United States are vaccinated against the flu
annually.
    
    IS patch for elderly receiving flu vaccines.We are developing our IS patch to improve
the immune response of the elderly to existing injectable influenza vaccines. We have
completed a number of studies in the United States and Europe, including a European
clinical trial that demonstrated the proof-of-concept with a previous patch formulation.
In 2007, we completed a Phase 1 safety study in Australia with our current dry patch
formulation, and the data from this 50-person study confirmed that our current dry patch
formulation of the IS patch was safe for this indication. At this time, we plan to draw
upon the results from the Phase 1/2 IS patch trial under the HHS contract to design our
Phase 2 study in the United States to confirm the results observed in our prior European
study. Approximately 36,000 individuals aged 65 and over die from influenza,
influenza-related pneumonia and related respiratory complications in the United States each
year, making influenza one of the leading causes of death among the elderly. According to
the United States Centers for Disease Control and Prevention, or CDC, over 65% of the
elderly population in the United States receive influenza vaccination, and public health
officials have stated the goal of achieving 90% vaccination rates by 2010.
 2




---



##### 



OUR GOALS FOR TCI
  
    
    Advance our needle-free travelers diarrhea vaccine patch.We are advancing our
needle-free travelers diarrhea vaccine patch through Phase 2 clinical trials, and we are
actively exploring collaborations with potential partners to support Phase 3 trials and
commercialize the product to international travelers in developed countries, including
the United States and European Union. At this point, we would expect to sell directly to
the military market. As for countries in which diarrhea is endemic, we would seek to
establish strategic partnerships with local manufacturers and non-governmental
organizations, or NGOs, to cover distribution of this vaccine patch to both adults and
children in those countries. To date, we have retained all of our rights to this product
candidate, and we believe this may enable us to obtain advantageous terms in any potential
collaboration. The terms of a collaboration, if any, would be negotiated with the partner
and may require us to cede control over marketing the product, if approved, to the
military and in endemic countries.
    
    Develop our IS patch for pandemic flu applications.Under the HHS contract, we plan
to perform preclinical and clinical testing of the patch and to develop a plan to bring
the IS patch to licensure for dose-sparing of pandemic flu vaccines. If, after reviewing
the results from our current Phase 1/2 trial testing our IS patch, HHS elects to continue
our contract beyond the initial 15-month stage, then we expect that if we demonstrate the
safety and dose-sparing capability of our IS patch in follow-on trials, we could be in a
position to sell up to 150 million IS patches to the United States government for its
stockpile of pandemic flu products.
    
    Seek a strategic collaboration for the development, marketing and commercialization of
our needle-free flu vaccine patch.As we do not intend to manufacture the flu antigens
for our needle-free flu vaccine patch, we are actively exploring collaborations with large
pharmaceutical companies in the United States and Europe that would provide the flu
antigens (including pandemic flu antigens) and financial resources to develop and, if
approved, commercialize our needle-free flu vaccine patch. To date, we have retained all
of our rights to this product, and we believe this will enable us to obtain advantageous
terms in any potential collaboration.
    
    Commercialize our IS patch for elderly receiving flu vaccines.If, after a complete
review of the results from the Phase 1/2 trial of our IS patch under the HHS contract, we
move forward with this program, we would expect to advance our IS patch for elderly
receiving flu vaccines into and through Phase 3 clinical trials ourselves, and then into
commercialization, possibly with a partner. To date, we have retained all of our rights to
this product candidate, and we believe this may enable us to obtain advantageous terms in
any potential collaboration.
    
    Continue to develop and expand our manufacturing capabilities to retain manufacturing
rights.We intend to retain manufacturing rights for our adjuvant and patch technologies.
To the extent practicable, we intend to continue to develop and expand our manufacturing
capabilities to meet our expected demands. We are manufacturing all of our patches for our
clinical trials in our manufacturing facility, and we believe we currently have the
capacity to produce anticipated needs through initial commercialization of our first
product, which is expected to be our travelers diarrhea vaccine.
    
    Leverage our broad technology platform to develop additional product candidates.As
our TCI technology has the potential to be useful with many different types of vaccines,
other companies developing vaccines represent possible partners with which to develop new
products. We intend to continue to evaluate and develop additional product candidates to
expand our pipeline where we perceive a significant unmet medical need and commercial
potential.
 3




---



##### 



MARKET OVERVIEW
 The immune system and vaccines
    Our initial target markets
 Travelers diarrhea
  E. coli
  4




---



##### 



Influenza
  Pandemic influenza
    5




---



##### 



Seasonal influenza
  Influenza in the elderly
  
 THE TCI SOLUTION
   6




---



##### 




    
    Following pretreatment that involves a mild abrasion of the skin at the application
point to disrupt the outer dead layer of skin, known as the stratum corneum, a patch
containing an adjuvant and one or more antigens from the target pathogen is applied.
    
    After permeating the disrupted stratum corneum, the adjuvant and antigens reach and
activate the underlying Langerhans cells.
    
    The Langerhans cells take up the adjuvant and antigens and migrate through the skin and
the lymphatic system to the nearest lymph node, where they stimulate a systemic immune
response.
  
    
    Increased efficacy with reduced risk of side effects.Because the adjuvant and
antigens delivered by our needle-free vaccine patch cannot penetrate further than the
outer layers of the skin, neither the adjuvant nor the antigens circulate systemically as
they would if delivered through injection. Preventing a systemic distribution of adjuvants
and antigens reduces the risk of side effects. As a result, our needle-free vaccine patch
permits the use of more potent adjuvants relative to systemic means of delivery (such as
injection, intranasal and oral delivery), which increases the overall level of immune
response. We and our collaborators have conducted over 30 trials, including six
double-blind, placebo-controlled trials, with over 3,100 volunteers receiving LT, and no
vaccine-related serious adverse events were observed.
    
    Stable at ambient temperatures. Most vaccines must be stored in refrigerated
environments. We believe our vaccines will be stable at room temperature, making both
transport and storage without refrigeration simple and inexpensive. We have data that
shows our products remain stable at room temperature for months, and we are continuing to
evaluate the performance of our patches when handled outside of the cold chain, which is
an important condition for self-administration of our vaccine candidates.
    
    Self-administration.All but a handful of vaccines must be administered by a
healthcare worker. We believe that our patch system has the potential to be
self-administered, thereby expanding the market opportunities for existing vaccines and
solving many of the logistical issues associated with governmental mass vaccination
programs as part of biodefense and pandemic flu preparedness. In February 2008, we
announced the interim results of a study that showed a robust immune response when the
second dose of the two-dose regimen for our travelers diarrhea vaccine was self-applied
by subjects outside of a clinical setting. Based on the results of this study, we are
evaluating the feasibility of including self-administration of the second vaccine dose in
the Phase 3 program for our travelers diarrhea vaccine, and the data also suggests the
possibility of self-administration of our other vaccines candidates.
    
    Increased compliance.We believe needle-free administration has the potential to
increase acceptance by patients who dislike the use of needles and desire a more
convenient and less painful means of vaccination.
    
    Safer administration and disposal.Needle-free administration eliminates the risk to
the health care provider of inadvertent needle sticks and avoids the need to dispose of
contaminated needles.
 7




---



##### 




    
    Reduced dosages.By targeting the skin and eliciting a stronger immune response, we
believe the amount of antigen required for immunization may be reduced.
  
 PRODUCTS IN DEVELOPMENT
   Product Candidates
    
    Clinical Status in 2008Travelers DiarrheaNeedle-free travelers diarrhea vaccine patch
    
    Phase 2InfluenzaIS patch for pandemic flu (under HHS contract)
    
    Phase 1/2Needle-free flu vaccine patch
    
    PreclinicalIS patch for elderly receiving flu vaccines
    
    Phase 1
  Needle-free travelers diarrhea vaccine patch
 Enterotoxigenic
E. coli
   8




---



##### 



Placebo
    
    Active
    
    ProtectiveTypes of Diarrhea
    
    (n=111)
    
    (n=59)
    
    Efficacy
    
    P-valueModerate/Severe
(4 to 5 loose stools in 24-hour period)
    
    
    23 (21
    %)
    
    
    3 (5
    %)
    
    
    75
    %
    
    
    0.007Severe
(> 6 loose stools in 24-hour period)
    
    
    12 (11
    %)
    
    
    1 (2
    %)
    
    
    84
    %
    
    
    0.033
 Vaccine
  9




---



##### 



Comparison of Administration of Second-Dose
of Travelers Diarrhea Vaccine Candidate
 
   IS patch for pandemic flu
  10




---



##### 



Needle-free flu vaccine patch
  11




---



##### 



IS patch for elderly receiving flu vaccines
   Enhanced Immune Responses In Elderly After IS Patch Application
 
  12




---



##### 



Additional indications
  
 INTELLECTUAL PROPERTY AND PROPRIETARY TECHNOLOGY
   
    
    4 issued and 1 allowed US patents;
    
    14 US non-provisional patent applications;
    
    42 issued foreign patents;
    
    27 foreign patent applications that are in various national stages of prosecution; and
    
    1 foreign patent application not at the national stage.
   13




---



##### 




    
    net sales of licensed products by us and by our affiliates; and
    
    revenues received by us from the licensed TCI technology and by our affiliates under
any sublicenses of the licensed TCI technology.
  
    
    a minimum annual payment of $15,000 for the first six years and $25,000 thereafter as a
non-recoverable advance against royalty and milestone payments;
    
    milestone payments upon the achievement of specified regulatory approval based
milestones, which may total up to $1,560,000 in the aggregate if we secure regulatory
approval for six or more products; and
    
    all costs and expenses relating to prosecution of patent protection for the licensed
TCI technology.
   
    
    such sublicenses are necessary to fulfill public health and safety needs that we are
not reasonably addressing;
    
    such sublicenses are necessary to meet requirements for public use specified by
applicable United States government regulations with which we are not reasonably in
compliance; or
    
    we are not manufacturing our products substantially in the United States.
  
    
    do not expend reasonable efforts and resources to carry out the development and
marketing of the licensed TCI technology and do not manufacture, use or operate products
that use the TCI technology by December 31, 2011 (subject to extension based upon a
showing of reasonable diligence in developing the technology);
    
    do not continue to make our TCI-based products available to the public on commercially
reasonable terms after we have developed such products;
    
    misuse the licensed TCI technology or permit any of our affiliates or sub-licensees to
do so;
    
    fail to pay royalties or meet our other payment or reporting obligations under the
license;
    
    become bankrupt; or
    
    otherwise materially breach our obligations under the license.
 14




---



##### 




    
    royalties equal to a percentage of net sales of products incorporating LT produced
under the license;
    
    milestone payments based upon regulatory approval of products incorporating LT produced
under the license, which may total up to $500,000 for each approved product; and
    
    time-based fees for any continuing technical assistance we may request at DowPharmas
prevailing hourly rate, with fees for the first 500 hours of technical assistance due only
upon the date the first milestone payment, if any, is due.
    
    
    at any time during the term of the license agreement, reasonably agree with Dow that
there are material health and safety risks associated with products produced under the
license which create a material risk of liability to DowPharma;
    
    fail to meet our payment obligations under the license;
    
    become bankrupt; or
    
    otherwise materially breach our obligations under the license.
   15




---



##### 



MANUFACTURING AND COMMERCIAL SUPPLY
     16




---



##### 



COMPETITION
    17




---



##### 




    
    safety and efficacy profile;
    
    product price;
    
    ease of application;
    
    length of time to receive regulatory approval;
    
    product supply;
    
    enforceability of patent and other proprietary rights; and
    
    marketing and sales capability.
  
 GOVERNMENT REGULATION
   
    
    preclinical laboratory tests and animal tests;
    
    the submission to the FDA of an investigational new drug application, or IND, for human
clinical testing, which must become effective before human clinical trials may begin;
    
    adequate and well-controlled human clinical trials to establish the safety and efficacy
of the product for its specific intended use(s);
    
    the submission to the FDA of a BLA;
 18




---



##### 




    
    satisfactory completion of an FDA inspection of the manufacturing facility or
facilities at which the product is made to assess compliance with current good
manufacturing practices, or cGMP; and
    
    FDA review and approval of the BLA.
   
    
    evaluate preliminarily the efficacy of the drug for specific, targeted conditions;
    
    determine dosage tolerance and appropriate dosage; and
    
    identify possible adverse effects and safety risks.
    19




---



##### 



SALES AND MARKETING
  
 EMPLOYEES
  
 CORPORATE INFORMATION
  20




---



##### 



AVAILABILITY OF PERIODIC SEC REPORTS
 www.iomai.com.
 
 Item 1A. Risk Factors
  Risks Relating to Our Business
 We are a biopharmaceutical company with a limited operating history and have generated no revenue
from product sales. As a development stage company, we face many risks inherent in our business. If
we do not overcome these risks, our business will not succeed.
  
    
    obtain sufficient capital to support our efforts to develop our
technology and commercialize our product candidates;
    
    complete and continue to enhance the product characteristics and
development of our product candidates; and
    
    attempt to transition from a development stage company to a company
capable of supporting commercial activities.
 We have a history of operating losses and may never be profitable.
  21




---



##### 



We will need additional funding, and we cannot guarantee that we will find adequate sources of
capital in the future.
   
    
    the number, size and complexity of our clinical trials;
    
    our progress in developing our product candidates;
    
    the timing of and costs involved in obtaining regulatory approvals;
    
    costs of manufacturing our product candidates;
    
    costs to maintain, expand and protect our intellectual property portfolio; and
    
    costs to develop our sales and marketing capability.
   22




---



##### 



We will need to demonstrate the safety and efficacy of our needle-free travelers diarrhea vaccine
in one or more Phase 3 clinical trials in order to obtain approval by the FDA and other regulatory
authorities, and there can be no assurance that our needle-free travelers diarrhea vaccine will
achieve positive results in further clinical testing.
       23




---



##### 



The success of some programs may depend on licensing biologics from, and entering into
collaboration arrangements with, third parties. We cannot be certain that our licensing or
collaboration efforts will succeed or that we will realize any revenue from them.
      
    
    may lose our rights to develop and market our product candidates;
    
    may lose patent and/or trade secret protection for our product candidates;
    
    may experience significant delays in the development or commercialization of
our product candidates;
    
    may not be able to obtain any other licenses on acceptable terms, if at all; and
    
    may incur liability for damages.
 24




---



##### 



We may not be able to manufacture our product candidates in commercial quantities, which would
prevent us from initiating Phase 3 trials and commercializing our product candidates.
    25




---



##### 



Our IS patch for pandemic flu program relies on government health organizations for funding
clinical development and for ultimately procuring the product, if approved.
      U.S. government agencies have special contracting requirements, which create additional risks.
   
    
    suspend or prevent us for a set period of time from receiving new contracts or extending
existing contracts based on violations or suspected violations of laws or regulations;
 26




---



##### 




    
    terminate our existing contracts;
    
    reduce the scope and value of our existing contracts;
    
    audit and object to our contract-related costs and fees, including allocated indirect costs;
    
    control and potentially prohibit the export of our products; and
    
    change certain terms and conditions in our contracts.
   Our technology is unproven and presents challenges for our product development efforts.
  
    
    research could demonstrate that the scientific basis of our technology
is incorrect or less sound than we had believed;
    
    unexpected research results could reveal side effects or other
unsatisfactory conditions that either will add cost to development of
our product candidates or jeopardize our ability to complete the
necessary clinical trials; and
    
    time and effort required to solve technical problems could
sufficiently delay the development of product candidates such that any
competitive advantage that we may enjoy is lost.
   27




---



##### 



We rely on third parties to conduct our clinical trials, and those third-parties may not perform
satisfactorily, including failing to meet established deadlines for the completion of such trials.
  We rely on third parties to provide us with materials necessary to manufacture our product
candidates that may not be available on commercially reasonable terms, or at all, which may delay
the development, regulatory approval and commercialization of our product candidates.
   We rely on a limited number of manufacturers for our skin preparation systems, and our business
will be seriously harmed if these manufacturers are not able to satisfy our demand and alternative
sources are not available.
  28




---



##### 



The skin preparation systems used in connection with our product candidates may make our products
less attractive to consumers.
  As part of our product development efforts, we may make significant changes to our product
candidates. These changes may not yield the benefits that we expect.
  We may be required to conduct clinical trials of our IS patch with flu vaccines developed by
different manufacturers, which may lead to added cost and delay in approval and commercialization
of our IS patch.
  None of our product candidates has been approved for commercial sale, and we may never receive such
approval.
    29




---



##### 



Federal regulatory reforms may create additional burdens that would cause us to incur additional
costs and may adversely affect our ability to commercialize our products.
  30




---



##### 



If physicians and patients do not accept our products, we may be unable to generate significant
revenue.
 E. coli
 Our license to use TCI technology from The Walter Reed Army Institute of Research, or WRAIR, is
critical to our success. Under some circumstances, WRAIR may modify or terminate our license or
sublicense the TCI technology to third parties which could adversely affect our business.
  
    
    do not expend reasonable efforts and resources to carry out the development and marketing of
the licensed TCI technology and do not manufacture, use, or operate products that use the
TCI technology by December 31, 2011 (subject to extension based upon a showing of reasonable
diligence in developing the technology);
    
    do not continue to make our TCI-based products available to the public on commercially
reasonable terms after we have developed such products;
    
    misuse the licensed TCI technology or permit any of our affiliates or sub-licensees to do so;
    
    fail to pay royalties or meet our other payment or reporting obligations under the license;
    
    become bankrupt; or
    
    otherwise materially breach our obligations under the license.
  31




---



##### 




    
    such sublicenses are necessary to fulfill public health and safety needs
that we are not reasonably addressing;
    
    such sublicenses are necessary to meet requirements for public use
specified by applicable United States government regulations with which
we are not reasonably in compliance; or
    
    we are not manufacturing our products substantially in the United States.
   If we are unable to protect our intellectual property, we may not be able to operate our business
profitably.
    32




---



##### 



If we are unable to protect the confidentiality of our proprietary information and know-how, the
value of our technology and products could be adversely affected.
  If the use of our technology conflicts with the intellectual property rights of third parties, we
may incur substantial liabilities, and we may be unable to commercialize products based on this
technology in a profitable manner, if at all.
  
    
    we may become involved in time-consuming and expensive litigation,
even if the claim is without merit;
    
    we may become liable for substantial damages for past infringement if
a court decides that our technology infringes upon a competitors
patent;
    
    a court may prohibit us from selling or licensing our product without
a license from the patent holder, which may not be available on
commercially acceptable terms, if at all, or which may require us to
pay substantial royalties or grant cross licenses to our patents; and
    
    we may have to redesign our product so that it does not infringe upon
others patent rights, which may not be possible or could be very
expensive and time-consuming.
  We may be involved in lawsuits to protect or enforce our patents or the patents of our
collaborators or licensors, which could be expensive and time consuming.
  33




---



##### 



We depend on our key personnel, the loss of whom may adversely affect our operations. If we fail to
attract and retain the talent required for our business, our business will be materially harmed.
  Our competitors may have superior products, manufacturing capability or marketing expertise.
  
    
    develop products or product candidates earlier than we do;
    
    form collaborations before we do, or preclude us from forming collaborations with others;
    
    obtain approvals from the FDA or other regulatory agencies for such products more rapidly than
we do;
    
    develop and validate manufacturing processes more rapidly than we do;
    
    obtain patent protection or other intellectual property rights that would limit our ability to
use our technologies or develop our product candidates;
    
    develop products that are safer or more effective than those we develop or propose to develop; or
    
    implement more effective approaches to sales and marketing.
  34




---



##### 



Our ability to generate revenues will be diminished if we fail to obtain acceptable prices or an
adequate level of reimbursement for our products.
   
    
    government and health administration authorities;
    
    private health insurers; and
    
    other third-party payors.
 35




---



##### 



We have no experience in sales, marketing and distribution and will depend on the sales and
marketing efforts of third parties.
  Our business exposes us to potential product liability claims.
   We deal with hazardous materials that may cause injury to others and are regulated by environmental
laws that may impose significant costs and restrictions on our business.
 E. coli
 36




---



##### 



Until 2006, we operated as a private company and as a result, we have limited experience attempting
to comply with public company obligations. Attempting to comply with these requirements will
increase our costs and require additional management resources, and we still may fail to comply.
   If we fail to maintain an effective system of internal control over financial reporting, we may not
be able to accurately report our financial results or prevent fraud. As a result, stockholders
could lose confidence in our financial and other public reporting, which would harm our business
and the trading price of our common stock.
   Investment Risks
 We expect that our stock price will fluctuate significantly, which may adversely affect holders of
our stock and our ability to raise capital.
  
    
    the timing and the results from our clinical trial programs;
    
    developments concerning current or future strategic alliances;
    
    FDA or international regulatory actions;
    
    failure of any of our product candidates, if approved, to achieve commercial success;
    
    announcements of clinical trial results or new product introductions by our competitors;
    
    market conditions in the pharmaceutical, biopharmaceutical and biotechnology sectors;
    
    developments concerning intellectual property rights;
 37




---



##### 




    
    litigation or public concern about the safety of our potential products;
    
    actual and anticipated fluctuations in our quarterly operating results;
    
    announcements regarding transactions with third parties;
    
    deviations in our operating results from the estimates of securities analysts;
    
    additions or departures of key personnel; and
    
    third-party reimbursement policies.
  If the price and volume of our common stock experience extreme fluctuations, then we could face
costly litigation.
  Our directors and management exercise significant control over our company.
  We may not achieve our projected development goals in the time frames we announce and expect.
  Provisions of Delaware law or our charter documents could delay or prevent an acquisition of our
company, even if the acquisition would be beneficial to our stockholders, and could make it more
difficult for you to change management.
   
    
    a staggered board of directors;
    
    a prohibition on stockholder action through written consent;
    
    a requirement that special meetings of stockholders be called only by the chairman of the board of
directors, the chief executive officer, or the board of directors pursuant to a resolution adopted
by a majority of the total number of authorized directors;
    
    advance notice requirements for stockholder proposals and nominations; and
 38




---



##### 




    
    the authority of the board of directors to issue preferred stock with such terms as it may determine.
  Because we do not expect to pay dividends in the foreseeable future, you must rely on stock
appreciation for any return on your investment.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Executive Officers of the Registrant
  Name
    
    Age
    
    Position(s)Stanley C. Erck
    
    
    59
    
    
    President, Chief Executive Officer, Treasurer and DirectorGregory M. Glenn, M.D.
    
    
    53
    
    
    Senior Vice President and Chief Scientific OfficerRussell P. Wilson
    
    
    48
    
    
    Senior Vice President, Chief Financial Officer, General
Counsel and Secretary
 Stanley C. Erck.
 39




---



##### 



Gregory M. Glenn, M.D.
 Russell P. Wilson.
 40




---



##### 



PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
   High
    
    Low2006First Quarter
    
    $
    7.34
    
    
    $
    5.22Second Quarter
    
    
    6.00
    
    
    
    3.91Third Quarter
    
    
    4.81
    
    
    
    2.61Fourth Quarter
    
    
    6.40
    
    
    
    4.602007First Quarter
    
    $
    6.85
    
    
    $
    4.56Second Quarter
    
    
    5.15
    
    
    
    1.61Third Quarter
    
    
    2.15
    
    
    
    1.57Fourth Quarter
    
    
    1.96
    
    
    
    0.92
   Securities Authorized For Issuance Under Equity Compensation Plans
  Number of
    
    
    
    
    
    Number of SecuritiesSecurities to Be
    
    
    
    
    
    Remaining Available forIssued Upon
    
    Weighted-average
    
    Future Issuance UnderExercise of
    
    Exercise Price of
    
    Equity CompensationOutstanding
    
    Outstanding
    
    Plan (ExcludingOptions, Warrants
    
    Options, Warrants
    
    Securities Reflected inand Rights (1)
    
    and Rights
    
    Column (a)) (2)Plan Category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    4,126,218
    
    
    $
    3.16
    
    
    
    540,632Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4,126,218
    
    
    
    
    
    
    
    540,632
 41




---



##### 



(1)
    
    Includes (i) outstanding options to purchase 50,380 shares of common stock under the 1998
Plan, of which 50,380 have been vested; and (ii) outstanding awards to purchase 1,681,577
shares of common stock under the 1999 Plan, of which 1,438,492 have been vested; and (iii)
outstanding awards to purchase 2,394,261 shares of common stock under the 2005 Plan, of which
265,465 have been vested. Options granted under the 1999 Plan to purchase 151,657 shares of
common stock were exercised prior to December 31, 2007.(2)
    
    Includes (i) up to 26,543 shares of common stock that may be issued under the 1998 Plan;
(ii) up to 168,350 shares of common stock that may be issued under the 1999 Plan; and
(iii) 345,739 shares of common stock that may be issued under the 2005 Plan. Does not include
up to 80,000 shares that may be issued under the 2006 Employee Stock Purchase Plan which
became effective upon our initial public offering. 
 Item 6. Selected Financial Data
  Years Ended December 31,Statement of Operations Data:
    
    2003
    
    2004
    
    2005
    
    2006
    
    2007(In thousands, except share and per share data)Revenues
    
    $
    1,601
    
    
    $
    2,345
    
    
    $
    2,371
    
    
    $
    1,475
    
    
    $
    10,667Cost and expenses:Research and development
    
    
    13,332
    
    
    
    14,349
    
    
    
    16,529
    
    
    
    28,041
    
    
    
    31,605General and administrative
    
    
    3,348
    
    
    
    3,206
    
    
    
    3,780
    
    
    
    5,857
    
    
    
    8,172Total costs and expenses
    
    
    16,680
    
    
    
    17,555
    
    
    
    20,309
    
    
    
    33,898
    
    
    
    39,777Loss from operations
    
    
    (15,079
    )
    
    
    (15,210
    )
    
    
    (17,938
    )
    
    
    (32,423
    )
    
    
    (29,110
    )Other (expense) income:Interest income
    
    
    953
    
    
    
    620
    
    
    
    392
    
    
    
    1,006
    
    
    
    1,144Interest expense
    
    
    (128
    )
    
    
    (265
    )
    
    
    (467
    )
    
    
    (377
    )
    
    
    (297
    )Other expense, net
    
    
    (448
    )
    
    
    (225
    )
    
    
    (17
    )
    
    
    (8
    )
    
    
    (11
    )Total other (expense) income, net
    
    
    377
    
    
    
    130
    
    
    
    (92
    )
    
    
    621
    
    
    
    836Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    Net loss
    
    
    (14,702
    )
    
    
    (15,080
    )
    
    
    (18,030
    )
    
    
    (31,785
    )
    
    
    (28,274
    )Dividends on and accretion of convertible
preferred stock
    
    
    (5,466
    )
    
    
    (5,525
    )
    
    
    (5,562
    )
    
    
    (471
    )
    
    
    Net income (loss) available to common stockholders
    
    $
    (20,168
    )
    
    $
    (20,605
    )
    
    $
    (23,592
    )
    
    $
    (32,256
    )
    
    $
    (28,274
    )Net income (loss) per share of common
stock  basic and diluted
    
    $
    (26.43
    )
    
    $
    (26.90
    )
    
    $
    (30.14
    )
    
    $
    (2.03
    )
    
    $
    (1.16
    )Weighted average shares of common stock
outstanding  basic and diluted
    
    
    763,075
    
    
    
    765,945
    
    
    
    782,715
    
    
    
    15,915,797
    
    
    
    24,412,688
 42




---



##### 



As of December 31,Balance Sheet Data:
    
    2003
    
    2004
    
    2005
    
    2006
    
    2007(In thousands)Cash, cash equivalents and marketable securities
    
    $
    38,213
    
    
    $
    22,397
    
    
    $
    5,190
    
    
    $
    15,336
    
    
    $
    15,500Working capital
    
    
    34,945
    
    
    
    18,878
    
    
    
    270
    
    
    
    10,401
    
    
    
    13,534Total assets(1)
    
    
    41,511
    
    
    
    28,942
    
    
    
    11,861
    
    
    
    23,085
    
    
    
    27,355Debt and capital lease obligations
    
    
    2,966
    
    
    
    5,273
    
    
    
    4,239
    
    
    
    4,759
    
    
    
    3,655Redeemable convertible preferred stock and
Series C warrant
    
    
    59,555
    
    
    
    65,357
    
    
    
    70,386
    
    
    
    
    
    
    
    Common stock subject to put right
    
    
    1,958
    
    
    
    1,958
    
    
    
    1,959
    
    
    
    
    
    
    
    Total stockholders equity (deficit)
    
    
    (26,038
    )
    
    
    (45,993
    )
    
    
    (68,458
    )
    
    
    14,035
    
    
    
    17,953
 
 (1)
    
    As of December 31, 2007, we had net operating loss (NOL) and research
and development credit carryforwards of approximately $109.8 million
and $3.4 million, respectively. Tax benefits may arise from these
carryforwards in the future in the event that we realize U.S. taxable
income. Potential tax benefits arising from these carryforwards are
not reflected in our total assets. Despite the NOL carryforward, we
may have an income tax liability in future years due to the
application of the alternative minimum tax rules. The NOL may also be
limited in its ability to offset future losses in the event that there
is a change in the stock ownership as defined by federal tax
regulations. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion of our financial condition and results of operations should be read
in conjunction with our financial statements and the notes to those financial statements appearing
elsewhere in this annual report on Form 10-K . This discussion contains forward-looking statements,
which are identified under our Cautionary Statement Regarding Forward-Looking Statements at the
beginning of this report, that involve significant risks and uncertainties. As a result of many
factors, such as those set forth under Risk Factors in Item 1A and elsewhere in this annual
report on Form 10-K , our actual results may differ materially from those anticipated in these
forward-looking statements.
 Overview
    43




---



##### 



Management Review of 2007
  Program Update
 Needle-free travelers diarrhea vaccine
    E. coli
 Vaccine
 44




---



##### 



IS patch for pandemic flu program
  45




---



##### 



Needle-free flu vaccine patch
  IS patch for elderly receiving flu vaccines
  Operations Update
  Financial Update
   FINANCIAL OPERATIONS REVIEW
 Revenues
  46




---



##### 



Research and development expenses
  
    
    salaries and related expenses for personnel;
    
    fees paid to consultants and clinical research organizations in conjunction with their monitoring our
clinical trials and acquiring and evaluating data in conjunction with our clinical trials;
    
    consulting fees paid to third parties in connection with other aspects of our product development efforts;
    
    fees paid to research organizations in conjunction with preclinical animal studies;
    
    costs of materials used in research and development;
    
    depreciation of facilities and equipment used to develop our product candidates; and
    
    milestone payments, license fees, and royalty payments for technology licenses.
  Years ended December 31,
    
    
    Cumulative SinceProduct Candidate
    
    2007
    
    
    2006
    
    
    January 1, 2003(in thousands)Needle-free travelers diarrhea vaccine patch
    
    $
    11,724
    
    
    $
    16,726
    
    
    $
    38,651IS patch for pandemic flu
    
    
    10,180
    
    
    
    2,593
    
    
    
    15,186Needle-free flu vaccine patch
    
    
    5,169
    
    
    
    5,889
    
    
    
    18,263IS patch for elderly receiving flu vaccines
    
    
    1,176
    
    
    
    1,262
    
    
    
    16,992Other programs
    
    
    3,356
    
    
    
    1,571
    
    
    
    14,762Total
    
    
    31,605
    
    
    
    28,041
    
    
    
    103,854
  General and administrative expense
  47




---



##### 



RESULTS OF OPERATIONS
 Comparison of the years ended December 31, 2007 and 2006
 Year ended December 31,(in thousands, except percentages)
    
    2007
    
    
    2006
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    10,667
    
    
    $
    1,475
    
    
    $
    9,192
    
    
    
    623.2
    %Costs & Expenses:Research & development
    
    
    31,605
    
    
    
    28,041
    
    
    
    3,564
    
    
    
    12.7
    %General & administrative
    
    
    8,172
    
    
    
    5,857
    
    
    
    2,315
    
    
    
    39.5
    %Total costs & expenses
    
    
    39,777
    
    
    
    33,898
    
    
    
    5,879
    
    
    
    17.3
    %Other income (expense)
    
    
    836
    
    
    
    621
    
    
    
    215
    
    
    
    34.6
    %Cumulative effect of a change in
accounting principle
    
    
    
    
    
    
    17
    
    
    
    (17
    )
    
    
    Net loss
    
    $
    (28,274
    )
    
    $
    (31,785
    )
    
    $
    3,511
    
    
    
    (11.0
    )%
 Revenues.
 Research and Development Expenses.
 General and Administrative Expenses.
 Interest Income (Expense) and Other  Net.
 Net Loss.
 Comparison of the years ended December 31, 2006 and 2005
 Year ended December 31,(in thousands, except percentages)
    
    2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    1,475
    
    
    $
    2,371
    
    
    $
    (896
    )
    
    
    (37.8
    )%Costs & Expenses:Research & development
    
    
    28,041
    
    
    
    16,529
    
    
    
    11,512
    
    
    
    69.6
    %General & administrative
    
    
    5,857
    
    
    
    3,780
    
    
    
    2,077
    
    
    
    54.9
    %Total costs & expenses
    
    
    33,898
    
    
    
    20,309
    
    
    
    13,589
    
    
    
    66.9
    %Other (expense) income
    
    
    621
    
    
    
    (92
    )
    
    
    713
    
    
    
    (775.0
    )%Cumulative effect of a change in
accounting principle
    
    
    17
    
    
    
    
    
    
    
    17
    
    
    
    Net loss
    
    $
    (31,785
    )
    
    $
    (18,030
    )
    
    $
    (13,755
    )
    
    
    76.3
    %
 48




---



##### 



Revenues.
 Research and Development Expenses.
 General and Administrative Expenses.
 Interest Income (Expense) and Other  Net.
 Net Loss.
 LIQUIDITY AND CAPITAL RESOURCES
   49




---



##### 



Years ended December 31,(in thousands)
    
    2007
    
    
    2006
    
    
    $ ChangeNet cash used in operating activities
    
    $
    (27,554
    )
    
    $
    (28,866
    )
    
    $
    1,312Net cash (used in) provided by investing activities
    
    
    21
    
    
    
    (4,357
    )
    
    
    4,378Net cash provided by (used in) financing activities
    
    
    29,186
    
    
    
    41,880
    
    
    
    (12,694
    )Net increase (decrease) in cash and cash equivalents
    
    
    1,653
    
    
    
    8,657
    
    
    
    (7,004
    )Cash and cash equivalents at end of period
    
    $
    15,500
    
    
    $
    13,847
    
    
    $
    1,653
   50




---



##### 



Payments Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More Than(in thousands)
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsLong-Term Debt (1)
    
    $
    4,422
    
    
    $
    1,533
    
    
    $
    2,021
    
    
    $
    731
    
    
    $
    137Operating Lease Obligations(2)
    
    
    6,846
    
    
    
    1,196
    
    
    
    2,489
    
    
    
    2,602
    
    
    
    559Total
    
    $
    11,268
    
    
    $
    2,729
    
    
    $
    4,510
    
    
    $
    3,333
    
    
    $
    696
 
 (1)
    
    Includes interest payable in the period.(2)
    
    These amounts include payments for additional facility space leased
under a lease amendment signed in January 2007. See discussion of
amended lease terms below.    
    
    the progress and costs of preclinical development and laboratory testing and clinical trials;
    
    our ability to establish, enforce, and maintain collaborations required for product commercialization;
    
    the number of product candidates we pursue;
    
    the time and costs involved in obtaining regulatory approvals;
    
    delays that may be caused by evolving requirements of regulatory agencies;
    
    the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims;
    
    our plans to establish sales, marketing, and/or manufacturing capabilities;
    
    the acquisition of technologies, products, and other business opportunities that require financial
commitments; and
    
    our revenues, if any, from successful development and commercialization of our products.
 51




---



##### 



Critical Accounting Policies and Estimates
  Revenue Recognition .
 Research and Development Costs .
 Stock-Based Compensation . Accounting for Stock-Based Compensation
     52




---



##### 



Accounting for Equity Instruments That are Issued to
Other Than Employees for Acquiring, or in conjunction with, Selling, Goods and Services
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
  53




---



##### 



Managements Report on Internal Control Over Financial Reporting
  Internal ControlIntegrated Framework
 Attestation Report of Independent Registered Public Accounting Firm
  Changes in Internal Controls Over Financial Reporting
  
 Item 9B. Other Information
  54




---



##### 



PART III
  
 PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 
 Financial Statements
  
 Financial Statement Schedules
  
 Exhibits
  
 Exhibits
  55




---



##### 



EXHIBIT INDEX
 Exhibit No.
    
    Description
    
    Location3.1.3
    
    Third Amended and Restated Certificate of Incorporation.
    
    
    (1
    )3.2.3
    
    Third Amended and Restated By-laws.
    
    
    (2
    )4.2
    
    Grant of Put Option dated April 6, 2001 by Iomai Corporation to the Walter Reed Army
Institute of Research as representative of the United States of America.
    
    
    (1
    )4.3
    
    Option Agreement dated December 4, 2002 by and between Iomai Corporation and Elan
Corporation, plc.
    
    
    (1
    )4.4
    
    Stock Purchase Warrant dated December 4, 2002 issued by Iomai Corporation to Friedman
Billings Ramsey & Co., Inc.
    
    
    (1
    )4.5.1
    
    Investor Rights Agreement dated December 4, 2002 between Iomai Corporation and the
individuals specified in Exhibit A thereto.
    
    
    (1
    )4.5.2
    
    Amendment to the Investor Rights Agreement dated March 27, 2003 among Iomai
Corporation and the Purchasers listed on the signature pages thereto.
    
    
    (1
    )4.5.3
    
    Amendment to Investor Rights Agreement and Consent dated May 30, 2003 among Iomai
Corporation and the Purchasers listed on the signature pages thereto.
    
    
    (1
    )4.5.4
    
    Amendment to Investor Rights Agreement and Consent dated December 1, 2005 among Iomai
Corporation and the purchasers listed on the signature pages thereto.
    
    
    (1
    )4.6
    
    Registration Rights Agreement dated April 6, 2001 by and between Iomai Corporation
and MdBio, Inc. as trustee for and on behalf of the Walter Reed Army Institute of
Research, a representative of the United States of America.
    
    
    (1
    )4.7
    
    Registration Rights Agreement dated March 30, 1999 by and between Iomai Corporation
and Maryland Health Care Product Development Corporation.
    
    
    (1
    )4.8
    
    Registration Rights Agreement dated July 18, 2000 by and between Iomai Corporation
and Eiicha Ida.
    
    
    (1
    )4.9
    
    Registration Rights Agreement dated July 18, 2000 by and between Iomai Corporation
and Yuichi Suzuki.
    
    
    (1
    )4.10
    
    Registration Rights Agreement dated July 18, 2000 by and between Iomai Corporation
and Toshiro Osoegawa.
    
    
    (1
    )4.11
    
    Registration Rights Agreement dated August 15, 2000 by and between Iomai Corporation
and CZ Venture Operations, Inc.
    
    
    (1
    )4.12
    
    Registration Rights Agreement dated January 4, 2001 by and between Iomai Corporation
and Alexandria Real Estate Equities, L.P.
    
    
    (1
    )4.13
    
    Form of common stock warrant dated March 2, 2007.
    
    
    (7
    )4.14
    
    Form of common stock warrant dated March 2, 2007.
    
    
    (7
    )9.1
    
    Voting Trust and Escrow Agreement dated April 6, 2001 between Iomai Corporation and
MdBio, Inc., as trustee for and on behalf of Walter Reed Army Institute of Research,
a representative of the United States of America.
    
    
    (1
    )10.1
    
    Employment Agreement dated May 18, 2002 between Iomai Corporation and Stanley Erck,
as amended on October 25, 2002.**
    
    
    (1
    )10.1.1
    
    Amendment No. 2, dated December 1, 2005, to the Employment Agreement between Iomai
Corporation and Stanley Erck.**
    
    
    (1
    )10.2
    
    1998 Stock Option Plan, as amended January 16, 2002.**
    
    
    (1
    )10.3.1
    
    1999 Stock Incentive Plan.
    
    
    (1
    )
 56




---



##### 



Exhibit No.
    
    Description
    
    Location10.3.2
    
    Form of Incentive Stock Option Agreement.**
    
    
    (1
    )10.3.3
    
    Form of Nonqualified Stock Option Agreement.**
    
    
    (1
    )10.4
    
    2005 Incentive Plan, as amended and restated as of June 5, 2007.**
    
    
    (8
    )10.5
    
    2006 Employee Stock Purchase Plan.**
    
    
    (1
    )10.6
    
    Terms of Non-Employee Director Compensation.**
    
    
    (1
    )10.7
    
    Amended and Restated License Agreement dated April 6, 2001 by and between Iomai
Corporation and the Walter Reed Army Institute of Research as representative of the
United States of America.+
    
    
    (1
    )10.7.1
    
    Amendment No. 1 to the Amended and Restated License Agreement dated February 4, 2008
by and between Iomai Corporation and the Walter Reed Army Institute of Research as
representative of the United States of America.10.8
    
    Form of Subordinated Convertible Promissory Note issued by Iomai Corporation to the
Walter Reed Army Institute of Research as representative of the United States of
America.
    
    
    (1
    )10.9
    
    Commercial License Agreement dated June 30, 2005 by and between Iomai Corporation and
Dow Global Technologies Incorporated.+
    
    
    (1
    )10.10.1
    
    Master Security Agreement dated September 26, 2003 by and between Iomai Corporation
and Oxford Finance Corporation.
    
    
    (1
    )10.10.2
    
    Form of Promissory Note issued by Iomai Corporation to Oxford Finance Corporation
together with schedule identifying dates, principal amounts and interest rates of all
outstanding promissory notes.
    
    
    (1
    )10.11.1
    
    Lease Agreement dated December 18, 2000 by and between Iomai Corporation and
ARE-20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (1
    )10.11.2
    
    First Amendment to Lease dated November 29, 2001 by and between Iomai Corporation and
ARE-20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (1
    )10.11.3
    
    Second Amendment to Lease dated April 14, 2003 by and between Iomai Corporation and
ARE-20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (1
    )10.11.4
    
    Third Amendment to Lease dated August 28, 2003 by and between Iomai Corporation and
ARE-20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (1
    )10.11.5
    
    Fourth Amendment to Lease dated October 26, 2005 by and between Iomai Corporation and
ARE 20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (1
    )10.11.6
    
    Letter Agreement amending Fourth Amendment to Lease dated January 3, 2006 by and
between Iomai Corporation and ARE 20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (3
    )10.11.7
    
    Sublease Agreement dated February 28, 2006 by and between Geomet Technologies, LLC
and Iomai Corporation.
    
    
    (3
    )10.11.8
    
    Fifth Amendment to Lease dated July 25, 2006 by and between Iomai Corporation and ARE
20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (4
    )10.11.9
    
    Sixth Amendment to Lease dated January 26, 2007 by and between Iomai Corporation and
ARE 20/22/1300 Firstfield Quince Orchard, LLC.
    
    
    (6
    )10.12
    
    Form of Change in Control Agreement, between Iomai Corporation and certain officers.**
    
    
    (1
    )10.13
    
    Securities Purchase Agreement dated October 23, 2006 by and among Iomai Corporation
and the Purchasers thereto.
    
    
    (5
    )10.14
    
    Securities Purchase Agreement dated March 2, 2007 by and among Iomai Corporation and
Investors thereto.
    
    
    (7
    )10.15
    
    Contract dated January 17, 2007 by and between Iomai Corporation and the Department
of Health and Human Services (HHS/OS/OPHEP/OPHEMC).+
    
    
    (9
    )
 57




---



##### 



Exhibit No.
    
    Description
    
    Location23.1
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.31.1
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)
under the Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
under the Securities Exchange Act of 1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
    
    
    (10
    )
 
 **
    
    Indicates a management contract or compensatory plan.+
    
    Confidential Treatment Requested Under 17 C.F.R. §§ 200.80(b)(4) and 230.406. The
confidential portions of this exhibit have been omitted and are marked by an asterisk.(1)
    
    Previously filed as an exhibit to the Companys Form S-1/A (File No. 333-128765) and
incorporated herein by reference thereto.(2)
    
    Previously filed as an exhibit to the Companys Form 8-K filed March 24, 2006 and
incorporated herein by reference thereto.(3)
    
    Previously filed as an exhibit to the Companys Annual Report on Form 10-K filed March 24,
2006 and incorporated herein by reference thereto.(4)
    
    Previously filed as an exhibit to the Companys Form 8-K filed July 7, 2006 and incorporated
herein by reference thereto.(5)
    
    Previously filed as an exhibit to the Companys Form 8-K filed October 24, 2006 and
incorporated herein by reference thereto.(6)
    
    Previously filed as an exhibit to the Companys Form 8-K filed January 30, 2007 and
incorporated herein by reference thereto.(7)
    
    Previously filed as an exhibit to the Companys Form 8-K filed March 2, 2007 and incorporated
herein by reference thereto.(8)
    
    Previously filed as an exhibit to the Companys Registration Statement on Form S-8 (File No.
333-143525) and incorporated herein by reference thereto.(9)
    
    Previously filed as an exhibit to the Companys Quarterly Report on Form 10-Q filed May 14,
2007 and incorporated herein by reference thereto.(10)
    
    This certification accompanies this annual report on Form 10-K and is not filed as part of
it. 58




---



##### 



SIGNATURES
  IOMAI CORPORATIONBy:
    /s/  Stanley C. ErckName:
    Stanley C. ErckTitle:
    President, Chief Executive Officer, Treasurer and Director   Signature
    
    Title/s/ Stanley C. Erck

Stanley C. Erck
    
    Chief Executive Officer, President,Treasurer
and Director
(Principal Executive Officer)/s/ Russell P. Wilson

Russell P. Wilson
    
    Senior Vice President, Chief Financial Officer,General
Counsel and Secretary
(Principal Financial and Accounting Officer)/s/ M. James Barrett

M. James Barrett, Ph.D.
    
    Chairman of the Board of Directors/s/ R. Gordon Douglas

R. Gordon Douglas, M.D.
    
    Director/s/ Richard Douglas

Richard Douglas, Ph.D.
    
    Director/s/ F. Weller Meyer

F. Weller Meyer
    
    Director/s/ Thomas Martin Vernon

Thomas Martin Vernon, M.D.
    
    Director
 59




---



##### 



Iomai Corporation
 INDEX TO FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Balance Sheets as of December 31, 2007 and 2006
    
    
    F-3Statements of Operations for the Years Ended December 31, 2007, 2006, and 2005
    
    
    F-4Statements of Changes in Redeemable Preferred Stock and Stockholders Equity
(Deficit) for the Years Ended December 31, 2007, 2006, and 2005
    
    
    F-5Statements of Cash Flows for the Years Ended December 31, 2007, 2006, and 2005
    
    
    F-6Notes to Financial Statements
    
    
    F-7
 F-1




---



##### 



Iomai Corporation
  
      Ernst & Young LLP
 
 F-2




---



##### 



Iomai Corporation
 BALANCE SHEETS
 December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    15,500
    
    
    $
    13,847Marketable securities
    
    
    
    
    
    
    1,489Accounts receivable
    
    
    4,011
    
    
    
    62Prepaid expenses and other current assets
    
    
    589
    
    
    
    500Total current assets
    
    
    20,100
    
    
    
    15,898Property and equipment, net
    
    
    6,699
    
    
    
    6,736Restricted marketable securities
    
    
    265
    
    
    
    268Loans to employees
    
    
    93
    
    
    
    Other noncurrent assets
    
    
    198
    
    
    
    183Total assets
    
    $
    27,355
    
    
    $
    23,085LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    
    2,710
    
    
    
    1,598Accrued expenses
    
    
    2,656
    
    
    
    2,353Notes payable, current portion
    
    
    1,005
    
    
    
    1,369Notes payable to related party, current portion
    
    
    195
    
    
    
    176Capital lease obligation, current portion
    
    
    
    
    
    
    1Total current liabilities
    
    
    6,566
    
    
    
    5,497Notes payable, long-term portion
    
    
    1,303
    
    
    
    1,866Notes payable to related party, long-term portion
    
    
    1,152
    
    
    
    1,347Deferred rent
    
    
    381
    
    
    
    340Total liabilities
    
    
    9,402
    
    
    
    9,050Stockholders equity:Common stock, $0.01 par value; 200,000,000
shares authorized and 25,588,673 and 19,197,387
shares issued and outstanding as of December 31,
2007 and 2006 respectively
    
    
    256
    
    
    
    192Additional paid-in capital
    
    
    146,759
    
    
    
    114,631Accumulated deficit
    
    
    (129,062
    )
    
    
    (100,788
    )Total stockholders equity
    
    
    17,953
    
    
    
    14,035Total liabilities and stockholders equity
    
    $
    27,355
    
    
    $
    23,085
  F-3




---



##### 



Iomai Corporation
 STATEMENTS OF OPERATIONS
 Year ended December 31,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    10,667
    
    
    $
    1,475
    
    
    $
    2,371Cost and expenses:Research and development
    
    
    31,605
    
    
    
    28,041
    
    
    
    16,529General and administrative
    
    
    8,172
    
    
    
    5,857
    
    
    
    3,780Total costs and expenses
    
    
    39,777
    
    
    
    33,898
    
    
    
    20,309Loss from operations
    
    
    (29,110
    )
    
    
    (32,423
    )
    
    
    (17,938
    )Other income (expense)Interest income
    
    
    1,144
    
    
    
    1,006
    
    
    
    392Interest expense
    
    
    (297
    )
    
    
    (377
    )
    
    
    (467
    )Other expense, net
    
    
    (11
    )
    
    
    (8
    )
    
    
    ( 17
    )Total other income (expense), net
    
    
    836
    
    
    
    621
    
    
    
    (92
    )Net loss before cumulative effect of a change in
accounting principle
    
    
    (28,274
    )
    
    
    (31,802
    )
    
    
    (18,030
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    17
    
    
    
    Net loss
    
    
    (28,274
    )
    
    
    (31,785
    )
    
    
    (18,030
    )Dividends on and accretion of convertible preferred stock
    
    
    
    
    
    
    (471
    )
    
    
    (5,562
    )Net loss available to common stockholders
    
    $
    (28,274
    )
    
    $
    (32,256
    )
    
    $
    (23,592
    )Net loss available to common stockholders per share of
common stockbasic and diluted
    
    $
    (1.16
    )
    
    $
    (2.03
    )
    
    $
    (30.14
    )Weighted-average number of shares of common stockbasic
and diluted
    
    
    24,412,688
    
    
    
    15,915,797
    
    
    
    782,715
  F-4




---



##### 



Iomai Corporation
 STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT)
 Stockholders Equity (Deficit)Series C Convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedRedeemable
    
    
    Series B Convertible
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    Other
    
    
    
    
    
    
    TotalPreferred Stock
    
    
    Preferred Stock
    
    
    Common Stock
    
    
    Paid-In
    
    
    Comprehensive
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    

Equity (Deficit)Balance at December 31, 2004
    
    
    129,590,034
    
    
    
    65,321
    
    
    
    14,734,578
    
    
    
    147
    
    
    
    771,921
    
    
    
    8
    
    
    
    3,849
    
    
    
    (26
    )
    
    
    (49,970
    )
    
    
    (45,992
    )Amortization of Series C warrants
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accretion of issuance costs
    
    
    
    
    
    
    443
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (333
    )
    
    
    
    
    
    
    (110
    )
    
    
    (443
    )Accrual of dividends
    
    
    
    
    
    
    4,587
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,084
    )
    
    
    
    
    
    
    (504
    )
    
    
    (4,588
    )Issuance of Common Stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    9Stock option compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    538
    
    
    
    
    
    
    
    
    
    
    
    538Cash in lieu of fractional common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,658
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    22Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,030
    )
    
    
    (18,030
    )Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    27Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,003
    )Balance at December 31, 2005
    
    
    129,590,034
    
    
    
    70,363
    
    
    
    14,734,578
    
    
    
    147
    
    
    
    795,519
    
    
    
    8
    
    
    
    
    
    
    
    1
    
    
    
    (68,614
    )
    
    
    (68,458
    )Amortization of Series C warrants
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Accretion of issuance costs
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    (37
    )Accrual of dividends
    
    
    
    
    
    
    389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (389
    )
    
    
    (389
    )Stock option compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,065
    
    
    
    
    
    
    
    
    
    
    
    1,065Exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,030
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    13Exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,865
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock in connection with initial public
offering, net of offering costs
of $4,012,584
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000,000
    
    
    
    50
    
    
    
    30,892
    
    
    
    
    
    
    
    
    
    
    
    30,942Automatic conversion of common stock subject to put right into
common stock upon initial public
offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,958
    
    
    
    
    
    
    
    
    
    
    
    1,958Automatic conversion of preferred stock into common
stock upon initial public
offering
    
    
    (129,590,034
    )
    
    
    (70,790
    )
    
    
    (14,734,578
    )
    
    
    (147
    )
    
    
    11,101,867
    
    
    
    111
    
    
    
    70,849
    
    
    
    
    
    
    
    
    
    
    
    70,813Issuance of common stock, net of offering costs of $86,593
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,283,106
    
    
    
    23
    
    
    
    9,891
    
    
    
    
    
    
    
    
    
    
    
    9,914Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,785
    )
    
    
    (31,785
    )Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,785
    )Balance at December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,197,387
    
    
    
    192
    
    
    
    114,631
    
    
    
    
    
    
    
    (100,788
    )
    
    
    14,035Stock option compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,902
    
    
    
    
    
    
    
    
    
    
    
    1,902Exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,458
    
    
    
    1
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    91Issuance of common stock in connection with PIPE, net of
offering costs of $1,685,114
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,291,828
    
    
    
    63
    
    
    
    30,136
    
    
    
    
    
    
    
    
    
    
    
    30,199Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,274
    )
    
    
    (28,274
    )Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,274
    )Balance at December 31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    25,588,673
    
    
    $
    256
    
    
    $
    146,759
    
    
    
    
    
    
    $
    (129,062
    )
    
    $
    17,953
  F-5




---



##### 



Iomai Corporation
 STATEMENTS OF CASH FLOWS
 Year ended December 31,2007
    
    
    2006
    
    
    2005Cash flows from operating activitiesNet loss
    
    $
    (28,274
    )
    
    $
    (31,785
    )
    
    $
    (18,030
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    1,600
    
    
    
    1,261
    
    
    
    2,670Stock-based compensation expense
    
    
    1,902
    
    
    
    1,065
    
    
    
    538Non-cash interest expense and amortization of premium/discount of
marketable securities
    
    
    (21
    )
    
    
    (255
    )
    
    
    28Deferred rent
    
    
    41
    
    
    
    194
    
    
    
    (54
    )Loss on disposal of property and equipment
    
    
    6
    
    
    
    10
    
    
    
    4Changes in operating assets and liabilities:Accounts receivable
    
    
    (3,949
    )
    
    
    (50
    )
    
    
    62Prepaid expenses and other current assets
    
    
    (89
    )
    
    
    (242
    )
    
    
    (40
    )Loans to employees
    
    
    (93
    )
    
    
    
    
    
    
    Other noncurrent assets
    
    
    (17
    )
    
    
    2
    
    
    
    (45
    )Accounts payable
    
    
    1,037
    
    
    
    (9
    )
    
    
    420Accrued expenses
    
    
    303
    
    
    
    943
    
    
    
    143Net cash used in operating activities
    
    
    (27,554
    )
    
    
    (28,866
    )
    
    
    (14,304
    )Cash flows from investing activitiesPurchases of property and equipment
    
    
    (1,495
    )
    
    
    (3,501
    )
    
    
    (1,339
    )Sale of property and equipment
    
    
    
    
    
    
    7
    
    
    
    Restricted cash and marketable securities
    
    
    16
    
    
    
    384
    
    
    
    35Sales/maturities of marketable securities
    
    
    1,500
    
    
    
    16,500
    
    
    
    22,150Purchases of marketable securities
    
    
    
    
    
    
    (17,747
    )
    
    
    (6,790
    )Net cash (used in) provided by investing activities
    
    
    21
    
    
    
    (4,357
    )
    
    
    14,056Cash flows from financing activitiesProceeds from the exercise of stock options
    
    
    91
    
    
    
    13
    
    
    
    22Cash issued in lieu of fractional common stock
    
    
    
    
    
    
    
    
    
    
    (1
    )Proceeds from initial public offering, net of underwriting
commissions
    
    
    
    
    
    
    32,854
    
    
    
    Proceeds from private placement of common stock
    
    
    31,884
    
    
    
    10,000
    
    
    
    Stock issuance costs
    
    
    (1,685
    )
    
    
    (1,517
    )
    
    
    Deferred stock issuance costs
    
    
    
    
    
    
    
    
    
    
    (481
    )Proceeds from notes payable
    
    
    496
    
    
    
    2,000
    
    
    
    468Principal payments on notes payable
    
    
    (1,423
    )
    
    
    (1,495
    )
    
    
    (1,166
    )Proceeds from notes payable to related party
    
    
    
    
    
    
    280
    
    
    
    Principal payments on notes payable to related party
    
    
    (176
    )
    
    
    (250
    )
    
    
    (333
    )Payments under capital lease obligations
    
    
    (1
    )
    
    
    (5
    )
    
    
    (13
    )Net cash provided by (used in) financing activities
    
    
    29,186
    
    
    
    41,880
    
    
    
    (1,504
    )Net increase (decrease) in cash and cash equivalents
    
    
    1,653
    
    
    
    8,657
    
    
    
    (1,752
    )Cash and cash equivalents at beginning of year
    
    
    13,847
    
    
    
    5,190
    
    
    
    6,942Cash and cash equivalents at end of year
    
    $
    15,500
    
    
    $
    13,847
    
    
    $
    5,190Supplemental cash flow disclosures:Cash paid for interest
    
    $
    445
    
    
    $
    435
    
    
    $
    497
  F-6




---



##### 



Iomai Corporation
 NOTES TO FINANCIAL STATEMENTS
 1. ORGANIZATION
  2. MANAGEMENTS PLANS AS TO CONTINUING AS A GOING CONCERN
     3. SIGNIFICANT ACCOUNTING POLICIES
 Use of estimates
  Cash and cash equivalents
  F-7




---



##### 



Marketable securities
    Restricted marketable securities
  Accounts receivable
   Concentration of credit risk and fair value of financial instruments
   F-8




---



##### 



Property and equipment
  Asset Description
    
    Useful Life (Years)Furniture and equipment
    
    3 - 7Lab equipment
    
    5
  Income taxes
   Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 Revenue recognition
  Research and development costs
  F-9




---



##### 



Comprehensive loss
 Reporting Comprehensive Income
 Stock-based compensation
  Accounting for Equity Instruments That are
Issued to Other Than Employees for Acquiring, or in conjunction with, Selling, Goods and Services.
  Basic and diluted net loss available to common stockholders per share of common stock
  Reverse stock split
  F-10




---



##### 



Recent Accounting Pronouncements
    4. GOVERNMENT CONTRACT FOR PANDEMIC FLU
  F-11




---



##### 



5. MARKETABLE SECURITIES
  December 31, 2007Gross Unrealized
    
    
    Gross UnrealizedAmortized Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueAvailable-for-SaleU.S. Treasury and agency obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Accrued interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total  Marketable securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Restricted Marketable SecuritiesU.S. Treasury and agency obligations
    
    $
    265
    
    
    $
    
    
    
    $
    
    
    
    $
    265Accrued interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total  Restricted marketable securities
    
    $
    265
    
    
    $
    
    
    
    $
    
    
    
    $
    265
 December 31, 2006Gross Unrealized
    
    
    Gross UnrealizedAmortized Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueAvailable-for-SaleU.S. Treasury and agency obligations
    
    $
    1,489
    
    
    $
    
    
    
    $
    
    
    
    $
    1,489Accrued interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total  Marketable securities
    
    $
    1,489
    
    
    $
    
    
    
    $
    
    
    
    $
    1,489Restricted Marketable SecuritiesU.S. Treasury and agency obligations
    
    $
    265
    
    
    $
    
    
    
    $
    
    
    
    $
    265Accrued interest
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Total  Restricted marketable securities
    
    $
    268
    
    
    $
    
    
    
    $
    
    
    
    $
    268
   6. PROPERTY AND EQUIPMENT
  December 31,2007
    
    
    2006Furniture and equipment
    
    $
    1,983
    
    
    $
    1,465Lab equipment
    
    
    4,729
    
    
    
    4,225Leasehold improvements
    
    
    6,103
    
    
    
    6,051Construction-in-progress
    
    
    1,847
    
    
    
    1,376Subtotal
    
    
    14,662
    
    
    
    13,117Accumulated depreciation
    
    
    (7,963
    )
    
    
    (6,381
    )Property and equipment, net
    
    $
    6,699
    
    
    $
    6,736
  F-12




---



##### 



7. ACCRUED LIABILITIES
  December 31,2007
    
    2006Salary and employee benefits
    
    $
    1,740
    
    
    $
    1,282Clinical trial obligations
    
    
    412
    
    
    
    561Other
    
    
    504
    
    
    
    510$
    2,656
    
    
    $
    2,353
 8. LONG-TERM DEBT
 Notes payable
    December 31,2007
    
    
    2006Promissory Note dated September 26, 2003; 8.93%, maturing March 26, 2007
    
    $
    
    
    
    $
    114Promissory Note dated September 26, 2003; 9.03%, maturing September 26, 2007
    
    
    
    
    
    
    16Promissory Note dated December 30, 2003; 9.24%, maturing June 30, 2007
    
    
    
    
    
    
    162Promissory Note dated February 26, 2004; 9.03%, maturing February 26, 2008
    
    
    10
    
    
    
    70Promissory Note dated April 30, 2004; 9.48%, maturing April 30, 2008
    
    
    33
    
    
    
    127Promissory Note dated June 30, 2004; 10.06%, maturing December 30, 2007
    
    
    
    
    
    
    33Promissory Note dated June 30, 2004; 10.03%, maturing June 30, 2008
    
    
    115
    
    
    
    327Promissory Note dated September 30, 2004; 9.58%, maturing March 30, 2008
    
    
    2
    
    
    
    11Promissory Note dated September 30, 2004; 9.40%, maturing September 30, 2008
    
    
    40
    
    
    
    90Promissory Note dated November 30, 2004; 9.72%, maturing November 30, 2008
    
    
    65
    
    
    
    129Promissory Note dated March 30, 2005; 10.46%, maturing March 30, 2009
    
    
    25
    
    
    
    43Promissory Note dated March 30, 2005; 10.70%, maturing September 30, 2008
    
    
    6
    
    
    
    14Promissory Note dated July 27, 2005; 10.32%, maturing July 27, 2009
    
    
    84
    
    
    
    131Promissory Note dated July 27,2005; 10.66%, maturing January 27, 2009
    
    
    8
    
    
    
    15Promissory Note dated September 30, 2005; 10.31%, maturing September 30, 2009
    
    
    76
    
    
    
    114Promissory Note dated May 31, 2006; 11,38%, maturing May 31, 2010
    
    
    284
    
    
    
    381Promissory Note dated May 31, 2006; 11.73%, maturing November 30, 2009
    
    
    153
    
    
    
    220Promissory Note dated August 28, 2006; 11.27%, maturing August 28, 2010
    
    
    403
    
    
    
    525
 F-13




---



##### 



December 31,2007
    
    
    2006Promissory Note dated August 28, 2006, 11.65%, maturing February 28, 2010
    
    
    57
    
    
    
    79Promissory Note dated December 20, 2006; 10.96%, maturing December 20, 2010
    
    
    395
    
    
    
    492Promissory Note dated December 20, 2006, 11.35%, maturing June 20, 2010
    
    
    108
    
    
    
    142Promissory Note dated June 25, 2007, 11.51%, maturing June 25, 2011
    
    
    444
    
    
    
    0Total notes payable
    
    
    2,308
    
    
    
    3,235Less current portion of notes payable
    
    
    (1,005
    )
    
    
    (1,369
    )Long-term portion of notes payable
    
    $
    1,303
    
    
    $
    1,866
  2007
    
    
    2006Total related-party notes payable, with interest
rates ranging from 14.0% to 10.5%, maturing May
31, 2013 (1)

    1,347
    
    
    
    1,523Less current portion of related-party notes payable
    
    
    (195
    )
    
    
    (176
    )Long-term portion of related-party notes payable
    
    $
    1,152
    
    
    $
    1,347
 
 (1)
    
    On October 26, 2005, the Company amended its lease agreement to, among
things, to extend the maturity of the related-party notes payable from May 2009 until May
2013. In connection with this lease amendment, the then-remaining balance owed to the
landlord as of May 31, 2006 under the related-party notes payable, which totaled
$1,342,719, is being amortized over the seven-year period until May 2013 at a revised rate
of 10.5%. See Note 9Related Party Transactions.  Notes Payablefrom RelatedNotes Payable
    
    
    Party(1)
    
    
    TotalYear ending:2008
    
    $
    1,005
    
    
    $
    195
    
    
    $
    1,2002009
    
    
    750
    
    
    
    216
    
    
    
    9662010
    
    
    479
    
    
    
    240
    
    
    
    7192011
    
    
    74
    
    
    
    267
    
    
    
    3412012 and thereafter
    
    
    
    
    
    
    429
    
    
    
    429$
    2,308
    
    
    $
    1,347
    
    
    $
    3,655
 
 (1)
    
    On October 26, 2005, the Company amended its lease agreement to, among
things, to extend the maturity of the related-party notes payable from May 2009 until May
2013. In connection with this lease amendment, the then-remaining balance owed to the
landlord as of May 31, 2006 under the related-party notes payable, which totaled
$1,342,719, is being amortized over the seven-year period until May 2013 at a revised
rate of 10.5%. See Note 9Related Party Transactions 9. RELATED PARTY TRANSACTIONS
   F-14




---



##### 



F-15




---



##### 



10. REDEEMABLE PREFERRED STOCK
 Series C convertible redeemable preferred stock
   11. STOCKHOLDERS EQUITY (DEFICIT)
 Series B convertible preferred stock
   Initial Public Offering
   F-16




---



##### 




    
    All shares of Series B Preferred Stock were automatically converted into
1,133,424 shares of common stock;
    
    All shares of Series C Preferred Stock were automatically converted into
9,968,443 shares of common stock; and
    
    A warrant issued to the Companys placement agent in connection with the Series C
Stock financing in December 2002 for 250,000 shares of Series C Preferred Stock was
automatically converted into a warrant to purchase up to 19,231 shares of Common Stock
at an exercise price of $5.7473 per share.
   Private Placement in Public Equity
    F-17




---



##### 



Stock Options
      Weighted-Average
    
    AggregateWeighted-
    
    Remaining
    
    Intrinsic ValueAverage
    
    Contractual
    
    (1)Shares
    
    Exercise Price
    
    Term
    
    ($000s)Outstanding at December 31, 2006
    
    
    2,918,805
    
    
    
    2.93Exercisable at December 31, 2006
    
    
    1,195,551
    
    
    
    1.93Granted
    
    
    1,383,500
    
    
    
    3.50Exercised
    
    
    (99,458
    )
    
    
    0.91Forfeited
    
    
    (70,305
    )
    
    
    3.74Expired
    
    
    (6,324
    )
    
    
    2.65Outstanding at December 31, 2007
    
    
    4,126,218
    
    
    
    3.16
    
    
    
    7.5
    
    
    $
    247Vested or expected to vest at December 31, 2007
    
    
    3,934,714
    
    
    
    3.13
    
    
    
    7.5
    
    
    $
    245Exercisable at December 31, 2007
    
    
    1,754,337
    
    
    
    2.26
    
    
    
    5.7
    
    
    $
    209
 
 (1)
    
    Calculated using the per-share closing price of the Companys common stock on December 31, 2007, which was $1.03. F-18




---



##### 



December 31,2007
    
    2006
    
    2005Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    73
    %
    
    
    77
    %
    
    
    60
    %Risk-free interest rate
    
    
    4.24
    %
    
    
    4.66
    %
    
    
    3.89
    %Expected average life of options
    
    5 years
    
    5 years
    
    5 yearsExpected forfeiture rate
    
    
    3 - 7
    %
    
    
    0 - 7
    %
    
    
    0 - 7
    %
 Dividend Yield
 Expected Volatility
 Risk-Free Interest Rate
 Expected Life of the Option Term
 Expected Forfeiture Rate
 F-19




---



##### 



December 31,2007
    
    
    2006
    
    
    2005Employees and directors
    
    $
    1,918
    
    
    $
    1,078
    
    
    $
    509Non-employee consultants
    
    
    (16
    )
    
    
    (13
    )
    
    
    29$
    1,902
    
    
    $
    1,065
    
    
    $
    538
   1998 Stock Incentive Plan
  1999 Stock Incentive Plan
   2005 Stock Incentive Plan
  F-20




---



##### 



2006 Employee Stock Purchase Plan
    12. COMMITMENTS AND CONTINGENCIES
   Operating2008
    
    $
    1,1962009
    
    
    1,2362010
    
    
    1,2522011
    
    
    1,2792012
    
    
    1,323Thereafter
    
    
    559Total minimum lease payments
    
    $
    6,845
  License agreement with the Walter Reed Army Institute of Research (WRAIR)
    F-21




---



##### 



13. INCOME TAXES
   December 31,2007
    
    
    2006NOL carryforward
    
    $
    42,419
    
    
    $
    32,323Research and development credit carryforward
    
    
    3,376
    
    
    
    2,678Deferred temporary differences
    
    
    2,306
    
    
    
    2,051Valuation allowance
    
    
    (48,101
    )
    
    
    (37,052
    )Net deferred tax asset
    
    $
    
    
    
    $
    
   Year ended December 31,2007
    
    2006
    
    2005Federal tax at statutory rates
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State taxes, net of federal benefit
    
    
    4.6
    
    
    
    4.6
    
    
    
    4.6Research and development credit
    
    
    2.9
    
    
    
    3.2
    
    
    
    2.8Permanent difference
    
    
    (1.9
    )
    
    
    (1.0
    )
    
    
    (1.2
    )Change in valuation allowance
    
    
    (39.6
    )
    
    
    (40.8
    )
    
    
    (40.2
    )Provision for income taxes
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB
Statement No. 109
 Balance as of January, 1, 2007
    
    $
    Additions for tax positions related to the current year
    
    
    Additions related for tax positions of prior years
    
    
    Reductions for tax positions of prior years
    
    
    Settlements
    
    
    Balance as of December 31, 2007
    
    $
    
  F-22




---



##### 



14. EMPLOYEE BENEFIT PLAN
  15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
  1st Quarter
    
    2nd Quarter
    
    3rd Quarter
    
    4th QuarterYear ended December 31, 2006Revenue
    
    $
    997
    
    
    $
    408
    
    
    $
    30
    
    
    $
    40Income (loss) from operations
    
    
    (5,151
    )
    
    
    (7,763
    )
    
    
    (9,474
    )
    
    
    (10,035
    )Net income (loss)
    
    
    (5,020
    )
    
    
    (7,544
    )
    
    
    (9,326
    )
    
    
    (9,895
    )Net income (loss) per share, basic and diluted
    
    $
    (0.45
    )
    
    $
    (0.45
    )
    
    $
    (0.55
    )
    
    $
    (0.53
    )Year ended December 31, 2007Revenue
    
    
    1,588
    
    
    
    2,868
    
    
    
    2,953
    
    
    
    3,257Income (loss) from operations
    
    
    (9,394
    )
    
    
    (7,091
    )
    
    
    (6,310
    )
    
    
    (6,317
    )Net income (loss)
    
    
    (9,222
    )
    
    
    (6,784
    )
    
    
    (6,087
    )
    
    
    (6,182
    )Net income (loss) per share, basic and diluted
    
    
    (0.44
    )
    
    
    (0.27
    )
    
    
    (0.24
    )
    
    
    (0.24
    )
 F-23