SOURCE: Pharming Group N.V.

October 21, 2010 01:24 ET

Pharming announces nine month financial report 2010

LEIDEN, NETHERLANDS--(Marketwire - October 21, 2010) - Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the nine month period ended September 30, 2010.

Financial Highlights first nine months

* Income from grants and license fees for the nine month period of EUR0.7 million (9M 2009: EUR0.5 million)

* Received US$15.0 million (EUR11.7 million) upfront payment from Santarus for the commercialization of Rhucin® in North America

* Received EUR 3.0 million upfront payment from SOBI for commercialization of Ruconest in the EU

* Significant decrease in operating cash outflows (EUR3.4 million in first nine months of this year compared to EUR18.4 million in the same period 2009)

* Operating loss of EUR18.3 million (9M 2009: EUR21.0 million)

* Cash at September 30, 2010 of EUR17.0 million

* Bondholders converted all of the EUR7.5 million bonds issued in January 2010


Operational Highlights in third quarter

* Agreement entered with Santarus for the commercialization of Rhucin in North America

* Signed manufacturing agreement with Sanofi Chimie for the drug substance of Ruconest™

* Dr Karl Keegan joined the Company as Chief Financial Officer (CFO)

* Intention to submit BLA to the FDA to obtain US marketing approval for Rhucin announced

* Spin off of DNage successfully completed


Subsequent to September 30, 2010

* Shareholders approved appointment Dr Keegan as CFO and member of Pharming's Management Board

* Shareholders also approved increase of the authorized share capital at Company's EGM

* Published peer reviewed randomized clinical trial results with recombinant human C1 esterase inhibitor in Journal of Allergy and Clinical Immunology

* Anticipated exercise of the put option by the 2007 public bondholders to repay the remaining outstanding 2007 convertible bonds per 31 October 2010 was confirmed


Sijmen de Vries, CEO, commented: "The first nine months of 2010 have been an important period for Pharming, during which we have consistently delivered on our stated targets of progressing our lead asset through the requisite developmental and regulatory pathways and maintaining tight control of our cost base. We believe that the progress we have made during the period is an endorsement of management's strategic focus. We look forward to working with our marketing partners towards the first commercial launch of our lead program, an historic point in Pharming's history and an important step towards bringing the Company to financial stability."

Financial Highlights first nine months

Pharming's income from grants and license fees were EUR0.7 million for the nine month period ended September 30, 2010. In the same period of 2009, Pharming recognized EUR0.5 million.

Operating loss decreased to EUR18.3 million from the EUR21.0 million recorded for the corresponding period in 2009. The decrease is mainly a result of timing of (pre)clinical and regulatory activities, our continued strong focus on cost savings and control, as well as the implementation of a strategic focus of our business resulting in the spin out of DNage. In the nine month period, operating losses attributable to DNage were approximately EUR2.0 million compared to EUR2.8 million in the first three quarters of 2009. General and administrative costs remained broadly constant but R&D expenses declined by EUR4.5 million in the nine month period 2010 compared to the corresponding period in 2009.

In the nine month period to September 30, 2010, Pharming recorded a net loss of EUR34.6 million compared to a net loss of EUR23.1 million for the same period in 2009. The vast majority of this loss was attributable to financing measures and their consequences that were triggered by financing activities during 2010. The net loss per share was EUR0.15 for the first nine months of 2010 compared to EUR0.22 in the first nine months of 2009. At the end of the period, the number of shares outstanding was 358,800,199 compared to 120,850,520 at the end of the corresponding period in 2009.

The increase in the current number shares by 3,018,702 from 355,781,497 on September 2, 2010 results from 2,171,117 shares in relation to exercise of cashless warrants and 847,585 shares issued to the Board of Management and various employees in settlement of bonuses due.

Pharming ended the nine month period with a cash position of EUR17.0 million, compared to a EUR10.6 million cash balance on September 30, 2009 and EUR2.3 million on December 31, 2009.

Pharming has recorded a significant decrease in operating cash outflows (EUR3.4 million in first nine months of this year compared to EUR18.4 million in the same period 2009). This achievement is primarily related to the receipt of upfront cash payments from SOBI and Santarus. The US$15.0 million (EUR11.7 million) non refundable and non off-settable upfront payment from Santarus is detailed in the consolidated statement of cash flows for the third quarter. The EUR3.0 million upfront from SOBI was recognized similarly in Q2 2010. In accordance with International Financial Reporting Standards, Pharming will recognize these upfront payments in the consolidated statement of income from Q4 2010 onwards as the amount received spread evenly over a period of approximately 10 years.

Operational Highlights in third quarter

Pharming entered into an agreement with specialty biopharmaceutical company Santarus, Inc for the commercialization of Rhucin in North America (the United States, Canada and Mexico) for the treatment of acute attacks in HAE patients and other future indications.

Pharming signed a manufacturing agreement with Sanofi Chimie, wholly owned subsidiary of sanofi-aventis to increase the production capacity of the drug substance of Ruconest. This will improve Ruconest cost of goods and competitiveness and will put Pharming in the position to satisfy future global demand.

Pharming announced that it intends to submit the Biologic License Application to the FDA to obtain marketing approval for Rhucin for the treatment of acute angioedema attacks in patients with HAE. Following pre-BLA discussions with the FDA, Pharming is preparing the BLA dossier for submission towards the end of this year but no later than January 2011.

The spin off of DNage was completed and all earn-out liabilities due by Pharming to former DNage shareholders were fully settled.

Subsequent to September 30, 2010

Dr Karl Keegan was appointed to the role of CFO and member of Pharming's Board of Management. Also, the increase of the authorized share capital from 400 million to 500 million shares was confirmed. These decisions were taken by the Shareholders at an Extraordinary General Meeting held on 1 October 2010.

The publication of the integrated analysis of Pharming's randomized placebo- controlled clinical trials with recombinant human C1 esterase inhibitor for treatment of acute angioedema attacks in HAE patients in the October issue of the peer-reviewed Journal of Allergy and Clinical Immunology.

The anticipated exercise of the put option by the 2007 public bondholders to repay the remaining outstanding 2007 convertible bonds per October, 31, 2010 was confirmed.

Outlook Q4 2010 and beyond

Ruconest in Europe

Following the positive opinion on the Marketing Authorization Application for Ruconest earlier this year, Pharming is anticipating the Market Authorization by the European Commission within the next few weeks. As stated previously, the main focus in Q4 2010 will continue to be on the market launch of Ruconest, which is on track. This pivotal event in Pharming's evolution will be marked by an associated milestone payment from SOBI upon European Market Authorization.

DNage

We have performed an impairment review on the intangible assets and goodwill capitalized with respect to DNage, which as previously announced is seeking additional funding through a combination of investors and government support.

Given that these financing activities are ongoing and given the uncertainty on the valuation ascribed to DNage by third party investors in any such financing, we have impaired the carrying value of goodwill associated with DNage in the balance sheet. This leads us to include a non cash impairment charge in the Q3 2010 financial statements.

Finances

As announced to the market, the Company has received confirmation of the put option from the bond holders. Thus, repayment of the remaining outstanding 2007 convertible bonds in cash and accrued interest (EUR11.3 million on aggregate) will occur by October 31, 2010. Pharming anticipates further cost savings from finalizing regulatory EU and US submission activities, co-funding development of rhC1INH for additional indications and further streamlining of the organization.

List of used abbreviations and terms

BLA           Biological License Application

DNage         DNage BV (Pharming has 51% stake)

EGM           Extraordinary General Meeting of Shareholders held on
              1 October 2010

FDA           US Food and Drug Administration

HAE           Hereditary Angioedema

rhC1INH       Pharming's recombinant human C1 esterase inhibitor

              Registered name in non-European countries for recombinant
Rhucin® human C1 esterase inhibitor or rhC1INH for treatment of acute
              attacks of HAE


Ruconest™     Trademark for European marketing of recombinant human C1
              inhibitor for treatment of acute attacks of HAE

Sanofi Chimie Wholly owned subsidiary of sanofi-aventis (NYSE Euronext:SAN,
              NYSE: SNY)

Santarus      Specialty biopharmaceutical company Santarus, Inc (NASDAQ: SNTS)

SOBI          Specialty pharmaceutical company Swedish Orphan Biovitrum
             (STO: BVT)

About Pharming Group NV

Pharming Group NV is developing innovative products for the treatment of genetic disorders, specialty products for surgical indications, and nutritional products. On June 24, the European Medicines Agency adopted a positive opinion for Ruconest™ (Rhucin® in non-EU territories) for the treatment of angioedema attacks. Market Authorization in the European Economic Area is therefore expected imminently with an anticipated market launch in the fourth quarter 2010. The product is also under development for follow-on indications, i.e. antibody-mediated rejection (AMR) and delayed graft function (DGF) following kidney transplantation. The advanced technologies of the Company include innovative platforms for the production of protein therapeutics, technology and processes for the purification and formulation of these products. Additional information is available on the Pharming website, www.pharming.com.

This press release contains forward looking statements that involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from the results, performance or achievements expressed or implied by these forward looking statements.


The full report including tables can be downloaded from the following link:


[HUG#1453716]


Q3 Report 2010:

http://hugin.info/132866/R/1453716/394269.pdf



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Source: Pharming Group N.V. via Thomson Reuters ONE

Contact Information

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