Pharming Group N.V.

August 23, 2012 01:20 ET

Pharming reports on financial results first half year 2012

LEIDEN, NETHERLANDS--(Marketwire - Aug 23, 2012) - Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the first half year ended June 30, 2012.


--  Revenues and other income increased to EUR1.9 million
    (H1 2011: EUR1.4 million)
--  Operating costs from continuing operations increased to EUR12.3 million
    (H1 2011: EUR9.1 million). Total net loss from continuing operations
    increased to EUR16.6 million (H1 2011: EUR8.6 million) mainly as a
    result of non-cash charges, including EUR4.9 million in costs
    associated with the December 2011 EUR8.4 million convertible bond,
    inventory impairments of EUR2.8 million and impairment charges of
    EUR1.2 million in relation to the closure of the US-based cattle
--  Cash outflows from operations decreased to EUR8.2 million (H1 2011:
    EUR8.9 million)
--  Cash at the end of the first half year of 2012 decreased to
    EUR3.4 million (2011 year end: EUR5.1 million) The negative equity
    position of EUR1.2 million at year end 2011 increased to a negative
    equity position of EUR8.2 million
--  Post the reporting period (August 1, 2012)  the Company announced
    it had secured an equity working capital facility with institutional
    investors of up to EUR10.0 million for a two year term.


--  Ongoing pivotal clinical trial for Ruconest® Study 1310, remains
    on track and is expected to be completed by the end of the third
    quarter of 2012, with the read-out of the top-line results soon
--  New agreements signed with Transmedic Pte Ltd. for the
    commercialization of Ruconest® inBrunei, Indonesia, Malaysia,
    Philippines, Singapore, and Thailand and with Hyupjin Corporation
    for the Republic of Korea
--  Commenced an open-label Phase II clinical study evaluating Ruconest®
    for the treatment of acute attacks of angioedema in pediatric patients
    with HAE
--  Positive study results published in peer-reviewed journal Biodrugs
    demonstrated that recombinant human C1 inhibitor was not observed to
    have a prothombotic effect when used to treat acute HAE attacks
--  Post the reporting period (August 2, 2012) the Company announced a
    strategic restructuring plan of its Dutch operations

Sijmen de Vries, CEO, commented: "The first half of 2012 has been a challenging period for Pharming, marked by the unexpected delay in the read out of Study 1310, as reported in June. However, the proposed restructuring, whilst regrettable, will allow Pharming to adopt a lean, efficient business model. We believe that the new structure, in the context of the current financing climate for small cap biotechs, is essential to Pharming's future success .We have also recently secured a EUR10 million equity working capital facility which should enable us to complete Study 1310 by the end of September and to analyse the results in the weeks following. In addition we are evaluating additional financing options going forward. The successful outcome of this study will trigger a US$10.0 million milestone payment by our partner Santarus, followed by a further US$5.0 million on the acceptance of the BLA for review by the US FDA. We look forward to updating the market on these events and on our ongoing discussions with potential partners for our protein pIatform."


In the six months to June 30, 2012 the Company generated revenue and other income from continuing operations of EUR1.9 million (H1 2011: EUR1.4 million). This increase stems from Ruconest® sales of EUR0.8 million (up from EUR0.3 million in H1 2011). Costs of revenues amounted to EUR0.8 million (H1 2011: EUR1.1 million) with impairments on inventories previously reserved for sales amounting to EUR2.2 million (H1 2011: nil).

Total operating costs from continuing operations increased by EUR3.2 million from EUR9.1 million in the first half year of 2011 to EUR12.3 million in the same period of 2012. The increase reflects non-cash items such as second quarter 2012 impairment charges related to the US-based cattle platform operations (EUR1.2 million), impairments on inventories reserved for research and development activities (EUR0.6 million) and cash related items such as the Company's activities in relation to Study 1310 required for US regulatory approval for Rhucin®. Successful completion of this study will trigger a US$10.0 million milestone payment by Santarus. In addition, the Company anticipates submitting a BLA filing approximately three months thereafter with another US$5.0 million due from Santarus as and when the U.S. Food and Drug Administration accepts the BLA filing for review.

Early in 2012 the Company finalized a transaction announced in December 2011 under which it issued EUR8.4 million convertible bonds plus 38,717,484 warrants. The bonds had to be repaid in six monthly instalments and could be settled in cash and/or in shares. To date the bonds have been fully repaid; all instalments plus interest were in shares with the number of shares based on volume weighted average price, a reference period minus a discount. With regards to these pay- backs in shares, the Company issued a total of 174,925,970 shares until the end of the first half of 2012. In addition to results on derivative financial liabilities, these items largely accounted for a substantially non-cash net loss in financial income and expense of EUR3.2 million as compared to a EUR0.2 million net profit on financial income and expenses in the comparative period of 2011.

As a result of the above items, net loss from continuing operations increased by EUR8.0 million to EUR16.6 million in H1 2012 (H1 2011: EUR8.6 million). Due to a one- time EUR0.6 million profit on discontinued operations in the first half of 2011, which followed liquidation and deconsolidation of the DNage business early in 2011, total net loss increased from EUR8.0 million to EUR16.6 million. The net loss per share for the first half year of 2012 amounted to EUR0.03 (H1 2011: EUR0.02).


Total cash and cash equivalents (including restricted cash) decreased by EUR1.7 million from EUR5.1 million at year end 2011 to EUR3.4 million at the end of the first half year 2012.

As explained in the financial results section, the Company has recently closed on an EUR10 million Equity Working Capital Facility and is evaluating additional options for financing going forward. In addition, the Company anticipates receiving US$10.0 million from Santarus upon the successful outcomeof Ruconest®'s Study 1310 in Q4 2012 and another US$5.0 million as and when the U.S. Food and Drug Administration accepts the BLA filing for review. Receipts of these milestones and equity financing are expected to significantly improve the Company's cash and equity position.


In December 2011 the Company announced that it had entered negative equity. This negative equity position of EUR1.2 million at year end 2011 increased by EUR7.0 million to EUR8.2 million and mainly reflects the EUR16.6 million net loss for the first half year 2012, net of EUR9.4 million posted for shares issued as a repayment of convertible bonds (EUR9.1 million) and other payments in shares (EUR0.3 million).

The negative equity position has in itself no immediate impact on the execution of Pharming's business plan, nor does it imply that the Company is legally required to issue new share capital. However, the Company is considering various options in order to reduce the negative equity and return to a positive equity position.

Pharming is continuously reviewing its financial and liquidity position and has various options to improve its equity standing under International Financial Reporting Standards (IFRS). Notably, the Company reports that the negative equity position was mainly caused by the inability to recognize the EUR19.7 million upfront payments and milestones received from Sobi and Santarus as equity (at June 30, 2012 the deferred license fees income amounted to EUR16.4 million; if release to the statement of income would have been permitted under IFRS, the Company would have reported a positive equity position of EUR8.2 million). Anticipated receipt of the two development milestones associated with the successful read out of Study 1310 (US$10.0 million) and acceptance of the BLA filing by the FDA (US$5.0 million) will, under IFRS, be recognized immediately and thus augment the equity position.


Pharming is conducting a Phase III clinical study with RUCONEST® under a Special Protocol Assessment (SPA) that is intended to support the submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA). Ruconest is being evaluated for the treatment of acute attacks of angioedema in patients with HAE in an international, multicenter, randomized, placebo-controlled Phase III study at a dosage strength of 50 U/kg with a primary endpoint of time to beginning of relief of symptoms. Santarus has licensed certain exclusive rights from Pharming to commercialize Ruconest in North America for the treatment of acute attacks of HAE and other future indications. Under the terms of the license agreement, a $10 million milestone is payable to Pharming upon successful achievement of the primary endpoint of the Phase III clinical study. The study is expected to be completed by the end of the third quarter of 2012.

About Ruconest® and Hereditary Angioedema

Ruconest® (INN conestat alfa) is a recombinant version of the human protein C1 inhibitor (C1INH). Ruconest is produced through Pharming's proprietary technology in the milk of transgenic rabbits and is approved in Europe for treatment of acute angioedema attacks in patients with HAE. RUCONEST® is an investigational drug in the U.S. and has been granted orphan drug designation for the treatment of acute attacks of HAE, a genetic disorder in which the patient is deficient in or lacks a functional plasma protein C1 inhibitor, resulting in unpredictable and debilitating episodes of intense swelling of the extremities, face, trunk, genitals, abdomen and upper airway. The frequency and severity of HAE attacks vary and are most serious when they involve laryngeal edema, which can close the upper airway and cause death by asphyxiation. According to the U.S. Hereditary Angioedema Association, epidemiological estimates for HAE range from one in 10,000 to one in 50,000 individuals.

About Pharming Group NV

Pharming Group NV is developing innovative products for the treatment of unmet medical needs. Ruconest® is a recombinant human C1 inhibitor approved for the treatment of angioedema attacks in patients with HAE in all 27 EU countries plus Norway, Iceland and Liechtenstein, and is distributed in the EU by Swedish Orphan Biovitrum (OMX: SOBI). Ruconest® is partnered with Santarus, Inc (NASDAQ: SNTS) in North America where the drug is undergoing Phase III clinical development. The product is also being evaluated for follow-on indications in the areas of transplantation and reperfusion injury. The advanced technologies of the Company include innovative and validated platforms for the production of protein therapeutics, technology and processes for the purification and formulation of these products. A feasibility study, using the validated transgenic rabbit platform, aimed at the development of recombinant Factor VIII for the treatment of Haemophilia A is underway with partner, Renova Life, Inc. Additional information is available on the Pharming website, To download the Pharming Group Investor Relations App, click here.

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.

Conference call information

Today, Chief Executive Officer Sijmen de Vries will discuss the first half 2012 results in a conference call for 09:30 am (CET). To participate, please call one of the following numbers 10 minutes prior to the call:

From the Netherlands: 31 (0) 45 6316902

From the UK: 44-207-153-2027

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

Q2 Report 2012:

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

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


Contact Information

  • Contact
    Sijmen de Vries
    T: +31 (0)71 524 7400

    FTI Consulting
    Julia Phillips/ John Dineen
    T: +44 (0)207 269 7193