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Pharming Group (PHGUF.PK) Reports Financial Results First Quarter 2012


4/26/2012 9:06:05 AM

LEIDEN, NETHERLANDS--(Marketwire - April 26, 2012) - Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the first quarter ended March 31, 2012.

FINANCIAL HIGHLIGHTS

* Revenues and other income increased to EUR1.0 million (Q1 2011: EUR0.7 million)

* Operating costs from continuing operations increased to EUR5.2 million (Q1 2011: EUR4.9 million). Total net loss from continuing operations increased to EUR6.5 million (Q1 2011: EUR4.2 million), mainly as a result of the costs associated with the December 2011 EUR8.4 million convertible bond

* Cash outflows from operations decreased to EUR3.5 million (Q1 2011: EUR4.5 million)

* Cash increased to EUR8.8 million (2011 year end: EUR5.1 million) The negative equity position of EUR1.2 million at year end 2011 increased by EUR2.4 million to EUR3.6 million

OPERATIONAL HIGHLIGHTS

* The ongoing pivotal clinical trial Study 1310 remains on track and is expected to readout by the third quarter of 2012

* New agreements signed for the commercialization of Ruconest® with Transmedic Pte Ltd. (for the territories of Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand) and 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

Sijmen de Vries, CEO, commented: "The first three months of 2012 has seen us delivering on extending the geographical coverage for Pharming's C1 inhibitor franchise, and this remains a key goal. We are also pleased to report that recruitment into our ongoing pivotal clinical trial Study 1310 remains on track and we look forward to updating on further progress."

FINANCIAL RESULTS

In the three months to March 31, 2012 the Company generated revenue and other income from continuing operations of EUR1.0 million (Q1 2011: EUR0.7 million). This increase comes, in part, from Ruconest® sales of EUR0.4 million (up from EUR0.15 million in Q1 2011) and increased income from grants of EUR0.1 million. Costs associated with the revenues and other income amounted to EUR0.4 million (Q1 2011: EUR0.1 million).

Total operating costs from continuing operations increased by EUR0.3 million from EUR4.9 million in the first quarter of 2011 to EUR5.2 million in the same quarter of 2012. The increase reflects the Company's activities in relation to Study 1310 required for US regulatory approval for Rhucin®. Successful completion of this study, which is anticipated to readout by the third quarter of 2012, 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 have to be repaid in six monthly instalments and can be settled in cash and/or in shares. To date four of the six payments have been made. If the Company elects to pay in shares the instalment amount plus interest is converted to a number of shares based on the share price (average of volume weighted average price over the period and to which a discount is applied). With regards to these pay-backs in shares, the Company issued a total of 67,437,000 shares until the end of the first quarter of 2012. These items largely accounted for a net loss in financial income and expense of EUR1.9 million as compared to a EUR0.1 million net profit on financial income and expenses in the comparative quarter of 2011.

As a result of the above items, net loss from continuing operations increased by EUR2.3 million to EUR6.5 million in Q1 2012 (Q1 2011: EUR4.2 million). Due to a one-time EUR0.6 million profit on discontinued operations in the first quarter of 2011, which followed liquidation and deconsolidation of the DNage business early in 2011, total net loss increased from EUR3.6 million to EUR6.5 million. The net loss per share for the first quarter of both 2011 and 2012 amounted to EUR0.01.

FINANCIAL POSITION

Total cash and cash equivalents (including restricted cash) increased by EUR3.7 million from EUR5.1 million at year end 2011 to EUR8.8 million at the end of the first quarter 2012.

As explained in the financial results section, the Company anticipates receiving US$10.0 million from Santarus upon the successful completion of Ruconest®'s Study 1310 in Q3 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 are expected to significantly improve the Company's cash and equity position.

NEGATIVE EQUITY

In December 2011 the Company announced that it had entered negative equity. This negative equity position of EUR1.2 million at year end 2011, as expected, increased by EUR2.4 million to EUR3.6 million and reflects the EUR6.5 million net loss for the first quarter, net of EUR4.1 million posted for shares issued as a repayment of convertible bonds (EUR3.8 million) and other share-based payments (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 March 31, 2012 the deferred license fees income amounted to EUR16.9 million; if release to the statement of income would have been permitted under IFRS, the Company would have reported a positive equity position of EUR13.3 million). Anticipated receipt of the two development milestones associated with the successful readout 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.

As a result of the negative equity position announced in December 2011, the Company committed to comply with Euronext Amsterdam Notice 2011-001 paragraph 3 requirements, which include the publication of quarterly financial statements within two months after the end of the quarter in compliance with International Accounting Standard 34 (Interim Financial Reporting). Therefore, the condensed consolidated interim financial statements for the quarter ended March 31, 2012 can be found on Pharming's website as of today.


RHUCIN Phase III Study

Pharming is conducting a Phase III clinical study with RHUCIN 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). RHUCIN 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 RHUCIN 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 third quarter of 2012.

About RUCONEST® (RHUCIN®) in non-European territories) 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 milk of transgenic rabbits and in Europe is approved under the name RUCONESTfor treatment of acute angioedema attacks in patients with HAE. RHUCIN® 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® (RHUCIN® in non-European territories) 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). RHUCIN® 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, www.pharming.com. 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.

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

Q1 Report 2012: http://hugin.info/132866/R/1606112/508952.pdf

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

[HUG#1606112]


Contact
Sijmen de Vries
CEO
T: +31 (0)71 524 7400
Karl Keegan
CFO
T: +31 (0)71 524 7400

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


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