Pharming Group Reports on Financial Results First Half Year 2013
Published: Aug 01, 2013
LEIDEN, THE NETHERLANDS--(Marketwired - August 01, 2013) - Leiden, The Netherlands, 1 August 2013. Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the six months ended 30 June 2013.
FINANCIAL HIGHLIGHTS * Revenues and other income increased to EUR4.9 million (H1 2012: EUR1.8 million), mainly a result of achieving the milestone of FDA acceptance for review of the BLA for Ruconest® which triggered a US$ 5 million payment by our US partner Santarus
* Operating costs decreased to EUR6.3 million (H1 2012: EUR12.3 million), mainly as a result of the reduction of costs following the 2012 restructuring and lower direct project costs regarding Ruconest®
* Financial income and expenses increased to EUR5.9 million (H1 2012: EUR3.2 million), mainly as a result of non-cash financial costs relating to the new EUR16.35 million convertible bond, while the 2012 costs mainly related to the EUR8.0 million 2012 convertible bond
* The net loss decreased to EUR7.2 million from EUR16.6 million for H1 2012
* Net cash outflows from operations decreased to EUR7.5 million (H1 2012: EUR8.2 million) while net cash inflows from financing activities amounted to EUR14.8 million (including EUR16.0 million in relation to the issue of convertible bonds) and net cash inflows from investing activities amounted to EUR0.2 million received upon transfer of an intangible fixed asset
* Cash at the end of the first half year of 2013 increased to EUR13.9 million (2012 FY: EUR6.3 million). The negative equity position decreased to EUR0.6 million from EUR7.7 million at year end 2012
* A reverse share split 10:1 was approved at the EGM of 28 February 2013. The total number of shares as of today, 1 August 2013 is 229,042,869.
* Biologics License Application (BLA) for Ruconest® accepted for filing by the US Food and Drug Administration (FDA)
* Santarus and Pharming are seeking U.S. marketing approval of Ruconest® for the treatment of acute angioedema attacks in patients with hereditary angioedema (HAE)
* Santarus and Pharming expect the FDA will complete its review or otherwise respond to the Ruconest® BLA by 16 April 2014.
* European Medicines Agency (EMA) provided approval for Sanofi Chimie, Pharming's Contract Manufacturing Organization partner, to manufacture drug substance for Pharming's product Ruconest® at their Aramon (France) site, completing an important up-scaling of the production capacity that will allow for future significant economies of scale
* New data from a pivotal Phase III clinical study (Study 1310) of Ruconest® for the treatment of acute angioedema attacks in patients with hereditary angioedema (HAE) featured in a poster presentation at the European Academy of Allergy and Clinical Immunology (EAACI) & World Allergy Organization (WAO) World Allergy & Asthma Congress in Milan, Italy
* Results of a study demonstrating that Ruconest® has been shown to have a beneficial effect as a donor pre-treatment therapy in an animal model of kidney transplantation was presented at the American Transplant Congress in Seattle, Washington
* On 1 July 2013, the Company announced that it had entered into a strategic collaboration in China with Shanghai Institute of Pharmaceutical Industry (SIPI), a Sinopharm Company, for the development, manufacture and commercialisation of new products at SIPI, funded by SIPI upto IND stage, based on the Pharming technology platform. In addition, Pharming has also granted SIPI an exclusive license to commercialise Ruconest® (conestat alfa) in China.
Sijmen De Vries, Chief Executive of Pharming commented: "During the first six months of 2013 we have continued to build on the positive momentum experienced in the closing months of 2012 - during which time we announced positive top-line phase III results for Ruconest® in acute HAE and received a related milestone payment of US$10 million from Santarus. I am particularly pleased to note the FDA's acceptance for review of the BLA for Ruconest®, a pivotal event for Pharming and one that represents the most significant step to date in our efforts to obtain marketing approval for Ruconest® in the U.S. I am also delighted to note the post period announcement of our strategic collaboration with SIPI in China for the development, manufacture and commercialisation of new products based on the Pharming technology platform. This collaboration represents our first step towards leveraging the Pharming technology platform and, combined with SIPI's capabilities, will represent an important source of future products and provides access to the fastest growing pharmaceutical market in the world; China."
In the first half year of 2013, the Company generated revenue and other income of EUR4.9 million (H1 2012: EUR1.8 million). This increase results from the achievement of a milestone of US$ 5 million from our US partner Santarus for FDA acceptance for review of our BLA for Ruconest. Product sales in H1 2013 amounted to EUR0.2 million compared to EUR0.8 million in H1 2012. The decline is due to a decrease in orders for Ruconest® from our EU partner Swedish Orphan Biovitrium (Sobi) which is a reflection of the underlying slow increase in EU sales. Costs of revenues amounted to EUR nil in H1 2013 compared to EUR0.8 million in H1 2012. In H1 2012, there was an inventory impairment of EUR2.2 million, while there were no impairments in H1 2013.
Total operating costs in the the first half year of 2013 decreased to EUR6.3 million from EUR12.3 million in the same period in 2012. Research and development costs decreased by EUR4.2 million to EUR5.0 million in H1 2013 from EUR9.2 million H1 2012, which reflects reduced human capital costs following the restructuring in 2012, as well as lower costs related to Study 1310 as well as other cost savings. General and administrative costs decreased by EUR0.5 million to EUR1.1 million in H1 2013 compared to H1 2012, mainly as a result of the restructuring in 2012. In H1 2013, there were no impairment charges while these amounted to EUR1.2 million in H1 2012 operating costs.
On 16 January 2013, the Company entered into a 8.5% convertible bond transaction of EUR16.35 million convertible bonds plus 16,349,999 warrants that was approved at the EGM of 28 February 2013. The bonds are repayable in cash and/or in shares in seven installments until 1 October 2013. In the first half year of 2013, four installments were repaid in shares. With regards to these pay-backs, the Company issued a total of 107,742,342 shares in H1 2013. Total non-cash costs associated with these bonds amounted to EUR6.5 million. Financial income in H1 2013 amounted to EUR1.0 million compared to EUR2.0 million in H1 2012. Financial income is non-cash in both periods and is exclusively related to decreases in the fair value of derivative financial liabilities.
As a result of the above items, net loss for the first six months of 2013 decreased to EUR7.2 million from EUR16.5 million in the same period of 2012.
Total cash and cash equivalents (including restricted cash) increased to EUR13.9 million at 30 June 2013 from EUR6.3 million at year end 2012. The increase follows from net cash outflows from operations of EUR7.5 million with net cash inflows from financing activities amounting to EUR14.8 million and net cash inflows from investing activities amounting to EUR0.2 million. Financing cash flows mainly result from the 2013 issue of convertible bonds which raised gross EUR16.0 million in cash.
The Company has negative equity since December 2011. The negative equity position at 30 June 2013 amounts to EUR0.6 million, a decrease of EUR7.1 million compared to 31 December 2012. The decrease is a result of new equity issues related to the 2013 convertible bonds in H1 2013, partially offset by the net loss for the period.
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.
Conference call information
Today, Chief Executive Officer Sijmen de Vries will discuss the financial results for the first half of 2013 in a conference call at 10:00am (CET). To participate, please call one of the following numbers 10 minutes prior to the call:
From the Netherlands: 31 (0) 45 631 6902
From the UK: 44 (0) 207 153 2027
(Conference ID: 4634352)
About RUCONEST® and Hereditary Angioedema
RUCONEST (INN conestat alfa) is a recombinant version of the human protein C1 esterase inhibitor, and is produced with Pharming's proprietary transgenic technology. RUCONEST is approved in Europe for the treatment of acute angioedema attacks in patients with HAE, a genetic disorder in which the patient is deficient in or lacks a functional plasma protein C1 esterase inhibitor, resulting in unpredictable and debilitating episodes of intense swelling. The swelling may occur in one or more anatomical areas, including 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. RUCONEST is an investigational drug in the U.S. and has been granted orphan drug designation by the FDA both for the treatment of acute attacks of HAE and for prophylactic treatment of HAE.
About Pharming Group NV
Pharming Group NV is developing innovative products for the treatment of unmet medical needs. RUCONEST® (conestat alfa) is a recombinant human C1 esterase 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. RUCONEST® is partnered with Santarus, Inc. (NASDAQ: SNTS) in North America and a Biologics License Application (BLA) for RUCONEST® is under review by the U.S. Food and Drug Administration. The product is also being evaluated for various follow-on indications. Pharming has a unique GMP compliant, validated platform for the production of recombinant human proteins that has proven capable of producing industrial volumes of high quality recombinant human protein in a more economical way compared to current cell based technologies. In July 2013, the Platform was partnered with Shanghai Institute for Pharmaceutical Industry (SIPI), a Sinopharm Company, for joint global development of new products. Pre-clinical development and manufacturing will take place at SIPI and are funded by SIPI. Pharming and SIPI initially plan to utilise this platform for the development of rhFVIII for the treatment of Haemophilia A. 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:
Q2 Report 2013: http://hugin.info/132866/R/1720346/572692.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
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Source: Pharming Group N.V. via Thomson Reuters ONE
Sijmen de Vries
T: +31 71 524 7400
Julia Phillips/John Dineen
T: +44 (0)207 269 7193
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