LEIDEN, NETHERLANDS--(Marketwire - February 18, 2010) - Biotech company Pharming Group NV (“Pharming” or “the Company”) (NYSE Euronext: PHARM) announced today its preliminary results for the year ended December 31, 2009.
Key financial developments
* EUR20.0 million Standby Equity Distribution Agreement (“SEDA”) signed with YA Global Master SPV LTD (“YA Global”) in April 2009, plus a EUR10.0 million extension in October 2009. Total financing under the SEDA received in 2009 of EUR6.6 million, with another EUR23.4 million available to date;
* EUR70.0 million convertible bonds (issued in 2007) reduced to EUR10.9 million at December 31, 2009 from EUR49.9 million at year end 2008;
* Decrease of operational costs from EUR30.1 million in 2008 to EUR28.9 million in 2009 as a result of EUR4.0 million lower non-cash impairment charges (EUR4.2 million in 2008; EUR0.2 million in 2009), which was offset with a EUR2.4 million increase of research and development costs driven by the submission of the EU Marketing Authorization Application for Rhucin® in September 2009, intensified efforts for the Rhucin program in North America and the clinical development of Prodarsan®;
* Net loss in 2009 of EUR32.1 million as compared to EUR26.2 million in 2008 primarily caused by the effect of a non-cash derivative profit of EUR4.9 million in 2008 and EUR1.6 million lower net interest income on cash and marketable securities.
“2009 was a challenging year for Pharming in which we have made significant progress on a number of fronts, for example by clearing the vast majority of our convertible debt and in creating a decent financial platform through a SEDA withYA Global and a short-term convertible debt financing of EUR7.5 million (secured just after year end 2009) from which we are confident we can continue to bring Rhucin through a successful regulatory review process,” said Dr. Sijmen de Vries, Chief Executive Officer of Pharming. “2010 is set to be a transformational year for Pharming as we remain confident in securing European approval for Rhucin and remain on track for BLA filing in the USA. We are also in discussions with a number of parties for commercialisation of Rhucin rights in major world markets and we anticipate the conclusion of commercial partnerships and additional financing in the first half of this year.”
Outlook 2010
* Opinion on Marketing Authorization Application for Rhucin from the European Medicines Agency in HY2
* Clarity on the filing and review process for Rhucin in the USA for the treatment of acute attacks of Hereditary Angioedema in HY1
* Initiation clinical development of rhC1INH for applications in the field of transplant indications in 2010
* Start clinical Phase II/III studies with Prodarsan in Cockayne Syndrome patients expected end of 2010
* Commercialisation agreement(s) for Rhucin in HY1 2010.
* Further improvement of the financial position by (combinations of) project-specific financing, licensing deals, loans and equity transactions
Key financial data (in EURmillion, except per share data) (unaudited)
Year Year ended ended December 31, December 31, 2009 2008 Statement of financial position: Non-current assets (excluding restricted cash) 27.1 31.0 Cash and marketable securities, net of bank overdrafts (*) 2.3 23.5 Other current assets 12.6 12.6 Total assets 42.0 67.1 Convertible bonds 9.5 35.7 Other liabilities 19.2 18.9 Total equity 13.3 12.5 Statement of income: Grants and other income 1.1 0.7 Operational costs (29.0) (30.1) Financial and other income and expenses (4.2) 3.2 Net loss (32.1) (26.2) Statement of cash flows: Net cash used in operating activities (24.3) (21.9) Net cash from/(used in) investment activities 4.2 (0.8) Net cash from/(used in) financing activities 2.5 (18.8) Share data: Outstanding shares at the end of the year 154,501,037 97,429,854 Weighted average shares outstanding in the year 116,177,686 91,657,617 Basic and diluted net loss per share (EUR) (0.28) (0.29)
(*) Year end 2009 cash excludes EUR7.5 million proceeds from early 2010 financing
Discussion of financial transactions and financial position
In 2009, the Company entered into several equity transactions and convertible bond settlements.
Standby Equity Distribution Agreement with YA Global
In April 2009, Pharming signed into a EUR20.0 million Standby Equity Distribution Agreement with YA Global. Under the terms of the April agreement, YA Global can invest a total of up to EUR20.0 million in a three year period. Pharming has the right, but not the obligation, to call the funds in regular tranches. In the second quarter of 2009, the Company started using the SEDA and called a total amount of EUR2.8 million in cash in exchange for the issuance of approximately 4.6 million Pharming shares, followed by another EUR3.8 million in cash in the second quarter in exchange for another 7.3 million shares issued.
On October 5, 2009, YA Global and Pharming announced that the original agreement has been extended with another EUR10.0 million, so the total facility amounts to EUR30.0 million of which EUR23.4 million is available as per today. At closing of the agreement in April, Pharming issued a one-off payment of 0.8 million commitment shares with another 0.4 million commitment shares paid upon extension of the agreement.
Convertible bonds settlements and public offer
In the first half of 2009, Pharming entered into various agreements with several holders of bonds issued in 2007. Under these agreements, the Company successfully cancelled a total outstanding amount of EUR14.1 million nominal bonds in exchange for EUR1.0 million cash and issuance of 9.5 million shares. Subsequently, in October 2009 the Company successfully completed a public offer under which remaining bondholders were invited to exchange bonds (nominal value of EUR50,000 each) into cash and shares (EUR7,500 cash and 59,000 shares per bond). In total, bonds with a nominal value of EUR24.9 million (70% of EUR35.8 million bonds outstanding prior to the offer) were offered for conversion and subsequently the Company paid EUR3.7 million in cash and issued 29.3 million shares. The cash portion of the offer was, in addition to the SEDA with YA Global, funded by other investors through issuance of 5.1 million shares for total cash proceeds of EUR2.6 million.
Following these transactions, the outstanding nominal value of bonds was reduced from EUR49.9 million at year end 2008 to EUR10.9 million at December 31, 2009. As a result, annual interest payments of EUR4.8 million in 2008 were reduced by EUR2.9 million to EUR1.9 million in 2009 with a further decrease of EUR1.1 million to less than EUR0.8 million anticipated for 2010.
Discussion of results
In 2009, the Company’s income increased from EUR0.7 million to EUR1.1 million. The increase stems from EUR0.3 million license fee income (2008: nil) and increased grant income (from EUR0.6 million in 2008 to EUR0.8 million in 2009) triggered by higher costs eligible for grants and improved facilities on grant programs by the Dutch government.
Operational costs decreased from EUR30.1 million in 2008 to EUR28.9 million in 2009. The EUR1.2 million decrease among others reflects EUR4.0 million lower non-cash impairment charges offset with a EUR2.4 million increase of research and development costs and a EUR0.3 million increase of general and administrative costs. Impairment charges in 2008 amounted to EUR4.2 million in relation to inventories (EUR1.3 million), goodwill (EUR1.1 million), ProBio assets (EUR1.0 million), manufacturing equipment (EUR0.7 million) and other items (EUR01. million); for 2009, total impairment charges of EUR0.2 million follow from the Company’s review of recoverability of ProBio’s assets. Costs of research and development increased from EUR22.1 million to EUR24.5 million, reflecting Pharming’s submission of a Marketing Authorization Application (EU) for Rhucin in September 2009. At the same time, the Company has intensified the Rhucin development program in North America and the preparation of clinical trials of Prodarsan. Pharming’s general and administrative costs increased from EUR3.3 million to EUR3.6 million, which largely reflects costs incurred with respect to the public offer to the bondholders as described earlier and including the issuance of a prospectus. Costs of share based compensation programs remained constant at EUR0.6 million.
Financial and other income and expenses for the years ended 2008 and 2009 were highly affected with non-cash valuation adjustments in relation to convertible bonds, marketable securities and deferred tax items as well as interest derived from cash and marketable securities. In total, net losses from these items in 2009 were EUR3.9 million compared to net profits of EUR3.2 million in 2008; the fluctuation is primarily caused by the effect of a non-cash derivative profit of EUR4.9 million in 2008 (EUR0.2 million in 2009), EUR1.6 million lower net interest income on cash and marketable securities and EUR0.8 million costs incurred in relation to various 2009 financing transactions.
Given uncertainties in the current environment, Pharming is not providing guidance for the financial results in 2010.
Conference call information
Today, Chief Executive Officer Sijmen de Vries will present the 2009 results and the outlook for 2010 in a conference call for analysts at 9:00 am and for press at 10:30 am CET. To participate, please call one of the following numbers 10 minutes prior to the call:
Analyst call (conference ID 423 0982):
* From the Netherlands:0800 265 8543 (toll-free) or +31 (0)45 631 6903
* From the UK: 0800 358 0886(toll-free) or +44 207 153 2027
Press call (conference ID 423 0986):
* From the Netherlands:0800 265 8543 (toll-free) or +31 (0)45 631 6901
* From the UK: 0800 358 0886(toll-free) or +44 207 153 2027.
Following a presentation of the results, the lines will be opened for a question and answer session. An audio cast of the conference calls will be available on Pharming’s website shortly thereafter.
The detailed results for the year ended December 31, 2009 will be included in the Annual Report 2009. Final 2009 results are subject to change in view of, in particular, impairment testing of assets.
About Pharming Group NV
Pharming Group NV is developing innovative products for the treatment of genetic disorders, ageing diseases, specialty products for surgical indications, and nutritional products. Pharming’s lead product Rhucin® for acute attacks of Hereditary Angioedema has passed clinical development stage and the Market Authorization Application is under review with the European Medicines Agency. Prodarsan® is in early stage clinical development for Cockayne Syndrome and lactoferrin for use in food products. 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, as well as technology in the field of DNA repair (via DNage). Additional information is available on the Pharming website, http://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.
Contact:
Marjolein van Helmond, T: +31 (0)71 52 47 431 or +31 (0)6 109 299 54
Samir Singh, T: + 1 908 720 6224
The full report including tables can be downloaded from the following link:
[HUG#1385766]
2009 Results: http://hugin.info/132866/R/1385766/344478.pdf
