LEIDEN, NETHERLANDS--(Marketwire - April 22, 2010) - Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the first quarter ended March 31, 2010.
Key financial items
* Secured EUR7.5 million convertible debt financing in early January with a possibility to extend with an additional EUR2.5 million. This debt will be converted into equity during the remainder of 2010;
* Authorized share capital was increased from 200 million to 400 million and nominal value per share was adjusted from EUR0.50 to EUR0.04;
* Operational costs decreased from EUR6.6 million in the first quarter of 2009 to EUR6.2 million in the same period of 2010 as a result of capitalization of Rhucin® development costs in Q1 2010 (EUR 0.2 million) and the timing of various expense items incurred in Q1 2009;
* Increased net loss in Q1 2010 of EUR7.7 million as compared to EUR6.2 million in Q1 2009 primarily stems from a EUR1.9 million profit realised on convertible bonds settlements in the first quarter of 2009.
Key financial data (in EURmillion, except per share data) (unaudited)
Quarter Year Quarter
ended ended ended
March 31, December 31, March 31,
2010 2009 2009
Statement of financial position:
Non-current assets (excluding restricted
cash) 27.3 27.1 30.9
Cash and marketable securities, net of bank
overdrafts 3.3 2.3 16.0
Inventories and other current assets 12.6 12.6 12.9
Total assets 43.2 42.0 59.8
Convertible bonds 18.1 9.5 33.5
Other liabilities 19.2 19.2 19.2
Total equity 5.9 13.3 7.1
Statement of income:
Grants and other income 0.2 1.1 0.1
Operational costs (6.2) (29.0) (6.6)
Financial and other income and expenses (1.7) (4.2) 0.3
Net loss (7.7) (32.1) (6.2)
Statement of cash flows:
Net cash used in operating activities (6.3) (24.3) (6.4)
Net cash from/(used in) investment
activities - 4.2 (0.1)
Net cash from/(used in) financing activities 7.5 2.5 (1.0)
Share data:
Outstanding shares at the end of
the period 154,501,037 154,501,037 98,960,156
Weighted average shares outstanding
in the period 154,501,037 116,177,686 98,822,277
Basic and diluted net loss
per share (EUR) (0.05) (0.28) (0.06)
Financial position
In the first quarter of 2010, the Company entered into a 9% convertible debt financing of EUR7.5 million, with the possibility to increase to EUR10.0 million, and issued 15,000,000 warrants with an exercise price of EUR 0.50 and an expiration date of December 31, 2012. This debt will be converting into equity no later than December 31, 2010. At the end of the first quarter 2010, as a result of meeting certain conditions in the investment agreement, the bondholders received an additional number of 3,750,000 warrants, bringing the total number of warrants under the agreement to 18,750,000, while at the same time the exercise price was lowered from EUR0.50 to EUR0.40. The maximum conversion price for the bonds also decreased from EUR 0.50 to EUR 0.40.
On March 30, 2010 the Company's shareholders approved to increase authorized share capital from 200 million to 400 million and to adjust the nominal value per share from EUR0.50 to EUR0.04. The approval of the shareholders was requested due to the Company's limited flexibility to issue new shares since 154.5 million shares were outstanding with the main portion of the unissued 45.5 million shares reserved for convertible debt facilities. These changes were legally formalized on April 1, 2010 as a result of which, at 154.5 million shares outstanding, the Company's share capital reported at the end of the first quarter 2010 will decrease with EUR71.1 million from EUR77.3 million to EUR6.2 million with a corresponding increase of other reserves; the overall effect of the adjustment on total equity therefore is nil. Overall, total equity of EUR13.3 million at December 31, 2009 decreased to EUR5.9 million at March 31, 2010; the EUR7.4 million decrease reflects the first quarter 2010 net loss of EUR7.7 million minus other changes of EUR0.3 million.
In April 2010, the first quarter interest due on the 2010 convertible bonds was paid through issuance of 407,475 shares; in addition, an aggregate number of 1,756,564 shares were issued with respect to the conversion of EUR0.7 million nominal bonds. As a result of these transactions, the total number of outstanding ordinary shares at March 31, 2010 of 154,501,037 increased to 156,665,076 as per today while the nominal value of the bonds issued in 2010 decreased from EUR7.5 million to EUR6.8 million.
Due to the EUR7.5 million cash proceeds of the convertible bonds issued in January 2010, the Company improved its net cash position from EUR2.3 million at year end 2009 to EUR3.3 million at the end of the first quarter 2010 with cash used in operating cash flows being fairly constant at EUR6.3 million compared to EUR6.4 million in the first quarter of 2009.
Financial results
In the first quarter of 2010, the Company's income increased from EUR0.1 million to EUR0.2 million, which in both quarters is exclusively related to grants.
Operational costs decreased from EUR6.6 million in the first quarter of 2009 to EUR6.2 million in the same period of 2010. The EUR0.4 million decrease among others reflects EUR0.2 million of Rhucin® development costs capitalized as intangible assets in Q1 2010 compared to none in the first quarter of 2009. The remaining EUR0.2 million decrease primarily relates to the timing of Rhucin® activities in the first quarter of 2009.
Financial income and expenses in the first quarter of 2010 amounted to a net expense of EUR1.7 million compared to a net income of EUR0.2 million in the first quarter of 2009. The difference primarily stems from a EUR1.9 million profit realised on convertible bonds settlements in the first quarter of 2009.
Sijmen de Vries, MD, MBA, Chief Executive Officer, commented: ''The first quarter of 2010 started under challenging circumstances. The convertible debt, secured at the start of the year, however provided us with sufficient runway to continue the regulatory processes of Rhucin and enabled us to execute on our first major commercialisation agreement for Rhucin, which in turn provided us with an upfront payment (which is not included in the net cash at the end of the first quarter 2010). We now look forward to continue to execute on our plans: proceeding with the Rhucin regulatory processes in Europe and USA, ensuring launch readiness together with our European partners as well as continuation of our partnering discussions for territories outside the European Union, Iceland, Norway, Switzerland and Turkey. In addition we pursue the further solidification of our financial basis through a combination of further cost savings and debt or equity financing. In this respect we have now engaged Kempen & Co and Petercam Bank to jointly investigate the possibilities of attracting additional funding.''
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, www.pharming.com
Contact: Sijmen de Vries, CEO +31 71 5247 400
The full report including all tables can be downloaded from the following link:
[HUG#1406614]
Q1 Report 2010: http://hugin.info/132866/R/1406614/360107.pdf
