Leiden, The Netherlands, 15 May 2014. Biotech company Pharming Group NV (“Pharming” or “the Company”) (NYSE Euronext: PHARM) today published its financial report for the three months ended 31 March 2014.
FINANCIAL HIGHLIGHTS
? Revenues and other income increased by €0.9 million to €1.4 million (Q1 2013: €0.5 million), resulting from an increase in revenues from sales of €0.9 million.
? Operating costs increased by €0.4 million to €3.3 million (Q1 2013: €2.9 million).
? Net financial expenses amounted to €13.0 million (Q1 2013: €3.0 million) as a result of revaluation of our warrants caused by the strong increase of our share price during Q1 2014. For more details on this, please refer to Note 10 on page 13 and 14 of the (attached) condensed consolidated interim financial statements for Q1 2014.
? Loss from operating activities increased by €0.6 million to €3.1 million.
? Total net loss (financial expenses and loss from operating expenses) increased by €10.6 million to €16.0 million (Q1 2013: €5.4 million).
? Net use of cash was €0.4 million, as result of cash outflow from operations of €4.6 million (Q1 2013: €2.8 million) and net cash flows from financing activities of €4.2 million (Q1 2013: €15.3 million).
? Cash at the end of the first quarter of 2014 was €18.8 million (2013 YE: €19.2 million).
? The equity position increased by €2.1 million to €7.1 million from €5.0 million at year end 2013 mainly as a result of the exercise of warrants.
OPERATIONAL HIGHLIGHTS
• Our Israeli commercialization partner MegaPharm Ltd (MegaPharm), received marketing approval for acute attacks of HAE RUCONEST® (recombinant human C1 inhibitor) in Israel.
• The US Food and Drug Administration (FDA) extended the Ruconest® BLA Prescription Drug User Fee Act (PDUFA) Action Date by three months to July 16, 2014.
FINANCIAL RESULTS
In the first quarter of 2014, the Company generated revenue from sales of Ruconest of €0.9 million (Q1 2013: €nil) and deferred licensing fees of €0.5 million, totaling to €1.4 million (Q1 2013: €0.5 million). The increase in revenue from sales reflect the underlying increased demands for Ruconest in the EU markets, compared to Q1 2013. Costs of revenues amounted to €1.2 million (2013: €nil) including impairments of inventories amounting to €0.4 million, reflecting the low yield from EU sales in combination with the current cost of manufacturing, absent economies of scale. Gross Profits decreased as result of this from €0.5 million to €0.2 million.
Loss from operating activities increased to €3.1 million (Q1 2013 €2.4 million), as a result of the increase in R&D costs and lower gross profits.
Financial income and expenses increased to €13.0 million (Q1 2013: €3.0 million), as a result of the (non-cash) increase of the fair value of our outstanding warrants, reflecting the increase of our share price in Q1 2014, while the Q1 2013 costs were related to the Q1 2013 €16.35 million convertible bond.
As a result of the above items, the net loss for the first quarter of 2014 increased to €16.0 million from €5.4 million in the same period of 2013.
Cash outflows from operations increased by €1.8 million to €4.6 million in Q1 2014 (Q1 2013: €2.8 million) due to the increase in manufacturing activities for Ruconest.
FINANCIAL POSITION
Total cash and cash equivalents (including restricted cash) decreased to €18.8 million at 31 March 2014 from €19.2 million at year end 2013. The decrease follows net cash outflows from operations of €4.6 million with net cash inflows from financing activities amounting to €4.3 million and net cash outflows from financing activities amounting to €0.1 million. Financing cash inflows mainly result from the 2013 exercise of warrants which raised €4.3 million gross in cash.
EQUITY POSITION
The equity position increased by €2.1 million versus year-end 2013 (€5.0 million) to €7.1 million (Q1 2013 €6.0 million negative).
Pharming continues to review its financial and liquidity position with the aim to further improve its equity standing under International Financial Reporting Standards (IFRS). Notably, the Company reports that the negative equity position at the end of 2011 was mainly caused by the inability to recognize the €19.7 million upfront payments and milestones received from Sobi and Santarus as equity (at 31 March 2014 the deferred license fees income amounted to €13.9 million).
The number of outstanding shares as of today, 15 May 2014, is 405,353,750 and the fully diluted number of shares is 443.7 million.
FINANCIAL GUIDANCE 2014
Pharming expects revenues from Ruconest (not including US sales) of €3.0 million. No additional financial guidance is provided.
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® 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. RUCONEST is partnered with Santarus Inc (NASDAQ: SNTS) in North America where the and a BLA for RUCONEST was submitted to the FDA in April 2013. 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, with the EU approval of Pharming’s rhC1 inhibitor, has proven capable of producing industrial volumes of high quality recombinant human protein in a significantly more economical way through low upfront capital investment and manufacturing costs, compared to current cell based technologies. Pharming now plans 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.
Contact
Sijmen de Vries, CEO: T: +31 71 524 7400
FTI Consulting
Julia Phillips/ John Dineen, T: +44 (0)203 727 1000
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