Pharming Group N.V. : Pharming reports on preliminary financial results 2012
Leiden, The Netherlands, March 7, 2013.Biotech company Pharming Group NV
("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its
preliminary (unaudited) financial results for the year ended December 31,
*Revenues and other income increased to €10.9 million (2011: €3.2 million)
following the Q4 2012 receipt of US$10.0 million (€7.9 million) from our
US partner Santarus in relation to the successful completion of Study 1310
*Operating costs from continuing operations increased to €24.1 million
(2011: €18.2 million).
*Total net loss from continuing operations increased to €24.1 million
(2011: €17.8 million) mainly as a result of non-cash charges, such as
€5.8 million in costs associated with financing activities and impairment
charges of €1.2 million in relation to the closure of the US-based cattle
*Net cash outflows from operations decreased to €10.3 million (2011: €16.9
million) with net cash inflows from financing activities amounting to
€11.6 million (including €8.0 million in relation to the issue of
convertible bonds) and net cash inflows from investing activities
amounting to €0.1 million (€0.7 million in cash was received due to sale
of the US-based cattle operations, which offset investment payments of
*Cash at the end of 2012 increased to €6.3 million (2011: €5.1 million).
The negative equity position of €1.2 million at year end 2011 increased to
a negative equity position of €7.7 million.
*Successful completion of the Ruconest US Phase III pivotal study (Study
1310) followed by receipt of an associated US$10.0 million milestone
payment from our US partner Santarus.
*Ruconest continues roll-out across Europe:
*Roll-out progressing slower than expected as a result of challenging
market access conditions in the EU during 2012.
*To address these issues, our partner Sobi has recently re-aligned
their commercial organisation and have initiated specific in-market
*First production validation runs completed and initiation of the
certification process with the European Medicines Agency (EMA) and Food
and Drug Authority (FDA) for new downstream manufacturing site for
Ruconest, which will enable significant future reductions in the cost of
*Restructuring to reduce cash-burn initiated in the second half of 2012;
sale of the US facility and the downsizing of the Netherlands
organization. The latter is expected to be completed in the first half of
*New positive data published showing that Ruconest was not observed to have
a prothrombotic effect when used to treat acute HAE attacks
*study published by Relan et al in the peer-reviewed journal Biodrugs
*competitive drugs have shown to be prothrombotic
*Expansion of the geographical coverage for Ruconest through new agreements
with Singapore based Transmedic Pte for Brunei, Indonesia, Malaysia,
Philippines, Singapore, as well as Thailand and Seoul based Hypjin Corp
for South Korea.
*Initiated an open-label Phase II clinical study evaluating Ruconest for
the treatment of acute attacks of angioedema in paediatric patients with
*Data published showing that Ruconest has a protective effect in a
preclinical animal model of severe blood loss designed to simulate
Sijmen de Vries, CEO, commented: "2012 was a challenging and volatile year for
Pharming, largely due to an unforeseen delay in Study 1310 which negatively
impacted on our cash resources. However, this early challenge was followed by
the arrangement of an Equity Working Capital Facility for financing and the
successful completion of Study 1310, which triggered the payment of a US$10.0
million milestone by our US partner Santarus. This in turn provided the
platform for the January 2013 €16.35 million financing, by means of a short
term convertible bond, and hence a strong ending to the year. In sharp
contrast to only some months ago, Pharming is now well prepared and funded to
enter the US regulatory review process for the treatment of acute HAE with
Ruconest. Furthermore, in the second half of the year, assuming that the
Ruconest BLA will have been accepted for review, together with our US partner
Santarus we plan to request separate meetings with the FDA to discuss the
pathway for other potential indications for Ruconest such as the treatment of
acute pancreatitis and the prophylactic treatment of HAE. As we near potential
approval and a subsequent launch for Ruconest in the US, the world's largest
pharmaceutical market, Pharming is in a strong position to capitalise on this
significant commercial opportunity."
In the year 2012 the Company generated revenue from continuing operations of
€10.6 million (2011: €3.0 million). This increase stems from the Q4 2012
receipt of US$10.0 million (€7.9 million) from our US partner Santarus in
relation to successful completion of Study 1310. Costs of revenues amounted to
€4.3 million (2011: €3.5 million) with impairments on inventories previously
reserved for sales amounting to €3.1 million (2011: €1.7 million). Other
income related to grants exclusively and increased from €0.2 million in 2011
to €0.3 million in 2012.
Total operating costs from continuing operations increased by €5.9 million
from €18.2 million in 2011 to €24.1 million in the same period of 2012. The
increase in part reflects items such as impairment charges related to the
US-based cattle platform operations (€1.2 million), a restructuring provision
expense in relation to the Dutch operations and the US-based cattle platform
operations (€1.4 million) as well as the Company's activities in relation to
Study 1310 required for US regulatory approval for Ruconest.
Early in 2012 the Company finalized a transaction announced in December 2011
under which it issued €8.4 million convertible bonds plus 38,717,484 warrants.
The bonds had to be repaid in six monthly installments and could be settled in
cash and/or in shares. The bonds have been fully repaid in 2012; all
installments plus interest were in shares with the number of shares based on
volume weighted average price, a reference period minus a discount. With
regard to these pay-backs, the Company issued a total of 210,181,995 shares.
Total non-cash costs associated with these bonds amounted to €5.1 million,
which in addition to the one-time recycling expense of an equity translation
reserve of €1.4 million and €1.3 million profit posted on financial
derivatives and various other expense items totaling €1.4 million, accounted
for a net loss on financial income and expenses of €6.6 million as compared to
a €0.7 million net profit on financial income and expenses in 2011.
As a result of the above items, the net loss from continuing operations
increased by €6.3 million to €24.1 million in 2012 (2011: €17.8 million). Due
to a one-time €0.6 million profit on discontinued operations in 2011, total
net loss increased from €17.2 million to €24.1 million. The net loss per share
for 2012 amounted to €0.03 (2011: €0.04).
Total cash and cash equivalents (including restricted cash) increased by €1.2
million from €5.1 million at year end 2011 to €6.3 million at the end of 2012.
The increase follows from net cash outflows from operations of €10.3 million
with net cash inflows from financing activities amounting to €11.6 million and
net cash inflows from investing activities amounting to €0.1 million. Net cash
flows used in operating activities decreased from €16.9 million in 2011 to
€10.3 million in 2012, which largely reflects receipt of US$10.0 million from
our US partner Santarus following the successful completion of Study 1310.
Financing cash flows followed the early 2012 issue of convertible bonds which
raised €8.0 million in cash (fully repaid in 210,181,995 shares in 2012), €4.9
million through the issue of 258,768,453 shares under a €10.0 million equity
working capital facility concluded in August 2012 and €0.4 million through the
issue of 24,051,258 shares following the exercise of warrants; financing cash
outflows of €1.8 million in 2012 related to finance lease payments and costs
associated with the issue of convertible bonds and shares. Investing cash
flows included €0.6 million in payments related to investments; these were
offset with €0.7 million received in relation to the closure and subsequent
sale of the US-based cattle operations.
Pharming continues to seek improvement in its financial position and at
December 31, 2012 had a remaining amount available under the €10.0 million
equity working capital facility of €5.1 million. In January 2013 the Company
announced it had entered into a €16.35 million convertible bond agreement (net
proceeds of €15.3 million); the transaction was subject to shareholder
approval, which was obtained at the Extraordinary General Meeting of
Shareholders held on February 28, 2013.
In addition, the Company anticipates receiving US$5.0 million from Santarus
when the US Food and Drug Administration accepts the BLA filing for review.
Receipt of this milestone is expected to further improve the Company's cash
and equity position.
In December 2011 the Company announced that it had entered negative equity.
This negative equity position of €1.2 million at year end 2011 increased by
€6.5 million to €7.7 million and mainly reflects the €24.1 million net loss
for the year 2012, net of €12.5 million posted for shares issued as a
repayment of convertible bonds (€9.9 million), shares issued in relation to
the equity working capital facility (€4.7 million), shares issued in relation
to the exercise of warrants (€0.9 million) and other payments in shares (€0.3
million). In addition, following the closure of the US-based cattle platform
operations Pharming restated a negative equity translation reserve of €1.4
million to the statement of income; this restatement impacted the €24.1
million net loss for the year 2012 but in itself did not affect equity.
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
€19.7 million upfront payments and milestones received from Sobi and Santarus
as equity (at December 31, 2012 the deferred license fees income amounted to
€15.4 million; if release to the statement of income would have been permitted
under IFRS, the Company would have reported a positive equity position of €7.7
million). Anticipated receipt of the development milestone associated with the
acceptance of the BLA filing by the FDA (US$5.0 million) will, under IFRS, be
recognized immediately and thus augment the equity position.
Conference call information
Today, Chief Executive Officer Sijmen de Vries will discuss the full year 2012
results 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
About Pharming Group N.V.
Pharming Group N.V. 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 drug has completed Phase III clinical
development. The product is also being evaluated for various follow-on
indications. Pharming has a unique GMP compliant, validated rabbit 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.
Sijmen de Vries, CEO: T: +31 (0)71 524 7400
Julia Phillips/John Dineen, T: +44 (0)207 269 7193
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The full report including tables can be downloaded from the following link:
Q4 Report 2012
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(ii) they are solely responsible for the content, accuracy and originality of
information contained therein.
Source: Pharming Group N.V. via Thomson Reuters ONE
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