Pharming Group N.V. : Pharming reports on preliminary financial results 2012

 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, 
2012.

FINANCIAL HIGHLIGHTS

  *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
    for Ruconest®.

  *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
    operations.

  *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
    €0.6 million).

  *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.

OPERATIONAL UPDATE

  *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
         actions.

  *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
    manufacturing.

  *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
    2013.

  *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
    HAE.

  *Data published showing that Ruconest has a protective effect in a
    preclinical animal model of severe blood loss designed to simulate
    battlefield injuries.

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."

FINANCIAL RESULTS

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).

FINANCIAL POSITION

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.

NEGATIVE EQUITY

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.

Contact
Sijmen de Vries, CEO: T: +31 (0)71 524 7400

FTI Consulting
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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