Pharming reports on preliminary financial results 2012

Pharming reports on preliminary financial results 2012 
LEIDEN, NETHERLANDS -- (Marketwire) -- 03/07/13 --  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 EUR10.9 million (2011:
EUR3.2 million) 
following the Q4 2012 receipt of US$10.0 million
(EUR7.9 million) from our US     partner Santarus in relation to the
successful completion of Study 1310 for 
Ruconest(R). 
* Operating costs from continuing operations increased to EUR24.1
million (2011: 
EUR18.2 million). 
* Total net loss from continuing operations increased to EUR24.1
million (2011: 
EUR17.8 million) mainly as a result of non-cash
charges, such as EUR5.8 million     in costs associated with
financing activities and impairment charges of EUR1.2 
million in
relation to the closure of the US-based cattle operations. 
* Net cash outflows from operations decreased to EUR10.3 million
(2011: EUR16.9 
million) with net cash inflows from financing
activities amounting to EUR11.6 
million (including EUR8.0 million
in relation to the issue of convertible 
bonds) and net cash
inflows from investing activities amounting to EUR0.1 
million
(EUR0.7 million in cash was received due to sale of the US- based 
cattle operations, which offset investment payments of EUR0.6
million). 
* Cash at the end of 2012 increased to EUR6.3 million (2011: EUR5.1
million). The     negative equity position of EUR1.2 million at year
end 2011 increased to a     negative equity position of EUR7.7
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 EUR16.35  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 EUR10.6 million (2011: EUR3.0 million). This increase
stems from the Q4 2012 receipt of  US$10.0 million (EUR7.9 million) 
from our US partner  Santarus in relation to successful  completion
of Study 1310. Costs of revenues amounted to EUR4.3 million
(2011: 
EUR3.5 million)  with impairments  on inventories  previously
reserved for sales  amounting to EUR3.1  million (2011: EUR1.7 
million). Other income related to grants  exclusively and increased 
from EUR0.2 million  in 2011 to EUR0.3 million in 2012. 
Total  operating costs from continuing operations increased by EUR5.9
million from EUR18.2  million in 2011 to EUR24.1 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  (EUR1.2  million),  a  restructuring  provision expense 
in relation  to the  Dutch operations  and the  US-based cattle
platform operations
(EUR1.4  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 EUR8.4  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 EUR5.1 million, which in addition  to the one-time
recycling expense  of an equity translation reserve of EUR1.4 million
and EUR1.3 million profit posted on financial derivatives and various
other expense items totaling EUR1.4 million, accounted for a net loss
on financial
income  and expenses of EUR6.6 million as compared to a
EUR0.7 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 EUR6.3 million to EUR24.1 million in 2012
(2011: EUR17.8 million). Due to a  one-time EUR0.6  million profit 
on discontinued  operations in 2011, total net loss  increased from
EUR17.2 million to EUR24.1  million. The net loss per share for 2012
amounted to EUR0.03 (2011: EUR0.04). 
FINANCIAL POSITION 
Total  cash and cash  equivalents (including restricted  cash)
increased by EUR1.2
million  from EUR5.1 million at year end 2011 to
EUR6.3 million at the end of 2012. The  increase follows  from net 
cash outflows  from operations of EUR10.3 million
with  net cash
inflows from financing  activities amounting to EUR11.6 million and
net  cash inflows from investing activities  amounting to EUR0.1
million. Net cash flows used in operating activities decreased from
EUR16.9 million in 2011 to EUR10.3 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  EUR8.0 million in cash (fully  repaid in
210,181,995 shares in 2012), EUR4.9 million  through the  issue of 
258,768,453 shares under  a EUR10.0 million equity
working  capital
facility concluded in August  2012 and EUR0.4 million through the
issue  of 24,051,258 shares following  the exercise of  warrants;
financing cash
outflows  of EUR1.8  million in  2012 related to 
finance lease payments and costs associated  with the issue of
convertible bonds and shares. Investing cash flows
included EUR0.6
million in payments related to investments; these were offset with
EUR0.7  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
EUR10.0 million equity working
capital  facility of EUR5.1 million.
In  January 2013 the Company announced it had entered  into a
EUR16.35 million convertible bond agreement (net proceeds of EUR15.3
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 EUR1.2  million at  year
end  2011 increased by EUR6.5 million  to EUR7.7 million and mainly
reflects  the EUR24.1 million net loss for the year  2012, net of 
EUR12.5 million  posted for  shares issued  as a repayment of
convertible  bonds  (EUR9.9  million),  shares  issued  in  relation
to the equity
working  capital  facility  (EUR4.7  million),  shares 
issued  in relation to the exercise of warrants (EUR0.9 million) and
other payments in shares (EUR0.3 million).
In  addition, following
the  closure of the  US-based cattle platform operations
Pharming 
restated a negative equity translation  reserve of EUR1.4 million to
the statement  of income; this  restatement impacted the  EUR24.1
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 EUR19.7
million 
upfront  payments  and  milestones  received  from Sobi and Santarus
as equity  (at December 31, 2012 the deferred license fees income
amounted to EUR15.4
million;  if release to the statement of  income
would have been permitted under
IFRS,  the  Company  would  have 
reported  a  positive  equity position of EUR7.7
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(R) 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(R)  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. 
The full report including tables can be downloaded from the following
link: 
Q4 Report 2012: 
http://hugin.info/132866/R/1683570/551032.pdf 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: Pharming Group N.V. via Thomson Reuters ONE 
[HUG#1683570] 
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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