93% increase in revenues from product sales and 110% increase in operating profit compared with the First Quarter 2017
Delivered net profitability for the first time
Leiden, The Netherlands, 17 May 2018: Pharming Group N.V. (“Pharming” or “the Company”) (Euronext Amsterdam: PHARM) presents its (unaudited) financial report for the quarter ended 31 March 2018.
- Investment in commercial teams and continued underlying demand for RUCONEST® in the USA following stabilisation of short supply situations at major competitors, driving growth and good patient retention rates.
- FDA acceptance of supplementary Biologics License Application file for RUCONEST® for prophylaxis of HAE, with an action date set for 21 September 2018.
- Preparation continues for initiation of clinical development of RUCONEST® for new indications, which will be outlined together with leading experts at a Capital Markets Briefing to be held in New York and by live webcast on Thursday June 21, 2018.
- Net product sales increased by 93% to €29.3 million (First quarter 2017: €15.2 million) on a like-for-like basis, mainly as a result of the continued underlying growth in revenue from US product sales despite a 15% deterioration in the US dollar exchange rate over the same period.
- Underlying product sales increased 122%.
- Total revenues increased by 90% to €29.5 million (including €0.2 million of license revenue) from €15.5 million in the first quarter 2017 (including €0.3 million in license revenue).
- Operating profit increased by 110% to €8.2 million (compared with €3.9 million in the first quarter 2017, and a profit of €21.9 million for the full year 2017), despite increased marketing costs in the US and increased R&D expenses.
- Delivered the Company’s first quarterly net profit of €3.3 million, compared with a loss of €5.7 million in 2017, mainly as a result of the strong sales performance. The result also benefited from a reduction in non-cash financing expenses required to be shown under IFRS associated with the various Convertible Bonds which were converted or redeemed around the year end.
- The equity position improved from €18.8 million in December 2017 (March 2017: €28.9 million) to €31.6 million at the end of March 2018, mainly due to the net profit of €3.3 million and the reduction in debt caused by redemption of bonds.
- Inventories changed from €18.3 million at the year end 2017 to €21.6 million at the end of the first quarter 2018, largely due to the higher sales demand and support in the US and to provide additional capacity to cover further potential stock shortages by competitors. This resulted in a greater proportion of inventories being held in final dosage forms of product rather than raw materials which are recognized at a lower carrying value per unit.
- Conversions by all remaining bondholders during the quarter meant that there are now no debt instruments outstanding apart from the loan facility with Orbimed Advisors (for which we begin repayments in the third quarter of this year).
- The Company’s cash position remained flat at €59.8 million (December 2017: €60.0 million, with €27.6 million at 31 March 2017), largely due to the increased inventory and additional preparation costs associated with investment in new product development.
- As a result of the growth achieved in the share price and market capitalization of the Company between January 2017 and March 2018, Pharming was admitted to the Euronext Amsterdam SmallCap-index (AScX) in March 2018.
Chief Executive Officer of Pharming, Sijmen de Vries, commented:
“The remarkable growth reported in 2017 has continued into 2018 and I am delighted to report our first quarter of net profitability, which is another significant achievement for Pharming. Investment in our commercial team and continued underlying demand for RUCONEST® in the US are driving this growth. We are also seeing good patient retention rates following the stabilization of competitor product supply, which is a testament to the efficacy of RUCONEST®. We are confident that with our increasing patient reach and advancing pipeline, we will be able to continue to deliver significant value to our patients and other stakeholders.”
The first quarter of 2018 was very positive for Pharming. We emerged from the high pressure on production and supply in Q4 2017 when both leading prophylaxis product suppliers in the USA had supply problems (which in one case extended to Europe). This resulted in extra sales and donated product supplies in the end of Q4 2017. As a responsible pharmaceutical partner, we have continued to supply RUCONEST® on prescription (including free supply) to ensure no patients were left without a C1 esterase inhibitor product where this was prescribed by their physician. These patients have been able to see for themselves the reliability, safety and effectiveness of RUCONEST®. As a testament to its efficacy, many have continued on RUCONEST® therapy despite the stabilisation of the crisis in supplies of the blood plasma-derived products in December 2017. We continue to make good progress in growth in the treatment of acute hereditary angioedema (HAE) attacks. As a result, sales in the US were ahead of the last quarter ($34.3 million compared with $33.8 million for Q4 2017). Importantly, this strong sales performance resulted in Pharming recording a net profit for the quarter for the first time.
Pharming is investing to improve the convenience of RUCONEST® administration further. Our R&D scientists have developed new forms of RUCONEST® to take into clinical trials to demonstrate effectiveness for intra-muscular and sub-cutaneous administration of smaller injections and other more convenient applications of RUCONEST® soon.
We mentioned at our 2017 full year results that we are examining additional indications for RUCONEST®, and the purpose of the 21 June Capital Markets Briefing is to give clear details of progress with RUCONEST ® in HAE and of prospects for these new indications, including contributions from leading physicians in the relevant specialties, with explanations of why we believe RUCONEST® could provide all or part of the solutions to these currently unmet medical needs. We will also be setting out our clinical plans and timelines for the studies involved as well as providing an update on our Pompe disease pipeline programme.
We also record and report our results in US dollars for the first time, with the statements shown in US dollars on pages 10-12 below.
We look forward with confidence to continuing growth of Pharming in the rest of 2018, with increased sales, a new and very exciting pipeline, and new opportunities to enhance shareholder value.
About Pharming Group N.V.
Pharming is a specialty pharmaceutical company developing innovative products for the safe, effective treatment of rare diseases and unmet medical needs. Pharming’s lead product, RUCONEST® (conestat alfa) is a recombinant human C1 esterase inhibitor approved for the treatment of acute Hereditary Angioedema (“HAE”) attacks in patients in Europe, the US, Israel and South Korea. The product is available on a named-patient basis in other territories where it has not yet obtained marketing authorization.
RUCONEST® is distributed by Pharming in Austria, France, Germany, Luxembourg, the Netherlands, the United Kingdom and the United States of America. Pharming holds commercialisation rights in Algeria, Andorra, Bahrain, Belgium, Ireland, Jordan, Kuwait, Lebanon, Morocco, Oman, Portugal, Qatar, Syria, Spain, Switzerland, Tunisia, United Arab Emirates and Yemen. In some of these countries RUCONEST® is made available on a named-patient basis in association with the HAEi Global Access Program (GAP).
RUCONEST® is distributed by Swedish Orphan Biovitrum AB (publ) (SS: SOBI) in the other EU countries, and in Azerbaijan, Belarus, Georgia, Iceland, Kazakhstan, Liechtenstein, Norway, Russia, Serbia and Ukraine.
RUCONEST® is distributed in Argentina, Colombia, Costa Rica, the Dominican Republic, Panama, and Venezuela by Cytobioteck, in South Korea by HyupJin Corporation and in Israel by Megapharm.
RUCONEST® has recently completed a clinical trial for the treatment of HAE in young children (2-13 years of age) and is also being evaluated for various additional follow-on indications.
Pharming’s technology platform includes a unique, GMP-compliant validated process for the production of pure recombinant human proteins that has proven capable of producing industrial quantities of high quality recombinant human proteins in a more economical and less immunogenetic way compared with current cell-line based methods. Leads for enzyme replacement therapy (“ERT”) for Pompe and Fabry’s diseases are being optimized at present, with additional programs not involving ERT also being explored at an early stage.
Pharming has a long-term partnership with the China State Institute of Pharmaceutical Industry (“CSIPI”), a Sinopharm company, for joint global development of new products, starting with recombinant human Factor VIII for the treatment of Haemophilia A. Pre-clinical development and manufacturing will take place to global standards at CSIPI and will be funded by CSIPI. Clinical development will be shared between the partners with each partner taking the costs for their territories under the partnership.
Pharming has declared that the Netherlands is its “Home Member State” pursuant to the amended article 5:25a paragraph 2 of the Dutch Financial Supervision Act.
Additional information is available on the Pharming website: www.pharming.com
This press release of Pharming Group N.V. and its subsidiaries (“Pharming”, the “Company” or the “Group”) may contain forward-looking statements including without limitation those regarding Pharming’s financial projections, market expectations, developments, partnerships, plans, strategies and capital expenditures.
The Company cautions that such forward-looking statements may involve certain risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive, political and economic factors, legal claims, the Company’s ability to protect intellectual property, fluctuations in exchange and interest rates, changes in taxation laws or rates, changes in legislation or accountancy practices and the Company’s ability to identify, develop and successfully commercialize new products, markets or technologies.
As a result, the Company’s actual performance, position and financial results and statements may differ materially from the plans, goals and expectations set forth in such forward-looking statements. The Company assumes no obligation to update any forward-looking statements or information, which should be taken as of their respective dates of issue, unless required by laws or regulations.
Pharming Group N.V.
Sijmen de Vries, CEO, Tel: +31 71 524 7400
Robin Wright, CFO, Tel: +31 71 524 7432
Julia Phillips/ Victoria Foster Mitchell, Tel: +44 203 727 1136
Lifespring Life Sciences Communication
Leon Melens, Tel: +31 6 53 81 64 27