Record revenue from product sales, up 96% on 2017
Pharming’s first half year of net profitability
Expanding pipeline of new products plus new large indications and dosage forms for RUCONEST®
Leiden, The Netherlands, 26 July 2018: Pharming Group N.V. (“Pharming” or “the Company”) (Euronext Amsterdam: PHARM) presents its (unaudited) financial report for the six months ended 30 June 2018.
The Company will hold a conference call at 13:00 CEDT/ 07:00 EDT today: dial-in details can be found on page 8.
- Invested in commercial teams to meet continued underlying demand for RUCONEST® in the USA, driving growth and good patient retention rates
- FDA acceptance of supplemental Biologics License Application file for RUCONEST® for prophylaxis of HAE, with an action date set for 21 September 2018
- Announced new versions of small vial liquid and fast-dissolving dose forms for RUCONEST® in subcutaneous, intramuscular and ‘virtually painless’ intradermal versions for use in clinical studies starting later in 2018/early 2019
- Announced five studies ongoing or starting to expand the pipeline strongly:
- An ongoing investigator-sponsored study of RUCONEST® in Basel, Switzerland in a double-blind, placebo-controlled trial in contrast-induced nephropathy, with top-line data expected in Q3 2018
- A new Phase I/II study of rhC1INH in pre-eclampsia to be filed by Pharming shortly to start in Q4 2018
- An ongoing investigator-sponsored study of RUCONEST® head-to-head against a competitor in a trial testing therapy failure rates in treating acute attacks of hereditary angioedema (“HAE”), with top-line data expected in Q4 2018
- Initiation of an investigator-sponsored study of RUCONEST® to treat delayed graft function, a form of ischemic reperfusion injury, at the University of Wisconsin
- A new in-house clinical trial of Pharming’s proprietary recombinant human alphaglucosidase in Pompe disease to be filed early 2019
- Delivered net profitability for the half year
- Revenues from product sales for the half year increased by 96% to €59.1 million (HY 2017: €30.1 million, and Q2 2018 €29.8 million), as a result of continuing growth in revenue from US and EU product sales from increasing patient numbers
- Total revenues increased by 94% to €59.5 million (including €0.4 million of license revenue) from €30.6 million (including €0.5 million in license revenue) in HY 2017
- Operating results improved 288% to a profit of €16.3 million from €4.2 million in HY 2017, despite a considerable increase in manufacturing and clinical activities
- The net result was a profit of €6.4 million (HY 2017: loss of €30.2 million)
- The company’s cash position increased from €60.0 million at year-end 2017 to €66.9 million at 30 June 2018 (up from €25.2 million at 30 June 2017), largely due to sales growth and the proceeds of option exercises by employees balanced by increased inventory manufacturing relating to restoring US inventories following significant free-of-charge emergency supplies to HAE patients as result of the pdC1INH supply crisis in Q4 2017 as well as increasing US sales and clinical and development costs
Sijmen de Vries, Chief Executive Officer, said:
“We are delighted with the further progress we have made expanding the reach of RUCONEST®, allowing more patients to access the clinical benefits of our product. We have continued net profitability in the second quarter of the year, which gives us the confidence and the financial resources to move forward with our new programs. With five studies underway or expected to initiate over the next six months, we anticipate significant strengthening of our pipeline.”
Chief Executive Officer’s comment
During the first half of the year, we continued to invest in the development of our commercial infrastructure in North America and Europe to drive the growth of new patients using our lead product, RUCONEST® (Recombinant Human C1 Esterase Inhibitor/ conestat alfa, or rhC1INH), for the treatment of HAE, as well as to manage the increased demand for the product. This strategic decision has significantly increased revenue and profit generation for the first half of the year compared to the first half of 2017. As a result, we have reported our first half year of net profitability significantly earlier than previously expected at the time of reacquiring the US commercial rights to RUCONEST® in December 2016.
Product sales for the half year increased by 96% to €59.1 million (HY 2017: €30.1 million). The positive sales momentum in the USA continued in Q2, following higher than expected sales in Q1 as a result of the shortage of a competitor product, with net sales of $33.9 million in Q2 ($34.3 million in Q1) despite stock level adjustments and a weakening in the exchange rate between US dollars and euros. As the clearest measure of the success of RUCONEST®, the number of patients using the product regularly in the USA has been increasing steadily since we reacquired the commercial rights. The growth rate, although affected in some periods by competitors’ failures to supply their blood-derived products and consequent sudden increases in patients using RUCONEST®, has been fairly consistent.
Underlying sales volumes increased in Q2 (up by 8% compared with Q1). On a reported basis, Q2 sales were higher at €29.8 million compared with €29.3 million for Q1. This reflects good retention of the patients who switched to RUCONEST® following stabilisation of the competitor supply situation, and a slightly higher volume of EU and rest of the world (“RoW”) sales.
Gross profits increased from €24.5 million in Q1 to €25.5 million in Q2, also reflecting slightly lower costs of goods balanced by the higher mix of lower-margin RoW sales.
Operating profit for the first half of the year was €16.3 million, of which €8.2 million was recorded in Q1 and €8.1 million in Q2. As previously guided, we have invested in expanding the pipeline for RUCONEST® and for our follow-up programs in Pompe disease and Fabry’s disease, the costs of which are reflected in a flat operating profit (and consequently net profit) for Q2. We expect to see the benefits of this investment in subsequent periods.
In January, we announced that the U.S. Food and Drug Administration (FDA) had accepted for review Pharming’s supplemental Biologics License Application (sBLA) for RUCONEST® [Recombinant Human C1 Esterase Inhibitor/ conestat alfa] for routine prophylaxis to prevent attacks in adult and adolescent patients with HAE. The FDA indicated that the sBLA was sufficiently complete to permit a substantive review and has set an action date of 21 September 2018.
At our Capital Markets Briefing Day in June, we announced a number of exciting new pipeline developments which will build out Pharming’s future from a company focused on RUCONEST® in HAE to a company with multiple products approved for commercial sale as well as a wide development franchise in several major unmet disease indications with very limited (if any) therapeutic options at present.
The highlights of these announcements were as follows:
- An ongoing investigator-sponsored study of RUCONEST® in Basel, Switzerland a double-blind, placebo-controlled trial of contrast-induced nephropathy which was initiated last year and is expected to report top-line data in Q3 2018.
- Pharming will file in Q3 for a new Phase I/II study of rhC1INH in treatment of pre-eclampsia to start in Q4 2018. Pre-eclampsia has no specific therapies at present, and affects 2.5 million pregnancies a year worldwide. Many women suffer from very severe cardiac and liver damage caused by the condition, and many pregnancies are either terminated or result in dangerously early deliveries.
- An ongoing investigator-sponsored head-to-head study of RUCONEST® in an open label clinical trial testing therapy failure rates (i.e. the need for re-dosing under either therapy) to treat an attack of hereditary angioedema, which is expected to be fully recruited in Q3, with top-line data expected in Q4 2018.
- Pharming has developed new versions of small vial liquid and fast-dissolving dosage forms for RUCONEST®, for use in subcutaneous and intramuscular versions and in an entirely new, intradermal version expected to be painless, starting with subcutaneous studies later in 2018/ early 2019.
- An investigator-sponsored study of RUCONEST® to treat delayed graft function, a form of ischemic reperfusion injury, is being initiated at the University of Wisconsin. This study is not expected to read out until 2020 due to the long follow-up required.
- Pharming will take its new, highly-improved alpha-glucosidase PGN004 into the clinic in a Phase I/II study in Pompe disease in early 2019, with the timing depending only on final manufacturing filings. This new recombinant form of alpha-glucosidase, the enzyme which is deficient in patients with Pompe disease, has been developed with the same technology platform as RUCONEST® and is expected to have little or no immunogenicity, as well as high efficacy.
- A similar program with alpha-galactosidase for use in the related Fabry’s disease has also been initiated and is expected to enter clinical development from 2H2020 onwards following ongoing process development and subsequent manufacturing runs.
Based on the continued momentum in sales volumes, underpinned by improving trends in identifying and diagnosing HAE patients, combined with better patient care and management practices, a focus on specialty pharmacy customers and subject to an FDA approval for prophylaxis of HAE, we expect to continue to increase sales of RUCONEST® further. If that approval is granted, we expect the efficacy of RUCONEST® to be appealing to healthcare professionals and the patients they manage for complete management of their HAE condition. It will also be the only approved product for both prophylaxis and treatment of breakthrough HAE attacks. We will continue to control costs and investments to improve profitability and to allow us to drive sustainable long-term growth. We continue to expect additional positive results for the remainder of the year. No further financial guidance is provided.
Sijmen de Vries
Chief Executive Officer
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
Conference call information
Today, Chief Executive Officer, Sijmen de Vries, and Chief Financial Officer, Robin Wright, will discuss the half year 2018 financial results with investors in a conference call at 13:00 CEDT/07:00 EDT. To participate, please call one of the following numbers 10 minutes prior to the call:
From the Netherlands: +31(0)20 709 5189
From the UK: +44 (0)33 3300 0804
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From France: +33 (0)1 70 75 07 11
From Switzerland: +41 (0)22 580 9034
From the US: +1 6319131422
For further international dial-in numbers: http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
Conference Call PIN: 33609588#
Presentation Password: 301238552