Pharming Group Reports Interim Financial Results for the First Nine Months of 2018

Pharming Group Reports Interim Financial Results for the First Nine Months of 2018

PR Newswire

LEIDEN, Netherlands, October 25, 2018

LEIDEN, Netherlands, October 25, 2018 /PRNewswire/ --

Compared with the first nine months of 2017 (on a like-for-like basis): 

Compared with the last quarter ended 30 June 2018: 

Cash increased to €72.2 million (after €7.5m repayment of debt) to invest in key growth drivers  

Pharming Group N.V. ("Pharming" or "the Company") (Euronext Amsterdam: PHARM) presents its (unaudited) interim financial report for the first nine months and the third quarter ended 30 September 2018.

Financial highlights 

Operational highlights during the third quarter 

Operational highlights since the reporting date 

The study was led by Dr. Michael Osthoff at the University Hospital Basel, Basel, Switzerland.  75 eligible patients with known moderate to severe renal function impairment were given either 50 units per kg (up to 4200 units) of RUCONEST® (n=37) or placebo (n=38) immediately prior to treatment with standard-of care contrast medium as part of an elective coronary angiography with or without a percutaneous coronary intervention ("PCI"), and then a second identical treatment four hours after the intervention. 

In the overall study, RUCONEST® showed a statistically-significant effect (p= 0.038) in reducing the rise in urinary Neutrophil Gelatinase-Associated Lipocalin (NGAL), the primary endpoint for the study and a generally recognized early marker of acute renal injury, in patients with diagnosed renal function impairment undergoing interventions enhanced with standard contrast media such as PCIs.  The results were especially clear in the sub-group of patients (n=30) undergoing PCI. The intent-to-treat analysis in this group showed that patients on RUCONEST® had a median increase in peak urinary NGAL concentration within 48 hours of 1.8 ng/ml compared with an increase of 26.2 ng/ml in the placebo arm (p=0.04). This corresponds to a clear difference in the median percentage change in the peak urinary NGAL level within 48 hours of 11.3% in the RUCONEST® arm and 205.2% in the placebo arm (p=0.001).

The overall assessment of the study also showed trends that patients undergoing more invasive interventions and procedures requiring higher volumes of contrast medium experienced a stronger benefit from the RUCONEST® treatment.  The treatment also showed an excellent safety profile comparable to the placebo group - a particularly significant observation considering the high-risk patient group included in the study (average age approximately 77 years, with multiple comorbidities and impaired kidney function).  

This data therefore supports additional clinical investigations for the use of rhC1INH in a new indication where there is significant unmet medical need.

Sijmen de Vries, Chief Executive Officer, commented: 

"I am pleased to report very good results indeed today in a period of intense competition.  The revenue and profit performance reinforces the success of our in-market strategy for RUCONEST®. The encouraging growth for RUCONEST® despite that competition also gives us confidence in our approach to ensure all patients have the least uncertainty, discomfort and disruption from their condition possible.  

In addition, we continue to make good progress in our pipeline, reporting positive data from the first investigator-initiated study of RUCONEST® in contrast-induced nephropathy, and filing clinical trial applications to initiate our clinical development of RUCONEST® to treat and prevent pre-eclampsia.  We also look forward to the data from the comparative investigator-initiated study in HAE at the end of the year, and to new filings for development of additional forms of RUCONEST® in the near future." 

Financial summary 

9 months to 30 September 

   
                                    2018           2018           2017          %    
    Amounts in EURm except per
    share data                   3rd Quarter   1st 9 months   1st 9 months    Change
    Income Statement
    Revenue from product sales      38.6           97.7           56.0          74% 
    Other revenue                    0.2            0.6            0.7         (14%) 
    Total revenue                   38.8           98.3           56.7          73%
    Gross profit                    32.4           82.4           48.8          69%
    Operating result                14.7           31.0           12.7         144%
    Net result                       5.4           11.7          (37.7)        131%
    Balance Sheet  
    Cash & marketable securities    72.2           72.2           38.6          87%
    Share Information  
    Earnings per share (EUR): -
    Undiluted                       0.009         0.019         (0.077)   
    - Fully diluted                 0.008         0.017            n/a         125%

Chief Executive Officer Commentary 

Dr Sijmen de Vries 

Chief Executive Officer 

Outlook 

For the remainder of 2018, the Company expects:

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 distribution is made 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 Kamada.

RUCONEST® is also being examined for approval for the treatment of HAE in young children (2-13 years of age) and 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 at present.

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 are funded by CSIPI. Clinical development will be shared between the partners with each partner taking the costs for their territories under the partnership.

Additional information is available on the Pharming website: http://www.pharming.com

Forward-looking Statements 

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 commercialise 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. 

Consolidated Interim Financial Statements (Unaudited)

For the first nine months ended 30 September 2018

Consolidated statement of income

Consolidated statement of comprehensive income

Consolidated balance sheet

Consolidated statement of cash flows

Appendix: Main Financial Statements reported in US dollars 
(This appendix is not part of the Consolidated Interim Financial Statements)

Consolidated statement of income in US Dollars (unaudited)

Consolidated balance sheet in US Dollars (unaudited)

Consolidated Statement of Income                  

For the first nine months ended 30 September


   
    Amounts in EUR'000, except per share data   YTD 2018   YTD 2017

    Product sales                                 97,677     55,987
    License fees                                     603        741
    Revenues                                      98,280     56,728

    Costs of sales                              (15,844)    (7,919)

    Gross profit                                  82,436     48,809

    Other income                                     473        607

    Research and development                    (17,568)   (13,068)
    General and administrative                   (8,321)    (4,308)

    Marketing and sales                         (26,005)   (19,315)
    Costs                                       (51,894)   (36,691)

    Operating result                              31,015     12,725

    Fair value gain (loss) on revaluation
    derivatives                                    (725)   (15,186)
    Other financial income and expenses         (18,498)   (35,248)
    Financial income and expenses               (19,223)   (50,434)

    Result before income tax                      11,792   (37,709)
    Income tax expense                              (76)          -

    Net result for the period                     11,716   (37,709)

    Attributable to:
    Owners of the parent                          11,716   (37,709)

    Total net result                              11,716   (37,709)

    Basic earnings per share (EUR)                 0.019    (0.077)

    Fully-diluted earnings per share (EUR)         0.017        n/a

  

Consolidated Statement of Comprehensive Income  

For the first nine months ended 30 September


   
    Amounts in EUR'000                      YTD 2018    YTD 2017
    Net result for the period                 11,716    (37,709)

    Currency translation differences              90       (482)

    Items that may be subsequently
    reclassified to profit or loss                90       (482)

    Other comprehensive income, net of
    tax                                           90       (482)

    Total comprehensive income for the
    period                                    11,806    (38,191)

    Attributable to:
    Owners of the parent                      11,806    (38,191)

Consolidated Balance Sheet  

As at date shown    


   
    Amounts in EUR'000               30 September     31 December

                                             2018            2017

    Intangible assets                      56,322          56,631
    Property, plant and equipment           8,298           8,234
    Long term prepayment                    1,968           2,296
    Deferred tax asset                      9,392           9,442
    Restricted cash                         1,191           1,336
    Non-current assets                     77,171          77,939

    Inventories                            20,951          18,334
    Trade and other receivables            23,570          11,260
    Cash and cash equivalents              71,025          58,657
    Current assets                        115,546          88,251

    Total assets                          192,717         166,190

    Share capital                           6,172           5,790
    Share premium                         391,023         370,220
    Legal reserves                          (848)           (938)
    Accumulated deficit                 (348,174)       (356,270)
    Shareholders' equity                   48,173          18,802

    Loans and borrowings                   41,432          58,684
    Deferred license fee income               867           1,467
    Finance lease liabilities                 185             390
    Other financial liabilities            15,773          28,319
    Non-current liabilities                58,257          88,860

    Loans and borrowings                   35,924          21,962
    Deferred license fee income               800             804
    Derivative financial liabilities          889           8,301
    Trade and other payables               31,167          27,198
    Finance lease liabilities                 263             263
    Other financial liabilities            17,244               -
    Current liabilities                    86,287          58,528

    Total equity and liabilities          192,717         166,190

Consolidated Statement of Cash Flows 

For the first nine months ended 30 September


   
    Amounts in EUR'000                                 YTD 2018  YTD 2017

    Operating result                                     31,015    12,725

    Non-cash adjustments:
    Depreciation, amortization                            2,907     2,543
    Accrued employee benefits                             2,316     1,308
    Deferred license fees                                 (603)     (741)

    Operating cash flows before changes in working
    capital                                              35,635    15,835

    Changes in working capital:
    Inventories                                         (2,617)      (54)
    Trade and other receivables                        (12,310)   (9,358)
    Payables and other current liabilities                3,969     2,977
    Total changes in working capital

                                                       (10,958)   (6,435)
    Changes in non-current assets, liabilities and
    equity                                                1,347       524

    Cash generated from (used in) operations before
    interest and taxes                                   26,024     9,924

    Interest received                                         -         -

    Net cash flows generated from (used in) operating
    activities                                           26,024     9,924

    Capital expenditure for property, plant and
    equipment                                           (2,057)   (2,518)
    Investment intangible assets                        (1,826)   (2,189)

    Net cash flows used in investing activities         (3,883)   (4,707)

    Proceeds of loans and borrowings                          -    89,181
    Payments of transaction fees and expenses                 -  (16,051)
    Prepayments and interests on loans and borrowings  (17,990)  (76,984)
    Proceeds of equity and warrants                       7,949     6,110

    Net cash flows generated from (used in) financing
    activities                                         (10,041)     2,256

    Increase (decrease) of cash                          12,100     7,473

    Exchange rate effects                                   123     (973)
    Cash and cash equivalents at 1 January               59,993    32,137

    Total cash and cash equivalents at 30 September      72,216    38,637

    Of which restricted cash                              1,191       248
    Cash and cash equivalents at 30 September            71,025    38,389


Appendix: Main Financial Statements reported in US dollars

The original Financial Statements are reported in Euros. In case of differences of interpretation between the Financial Statements in US Dollars and the Financial Statements in Euros, the Financial Statements in Euros will prevail. 

Consolidated Statement of Income in US Dollars                

For the first nine months ended 30 September


   
    Amounts in $'000, except per share data     YTD 2018   YTD 2017

    Product sales                                116,799     62,789
    License fees                                     722        831
    Revenues                                     117,521     63,621

    Costs of sales                              (18,946)    (8,881)

    Gross profit                                  98,575     54,740

    Other income                                     566        681

    Research and development                    (21,007)   (14,656)
    General and administrative                   (9,950)    (4,831)

    Marketing and sales                         (31,097)   (21,662)
    Costs                                       (62,054)   (41,149)

    Operating result                              37,087     14,271

    Fair value gain (loss) on revaluation
    derivatives                                    (867)   (17,031)
    Other financial income and expenses         (22,541)   (39,531)
    Financial income and expenses               (23,408)   (56,561)

    Result before income tax                      13,679   (42,291)
    Income tax expense                              (91)          -

    Net result for the period                     13,588   (42,291)

    Attributable to:
    Owners of the parent                          13,588   (42,291)

    Total net result                              13,588   (42,291)

    Basic earnings per share ($)                   0.022    (0.086)

    Fully-diluted earnings per share ($)           0.020        n/a

Consolidated Balance Sheet in US Dollars 

As at date shown    


   
    Amounts in $'000                 30 September 31 December

                                             2018        2017

    Intangible assets                      65,323      67,827
    Property, plant and equipment           9,624       9,862
    Long term prepayment                    2,283       2,749
    Deferred tax asset                     10,892      11,309
    Restricted cash                         1,381       1,600
    Non-current assets                     89,503      93,347

    Inventories                            24,299      21,958
    Trade and other receivables            27,337      13,487
    Cash and cash equivalents              82,374      70,254
    Current assets                        134,010     105,699

    Total assets                          223,513     199,046

    Share capital                           7,158       6,935
    Share premium                         453,509     443,412
    Legal reserves                          (984)     (1,124)
    Accumulated deficit                 (403,812)   (426,703)
    Shareholders' equity                   55,871      22,520

    Loans and borrowings                   48,054      70,286
    Deferred license fee income             1,005       1,757
    Finance lease liabilities                 215         467
    Other financial liabilities            18,292      33,918
    Non-current liabilities                67,566     106,428

    Loans and borrowings                   41,665      26,304
    Deferred license fee income               928         962
    Derivative financial liabilities        1,031       9,942
    Trade and other payables               36,147      32,575
    Finance lease liabilities                 305         315
    Other financial liabilities            20,000           -
    Current liabilities                   100,076      70,098

    Total equity and liabilities          223,513     199,046

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