Pharming Group Reports Strong Preliminary Financial Results for 2018 Including First Year of Net Profit

Pharming Group Reports Strong Preliminary Financial Results for 2018 Including First Year of Net Profit

PR Newswire

LEIDEN, Netherlands, March 7, 2019

LEIDEN, Netherlands, March 7, 2019 /PRNewswire/ --

Highlights:  


Pharming Group N.V. ("Pharming" or "the Company") (Euronext Amsterdam: PHARM) presents its preliminary (unaudited) financial report for the full year ended 31 December 2018. The Company will hold a conference call at 13.00 CET/07.00 EST today. Dial in details can be found on page 11 of this report.

Chief Executive Officer Sijmen de Vries said:  

"Throughout 2018, as for 2017, we continue to see consistent growth in the numbers of patients benefitting from RUCONEST® in acute attacks of hereditary angioedema ("HAE"). The initial significant surge in growth was caused by patients starting RUCONEST® therapy after we had provided unrestricted emergency treatments free of charge, to cope with the supply shortages of competitor plasma C1 inhibitor products.  We retained many of these patients and added new patients throughout the year. The increasing sales from our growing patient base resulted in Pharming's first year of net profit, despite intense competitive pressure resulting from recent product launches. It also enabled us to increase investment to expand our pipeline, embarking on ambitious development plans for improved delivery methods for RUCONEST® in HAE and for new larger indications. We also continued to advance our existing pipeline programs for Pompe disease and Fabry's disease. We are confident that with our increasing patient reach and advancing pipeline, we will to continue to deliver significant value to all our stakeholders." 

Chief Executive Officer's Commentary 

2018 was an exciting year for Pharming. We built on the strong foundations of the successful re-launch of RUCONEST® in the USA in 2017, continuing impressive product sales growth from €88.7 million in 2017 to €134.3 million in 2018, an increase of 51%. As well as strong growth in the USA, we continued to develop RUCONEST® in all key markets.  In Europe, direct sales grew well during the year, particularly in the major markets of Western Europe, resulting in strong gains in France and the UK and continued growth in Germany, Austria and the Netherlands.

First year of Net Profits  

As result of the steady sales growth, the Company was profitable at the net level in every quarter and for the year as a whole.  Total net profit for the year ended at €25.0 million, representing a net margin of 19% and well ahead of analysts' forecasts. Operating profit for the year (i.e. EBIT), before a one-off small non-cash correction, almost doubled to €40.6 million (2017: €21.9 million on the same basis), representing an improved operating margin of 30% (2017: 24%). This was achieved despite significant investments in providing free-of-charge emergency support to patients during the stock outages of competitors at the start of the year.

As a result of the continued sales growth in the USA, we achieved the sales level required to trigger the first US$20 million milestone payment due to Bausch Health Companies Inc. (formerly Valeant Pharmaceuticals International, Inc.) which was duly made earlier this week.  If sales growth continues at or near the current level, the remaining US$45 million milestones will also be triggered in this or future years.

As a result, we have prudently made a (non-cash) provision for additional fair value of the contingent consideration in the balance sheet, and a corresponding charge to the profit and loss account, of €21.2 million ($25.0 million).

In addition, the increasing profitability of Pharming means that we are likely to be able to use all of our accumulated net operating tax losses, and so we have increased the deferred tax asset which recognises these by a net amount of €25.6 million (2017: €9.4 million), being mainly the tax effect of the total accumulated losses to date in the Netherlands. These two provisions reflect our strong confidence in the performance of our US and EU commercial teams and patients' increasing confidence in the use of RUCONEST® as their therapy of choice to treat attacks of HAE.

Clear product differentiation 

The HAE market remains dynamic, and patient choice continues to increase as new products enter the market for prophylaxis.  RUCONEST® has a unique potential competitive advantage in that it is currently the only product with the future potential to be approved for both prophylaxis and treatment of attacks of HAE. Furthermore, in order to increase the convenience of RUCONEST® for patients, we are developing new forms of RUCONEST® with new routes of administration to address both acute attacks and prophylaxis of HAE, such as (painless) intradermal, sub-cutaneous and intramuscular dosage forms with a new ready-mixed liquid vial.

Investing in sustainable long-term growth 

At the end of 2017, we explained our strategy for sales growth in HAE based on creating an optimized sales infrastructure for our needs. During 2018 we have been able to develop this strategy further to add programs for new routes of administration for RUCONEST® and preparation for expansion of rhC1INH into other larger indications, specifically pre-eclampsia and acute kidney injury. We also continued preparation of a clinical trial program for α-glucosidase for Pompe disease.  This enhanced strategy and developing pipeline provides Pharming with excellent potential to deliver strong sustainable growth for the long term in these very large areas of unmet medical needs.

None of these achievements and development programs would be possible without the support, expertise and hard work of all our employees. I would like to take this opportunity once again to thank all Pharming employees as well as all of our investors, partners and debt providers for their support and commitment throughout 2018, which enabled us to execute on the commercial development of the Company to create a platform for continued growth.

I look forward with confidence to continuing the upward trajectory of Pharming in 2019, with sales increasing further, new exciting pipeline projects and new opportunities for enhanced shareholder value.

Leiden, 7 March 2019 
Sijmen de Vries
Chief Executive Officer and Chairman of the Board of Management

Financial summary 


   
                                                       2017        %
                                            2018    Restated**  Change

    Amounts in EURm except per share data                      
    Income Statement                         134.3      88.7      51%
    Product Sales                              0.8       0.9     (15%)
    License Revenue                          135.1      89.6      51%
    Total Revenue                            113.0      77.2      46%
    Gross profit                              38.0      21.9      74%
    Operating result                         (37.1)   (107.6)    (66%)
    Financial Income, expenses and
    adjustments                               24.1       9.4      n/a*
    Tax credit/(expense)                      25.0     (76.2)           
    Net result                                  
    Balance Sheet                             81.5      60.0      36%
    Cash & marketable securities           
    Share Information                        0.041    (0.152)    126%
    Earnings per share before dilution (EUR)     


*   The tax credit is principally a one-off credit reflecting the balance of the Company's net operating losses taken on the balance sheet, and is therefore not directly comparable year on year. 

** Prior year's financial statements have been restated as detailed below under Financial Highlights on page 5. 

Summary of 2018 

Operational highlights 


The Capital Markets Day included presentations from key opinion leaders in HAE and pre-eclampsia. Professor Marc Riedl, Professor of Medicine at the University of California, San Diego, Clinical Director of the US HAEA Angioedema Center and a world expert on the diagnosis, treatment and etiology of hereditary angioedema, and Professor Gustaaf Dekker, of the school of Obstetrics and Gynaecology at the University of Adelaide and a world expert on the etiology and treatment of pre-eclampsia, made presentations of the potential value of C1 esterase inhibitor in these conditions.


The positive results were especially clear in the sub-group of patients undergoing percutaneous coronary interventions such as stent insertions. The intent-to-treat analysis in this group showed that patients on RUCONEST® had a median percentage change in peak urinary Neutrophil Gelatinase-Associated Lipocalin within 48 hours, the primary endpoint for the study and a generally-recognized early marker of acute renal injury, 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.

This data therefore supports additional clinical investigations for the use of rhC1INH in this new indication where there is significant unmet medical need and forms the basis for a follow on study that is currently being designed.  


Financial highlights 


Restatement of prior year 


After the year end 

Since 31 December 2018, the following additional events have occurred:


Financial review 

Revenues 

Revenues increased to €135.1 million in 2018 (2017: €89.6 million). Both 2017 and 2018 include amounts of deferred license revenue released, reflecting a portion of earlier license fee payments from partners including Swedish Orphan Biovitrum, and China State Industry for Pharmaceutical Industry which have been allocated across a number of financial years in accordance with accounting guidelines. These amounts were €0.8 million in 2018 and €0.9 million in 2017.  

Revenues from product sales by Pharming and its partners increased to €134.3 million (2017: €88.7 million) reflecting a good year overall for RUCONEST®. Sales in the USA produced €126.6 million ($149.3 million), up from €83.7 million in 2017. This shows the effect on the top line of the effective execution of commercialisation in the USA.

Sales for RUCONEST® in Europe and the Rest of World ("RoW") were €7.7 million (2017: €5.0 million), reflecting growth in direct sales by Pharming in the countries recovered from SOBI in 2016, supported by increasing sales of our partners Cytobioteck and SOBI.

Costs of product sales in 2018 amounted to €22.2 million (2017: €12.4 million), reflecting the strongly increased sales volume and savings obtained by better inventory management, plus the cost of contributing free drug to patients unable to afford health insurance and also during the stock limitations at competitors early in the year.

Gross profit increased to €113.0 million in 2018 (2017: €77.2 million), an increase of 46%. The main reasons for this increase were the increased sales in the US and EU.

Operating Costs 

Operating costs increased to €75.0 million in 2018 net of grant income (2017: €55.3 million on the same basis). This increase was substantially due to the added cost of clinical research activities relating to the new indications and forms of RUCONEST® as well as the development cost write-back referred to above.  There were small increases in marketing and sales activities both in the US and in Europe, mainly in France and the United Kingdom, and in general and administrative costs.

Marketing and sales costs of €34.5 million (2017: €31.4 million) reflect Pharming's additional new full direct commercialization activities in the US and in France and the United Kingdom in Europe, which were increased slightly during the year as a result of additional sales representatives in the USA.

R&D costs within these figures increased from €18.7 million in 2017 to €28.9 million in 2018. The increased costs mainly relate to developing the new versions of RUCONEST®, preparing for the clinical studies of rhC1INH in pre-eclampsia and acute kidney injury, and continuing work on the preparation and production of α-glucosidase for Pompe disease and α-galactosidase for Fabry disease using Pharming's proprietary technology platform.

General and administrative costs increased to €12.2 million (2017: €6.0 million). The increase is mainly related to the addition of senior management in the EU and US, costs incurred in connection with management of a more internationally-active company.

Operating Result 

Operating results improved very strongly to a profit of €38.0 million in 2018 from €21.9 million in 2017, an increase of 73% in spite of considerable increases in marketing and sales and R&D activity, mainly due to the effect of strong sales growth and efficient production of RUCONEST® in major markets.  The basic underlying adjusted operating result was €40.6 million, but this was reduced by a one-off write-back of previously capitalised development costs of €2.6 million relating to a superseded version of the small vial now under development. Operating costs increased significantly, reflecting the increased activity preparing for new clinical studies for pre-eclampsia and acute kidney injury, as well as development work on new forms of RUCONEST® including the concentrated liquid vial format and intramuscular and subcutaneous routes of administration.

Financial income and expenses 

The 2018 net loss on financial income and expenses was €37.1 million, compared with a loss of €107.6 million a year earlier. This is mainly due to two items: (i) the interest on loans and borrowings and non-cash adjustments thereto, totalling approximately €14.3 million; and (ii) the increase in the provision for contingent consideration (i.e. the milestones due to Bausch Health Companies Inc. upon reaching certain sales targets) of €21.2 million.  A loss was also recorded on the change of value of the loans and borrowings as a result of exchange rates during the year.

Taxation 

As a result of the growth in sales, it is now probable that the Company will be able to use all its remaining net operating tax losses from previous years going forward. The Board of Management has therefore elected to report an increase in the deferred tax asset in accordance with IFRS, reflecting the timing differences between the tax value of those losses and the time when they can be exercised. This has led to another credit to the income tax charge (i.e. a positive movement) of €24.1 million in 2018 (2017: €9.4 million).

Net Result 

For the first time in its history, Pharming Group reported net profits in 2018. The net result of a profit of €25.0 million represented a reversal of the loss of €76.2 million in 2017. The main point of difference was the very large adjustments to profit required in 2017 in connection with the amortizing bonds and their subsequent refinance, together with a significant adjustment to fair value of derivative financial liabilities stemming from the large share price rise during 2017.  The elimination of these instruments has resulted in simplification of the capitalization table which has led to much smaller adjustments relating to fair value changes during 2018.  Together with a stronger operating result from larger sales, this has enabled the Company to reach net profitability which we believe will be sustainable in future periods.

Inventories 

Inventories reduced slightly from €18.3 million in December 2017 to €17.3 million in December 2018, largely due to the increase in sales above the effect of movement of inventory from lower value raw materials to higher value drug product.  This level of inventory should enable us to meet the naturally improving sales level especially in the US and in Europe.

Cash and cash equivalents 

The cash position including restricted cash increased from €60.0 million at year-end 2017 to €81.5 million at year-end 2018. This was mainly due to the strong sales performance of RUCONEST® especially in the third and fourth quarters, and occurred despite considerable increases in marketing and R&D activities and the repayment of over €14.5 million ($16.7 million) of the Orbimed loan facility.  Cash generation has been strong across all four quarters of 2018, as sales revenues grew and as faster credit collection was achieved.  

The Company's current pattern of sales growth, together with the strong cash generation and cash balance and the tight control over costs going forward, forms the basis of the Board of Management's view that Pharming Group should be accounted for as a going concern.

As the Company's sales are largely in US dollars and the Company's debt is largely in US dollars, a natural hedge exists which means that any decline in the US dollar exchange rate over the year to reduce sales reported in Euros has a balancing effect of reducing the size of the debt liability when reported in Euros, and vice versa. These movements had a total cash effect of a gain of €2.9 million (2017: loss of €1.1 million).

Other Financial Liabilities 

The strong sales performance in 2018 has led the Board of Management to increase the book value of the contingent consideration from €28.3 million in 2017 to €49.5 million (US$56.6 million) in 2018. This is essentially a provision for potential future costs (specifically the remaining sales milestone payments to Valeant) of contingent liabilities taken on in the context of the reacquisition of the commercial rights for RUCONEST® in North America in December 2016. This is a strong expression of confidence in the sales performance in the USA for RUCONEST®, which we believe will continue for the time being despite increased competition in the HAE marketplace. As the first milestone amount was due to be paid in the first quarter of 2019, the amount of this payment ($20.0 million or €17.5 million) is shown in the current liabilities section of the balance sheet as at 31 December 2018, with the remainder shown under long term liabilities.  Release of part of this provision will have the effect of negating the effect of the milestone payment on the Company's income statement in the first quarter 2019.

Deferred Tax Assets 

At the same time, because we believe that we will continue to generate positive net quarterly results and thus taxable profits in 2019 and beyond, we have recorded an increase in the deferred tax asset to €35.1 million (2017: €9.4 million) in respect of net operating losses which we expect to be able to use in future periods. The net effect of this change is an increase in the net result of €24.1 million. After many years of operating losses, this is a similar strong statement in support of our belief in the underlying sustainable performance of the Company.

Equity 

The equity position changed from €16.1 million in December 2017 to €61.8 million in December 2018, mainly due to the changes in: the net result achieved by the Company; the equity increases from conversion or redemption of options, warrants and bonds. This represents an increase of 284%.

Performance of Pharming shares 

During 2018, the Pharming stock price fluctuated around an average price of €1.15 per share. The year-end price was €0.76 (2017: €1.13), with a high of €1.57 in both January and June 2017 and a low of €0.68 in December 2018.

The closing number of shares as at the reporting date was 621,501,238 (2016: 579,014,891). New issues of stock representing a total of 42,486,347 shares were made to investors during the year related to the conversion of the remaining Ordinary Bonds due 2021, exercise of warrants, and exercise of employee options. As at the date of this report, the fully diluted number of shares is 663,472,724 and the number of shares in issue is 622,002,770.  

Outlook 2019 

For the remainder of 2019, the Company expects:


No further financial guidance for 2019 is provided.

The Board of Management 

Sijmen de Vries, CEO
Bruno Giannetti, COO
Robin Wright, CFO

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 commercialized by Pharming in Algeria, Andorra, Austria, Bahrain, Belgium, France, Germany, Ireland, Jordan, Kuwait, Lebanon, Luxembourg, Morocco, the Netherlands, Oman, Portugal, Qatar, Syria, Spain, Switzerland, Tunisia, the United Arab Emirates, the United Kingdom, the United States of America and Yemen.

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 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 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 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. 

 

Conference call information 

Today, Chief Executive Officer Sijmen de Vries and Chief Financial Officer Robin Wright will discuss the preliminary financial results for 2018 in a conference call at 13.00 (CET) / 12:00 (GMT) / 07:00 (EST). To participate, please call one of the following numbers 10 minutes prior to the call:

From the Netherlands:    
+31 (0) 20 709 5189
Toll-free 0800 405 0000

From the UK:        
+44 (0) 33 3300 0804
Toll-free 0800 358 9743

From Belgium:        
+32 (0) 2 403 5814
Toll-free 0800 29913

From France:        
+33 (0) 1 70 75 07 11
Toll-free 0800 946 608

From Switzerland:    
+41 (0) 22 580 9034
Toll-free 0800 721 298

From the US:        
+1 631 913 1422
Toll-free 855 857 0686

For other numbers, please see : http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf

Conference call PIN: 26644559#

To access the live conference on screen, please follow the link below:  

Presentation link:  

    
https://arkadin-event.webex.com/arkadin-event/onstage/g.php?MTID=e0c4c862448bba6c64e4b769306308ac7 .
Presentation Password: 301281321

Pharming Group N.V. 

Preliminary Consolidated Financial Statements (Unaudited) 

For the year ended 31 December 2018 

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Consolidated Statement of Income 

For the year ended 31 December


   
                                                                                      2017
    Amounts in EUR '000                                                 2018     restated*
    Product sales                                                    134,326        88,677
    License fees                                                         804           943
    Revenues                                                         135,130        89,620
    Costs of sales                                                  (22,180)      (12,445)
    Gross profit                                                     112,950        77,175
    Other income                                                         684           790
    Research and development                                        (28,882)      (18,657)
    General and administrative                                      (12,221)       (5,974)
    Marketing and sales                                             (34,539)      (31,422)
    Costs                                                           (75,642)      (56,053)
    Operating result                                                  37,992        21,912
    Fair value gain (loss) on revaluation derivatives                  (495)      (42,063)
    Other financial income and expenses                             (36,640)      (65,538)
    Financial income and expenses                                   (37,135)     (107,601)
    Result before income tax                                             857      (85,689)
    Income tax credit/(expense)                                       24,136         9,442
    Net result for the year                                           24,993      (76,247)
    Attributable to:
    Owners of the parent                                              24,993      (76,247)
    Total net result                                                  24,993      (76,247)
    Basic earnings per share (EUR)                                     0.041       (0.152)
    Fully-diluted earnings per share (EUR)                             0.038          n/a

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.

Consolidated Statement of Comprehensive Income 

For the year ended 31 December


   
                                                                     2017
    Amounts in EUR '000                                   2018  restated*
    Net result for the year                             24,993   (76,247)
    Currency translation differences                       348      (998)
    Items that may be subsequently reclassified to
    profit or loss                                         348      (998)
    Other comprehensive income, net of tax                 348      (998)
    Total comprehensive income for the year             25,341   (77,245)
    Attributable to:
    Owners of the parent                                25,341   (77,245)

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.

Consolidated Balance Sheet 

As at 31 December


   
                                                         2017
    Amounts in EUR '000                        2018 restated*
    Non-current assets
    Intangible assets                        52,435    56,631
    Property, plant and equipment             8,402     8,234
    Long-term prepayments                     2,006     2,296
    Deferred tax asset                       35,082     9,442
    Restricted cash                           1,204     1,336
    Total non-current assets                 99,129    77,939

    Current assets
    Inventories                              17,315    18,334
    Trade and other receivables              17,814    11,260
    Cash and cash equivalents                80,311    58,657
    Total current assets                    115,440    88,251
    Total assets                            214,569   166,190

    Equity
    Share capital                             6,215     5,790
    Share premium*                          387,525   363,818
    Legal reserves                            (590)     (938)
    Accumulated deficit                   (331,399) (352,560)
    Shareholders' equity                     61,751    16,110
    Non-current liabilities
    Loans and borrowings*                    37,267    59,161
    Deferred tax liabilities                     87         -
    Contract liabilities                        667     1,467
    Finance lease liabilities                   164       390
    Other financial liabilities              32,034    28,319
    Total non-current liabilities            70,219    89,337
    Current liabilities
    Loans and borrowings*                    35,235    22,398
    Contract liabilities                        800       804
    Derivative financial liabilities*           228    10,080
    Trade and other payables                 28,589    27,198
    Finance lease liabilities                   263       263
    Other financial liabilities              17,484         -
    Total current liabilities                82,599    60,743

    Total equity and liabilities            214,569   166,190

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.

Consolidated Statement of Changes in Equity  

For the year ended 31 December 2018


                                                  Attributable to owners of the parent


   
                                                   Number of        Share        Share
    Amounts in EUR '000                        shares ('000)      capital      Premium
    Balance at 1 January 2017                        455,587        4,556      301,876
    Result for the year*                                   -            -            -
    Other comprehensive income for the year                -            -            -
    Total comprehensive income for the year                -            -            -
    Share-based compensation                               -            -            -
    Bonuses settled in shares                            909            9          246
    Shares issued for cash/ conversion of
    bonds                                             63,477          635       43,872
    Warrants exercised/ issued                        58,123          581       17,657
    Options exercised                                    919            9          167
    Total transactions with owners,

    recognized directly in equity                    123,428        1,234       61,942
    Balance at 31 December 2017                      579,015        5,790      363,818
    Restatement                                            -            -            -
    Balance at 31 December 2017 after
    restatement                                      579,015        5,790      363,818
    Result for the year                                    -            -            -
    Other comprehensive income for the year                -            -            -
    Total comprehensive income for the year                -            -            -
    Share-based compensation                               -            -            -
    Bonuses settled in shares                          1,625           16        1,284
    Shares issued for cash / conversions of
    bonds                                              2,746           28        3,117
    Warrants exercised/ issued                        11,122          111        2,305
    Options exercised                                 26,993          270       17,001
    Total transactions with owners, recognized
    directly in equity                                42,486          425       23,707
    Balance at 31 December 2018                      621,501        6,215      387,525

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.


Consolidated Statement of Changes in Equity (Continued)
 
For the year ended 31 December 2018
 
                                                     Attributable to owners of the parent


   
                                                    Legal   Accumulated
    Amounts in EUR '000                          reserves       Deficit Total Equity
    Balance at 1 January 2017                          60     (279,025)       27,467
    Result for the year                                 -      (76,247)     (76,247)
    Other comprehensive income for the year         (998)             -        (998)
    Total comprehensive income for the year         (998)      (76,247)     (77,245)
    Share-based compensation                            -         2,712        2,712
    Bonuses settled in shares                           -             -          255
    Shares issued for cash/ conversion of
    bonds                                               -             -       44,507
    Warrants exercised/ issued                          -             -       18,238
    Options exercised                                   -             -          176
    Total transactions with owners,

    recognized directly in equity                       -         2,254       65,888
    Balance at 31 December 2017*                    (938)     (352,560)       16,110
    Restatement                                         -             -            -
    Balance at 31 December 2017 after
    restatement                                     (938)     (352,560)       16,110
    Result for the year                                 -        24,993       24,993
    Other comprehensive income for the year           348             -          348
    Total comprehensive income for the year           348        24,993       25,341
    Share-based compensation                            -         2,531        2,531
    Bonuses settled in shares                           -         (606)          694
    Shares issued for cash / conversions of
    bonds                                               -             -        3,145
    Warrants exercised/ issued                          -             -        2,416
    Options exercised                                   -       (5,757)       11,514
    Total transactions with owners,

    recognized directly in equity                       -       (3,832)       20,300
    Balance at 31 December 2018                     (590)     (331,399)       61,751

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.

Consolidated Statement of Cash Flows  

For the year ended 31 December


   
    Amounts in EUR'000                                        2018        2017
    Operating result                                        37,992      21,912
    Non-cash adjustments:
    Depreciation, amortization                               6,559       3,415
    Accrued employee benefits                                3,270       2,712
    Deferred license fees                                    (804)       (943)
    Operating cash flows before changes in working
    capital                                                 47,017      27,096
    Changes in working capital:
    Inventories                                              1,019       (393)
    Trade and other receivables                            (6,554)     (3,345)
    Payables and other current liabilities                   1,391      14,837
    Total changes in working capital                       (4,144)      11,099
    Changes in non-current assets, liabilities and
    equity                                                 (1,098)          15
    Cash generated from / (used in) operations before
    interest and taxes                                      41,775      38,210
    Interest received                                           18           3
    Income taxes paid                                      (1,417)           -
    Net cash flows generated from / (used in) operating
    activities                                              40,376      38,213
    Capital expenditure for property, plant and
    equipment                                              (2,496)     (3,248)
    Investment in intangible assets                        (1,273)     (2,797)
    Acquisition of business                                      -           -
    Net cash flows generated from / (used in) investing
    activities                                             (3,769)     (6,045)
    Proceeds of debt loans and borrowings                        -      91,333
    Payments of transaction fees and expenses                    -     (3,352)
    Prepayment on loans and borrowings                    (15,137)    (86,258)
    Redemption of bonds                                    (2,257)     (3,934)
    Interest on loans                                     (11,063)     (7,877)
    Proceeds of equity and warrants                         10,496       6,833
    Net cash flows generated from / (used in) financing
    activities                                            (17,961)     (3,255)
    Increase (decrease) of cash                             18,646      28,913
    Exchange rate effects                                    2,876     (1,057)
    Cash and cash equivalents at 1 January                  59,993      32,137
    Total cash and cash equivalents at 31 December          81,515      59,993

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 year ended 31 December


   
                                                                                      2017
    Amounts in $ '000                                                   2018     restated*
    Product sales                                                    158,773       100,223
    License fees                                                         950         1,066
    Revenues                                                         159,724       101,289
    Costs of sales                                                  (26,127)      (14,065)
    Gross profit                                                     133,507        87,223
    Other income                                                         808           893
    Research and development                                        (34,139)      (21,086)
    General and administrative                                      (14,445)       (6,752)
    Marketing and sales                                             (40,825)      (35,513)
    Costs                                                           (89,409)      (63,351)
    Operating result                                                  44,907        24,765
    Fair value gain (loss) on revaluation derivatives                  (585)      (47,540)
    Other financial income and expenses                             (43,308)      (74,071)
    Financial income and expenses                                   (43,894)     (121,611)
    Result before income tax                                           1,013      (96,846)
    Income tax credit/(expense)                                       28,529        10,671
    Net result for the year                                           29,542      (86,174)
    Attributable to:
    Owners of the parent                                              29,542      (86,174)
    Total net result                                                  29,542      (86,174)
    Basic earnings per share ($)                                       0.048       (0.172)
    Fully-diluted earnings per share ($)                               0.045           n/a

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.

Consolidated Balance Sheet 

As at 31 December


   
                                                         2017
    Amounts in $'000                           2018    restated*
    Non-current assets
    Intangible assets                        59,980    67,827
    Property, plant and equipment             9,611     9,862
    Long-term prepayments                     2,295     2,750
    Deferred tax asset                       40,130    11,309
    Restricted cash                           1,377     1,600
    Total non-current assets                113,394    93,348

    Current assets
    Inventories                              19,807    21,959
    Trade and other receivables              20,377    13,486
    Cash and cash equivalents                91,868    70,253
    Total current assets                    132,052   105,698
    Total assets                            245,445   199,046

    Equity
    Share capital                             7,109     6,935
    Share premium*                          443,290   435,745
    Legal reserves                            (675)   (1,123)
    Accumulated deficit                   (379,087) (422,261)
    Shareholders' equity                     70,637    19,295
    Non-current liabilities
    Loans and borrowings*                    42,630    70,857
    Deferred tax liabilities                    100         -
    Contract liabilities                        763     1,757
    Finance lease liabilities                   188       467
    Other financial liabilities              36,644    33,918
    Total non-current liabilities            80,324   106,999
    Current liabilities
    Loans and borrowings*                    40,305    26,826
    Contract liabilities                        915       963
    Derivative financial liabilities*           261    12,073
    Trade and other payables                 32,703    32,575
    Finance lease liabilities                   301       315
    Other financial liabilities              20,000         -
    Total current liabilities                94,485    72,752

    Total equity and liabilities            245,445   199,046

* Prior year's financial statements have been restated, as disclosed in Financial Highlights on page 5.

 

Contact: 

Pharming Group N.V. 

Sijmen de Vries, CEO, Tel: +31 71 524 7400
Robin Wright, CFO, Tel: +31 71 524 7432

FTI Consulting, London, UK: 

Julia Phillips/ Victoria Foster Mitchell, T: +44 203 727 1136

LifeSpring Life Sciences Communication, Amsterdam, The Netherlands:  

Leon Melens, Tel: +31 6 53 81 64 27

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