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Press Release

Pharming Announces Progress on Financing

Pharming Group N.V.
Posted on: 14 Nov 16

PR Newswire

LEIDEN, Netherlands, November 14, 2016

LEIDEN, Netherlands, November 14, 2016 /PRNewswire/ --

- Total F inancing P ackage C onsisting of up to 87 M illion, P lanned to C onsi st of D ebt, C onvertible B onds and a R ights I ssue 

- Terms A greed for a N ew D ebt F inancing F acility of US$40 million ( A pproximately €37 M illion ) W ith E xisting and N ew L enders 

- C ornerstone O rders for a N ew C onvertible B ond I nstrument of € 17 M illion to D ate 

- Rights I ssue t o R aise B alance of F unding E xpected to be L aunched S hortly 

Pharming Group N.V. ("Pharming" or "the Company") (EURONEXT: PHARM) today announced that it has made significant progress with financing towards completion of the transaction with subsidiaries of Valeant Pharmaceuticals International, Inc. (NYSE/TSX: VRX) signed on 8 August 2016 for Pharming to acquire the commercialization rights to its own product RUCONEST® in North America.

The Company has signed a term sheet with a syndicate of debt providers for a US$40 million, 42 months debt facility on standard commercial terms (8% interest and one-off 9% final payment at maturity in June 2020). The syndicate includes one of the Company's current lenders. The documentation for the loan instrument is being completed over the coming weeks. The facility is conditional on Pharming raising a minimum amount of €40 million of convertible debt and equity.

Cornerstone investors have also been found for €17 million so far for a five year redeemable convertible bond which will be convertible into shares at a premium of 25% to the 20-day volume weighted average price (VWAP) of the shares for the period prior to the approval of the prospectus by the Netherlands Authority for the Financial Markets (AFM) to be published in connection with the rights issue (Prospectus). The bonds have an 8.5% interest rate and a 20% warrant coverage. The warrant will also convert at 25% premium to the VWAP. Further orders for additional amounts of these bonds are currently being gathered from institutional investors.  

Following the confirmation of the size of the convertible bond, expected later this week and the approval of the Prospectus, the Company will launch a rights issue for the balance of the funds (which, in the absence of additional investors in the convertible bond, will be up to €33 million) to existing shareholders to subscribe for new shares (Rights Shares) at a discount to the VWAP. This discount will be kept as small as possible to reduce dilution of the Company's share price. In the event that not all of the Rights Shares are taken up during the exercise period, the remaining shares represented by rights not taken up (so called Rump Shares) will be placed with interested institutional investors in the US and EU immediately at the same price. Institutional investors who sign up for this before the offer closes to support the issue will receive 25% warrant coverage at a 25% premium to the VWAP. Only the Rights Shares and Rump Shares will be issued in connection with the acquisition.  Those shares that are represented by warrants and convertible bonds will only be issued upon future, subsequent conversion, at a 25% premium to the VWAP.

The Company has also been offered and is evaluating the merits of premium priced alternative convertible equity instruments, periodically redeemable in cash or equity at the discretion of the Company. Such instruments could be used alongside the convertible bond and debt and would then come in lieu of part or all of the Rights Issue. Usage of such instruments, in combination with the debt and the convertible bond, would then further reduce or totally eliminate the need to issue equity at the time of the closing.

Dr Sijmen de Vries , Pharming ' s C E O commented:  

" We are very pleased to have put together a financing package and have alternatives at hand that minimize dilution of ex i sting shareholders and which is attracting high - quality investors, so that we can complete the transaction with Valeant , move RUCONEST forward and will enable Pharming to reach profitability potentially as much as three years earlier than under the Valeant license. With such a financing package we expect to stay well within the limits of the available share capital to help manage dilution for shareholders . Together with the excellent prop hylaxis data which was presented at the American College of Allergy, Asthma and Immunology scientific meeting in San Francisco yesterday and the positive opinion of the European Committee for Medicinal Products for Human Use to allow self-administration for patients in Europe announced on Friday , the future for RUCONEST® is very promising and we are confident that we are creating good value for shareholders, patients and other stakeholders. " 

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 and rest of the world. 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, Netherlands, Oman, Portugal, Qatar, Syria, Spain, Switzerland, Tunisia, United Arab Emirates, United Kingdom 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 the United States by a subsidiary of Valeant Pharmaceuticals International, Inc. (NYSE: VRX/TSX: VRX), following Valeant's acquisition of Salix Pharmaceuticals, Ltd.

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® is also being investigated in a Phase II clinical trial 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 Pompé 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.

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: 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. 

The distribution of this announcement in jurisdictions other than the Netherlands may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the Netherlands will need to inform themselves about, and observe any applicable requirements. Investors will need to base their investment decision on the prospectus and particularly the risk factors as described in the prospectus that the Company will publish in connection with the rights issue. When made generally available, copies of the prospectus may be obtained at no cost from the Company or through the website of the Company, subject to certain regulatory restrictions. 

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for, any securities in the Company or any other entity. Any such offer pursuant to the proposed rights issue will be made solely by means of a prospectus to be published in due course and any supplement or amendment thereto and any acquisition of securities in the Company should be made solely on the basis of the information contained in such prospectus. 

Neither this announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, in whole or in part, in, into or from the United States of America (including its territories and possessions, any state of the United States of America (the " United States " or the " US " )), Australia, Canada, Japan or the Republic of South Africa or transmitted, distributed to, or sent by, any national or resident or citizen of any such countries or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each a " Restricted Jurisdiction " ). Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian,  Japanese or South African securities laws. 

The securities mentioned in this announcement have not been, and will not be, registered under the US Securities Act of 1933 (as amended) (the " US Securities Act " ), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.  No public offer of the shares is being made in the United States and the information contained herein does not constitute an offering of securities for sale in the United States.    

This announcement is directed only at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments and are: (i) if in a member state of the European Economic Area, qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive ( " Qualified Investors " ); or (ii) if in the United Kingdom, Qualified Investors and fall within: (a) article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the " Order " ); or (b) article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order (all such persons together being referred to as " Relevant Persons " ). The term " Prospectus Directive " means Directive 2003/71/EC as amended and includes any relevant implementing measures in each member state of the European Economic Area.  

Contacts:
Pharming Group N.V.
Sijmen de Vries, CEO, Tel: +31 71 524 7400
Robin Wright, CFO, Tel: +31 71 524 7400

FTI Consulting:
Julia Phillips/ Victoria Foster Mitchell, Tel: +44 203 727 1136

Lifespring Life Sciences Communication
Leon Melens, Tel: +31 20 705 95 90

PR Newswire
www.prnewswire.com

Last updated on: 14/11/2016

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