PharmiWeb.com - Global Pharma News & Resources
29-Oct-2020

Pharming Group reports financial results for the first nine months of 2020

Continued solid performance and strong recovery of sales in Q3 2020

Delivered 9.2% increase in revenues, 19.8% increase in operating profit and 6.4% increase in net profit (59% increase on constant currency basis) year-on-year for the first nine months of 2020

Company has initiated the process for a secondary listing in the US on Nasdaq

LEIDEN, Netherlands, Oct. 29, 2020 /PRNewswire/ -- Pharming Group N.V. ("Pharming" or "the Company") (Euronext Amsterdam: PHARM) presents its (unaudited) financial report for the nine months and third quarter ended 30 September 2020.

Financial summary

Amounts in €m except per share data

Q3

2020

Nine months 2020

Nine months 2019

% Change

Income Statement

Revenues

Gross profit

Operating profit

Net profit

46.1

41.3

18.8

7.5

134.7

120.0

51.1

25.6

123.4

107.1

42.7

24.1

9.2%

12.0%

19.7%

6.2%

Balance Sheet

Cash & cash equivalents

156.1

156.1

64.4

142.4%

Share Information

Earnings per share (€):  

-  Undiluted

-  Fully diluted

0.011

0.010

0.040

0.035

0.038

0.036

5.3%

(2.8%)

Financial highlights

  • Delivered revenue of €134.7 million in the first nine months of 2020, a 9.2% increase year-on-year (nine months of 2019: €123.4 million).
  • Quarter-on-quarter revenues strongly recovered, delivering an increase of 17.3% in Q3 2020 (24.7% at constant currency) compared with Q2 2020, demonstrating continued underlying growth in HAE patients using RUCONEST®, following a move to more online sales and marketing activities during the COVID-19 pandemic.
  • US revenues increased 8% year-on-year to €129.3 million (nine months of 2019: €119 million).
  • In Europe and the rest of world (RoW), revenues for the first nine months of 2020 increased 26% year-on-year to €5.4 million (nine months of 2019: €4.3 million), as the Company continues to build out its EU commercial infrastructure and expand into new territories following the re-acquisition of EU rights for RUCONEST® from Swedish Orphan Biovitrum (SOBI) in January 2020.
  • Operating profit in the first nine months of 2020 increased 19.7% year-on-year to €51.1 million (nine months of 2019: €42.7 million).
  • Other financial expenses totalling €18.3 million were affected by one-off payments of fees and penalties as a result of the final payment of the Orbimed loan facility in January 2020 (€4.5 million). In addition, as result of the sudden and significant decrease in the US dollar versus the Euro over the period and during Q3 in particular, significant negative currency effects (€9.0 million) were incurred on the cash reserves invested in US government securities and on the continuous inflow of mainly US dollars from revenues.
  • Net profit increased 6.2% year-on-year to €25.6 million (nine months of 2019: €24.1 million), despite the negative currency effects as result of the US Dollar decrease versus the Euro. On a constant currency basis, net profit increased 59% to €34.6 million.
  • Positive cashflows from operations continued during Q3 2020 (€14.1 million), resulting in a cash position of €156.1 million at 30 September 2020, despite significant negative currency effects incurred on cash reserves primarily invested in US dollar denominated US government securities and the payment of the final €2.5 million milestone to SOBI in Q3 2020.
  • Equity position improved from €104.7 million at the end of December 2019 to €136.3 million at the end of September 2020.
  • Other financial liabilities, which refer to the contingent consideration reserved for the final successful sales performance milestone of US$25 million to Bausch Health, did not increase in the first nine months of 2020, as compared to the same period in 2019. As a result, the Company's estimation of the likelihood of paying this milestone in the future has not changed during the period.
  • In the first nine months of 2020, a total of 6,732,152 new shares have been issued resulting from various exercises of options. The number of issued shares as of 30 September 2020 is 638,055,619. The fully diluted number of shares as of 29 October 2020 is 756,428,631.

Operational highlights

  • On 10 August 2020, the Company announced the enrollment of the first patient in a randomised, controlled, investigator-initiated clinical trial in up to 150 patients for treatment with rC1INH of patients with confirmed COVID-19 infections hospitalised with related severe pneumonia at the University Hospital Basel in Basel, Switzerland. This trial continues to recruit and has since expanded to other centres in Switzerland and is in the last stages of preparation in centres in Mexico and Brazil.
  • On 17 August 2020, the Company announced the publication of data in the peer-reviewed journal, Frontiers in Immunology, from a compassionate use programme of five patients with confirmed COVID-19 infections hospitalised with related severe pneumonia that were treated with rhC1INH at the University Hospital Basel, Switzerland. The publication is available on the Company's website: https://www.pharming.com/news/pharming-announces-publication-data-compassionate-use-programme-ruconestr-covid-19-patients

Post-period highlights

  • On 21 October 2020, the Company announced that the European Commission has granted orphan drug designation for leniolisib for the treatment of activated phosphoinositide 3-kinase delta syndrome, based on a positive opinion from the Committee for Orphan Medicinal Products of the European Medicine Agency. The European Commission orphan drug designation provides certain regulatory procedural and financial incentives including, but not limited to, product market exclusivity for ten years in the EU following regulatory approval.
  • On 29 October 2020, the Company announced it has initiated the process for a secondary listing in the US on Nasdaq via a Level 2 ADR programme, which does not include plans for any fundraising. The Company has not made any decisions regarding either the timing or the terms of the Level 2 ADR programme and there can be no certainty that the Nasdaq listing in the US will take place. An Extraordinary General Meeting of Shareholders will be held on 11 December 2020 for a proposal to amend the Company's Articles of Association to implement a one-tier Board structure in anticipation of the launch of the Level 2 ADR Programme and the associated Nasdaq listing. (Please see separate announcement today for further details regarding the EGM).
  • The Nasdaq listing process does not include any plans for approvals of additional fund raising.
  • Also announced today, with the US dollar being the dominant currency as a result of continuing positive cashflows in US dollars and investments in mainly dollar denominated US government securities, the Company will change its reporting currency from Euro to US dollar from 1 January 2021 onwards.

COVID-19 update

Pharming continues to comply with international guidance and requirements across its operations to prioritise the health and safety of its employees during the COVID-19 pandemic.

An update on the impact of COVID-19 on the operations of the business is summarised below:

  • No impact on the upscaling or continued production of RUCONEST®
  • No impact on the availability or distribution of RUCONEST® to HAE patients
  • The recruitment of new patients in ongoing clinical trials has been temporarily halted; patients already incorporated into ongoing clinical trials are continuing to receive treatment
  • As a result of halted recruitment, timelines for the pre-eclampsia and acute kidney injury studies are continuing to incur delays, subject to the return of recruitment
  • Recruitment in the registration enabling trial for leniolisib has restarted and, subject to regulatory approval, we continue to expect the potential launch of leniolisib in H2 2022

Sijmen de Vries, Chief Executive Officer, commented:

"We are pleased to announce continued growth during the first nine months of 2020, demonstrating consistent progress, despite the impact of the COVID-19 pandemic on sales and marketing activities and a significant decrease in the US dollar versus the Euro. We remain focused on, and are delivering against, our strategy for long-term growth. This includes continued sales growth of RUCONEST® through increasing market share for the treatment of acute HAE attacks, indication expansion for rhC1INH and the development of new proteins from our recombinant technology platform, as well as in-licencing or acquiring new products to leverage our global commercial infrastructure.

"In the past four years, Pharming has transitioned into a profitable biopharmaceutical company with its own direct sales operations in the US and the EU to continue to expand our patient reach and an advancing pipeline. We believe the Company is well-positioned to continue to deliver significant value to both our patients and our stakeholders."

Outlook

For the remainder of 2020, the Company expects:

  • Subject to progression of the COVID-19 pandemic in the US; continued growth in revenues from sales of RUCONEST®, mainly driven by the US and expanded EU operations
  • Maintenance of positive net earnings during the year
  • Continued investment in the expansion of production of RUCONEST® in order to ensure continuity of supply to the growing markets in the US, Europe, China and the RoW
  • Investment in the ongoing clinical trials for pre-eclampsia and acute kidney injury, severe pneumonia as a result of COVID-19 infection and support for investigators wishing to explore additional indications for rhC1INH
  • Investment in the continuing registration-enabling study for leniolisib for APDS, leading to headline data mid 2021
  • Investment in upscaling and IND enabling studies for α-glucosidase in Pompe disease.
  • Investment in acquisitions / in-licensing of other new development opportunities and assets as these occur
  • Increasing marketing activity where this can be profit-enhancing for Pharming
  • Continued close monitoring of the ongoing COVID-19 pandemic and the potential impact on the business

No further financial guidance for 2020 is provided.

About Pharming Group N.V.

Pharming Group N.V. is a global, commercial stage biopharmaceutical company developing innovative protein replacement therapies and precision medicines for the treatment of rare diseases and unmet medical needs.

The flagship of our portfolio is our recombinant human C1 esterase inhibitor, or rhC1INH, franchise. C1INH is a naturally occurring protein that downregulates the complement cascade in order to control swelling in affected tissues.

Our lead product, RUCONEST® is the first and only plasma-free rhC1INH protein replacement therapy. It is approved for the treatment of acute hereditary angioedema, or HAE, attacks. We are commercializing RUCONEST® in the United States, the European Union and the United Kingdom through our own sales and marketing organization, and the rest of the world through our distribution network.

We are also developing rhC1INH for subsequent indications, including pre-eclampsia, acute kidney injury and we also investigating the clinical efficacy of rhC1INH in COVID-19.

In addition, we are studying our oral precision medicine, leniolisib (a phosphoinositide 3-kinase delta, or PI3K delta, inhibitor), for the treatment of activated PI3K delta syndrome, or APDS, in a registration enabling Phase 2/3 study in the US and Europe.

Furthermore, we are also leveraging our transgenic manufacturing technology to develop next-generation protein replacement therapies most notably for Pompe disease, which program is currently in the preclinical stage.

Forward-looking Statements

This press release contains forward-looking statements, including with respect to timing and progress of Pharming's preclinical studies and clinical trials of its product candidates, Pharming's clinical and commercial prospects, Pharming's ability to overcome the challenges posed by the COVID-19 pandemic to the conduct of its business, and Pharming's expectations regarding its projected working capital requirements and cash resources, which statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to the scope, progress and expansion of Pharming's clinical trials and ramifications for the cost thereof; and clinical, scientific, regulatory and technical developments. In light of these risks and uncertainties, and other risks and uncertainties that are described in Pharming's 2019 Annual Report and its report for the six months ended 30 June 2020, the events and circumstances discussed in such forward-looking statements may not occur, and Pharming's actual results could differ materially and adversely from those anticipated or implied thereby. Any forward-looking statements speak only as of the date of this press release and are based on information available to Pharming as of the date of this release.

For further public information, contact:

Pharming Group, Leiden, The Netherlands
Sijmen de Vries, CEO: T: +31 71 524 7400
Susanne Embleton, Investor Relations Manager: T: +31 71 524 7400 E: investor@pharming.com

FTI Consulting, London, UK
Victoria Foster Mitchell/Mary Whittow
T: +44 203 727 1000

LifeSpring Life Sciences Communication, Amsterdam, The Netherlands
Leon Melens
T: +31 6 53 81 64 27
E: pharming@lifespring.nl

Pharming Group N.V.

Condensed Consolidated Interim Financial Statements (unaudited)

For the period ended 30 September 2020

  • Condensed consolidated statement of profit or loss
  • Condensed consolidated statement of comprehensive income
  • Condensed consolidated balance sheet
  • Condensed consolidated statement of cash flow

Appendix: Main Condensed Consolidated Interim Financial Statements reported in US dollars

(This appendix is not part of the Condensed Consolidated Interim Financial Statements)

  • Condensed consolidated statement of profit or loss in US Dollar
  • Condensed consolidated statement balance sheet in US Dollar
  • Condensed consolidated statement of cash flows in US Dollar

 

Condensed Consolidated Statement of Profit or Loss                                     

For the period ended 30 September

Amounts in € '000

YTD 2020

YTD 2019




Revenues

134.714

123.358

Costs of sales

(14.694)

(16.278)

Gross profit

120.020

107.080

Other income

718

292

Research and development

(23.810)

(23.726)

General and administrative

(13.670)

(10.780)

Marketing and sales

(32.113)

(30.182)

Costs

(69.593)

(64.688)

Operating profit

51.145

42.684

Fair value gain (loss) on revaluation derivatives

131

(141)

Other financial income

581

769

Other financial expenses

(18.285)

(12.146)

Financial income and expenses

(17.573)

(11.518)

Share of net profits in associates using the equity method

195

439

Result before income tax

33.767

31.605

Income tax credit (expense)

(8.171)

(7.549)

Net profit for the year

25.596

24.056

Attributable to:



Owners of the parent

25.596

24.056

Total net profit

25.596

24.056

Basic earnings per share (€)

0,040

0,038

Fully diluted earnings per share (€)

0,035

0,036

 

Condensed Consolidated Statement of Comprehensive Income 

For the period ended 30 September

Amounts in € '000

YTD 2020

YTD 2019

Net profit for the year

25.596

24.056

Currency translation differences

441

170

Items that may be subsequently reclassified to profit or loss

441

170

Other comprehensive income (loss), net of tax

441

170

Total comprehensive income (loss) for the year

26.037

24.226

Attributable to:



Owners of the parent

26.037

24.226

 

Condensed Consolidated Balance Sheet

As at date shown          

Amounts in €'000

30 September

2020

31 December

2019




Intangible assets

76.946

70.809

Property, plant and equipment

8.630

8.553

Right-of-use assets

7.882

5.979

Deferred tax assets

21.329

28.590

Investments accounted for using the equity method

5.682

5.508

Restricted cash

1.256

2.268

Non-current assets

121.725

121.707




Inventories

16.382

14.467

Trade and other receivables

26.446

25.737

Cash and cash equivalents

154.795

66.299

Current assets

197.623

106.503




Total assets

319.348

228.210




Share capital

6.381

6.313

Share premium

396.231

392.266

Legal reserves

4.242

3.718

Accumulated deficit

(270.601)

(297.618)

Shareholders' equity

136.253

104.679




Convertible bonds

121.744

-

Lease liabilities

6.549

4.363

Other financial liabilities

18.298

17.282

Non-current liabilities

146.591

21.645




Loans and borrowings

-

45.590

Derivative financial liabilities

138

268

Trade and other payables

34.622

36.247

Lease liabilities

1.744

1.946

Other financial liabilities

-

17.835

Current liabilities

36.504

101.886




Total equity and liabilities

319.348

228.210

 

Condensed Consolidated Statement of Cash Flow

For the period ended 30 September

Amounts in €'000

YTD 2020

YTD 2019



Operating result

51.145

42.684






Non-cash adjustments:




Depreciation, amortisation, impairment

5.092

5.281


Accrued employee benefits

2.098

794


Release contract liabilities

-

(600)


Operating cash flows before changes in working capital

58.335

48.159






Changes in working capital:




Inventories

(1.915)

5.779


Trade and other receivables

(709)

(9.740)


Payables and other current liabilities

(1.755)

4.882


Total changes in working capital

(4.379)

921






Changes in non-current assets, liabilities and equity

2.208

(1.354)






Cash generated from (used in) operations before interest and taxes

56.164

47.726






Interest received

581

801


Income taxes paid

(2.431)

(1.278)






Net cash flows generated from (used in) operating activities

54.314

47.249






Capital expenditure for property, plant and equipment

(1.376)

(1.724)


Investment intangible assets

(332)

(623)


Investment in associates

-

(2.503)


Acquisition of license

(8.447)

(17.908)






Net cash flows used in investing activities

(10.155)

(22.758)






Repayment on loans and borrowings

(49.914)

(23.460)


Proceeds of issued convertible bonds

122.682

-


Interest on convertible bond

(1.875)

-


Payment on contingent consideration

(18.135)

(17.635)


Interests on loans and leases

(850)

(6.794)


Payment of lease liabilities

(1.321)

-


Proceeds of equity and warrants

2.035

3.536






Net cash flows generated from (used in) financing activities

52.622

(44.353)






Increase (decrease) of cash

96.781

(19.862)


Exchange rate effects

(9.297)

2.736


Cash and cash equivalents at 1 January

68.567

81.515






Total cash and cash equivalents at 30 September

156.051

64.389


 

Appendix: Main Condensed Consolidated Financial Statements reported in US dollars

These statements are not part of the original Interim Financial Statements. The original Interim 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.

 

Condensed Consolidated Statement of Profit or Loss         in US Dollars                            

For the period ended 30 September

Amounts in $ '000

YTD 2020

YTD 2019




Revenues

151.874

138.728

Costs of sales

(16.566)

(18.306)

Gross profit

135.308

120.422

Other income

810

328

Research and development

(26.842)

(26.682)

General and administrative

(15.411)

(12.123)

Marketing and sales

(36.204)

(33.943)

Costs

(78.457)

(72.748)

Operating profit

57.661

48.002

Fair value gain (loss) on revaluation derivatives*

147

(159)

Other financial income

655

865

Other financial expenses*

(20.614)

(13.659)

Financial income and expenses

(19.812)

(12.953)

Share of net profits in associates using the equity method

219

494

Result before income tax

38.068

35.543

Income tax credit (expense)

(9.212)

(8.490)

Net profit for the year

28.856

27.053

Attributable to:



Owners of the parent

28.856

27.053

Total net profit

28.856

27.053

Basic earnings per share ($)

0,045

0,043

Fully diluted earnings per share ($)

0,039

0,040

 

Condensed Consolidated Balance Sheet in US Dollars

As at date shown

Amounts in $ '000

30 September

2020

31 December

2019




Intangible assets

89.996

79.405

Property, plant and equipment

10.094

9.591

Right-of-use assets

9.219

6.705

Deferred tax assets

24.946

32.061

Investments accounted for using the equity method

6.646

6.177

Restricted cash

1.469

2.543

Non-current assets

142.370

136.482




Inventories

19.161

16.223

Trade and other receivables

30.931

28.862

Cash and cash equivalents

181.048

74.348

Current assets

231.140

119.433




Total assets

373.510

255.915




Share capital

7.463

7.079

Share premium

463.432

439.887

Legal reserves

4.962

4.169

Accumulated deficit

(316.494)

(333.749)

Shareholders' equity

159.363

117.386




Convertible bonds

142.391

-

Lease liabilities

7.660

4.893

Other financial liabilities

21.401

19.380

Non-current liabilities

171.452

24.273




Loans and borrowings

-

51.125

Derivative financial liabilities

161

301

Trade and other payables

40.494

40.648

Lease liabilities

2.040

2.182

Other financial liabilities

-

20.000

Current liabilities

42.695

114.256




Total equity and liabilities

373.510

255.915

 

Condensed Consolidated Statement of Cash Flows in US Dollars

For the period ended 30 September





Amounts in $'000

YTD 2020

YTD 2019



Operating result

57.661

48.002






Non-cash adjustments:




Depreciation, amortisation, impairment

5.741

5.939


Accrued employee benefits

2.365

893


Release contract liabilities

-

(674)


Operating cash flows before changes in working capital

65.767

54.160






Changes in working capital:




Inventories

(2.159)

6.499


Trade and other receivables

(799)

(10.954)


Payables and other current liabilities

(1.979)

5.490


Total changes in working capital

(4.937)

1.035






Changes in non-current assets, liabilities and equity

2.489

(1.523)






Cash generated from (used in) operations before interest and taxes

63.319

53.672






Interest received

655

901


Income taxes paid

(2.741)

(1.437)






Net cash flows generated from (used in) operating activities

61.233

53.136






Capital expenditure for property, plant and equipment

(1.551)

(1.939)


Investment intangible assets

(374)

(701)


Investment in associates

-

(2.815)


Acquisition of license

(9.523)

(20.139)






Net cash flows used in investing activities

(11.448)

(25.594)






Repayment on loans and borrowings

(56.273)

(26.383)


Proceeds of issued convertible bonds

138.312

-


Interest on convertible bond

(2.114)

-


Payment on contingent consideration

(20.445)

(19.832)


Interests on loans and leases

(958)

(7.641)


Payment of lease liabilities

(1.489)

-


Proceeds of equity and warrants

2.294

3.977






Net cash flows generated from (used in) financing activities

59.327

(49.879)






Increase (decrease) of cash

109.112

(22.337)


Exchange rate effects

(3.486)

(563)


Cash and cash equivalents at 1 January

76.891

93.245






Total cash and cash equivalents at 30 September

182.517

70.345


 

 

Editor Details

Last Updated: 29-Oct-2020