Pharming Group reports financial results for the first half of 2022
- Total revenues increased 4% in H1 2022 to US$96.8 million, supported by increases in physicians prescribing and number of patients
- Strong balance sheet and stable cash flow from RUCONEST® providing for investments in Pharming's future growth
- Continued investment in launch preparations for leniolisib; post period milestones include US FDA filing and grant of accelerated assessment in EMA
- Reduction in minority stake of BioConnection leads to recognized gain of US$ 12.8 million
LEIDEN, The Netherlands, Aug. 4, 2022 /PRNewswire/ -- Pharming Group N.V. ("Pharming" or "the Company") (Euronext Amsterdam: PHARM) (NASDAQ: PHAR) presents its preliminary (unaudited) financial report for the first six months of 2022 ended June 30, 2022.
Chief Executive Officer, Sijmen de Vries, commented:
"Pharming delivered strong half year results with total revenues up 4% compared to the same period last year. RUCONEST® sales growth was supported by increases in physicians prescribing and number of patients. For the second quarter of 2022, sales were US$50.1 million bringing the first half year of 2022 to US$96.8 million.
Concerning pipeline development, we continued to advance leniolisib through the regulatory process as we seek marketing authorization in the US, the UK, and the EEA for the treatment of APDS, a rare, complex and progressive primary immunodeficiency. In the US, we filed a New Drug Application with the FDA for the treatment of APDS in adults and adolescents aged 12 or older at the end of July 2022. On August 2, we announced a new diagnosis code for reporting cases of APDS, which will be added to the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) by the US Centers for Disease Control and Prevention (CDC). The diagnosis code, D81.82, will be effective starting October 1, 2022.
Looking to Europe, the EEA and the UK remain on track for regulatory filings from October this year. On August 1, we announced the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) granted an accelerated assessment for the Marketing Authorisation Application (MAA) for leniolisib in adults and adolescents aged 12 and older.
In our drive to focus on RUCONEST® sales, the launch and commercialization of leniolisib, and the management of our pipeline, we initiated an internal review of our pipeline. As a result of these initial findings, we have taken the strategic decision to discontinue the development of rhC1INH for acute kidney injury and pre-eclampsia. In line with this decision, we will also de-prioritize further development in the large-scale production of rhC1INH through the use of our transgenic cattle herd. The herd will be maintained while we consider strategic options for acute kidney injury (AKI) to gain value from the work done to date. We will continue to progress the ongoing Phase IIb clinical trial in AKI until further notice.
With these decisions, we continue to evolve as a company, and continue to focus our efforts and resources on the most value enhancing initiatives for our stakeholders."
Strategic highlights
During the first half of 2022, we continued to execute on our strategic objectives of building a sustainable business by focusing on RUCONEST® sales, the approval, launch and commercialization of leniolisib, and the ongoing development and management of our pipeline.
The development of our pipeline will be through a combination of internal development projects - including the development of additional indications for leniolisib and OTL-105 as a gene therapy for HAE - and the potential acquisition of new, late-stage assets through in-licensing and M&A opportunities.
These potential acquisitions will be financed through a combination of positive cash flow from the RUCONEST® business, anticipated future leniolisib businesses, as well as available cash from our strong balance sheet. If required, Pharming will access additional funding from the capital markets.
Therefore, with the ongoing focus on our strategic objectives, we have initiated an internal review of our pipeline. As a result, we are announcing a number of initial changes to the pipeline as detailed below.
Pipeline development
leniolisib
For leniolisib, a three-step approach has been planned for the coming years.
The first step is the anticipated commercial approval and market launch in the US during the first half of 2023, followed by key markets in the European Economic Area (EEA) and the UK in the second half of 2023. The Company will evaluate additional countries and regions and will commercialize the product either directly, or through strategic distribution partnerships.
The second step includes the approval and launch of leniolisib as a treatment of APDS in children as young as one year of age.
The third step is the continued life cycle management of the leniolisib compound into further indications.
US market
Subject to FDA approval and granting of priority review by the FDA in the US, we remain on track for the commercial approval of leniolisib in the first quarter and market launch early in the second quarter of 2023.
On July 29, 2022, a New Drug Application (NDA) was submitted to the US FDA for leniolisib, for the treatment of activated phosphoinositide 3-kinase delta (PI3K?) syndrome (APDS) in adults and adolescents aged 12 or older. Aligned with the goals set out in PDUFA VI, Pharming expects a Filing Notification Letter by Day 60, which will include the FDA's determination of priority review. If priority review is granted, it is expected that the FDA review will be completed within six months of the 60-day filing date.
In anticipation of a positive outcome from the FDA, we continue to grow our US field force and leverage our marketing capabilities for the commercialization of leniolisib.
Finally for the US market, on August 2, 2022, Pharming announced that a new diagnosis code for reporting cases of APDS, will be added to the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) by the US Centers for Disease Control and Prevention (CDC). The diagnosis code, D81.82, will be effective starting October 1, 2022, and will help accurately identify, stratify and triage US patients eligible for APDS treatments and research opportunities.
EU and UK markets
In Europe, we remain on track with anticipated filings of the market authorization applications to both regulatory agencies - the European Medical Agency (EMA) and the UK Medicines and Healthcare Products Regulatory Agency (MHRA) - in the second half of 2022. Additionally, the MHRA granted Promising Innovative Medicine (PIM) designation to leniolisib for the treatment of APDS.
Additionally, on August 1, we announced the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) granted an accelerated assessment for the Marketing Authorisation Application (MAA) for leniolisib in adults and adolescents aged 12 and older. Pharming plans to submit the MAA for leniolisib to EMA in October 2022.
Pediatric clinical development
The studies to support the initial applications in the US, EU, and UK have enrolled patients ages 12 years and older. To expand access to leniolisib for the treatment of pediatric APDS, Pharming has developed a clinical plan to include children as young as one year of age. During the first half of the year, positive decisions were received from EMA and MHRA on the Pediatric Investigation Plan (PIP) for leniolisib as a treatment for APDS in children.
The leniolisib PIP includes two planned, global clinical trials in pediatric patients with APDS aged 4 to 11 with a second study in patients aged 1 to 6. These two studies will support regulatory filings worldwide. Pharming expects to initiate recruitment for this pediatric program for leniolisib in the second half of 2022.
OTL-105
In July 2021, Pharming announced a strategic collaboration with Orchard Therapeutics to research, develop, manufacture and commercialize OTL-105, a newly disclosed investigational ex vivo autologous hematopoietic stem cell (HSC) gene therapy for the treatment of hereditary angioedema (HAE). The program has made significant progress developing the lentiviral vector to enhance C1-inhibitor expression and is now testing in preclinical HAE disease models. We anticipate providing further updates as we move towards preparing an Investigational New Drug (IND) filing.
Acute Kidney Injury (AKI)
Following an internal review of our pipeline, we have taken the strategic decision to discontinue further development of this therapy.
While we consider strategic options to gain value from the work done to date, we will de-prioritize further development and investment in the large-scale production of rhC1INH through the use of our transgenic cattle herd. The herd will continue to be maintained to allow all possible outcomes to be explored.
The ongoing Phase IIb clinical trial will continue as we evaluate these strategic options.
Pre-eclampsia
Following an internal review of our pipeline, a decision has been made to discontinue further development and investment. This was due to the choices we have made to prioritize the investments to support the sales of RUCONEST® and the commercialization of leniolisib.
Pompe
The study into the development of a next-generation alpha-glucosidase therapy for the treatment of Pompe disease is ongoing. We are currently engaged in preclinical studies. If and when results from these preclinical studies become available, we will update the market.
Operational highlights
RUCONEST®
RUCONEST® sales were up 4% in the first half of 2022 providing stable cash flow for Pharming's future growth. Total revenues were US$96.8 million compared to US$93.2 million in the first half of 2021. RUCONEST® sales growth was supported by increases in physicians prescribing and number of patients.
The US market represented 97% of total revenues for the first half of the year, while Rest of World (RoW) and Europe represented 3%.
With a continued need for safe and reliable acute treatment options for hereditary angioedema (HAE), we remain confident in the ongoing demand for RUCONEST® and continued single digit growth for the 2022 financial year.
Organizational update
Robert Friesen, Chief Scientific Officer and Executive Board member resigned from his role at Pharming Group. Mr Friesen's succession is currently under review.
Financial Summary
Amounts in US$m except per share data |
H1 2022 |
H1 2021 |
% Change |
Income Statement |
|||
Revenues |
96.8 |
93.2 |
4 % |
Gross profit |
87.9 |
83.8 |
5 % |
Operating profit |
20.6 |
17.2 |
20 % |
Profit for the year |
19.2 |
14.4 |
33 % |
Balance Sheet |
|||
Cash & marketable securities |
190.9 |
189.8 |
1 % |
Share Information |
|||
Basic earnings per share (US$) |
0.029 |
0.022 |
32 % |
Diluted earnings per share (US$) |
0.027 |
0.019 |
42 % |
Financial highlights
H1 2022
Total revenues increased by 4% during the first half of 2022 to US$96.8 million, versus US$93.2 million during the first half of 2021.
Gross profit increased by 5% during the first half of 2022, in line with the growth in revenues. Gross profit for 2022 was US$87.9 million (2021: US$83.8 million).
Other income increased significantly in 2022 (US$15.0 million) as compared to 2021 (US$1.4 million) as Pharming reduced its minority stake in BioConnection from 43.85% to 22.98% in April 2022. As a result of this transaction, Pharming has received one-off net cash proceeds of US$7.5 million (EUR6.9 million) and recognized a gain of US$12.8 million.
Operating profit for the first half of 2022 amounted to US$20.6 million, a 20% increase compared to the same period last year (US$17.2 million). This was mainly driven by the increase in other income of US$13.6 million. This was partly offset by an increase in operating costs resulting from a combination of increased R&D expenditure, launch preparation and manufacturing cost for leniolisib, and an increase in travel related expenses post-COVID.
Net profit for H1 2022 was US$19.2 million, a 33% increase compared to H1 2021 (US$14.4 million). This was due to higher operating profit, increased financial income, and a decrease in tax expenses, which was offset by a decrease in the net profits in associates using the equity method.
Cash and cash equivalents, together with restricted cash, decreased from US$193.0 million at the end of 2021 to US$190.9 million at the end of the second quarter 2022.
Q2 2022
For the second quarter of 2022, revenues increased by 1.0% to US$50.1 million, compared to US$49.7 million in the second quarter of 2021.
Gross profit increased by 2.4%, to US$46.1 million as compared to the same period last year. This was in line with the growth in revenues.
Operating profit of US$17.8 million was recorded for the second quarter of 2022. This was a 63.3% increase compared to the same quarter last year. This was a result of Pharming recognizing a gain of US$12.8 million in relation to the reduction in its minority stake in BioConnection, partly offset by increased costs for the leniolisib launch preparations.
Net profit for the second quarter was US$15.7 million compared to US$5.8 million in the second quarter of 2021. This was mainly due to the one-off recognized gain of US$12.8 million from the reduction in its minority stake in BioConnection.
Outlook
For the remainder of 2022, we expect:
- Single digit growth in Group revenues from RUCONEST® sales, driven by the US and expanded EU markets, are subject to potential business restrictions related to the COVID-19 pandemic. Quarterly fluctuations are expected.
- The submission of leniolisib's regulatory filings to EMA and UK MHRA are expected in the second half of 2022.
- Subject to positive outcomes of the FDA review and granting of a Priority Review for leniolisib, we anticipate commercial approval from the FDA in the first quarter of 2023, with an anticipated launch and commercialization soon after.
- Pharming will continue to allocate resources towards the anticipated launch and commercialization of leniolisib with the view of accelerating future growth. Investments in launch preparations and focused clinical development for leniolisib will continue to impact profit for 2022. With continued cash flow from RUCONEST® funding these investments, no additional financing to support the current business is expected.
- Investment and continued focused on the potential acquisitions and in-licensing of new, late-stage development opportunities and assets in rare diseases. Financing, if required, would come via a combination of our strong balance sheet and access to capital markets.
No further specific financial guidance for 2022 is provided.
Additional information
Presentation
The conference call presentation is available on the Pharming.com website from 10:30 CET.
Conference Call
The conference call will begin at 13:30 CET. A transcript of the call will be made available on the Pharming.com website the following day at 14:30 CET.
Please note, the Company will only take questions from dial-in attendees.
Dial-in numbers for conference call
Netherlands Local: +31 85 888 7233
United Kingdom Toll-Free: +44 800 640 6441
United Kingdom Local/International: +44 20 3936 2999
United States Local: +1 646 664 1960
United States Toll Free: +1 855 979 6654
Access Code: 114487
Webcast Link:
https://webcast.openbriefing.com/pharming-q22022/
Financial Calendar 2022
H.C. Wainwright Annual Global Conference September 12 - 14
Third Quarter 2022 Results October 27
Jefferies London Healthcare Conference November 15 - 17
Stifel Healthcare Conference 2022 November 15 - 16
For further public information, contact:
Pharming Group N.V., Leiden, The Netherlands
Heather Robertson, Investor Relations Manager
T: +31 7 1 524 7400
E: investor@pharming.com
FTI Consulting, London, UK
Victoria Foster Mitchell/Alex Shaw
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
About Pharming Group N.V.
Pharming Group N.V. (Euronext Amsterdam: PHARM/Nasdaq: PHAR) is a global biopharmaceutical company dedicated to transforming the lives of patients with rare, debilitating, and life-threatening diseases. Pharming is commercializing and developing an innovative portfolio of protein replacement therapies and precision medicines, including small molecules, biologics, and gene therapies that are in early to late-stage development. Pharming is headquartered in Leiden, Netherlands, and has employees around the globe who serve patients in over 30 markets in North America, Europe, the Middle East, Africa, and Asia-Pacific. For more information, visit www.pharming.com.
Auditor's involvement
The Condensed Consolidated Interim Financial Statements have not been audited by the Company's statutory auditor.
Responsibility Statement
The Board of Directors of the Company (the "Board") hereby declares that to the best of its knowledge, the condensed interim financial statements, which have been prepared in accordance with IAS 34 (interim financial reporting), give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, and this interim Board report includes a fair review of the information required pursuant to section 5:25d(8) and (9) of the Dutch Financial Supervision Act (Wet op het financieel toezicht).
Leiden, August 4, 2022
Sijmen de Vries, Executive Director and Chief Executive Officer
Paul Sekhri, Non-Executive Director and Chairman of the Board of Directors
Deborah Jorn, Non-Executive Director
Steven Baert, Non-Executive Director
Leonard Kruimer, Non-Executive Director
Jabine van der Meijs, Non-Executive Director
Barbara Yanni, Non-Executive Director
Mark Pykett, Non-Executive Director
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 2021 Annual Report and the Annual Report on Form 20-F for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission, 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.
Inside Information
This press release relates to the disclosure of information that qualifies, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Pharming Group N.V.
Condensed Consolidated Interim Financial Statements in US Dollars (unaudited)
For the period ended 30 June 2022
- Condensed consolidated statement of profit and loss
- Condensed consolidated statement of comprehensive income
- Condensed consolidated balance sheet
- Condensed consolidated statement of changes in equity
- Condensed consolidated statement of cash flow
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS |
|||
For the 6-month period ended 30 June |
|||
Amounts in $ '000 |
notes |
H1 2022 |
H1 2021 |
Revenues |
7 |
96,763 |
93,237 |
Costs of sales |
9 |
(8,906) |
(9,487) |
Gross profit |
87,857 |
83,750 |
|
Other income |
8 |
14,955 |
1,354 |
Research and development |
(29,296) |
(24,206) |
|
General and administrative |
(16,421) |
(15,060) |
|
Marketing and sales |
(36,449) |
(28,686) |
|
Other Operating Costs |
9 |
(82,166) |
(67,952) |
Operating profit |
20,646 |
17,152 |
|
Fair value gain (loss) on revaluation derivatives |
— |
44 |
|
Other finance income |
10 |
6,474 |
5,398 |
Other finance expenses |
10 |
(2,780) |
(2,958) |
Finance gain (cost) net |
3,694 |
2,484 |
|
Share of net profits in associates using the equity method |
11 |
(550) |
388 |
Profit before tax |
23,790 |
20,024 |
|
Income tax credit (expense) |
(4,587) |
(5,672) |
|
Profit for the year |
19,203 |
14,352 |
|
Basic earnings per share (US$) |
19 |
0.029 |
0.022 |
Diluted earnings per share (US$) |
19 |
0.027 |
0.019 |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|||
For the 6-month period ended 30 June |
|||
Amounts in US$ '000 |
H1 2022 |
H1 2021 |
|
Profit for the year |
19,203 |
14,352 |
|
Currency translation differences |
(14,755) |
(5,582) |
|
Fair value remeasurement investments |
(702) |
— |
|
Items that may be subsequently reclassified to profit or loss |
(15,457) |
(5,582) |
|
Other comprehensive income (loss), net of tax |
(15,457) |
(5,582) |
|
Total comprehensive income (loss) for the year |
3,746 |
8,770 |
CONDENSED CONSOLIDATED BALANCE SHEET |
|||
as at date |
|||
Amounts in $ '000 |
notes |
June 30, 2022 |
December 31, |
Non-current assets |
|||
Intangible assets |
12 |
75,766 |
83,834 |
Property, plant and equipment |
13 |
11,674 |
13,222 |
Right-of-use assets |
14 |
18,284 |
19,943 |
Long term prepayments |
. |
223 |
194 |
Deferred tax assets |
15 |
18,594 |
21,216 |
Investments accounted for using the equity method |
11 |
3,143 |
7,201 |
Investments in equity instruments designated as at FVTOCI |
11 |
643 |
1,449 |
Investments in debt instruments designated as at FVTPL |
11 |
7,845 |
— |
Restricted cash |
746 |
812 |
|
Total non-current assets |
136,918 |
147,871 |
|
Current assets |
|||
Inventories |
16 |
33,929 |
27,310 |
Trade and other receivables |
32,878 |
29,983 |
|
Restricted cash |
209 |
227 |
|
Cash and cash equivalents |
189,964 |
191,924 |
|
Total current assets |
256,980 |
249,444 |
|
Total assets |
393,898 |
397,315 |
|
Equity |
|||
Share capital |
7,469 |
7,429 |
|
Share premium |
458,357 |
455,254 |
|
Legal reserves |
(12,607) |
3,400 |
|
Accumulated deficit |
(253,549) |
(273,167) |
|
Shareholders' equity |
17 |
199,670 |
192,916 |
Non-current liabilities |
|||
Convertible bonds |
18 |
128,235 |
139,007 |
Lease liabilities |
14 |
16,647 |
18,456 |
Other financial liabilities |
152 |
165 |
|
Total non-current liabilities |
145,034 |
157,628 |
|
Current liabilities |
|||
Convertible bonds |
18 |
1,728 |
1,879 |
Trade and other payables |
45,074 |
42,473 |
|
Lease liabilities |
2,392 |
2,419 |
|
Total current liabilities |
49,194 |
46,771 |
|
Total equity and liabilities |
393,898 |
397,315 |
CONDENSED CONSOLIDATED STATEMENT CHANGES IN EQUITY |
||||||
For the period ended 30 June |
||||||
Attributable to owners of the parent |
||||||
Amounts in $ '000 |
notes |
Number of shares |
Share capital |
Share premium |
Legal reserve |
Legal reserve |
Balance at January 1, 2021 |
638,822 |
7,312 |
447,130 |
4,955 |
— |
|
Result for the half-year |
— |
— |
— |
— |
— |
|
Other comprehensive income (loss) for the half-year |
— |
— |
— |
— |
— |
|
Total comprehensive income (loss) for the half-year |
— |
— |
— |
— |
— |
|
Legal reserves |
— |
— |
— |
— |
— |
|
Income Tax expense from excess tax deductions related to Share-based payments |
— |
— |
||||
Share-based compensation |
— |
— |
— |
— |
— |
|
Bonuses settled in shares |
— |
— |
— |
— |
— |
|
Value of conversion rights on convertible bonds |
— |
— |
— |
— |
— |
|
Shares issued for cash |
— |
— |
— |
— |
— |
|
Warrants exercised/ issued |
61 |
1 |
20 |
— |
— |
|
Options exercised |
7,240 |
87 |
8,054 |
— |
— |
|
Total transactions with owners, recognized directly in equity |
7,301 |
88 |
8,074 |
— |
— |
|
Balance at June 30, 2021 |
646,123 |
7,400 |
455,204 |
4,955 |
— |
|
Balance at January 1, 2022 |
19 |
648,749 |
7,429 |
455,254 |
402 |
(2,283) |
Result for the year |
— |
— |
— |
— |
— |
|
Other comprehensive income (loss) for the half-year |
— |
— |
— |
— |
(702) |
|
Total comprehensive income (loss) for the half-year |
— |
— |
— |
— |
(702) |
|
Legal reserves |
— |
By: PR Newswire Association LLC.
- 04 Aug 2022
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