LEIDEN, Netherlands, May 17, 2018 /PRNewswire/ --
93% increase in revenues from product sales and 110% increase in operating profit compared with the First Quarter 2017
Delivered net profitability for the first time
Pharming Group N.V. ("Pharming" or "the Company") (Euronext Amsterdam: PHARM) presents its (unaudited) financial report for the quarter ended 31 March 2018.
- Investment in commercial teams and continued underlying demand for RUCONEST® in the USA following stabilisation of short supply situations at major competitors, driving growth and good patient retention rates.
- FDA acceptance of supplementary Biologics License Application file for RUCONEST® for prophylaxis of HAE, with an action date set for 21 September 2018.
- Preparation continues for initiation of clinical development of RUCONEST® for new indications, which will be outlined together with leading experts at a Capital Markets Briefing to be held in New York and by live webcast on Thursday June 21, 2018.
- Net product sales increased by 93% to €29.3 million (First quarter 2017: €15.2 million) on a like-for-like basis, mainly as a result of the continued underlying growth in revenue from US product sales despite a 15% deterioration in the US dollar exchange rate over the same period.
- Underlying product sales increased 122%.
- Total revenues increased by 90% to €29.5 million (including €0.2 million of license revenue) from €15.5 million in the first quarter 2017 (including €0.3 million in license revenue).
- Operating profit increased by 110% to €8.2 million (compared with €3.9 million in the first quarter 2017, and a profit of €21.9 million for the full year 2017), despite increased marketing costs in the US and increased R&D expenses.
- Delivered the Company's first quarterly net profit of €3.3 million, compared with a loss of €5.7 million in 2017, mainly as a result of the strong sales performance. The result also benefited from a reduction in non-cash financing expenses required to be shown under IFRS associated with the various Convertible Bonds which were converted or redeemed around the year end.
- The equity position improved from €18.8 million in December 2017 (March 2017: €28.9 million) to €31.6 million at the end of March 2018, mainly due to the net profit of €3.3 million and the reduction in debt caused by redemption of bonds.
- Inventories changed from €18.3 million at the year end 2017 to €21.6 million at the end of the first quarter 2018, largely due to the higher sales demand and support in the US and to provide additional capacity to cover further potential stock shortages by competitors. This resulted in a greater proportion of inventories being held in final dosage forms of product rather than raw materials which are recognized at a lower carrying value per unit.
- Conversions by all remaining bondholders during the quarter meant that there are now no debt instruments outstanding apart from the loan facility with Orbimed Advisors (for which we begin repayments in the third quarter of this year).
- The Company's cash position remained flat at €59.8 million (December 2017: €60.0 million, with €27.6 million at 31 March 2017), largely due to the increased inventory and additional preparation costs associated with investment in new product development.
- As a result of the growth achieved in the share price and market capitalization of the Company between January 2017 and March 2018, Pharming was admitted to the Euronext Amsterdam SmallCap-index (AScX) in March 2018.
Chief Executive Officer of Pharming, Sijmen de Vries, commented:
"The remarkable growth reported in 2017 has continued into 2018 and I am delighted to report our first quarter of net profitability, which is another significant achievement for Pharming. Investment in our commercial team and continued underlying demand for RUCONEST® in the US are driving this growth. We are also seeing good patient retention rates following the stabilization of competitor product supply, which is a testament to the efficacy of RUCONEST®. We are confident that with our increasing patient reach and advancing pipeline, we will be able to continue to deliver significant value to our patients and other stakeholders."
The first quarter of 2018 was very positive for Pharming. We emerged from the high pressure on production and supply in Q4 2017 when both leading prophylaxis product suppliers in the USA had supply problems (which in one case extended to Europe). This resulted in extra sales and donated product supplies in the end of Q4 2017. As a responsible pharmaceutical partner, we have continued to supply RUCONEST® on prescription (including free supply) to ensure no patients were left without a C1 esterase inhibitor product where this was prescribed by their physician. These patients have been able to see for themselves the reliability, safety and effectiveness of RUCONEST®. As a testament to its efficacy, many have continued on RUCONEST® therapy despite the stabilisation of the crisis in supplies of the blood plasma-derived products in December 2017. We continue to make good progress in growth in the treatment of acute hereditary angioedema (HAE) attacks. As a result, sales in the US were ahead of the last quarter ($34.3 million compared with $33.8 million for Q4 2017). Importantly, this strong sales performance resulted in Pharming recording a net profit for the quarter for the first time.
Pharming is investing to improve the convenience of RUCONEST® administration further. Our R&D scientists have developed new forms of RUCONEST® to take into clinical trials to demonstrate effectiveness for intra-muscular and sub-cutaneous administration of smaller injections and other more convenient applications of RUCONEST® soon.
We mentioned at our 2017 full year results that we are examining additional indications for RUCONEST®, and the purpose of the 21 June Capital Markets Briefing is to give clear details of progress with RUCONEST ® in HAE and of prospects for these new indications, including contributions from leading physicians in the relevant specialties, with explanations of why we believe RUCONEST® could provide all or part of the solutions to these currently unmet medical needs. We will also be setting out our clinical plans and timelines for the studies involved as well as providing an update on our Pompe disease pipeline programme.
We also record and report our results in US dollars for the first time, with the statements shown in US dollars on pages 10-12 below.
We look forward with confidence to continuing growth of Pharming in the rest of 2018, with increased sales, a new and very exciting pipeline, and new opportunities to enhance shareholder value.
Financial summary - Euros 3 months to 31 March Amounts in EURm except per share data 2018 2017 % Change Income Statement 29.3 15.2 93% Revenue from product sales 0.2 0.3 (33%) Other revenue 29.5 15.5 90% Total revenue 24.5 13.8 78% Gross profit 8.2 3.9 110% Operating result 3.3 (5.7) 158% Net result Balance Sheet 59.8 27.6 117% Cash & marketable securities Share Information 0.006 (0.012) 150% Earnings per share before dilution(EUR)
For the remainder of 2018, the Company expects:
- Continued growth in revenues from sales of RUCONEST®, mainly driven by the US operations.
- Achievement of positive quarterly operating results and net results throughout the course of the year.
- Continued investment in the production of RUCONEST® in order to ensure continuity of supply to the growing markets in the US, Europe and the rest of the world.
- Investment in RUCONEST® in prophylaxis of HAE (following approval) and in the development of new intramuscular and subcutaneous versions of RUCONEST®.
- Investment in clinical trial development for RUCONEST® in other indications where the drug's unique properties may help solve unmet medical needs.
- We will also continue to invest in our pipeline programs in Pompe disease and Fabry's disease, and will look to acquire additional development opportunities and assets as they occur.
- Increasing marketing activity where profitable for Pharming, such as in our current major territories of the USA and in Europe: Austria, France, Germany, the Netherlands and the UK.
- We will continue to support patients in all territories, as we continue to believe that RUCONEST® represents a fast, effective, reliable and safe therapy option for HAE patients.
No further financial guidance for 2018 is provided.
About Pharming Group N.V.
Pharming is a specialty pharmaceutical company developing innovative products for the safe, effective treatment of rare diseases and unmet medical needs. Pharming's lead product, RUCONEST® (conestat alfa) is a recombinant human C1 esterase inhibitor approved for the treatment of acute Hereditary Angioedema ("HAE") attacks in patients in Europe, the US, Israel and South Korea. The product is available on a named-patient basis in other territories where it has not yet obtained marketing authorization.
RUCONEST® is distributed by Pharming in Austria, France, Germany, Luxembourg, the Netherlands, the United Kingdom and the United States of America. Pharming holds commercialisation rights in Algeria, Andorra, Bahrain, Belgium, Ireland, Jordan, Kuwait, Lebanon, Morocco, Oman, Portugal, Qatar, Syria, Spain, Switzerland, Tunisia, United Arab Emirates and Yemen. In some of these countries this is done in association with the HAEi Global Access Program (GAP).
RUCONEST® is distributed by Swedish Orphan Biovitrum AB (publ) (SS: SOBI) in the other EU countries, and in Azerbaijan, Belarus, Georgia, Iceland, Kazakhstan, Liechtenstein, Norway, Russia, Serbia and Ukraine.
RUCONEST® is distributed in Argentina, Colombia, Costa Rica, the Dominican Republic, Panama, and Venezuela by Cytobioteck, in South Korea by HyupJin Corporation and in Israel by Megapharm.
RUCONEST® is also being examined for approval for the treatment of HAE in young children (2-13 years of age) and evaluated for various additional follow-on indications.
Pharming's technology platform includes a unique, GMP-compliant, validated process for the production of pure recombinant human proteins that has proven capable of producing industrial quantities of high quality recombinant human proteins in a more economical and less immunogenetic way compared with current cell-line based methods. Leads for enzyme replacement therapy ("ERT") for Pompe and Fabry's diseases are being optimized at present, with additional programs not involving ERT also being explored at an early stage at present.
Pharming has a long term partnership with the China State Institute of Pharmaceutical Industry ("CSIPI"), a Sinopharm company, for joint global development of new products, starting with recombinant human Factor VIII for the treatment of Haemophilia A. Pre-clinical development and manufacturing will take place to global standards at CSIPI and are funded by CSIPI. Clinical development will be shared between the partners with each partner taking the costs for their territories under the partnership.
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
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.
Consolidated Statement of Income For the period, in Euros: Q1 Q1 2018 2017 Amounts in EUR '000 Product sales 29,281 15,192 License fees 202 268 Revenues 29,483 15,460 Costs of sales (5,022) (1,697) Gross profit 24,461 13,763 Other income 149 84 Research and development (5,737) (4,689) General and administrative (2,463) (1,375) Marketing and sales (8,205) (3,911) Costs (16,405) (9,975) Operating result 8,205 3,872 Fair value gain (loss) on revaluation derivatives (961) (2,426) Other financial income and expenses (3,121) (7,194) Financial income and expenses (4,082) (9,620) Result before income tax 4,123 (5,748) Income tax credit/(expense) (796) - Net result for the year 3,327 (5,748) Attributable to: Owners of the parent 3,327 (5,748) Total net result 3,327 (5,748) Basic earnings per share (EUR) 0.006 (0.012)
Consolidated Statement of Comprehensive Income For the period, in Euros Q1 Q1 2018 2017 Amounts in EUR '000 Net result for the year 3,327 (5,748) Currency translation differences (1,423) (20) Items that may be subsequently reclassified to profit or loss (1,423) (20) Other comprehensive income, net of tax (1,423) (20) Total comprehensive income for the year 1,904 (5,768) Attributable to: 1,904 (5,768) Owners of the parent
Consolidated Balance Sheet As at date shown, in Euros 31 March 31 December Amounts in EUR '000 2018 2017 Non-current assets Intangible assets 56,272 56,631 Property, plant and equipment 7,970 8,234 Long-term prepayments 2,116 2,296 Restricted cash 1,305 1,336 Deferred tax asset 8,581 9,442 Total non-current assets 76,244 77,939 Current assets Inventories 21,611 18,334 Trade and other receivables 14,370 11,260 Cash and cash equivalents 58,456 58,657 Total current assets 94,437 88,251 Total assets 170,681 166,190 Equity Share capital 6,017 5,790 Share premium 381,042 370,220 Legal reserves (2,361) (938) Accumulated deficit (353,091) (356,270) Shareholders' equity 31,607 18,802 Non-current liabilities Loans and borrowings 50,089 58,684 Deferred license fees income 1,267 1,467 Finance lease liabilities 279 390 Other financial liabilities 28,319 28,319 Total non-current liabilities 79,954 88,860 Current liabilities Loans and borrowings 27,945 21,962 Deferred license fees income 802 804 Derivative financial liabilities 1,125 8,301 Trade and other payables 28,968 27,198 Finance lease liabilities 280 263 Total current liabilities 59,120 58,528 Total equity and liabilities 170,681 166,190
Consolidated Statement of Cash Flows For the period, in Euros Q1 Q1 Amounts in EUR'000 2018 2017 Operating result 8,205 3,872 Non-cash adjustments: Depreciation, amortization 944 839 Accrued employee benefits 458 564 Deferred license fees (202) (268) Operating cash flows before changes in working capital 9,405 5,007 Changes in working capital: Inventories (3,277) (960) Trade and other receivables (3,110) (11,221) Payables and other current liabilities (4,684) 2,828 Total changes in working capital (11,071) (9,353) Changes in non-current assets, liabilities and equity 705 (581) Cash generated from (used in) operations before interest and taxes (961) (4,927) Interest received - - Net cash flows generated from (used in) operating activities (961) (4,927) Capital expenditure for property, plant and equipment (517) (654) Investment intangible assets (353) (180) Net cash flows generated from (used in) investing activities (870) (834) Proceeds of loans and borrowings - 4,444 Redemption on bonds (2,238) (2,413) Interest on loans (2,592) (775) Proceeds of equity and warrants 6,556 - Net cash flows generated from (used in) financing activities 1,726 1,256 Increase (decrease) of cash (105) (4,505) Exchange rate effects (127) (26) Cash and cash equivalents at 1 January 59,993 32,137 Total cash and cash equivalents at 31 March 59,761 27,606
US Dollar Statements Consolidated Statement of Income For the period, in US dollars Q1 Q1 Amounts in $ '000 2018 2017 Product sales 35,934 16,169 License fees 248 285 Revenues 36,182 16,454 Costs of sales (6,163) (1,806) Gross profit 30,019 14,648 Other income 183 89 Research and development (7,040) (4,991) General and administrative (3,022) (1,463) Marketing and sales (10,070) (4,162) Costs (20,132) (10,616) Operating result 10,070 4,121 Fair value gain (loss) on revaluation derivatives (1,179) (2,582) Other financial income and expenses (3,813) (7,681) Financial income and expenses (4,992) (10,263) Result before income tax 5,078 (6,142) Income tax credit/(expense) (977) - Net result for the year 4,101 (6,142) Attributable to: Owners of the parent 4,101 (6,142) Total net result 4,101 (6,142) Basic earnings per share ($) 0.006 (0.012) Please note the 2017 figures are estimates for information only, and are not presented as true comparable figures at this stage.
Consolidated Balance Sheet As at date shown, in US dollars 31 March 31 December Amounts in $ '000 2018 2017 Non-current assets Intangible assets 69,361 67,827 Property, plant and equipment 9,824 9,862 Long-term prepayments 2,608 2,749 Restricted cash 1,608 1,600 Deferred tax asset 10,578 11,309 Total non-current assets 93,979 93,347 Current assets Inventories 26,638 21,958 Trade and other receivables 17,712 13,487 Cash and cash equivalents 72,052 70,254 Total current assets 116,402 105,699 Total assets 210,381 199,046 Equity Share capital 7,416 6,935 Share premium 469,673 443,412 Legal reserves (2,911) (1,124) Accumulated deficit (435,220) (426,703) Shareholders' equity 38,958 22,520 Non-current liabilities Loans and borrowings 61,740 70,286 Deferred license fees income 1,561 1,757 Finance lease liabilities 344 467 Other financial liabilities 34,906 33,918 Total non-current liabilities 98,551 106,428 Current liabilities Loans and borrowings 34,445 26,304 Deferred license fees income 988 962 Derivative financial liabilities 1,387 9,942 Trade and other payables 35,707 32,575 Finance lease liabilities 345 315 Total current liabilities 72,872 70,098 Total equity and liabilities 210,381 199,046 Please note the 2017 figures are estimates for information only, and are not presented as true comparable figures at this stage.
Consolidated Statement of Cash Flows For the period, in US dollars Q1 Q1 Amounts in $'000 2018 2017 Operating result 10,070 4,121 Non-cash adjustments: Depreciation, amortization 1,158 893 Accrued employee benefits 562 600 Deferred license fees (248) (285) Operating cash flows before changes in working capital 11,542 5,329 Changes in working capital: Inventories (4,680) (1,259) Trade and other receivables (4,225) (12,410) Payables and other current liabilities (4,824) 3,146 Total changes in working capital (13,729) (10,523) Changes in non-current assets, liabilities and equity 865 (618) Cash generated from (used in) operations before interest and taxes (1,322) (5,812) Interest received - - Net cash flows generated from (used in) operating activities (1,322) (5,812) Capital expenditure for property, plant and equipment (634) (696) Investment intangible assets (433) (192) Net cash flows generated from (used in) investing activities (1,067) (888) Proceeds of loans and borrowings - 5,000 Redemption on bonds (2,744) (2,568) Interest on loans (3,186) (825) Proceeds of equity and warrants 8,081 - Net cash flows generated from (used in) financing activities 2,151 1,607 Increase (decrease) of cash (238) (5,093) Exchange rate effects (1,569) 670 Cash and cash equivalents at 1 January 71,854 33,920 Total cash and cash equivalents at 31 March 73,661 29,497 Please note the 2017 figures are estimates for information only, and are not presented as true comparable figures at this stage.
Pharming Group N.V.
Sijmen de Vries, CEO
Robin Wright, CFO
Julia Phillips/Victoria Foster Mitchell
Lifespring Life Sciences Communication