Management exercise options representing 6,240,000 shares and as result increase their holdings by 26%

Leiden, the Netherlands – 30 July 2018

Pharming Group N.V. (“Pharming” or “the Company”) (Euronext Amsterdam: PHARM) announced today that it has issued a total of 6,240,000 new shares following exercise of warrants representing a total of 6,240,000 shares. The new shares represent an increase in the number of issued shares of 1.02%. As a result of this exercise, including shares needed to be sold to meet both the mandatory immediate withholding of Dutch income tax on exercise and funds for the exercise price of all options exercised, the members of management involved increased their holdings of shares by 26% from 5,945,458 to 7,475,126.

Two members of the Board of Management have option schemes which expire within the next 9 months, representing a total of 19.2 million shares. To prevent the exercise of such a large number of options and the consequent sale of the majority of these shares to fund income tax and option exercise prices at the time of exercise, thereby releasing almost 3% of the Company’s issued share capital on to the market over a short period of time, the option holders took the decision to spread the exercise over as many open periods as may be declared for them as insiders until that expiry date, in order to create as little effect on the Pharming stock price as possible.

As is standard for exercises of employee share options in listed companies across the world, Pharming share options are exercised by (i) exercising the options, and then (ii) selling such proportion of the resulting shares on the open market as is required to enable the option holder to pay (a) the exercise price of the options to the Company and (b) the income tax due on the gain as determined by reference to the option holder’s tax circumstances at their marginal tax rate. In the case of a large exercise of options in the Netherlands, this, by default, results in the immediate sale of the major part of the option shares in the market to meet these two cash requirements.

Dr Sijmen de Vries, Chief Executive Officer of Pharming, commented:

“The Board of Management is absolutely committed to the success of Pharming, and as can be seen, we are very happy to convert our holdings of options into holdings of Pharming shares at this time. We understand that some observers were not aware of the required sales of considerable amounts of shares necessary to pay the exercise price and tax obligations created by such exercises.”

We have been asked why our stock price has become so fluid recently. One big reason, we suspect, is that small shareholders are holding their stocks at brokerages who, usually without the shareholders’ knowledge, are regularly engaging in lending their shares for a fee to institutions who specialise in automated (short- term) short-selling stocks. This is where the short-seller institution sells a lot of stock they do not in fact own in the morning at the market price, thereby putting downward pressure on the stock price, which is then amplified by (small) shareholders following these sales, which is then followed in turn by the short- seller buying back the stock in the afternoon at the lower price to meet their sales obligations, making themselves a net gain during that day.

Revised Share Capital Structure
26 July 2018 Shares issued Shares reserved 31 July 2018

Shares 610,411,871 6,240,000 ----------- 616,651,871
Warrants 1,222,711 ------------------------1,222,711
Options 37,598,274 ------ (6,240,000)-- 31,358,274
LTIP 8,063,864 -------------------------- 8,063,864
Issued 657,296,716 657,296,716
Available for issue 142,703,284 142,703,284
Authorised share capital 800,000,000 800,000,000