Delivered 14% increase in revenue, 31% increase in operating profit and 33% increase in net profit year-on-year
Leiden, The Netherlands, 30 July 2020: Pharming Group N.V. (“Pharming” or “the Company”) (Euronext Amsterdam: PHARM) presents its (unaudited) financial report for the six months ended 30 June 2020.
The Company will hold a conference call at 13:00 CEST / 07:00 EST today. Dial-in details can be found on page 6 of this report.
Six months to 30 June 2020
Amounts in €m except per share data
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In Europe and the rest of the world (RoW), revenues for H1 2020 increased 24% year-on-year to €3.6 million (H1 2019: €2.9 million), as a result of significant growth in the EU. This follows the reacquisition of commercial product rights in EU territories, effective from 1 January 2020, as well as volume increases in the EU.
• Operating profit in H1 2020 increased 31% year-on-year to €32.3 million (H1 2019: €24.6 million).
• Net profits in H1 2020 increased 33% year-on-year to €18.1 million (H1 2019: €13.6 million). Despite the decrease in US sales in Q2 2020, net profit for the quarter increased to €9.7 million from €8.4 million in Q1 2020, mainly as a result of lower financing costs following the successful convertible bond refinancing in January 2020 and continued cost control.
• Strengthened cash position to €155.1 million as of 30 June 2020, an increase of €19 million from €136.1 million at 31 March 2020 (cash at 31 December of €68.6 million). This is a result of strong positive operational cashflows during both Q1 and Q2, from Q2 onwards also supported by lower financing costs as result of the successful convertible bond re-financing in Q1.
• The equity position improved from €104.7 million at the end of December 2019 to €127.6 million at the end of June 2020. The majority of the increase in equity is related to the net result for the first half.
• Other financial liabilities, which refers to the contingent consideration reserved for the final successful sales performance milestone of US$25 million to Bausch Health, did not increase. As a result, our estimation of the likelihood of paying this milestone in the future has not changed during the period.
• Since the last reporting date of 20 May 2020, the Company has issued, or reserved for issue, a total of 2.748.244 shares in connection with a number of exercises of options under the current schemes. The number of issued shares as of 30 July 2020 is 637.743.008. The fully diluted number of shares as of 30 July 2020 is 740.943.581.
• On 14 January 2020, the Company announced the placement of a €125 million 3% senior unsecured convertible bonds due 2025. The proceeds of the issue were used to redeem the remaining $56 million of the original $100 million loan from Orbimed Advisors and therefore reduced the Company’s financing costs. The remaining balance of the net proceeds will support the Company’s capital expenditure in relation to the expansion of commercialisation and manufacturing infrastructure.
• During Q1 2020, Pharming received European and US validation of its new production facility of starting material for the Company’s lead product, RUCONEST®. On 21 January 2020, the Company received European Medicines Agency (EMA) approval for a Type II Variation for the new production facility. On 9 March 2020, the Company received approval on its Prior Approval Supplement from the US Food and Drug Administration (FDA) for the new production facility.
• On 11 March 2020, the Company announced Chief Financial Officer (CFO), Robin Wright, would not put himself up for re-election as a member of the Board of Management and therefore as CFO at the General Meeting of Shareholders. As a result, Robin Wright’s term with Pharming ended on 20 May 2020. The search for a new CFO is well underway.
• On 23 March 2020, the Company announced it had been promoted to the Euronext Amsterdam MidKap index (AMX).
• On 21 April 2020, the Company reported encouraging results from a study of five patients with confirmed COVID-19 (SARS-CoV-2) infections hospitalised with related severe pneumonia that were treated with RUCONEST® under a compassionate use programme at the University Hospital of Basel, Switzerland. Following these encouraging results, a multinational, randomised, controlled investigator-initiated study, led by Dr Michael Osthoff from the University Hospital of Basel, is ready to recruit patients. Pharming expects the study to include up to 150 patients and to be carried out in multiple research centres in parallel, in Switzerland, the US and Latin-America.
• On 30 April 2020, the Company announced that the European Commission had approved an extension in the indication of RUCONEST®’s Marketing Authorisation to include the treatment
of acute hereditary angioedema (HAE) attacks in children (aged 2-13). In the EU, RUCONEST® has been approved for the treatment of acute HAE attacks in adults since 2010 and in adolescents since 2016. • On 20 May 2020, the Company announced the nomination of Barbara Yanni and Mark Pyktett to the Board of Supervisory Directors. An Extraordinary General Meeting of Shareholders (EGM) is expected to convene in Q4 2020 for their official appointments. Until that time, both Barbara and Mark will hold observational roles.
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®. The Company’s new starting material facility, approved earlier this year, significantly increases Pharming’s production capacity 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 will continue to receive treatment.
• As a result of halted recruitment, timelines for the pre-eclampsia and acute kidney injury studies are expected to incur delays, subject to the return of recruitment.
• Recruitment in the registration enabling trial for leniolisib has started again and we continue to expect the potential launch of leniolisib in mid-2022.
Sijmen de Vries, Chief Executive Officer, commented:
“We are delighted to announce strong results for the first half of the year, demonstrating consistent progress in a challenging period that included the restriction of all face-to-face sales and marketing activities. Thanks to the dedication, creativity and tenacity of our employees, we have been able to continue our growth trajectory, both in terms of production capacity and sales expansion, to deliver record results. We also continued to increase net profitability, supported by our successful convertible bond refinancing, which significantly lowered our financing costs, and the re-acquisition of RUCONEST®’s commercialisation rights for the remaining EU territories.
In addition, we have continued to demonstrate operational success, receiving EMA and FDA approval for a new production facility of RUCONEST® starting material, receiving approval for an expansion of the EU Marketing Authorisation for RUCONEST® to include children aged 2-13, and reporting encouraging results from a compassionate use study in the treatment of severe pneumonia related to COVID-19 with RUCONEST®, a further investigation into which is due to begin shortly. We are also encouraged that recruitment in the pivotal study for leniolisib has started again and we continue to expect the potential launch of the product in mid-2022. We remain confident we are well positioned to continue to deliver significant value to all our stakeholders in the second half of the year and beyond.”
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®, compared to the first half of 2020, mainly driven by the US and expanded European 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, and support for investigators wishing to explore additional indications for RUCONEST®, such as the planned study in patients confirmed with COVID-19 infections with related severe pneumonia.
• Initiation of patient recruitment of the investigator sponsored, randomised controlled COVID-19 study, in centres in Switzerland, USA and Latin America.
• Investment in the continuing registration-enabling study for leniolisib for APDS, leading to headline data early in 2021.
• Investment in an Investigational New Drug Application to the FDA enabling studies for ?-glucosidase in Pompe disease and preclinical development of the new recombinant ?-galactosidase candidate for Fabry’s 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.
• US revenues increased 13% year-on-year to €85.0 million (H1 2019: €75.0 million), however, sales in Q2 2020 declined by 21% compared to Q1 2020. This was as a result of an unusually high sales level towards the end of Q1 2020, which is believed to have included some pre-filling of prescriptions in response to the emerging COVID-19 pandemic. The Company therefore believes that the H1 2020 results are more representative of underlying performance, than either quarter in isolation.
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Pharming levert in op EUR 1,0433 -10,1ct vol. 18,3 milj.