Leiden, The Netherlands, August 4, 2011. Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the first half year ended June 30, 2011.
HIGHLIGHTS
Revenues and other income from continuing operations increased to €1.4 million (H1 2010: €0.1 million) due to recognition of license fee income and product sales following launch of Ruconest® in December 2010.
Operating costs from continuing operations decreased to €9.1 million (H1 2010: €10.1 million). Operating cash outflows in the first half of 2011 amounted to €8.9 million compared to €10.0 million (H1 2010) of which €8.4 million in H1 2010 was from continuing operations and €1.6 million from discontinued operations. The €0.5 million net increase in cash outflow from continued operations is explained by €2.9 million less cash received from commercial partners, primarily related to a €3.0 million second quarter 2010 upfront payment from SOBI upon entering into a distribution agreement for Rhucin®, and the deferred payment of 2009 liabilities to early 2010 as a result of a limited cash position at year end 2009.
Total net loss decreased to €8.0 million (H1 2010: €28.0 million).
In the six months to June 30, 2011, net cash and cash equivalents, including restricted cash, increased to €11.0 million (December 31, 2010: €10.5 million). The €0.5 million increase largely reflects the net cash inflows from financing activities of €10.2 million and net operating cash outflows of €8.9 million. Post period we raised €3.2 million gross through a private placement with specialist investors.
Roll-out of Ruconest® across Europe is progressing well and we continue to make progress with the US development. We and our partner, Santarus, are finalizing discussions with the FDA on the Phase III protocol to support the submission of a Biologics License Application. As previously discussed, changes to the study design will include a modification to the way the primary endpoint will be assessed and an increase in the number of study patients from 50 to approximately 75. We continue to expect that the Phase III study will be completed by the third quarter of 2012, which is within our original time estimate of 12 to 18 months. If approved, Rhucin® will be the first recombinant C1 inhibitor on the market, and could offer an attractive therapeutic option for patients with HAE.
Agreement signed with MegaPharm for the commercialization of Ruconest® in Israel represents first step in global expansion of C1 Inhibitor franchise.
Chief Executive Officer, Sijmen de Vries, commented: "Throughout the first half of 2011 we have been focusing on addressing the FDA's refusal to file letter for Rhucin® and we continue to make progress. Concurrently, we have continued to seek and evaluate new sources of value creation and financing for the Company, including additional partnerships for our C1 inhibitor franchise and potential deals which utilise our validated, proprietary and low cost production platform. We were pleased to complete a private placement post the period against a backdrop of difficult market conditions. This raise significantly extends our runway into 2012."
KEY FINANCIAL DATA
(in €million, except per share data)
Half year ended June 30, 2011 (unaudited) Half year ended June 30, 2010
(unaudited).
Statement of financial position:
Non-current assets (excluding restricted cash)
10.2
27.0
Cash and cash equivalents, net of bank overdrafts
11.0
9.8
Inventories and other current assets
8.6
12.4
Total assets
29.8
49.2
Total equity
4.1
11.4
Deferred license fees income
18.3
3.1
Convertible bonds
-
11.7
Other liabilities
7.4
23.0
Total equity and liabilities
29.8
49.2
Statement of income:
Revenues and other income
1.4
0.1
Cost of revenues
(1.1)
-
Other operating costs
(9.1)
(10.1)
Financial income and expenses
0.2
(16.3)
Net loss from continuing operations
(8.6)
(26.3)
Net profit/(loss) from discontinued operations
0.6
(1.7)
Total net loss
(8.0)
(28.0)
Net loss attributable to equity owners of the parent
(7.9)
(28.0)
Net loss attributable to non-controlling interest
(0.1)
-
Statement of cash flows:
Net cash used in operating activities
(8.9)
(10.0)
Net cash used in investment activities
(0.6)
-
Net cash from financing activities
10.2
18.3
Share data:
Outstanding shares at the end of the period
461,116,470
304,953,323
Weighted average shares outstanding in the period
452,653,744
177,091,915
Basic and diluted net loss per share (€)
(0.02)
(0.16)
FINANCIAL RESULTS
Financial results for the first six months of this year showed significant increase in revenues compared with the equivalent period last year.
In the six months to June 30, 2011 the Company generated revenue and other income from continuing operations of €1.4 million (H1 2010: €0.1 million). This increase reflects the recognition of license fee income and product sales following launch of Ruconest® in December 2010. Costs associated with the revenues and other income amounted to €1.1 million.
Total operating costs from continuing operations decreased to €9.1 million (H1 2010: €10.1 million). The decrease partially reflects the timing of expenses, in particular related to the EU regulatory activities in the first half year of 2010 and a continuing emphasis on cost containment.
Financial income and expenses from continuing operations resulted in a €0.2 million profit (H1 2010: €16.3 million loss). Except for the derivative financial liability, which yielded a €0.3 million profit in the first half year of 2011, the anti-dilution provisions, convertible bonds and earn-out obligations were all settled in the second half of 2010 so that no further expenses were incurred in 2011.
Following liquidation of DNage early 2011, the Company deconsolidated the DNage entity from its statement of financial position, resulting in a one-time profit from discontinued operations of €0.6 million (H1 2010: €1.7 million loss).
Overall, the total net loss including the contribution of minority shareholders decreased to €8.0 million (H1 2010: €28.0 million). The net loss per share for the first half year decreased to €0.02 (H1 2010: €0.16).
FINANCIAL POSITION
In the six months to June 30, 2011, net cash and cash equivalents, including restricted cash, increased to €11.0 million (December 31, 2010: €10.5 million). The €0.5 million increase largely reflects the net cash inflows from financing activities of €10.2 million and net operating cash outflows of €8.9 million.
The full half year report for the period ended June 30, 2011 can be found on Pharming's website.
