Pharming Announces First Half 2007 Results
Reports on significant progress in development of Rhucin®
Leiden, The Netherlands.- Biotech company Pharming Group NV (“Pharming” or “the Company”) (Euronext: PHARM) announced today its results for the first half year (HY1) of 2007 ended June 30, 2007. The financial results are in line with expectations communicated earlier this year, while important progress has been realized in the development of Pharming’s lead product Rhucin®.
# Net loss of € 11.3 million in HY1 2007 (€ 10.4 million in HY2 2006 and € 8.1 million in HY1 2006)
# Cash position (including marketable securities) of € 19.1 million as of June 30, 2007
# Revenues of € 0.4 million in HY1 2007 compared to less than € 0.2 million for the full year 2006
# Total costs and expenses of € 10.7 million in HY1 2007 (€ 10.1 million in HY2 2006 and € 8.1 million in HY1 2006)
# Total equity of € 39.9 million per June 30, 2007 compared to € 49.8 million per December 31, 2006.
# ProductsPharming has submitted its answers to the list of questions received from the European Medicines Evaluation Agency (EMEA) in the process of review of the Market Authorization Application (MAA) for Rhucin®. These answers include an interim analysis of the European placebo-controlled randomized clinical trial.
# Pharming facilities have received (in July) GMP status from the EMEA making them licensed for the manufacture of pharmaceutical products
# Decision from the US Food and Drug Administration (“FDA”) regarding the notification of the Generally Recognized As Safe (GRAS) status for human lactoferrin (hLF) expected later this year
# Pharming has been awarded Orphan Drug designation from the EMEA for its recombinant human C1 inhibitor (rhC1INH) for the prevention of Delayed Graft Function (DGF) after solid organ transplantation
# SenterNovem granted two subsidies in the field of Osteoporosis totalling over € 1 million to Pharming’s wholly owned subsidiary DNage BV (“DNage”)
# Scientists of Pharming published breakthrough findings linking ageing with stem cell exhaustion in the leading journal Nature.
# Adjustments in Board of Management (BOM) and key appointments in area of commercial development implemented
# Messrs. Jaap Blaak and Barrie Ward appointed to the Board of Supervisory Directors
# Pharming shares included in Amsterdam Small Cap Index on Euronext.
Dr. Francis J. Pinto, Chief Executive Officer of Pharming, commented: “During the first six months of this year we made significant progress in the development of our lead product Rhucin®. The filing of answers to all of the 120 days questions, including an interim analysis of our European Placebo-controlled trial, coupled to the GMP status of our facilities gives us confidence that we will be able to bring this product to the market in the near future and make it widely available for patients suffering from this severe disease. We look forward to continue to work with the experts of the EMEA in the regulatory review process. In the meantime, we have also made important progress in the USA, where we hope to finish our clinical program later in this year, after which we will submit the regulatory filings as soon as practically possible.
On the financial front we have been able to keep our costs and expenses in line with those in 2006. We expect tostrengthen our financial position either through commercial agreements or through a financial transaction or a combination of both, later in the year. This will allow us to effectively launch Rhucin® in the market and to expand our clinical program to develop Rhucin® for other indications.
With two products close to entering the market and a portfolio of products under development all based on state-of-the-art technology platforms, Pharming remains at the forefront of European Biotech and is well positioned for further significant growth.”
Total costs and expenses in the first half year of 2007 amounted to € 10.7 million compared to € 8.5 million in HY2 of 2006 and € 8.1 million in HY1 2006. Of these costs, approximately € 1.7 million were non-cash costs related to depreciation, amortization and share-based payments. The costs were in line with expectations communicated earlier this year and are higher compared to the same period in 2006 due to increased efforts in Research and Development (partly caused by the addition of DNage activities) and to increased activities in the area of clinical development. Also, the charge for share-based payments is higher in 2007 compared to the same period in 2006.
Revenues have grown due to increased subsidies and grants that are mostly related to the DNage business and partly to an earlier awarded Rhucin®-related grant from the FDA which, could only now be recognized as income.
Pharming’s balance of cash and marketable securities amounted to € 19.1 million at the end of the first six months of 2007. The Company expects to increase its cash position later this year through one or more licensing agreements or another financial transaction. In addition, Pharming expects to receive milestone payments up to US$ 10 million from Paul Royalty Fund (“PRF”) dependent on progress in the development of Rhucin® while the Company will make payments of US$ 2 million in July 2007 and US$ 10 million in July 2008 to PRF.
Inventories have increased to a value of approximately € 11 million per June 30, 2007 in anticipation of a commercial launch of Rhucin®. Inventories consist of finished product, bulk-purified product and frozen milk. Expiration dates of inventories are well beyond the expected date of use.
Pharming submitted its answers to the list of questions received from EMEA as part of the review process of the Market Authorization Application of Rhucin®. These answers included an interim analysis of the ongoing European placebo-controlled randomized clinical trial to test the safety and efficacy of Rhucin®. The Company expects to publish the results of this analysis once it receives clearance from the relevant authorities and Ethics Commitees.
Just after the first six months ended, Pharming received confirmation from the EMEA that its production facilities and processes are in conformity with Good Manufacturing Practice. In the USA, Pharming made good progress in its development program and now aims to finalize its placebo-controlled randomized clinical trial in the second half of 2007.
Earlier this year, Pharming’s rhC1INH received an Orphan Drug designation from the EMEA (a similar designation had been received from the FDA in 2006) for prevention of DGF in solid organ transplantation. DGF is a serious medical condition which frequently occurs after transplantation procedures. In this condition, the transplanted organ or tissue does not function properly during the first period after the transplantation. This may be caused by an immune response of the recipient or by damage caused by oxygen or other external factors during the transplantation procedure. Current treatments include the use of immune suppressing agents. In the area of prevention much focus is given on the transplantation procedure itself and the conditions under which the organs or tissues are stored and treated during the procedure. RhC1INH works in a different way than the current treatments and may, therefore, provide additional benefits. Pharming is well underway in its efforts to start the first clinical studies which are planned to commence in the second half of 2007.
With respect to Pharming’s lactoferrin product, the Company has shown that the product has an excellent safety profile with no toxicity observed after considerable testing. In recent interactions with the FDA, who are reviewing the dossier in relation to Pharming’s request to obtain GRAS status, it appears that there are no further questions outstanding, and that the FDA will communicate on next steps in regard to the review of lactoferrin in the third quarter of 2007. Pharming expects that a final opinion by the FDA will be given to Pharming later this year.
In the first half of 2007, Pharming confirmed efforts to develop recombinant human fibrinogen as a pharmaceutical product for the treatment of bleeding disorders, along with its development for medical device applications in partnership with third parties. The Company expects to provide further details on the pharmaceutical applications of its fibrinogen product and its development in the second half of 2007.
DNage, which was acquired by Pharming in late 2006, continued to make excellent progress in its research programs exemplified by the award of two grants (totalling over € 1 million) in the field of Osteoporosis by SenterNovem, an agency of the Dutch Ministry of Economic Affairs, and by the publication of several research papers including a recent article in Nature. The Company is preparing its first clinical studies in the field of ageing diseases to start in 2008. In these studies Prodarsan®, a proprietary mixture of small molecules with an excellent safety profile, will be tested in a sub-group of patients suffering from premature ageing.
In the first half of this year, Pharming has revised the composition of the Board of Management which now consists of Dr. Francis Pinto (Chief Executive Officer), Dr. Rein Strijker (Chief Commercial Officer) and Dr. Bruno Giannetti (Chief Operations Officer). Dr. Francis Pinto is Chairman of the BOM and has the primary responsibility for the long-term strategy of the Company. Dr. Rein Strijker is responsible for all commercial, financial and investor relation activities and corporate communication. Dr. Bruno Giannetti is responsible for all operational activities, including clinical development, R&D, regulatory and manufacturing. In addition, the Company has strengthened its commercial development team by the appointments of Richard Onyett and Tolleiv Trimborn and the new responsibilities of Samir Singh.
At the level of the Board of Supervisory Directors, Mr. G. Verhagen completed his term, while Mr. J. Blaak and Dr. B. Ward were appointed by the Shareholders.
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