Pharming Announces Strategic Agreement Valued At US $30 Million
Company poised for growth with solid financial position
Leiden, The Netherlands, February 3, 2006. Biotech company Pharming Group N.V. (“Pharming” or “the Company”) (Euronext: PHARM) (PHARM.AS) announced today that it has signed a strategic partnering agreement with affiliates of Paul Royalty Fund II, LP (“Paul Royalty Fund”) valued at US $30 million on recombinant human C1 inhibitor (rhC1INH) for the treatment of hereditary angioedema (HAE).
Under the terms of the agreement, Pharming has received an upfront payment of US $18.5 million. This amount consists of US $15 million for the Company’s development work on rhC1INH to date and the continued development and commercialization of rhC1INH products, as well as a US $3.5 million equity investment. Recently, the Company received a US $1.5 million investment upon signing of the term sheet with Paul Royalty Fund.
Pharming is also eligible to receive up to US $10 million in milestone payments based on the achievement of Food and Drug Administration approval and the commercial launch of rhC1INH in the US. Paul Royalty Fund is entitled to receive single digit royalties on revenues of rhC1INH and other Pharming products over the ten year term of the agreement. Pharming has the option to repurchase the royalty rights from Paul Royalty Fund at any time and has provided Paul Royalty Fund with a security in the event of financial insolvency. In conjunction, Paul Royalty Fund will receive approximately 815,000 warrants with an exercise price of € 4.00 per share. Pharming will provide further details on the agreement in its annual report.
“With this strategic agreement, Pharming has obtained additional funding for the Company while retaining flexibility to complete regional distribution agreements for rhC1INH,” said Dr. Francis J. Pinto, CEO of Pharming. “Paul Capital\’s expertise in working with life sciences companies will be invaluable to Pharming as we seek to finalize negotiations for rhC1INH on attractive commercial terms through this two-step licensing process.”
“Based on our review of the available data, we were impressed by the potential of rhC1INH for the treatment of HAE,” said Dr. Kenneth Macleod, Principal of Paul Royalty Fund. “The flexible structure of this agreement meets Pharming’s overall financing objectives and puts the Company in a solid position to complete the development and commercialization of the product.”
Pharming has recently announced that it had raised €17.1 million in a share placement with new institutional investors. Including the strategic agreement with Paul Royalty Fund, the Company now has a solid balance sheet with over €50 million in cash. As a result, Pharming is poised for growth through upcoming commercial and strategic transactions, as well as further development of its product pipeline.
Background on Hereditary Angioedema
Hereditary angioedema (HAE) is a human genetic disorder caused by a shortage in activity of the blood protein C1 inhibitor. The disease is characterized by acute attacks of painful and potentially life threatening swelling of soft tissues (edema) of hands, face, feet, abdomen and throat, the latter of which can lead to asphyxiation. An estimated one in 30,000 people in the Western world suffers from HAE. Existing treatments using androgens are unsuited for treatment of acute attacks and may cause serious side effects such as excessive hair growth with women, menstrual disorders, infertility, Hepatitis, and in rare cases liver cancer.
Background on Pharming Group N.V.
Pharming Group N.V. is developing innovative protein products for unmet needs. The Company’s products include potential treatments for genetic disorders, specialty products for surgical indications, intermediates for various applications and food products. Pharming has two products in late stage development - recombinant human C1 inhibitor for hereditary angioedema (Phase III) and recombinant human lactoferrin for food use. The advanced technologies of the Company include innovative platforms for the production of protein therapeutics, as well as technology and processes for the purification and formulation of these products. Additional information is available on the Pharming website, http://www.pharming.com.
Background on Paul Capital Partners and Paul Royalty Funds
Paul Capital Partners manages nearly $5 billion in equity capital commitments for its three investment platforms and has offices in New York, San Francisco, Paris, London and Toronto. The Paul Royalty Fund is one of the largest dedicated healthcare funds globally, with approximately $1 billion in equity capital commitments. The Paul Royalty Fund has made investments in the pharmaceutical, biotechnology, and medical device sectors valued at more than $625 million. These investments are focused on commercial stage companies and products, and consist of investments in the form of royalties, revenue interests and equity. For more information on Paul Capital Partners and the Paul Royalty Fund visit www.paulcapital.com.
This press release contains forward looking statements that involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from the results, performance or achievements expressed or implied by these forward looking statements. The press release also appears in Dutch. In the event of any inconsistency, the English version will prevail over the Dutch version.
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- Samir Singh
- Pharming Group N.V.
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