PR Newswire
LEIDEN, The Netherlands, October 30, 2014
LEIDEN, The Netherlands, October 30, 2014 /PRNewswire/ --
Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) today published its financial report for the nine months ended 30 September 2014.
FINANCIAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
POST-PERIOD HIGHLIGHT
Sijmen de Vries, Chief Executive Officer of Pharming, commented: "During this first nine months of 2014 we prepared for US market entry by investing in building inventories of Ruconest®. At the same time, we strengthen the balance sheet with a "sub-10%" private placement to institutional investors that yielded €14.7 million, which ensured that we were able to co- invest to develop our main asset Ruconest® for additional indications, such as the start of the Phase II clinical study in prophylaxis of HAE. In addition, we announced our involvement in direct commercialization activities in Austria, Germany and Netherlands.
We have executed on the next step of our strategic plan to leverage our unique production platform through the acquisition of product leads for additional enzyme replacement therapies in orphan diseases such as Pompe, Fabry and Gaucher's disease and additional leads to Factor VIII for Haemophilia A, to further support the collaboration with Sinopharm's SIPI. Following the FDA approval of Ruconest® in the USA, we are looking forward to the launch of Ruconest® during Q4 and the receipt of the US$20 million milestone from Salix. In addition we will receive 30 % of US net sales, up to $100 million annual sales. For annual US net sales in excess of US$100 million this will stepwise increase up to 40 % of net sales. These proceeds, together with the start of direct commercialization of Ruconest® in Austria, Germany and Netherlands, should begin to drive profitable sales revenues from 2015 onwards and should help us meet our aim of future financial sustainability."
FINANCIAL RESULTS
In the first nine months of 2014, the Company generated revenue from sales of Ruconest® of €2.2 million (9M 2013: €0.6 million). The increase in revenue from sales reflects the underlying increased demands for Ruconest® in the EU markets, compared to 9M 2013. Costs of revenues amounted to €2.6 million (2013: €0.4) including impairments of inventories amounting to €0.5 million. Licensing fees decreased to €1.6 million (9M 2013: €5.4 million) as a result of last year's receipt of a US$5 million payment by our US partner Santarus (now Salix Pharmaceuticals: NASDAQ: SLXP "Salix").
Loss from operating activities increased to €9.7 million (9M 2013 €3.7 million), predominantly as a result of the receipt of the one- off milestone payment of US$5 million in 2013, the increase of operating costs and a €0.5 million impairment on inventory, reflecting the current low yield on EU sales.
Financial income and expenses increased to €9.2 million (9M 2013: €7.4 million), as a result of the (non-cash) increase of the fair value of our outstanding warrants, reflecting the increase of our share price in 9M 2014; while the 9M 2013 costs were related to the January 2013 €16.35 million convertible bond.
As a result of the above items, the net loss for the first nine months of 2014 increased to €18.9 million from €11.1 million in the same period of 2013.
Cash outflows from operations increased by €6.6 million to €13.7 million in 3Q 2014 (9M 2013: €7.1 million), mainly as a result of the increase in manufacturing activities for Ruconest®, ahead of the anticipated US launch in 4Q 2014.
FINANCIAL POSITION
Total cash and cash equivalents (including restricted cash) increased to €23.8 million at 30 September 2014 from €19.2 million at year end 2013. The increase is a result of net cash outflows from operations of €13.7 million and €0.5 million used in investing activities, with net cash inflows from financing activities amounting to €19.4 million and net cash outflows from financing activities amounting to €0.6 million.
Financing cash inflows mainly result from the proceeds of the private equity placement of €14.7 million in April 2014 and the exercise of (2012 and 2013) warrants during 9M 2014, which yielded €4.7 million in cash.
EQUITY POSITION
The equity position increased by €10.9 million versus year-end 2013 (€5.0 million) to €15.9 million (9M 2013: €1.6 million negative).
Pharming continues to monitor the development of its equity standing under International Financial Reporting Standards (IFRS). Notably, the Company reports that the negative equity position at the end of 2011 was mainly caused by the inability to recognize the €19.7 million upfront payments and milestones received from Sobi and Santarus as equity (at 30 September 2014 the deferred license fees income amounted to €12.8 million).
The number of outstanding shares as of 30 October 2014 is 407,686,599 and the fully diluted number of shares is 475.9 million
FINANCIAL GUIDANCE 2014
As result of the continuing regulatory review process in Turkey, the prevailing unrest in Israel and the announcement of direct commercialization by Pharming in Austria, Germany and Netherlands, revenues from Ruconest® sales for 2014 (not including US sales) are now expected to increase from €1.0 million in 2013 to €2.8 million, instead of the previously expected €3.0 million.
No additional financial guidance is provided.
About Pharming Group NV
Pharming Group NV is developing innovative products for the treatment of unmet medical needs. Ruconest® (conestat alfa) is a recombinant human C1 esterase inhibitor approved for the treatment of angioedema attacks in patients with HAE in the USA, Israel, all 27 EU countries plus Norway, Iceland and Liechtenstein. Ruconest® is commercialized by Pharming in Austria, Germany and Netherlands. Ruconest® is distributed by Swedish Orphan Biovitrum AB (publ) (SS: SOBI) in the other EU countries and in Azerbaijan, Belarus, Georgia, Iceland, Kazakhstan, Liechtenstein, Norway, Russia, Serbia and Ukraine.
Ruconest® is partnered with Salix Pharmaceuticals Inc. (NASDAQ: SLXP) in North America.
Ruconest® is also being investigated in a randomized Phase II clinical trial for prophylaxis of HAE and evaluated for various additional follow-on indications. Pharming has a unique GMP compliant, validated platform for the production of recombinant human proteins that has proven capable of producing industrial volumes of high quality recombinant human protein in a more economical way compared to current cell based technologies. Leads for enzyme replacement therapy in Pompe's, Fabry's and Gaucher's diseases are under early evaluation.The platform is partnered with Shanghai Institute for Pharmaceutical Industry (SIPI), a Sinopharm Company, for joint global development of new products. Pre- clinical development and manufacturing will take place at SIPI and are funded by SIPI. Pharming and SIPI initially plan to utilize this platform for the development of rh-FVIII for the treatment of Haemophilia-A. Additional information is available on the Pharming website; http://www.pharming.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.
PHARMING GROUP N.V.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
Consolidated Statement of Financial Position
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Condensed Consolidated Interim Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September 2014 (unaudited - amounts in €'000)
30 September 31 December 2014 2013 Intangible assets 321 405 Property, plant and equipment 5 5,776 6,228 Restricted cash 8 176 176 Non-current assets 6,273 6,809 Inventories 6 9,191 4,763 Trade and other receivables 7 1,667 860 Restricted cash 8 - 2,008 Cash and cash equivalents 8 23,632 16,968 Current assets 34,490 24,599 Total assets 40,763 31,408 Share capital 4,077 3,346 Share premium 282,261 254,901 Other reserves 16.525 14,874 Accumulated deficit (286,982) (268,111) Total equity 9 15,881 5,010 Deferred license fees income 10,572 12,222 Finance lease liabilities 1,076 1,207 Other liabilities 22 44 Non-current liabilities 11,670 13,473 Deferred license fees income 2,200 2,200 Derivative financial liabilities 10 4,682 4,147 Trade and other payables 11 5,868 5,812 Finance lease liabilities 462 766 Current liabilities 13,212 12,925 Total equity and liabilities 40,763 31,408
Notes on pages 11-15 are an integral part of these condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF INCOME
For the nine months ended 30 September 2014 (unaudited - amounts in €'000, except per share data)
30 September 30 September Note 2014 2013 Continuing operations: License fees 1,650 5,353 Product sales 2,193 614 Revenues 3,843 5,967 Costs of product sales (2,189) (419) Inventory impairments (474) - Gross profit 1,180 5,548 Income from grants 92 79 Other income 92 79 Research and development (9,165) (7,554) General and administrative (1,770) (1,754) Costs (10,935) (9,308) Result from operating activities 12 (9,663) (3,681) Financial income 13 144 588 Financial expenses 14 (9,352) (8,002) Financial income and expenses (9,208) (7,414) Net result from continuing operations (18,871) (11,095) Attributable to: Net result from continuing operations (18,871) (11,095) Owners of the parent (18,871) (11,095) Share information: Basic and diluted net loss per share (EUR) (0.05) (0.06) Weighted average shares outstanding 388,245,868 175,368,600
Notes on pages 11-15 are an integral part of these condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the nine months ended 30 September 2014 (unaudited - amounts in €'000)
30 September 30 September 2014 2013 Net result (18,871) (11,095) Currency translation differences - - Items that will be subsequently reclassified to profit or loss - - Other comprehensive income, net of tax - - Total comprehensive income (18,871) (11,095) Attributable to: Equity owners of the parent (18,871) (11,095)
Notes on pages11-15 are an integral part of these condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended 30 September 2014 (unaudited - amounts in €'000)
30 September 30 September Note 2014 2013 Receipts from license partners 1,651 4,804 Receipts of Value Added Tax 712 572 Interest received 136 6 Other receipts 283 848 Payments of third party fees and expenses, including Value Added Tax (5,471) (8,708) Payments of third party manufacturing expenses (7,684) (347) Net compensation paid to board members and employees (1,707) (1,460) Payments of pension premiums, payroll taxes and social securities, net of grants settled (1,604) (1,585) Restructuring payments - (1,245) Net cash flows used in operating activities 8 (13,684) (7,115) Proceeds from sale of assets - 262 Purchase of property, plant and equipment (500) (21) Net cash flows provided by/(used in) investing activities 8 (500) 241 Proceeds of convertible bonds issued - 16,023 Proceeds of equity and warrants issued 19,375 - Payments of transaction fees and expenses (697) (1,368) Payments of finance lease liabilities (139) (478) Net cash flows from financing activities 8 18,539 14,177 Increase cash 4,355 7,303 Exchange rate effects on cash 301 (123) Cash at 1 January 8 19,152 6,314 Cash at 30 September 23,808 13,494 Cash composition: Restricted cash (non-current) 176 176 Restricted cash (current) - 618 Cash and cash equivalents 23,632 12,700 Cash at 30 September 23,808 13,494
Notes on pages 11-15 are an integral part of these condensed consolidated interim financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the nine months ended 30 September 2014 (unaudited - amounts in €'000)
Accu- Share- Number Share Share Other mulated holders' Total Note of shares capital premium reserves deficit equity equity Balance at 1 January 2013 100,918,910 10,092 231,866 14,144 (263,754) (7,652) (7,652) Loss for the period - - - - (11,095) (11,095) (11,095) Other comprehensive income for the period - - - - - - - Total comprehensive income for the period - - - - (11,095) (11,095) (11,095) Share-based compensation - - - 224 - 224 224 Bonuses settled in shares 9 1,281,777 12 176 - - 188 188 Repayments of bonds 2013 9 127,369,529 2,896 13,824 - - 16,720 16,720 Warrants exercised 300,000 3 19 - - 22 22 Adjustment nominal value per share - (10,704) - - 10,704 - - Total transactions with owners, recognized directly in equity 128,951,306 (7,793) 14,019 224 10,704 17,154 17,154 Balance at 30 September 2013 229,870,216 2,299 245,885 14,368 (264,145) (1,593) (1,593) Balance at 1 January 2014 334,655,224 3,346 254,901 14,874 (268,111) 5,010 5,010 Loss for the period - - - - (18,871) (18,871) (18,871) Other comprehensive income for the period - - - - - - - Total comprehensive income for the period - - - - (18,871) (18,871) (18,871) Share-based compensation - - - 1,651 - 1,651 1,651 Bonuses settled in shares 963,066 10 440 - - 450 450 Shares issued for cash 9 30,000,000 300 13,704 - - 14,004 14,004 Warrants exercised/ issued 9 42,012,059 420 13,213 - - 13,633 13,633 Options exercised 56,250 1 3 - - 4 4 Total transactions with owners, recognized directly in equity 73,031,375 731 27,360 1,651 - 29,742 29,742 Balance at 30 September 2014 407,686,599 4,077 282,261 16,525 (286,982) 15,881 15,881
Notes on pages 11-15 are an integral part of these condensed consolidated interim financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the nine months ended 30 September 2014
1. Company information
Pharming Group N.V. ('Pharming' or 'the Company') is a limited liability public company which is listed on NYSE Euronext Amsterdam, with its headquarters and registered office located at:
Darwinweg 24
2333 CR Leiden
The Netherlands
Pharming focuses on the development, production and commercialization of human therapeutic proteins to be used as highly innovative therapies. The Company's products are aimed at treatments for genetic disorders and surgical and traumatic bleeding. Pharming's technologies include novel transgenic platforms for the production of biopharmaceuticals, as well as technology and processes for the purification and formulation of these biopharmaceuticals.
2. Basis of presentation
These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with Pharming's Annual Report 2013. In addition, the notes to these condensed consolidated interim financial statements are presented in a condensed format.
These condensed consolidated interim financial statements have not been reviewed or audited. The Board of Management has approved these condensed consolidated interim financial statements on 29 October 2014.
Going Concern Assessment
The Board of Management of Pharming has, upon preparing and finalizing these financial statements, assessed the Company's ability to fund its operations for a period of at least one year after the date of signing these financial statements.
Based on the above assessment, the Company has concluded that funding of its operations for a period of well in excess of one year after the date of the signing of these financial statements is realistic and achievable. In arriving at this conclusion, the following main items and assumptions have been taken into account:
Pharming has not taken into account other potential sources of cash income, including, but not limited to the following:
In addition, the Company may decide to cancel and/or defer certain activities in order to limit cash outflows until sufficient funding is available to resume them. Deferrals substantially relate to the timing of manufacturing-related and/or planned future clinical development activities for additional indications carried out on the initiative of Pharming.
Notwithstanding the above, the Board of Management of the Company emphasizes that the funding of the Company's operations beyond one year after these financial statements is largely affected by its ability to increase product sales and/or license fee payments from both existing and new partnerships to generate positive cash flows in the future.
With regards to its ability to generate operating cash flows from product sales and/or license fee payments, the following uncertainties (individually or combined) have been identified:
Overall, based on the outcome of this assessment, these financial statements have been prepared on a going concern basis. Notwithstanding their belief and confidence that Pharming will be able to continue as a going concern, the Board of Management emphasizes that the actual cash flows for various reasons may ultimately (significantly) deviate from their projections. Therefore, in a negative scenario (actual cash inflows less than projected and/or actual cash outflows higher than projected) the going concern of the Company could be at risk in the period beyond 12 months as per the date of these financial statements.
3. Summary of significant accounting policies
The applied accounting principles are consistent with those as described in Pharming's Annual Report 2013.
Significant accounting estimates and judgments
The preparation of financial statements requires judgments and estimates that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements. The resulting accounting estimates will, by definition, seldom equal the actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below.
Property, plant and equipment
At the end of the first nine months of 2014, Pharming has property, plant and equipment with a net carrying value of €5.8 million. These assets are dedicated to the production of Ruconest® inventories (€4.6 million) and other corporate purposes (€1.2 million). It is assumed these asset groups will continue to be used in ongoing production, research and development or general and administrative activities over its anticipated lifetime.
Inventories
At the end of the first nine months of 2014, the Company has capitalized Ruconest® product and milk with an aggregate net carrying value of €9.2 million.
The Company has planned for additional inventory investments after the end of the reporting period. These inventories are available for use in commercial, preclinical and clinical activities.
Estimates have been made with respect to the ultimate use or sale of the product, taking into account current and expected preclinical and clinical programs for both the HAE project and other indications of Ruconest® as well as sales projections. In doing so, best estimates have been made with respect to the timing of such events in view of both the existing and expected lifetimes of the product involved.
Due to the early stage commercialization cycle of Ruconest® the actual cash proceeds from these product sales are currently difficult to predict in terms of volumes, timing and reimbursement amounts. In addition, further inventory investments and execution of pre-clinical and clinical activities are subject to availability of sufficient financial resources.
Derivative financial liabilities
At 30 September 2014, the Company has presented derivative financial liabilities with a carrying value of €4.7 million. These liabilities primarily represent the fair values of warrants issued. These fair values are based on models using assumptions with respect to, amongst others, the exercise of the warrants on or before maturity dates as well as (historical) volatility. Actual share price developments may trigger exercise of these warrants on a different moment than anticipated in the model and also cause transfer of assets to warrant holders under conditions that are (much) more or (much) less favorable than anticipated at 30 September 2014. As a result, the difference between the value of assets transferred to warrant right holders upon exercise and the carrying value at 30 September 2014 as charged to the statement of income may be material.
Share price developments may also result in the warrants expiring unexercised while the fair value of warrants unexercised may fluctuate (significantly) until expiration. Fair value changes of warrant rights unexercised between 30 September 2014 and subsequent reporting dates are charged to the statement of income.
4. Cyclicality
In view of the Company's line of business, revenues and cash income from operating activities are subject to the timing of entering into commercial activities as well as the underlying mechanisms of the deal structure (e.g. achievement of milestones). Expenses incurred for research and development activities as well as their associated cash flows highly depend on the phase of research or development. Such items may vary significantly from period to period (i.e. from quarter to quarter) due to the timing and extent of commercial activities as well as research and development activities and are partially beyond control of the Company.
5. Property, plant and equipment
The carrying value of Pharming's property, plant decreased from €6.2 million at year end 2013 to €5.8 million at 30 September 2014 due to depreciation of these assets.
6. Inventories
Pharming's inventories increased from €4.8 million at 31 December 2013 to €9.2 million at 30 September 2014.
7. Trade and other receivables
The increase of trade and other receivables to €1.7 million at 30 September 2014 from €0.9 million at 31 December 2013 mainly results from an increase in trade receivables of €0.3 million and other receivables of €0.5 million related to the investing activities.
8. Restricted cash, cash and cash equivalents, cash flows
The overall net cash position for the first nine months ended 30 September 2014 and 30 September 2013 is as follows:
30 September 30 September Amounts in EUR'000 2014 2013 Non-current restricted cash 176 176 Current restricted cash - 618 Cash and cash equivalents 23,632 12,700 Balance at 30 September 23,808 13,494 Balance at 1 January 19,152 6,314 Increase for the period 4,656 7,180
Restricted cash represent the value of banker's guarantees issued with respect to (potential) commitments towards third parties and are primarily related to the rent of the Company's offices.
The main cash flow items for the first nine months of 2014 and 2013 can be summarized as follows:
30 September 30 September Amounts in EUR'000 2014 2013 Net cash flows used in operating activities (13,684) (7,115) Net cash flows provided by/(used in) investing activities (500) 241 Net cash flows from financing activities 18,539 14,177 Exchange rate effects on cash 301 (123) increase for the period 4,656 7,180
Cash flows used in operating activities increased by €6.6 million, which is entirely related to the increase of third party manufacturing expenses, regarding the build-up of Ruconest® inventories.
Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte.