Pharming Group reports earnings for the first nine months of 2022 Pharming_Group_NV_Logo

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Pharming Group N.V. (“Pharming” or “the Company”) (Euronext Amsterdam: PHARM) (NASDAQ: PHAR) presents its preliminary, unaudited financial report for the first nine months ended September 30, 2022.

Chief Executive Officer, Sijmen de Vries, commented:

“In the first nine months of 2022 Pharming continued to perform well despite challenging industry conditions. Our commercialized asset RUCONEST® saw increased sales of 3% or US$151.0 million, compared to the same period last year, highlighting the continued need for a safe and effective acute hereditary angioedema therapy.

From a strategic perspective, we continued to make significant progress delivering on a number of important regulatory milestones for leniolisib, a rare immunodeficiency disease. Of note, our New Drug Application for leniolisib was accepted by the US FDA for Priority Review with a PDUFA goal date of March 29, 2023. Furthermore, we submitted a Marketing Authorisation Application for the product to the European Medicines Agency following the grant of accelerated assessment. We remain on track for the anticipated marketing authorization of leniolisib as a treatment of APDS in key markets next year.

Looking ahead, the anticipated launch and commercialization of leniolisib will be supported by our strong balance sheet and the steady sales of RUCONEST®. We will continue focusing on our strategic objectives and the internal review of our pipeline as we look to bring the unserved rare disease patient the solutions they need. We look forward to presenting more detailed plans at our full year financial results.”

Strategic highlights

During the first nine months of 2022, we continued to execute on our strategic objectives of building a sustainable business by focusing on RUCONEST® sales, the approval, launch and commercialization of leniolisib, and the ongoing development and management of our pipeline as we prioritize our efforts on rare diseases.

As announced during the half year financial results in August 2022, we initiated an internal review of our pipeline with a greater and renewed focus towards rare diseases. As a result, we will advance the development of our pipeline through a combination of internal development projects – including the development of additional indications for leniolisib, as well as OTL-105 as a gene therapy for HAE – and the potential acquisition of new, late-stage assets through in-licensing and M&A opportunities.

We believe these potential acquisitions and in-licensing will be financed through a combination of positive cash flow from the RUCONEST® business, anticipated future leniolisib business, as well as available cash from our strong balance sheet. If required, Pharming will access additional funding from the capital markets.

Pipeline development
leniolisib

For leniolisib, Pharming has a three-step approach planned for the coming years.

The first step is the anticipated marketing authorization and commercial launch of leniolisib for the treatment of activated PI3K delta syndrome (APDS) in adults and adolescents aged 12 and older in the US during the first half of 2023. This will be followed by key markets in the European Economic Area (EEA) and the UK in the second half of 2023 and early 2024, respectively, dependent upon regulatory approval. The Company will evaluate additional countries and regions and will commercialize the product either directly or through strategic distribution partnerships.

The second step includes the marketing authorization and commercial launch of leniolisib as a treatment of APDS in children as young as one year of age.

The third step is the continued life cycle management of the leniolisib compound into further indications which will be disclosed when decisions have been taken.

US market

We remain on track for the anticipated commercial approval of leniolisib in the first quarter of 2023, subject to approval from the US Food and Drug Administration (FDA), followed by the commercial launch of leniolisib in the second quarter of 2023.

In the third quarter of 2022, we delivered on a number of important regulatory milestones including the filing and acceptance of a New Drug Application (NDA) for Priority Review by the FDA.

As a result of receiving Priority Review, Pharming’s NDA for leniolisib was assigned a Prescription Drug User Fee Act (PDUFA) goal date of March 29, 2023.

In anticipation of a positive outcome from the FDA, we continued to grow our US field force and leverage our marketing capabilities for the commercialization of leniolisib.

Finally, the ICD-10-CM code for APDS took effect on October 1, 2022. The assignment of the ICD-10-CM code enables physicians and payors in the US to add a diagnosis of APDS to patients’ health records, which will help connect these individuals with researchers studying the prevalence and course of the disease. In addition, by allocating a specific diagnosis, the new ICD-10-CM code may help confirm medical necessity in individual patients, thus improving their access to relevant care options through US health insurance plans.

European Economic Area (EEA) and UK market
In the EEA, we announced that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) had granted an accelerated assessment for the Marketing Authorisation Application (MAA) for leniolisib in adults and adolescents aged 12 and older. Upon further request, EMA will grant an accelerated assessment of an MAA if they decide the product is of major interest for public health, and in particular, from the viewpoint of therapeutic innovation. The accelerated assessment reduces the review timeframe from 210 days to 150 days.

Further positive milestones were reached in October 2022 when we announced that we had submitted a Marketing Authorisation Application for leniolisib to the EMA. We expect to receive EMA validation of the MAA at the end of October 2022, with anticipated marketing authorization in H1 2023.

Moving on to the UK market, in April 2022, the Medicines and Healthcare products Regulatory Agency (MHRA) granted Promising Innovative Medicine (PIM) designation to leniolisib for the treatment of APDS. A PIM designation is an early indication that leniolisib is a candidate for the MHRA’s Early Access to Medicines Scheme. This scheme provides an opportunity for treatment options to be used in clinical practice in parallel with the later stages of the regulatory process.

Finally, on September 30, 2022, the UK government took the decision to extend the European Commission Decision Reliance Procedure (ECDRP) by 12 months, until December 31, 2023. The ECDRP allows a company to submit a product that has received approval from EMA to the UK’s MHRA. The MHRA can grant a license relying on the EMA’s decision, thereby ensuring a less time consuming in-country review.

The extension of the ECDRP has several benefits including aligned EU and UK dossiers, consistent labeling across the EU and UK, and the potential for an earlier Marketing Authorisation Approval. As such, Pharming has decided that the ECDRP procedure will be used for the application of leniolisib to the MHRA. Under ECDRP, if the submission of an application is made within five days of an EMA CHMP positive opinion, the MHRA will aim to determine a decision within a 67-day timeline. The anticipated MHRA decision should be known in H2 2023.

Pediatric clinical development
As previously announced, we intend to expand access to leniolisib for the treatment of pediatric APDS. As a result, Pharming has developed a clinical plan to include children as young as one year of age. During the first half of the year, positive decisions were received from EMA and MHRA on the Pediatric Investigation Plan (PIP) for leniolisib as a treatment for APDS in children. The leniolisib PIP includes two planned, global clinical trials in pediatric patients with APDS aged 4 to 11 with a second study in patients aged 1 to 6. These two studies will support regulatory filings worldwide. Pharming expects to initiate recruitment for this pediatric program for leniolisib in the fourth quarter of 2022.

OTL-105
Pharming’s strategic collaboration with Orchard Therapeutics to research, develop, manufacture and commercialize OTL-105, a newly disclosed investigational ex vivo autologous hematopoietic stem cell (HSC) gene therapy for the treatment of hereditary angioedema (HAE) is ongoing. The program has made good progress developing the lentiviral vector to enhance C1-inhibitor expression and is now testing in preclinical HAE disease models. We anticipate providing further updates as we move towards preparing an Investigational New Drug (IND) filing.

Acute Kidney Injury (AKI)
As announced at our half year 2022 financial results, following an internal review of our pipeline, we have taken the strategic decision to discontinue further development of rhC1INH therapy for Acute Kidney Injury. We are considering strategic options to gain value from the work done to date and have de-prioritized further development and investment in the large-scale production of rhC1INH through the use of our transgenic cattle herd. The herd is being maintained to allow all possible outcomes to be explored.

The ongoing Phase IIb clinical trial is continuing as we evaluate these strategic options.

We will update the market at our full year 2022 financial results on further progress in this area.

Pompe
We continue the preclinical investigation of a next-generation alpha-glucosidase therapy for the treatment of Pompe disease and will update the market on the results as appropriate.

Financial Summary

Amounts in US$m except per share data

YTD 2022

YTD 2021

% Change

Income Statement

Revenues

151.0

146.1

3 %

Gross profit

139.7

130.6

7 %

Operating profit

28.4

15.3

86 %

Profit for the year

28.3

13.9

104 %

Balance Sheet

Cash & marketable securities

189.9

184.8

3 %

Share Information

Basic earnings per share (US$)

0.043

0.022

95 %

Diluted earnings per share (US$)

0.040

0.018

122 %

Financial highlights

YTD Q3 2022

Revenues for the first nine months of 2022 were US$151.0 million, a 3% increase compared to the first nine months of 2021 (US$146.1 million).

Gross profit for the first nine months of 2022 increased 7% to US$139.7 million. This increase was driven by growth in revenues, production efficiencies and a favorable tailwind in currency translation effects.

Operating costs for the first nine months of 2022 increased by US$9.8 million to US$126.9 million versus the same period last year. The increase results from a combination of increased R&D expenditure, launch preparation and manufacturing costs for leniolisib, and an increase in travel related expenses post-COVID-19. This increase was partly offset by significant one-off costs in Q3 2021 relating to the in-licensing of OTL-105 from Orchard Therapeutics.

Operating profit for the first nine months of 2022 was US$28.4 million, increasing 86% versus the same period last year. This was mainly driven by the increase in other income of US$13.8 million as a result of a reduced minority stake in BioConnection communicated in our H1 2022 press release.

Net profit for the first nine months of 2022 was US$28.3 million, a 104% increase compared to the same period last year (US$13.9 million). This was driven by the increase in other income of US$13.8 million.

Cash and cash equivalents, together with restricted cash, decreased from US$193.0 million at the end of 2021, to US$189.9 million at the end of the third quarter 2022.

Outlook

For the financial year of 2022:

  • Single digit growth in Group revenues from RUCONEST® sales. Quarterly fluctuations are expected.
  • Subject to a positive outcome from the FDA review, we anticipate marketing authorization in the US for leniolisib at the end of Q1 2023, with an anticipated launch and commercialization in Q2 2023.
  • Subject to a positive outcome from the EMA review, we anticipate a positive opinion from the CHMP for leniolisib, followed by the issuance of an MAA by the European Commission towards the end of H1 2023. Initial commercial launches in EU markets are planned for H2 2023.
  • Following an anticipated positive CHMP opinion, we intend to submit an ECDRP filing for leniolisib with the MHRA in the UK in H2 2023.
  • Pharming will continue to allocate resources towards the anticipated launch and commercialization of leniolisib with the view of accelerating future growth. Investments in launch preparations and focused clinical development for leniolisib will continue to impact profit for the remainder of 2022 and throughout 2023. However, no additional financing to support the current business is expected with the continued cash flow from RUCONEST® funding these investments.
  • Investment and continued focus on potential acquisitions and in-licensing of new, late- stage development opportunities and assets in rare diseases. Financing, if required, would come via a combination of our strong balance sheet and access to capital markets.

No further specific financial guidance for 2022 is provided.

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