Pharming Group N.V. — Form 6-K Summary
Reporting period: Preliminary, unaudited results for the fourth quarter and year ended December 31, 2023, furnished on March 14, 2024. The filing covers Pharming’s rare-disease products RUCONEST® and Joenja® (leniolisib).
Financial performance
| US$ millions, except per-share data | 4Q 2023 | 4Q 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Total revenue | 81.2 | 54.6 | 245.3 | 205.6 |
| Gross profit | 74.1 | 48.3 | 220.1 | 188.1 |
| Operating profit (loss) | 1.1 | (10.2) | (5.4) | 18.2 |
| Profit (loss) for the period | (2.7) | (14.6) | (10.1) | 13.7 |
| Basic EPS | $(0.004) | $(0.022) | $(0.015) | $0.021 |
- FY 2023 revenue increased 19% to $245.3 million. RUCONEST revenue rose 10% to $227.1 million, including record fourth-quarter revenue of $73.3 million, up 34% year over year.
- Joenja generated $18.2 million of FY 2023 revenue and $7.9 million in the fourth quarter following its U.S. launch in April 2023.
- FY 2023 gross profit increased 17% to $220.1 million. Approximate gross margin declined to 89.7% from 91.5%, primarily reflecting higher RUCONEST production costs, Joenja royalties and inventory impairment charges.
- FY 2023 operating expenses increased materially: research and development was $68.9 million, general and administrative expense was $55.9 million, and marketing and sales expense was $124.0 million.
- Operating performance was affected by $10.4 million of Joenja milestone payments, increased leniolisib development and commercialization spending, a $24.2 million increase in payroll expense, and $4.7 million of additional impairment expense related to the Pivot Park DSP facility.
- Other income included a $21.3 million gain from the sale of the FDA Rare Pediatric Disease Priority Review Voucher to Novartis.
Cash flow, liquidity and debt
- Net cash used in operating activities was $17.5 million in 2023, compared with $22.5 million of operating cash generation in 2022. Working capital use included increased inventories and receivables.
- Cash and cash equivalents declined to $61.5 million from $207.3 million, primarily because the company invested in marketable securities.
- Marketable securities totaled $151.7 million at year-end. Including cash and restricted cash, total cash, restricted cash and marketable securities increased to $215.0 million from $208.7 million.
- Total assets were $461.4 million and shareholders’ equity was $219.2 million at December 31, 2023.
- Convertible bonds totaled $138.4 million, including current and non-current portions, compared with $133.4 million at year-end 2022. Lease liabilities totaled $33.1 million.
- Management stated that current cash and continuing product revenue cash flows are expected to fund planned investments, with no material cash burn expected before potential acquisitions or in-licensing transactions.
Material changes versus the prior comparable period
- Pharming transitioned from a single-product commercial business to a two-product business following the U.S. launch of Joenja for activated PI3K-delta syndrome, or APDS.
- Revenue growth was offset by substantially higher commercial, development and infrastructure costs, resulting in a FY 2023 operating loss of $5.4 million versus operating profit of $18.2 million in 2022.
- Net income declined to a $10.1 million loss from a $13.7 million profit. Foreign-exchange effects, higher finance expenses and growth investments contributed to the deterioration.
- The company identified more than 840 diagnosed APDS patients globally, including more than 200 in the U.S. At year-end, 92 U.S. patients were enrolled in Joenja therapy and 81 were on paid therapy.
- Pharming identified more than 1,100 U.S. patients with potentially relevant variants of uncertain significance and expects validation studies to be completed during the fourth quarter of 2024.
Guidance, outlook and key developments
- FY 2024 total revenue guidance is $280 million to $295 million, representing 14% to 20% growth. No further specific financial guidance was provided.
- Management expects continued RUCONEST growth, additional U.S. Joenja patient identification and conversion, and increasing ex-U.S. leniolisib revenue through commercial launches and early-access programs.
- Regulatory activity is expected in 2024 for leniolisib in the EEA, United Kingdom, Canada, Australia and Israel. The company submitted a U.K. marketing application on March 12, 2024.
- Pharming is advancing pediatric leniolisib trials and a Japanese Phase III trial. It plans to initiate a Phase II proof-of-concept study in approximately 12 patients with selected primary immunodeficiencies involving PI3K-delta-linked immune dysregulation.
- Key risks include regulatory approval and timing, clinical-trial outcomes, patient identification and diagnosis, conversion to paid therapy, market access and reimbursement, competitive HAE and rare-disease markets, foreign-exchange exposure, cost escalation, and the need to fund potential acquisitions or in-licensing.
- The financial statements were not audited by the company’s statutory auditor. The company stated that a fuller risk profile would be included in its 2023 Annual Report and Form 20-F.
Important facts for investors to verify
- Reconcile the $215.0 million reported total of cash, restricted cash and marketable securities with the underlying balances of $61.5 million cash, $151.7 million marketable securities and restricted cash.
- Monitor whether Joenja U.S. paid-patient additions and APDS diagnosis initiatives support the $280 million to $295 million 2024 revenue guidance.
- Track regulatory decisions and launch timing in the EEA, United Kingdom, Canada, Australia, Israel and Japan, as well as pediatric label-expansion progress.
- Assess whether operating-cost growth moderates as Joenja revenue scales, particularly marketing, sales, research and development, payroll and milestone costs.
- Review the audited 2023 Annual Report and Form 20-F for final results, detailed risk disclosures, debt terms, liquidity restrictions and any changes to the preliminary unaudited figures.