Pharming Group N.V. — Form 6-K Summary
Reporting period: Unaudited first-quarter results for the three months ended March 31, 2022, furnished on May 12, 2022. Pharming is a global biopharmaceutical company commercializing RUCONEST and developing leniolisib for activated phosphoinositide 3-kinase delta syndrome (APDS).
Key Financial Metrics
| US$ millions, except per-share data | Q1 2022 | Q1 2021 | Change |
|---|---|---|---|
| Revenue | 46.6 | 43.6 | +7% |
| Gross profit | 41.7 | 38.7 | +8% |
| Operating profit | 2.8 | 6.3 | -55% |
| Net finance result | 1.8 | 6.6 | -72% |
| Net profit | 3.5 | 8.5 | -59% |
| Basic and diluted EPS | US$0.005 | US$0.013 | -62% |
| Operating cash flow | 0.6 | 7.1 | Decrease |
- Operating expenses increased to US$39.8 million from US$32.7 million, reflecting leniolisib launch preparation, higher post-COVID travel costs and expense phasing.
- Gross profit increased primarily with revenue growth. The filing does not provide a separately stated gross-margin percentage.
- Cash and cash equivalents were US$189.7 million at March 31, 2022, down from US$191.9 million at December 31, 2021. Cash, marketable securities and restricted cash totaled US$190.7 million.
- Total convertible bonds were US$137.4 million, comprising US$135.6 million non-current and US$1.8 million current balances. Lease liabilities totaled US$20.4 million.
- Shareholders’ equity was US$194.0 million, compared with US$192.9 million at December 31, 2021.
Material Changes Versus Q1 2021
- Revenue rose 7%, driven by more patients treated, partly offset by tighter inventory management at larger specialty pharmacies.
- Operating profit declined 55% as operating expenses grew faster than gross profit.
- Net profit declined 59%, primarily because Q1 2021 included significantly higher finance income, largely from more favorable foreign-exchange gains.
- Operating cash flow fell to US$0.6 million from US$7.1 million. Working-capital outflows included increased inventories, receivables and payables movements.
- Cash and cash equivalents decreased by US$2.3 million during the quarter, while exchange-rate effects increased reported cash by US$0.4 million.
Outlook, Commentary and Unusual Items
- Management expects single-digit 2022 revenue growth from RUCONEST, driven by the United States and expanded European operations, subject to COVID-19 developments and expected quarterly fluctuations.
- Leniolisib regulatory submissions to the FDA and EMA were planned to begin in Q2 2022. The anticipated U.S. launch is in Q1 2023 and the European launch in the second half of 2023, subject to regulatory approvals.
- Both co-primary endpoints were met in the pivotal Phase II/III leniolisib study. The company planned to begin recruitment for leniolisib pediatric trials during the second half of 2022.
- Management expects substantially increased investment in leniolisib launch preparation and clinical development, with a significant impact on profit. It expects RUCONEST cash flow to fund current investments and does not expect additional financing for the current business.
- Pharming received a one-time US$7.5 million payment after reducing its holding in BioConnection to 22.98% following Gimv’s acquisition of a majority stake.
- Post-period developments included positive regulatory decisions concerning leniolisib’s pediatric investigation plan and a Promising Innovative Medicine designation from the UK MHRA.
- No further specific financial guidance for 2022 was provided.
- Risks include regulatory approval and launch timing for leniolisib, clinical and development outcomes, related costs, COVID-19 effects on prescriptions and medical practices, foreign-exchange movements, working-capital requirements and the potential need to finance acquisitions or in-licensed assets.
Investor Verification Points
- Verify the timing and outcome of FDA and EMA filings and the expected Q1 2023 U.S. launch of leniolisib.
- Monitor the scale and timing of leniolisib launch and clinical-development spending and its effect on profitability and cash flow.
- Assess whether RUCONEST revenue growth meets the stated single-digit 2022 outlook, including the effects of inventory management and COVID-19-related prescription delays.
- Review liquidity relative to convertible-bond obligations, lease liabilities and planned investments.
- Confirm the accounting and recurring versus non-recurring nature of the US$7.5 million BioConnection payment.
- Review the company’s 2021 Annual Report and Form 20-F for additional risk factors and forward-looking-statement assumptions.