LEIDEN, The Netherlands,
December 8, 2016 /PRNewswire/ --
Pharming Group N.V. ("Pharming" or "the Company") (EURONEXT:
PHARM) announces today that it has completed a definitive agreement
to acquire all North American commercialisation rights for its own
product, RUCONEST® (recombinant human C1 esterase inhibitor),
including all rights in the US, Mexico and Canada, from certain subsidiaries of Valeant
Pharmaceuticals International, Inc. ("Valeant") (NYSE/TSX: VRX).
RUCONEST® is an orphan drug designated therapy developed by
Pharming, already approved for the treatment of acute Hereditary
Angioedema ("HAE") attacks in patients in the US and EU. This
transaction will accelerate Pharming's development into a
profitable specialty pharmaceutical company with its own
independent commercial infrastructure, which will form the
foundation for future growth.
- Transformational acquisition of commercial rights to
Pharming's own product RUCONEST®
- Immediate and substantial positive impact on
Pharming's operational results and near-term
profitability; annualised run rate of sales, increased from
US$35 million in Q3 2016 to more than
US$40 million, based on the average of the most
recent two months of sales (October and November).
- US$125 million deal
value, with an upfront fee paid to Valeant of
US$60 million, and future
self-funding sales milestone payments up to a further
US$65 million in total
- Funding through a combination of new equity, straight debt
and new convertible bonds of €104 million before costs.
- Cash position after closing of deal and payment of all
transaction costs strengthenend to €34.3
million
- Additional new investment going into RUCONEST® sales force,
medical science liaison personnel and marketing activities in the
US and Europe to accelerate
sales growth in both the US and Europe
Since the US Food and Drug Administration ("FDA") approval of
RUCONEST® on 16 July, 2014, US net
product sales have grown from US$0.3
million in 2014 to an annualised run rate of approximately
US$35 million at the end of the third
quarter of 2016 and recently, based on average sales over the last
two months (October and November) to an annualised run rate of more
than US$40 million, within the US
acute HAE market of around US$850
million per year.
Recently, RUCONEST® has shown very good positive data in
prophylaxis of HAE, meeting its primary endpoints for both
once-weekly and twice-weekly dosing regimens in a Phase II clinical
trial (announced on July 18, 2016).
If approved in this indication, RUCONEST® will be able to
enter this additional market, worth around US$700 million per year. RUCONEST®
therefore has the potential to be the only recombinant C1 esterase
inhibitor approved to target both the acute market and the HAE
prophylaxis market.
Structure of the Deal
Under the terms of the agreement, Pharming has paid Valeant an
upfront fee of US$60 million upon
Closing. In addition, over the coming years the Company will
make one-time-only payments to Valeant on achievement of a small
number of specific sales milestones events, totalling a maximum of
US$65 million. The specific details
of these self-funding additional transaction terms are not
disclosed for commercial reasons.
The transaction has been completed and Pharming is now
responsible for selling RUCONEST® directly in the US.
Growth of sales force and supplementary marketing efforts
crucial for success
Helping to ensure a seamless transition, all of the dedicated
RUCONEST® sales force who previously worked for Valeant or one of
its subsidiaries, a total of 11 people, have accepted offers to
join Pharming to maintain and boost the RUCONEST® sales effort in
the US. The Company also plans to drive sales growth by
increasing the size of the sales force, investing in medical
science liaison personnel and supporting additional marketing
activities, including patient advocacy programmes and the provision
of significant unconditional support for the HAEA (the US HAE
patients' association) and its programmes as well as other HAE
centers of excellence in the US. In addition, Pharming is planning
further investment in the acceleration of RUCONEST® sales efforts
to drive growth in the European, Middle Eastern and African markets
which Pharming assumed responsibility over in October 2016 from SOBI, as announced on
14 July 2016, and to make RUCONEST
available in Canada and
Mexico.
Valeant and Pharming will work closely on the transition for
customers and HAE patients under a transition services agreement
entered into today in connection with the closing of the
transaction. This will enable Pharming to replace core
functions currently undertaken by Valeant and its contractors in a
smooth and timely manner without any risk for patients.
Funding the transaction and development
investments
The transaction was funded by a complex combination of new
financial instruments, including a Rights Issue to existing
shareholders. These instruments are as follows:
- A Rights Offer to existing shareholders to acquire one new
share for every seven shares already held, at a price of €0.205 per
new share, which raised €8.8 million, including a Rump Offer of
shares represented by unexercised rights, to institutional
shareholders.
- A US$40 million, 42 months'
straight debt facility on standard commercial terms (8.25% interest
and one-off 9% final payment at maturity in June 2020). The syndicate includes one of the
Company's current lenders, Silicon Valley Bank, and new lender
Kreos Capital. The debt allows for twelve months of interest-only
payments and is then paid off in 30 equal instalments.
- A five-year redeemable 8.5% convertible Eurobond facility (the
Ordinary Bonds) for €12.5 million which will be convertible into
shares at €0.284, a premium of 25% to the 20-day volume-weighted
average price (VWAP) as at 18 November
2016, the business day prior to publication of Pharming's
prospectus on 21 November 2016.
The issue was led by Kreos Capital and other EU and US
institutional investors. These bonds have an 8.5% interest
rate.
- An 18-month redeemable amortizing convertible bond (the
Amortizing Bond) for €45 million, led by Hudson Bay Capital with
other institutional investors. These bonds are convertible
into shares at €0.289, a premium of 35% to the price on
5 December 2016, the day before
closing of the bond issue. The bonds carry no interest rate and can
be partly redeemed in cash at discretion of the Company. Further
details of this instrument were announced on 7 December 2016.
- The costs of the whole financing programme are approximately
€9.7 million, including legal costs, and the costs for the Valeant
transaction will be approximately €1.0 million. The amount
payable to repay the existing debt facility will be approximately
€15.6 million. The net proceeds of all the financing
transactions after payment of costs, the repayment of the existing
debt facility and the payment of the upfront amount to Valeant will
be €19.4 million. Following closing, the cash position will be
approximately €34.3 million.
- A total of 88,025,158 warrants to subscribe for Pharming shares
at €0.284 per share, a premium of 25% to the 20-day volume-weighted
average price (VWAP) as at 18 November
2016, have been issued to institutional investors who
subscribed for the different financing instruments.
- Only the 42,981,939 shares bought in the Rights Offer and
associated rump offer have been issued in connection with the
acquisition. Up to a further 199,864,273 shares are
represented by the convertible bonds and will only be issued upon
future conversion or in case of amortization in equity by the
Company.
Pharming anticipates that this transaction, after taking full
account of the costs of the transaction and the financing including
interest, will be accretive to earnings within 2017 and will enable
the Company to reach profitability, potentially as much as three
years earlier than under the Valeant license.
Sijmen de Vries, Pharming CEO, commented:
"This is a quantum leap forward for Pharming and marks
a significant step for the Company taking control of
its own destiny and providing a real prospect of reaching
profitability soon. Now that we have
taken full ownership of our key asset
and by integrating the Valeant US sales team members and
building that team, we will work with a single-minded
focus, energy and investments to bring this treatment
to all eligible HAE patients in the US.
For well over a decade Pharming has been
dedicated to the HAE market and has been working with
HAE physicians and patients on the
development of a safe and effective recombinant enzyme replacement
therapy. I am delighted that our shareholders,
including our new investors, have taken this opportunity
to support our strategic efforts to accelerate profitability
for Pharming, taking us in to a new phase as a
specialty pharmaceutical company.
I would like to thank the Pharming team, including our
advisers, for their help in bringing this highly
complex transaction to completion. This is
an exciting day for all of Pharming's employees
and for our shareholders."
Stifel Nicolaus Europe Limited acted solely as lead European
Placement Agent and Roth Capital Partners, acted solely as lead US
Placement Agent. Trout Capital LLC acted as a Co-Placement
Agent and First Berlin Securities Brokerage GmbH is acted as a
Placement Advisor.
Stifel Nicolaus Europe Limited acted as sole financial adviser
to Pharming in connection with the proposed re-acquisition of
Ruconest US rights from Valeant.
About Kreos Capital
Kreos Capital is the leading provider of growth debt financing
in Europe and Israel to high-growth companies. Since 1998,
Kreos has completed over 450 transactions and committed more over
EUR 1.7 billion in 15 different
countries. Kreos is dedicated to supporting management teams and
their equity investors with flexible loan structures for all stages
of a growth company's development and to addressing the needs for
growth capital, working capital, acquisition financings, lower
mid-market buy-outs, roll-up strategies, bank re-financings as well
as pre- and post-IPO financings. Kreos's most recent fund, Kreos V,
was launched in January 2016 and has
EUR 400 million of equity commitments
from top-tier institutional investors. The Kreos global team has
extensive debt financing, management and equity investing
experience, covering the pan-European market from its locations in
London, Tel Aviv and Stockholm.
Commercial rights history
Valeant acquired the North American license rights to RUCONEST®
through its acquisition of Salix Pharmaceuticals, Inc. ("Salix") on
1 April, 2015. Prior to this, Salix had acquired the rights
through its acquisition of Santarus, Inc. ("Santarus") on 3
January, 2014. Pharming originally entered into an agreement
with Santarus for development and commercialisation of RUCONEST® in
the US, Canada and Mexico on 10 September
2010.
About HAE
Hereditary Angioedema (HAE) is a rare genetic disorder. It is
characterized by spontaneous and recurrent episodes of swelling
(edema attacks) of the skin in different parts of the body, as well
as in the airways and internal organs. Edema of the skin usually
affects the extremities, the face, and the genitals. Patients
suffering from this kind of edema often withdraw from their social
lives because of the disfiguration, discomfort and pain these
symptoms may cause. Almost all HAE patients suffer from bouts of
severe abdominal pain, nausea, vomiting and diarrhea caused by
swelling of the intestinal wall.
Edema of the throat, nose or tongue is particularly dangerous
and potentially life-threatening and can lead to obstruction of the
airway passages. Although there is currently no known cure for HAE,
it is possible to treat the symptoms associated with edema attacks.
HAE affects about 1 in 10,000 to 1 in 50,000 people worldwide.
Experts believe that a lot of patients are still seeking the right
diagnosis: although HAE is (in principle) easy to diagnose, it is
frequently identified very late or not discovered at all. The
reason HAE is often misdiagnosed is because the symptoms are
similar to those of many other common conditions such as allergies
or appendicitis. By the time it is diagnosed correctly, the patient
has often been through a long lasting ordeal.
About RUCONEST®
RUCONEST® (recombinant C1 esterase inhibitor) is an orphan drug
indicated for the treatment of hereditary angioedema (HAE).
RUCONEST contains C1 esterase inhibitor for delivery at 50
IU/kg
HAE is caused by a deficiency of the C1 esterase inhibitor
protein, which is present in blood and helps control inflammation
(swelling) and parts of the immune system. A shortage of C1
esterase inhibitor can lead to repeated attacks of swelling, pain
in the abdomen, difficulty breathing and other symptoms.
When administered at the onset of HAE attack symptoms at the
recommended dose, RUCONEST helps to return a patient's C1 esterase
inhibitor levels to normal range and to relieve the symptoms of an
HAE attack, with a low recurrence of symptoms within 24 hours.
RUCONEST is the only recombinant C1 esterase inhibitor approved
by the U.S. Food and Drug Administration (FDA) and the European
Medicines Agency (EMA) and was approved in July 2014 by the FDA and in October 2010 by the EMA.
Under the Biologics Price Competition and Innovation Act of
2009, RUCONEST was granted data exclusivity in the USA until July
2026.
Important Safety Information for RUCONEST®
RUCONEST® is a recombinant C1 esterase inhibitor indicated for
the treatment of acute attacks in adult and adolescent patients
with hereditary angioedema (HAE). Effectiveness in clinical studies
was not established in HAE patients with laryngeal attacks.
RUCONEST (C1 esterase inhibitor [recombinant]) is
contraindicated in patients with a history of allergy to rabbits or
rabbit-derived products, and patients with a history of
life-threatening immediate hypersensitivity reactions to C1
esterase inhibitor preparations, including anaphylaxis.
Severe hypersensitivity reactions may occur. The signs and
symptoms of hypersensitivity reactions may include hives,
generalized urticaria, tightness of the chest, wheezing,
hypotension, and/or anaphylaxis during or after injection of
RUCONEST. Should symptoms occur, discontinue RUCONEST and
administer appropriate treatment. Because hypersensitivity
reactions may have symptoms similar to HAE attacks, treatment
methods should be carefully considered.
Serious arterial and venous thromboembolic (TE) events have been
reported at the recommended dose of plasma-derived C1 esterase
inhibitor products in patients with risk factors. Risk factors may
include the presence of an implanted venous catheter/access device,
prior history of thrombosis, underlying atherosclerosis, use of
oral contraceptives or certain androgens, morbid obesity, and
immobility. Monitor patients with known risk factors for TE
events during and after RUCONEST administration.
RUCONEST has not been studied in pregnant women; therefore, it
should only be used during pregnancy if clearly needed.
The most common adverse reactions (incidence ≥2%) were headache,
nausea, and diarrhea. The serious adverse reaction in clinical
studies of RUCONEST was anaphylaxis.
Please see complete Prescribing Information for RUCONEST.
About Pharming Group N.V.
Pharming is a specialty pharmaceutical company developing
innovative products for the safe, effective treatment of rare
diseases and unmet medical needs. Pharming's lead product,
RUCONEST® (conestat alfa) is a recombinant human C1 esterase
inhibitor approved for the treatment of acute Hereditary Angioedema
("HAE") attacks in patients in Europe, the US and rest of the world. The
product is available on a named-patient basis in other territories
where it has not yet obtained marketing authorization.
RUCONEST® is commercialized by Pharming in Algeria, Andorra, Austria, Bahrain, Belgium, France, Germany, Ireland, Jordan, Kuwait, Lebanon, Luxembourg, Morocco, Netherlands, Oman, Portugal, Qatar, Syria,
Spain, Switzerland, Tunisia, United Arab
Emirates, United Kingdom,
United States of America and
Yemen.
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 distributed in Argentina, Colombia, Costa
Rica, the Dominican
Republic, Panama and
Venezuela by Cytobioteck, in
South Korea by HyupJin Corporation
and in Israel by Megapharm.
RUCONEST® is also being investigated in a Phase II clinical
trial for the treatment of HAE in young children (2-13 years of
age) and evaluated for various additional follow-on
indications.
Pharming's technology platform includes a unique, GMP-compliant,
validated process for the production of pure recombinant human
proteins that has proven capable of producing industrial quantities
of high quality recombinant human proteins in a more economical and
less immunogenetic way compared with current cell-line based
methods. Leads for enzyme replacement therapy ("ERT") for Pompé and
Fabry's diseases are being optimized at present, with additional
programs not involving ERT also being explored at an early stage at
present.
Pharming has a long term partnership with the China State
Institute of Pharmaceutical Industry ("CSIPI"), a Sinopharm
company, for joint global development of new products, starting
with recombinant human Factor VIII for the treatment of Haemophilia
A. Pre-clinical development and manufacturing will take place to
global standards at CSIPI and are funded by CSIPI. Clinical
development will be shared between the partners with each partner
taking the costs for their territories under the partnership.
Pharming has declared that the
Netherlands is its "Home Member State" pursuant to the
amended article 5:25a paragraph 2 of the Dutch Financial
Supervision Act.
Additional information is available on the Pharming website:
http://www.pharming.com
Forward-looking Statements
This press release of Pharming Group N.V. and its
subsidiaries ("Pharming", the
"Company" or the
"Group") may contain forward-looking
statements including without limitation those regarding
Pharming's financial projections, market
expectations, developments, partnerships, plans, strategies and
capital expenditures.
The Company cautions that such forward-looking statements may
involve certain risks and uncertainties, and actual results may
differ. Risks and uncertainties include without limitation the
effect of competitive, political and economic factors, legal
claims, the Company's ability to protect intellectual
property, fluctuations in exchange and interest rates, changes in
taxation laws or rates, changes in legislation or accountancy
practices and the Company's ability to identify,
develop and successfully commercialize new products, markets or
technologies.
As a result, the Company's actual performance,
position and financial results and statements may differ materially
from the plans, goals and expectations set forth in such
forward-looking statements. The Company assumes no obligation to
update any forward-looking statements or information, which should
be taken as of their respective dates of issue, unless required by
laws or regulations.
Contacts:
Pharming Group N.V.
Sijmen de Vries, CEO, Tel: +31 71 524 7400
Robin Wright, CFO, Tel: +31 71 524
7400
FTI Consulting:
Julia Phillips/ Victoria Foster Mitchell, Tel: +44 203 727
1136
Lifespring Life Sciences Communication
Leon Melens, Tel: +31 653 81 64
27
PRN NLD