GTC Biotherapeutics (fka GTCB)

[DewDiligence]

Pharming Reports 1Q08 Results

[The cash balance as of 3/31/08 was €49M ($78M), and cash burn during 1Q08 was €5.5M ($8.8M). Clearly, Pharming does not have a liquidity problem.]

http://www.pharming.com/index.php?act=show&pg=413

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Leiden, The Netherlands, April 18, 2008. Biotech company Pharming Group NV (“Pharming” or “the Company”) (Euronext: PHARM) announced today its financial first quarter (Q1) results for the period ended March 31, 2008.

Key Developments

Financial

• Cash position of € 49.2 million (including marketable securities, excluding restricted cash) at March 31, 2008 (€ 54.9 million, at December 31, 2007)

• Equity at March 31, 2008 of € 28.2 million (€ 34.7 million at December 31, 2007)

• Net cash of € 5.5 million used for operating activities in Q1 2008 compared to € 4.8 million in Q1 2007

• Revenues of € 0.1 million (€ 0.2 million in Q1 2007)

• Operating costs and expenses € 5.3 million in Q1 2008 (€ 4.8 million in Q1 2007)

• Total net loss of € 6.4 million in Q1 2008 (€ 5.0 million in Q1 2007)

Products

• Rhucin® (recombinant human C1 inhibitor or rhC1INH) for the treatment of acute attacks of Hereditary Angioedema (HAE) received negative opinion from European Medicines Agency (EMEA) for marketing authorization

• Exclusive licensing and distribution agreement signed with EİP Eczacıbaşı İlaç Pazarlama A.Ş., a leading Turkish pharmaceutical company for the marketing and sales of Rhucin® in Turkey

• License agreement signed with Advanced Cell Technology Inc to obtain exclusive rights on patents in the field of transgenic technology, to which Pharming already had non-exclusive rights.

• Pharming’s wholly owned subsidiary DNage will head a collaborative Research and Development effort to identify novel biomarkers and therapeutic targets, and to develop therapeutics for the treatment of premature ageing diseases. The consortium has been granted a SenterNovem subsidy of € 0.9 million for a period of three years.

“In the first quarter of 2008, Pharming encountered a disappointment in the form of a negative opinion regarding its marketing authorization application of Rhucin® for the treatment of acute attacks of Hereditary Angioedema in Europe,” said Dr. Bruno Giannetti, COO of Pharming. “However, we remain determined to bring Rhucin® to the market and provide the relevant patient community with a safe and effective product to relive their medical needs. Pharming is fortunate to have a strong financial position which will allow us to take the necessary next steps in our Rhucin® program as well as invest in other portfolio programs. ”

Financial

Pharming’s cash position, including marketable securities excluding restricted cash, at March 31, 2008 was € 49.2 million in comparison to € 54.9 million at the end of 2007. The equity position of the Company was € 28.2 million compared to € 34.7 million at the end of 2007. Current liabilities were € 13.3 million compared to € 23.5 million at December 31, 2007. This decrease is large caused by the planned payment of € 10.2 million to Paul Capital as part of the final settlement in the restructuring of the original agreement with Paul Capital. Total non-current assets were € 35.4 million, almost identical to December 31, 2007. Total cash used for operating activities in the first quarter amounted to € 5.5 million compared to € 4.8 million in Q1 2007.

The operational costs and expenses in Q1 2008 were € 5.3 million compared to € 4.8 million in Q1 2007. The net loss after tax in Q1 2008 was € 6.4 million compared to a net loss of € 5.0 million in Q1 2007. Costs for Research and Development increased due to due to costs associated with the EMEA re-examination process as well preparations for the first clinical study of Prodarsan®, a DNage-product being developed for the treatment of premature ageing. Revenues decreased to € 0.,1 million compared to March 31, 2007 due to the one-time effect of an FDA grant recognized in 2007.

Product Development

On March 20, 2008 Pharming received a negative opinion regarding its Marketing Authorization Application for Rhucin® in the European Union. the Committee for Medicinal Products for Human Use (CHMP), after re-examination of its initial opinion, was not reassured that there is sufficient evidence to confirm the clinical benefits of Rhucin® in repeat use. In particular, the CHMP was not reassured about the potential for undesirable immune responses following repeated administration. The re-examination procedure by EMEA included a review by an independent scientific advisory group composed of European recognized experts in the field of HAE. There was consensus among the experts, recognizing that the available clinical data were limited, that there was no evidence to indicate the development of neutralising antibodies to C1-inhibitor with repeat administration of Rhucin®. The Company now intends to re-submit the registration dossier with the inclusion of additional clinical data including those from the recently completed North American clinical study when these results become available in the second quarter of 2008. As part of the re-submission, Pharming will request an expedited review, which is an assessment period of 150 days. In the meantime the Company will pursue registration in markets outside the European Union.

In March 2008 Pharming signed an exclusive licensing and distribution agreement with EİP Eczacıbaşı İlaç Pazarlama A.Ş., (EIP), a leading Turkish pharmaceutical company for the marketing and sales of Rhucin® in Turkey. The agreement covers the use of Rhucin® to treat acute attacks of HAE with a right of first refusal to EIP for other indications. EIP will be responsible for registration of the product in Turkey and has already taken the first steps in this process. Rhucin® may be eligible for an accelerated review procedure given the high medical need for new therapies in the HAE-patient community as a life threatening disease. Data submitted to the EMEA as well as additional data generated after the EMEA-submission will be used in the registration procedure, although the decision on registration in Turkey will be independent of decisions made in the EU or the USA. Under the terms of the agreement, EIP will purchase the product from Pharming and market, sell and distribute it in Turkey. EIP will also pay a license fee to Pharming for the product.

In February, a license agreement with Advanced Cell Technology Inc was concluded to obtain exclusive rights on patents in the field of transgenic technology. Pharming already had non-exclusive rights to this Intellectual Property. The patents were previously owned by Infigen Inc and cover a wide range of technologies including for Pharming relevant elements of nuclear transfer, which is an essential step in generating transgenic cattle. The agreement provides Pharming strict control over the generation of its transgenic cattle, while, at the same time, increasing the barriers of entry for others.

Using an International Innovation Subsidy of € 0.9 million for a period of three years, Pharming’s subsidiary DNage has initiated a project with the Eberhard Karls University in Tubingen Germany, and Pyxis Discovery BV, to design new drug development tools aimed at discovery of new therapeutics to treat (premature) ageing diseases. In addition, DNage has announced that it will collaborate with the Leiden University Medical Center to identify unique biomarkers of such diseases that will facilitate the clinical development of new therapies.

Background on Pharming Group NV

Pharming Group NV is developing innovative products for the treatment of genetic disorders, ageing diseases, specialty products for surgical indications, intermediates for various applications and nutritional products. Pharming has two products in late stage development - Rhucin® (recombinant human C1 inhibitor) for hereditary angioedema (MAA under review by EMEA) and human lactoferrin for use in food products (GRAS notification under review by US FDA). The advanced technologies of the Company include innovative platforms for the production of protein therapeutics and technology and processes for the purification and formulation of these products, as well as technologies in the field of tissue repair (via its collaboration with NovaThera) and DNA repair (via its acquisition of DNage). Additional information is available on the Pharming website, http://www.pharming.com and on http://www.dnage.nl.
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