GTC Biotherapeutics (fka GTCB)

[DewDiligence]

Pharming Reports 3Q08 Results

[The Sep 30 cash balance—excluding restricted cash—was $45M (€33.7M). Because the Jun 30 cash balance of $61M (€38.6M) reported in the 2Q08 PR *included* restricted cash, there is no direct apples-to-apples comparison of cash at the end of 3Q08 vs the end of 2Q08. What seems clear is that Pharming has reduced its cash burn relative to prior quarters.

Pharming has $94M (€70M) of far-out-of-the-money convertible debt that is subject to redemption on 31-Oct-2010 (#msg-30659059). Hence, Pharming has adequate short-term liquidity, but they could be in trouble in two years if Rhucin is not approved and the global credit crisis is still in effect.]

http://biz.yahoo.com/iw/081017/0443923.html

›Friday October 17, 1:07 am ET

LEIDEN, NETHERLANDS--(MARKET WIRE)--Oct 17, 2008 --
Significant progress with lead product Rhucin®

Leiden, The Netherlands, October 17, 2008. Biotech company Pharming Group NV ("Pharming" or "the Company") (NYSE Euronext: PHARM) announced today its results for the first nine months of 2008 ended September 30, 2008. The financial results are in line with previously reported quarterly results while significant progress has been achieved in the review and approval process of Pharming's lead product Rhucin®.

Key Developments

Financial

* Cash position of EUR 33.7 million (including marketable securities and excluding restricted cash) at September 30, 2008 (EUR 14.1 million, at September 30, 2007),

* Total equity at September 30, 2008 of EUR 12.2 million (EUR 34.7 million at December 31, 2007),

* Net cash used for operating activities in the first nine months of 2008 of EUR 17.3 million compared to EUR 15.2 million over the same period in 2007,

* Revenues of EUR 0.4 million in the first nine months of 2008 compared to EUR 0.6 million in the same period in 2007,

* Total costs in Q3 2008 were EUR 5.7 million (EUR 7.5 million in Q2 2008 and EUR 6.5 million in Q3 2007),

* Net loss after tax of EUR 7.2 million in Q3 2008 (EUR 8.8 million in Q2 2008 and EUR 6.4 million in Q3 2007).

Products

* Submission of Rhucin® registration dossier including additional data from ongoing open-label studies with European Medicines Agency (EMEA) and US Food and Drug Administration (FDA) proceeding as planned,

* Database on Rhucin® further expanded to over 300 administrations, with more than half in repeat treatments; data confirms effectiveness and safety of Rhucin® in repeat use,

* Database on very severe attacks broadened with seven laryngeal attacks successfully treated with Rhucin®,

* Clinical study with recombinant human C1 inhibitor (rhC1INH) for treatment of antibody-mediated rejection (AMR) in kidney transplantation authorized by FDA,

* Phase I study with Prodarsan® ongoing with data expected in Q4 2008.

Corporate

* Dr Sijmen de Vries appointed as Chief Executive Officer (CEO) of Pharming as successor to Dr. Francis J. Pinto; who has taken up a non-executive position to ensure a smooth transition,

* Commercialization and supply agreement with Aslan Group AS ("Aslan") in Turkey for the marketing and distribution of food or food supplements containing Pharming's human lactoferrin product (hLF),

* Pharming's wholly owned subsidiary DNage participates in large pan-European subsidized studies in the field of biomarkers for ageing diseases,

* Pharming Included In Amsterdam Midkap Index on NYSE Euronext

* Corporate and product presentations at several investor and medical conferences in USA and Europe.

"In the third quarter of this year we continued to focus on strengthening the Rhucin® registration dossier, while maintaining a relatively low cash-need. We have included in our dossier additional data from patients receiving repeat treatments of Rhucin® as well as more treatment data from patients suffering from severe attacks. The data confirmed the effectiveness and safety of Rhucin® and we feel that we have fully addressed the concerns raised by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMEA) earlier this year and therefore face upcoming registration filings with confidence, said Dr. Francis J. Pinto. "Meanwhile, our costs are in-line with our budget and we are keenly focused on controlling these, given the turmoil in the financial markets. Although our current liquidity position is relatively strong, we continue to look at alternative financing for our other projects."

Financial

Pharming's cash position (including marketable securities, but excluding restricted cash) at September 30, 2008 was EUR 33.7 million in comparison to EUR 14.1 million at September 30, 2007. Net cash used for operating activities of EUR 17.3 million in the first nine months of this year is slightly higher than the amount used over the same period in 2007 (EUR 15.2 million), largely as a result of increased costs for Research and Development, including clinical studies. Cash needs can vary from quarter to quarter depending on exact timing of payments related to, for instance, clinical trials and manufacturing. The equity position of the Company at the end of the quarter was EUR 12.2 million compared to EUR 19.4 million at June 30, 2008 and EUR 34.7 million at December 31, 2007. Current liabilities decreased from EUR 23.5 million at December 31, 2007 to EUR 11.3 million at September 30, 2008. This is largely as a result of the payment of EUR 10.2 million to Paul Royalty Fund as part of the final settlement in the restructuring of the original agreement with Paul Capital. Current liabilities at September 30, 2008 of EUR 11.3 million includes EUR 4.8 million of earn-out obligations, which the Company can decide to pay in cash or shares. Total non-current assets were EUR 35.3 million, almost identical to December 31, 2007.

Total costs were EUR 5.7 million in Q3 2008 compared to EUR 7.5 million in Q2 2008 and EUR 5.3 million in Q1 2008 and were mainly related to Research and Development, including regulatory filings. Total costs in the first nine months of 2008 amounted to EUR 18.5 million compared to EUR 17.2 million in the same period of 2007. The net loss after tax in Q3 2008 was EUR 7.2 million compared to EUR 6.4 million in Q3 2007, primarily related to the effective interest on the convertible bonds issued in Q4 2007. Revenues were EUR 0.4 million compared to EUR 0.6 million in the first nine months of 2007 and mainly attributable to grants and subsidies.

Products

Over the last few months, Pharming made significant progress with its lead product Rhucin®, particularly by the expansion of the database and the strengthening of the registration dossier. Earlier this year, the CHMP requested more data on repeat use and treatment of severe attacks. Over 300 administrations of Rhucin® have now been analyzed, of which more than half in repeat treatments. The database on very severe attacks has also been expanded and now includes seven laryngeal attacks. There are no relevant safety issues, no allergic reactions and efficacy remains very good. The Company is in discussions with the relevant authorities both in the EU and in the US on the submission of the Rhucin® registration file. Pharming hopes to submit the Biological License Application (BLA) for Rhucin® with the FDA later this year and the Market Authorization Application to EMEA shortly thereafter.

With respect to other clinical indications, Pharming successfully completed a Phase I safety study with recombinant human C1 inhibitor (rhC1INH) in healthy volunteers. The Company has recently received approval from the FDA to start clinical studies in the US with rhC1INH for the treatment of antibody-mediated rejection (AMR) in kidney transplantation. AMR can lead to organ failure and is a significant cause of kidney transplant loss. In the FDA-approved study, Dr. Sollinger of the University of Wisconsin, Madison will study patients with AMR to compare rhC1INH against the available standard of care.

Although an independent scientific expert panel concluded that Pharming's lactoferrin product (hLF) is safe for its intended uses, the Company is still awaiting an official response from the FDA with regard to the GRAS notification (Generally Recognized As Safe) procedure for hLF.

Pharming's subsidiary DNage started a Phase I clinical study in healthy volunteers. In this study, pharmacokinetics and tolerability of single and multiple doses of Prodarsan® are evaluated. In animal models for Cockayne Syndrome, a premature ageing disorder, Pharming has already demonstrated that Prodarsan® has significant effects on life expectancy in general and more specifically on eye abnormalities associated with the disease. The Company expects to announce the results of the Phase I study in the fourth quarter of this year. Following a successful completion of this trial, Pharming will start clinical studies in patients of Cockayne Syndrome.

DNage is also participating in several projects on the identification of novel biomarkers of human ageing. Most of these projects are subsidized or paid for by government grants.

Corporate

At a recent Extraordinary Shareholders' Meeting, Dr Sijmen de Vries was appointed as Chief Executive Officer (CEO) of Pharming effective November 3, 2008. Dr de Vries is successor to Dr Francis J. Pinto who will retire at the next Annual General Meeting of Shareholders in 2009. Dr de Vries has extensive experience in pharma and biotech companies, with specific strengths built in the fields of international business development and strategic marketing.

To ensure a smooth transition, Dr Pinto will stay on as Non-Executive Chairman of the Management Board. As part of this transition plan, task forces have been set-up to focus on optimising the key aspects of Pharming's business. These task forces include a Rhucin® task force focusing on the upcoming Rhucin® filings (led by Dr Giannetti), a DNage task force focusing on the development and partnering of the DNage ageing products (led by Dr Strijker), a task force "Financing and Shareholder Value" addressing the future financing of Pharming (led by Dr Pinto) and a task force focusing on further developing the Pharming organization and 2009 plans and budgets, which will be led by Dr de Vries.

In July, Pharming and Turkish company Aslan closed a commercialization and supply agreement for Pharming's human lactoferrin product. The agreement focuses on the marketing and distribution of food or food supplements containing hLF. Pharming will supply hLF containing milk powder to Aslan, who will be responsible for the production and the design of the finished products.

During the third quarter, Pharming made several corporate and product presentations at investor and medical conferences in the USA and Europe, including the UBS Global Life Sciences Meeting in New York on September 22, 2008. Dr Pinto presented a business update at that meeting describing the progress made in the development of lead product Rhucin®. The presentation can be found on the Pharming website.‹