Pharming Group Q1 2024 Earnings Report

Pharming Group EPS Results

• Actual EPS: -$0.19
• Consensus EPS: $0.01
• Beat/Miss: Missed by -$0.20
• One Year Ago EPS: N/A

Pharming Group Revenue Results

• Actual Revenue: $55.59 million
• Expected Revenue: $68.43 million
• Beat/Miss: Missed by -$12.84 million
• YoY Revenue Growth: N/A

Pharming Group Announcement Details

• Quarter: Q1 2024
• Date: 5/8/2024
• Time: N/A
• Conference Call Date: Wednesday, May 8, 2024
• Conference Call Time: 7:30AM ET

Pharming Group (NASDAQ:PHAR) N.V. is a clinical-stage biopharmaceutical company headquartered in Leiden, the Netherlands, with a primary focus on developing and commercializing innovative protein replacement therapies for patients living with rare diseases. The company employs a proprietary transgenic technology platform designed to produce recombinant human proteins in the milk of transgenic animals, enabling scalable and cost-efficient manufacturing of complex therapeutic proteins.

The company’s lead product, RUCONEST (recombinant human C1 esterase inhibitor), is approved for the treatment of acute hereditary angioedema (HAE) attacks in multiple markets, including the United States and Europe. RUCONEST represents the first recombinant C1 inhibitor therapy, offering an alternative to plasma-derived treatments and addressing key safety and supply concerns associated with conventional sources. Pharming continues to support RUCONEST through lifecycle management initiatives and expanded patient access programs.

Beyond its marketed product, Pharming’s research and development pipeline includes additional indications for C1 esterase inhibitor in prophylactic HAE treatment and novel programs targeting other rare and genetic disorders. Preclinical efforts leverage the same transgenic expression platform to explore therapies for conditions such as alpha-1 antitrypsin deficiency and metabolic disorders. Strategic collaborations and licensing agreements underpin the company’s approach to expanding its portfolio and reaching underserved patient populations.

Pharming Group serves patients and partners across Europe, North America, Latin America and Asia-Pacific through a combination of direct commercial operations and regional partnerships. The company is led by Chief Executive Officer Sijmen de Vries, whose experience in biotechnology and global product commercialization supports Pharming’s mission to deliver life-transforming therapies to individuals affected by rare diseases.

Pharming Group Q1 2024 Earnings Call Transcript

Key Takeaways

• Q1 revenues up 31% to US$55.6 million, led by RUKANIS growth (8% year-on-year) and the US launch of Joenja (leniolisib), supporting full-year guidance of US$280–295 million.
• RUKANIS maintained momentum as a recombinant protein replacement therapy for hereditary angioedema with unique efficacy and customer service, on track for low-mid single-digit sales growth.
• Joenja uptake strong in APDS with 83 fully reimbursed US patients (+2 in Q1), 15 new diagnoses in the quarter, €9.6 million in sales (+21% vs Q4 2023) and €1.1 million ex-US via named patient programs.
• Patient identification initiatives combine no-cost genetic testing, family testing, VUS functional assays and a MAVE study due Q4 2024 to reclassify uncertain variants, aiming to expand the treatable APDS population.
• Pipeline expansion includes a Phase 2 proof-of-concept trial of leniolisib in primary immune deficiencies with immune dysregulation beyond APDS—starting soon at NIH with a readout expected in 2025—alongside pediatric studies and in-licensing pursuits.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Pharming Group N.V. Q1 2024 results conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker today, Sijmen de Vries. Please go ahead.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Thank you very much, Sandra, and welcome, ladies and gentlemen, to this, our first quarter results conference. Next slide, please. I'm here with my three colleagues, in order of speaking, Stephen Toor, our Chief Commercial Officer, who's joining us from our New Jersey office, Dr. Anurag Relan, Chief Medical Officer, joining us from our U.S. office as well, and Jeroen Wakkerman, our Chief Financial Officer, who's based with me here in Leiden. And before I do that, I would like to point out to the next slide, please, number three. That is the forward-looking statement slide.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

So we will be making forward-looking statements today in our presentation, and those are based upon our current plans, and you know, and insights of the current market circumstance. And of course, actual results may differ from these forward-looking statements, so you cannot necessarily rely on those. So having said that, I would like to go to slide number 4 and maybe even onwards to slide number 5, because you've seen my picture already. Yes, and here we are. We're building this leading global rare disease biopharma company. And we do that based on three pillars, and this is a very familiar slide for you. We've been here before.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

On the left-hand side, the foundation of our company, the product Ruconest, that comes from our own research and, it has already been on the U.S. market for almost 10 years. It was approved in July 2014. Recombinant protein replacement therapy for hereditary angioedema attacks. And as you can see, we are still, you know, growing this product, and, you know, we had 8% growth, versus last year, this quarter. Good growth, last year as well. And we see increasing numbers of prescribers and patients, and there's many options for these patients available, but Ruconest continues to play an important role, and we expect it to be continuing for the foreseeable future. And Stephen will talk a lot more about that in his part of the presentation.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Next, you see there, Joenja, the product we in-licensed from Novartis for the treatment of APDS, an ultra-rare immune disorder, a new disease that was only discovered 10 years ago, and we already have the first disease-modifying drug on the market that we launched now a year ago. You see, we had a very successful introduction of the product in the U.S. market. Stephen will allude to that as well. You know, we're very proud that we can actually, you know, record $9.6 million sales in this quarter, good growth versus Q4 of last year. You see here, if you add both numbers, we realized $28 million dollars of sales for this product in the first 12 months on the market.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

It's a newly described and ultra-rare disease, and there's a very strong focus there for patient finding. Both Stephen and Anurag will talk about that, how we go about that to find those patients. We're also very pleased to see that very recently we got the second approval in Israel at the end of April 2024. We have a lot of regulatory reviews ongoing and a lot of trials ongoing, and Anurag will talk about that a lot more. On the right-hand side, the possibility to leverage our commercialization infrastructure, both in the U.S. and outside of the U.S., by not only you know finding new compounds. We're hunting for clinical stage or later stage compounds to in-license or acquire, to actually leverage.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

First and foremost, we have a very interesting opportunity in leniolisib to develop it further for a second indication for primary immune deficiencies with immune dysregulation beyond APDS, where we are preparing, in final stages, we're preparing a phase II planning study. And in addition, we're working on a third primary immune deficiency indication in early stage at this point in time, and Anurag will talk about that a lot more. And on the bottom of the slide, you see that we have a total revenue guidance out between $280 million and $295 million for this year, you know, driven, of course, by Joenja, but, you know, the foundation is, of course, Ruconest underneath that.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

And then you see the next slide, a little bit more in detail, because we're gonna talk a lot about the potential for Joenja today. Joenja for APDS is the first stage where we are currently now in the market with a 12-plus indication in the U.S., where we already found a significant portion of the identified patients on paid therapy, where we have a lot of ongoing search for patients and so-called variants of uncertain significance mutations that's ongoing. The next step, of course, where you already see, and that's of course, an interesting observation of all of almost $1.1 million of sales in this quarter already outside the U.S.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

So in other words, we're starting to work on the global expansion of the product and on the pediatric studies will further boost that, to get a full label, and full geographic coverage for Joenja APDS. And then, as I said already earlier, the bigger indication that we are starting the proof of concept trial in the not-too-distant future for the bigger indication of PIDs with immune dysregulation, with similar symptomatology to APDS. So having given you this introduction, I would like to now hand over to the next speaker, to Stephen Toor, our Chief Commercial Officer. Steve, over to you, please.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Thank you, Sijmen. Everybody. If you could go to... Okay, give me one second. Okay, thank you, Sijmen. So, is that around your. Okay, I think we go to the right. So the key features of the commercial strength have and continue to underpin Ruconest over the last 10 years since launch. Those unique attributes and the exceptional customer service and execution by our customer-facing teams is why Ruconest continues to remain a highly relevant conversation in the HAE community. That remains the case despite the transformation of the treatment landscape with prophylactic in the genericization of the C1 inhibitor, and it will continue to remain in the face of all acute competition in the coming years.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

HAE patients in Ruconest generally have a more severe course of disease, and they need a virtually guaranteed and fast efficacy that stops an attack in its tracks. Ruconest's unique product features and the mode of administration deliver that in a way that future options can't. So as you know, 2023 was a strong year with solid growth in prescribers, new patients and sales. That success was in spite of the market-wide event related to reimbursement for government patients in Q1. In Q4, we've seen less of an impact as the patients' out-of-pocket responsibility almost half.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

The strength of leading indicators has continued into this year, and we've had a strong Q1, up 8% on prior year, and we exit Q1 2024 on track to achieve the revenue guidance, which, as previously discussed, is seem to be low to mid-single digit growth for Ruconest. If you go to the Joenja slide, please. As you know, we were strong out of the gate with the launch of Joenja, with patients fully reimbursed within days, and that momentum built through year one, and it continues into 2024. So we now have 83 patients fully reimbursed, with five more in process, being processed, with 15 newly diagnosed patients in the quarter, taking us past 220, close to half the number of patients the literature suggests are out there, although we believe there are more.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

We have over 50 more diagnosed patients whose doctors who we're working with their physicians to enroll into our program. Plus, of course, 50+ pediatric patients who are rediagnosed, who could potentially go on Joenja treatment when the pediatric label expansion is approved. All this means, we execute one just shy of $10 million in sales and 21% up on prior quarter. As we discussed in March on our 2023 full year call, as we convert the caseload identified at launch, our focus moving forward remains finding new patients. Given APDS is not the sole dominant condition, this means testing families to uncover additional patients with this progressive disease so they too can benefit from management and treatment.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

We're also working to resolve VUS for the many patients who have these results, which Anurag will discuss further. And as with Ruconest, the results for the quarter are in line with our financial guidance for the year. Can you go to the next slide, please? So our U.S. teams continue their patient finding, education, and genetic testing efforts to build the APDS patient base. At the same time, we remain laser-focused on Ruconest execution. And while at different stages in the commercial cycle, both Ruconest and Joenja are critical to our growth. Now, I've already covered the U.S. here, and that you see on the first pillar. For ex U.S., alongside the U.S. launch, we continue to build our capabilities in preparation for launches in the EU, U.K., Japan, and Australia, and other Asia Pacific countries.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Our ex-U.S. teams are focused on both educating, finding potential patients, testing and diagnosing, and continue to build that patient funnel, all in readiness for the steady flow of launches that we have in the coming years. So far, we've identified over 800 patients in those key, key launch markets. We also see multiple years of growth ahead for Joenja, with initiatives such as family testing and VUS validation that should contribute modest additions to patient numbers in 2024. We expect those initiatives, though, to have a more significant impact in 2025, when we see a potential for a few hundred patients to be on Joenja. Altogether, the APDS opportunity, as you know, is at least 1.5 million patients.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

1.5 patients per million, or approximately 2,000 patients in these key markets, of which we've already found a large number. While the ex-U.S. prices are expected to be lower than those in the U.S., the overall APDS opportunity is still significant. So while much of our organization is focused on Joenja for APDS, we're also, as you see in the final column, focused on developing leniolisib for additional indications. This is a good moment to hand over to our Chief Medical Officer, Anurag.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Thanks, Steve. Next slide, please. And then if we can go to the U.S. launch of Joenja slide. Next slide. Thank you.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

As you mentioned, Steve, we've had a strong launch of Joenja in the U.S. This reflects both the unmet need and the clinical experience with Joenja. To review, Joenja is approved for the treatment of APDS in adult and pediatric patients 12 years of age and older. This approval was based on data from a randomized placebo-controlled study that showed Joenja met both primary endpoints, with significant benefits also seen in the secondary and other exploratory endpoints. Importantly, what we've seen across the development program is that Joenja has been generally safe and well tolerated, and this data has been seen not only in the randomized study, but also in the ongoing long-term open label extension study.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

In that study, we also saw benefits with patients being able to reduce or discontinue their use of immune globulin replacement therapy, and we also saw reductions in infection rates over time. We continue to share this data on the long-term use of Joenja from these studies, as well as from post-marketing experiences. Next slide. And as with many rare diseases, patients have a long journey to reach a diagnosis. We have several efforts now ongoing to help patients get a correct diagnosis quickly. The first centers around medical education to raise awareness about APDS and share data on leniolisib. For example, recently we've shared information about the seriousness of APDS by publishing data on early mortality and the frequency of lymphoma in these patients.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

We've also been discussing, for example, the frequency of bronchiectasis, a lung complication that is often seen in these patients at a young age, to help doctors be able to recognize the types of symptoms that APDS patients may have, and to be able to perform a genetic test, which is actually the only way to make a diagnosis. Now, to make that diagnosis, we've made the genetic testing available through a sponsored no-cost testing program. We also have assistance from genetic counselors to be able to help patients and physicians interpret the results, and we're working closely with these patients and their doctors to also help perform family testing. Because as an inherited disease, we know that these. There are more patients than the patients that we've uncovered so far.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

We found, in fact, that most patients have not had proper family testing, such as testing of parents or siblings, to ensure that all of those members of their family can also receive a correct diagnosis. And we have several programs now in place to help assist with that type of effort. And as you've heard us talk about several times now, getting a genetic test is important for these patients, but also interpreting the result is critical. And unfortunately, many patients can, after they get a genetic test, can get a result called a variant of uncertain significance. What this means is that these patients have a variant or a mutation that hasn't been previously described. And what we found is that there's a significant number of patients who have actually already received a VUS test result. Just in the U.S., alone, 1,100 such patients.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

We're working closely now with a number of groups to help curate all of this data and put that into a single central database. And on top of that, what we need to do is perform further testing to determine whether that variant is disease causing or not. Recently, we've been able to start a functional testing program whereby patients can get access to a functional test, and that can help them determine if they have APDS. We are seeing already the results of those in the first quarter, where patients who had a VUS result got a functional test and then eventually got a diagnosis of APDS, some of whom are already on Joenja now.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

And to address this problem more thoroughly and more completely, we also have a large study called a MAVE study, which will allow us to determine the all possible variants, and we're hoping that this reads out by the end of the fourth quarter. I should say, we're expecting that this is going to read out by the end of the fourth quarter, to be able to eventually answer the question of which patients who have a VUS actually have APDS. Next slide. In addition to the work that we're doing with Joenja in the U.S., we have several projects to bring Joenja to patients in other countries and to younger patients. We have an application under review, for example, in Europe, and we are waiting now CHMP opinion.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

We anticipate being on the May agenda for a CHMP opinion, so that would be later this month. We also have completed enrollment in our Japanese clinical study, and we're working with the regulatory authority there to determine the filing strategy following the completion of the clinical trials that are ongoing. Then we have two pediatric studies. The first is on children ages 4 to 11, and enrollment is completed there. Then we have an ongoing study that you see on the right for children ages 1 to 6-year-old using granules, and we had the first patient dosed last year and enrollment is continuing there. Considering all of these clinical trials, as well as the expanded access and named patient programs, we have 138 patients receiving Joenja through these various programs.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

And as you heard from Sijmen, we also received recently the marketing authorization in Israel. We have a number of reviews ongoing, including in the U.K., Canada, and Australia, and we're expecting regulatory action on those reviews in the course of 2024 and 2025. And then we're very excited also about the possibility of using leniolisib outside of APDS, and I'll be talking a little bit more about that now. In the next slide, you can begin to see through our work in APDS, we have a better understanding of the broader PID landscape. Next slide, please. And what we see is that there are a large number of PIDs.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Obviously, these PIDs have an increased risk of infection, but we also see there's a subgroup of PIDs that have not only this phenotype of increased risk of infection, but also have this immune dysregulation phenotype. What I'm referring to here is this concept where there's abnormal lymphoproliferation and frequently autoimmunity. APDS, of course, is an example of such a primary immune deficiency with immune dysregulation. In the next slide, I'll talk a little bit about this first program, but we're, we're already moving forward on a second non-APDS PID indication, again, with encouragement from experts across the world, to suggesting that we should study leniolisib in these populations. Next slide, please.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

What these experts are telling us is that there are many patients with clinical features similar to APDS, that have similar disordered PI3K signaling, but don't necessarily have the PI3K genetic abnormalities that we see in APDS. That signaling, not surprisingly, leads to the clinical manifestations that you see on the right, and you see that these are very similar to the types of things that we see with APDS. Namely, we see abnormal lymphoproliferation, so large lymph nodes, large spleens. We see this also in the gut. On top of that, there's a problem of autoimmunity, again, signaling the abnormal dysregulation in these patients' immune system. We see GI disease, lung disease, the frequent infections, of course, and then unfortunately, these patients also have a predilection toward developing early lymphoma.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

So there's clearly a high unmet need here, and not surprisingly, given that there is abnormal signaling and that the symptoms you see there on the right are similar to APDS, the treatments that are being applied for these patients, such as rapamycin, an mTOR inhibitor, or other immunosuppressive agents, have been also applied in this population. So overall, we see that there's a strong basis to study leniolisib in this group of patients, and you see some of the genetic abnormalities that are mentioned there, including the condition called ALPS, caused by an abnormality in the FAS gene, CTLA-4, and PTEN.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

And on the next slide, you can see a little bit about the work that we're doing to advance this program. We're working closely with the team at the NIH, and this includes Dr. Rao, who led the APDS clinical trial program at the NIH, and Dr. Uzel, who actually was part of the team that led to the discovery of APDS 10 years ago. We're starting this phase II proof of concept, dose-finding study. We're starting at doses that we used in the leniolisib development program for APDS also, so starting at the 10 mg dose.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

As I mentioned, we're using patients that have a number of abnormalities, including those listed there. The primary goal, of course, is to look at safety and tolerability, and we're also going to be looking at pharmacokinetic measures and various efficacy measures. Patients will receive doses for a number of weeks and then escalate as they progress through the program.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

The goal is to be able to pick the best dose regimen for the phase III study. If we go to the next slide, we can see that some of the populations that have already been characterized with these various genetic abnormalities. You can see here several large cohorts with each of these different genetic forms of primary immune deficiency. These large cohorts together tell us that there's a treatable population of approximately 5 patients per million across the world here. So, when we put all of this together, you can see we're very enthusiastic about the potential of Joenja in APDS, as well as beyond APDS in these various abnormalities that have clinical features that are similar to APDS. With that, I will turn it over to my colleague, Jeroen, to talk about our financials.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

Thank you very much, Anurag. Next slide, please. In the first quarter of 2024, the revenues increased by 31% to $55.6 million, and that's a comparison to first quarter of last year. This is driven by both the U.S. commercial launch of Joenja and revenue growth of Ruconest. Ruconest revenues increased by 8% to $46 million compared to first quarter last year, and Joenja, or leniolisib revenues were $9.6 million, and that's a 21% increase compared to the fourth quarter of last year. Overall, we are well on track for 2024 to hit our total revenue guidance, which is between $280 million and $295 million or 14%-20% revenue growth.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

Looking at gross profit, it increased in line with the sales increase and gross margin dropped slightly, and that was because of a non-recurring inventory impairment of just over $2 million. Looking at OpEx, it went up compared to last year's first quarter, but went down if I compare it to Q4 last year, as we already indicated at the time. So this increase versus last year was planned, and we are increasing the OpEx to support the launch of Joenja in the U.S., but also preparation for the launch outside of the U.S. The operating loss, because of the increase in OpEx, increased from $13.7 million to $16.3 million in the quarter.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

The net profit remained fairly stable, increased by $0.2 million, and that is compared to the operating loss is due to better net finance results in the quarter. Our overall cash and marketable securities position went from $215 million-$203.5 million, so a reduction of $11.5 million, and that is on the back of mainly negative net cash flow from operating activities of $7.6 million. On the next slide, we see the revenue breakdown by product and geographic segment. Just focusing on Joenja for the first quarter, we saw $8.5 million revenue in the U.S. from $7.9 million Q4 last year.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

We see $1.1 million outside of the U.S., and that was $0.3 million in the fourth quarter last year, and this is sales from named patient programs. If you look at the overall part of Joenja in the total revenues at $9.6 million, that's now 17.17% of total sales, and obviously last year was nothing. We expect that share to go up going forward. Now, next slide, some more perspective on the OpEx. As I said, the OpEx went down from last quarter by around $10 million. The OpEx really reflects the continued investment in Joenja in the U.S., and the launch preparation ex-U.S.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

We also increased investments to expand the leniolisib franchise. So think about the pediatric trial, and new indications that we are working on and that Anurag mentioned, and we also increased payroll costs, and that is because of a general business growth. With that, I would like to hand over to Sijmen for the outlook for the remainder of the year.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Thanks, thanks, Jeroen. And yes, I'm happy to present you with the next slide, the outlook for 2024. As you heard in the beginning, we gave guidance, and we continue to give guidance between $280 and $295 for revenues for this year, which means between 14% and 20% growth, with, of course, quarterly fluctuations, as expected. Joenja, you heard about the continued progress in finding the additional APDS patients in the U.S. market, the patients that are already identified, of course, but also this is supported by the family testing, the systematic family testing that we have embarked upon, and the first results of the VUS validation efforts, and of course, subsequently converting those patients to paid therapy.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Albeit, you also heard from, of course, from Anurag, that the MAVE experiment, which will provide the definitive answer of the full definition of APDS, will report at the end of this year. So in other words, we expect a significant inflow of patients in the U.S. from that experiment that will address more than 1,100 patients with VUS. Then, you heard about the ex-U.S. increasing revenues from the commercial availability through the named patient program, which we expect to continue to increase during the remainder of this year. The clinical trials, the pediatric trial, and of course, the Japan trial continue.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

We also expect regulatory action, you heard, this year from the various jurisdictions where we have regulatory files that are under review. We're very excited, of course, and expect in the very near future to be able to announce that the phase II proof of concept clinical trial in PID with immune dysregulation is actually will be started to significantly expand our commercial potential of leniolisib, what you heard Anurag you know outlining the details about.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

And then last but not least, we have an active, business development group that looks for primarily in-licensing opportunities, but also we look at, acquiring, opportunities that are in clinical stage of development or later, and, you know, in those areas that are mentioned here on the slide: immunology, hematology, respiratory, and gastroenterology, preferably. So in other words, we have a very busy, remainder of the year, ahead of us, and we look forward, of course, to updating you on that, later on. But, let's, switch over now to the operator first, because, there may be some questions that, we happily answer. Over to you, operator.

[Operator]

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question.

[Operator]

From the line of Christian Glennie from Stifel. Please go ahead.

[Christian Glennie, Director at Stifel]

Thank you. Thanks guys, for taking the question. Three questions, please. The first one will be on Joenja in the U.S., just to understand a bit better the sort of potential moving parts here in terms of patient numbers. You talked about 83 being on treated therapy as of 31st of March, but that compares to 81 at the end of December. So just a net 2 additional, but maybe there's some additional patients there that have come on, but then some have dropped off, and then maybe some comment around the duration of treatment that you've seen so far, given that you now have some patients, potentially, who've been on it since it was launched 12 months ago.

[Christian Glennie, Director at Stifel]

Just a better understanding of the patient dynamics there and what to expect through the rest of the year.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Steve, would you, would you be so kind?

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Sure. Thanks, Christian. Good morning. So yeah, the... So we actually with 81, and we added four group patients in the, in the quarter. There were two, though, that dropped out. One was post-transplant. Unfortunately, that patient passed away, unrelated to Joenja. And then secondarily, a patient with an unknown adverse event. So the net of that is 83. We also diagnosed or had diagnosed 15 more patients during that quarter, and those are currently being processed, obviously, and will be additive to the current patient load. So as things stand right now, our outlook is much the same as Sijmen said. You know, we, we're on track to get to where we need to by year end.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

I think, you know, first of that. Thanks, thanks, Steve. First, then, I think, you know, as with all these sort of ultra-rare therapies, you will see, of course, especially in the beginning, you'll see some lumpiness in the sales, right? That, that's why we say quarterly fluctuations, Christian.

[Christian Glennie, Director at Stifel]

Yeah. Okay. Thank you. And then, have you got a—I mean, is it a working assumption that the majority of patients continue to be on therapy, or if you've got an average duration of treatment that you can quote at the moment?

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

I think you're right. I mean, people stopping therapies are far and few between that we see, right? So Anurag, you wanna say something about that?

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Yeah, thanks, Sijmen. Hi, Christian. Yeah, we see continued very high compliance with the product. We've seen that throughout the clinical development program, and we see infrequent discontinuation.

[Christian Glennie, Director at Stifel]

Okay. Thank you. And then, and then the second one will be on leniolisib or Joenja in Europe, flagging ongoing review with the EMA and obviously expecting a CHMP. Just wanted to try and understand a little bit, as much as you can tell, about what, what some of these issues could be or, or relate to. Do you have any outstanding issues there? And, and when you say you expect to be on the agenda for May, is that, that's not necessarily the same thing as being up for a, an opinion in May? I just want to clarify what, what your expectation is for the May committee.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Anurag, would you be happy to answer that question?

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Sure. So we do expect to be on the CHMP agenda that for their meeting at the end of May on the MAA. So that's our expectation. Of course, we'll wait for the CHMP feedback to confirm that.

[Christian Glennie, Director at Stifel]

Okay, so we should be expecting... That's your expectation, Joenja will be up for an opinion at the end, in May?

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

That's correct.

[Christian Glennie, Director at Stifel]

Then just finally on the named patient rollout, obviously $1.1 million, you said that will continue to grow. Can you give us a sense for the growth there through the rest of the year, and also, you know, kind of the, you know, the number of patients and, and the sort of the, the prices that you're getting for these patients? Thank you.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Steve, would you like to comment on that?

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Certainly. So the prices are generally in line with the U.S. price, sometimes with a slight discount to that, so generally in that ballpark range. In terms of numbers, we don't necessarily forecast NPP out, just because that's driven obviously by the doctor and their discussions with both the patient and local authorities in country. But we would expect to see as the product becomes better known and the effect that it has on a positive effect on patients becomes more widely understood, that as we await approvals, more patients do benefit from that. But there isn't a specific target as such. That's very much doctor-driven, Christian.

[Christian Glennie, Director at Stifel]

Okay. Thank you.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Christian?

[Operator]

Thank you. We will now take the next question from the line of Suzanne van Voorthuizen from Van Lanschot Kempen. Please go ahead.

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

Yes, thank you, for taking my question, also one on Joenja and, patient findings. We see that there are 15 diagnosed patients in Q1, so how many of these patients do you expect to be converted to paid patients? And also, on operating expenses, are these the levels that we can expect throughout the year, or are you foreseeing any increases or decreases compared to, this quarter? Thank you.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Okay. So may I suggest, Stephen, that you answer the first one? Is that all right?

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Yep, absolutely. So, thanks for the question. We expect the majority of those patients, if not all of them, to be converted onto paid therapy. We have not as yet had a rejection, so I would expect in the course of business that all those patients come online.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Would you like to comment on the operating expenses, Jeroen? What do we expect for that? You're probably on mute, Jeroen.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

As I said last year on the OpEx, when it was in the Q4, it was EUR 73 million that we expected it to go down. It has gone down now, and I would expect it to be slightly up in the next quarters because we keep investing in Joenja, both in the U.S. and ex-U.S. And so I don't expect a sharp drop or anything in OpEx in the next few quarters.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Does that answer your question, Suzanne?

[Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen]

Yes. Thank you.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

All right. Pleasure.

[Operator]

Thank you. We will now take the next question from the line of Joe Pantginis from H.C. Wainwright. Please go ahead.

[Joe Pantginis, Managing Director and Senior Healthcare Analyst at H.C. Wainwright]

Good morning and good afternoon, gentlemen. Thanks for taking the questions. So-

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Mm-hmm.

[Joe Pantginis, Managing Director and Senior Healthcare Analyst at H.C. Wainwright]

A couple, please. So at the... I just wanna start at the end of your written comments today, 'cause, more on curiosity, I mean, obviously, it's not impactful of your investment case, but you did disclose that, OTL-105 with Orchard being discontinued. So just curious if, two things: Is there anything, technical or science that impacted, the decision to discontinue for the program? And, are there any payments either way for the termination, and, will you be potentially looking for, an additional or an alternative gene therapy approach for the future? Thanks.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

All right, Joe. First, no significant payments. Secondly, yes, there was always a high hurdle, of course, involved in this, a high technical hurdle. When you look at it, it's associated with both the ability to generate sufficient C1 inhibitor protein by means of the blood organ. That's one. And then, of course, the non-toxic conditioning regimen developments. So those were the high hurdles. And then, of course, you know, last but not least, but very importantly, we, at the time, we did not have the opportunity to develop, and that's the main reason, to develop leniolisib. We were not expecting that, to be able to develop leniolisib for 2 subsequent indications. So we're now about to kick off that phase II study for leniolisib.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

For the next indication, you heard from Anurag, that is a very, very significant indication, which is fairly nearby the market, compared to also a product like OTL-105. Obviously, no competition around with a long exclusivity guaranteed for leniolisib. Secondly, we are looking at an even more and bigger PID indication further going further forward. So in other words, we have a lot of opportunities now that are more nearby, more de-risked without any competitive threats here. So we decided, you know, given all the things together, that it is the best way forward to focus ourselves now on this with regards to our internal portfolio, and of course, to continue to look for leveraging the infrastructure, the commercial infrastructure further with our active in-licensing/acquisition quest. So I hope...

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

It's a bit long-winded, and I hope I answered your question there, Joe.

[Joe Pantginis, Managing Director and Senior Healthcare Analyst at H.C. Wainwright]

No, absolutely. Thank you. And then, on Ruconest, sort of a two-pronged question. How would you describe, sort of the first quarter impact with regard to insurance resets that are usually expected? How much did that impact, at least just for the first quarter, to be able to then get back on trajectory? And, secondly, how would you describe the balance? Because obviously, it's very nice to see, you know, the continued addition of new physicians to the program and, refill rates. Thanks a lot.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Yeah, yeah. Yeah, of course, it's always part of the lumpiness, or the first quarter is always part and parcel of that, renewals of the prior authorizations. But let's just go to Steve, give a bit more insight on these things. Right, Steve?

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Yeah, absolutely. Hi, Joe. So actually, the things went well, Joe. As you know, we've been doing this now for a number of years, so we were able to prepare in Q4. And the prior authorization, prior authorizations in Q1 actually went pretty smoothly, and we were completed almost all of them by the end of February. Now, what complicated last year was some issues, as you know, that were external issues that hit the market for government patients. We saw that impact decline quite significantly this year, as patient out-of-pockets also came down from Medicaid in the Medicare space. And certainly, for us, it was a significant decline in impact. So overall, I would say Q1, while you expect lumpiness in Q1, it was pretty successful reauthorization period for us.

[Joe Pantginis, Managing Director and Senior Healthcare Analyst at H.C. Wainwright]

Excellent. Thanks for all the details, guys.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Pleasure, Joe.

[Operator]

Thank you. We will now take the next question from the line of Hartaj Singh from Oppenheimer. Please go ahead.

[Hartaj Singh, Managing Director at Oppenheimer]

Great. Thank you, and thanks for the questions. I just have a couple. A really nice launch going on with Joenja, but I just wanna kind of go back to a previous question on the first quarter fluctuations. You know, two years in a row now, we've had them, and they seem to be pretty extreme. I mean, is it, you know, other companies, they talk about, you know, payment into government programs, there's patient assistance programs, et cetera, et cetera. I mean, what exactly happens in the first quarter where you have this, you know, pretty large drop-off from the fourth quarter to the first quarter? It seems mostly Ruconest sales. And then, is that the expectation going forward?

[Hartaj Singh, Managing Director at Oppenheimer]

Is that the way we should model this going forward, in that in future first quarters, you know, on a quarter-on-quarter sequential, we should expect a pretty significant decrease in Ruconest sales, and then that, that will pick up going on later. I mean, is this the way to think about it? So that's my first question. I just got a couple of others. Thank you.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Yeah. Hey, Hartaj, I think it's been the case, right, for all those years, and was aggravated last year by this, by this special situation there... but, yeah, it seems to be the case, right? Do you wanna comment any further on this, Stephen?

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Sure. Morning, Hartaj. So, I think it's certainly the case that in most Q1s you've seen over the years, Ruconest sees a slight decline due to the reauthorizations of most of our patients in that period of time, and that does affect most companies. Last year was exacerbated by an impact to government patients. It was external. It affected the whole HA space. That came down significantly this year as patient out-of-pockets declined, so we saw about half the impact that we saw last year. And next year, that stabilizes completely, I think, with patient out-of-pockets coming down to around $2,000. So I think you can say by the time we get to next year, it's steady state.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Yeah, perhaps we should expect a decline as we always have year-over-year, but I don't expect what's happened last year and this year to continue. That's the result of a very specific event affecting government patients.

[Hartaj Singh, Managing Director at Oppenheimer]

Yep. No, Stephen, that makes sense, and we've heard that from other companies also. I think the IRA, Inflation Reduction Act, had exacerbated these first quarter fluctuations. The other question I would just have is on OpEx. You know, really like all the color there. But, you know, let me put the question, there's a question asked previously. Let me put it another way, which is that, you know, if you're expecting, you know, your guidance suggests a pretty significant increase in revenues this year, you know, is OpEx expected to grow at the same rate? I mean, or can we hope for some operating leverage, you know, which would mean OpEx growing at a slower rate than revenues. And I've got one last question after that.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Yeah, sure. No, I think Jeroen already commented on that, Hartaj, about, you know, the still to be expected slight increase in the operating expenses for the coming quarters. Having said that, you know, it's not the spectacular increase anymore before because, you know, we did the U.S. launch, of course. It was... That is very capital intensive. On the other hand, you know, we continue to invest in all those things in the U.S., in the U.S. market. And of course, we're preparing for, as Jeroen was already alluding to, for the preparations for the launch of Joenja outside of the U.S.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

In addition to that, you also see that, you know, gradually, our R&D costs will, not spectacularly, but will continue to go up as well, because of the fact that we are starting, you know, the clinical trial programs for leniolisib in the subsequent indications. So all in all, we're not aiming for profitability per se in this year because it's still a launch year, right? And it takes time.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

And you already heard that, for instance, you know, the leverage, I think the real leverage, if you look at the patient growth in APDS, you heard Stephen say there that, you know, that conclusive the U.S. MAVE experiment that Anurag was talking about, will or should be bringing a very significant volumes of patients to the U.S., in the U.S. market towards becoming available for paid therapy next year. So, you know, this is typically, you know, when you have a new disease that is not fully described, it is typically, you know, when you are, you know, you're dealing in ultra-rare diseases, that it takes time, and it takes a lot of investment. But eventually, it will be a very, of course, profitable operation.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

I hope that answers your question a little bit, Hartaj.

[Hartaj Singh, Managing Director at Oppenheimer]

Yeah, no, no, absolutely. And then, so in line with what you've said before, also previously, Sijmen, just wanted to get more color around it. My last question is just on the phase II design. Anurag, you might have mentioned this already, but you know, can you just kinda walk us through you know, roughly how long would it take for you to sort of get all the sites open, recruiting? You know, when could we see... Essentially, what I'm trying to get to is when could we see a sort of a readout? You know, would that be a 2025 event or 2026? And thank you for all the questions.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Thank you, Hartaj. Anurag, please.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Hi, Hartaj. Yeah, so this next phase II dose finding study is being conducted at a single center, and that's at the NIH. So with that and the fact that they've, you know, we're anticipating 12 patients in this study, this is a center that has actually already identified which patients they anticipate being able to enroll. We believe that they'll be able to enroll the study in relatively rapid fashion once we get going, and we expect to be able to read out the results probably in the course of 2025.

[Hartaj Singh, Managing Director at Oppenheimer]

Great. Thank you all.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Thank you, Hartaj.

[Stephen Toor, Chief Commercial Officer at Pharming Group N.V.]

Thank you. We will now take the next question from the line of Alistair Campbell from RBC Capital Markets. Please go ahead.

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

Thanks so much for taking the questions. I've got three, if that's okay. Just first of all, looking at Joenja, I mean, obviously, we've, we've seen more diagnoses through Q1, but we haven't seen progression in terms of patients on therapy. So I just want to ask, you know, get a sense of that. I mean, just check we're not seeing an underlying dynamic here, or perhaps what you've done in the first instance is kind of hoovered up the most severe patients and, and maybe now we're moving into patients who are diagnosed but don't have quite so severe disease, and they're potentially harder to pick up. So maybe some commentary on that in terms of what's happening with severity in patients on drug.

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

And then if I do some quick mathematics and assuming you had about 80 patients on paid therapy through the quarter, that would sort of point me to a U.S. number based on the WAC, a chunk higher than reported sales. It sort of indicates something like a 25% gap in the system. Is that, is that a good proxy for, for how much kind of discounting there might be from the, from the WAC price in the system? And then finally, just on the PID trials, is there any reason to think that PIDs need a different dose from APDS? I mean, do you maybe perhaps need stronger suppression of the pathway? Just any sort of feedback on that would be interesting. Thank you.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Okay, let's maybe start with, thanks, Alistair. Let's maybe start with, two questions for Anurag about the severity and the, and the PID, dosing. Anurag, would you like to comment on that?

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Sure. So I think, Alistair, the first comment is correct, that, you know, the patients that we initially were able to convert over to paid therapy, these were patients, of course, that were in the clinical trial program, in the expanded access program, so there was, of course, a bolus of those patients. And many of those patients were quite severely ill. Now, APDS, in general, is a serious disease, so there's, you know, there aren't, you know, a large number of, let's say, asymptomatic patients that were floating around out there. But all of these patients are sick. Most of these patients are on IG replacement therapy, for example. So this is, you know, this is a serious disease and a progressive disease.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

So I think it's just a matter of continuing to, you know, reach out to these doctors and educate them, as well as patients, about their condition and the potential effects of Joenja. Onto the question about the dosing in this study as well as any future studies, and I think that's... It's really an open question. We're starting with a lower dose than we have approved for Joenja currently, so we're starting at the 10 mg dose, which is the same dose that we used initially with APDS, and we'll progress these patients through.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Based on everything that we know so far about the activation of the pathway in these patients and measurements that have been done about that activation relative to APDS patients, we feel like we're in the right dosing range, so we don't believe that we're going to need a higher dose to so-called suppress the pathway, but we're really trying to normalize and sort of balance the pathway. I think that's probably a better way to think about it.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Okay, thanks. And then maybe, Jeroen, you wanna comment on Alistair's question about the discounting or the absence of it in Joenja?

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

Yeah, absolutely. So, basically, it's not just discounting like in other drugs. It's mainly because of the mix with Medicaid, Medicare patients and mainly Medicare. And so we did have, for that reason, a discount of around 12%.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Does that answer your question, Alistair?

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

Yeah, and it-

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

So there's no, no other discount on that, Alistair.

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

Yeah, that's good. That's very clear. And, and is that broadly what we should be thinking about carrying on going forward, or do you think the mix will change over time?

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

It's a good question.

[Jeroen Wakkerman, CFO at Pharming Group N.V.]

Well, it really depends on the patient mix, so it's very difficult to say. But, it's been relatively stable so far.

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

Great. Thank you very much.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

You should realize, Alistair, it's a relatively young population that we're treating, right here-

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

Yeah

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

... in this case.

[Alistair Campbell, Equity Analyst at RBC Capital Markets]

Very good. Very clear. Thank you.

[Anurag Relan, Chief Medical Officer at Pharming Group N.V.]

Okay.

[Operator]

Thank you. As a reminder, if you wish to ask a question, please press star one and one on your telephone. That's star one and one to ask a question. There are no further questions at this time. I would like now to turn the conference back to Sijmen de Vries for closing remarks.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Thank you, Sandra. Yes, thank you very much. Yes, so you heard, you know, our total revenue guidance continued to be between EUR 280 million and EUR 295 million. You heard about the progress of finding the additional APDS patients in the U.S. and outside of the U.S., of course, and them bringing also a relevant part of the revenues for Joenja. You heard about the expectations towards the big effort that's ongoing during the remainder of the year to clarify the full description of the disease by means of the MAVE experiment to... So which will we expect deliver a significant new bolus of patients next year becoming available for therapy.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Obviously, the clinical trials are ongoing, and especially here, the pediatric label expansion trial progresses very well, and that, you know, that, the trial with the 4 11-year-olds has the majority or the vast majority of the pediatric patients in it, and, you know, that, of course, will be delivering a significant bolus of patients. In addition to that, you heard about the regulatory actions that are ongoing in the various territories outside the U.S. and where we expect to see some, some progress there continuing. And then, of course, last but not least, we're very excited about the start of our phase II clinical trial, proof of concept trial in PID with immune dysregulation, that will very significantly expand long-term commercial opportunity of leniolisib.

[Sijmen de Vries, Executive Director and CEO at Pharming Group N.V.]

Very lastly, you know, we continue to look for in-licensing opportunities of clinical-stage, rare disease opportunities, to be either in-licensed preferably or acquired. So with that, I would like to all thank you for being present at our conference, and we look forward to updating you on our next call, which will be our half-year results in the beginning of August. Thank you very much, and goodbye.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Anurag Relan, Chief Medical Officer
• Jeroen Wakkerman, CFO
• Sijmen de Vries, Executive Director and CEO
• Stephen Toor, Chief Commercial Officer

Analysts

• Alistair Campbell, Equity Analyst at RBC Capital Markets
• Christian Glennie, Director at Stifel
• Hartaj Singh, Managing Director at Oppenheimer
• Joe Pantginis, Managing Director and Senior Healthcare Analyst at H.C. Wainwright
• Suzanne van Voorthuizen, Head of Life Sciences Equity Research at Van Lanschot Kempen