Pharming Announces Strategic Agreement Valued At US $30 Million
Company poised for growth with solid financial position
Leiden, The Netherlands, February 3, 2006. Biotech company Pharming Group N.V. (“Pharming” or “the Company”) (Euronext: PHARM) (PHARM.AS) announced today that it has signed a strategic partnering agreement with affiliates of Paul Royalty Fund II, LP (“Paul Royalty Fund”) valued at US $30 million on recombinant human C1 inhibitor (rhC1INH) for the treatment of hereditary angioedema (HAE).
Under the terms of the agreement, Pharming has received an upfront payment of US $18.5 million. This amount consists of US $15 million for the Company’s development work on rhC1INH to date and the continued development and commercialization of rhC1INH products, as well as a US $3.5 million equity investment. Recently, the Company received a US $1.5 million investment upon signing of the term sheet with Paul Royalty Fund.
Pharming is also eligible to receive up to US $10 million in milestone payments based on the achievement of Food and Drug Administration approval and the commercial launch of rhC1INH in the US. Paul Royalty Fund is entitled to receive single digit royalties on revenues of rhC1INH and other Pharming products over the ten year term of the agreement. Pharming has the option to repurchase the royalty rights from Paul Royalty Fund at any time and has provided Paul Royalty Fund with a security in the event of financial insolvency. In conjunction, Paul Royalty Fund will receive approximately 815,000 warrants with an exercise price of € 4.00 per share. Pharming will provide further details on the agreement in its annual report.
“With this strategic agreement, Pharming has obtained additional funding for the Company while retaining flexibility to complete regional distribution agreements for rhC1INH,” said Dr. Francis J. Pinto, CEO of Pharming. “Paul Capital\'s expertise in working with life sciences companies will be invaluable to Pharming as we seek to finalize negotiations for rhC1INH on attractive commercial terms through this two-step licensing process.”
“Based on our review of the available data, we were impressed by the potential of rhC1INH for the treatment of HAE,” said Dr. Kenneth Macleod, Principal of Paul Royalty Fund. “The flexible structure of this agreement meets Pharming’s overall financing objectives and puts the Company in a solid position to complete the development and commercialization of the product.”