BioWorld International Correspondent

Shares in Pharming Group NV sank by more than 65 percent on news that the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) adopted a negative opinion on a marketing authorization application for its lead drug, the hereditary angioedema treatment Rhucin.

Pharming, of Leiden, the Netherlands, said it would apply later this month to seek a re-examination of the CHMP's opinion. Investors voted with their feet, however, and exited from the stock late last week and early this week.

The stock (Amsterdam:PHARM) closed at €3.21 (US$4.62) immediately before the news was disclosed last Thursday. Shares dropped steadily over subsequent trading sessions, hitting €1.12 by Monday's close, the stock's lowest point since December 2003. It dipped below €1 during trading Tuesday, although it was back up to €1.05 by midafternoon.

"As you can see from the stock price, this was a complete surprise," Fabian Smits, analyst at Rabo Securities NV in Amsterdam, told BioWorld International.

In August, the company discontinued the placebo arm of a double-blind trial of Rhucin on the advice of an independent data monitoring committee, on ethical and methodological grounds. An interim analysis indicated that the drug, a recombinant version of the human C1 inhibitor, was safe and effective.

Patients with hereditary angioedema are deficient in that protein, which dampens the complement cascade within the immune system, and are prone to acute, sometimes life-threatening attacks, characterized by swelling of mucosal tissue.

"The data looked very good - even excellent I would say," Bernd Hilhorst, analyst at Amsterdam, the Netherlands-based Amsterdams Effectenkantoor BV, told BioWorld International.

However, the CHMP raised several concerns about the data, which are summarized in a document published on its website. It stated that the studies included in Pharming's MAA were too small to demonstrate the efficacy of Rhucin, particularly in treating the more severe forms of the condition characterized by swelling in the larynx. The CHMP also said the company did not supply enough information on the likely immunogenicity of Rhucin, which is secreted in the milk of transgenic rabbits. Moreover, it failed to demonstrate that it could reliably measure such antibodies - or potential impurities arising from the rabbit milk.

Framingham, Mass.-based GTC Biotherapeutics Inc., also suffered an initial rebuff from the CHMP when it sought approval for its recombinant human antithrombin, ATryn, which is produced in the milk of secreted goats. However, it eventually obtained approval in August 2006, and the product now is marketed by Leo Pharma A/S, of Ballerup, Denmark. "It feels like the same issue right now," Hilhorst said of the Rhucin opinion. "I believe they will get a positive opinion within a half year, but it's very surprising [that they have not]."

"Pharming said that they see at least a 50 percent chance they will get approval - even more than 50 percent," Smits said. A conditional approval is the most likely scenario, if they do get a positive result, but gauging the likelihood of success is difficult, he said. "I think there is still a chance, because there are examples in the past where this has happened. But it's a very rare situation."

The recent share price decline offers investors a clear-cut bet on whether it will succeed. Even if it doesn't, the rest of its pipeline, although early stage for the most part, also has attractions, Hilthorst said. "My advice to our clients is this is a good buying opportunity," he said. "It's not a one-product company."