BioWorld International Correspondent
Pharming Group NV's planned acquisition of fellow Dutch firm DNage BV encountered an unusual obstacle.
Pharming's own employees are opposed to the move and, through their works council (called Ondernemingsraad in Dutch), plan to file an appeal in a commercial court in Amsterdam.
Leiden-based Pharming's works council has claimed that it was not properly consulted on the acquisition and that the purchase of Rotterdam, the Netherlands-based DNage is not sufficiently justified. The companies disclosed an agreement earlier this year, through which Pharming would pay DNage shareholders in a combination of shares and undisclosed milestones. The stock-based portion of the deal was then valued at about €15 million (US$18.3 million). (See BioWorld International, March 29, 2006.)
Neither Pharming nor DNage officials were available for comment, but Pharming said in a statement that "the eventual implementation of the sale and purchase agreement will be dependent on the outcome of that appeal."
"I think it's quite a unique case," said Marcel Wijma, biotechnology analyst at Van Leeuwenhoeck Research, of Voorhout, which recently was acquired by SNS Reaal, of Utrecht. Normally, works councils focus on employment conditions and other personnel-related issues, he said. "It could be a signal of other problems within the company. Shareholders should be aware of this," he told BioWorld International.
Immediately before the DNage acquisition plan was disclosed, Pharming's shares were changing hands for €3.83 on the Euronext exchange in Amsterdam. Before last week's disclosure, they had dropped to €3.39. During Tuesday's trading session, the share price dipped to a new 52-week low of €2.86, before ending the day at €2.94.
"I think that people expected they would go for an acquisition of a late-stage pipeline. When you look at DNage, it's very early stage, of course," Wijma said. "I think they wanted to have [DNage co-founder and CEO] Rein Strijker back on board at Pharming, because Pharming desperately needs to strengthen its management, also," Wijma said. Strijker had been chief business officer at Pharming before leaving to establish DNage, a spinout from Rotterdam University that is developing therapies aimed at diseases of aging. (See BioWorld International, April 20, 2005.)
Wijma said there also are concerns about delays in completing a Phase III program of Pharming's lead product, recombinant human C1 inhibitor, which is in development for hereditary angioedema. Patient recruitment appears to have slowed progress, whereas competitors do not appear to have the same problems, he said. "Jerini [AG, of Berlin] doesn't seem to have problems getting patients for their last trial," he said.