BioWorld International Correspondent

Just one week after taking in €17.1 million (US$20.6 million) in a private placing, Pharming Group NV banked another $18.5 million as part of a royalty agreement with Paul Royalty Fund that could be worth up to $30 million in total.

The deal, which has a 10-year term, gives New York based Paul Royalty Fund single-digit royalties on sales of Pharming's lead product, recombinant human C1 inhibitor (rhC1INH), which is undergoing a pivotal trial in hereditary angioedema (HAE). It previously paid Pharming, of Leiden, the Netherlands, $1.5 million for signing a term sheet, and it would hand over milestone payments totaling $10 million if rhC1INH gains FDA approval and undergoes commercialization in the U.S. The money includes a $3.5 million up-front equity investment.

The agreement should provide a greater return for shareholders than a conventional big pharma deal, Pharming CEO Francis Pinto told BioWorld International.

"Last year, we were in discussions with a pharmaceutical major," he said. "They wanted to give us some up-front money and 10 percent of the royalties."

Pharming still plans to enter marketing agreements for rhC1INH, which would cover the U.S., Western Europe and Japan. The validation from the Paul Royalty Fund, which conducted extensive due diligence on the company and its program, will aid that process, he said.

HAE is a genetic disorder caused by a deficiency in C1INH, a protein that plays a pivotal role in the classical pathway of the complement cascade, in coagulation and in the fibrinolytic system.

The condition is characterized by acute episodes of painful and potentially life-threatening swelling of the skin or mucosa. Pharming is one of several companies developing late-stage products in this space.

Its competitors include Dyax Corp., of Cambridge, Mass., which has partnered its drug, DX-88, with Genzyme Corp., also of Cambridge. Jerini AG, of Berlin, has partnered the compound Icatibant, a bradykinin B2 receptor antagonist, with Kos Life Sciences Inc., a subsidiary of Kos Pharmaceuticals, of Cranbury, N.J. Also, Lev Pharmaceuticals Inc., of New York, is developing a version of C1INH derived from human plasma.

Pharming has enrolled 160 HAE patients in its Phase III program, which is being conducted in 23 centers in the U.S. and Europe.

"The first to market will benefit a lot," Pinto said. "We will be first to market. We have already filed in a number of markets."

While there is a large unmet need in HAE, there also is greater market potential for rhC1INH in other areas, Pinto said. The company has filed INDs for acute host-vs.-graft disease and reperfusion injury and will fund trials in those indications using the €17.1 million it raised via a private placing in late January.

The company now has more than €50 million in cash on its balance sheet and zero debt.

"We can look at ways and means of building our pipeline," Pinto said. It already has submitted a GRAS filing for its version of human lactoferrin, a food supplement that it produces in the milk of transgenic cows. A recombinant fibrin tissue sealant has entered clinical trials as part of a U.S. Army agreement. A fourth program centers on developing recombinant human collagen.

The company, Pinto said, emerged from bankruptcy protection in October 2002 and has completed one of the most successful turnarounds in the biotech industry.

"Four years ago, we had no cash, a lot of debt, no future almost," he said.

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