LONDON ¿ Pharming Group NV, a specialist in the production of human proteins in the milk of transgenic animals, has effectively put itself up for sale as it struggles to secure sufficient funding to bring to market its lead product, Pompase, currently in Phase II/III trials.
As of June the company had EUR24.6 million (US$21.7 million), enough for six months.
Last week, Pharming, based in Leiden, the Netherlands, reached an agreement on EUR15 million in debt financing secured against its manufacturing plant as the first step in raising long-term funding, and said in the coming months it will investigate various options, ¿including formation of strategic alliances, merger with, or acquisition by, (bio)pharmaceutical companies.¿
A rights issue is not an option as the stock has performed poorly in the past 12 months, falling 77.6 percent to EUR3.40. The current market capitalization is just under EUR50 million.
Rein Strijker, senior vice president, told BioWorld International, ¿In view of the current share price we feel the shareholders will be served best by a strategic deal.¿ Pharming is in discussions with various parties and the prospects of securing financing through a deal ¿are better than issuing more shares.¿
However, the company, quoted on Nasdaq Europe (formerly Easdaq) and the Amsterdam Stock Exchange, needs more money now and Strijker said it will use some form of equity instrument to raise EUR15 million immediately.
Pompase, a human alpha-glucosidase for the treatment of Pompe¿s disease, is being jointly developed with Genzyme General, of Cambridge, Mass. The Phase II/III trial in the U.S. and Europe began in March and the product is expected to be submitted for approval in 2002, with the first launch planned to be in Europe.
Pompe¿s disease is a lethal hereditary disease in which sufferers are unable to produce the enzyme alpha-glucosidase for breaking down glycogen to glucose.
The joint venture, Genzyme-Pharming Alliance LLC, was set up in 1998. Genzyme paid the first $14 million of development costs, and since then the partners have shared costs 50-50. Strijker said one of the options is for Genzyme to take a large share of the venture.
Strijker said Pharming had always known it would have to make a heavy investment in manufacturing as Pompase reached the end of its clinical development program. ¿Even Genzyme, with over $1 billion in cash, announced it would need to increase investment in the joint venture when it released its second-quarter figures.¿
But the state of the markets has made it impossible for Pharming to raise further cash. One of its peers and competitors, PPL Therapeutics plc, of Edinburgh, Scotland, has faced similar difficulties. Although it succeeded in putting together a #42 million (US$59.6 million) funding package to build a manufacturing plant for its lead product, the company was forced to abandon a #45 million share issue in April because of hostile market conditions.
Transgenic technology is proving time consuming and costly to get to market, but is starting to prove itself. ¿There have been several deals over the past year to 18 months with established pharma companies looking at transgenics to solve long-term manufacturing needs,¿ Strijker said.
Pharming¿s second product, a human C1 inhibitor being developed in collaboration with Baxter Healthcare Corp., entered Phase I in March 2000 in the treatment of the inflammatory disease hereditary angioedema. In April 2001 Pharming completed the acquisition of ProBio Inc., of Honolulu, a specialist in nuclear transfer and transgenic technologies.