LEIDEN, The Netherlands,
December 7, 2016 /PRNewswire/ --
- Valeant transaction expected to close today,
7 December 2016 -
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IMPORTANT NOTICE AT THE END OF THIS PRESS RELEASE.
Pharming Group N.V. ("Pharming" or "the Company") (EURONEXT:
PHARM) today announced that it has closed a new financing round,
comprising three financial instruments and a rights issue,
providing a total of €104 million before costs. The financing
will be used to pay the upfront amount of US$60 million (approximately €56.1 million) for
completion of the transaction with subsidiaries of Valeant
Pharmaceuticals International, Inc. (NYSE/TSX: VRX) signed on
9 August 2016 for Pharming to acquire
the commercialization rights to its own high quality Heritary
Angioedema therapy RUCONEST® in North
America. The balance after costs of approximately €19.3
million will be used to boost sales of RUCONEST® in North America as well as in the additional
countries in Western Europe and
the Middle East in which Pharming
is selling the product directly.
- Total financing of €104 million, comprising new straight
debt, convertible bonds and proceeds of the rights
issue.
- Agreement executed for a new debt financing facility of
US$40 million (approximately €37.6
million) with existing and new lenders.
- Agreement executed for a new 8.5% redeemable convertible
bond instrument of approximately €12.5
million with institutional investors.
- Agreement executed for a new 0% amortizable convertible bond
instrument of €45 million led by US institutional
investors.
- Rights issue completed with 49% acceptances from
shareholders, with additional shares acquired
in the Rump Offer, raising €8.8 million in total before
costs.
- All new financing transactions are conditional on Valeant
transaction closing.
- Valeant transaction expected to close today, 7 December 2016.
- Cash position strengthened to €34.3 million
following closing of the transaction.
Rights Issue
The Rights Issue closed with acceptances for 49% of the shares
on offer, a total of 28,703,934 shares, producing €5.9 million at
the rights price of €0.205 per share. The shares represented
by the unexercised rights were offered to institutional investors
who subscribed for an additional 14,277,201 shares producing €2.9
million at the same price of €0.205, resulting in a total of €8.8
million before costs. The institutional investors who committed to
acquire shares before the close of the rights exercise period
received a total of 2,576,431 warrants to subscribe for Pharming
shares at €0.284 per share, a premium of 25% to the 20-day
volume-weighted average price as at 18
November 2016 ("VWAP"), the business day prior to
publication of Pharming's Rights Issue prospectus on 21 November 2016. The warrants have a
duration of 5 years.
New Debt Facility
The Company has signed an agreement with a syndicate of debt
providers for a US$40 million (€37.6
million), 42 months' debt facility on standard commercial terms
(8.25% interest and one-off 9% final payment at maturity in
June 2020). The syndicate includes
one of the Company's current lenders, Silicon Valley Bank, and new
lender Kreos Capital. The debt is paid interest only for 12 months
and then interest and principal over the next 30 months. It
carries a 10% warrant coverage. The warrants are the same as for
the rump offer investors and so entitle the debtholders to
subscribe for Pharming shares at €0.284 per share. The lenders will
receive 13,237,318 warrants.
Ordinary Bonds
Pharming has also entered a five-year redeemable 8.5%
convertible Eurobond facility (the "Ordinary Bonds") for €12.5
million which will be convertible into shares at €0.284 per share,
a premium of 25% to the VWAP, the business day prior to publication
of Pharming's prospectus on 21 November
2016. The issue was led by Kreos Capital with other US
and EU institutional investors. The Ordinary Bonds have an
8.5% interest rate and a 20% warrant coverage. This entitles the
Ordinary Bondholders to subscribe for Pharming shares at €0.284 per
share, the same as for the rump offer and debt warrants. The
investors will receive 8,830,986 warrants. The total amount of the
Ordinary Bonds is slightly lower than previously announced
estimates as a result of investors preferring to invest directly
into one or more of the other instruments (including the rump offer
associated with the rights issue) or having to withdraw indicative
orders for their own funding reasons.
Amortizing Bonds
The Company also entered into an 18 month redeemable amortizing
convertible bond (the "Amortizing Bonds") for €45 million, led by
US institutional investors. The Amortizing Bonds convert into
shares at €0.289 per share, a premium of 35% to the closing price
of the Pharming shares on 5 December
2016 which was €0.214 per share. The bonds carry no
interest, although there is a fee payable to the holders upon
closing of €5.0 million, and have a 40% warrant coverage. The
Amortizing Bonds are intended to be amortized from February 2017 in 16 equal monthly instalments
which can be paid, at the Company's discretion, either in cash at
105% of the instalment amount or in shares, at a 14% discount to
the then market price. The warrants for the Amortizing Bondholders
are the same as for the other instruments and so entitle the
Amortizing Bondholders to subscribe for Pharming shares at €0.284
per share. The Amortizing Bondholders will receive 63,380,282
warrants.
Net Proceeds
The costs of the whole financing programme will be approximately
€9.7 million, including financing fees and legal costs, and the
costs for the Valeant transaction and prospectus will be
approximately €1.0 million. The amount payable to repay the
existing debt facility will be approximately €15.6 million.
The net proceeds of all the financing transactions after
payment of costs, the repayment of the existing debt facility and
the payment of the upfront amount to Valeant will be approximately
€19.3 million. Following closing, the cash position will be
approximately €34.3 million.
Shares Issued
Only the 42,981,134 shares bought in the Rights Issue and Rump
Offer have been issued in connection with the financing of the
acquisition. The shares that are represented by warrants and
convertible bonds will only be issued upon subsequent future
exercise, conversion or amortization.
Dr Sijmen de Vries, Pharming's
CEO, commented:
"We are very pleased to have put together a financing
package that minimizes dilution of
existing shareholders and brings
additional high-quality investors.
We can now complete the
transformational transaction with Valeant,
move RUCONEST's commercialization
forward quickly and enable Pharming to
reach profitability potentially as much as three years earlier than
under the Valeant license. The uptake of the rights issue
was extremely high given the time of year and
the turbulent market environment, at a very
small discount. It demonstrates
the confidence that shareholders have in
Pharming's strategy and future.
We anticipate that we will be able to close the
Valeant transaction quite quickly, enabling us
to focus on delivering value for all our
shareholders."
Stifel Nicolaus Europe Limited is acting solely as lead European
Placement Agent and Roth Capital Partners is acting solely as Lead
US Placement Agent. Trout Capital LLC. is acting as a Co-Placement
Agent and First Berlin Securities Brokerage GmbH is acting as a
Placement Advisor.
Stifel Nicolaus Europe Limited acted as sole financial adviser
to Pharming in connection with the proposed re-acquisition of
Ruconest US rights from Valeant.
Summary
The summary can be seen below:
Instrument/Transaction Proceeds Costs Net Proceeds
€million €million €million
Rights Issue & Rump Offer 8.8 (1.0) 7.8
Ordinary Bond 12.5 (0.6) 11.9
Amortizing Bond 45.0 (7.5) 37.5
Debt Facility 37.6 (0.6) 37.0
Legal and other transaction costs: (1.0) (1.0)
Total 103.9 (10.7) 93.2
To be used for:
Upfront Payment to Valeant (56.1) (1.0) (57.1)
Repayment of existing facility (15.6) (15.6)
Liquidity reserve for debt facility (1.2) (1.2)
______
Net Proceeds after costs used to
boost RUCONEST® sales (€ million) 19.3
Existing cash at 6 December 2016 15.0
New Cash balance 34.3
About Pharming Group N.V.
Pharming is a specialty pharmaceutical company developing
innovative products for the safe, effective treatment of rare
diseases and unmet medical needs. Pharming's lead product,
RUCONEST® (conestat alfa) is a recombinant human C1 esterase
inhibitor approved for the treatment of acute Hereditary Angioedema
("HAE") attacks in patients in Europe, the US and rest of the world. The
product is available on a named-patient basis in other territories
where it has not yet obtained marketing authorization.
RUCONEST® is commercialized by Pharming in Algeria, Andorra, Austria, Bahrain, Belgium, France, Germany, Ireland, Jordan, Kuwait, Lebanon, Luxembourg, Morocco, Netherlands, Oman, Portugal, Qatar, Syria,
Spain, Switzerland, Tunisia, United Arab
Emirates, United Kingdom
and Yemen.
RUCONEST® is distributed by Swedish Orphan Biovitrum AB (publ)
(SS: SOBI) in the other EU countries, and in Azerbaijan, Belarus, Georgia, Iceland, Kazakhstan, Liechtenstein, Norway, Russia, Serbia, and Ukraine.
RUCONEST® is distributed in the United
States by a subsidiary of Valeant Pharmaceuticals
International, Inc. (NYSE: VRX/TSX: VRX), following Valeant's
acquisition of Salix Pharmaceuticals, Ltd.
RUCONEST® is distributed in Argentina, Colombia, Costa
Rica, the Dominican
Republic, Panama and
Venezuela by Cytobioteck, in
South Korea by HyupJin Corporation
and in Israel by Megapharm.
RUCONEST® is also being investigated in a Phase II clinical
trial for the treatment of HAE in young children (2-13 years of
age) and evaluated for various additional follow-on
indications.
Pharming's technology platform includes a unique, GMP-compliant,
validated process for the production of pure recombinant human
proteins that has proven capable of producing industrial quantities
of high quality recombinant human proteins in a more economical and
less immunogenetic way compared with current cell-line based
methods. Leads for enzyme replacement therapy ("ERT") for Pompé and
Fabry's diseases are being optimized at present, with additional
programs not involving ERT also being explored at an early stage at
present.
Pharming has a long term partnership with the China State
Institute of Pharmaceutical Industry ("CSIPI"), a Sinopharm
company, for joint global development of new products, starting
with recombinant human Factor VIII for the treatment of Haemophilia
A. Pre-clinical development and manufacturing will take place to
global standards at CSIPI and are funded by CSIPI. Clinical
development will be shared between the partners with each partner
taking the costs for their territories under the partnership.
Pharming has declared that the
Netherlands is its "Home Member State" pursuant to the
amended article 5:25a paragraph 2 of the Dutch Financial
Supervision Act.
Additional information is available on the Pharming website:
http://www.pharming.com
About Kreos Capital
Kreos Capital is the leading provider of growth debt financing
in Europe and Israel to high-growth companies. Since 1998,
Kreos has completed over 450 transactions and committed more over
EUR 1.7 billion in 15 different
countries. Kreos is dedicated to supporting management teams and
their equity investors with flexible loan structures for all stages
of a growth company's development and to addressing the needs for
growth capital, working capital, acquisition financings, lower
mid-market buy-outs, roll-up strategies, bank re-financings as well
as pre- and post-IPO financings. Kreos's most recent fund, Kreos V,
was launched in January 2016 and has
EUR 400 million of equity commitments
from top-tier institutional investors. The Kreos global team has
extensive debt financing, management and equity investing
experience, covering the pan-European market from its locations in
London, Tel Aviv and Stockholm.
Important Notice
The distribution of this announcement in jurisdictions other
than the Netherlands may be
affected by the laws of relevant jurisdictions. Therefore any
persons who are subject to the laws of any jurisdiction other than
the Netherlands will need to
inform themselves about, and observe any applicable
requirements.
This announcement is for information purposes only and shall
not constitute an offer to buy, sell, issue or subscribe for, or
the solicitation of an offer to buy, sell, issue, or subscribe for,
any securities in the Company or any other entity. Any such offer
pursuant to the proposed rights issue will be made solely by means
of a prospectus to be published in due course and any supplement or
amendment thereto and any acquisition of securities in the Company
should be made solely on the basis of the information contained in
such prospectus.
Neither this announcement nor any copy of it may be taken or
transmitted, published or distributed, directly or indirectly, in
whole or in part, in, into or from the
United States of America (including its territories and
possessions, any state of the United
States of America (the "United States" or the
"US")), Australia, Canada, Japan
or the Republic of South Africa or
transmitted, distributed to, or sent by, any national or resident
or citizen of any such countries or any other jurisdiction
where to do so would constitute a violation of the relevant
securities laws of such jurisdiction (each a
"Restricted Jurisdiction"). Any failure to
comply with this restriction may constitute a violation of
United States, Australian,
Canadian, Japanese or South African securities
laws.
The securities mentioned in this announcement have not been,
and will not be, registered under the US Securities Act of 1933 (as
amended) (the "US Securities Act"), and
may not be offered or sold in the United
States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. No public offer of the shares is being made
in the United States and the
information contained herein does not constitute an offering of
securities for sale in the United
States.
This announcement is directed only at persons whose ordinary
activities involve them in acquiring, holding, managing and
disposing of investments (as principal or agent) for the purposes
of their business and who have professional experience in matters
relating to investments and are: (i) if in a member state of the
European Economic Area, qualified investors within the meaning of
article 2(1)(e) of the Prospectus Directive
("Qualified Investors"); or (ii) if in
the United Kingdom, Qualified
Investors and fall within: (a) article 19(5) (investment
professionals) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the
"Order"); or (b) article 49(2)(a) to (d)
(high net worth companies, unincorporated associations, etc.) of
the Order (all such persons together being referred to as
"Relevant Persons"). The term
"Prospectus Directive" means Directive
2003/71/EC as amended and includes any relevant implementing
measures in each member state of the European Economic
Area.
Forward-looking Statements
This press release of Pharming Group N.V. and its
subsidiaries ("Pharming", the
"Company" or the
"Group") may contain forward-looking
statements including without limitation those regarding
Pharming's financial projections, market
expectations, developments, partnerships, plans, strategies and
capital expenditures.
The Company cautions that such forward-looking statements may
involve certain risks and uncertainties, and actual results may
differ. Risks and uncertainties include without limitation the
effect of competitive, political and economic factors, legal
claims, the Company's ability to protect intellectual
property, fluctuations in exchange and interest rates, changes in
taxation laws or rates, changes in legislation or accountancy
practices and the Company's ability to identify,
develop and successfully commercialize new products, markets or
technologies.
As a result, the Company's actual performance,
position and financial results and statements may differ materially
from the plans, goals and expectations set forth in such
forward-looking statements. The Company assumes no obligation to
update any forward-looking statements or information, which
should be taken as of their respective dates of issue, unless
required by laws or regulations.
Contacts:
Pharming Group N.V.
Sijmen de Vries, CEO, Tel: +31-71-524-7400
Robin Wright, CFO, Tel:
+31-71-524-7400
FTI Consulting:
Julia Phillips/ Victoria Foster Mitchell, Tel:
+44(0)203-727-1136
Lifespring Life Sciences Communication
Leon Melens, Tel:
+31-653-81-64-27
PRN NLD