By Angela McDaniels
Seattle, Feb. 3 - Pharming Group NV has signed a $30 million strategic partnering agreement with affiliates of Paul Royalty Fund II LP on recombinant human C1 inhibitor (rhC1INH) for the treatment of hereditary angioedema, according to a company news release.
Under the terms of the agreement, Pharming has received an upfront payment of $18.5 million, which includes $15 million for the company's development work on rhC1INH to date and the continued development and commercialization of rhC1INH products and a $3.5 million equity investment.
The company also received a $1.5 million investment upon signing the term sheet with Paul Royalty Fund.
Pharming said it is also eligible to receive up to $10 million in milestone payments upon Food and Drug Administration approval and the commercial launch of rhC1INH in the United States.
Paul Royalty Fund is entitled to receive single-digit royalties on revenues of rhC1INH and other Pharming products over the 10-year term of the agreement. Pharming has the option to repurchase the royalty rights from Paul Royalty Fund at any time and has provided Paul Royalty Fund with a security in the event of financial insolvency.
In conjunction, Paul Royalty Fund will receive about 815,000 warrants with an exercise price of €4 per share.
"With this strategic agreement, Pharming has obtained additional funding for the company while retaining flexibility to complete regional distribution agreements for rhC1INH," Pharming chief executive officer Francis J. Pinto said in the release.
"Paul Capital's expertise in working with life sciences companies will be invaluable to Pharming as we seek to finalize negotiations for rhC1INH on attractive commercial terms through this two-step licensing process."
Between the strategic agreement with Paul Royalty Fund Pharming and a recent €17.1 million private placement of shares with new institutional investors, the company said it now has a balance sheet with more than €50 million in cash.
Hereditary angioedema is a human genetic disorder caused by a shortage in activity of the blood protein C1 inhibitor. The disease is characterized by acute attacks of painful and potentially life-threatening swelling of soft tissues (edema) of hands, face, feet, abdomen and throat, the latter of which can lead to asphyxiation, according to the release.
Existing treatments using androgens are unsuited for treatment of acute attacks and may cause serious side effects such as excessive hair growth, menstrual disorders, infertility, hepatitis and, in rare cases, liver cancer.
Pharming is based in Leiden, the Netherlands, where is develops protein products such as therapeutics for genetic disorders, specialty products for surgical indications, intermediates for various applications and food products.
| Issuer: | Pharming Group NV
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| Issue: | Private financing
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| Investor: | Paul Royalty Fund II LP
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| Up front amount: | $20 million
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| Total amount: | Up to $30 million
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| Warrants: | 815,000
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| Warrant strike price: | €4.00
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| Announcement date: | Feb. 3
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