Pharming Group N.V. First quarter 2024 financial results and business update May 8, 2024 NASDAQ: PHAR | EURONEXT Amsterdam: PHARM � Pharming® Sijmen de Vries, MD Stephen Toor Chief Executive Officer Chief Commercial Officer SPEAKERS Anurag Relan, MD Jeroen Wakkerman Chief Medical Officer Chief Financial Officer Forward-looking statements This presentation may contain forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectatio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the Month of April 2024 Commission File Number: 001-39822 Pharming Group N.V. (Exact Name of Registrant as Specified in Its Charter) Darwinweg 24 2333 CR Leiden The Netherlands (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form ...

Part I [Key Information](index=9&type=section&id=Item%203.%20Key%20Information) The company faces significant risks from its reliance on RUCONEST®, competition, and material weaknesses in internal controls [Risk Factors](index=11&type=section&id=D.%20Risk%20Factors) Key risks include commercial dependency on RUCONEST®, new product uncertainties, supplier concentration, and financial control deficiencies - The company is heavily dependent on sales of RUCONEST®, which accounted for approximately **92.6% of total revenues in 2023**[39](index=39&type=chunk) - Joenja®, approved by the FDA in March 2023, is a new drug and could develop unexpected safety or efficacy concerns, which would pose a material risk[40](index=40&type=chunk) - The company experiences significant customer concentration, with two U.S. specialty wholesale companies accounting for **83% of revenues in 2023**[92](index=92&type=chunk) - **Material weaknesses** have been identified in the company's internal control over financial reporting across all five components of the COSO framework[154](index=154&type=chunk)[718](index=718&type=chunk) - RUCONEST® faces intense competition from other approved products for treating Hereditary Angioedema (HAE), including both acute and prophylactic therapies, as well as generic equivalents to competing treatments[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Information on the Company](index=46&type=section&id=Item%204.%20Information%20on%20the%20Company) The company is a global biopharmaceutical firm focused on rare diseases with two commercial products, RUCONEST® and Joenja® [History and Development of the Company](index=46&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Pharming Group N.V., incorporated in 1988, trades on Euronext Amsterdam and Nasdaq, with capital expenditures of $1.4 million in 2023 - The company was incorporated in The Netherlands on November 11, 1988[201](index=201&type=chunk) Capital Expenditures (2021-2023) | Year | Capital Expenditures (in millions) | | :--- | :--- | | 2023 | $1.4 | | 2022 | $1.4 | | 2021 | $10.7 | [Business Overview](index=47&type=section&id=B.%20Business%20Overview) The company's portfolio features RUCONEST® and the newly approved Joenja®, supported by a proprietary manufacturing platform - The company's portfolio is led by two commercialized products: **RUCONEST® for HAE and Joenja® for APDS**[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - Joenja® (leniolisib) received FDA approval on March 24, 2023, for the treatment of APDS in adult and pediatric patients 12 years and older[208](index=208&type=chunk)[221](index=221&type=chunk) - As of December 31, 2023, Pharming has identified over **840 diagnosed APDS patients globally**, including over 200 in the United States, with an estimated total prevalence of approximately 2,000 patients in key markets[239](index=239&type=chunk) - RUCONEST® is manufactured using a proprietary transgenic platform where recombinant proteins are produced in the milk of rabbits[278](index=278&type=chunk)[280](index=280&type=chunk) - The company is subject to extensive pre- and post-market regulation by authorities such as the FDA in the U.S. and the EMA in the EU[310](index=310&type=chunk)[349](index=349&type=chunk) [Organizational Structure](index=82&type=section&id=C.%20Organizational%20Structure) Pharming Group N.V. is the parent company with wholly-owned subsidiaries in The Netherlands and the United States - Pharming Group N.V. is the parent company with multiple wholly-owned subsidiaries in The Netherlands and the United States[419](index=419&type=chunk) [Property, Plant and Equipment](index=84&type=section&id=D.%20Property%2C%20Plant%20and%20Equipment) The company's primary facilities are in The Netherlands, with a capital investment of $1.4 million in 2023 - The company's main facilities, including administrative offices, labs, and production sites, are located in The Netherlands[421](index=421&type=chunk)[422](index=422&type=chunk) - Capital investment in 2023 was **$1.4 million**, primarily for new machinery and lab equipment[427](index=427&type=chunk) [Operating and Financial Review and Prospects](index=84&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) Revenue grew to $245.3 million in 2023, but increased operating expenses for the Joenja® launch resulted in a net loss [Operating Results](index=85&type=section&id=A.%20Operating%20Results) Revenue increased 19.3% to $245.3 million in 2023, but higher launch-related expenses led to a net loss of $10.5 million Consolidated Statement of Income (2021-2023) | Amounts in $'000 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenues** | **245,316** | **205,622** | **198,871** | | Gross profit | 220,104 | 188,060 | 177,729 | | **Operating profit / (loss)** | **(5,387)** | **18,233** | **13,561** | | (Loss) / Profit before tax | (12,012) | 14,987 | 23,078 | | **(Loss) / Profit for the year** | **(10,548)** | **13,674** | **15,996** | | Basic (loss) / earnings per share ($) | (0.016) | 0.021 | 0.025 | | Diluted (loss) / earnings per share ($) | (0.016) | 0.019 | 0.023 | Revenues by Product and Geography (2023 vs 2022) | Amounts in US$ '000 | 2023 | 2022 | | :--- | :--- | :--- | | **RUCONEST®** | **227,134** | **205,622** | | - US | 221,213 | 200,082 | | - Europe and RoW | 5,921 | 5,540 | | **Joenja®** | **18,182** | **—** | | - US | 17,894 | — | | - Europe and RoW | 288 | — | | **Total revenues** | **245,316** | **205,622** | - Marketing and sales costs increased by **44.6% to $124.0 million** in 2023, primarily due to the commercial expansion for the launch of Joenja®[463](index=463&type=chunk) - Research and development costs rose by **31.2% to $68.9 million** in 2023, mainly related to leniolisib clinical trials for pediatric APDS patients and research into additional indications[461](index=461&type=chunk) [Liquidity and Capital Resources](index=102&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $213.4 million in cash, despite a net cash outflow from operations - The company held **$213.4 million in cash**, cash equivalents, and marketable securities as of December 31, 2023, which is expected to fund operations for more than 12 months[520](index=520&type=chunk)[521](index=521&type=chunk) Selected Cash Flow Information (2021-2023) | Amounts in $'000 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash from (used in) operating activities | (17,302) | 22,458 | 37,842 | | Net cash from (used in) investing activities | (129,388) | 5,323 | (21,305) | | Net cash from (used in) financing activities | (1,039) | (4,982) | (27,947) | | **Net change in cash and cash equivalents** | **(145,601)** | **15,418** | **(13,235)** | - The company has **€125 million in 3.00% convertible bonds** due January 21, 2025[534](index=534&type=chunk) [Critical Accounting Estimates](index=106&type=section&id=E.%20Critical%20Accounting%20Estimates) Financial statements rely on critical management judgments and estimates, with details provided in the Annual Financial Statements - The company's financial statements rely on critical accounting estimates and judgments, particularly concerning the value of assets and liabilities, which are reviewed on an ongoing basis[542](index=542&type=chunk) [Directors, Senior Management and Employees](index=106&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) The company operates with a one-tier board, and its workforce grew to an average of 382 full-time employees in 2023 [Directors and Senior Management](index=106&type=section&id=A.%20Directors%20and%20Senior%20Management) Pharming has a one-tier board structure led by CEO Sijmen de Vries and seven non-executive directors - The company has a one-tier board structure with a single executive director, CEO Sijmen de Vries, and seven non-executive directors[543](index=543&type=chunk)[546](index=546&type=chunk) - Dr. Richard Peters was appointed Chairman of the Board of Directors on September 25, 2023, succeeding Paul Sekhri[556](index=556&type=chunk) [Compensation](index=111&type=section&id=B.%20Compensation) Executive remuneration includes fixed salary, annual bonuses, and long-term performance-based share incentives CEO Remuneration (2023) | Amounts in $'000 | Fixed Remuneration | Annual Bonus | Share-based Payments | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Dr. Sijmen de Vries | 673 | 615 | 1,371 | 150 | 2,809 | - The executive LTI plan is performance-related, with vesting based on **Total Shareholder Return (40% weight)** and **strategic objectives (60% weight)** over a three-year period[582](index=582&type=chunk) - Non-executive directors receive fixed annual retainers and committee fees, not linked to company performance, to ensure independence[584](index=584&type=chunk)[587](index=587&type=chunk) [Board Practices](index=120&type=section&id=C.%20Board%20Practices) The Board has established Audit, Remuneration, and Corporate Governance committees composed of non-executive members - The Board has three primary committees: Audit, Remuneration, and Corporate Governance, all composed of non-executive directors[600](index=600&type=chunk) [Employees](index=122&type=section&id=D.%20Employees) The company's workforce grew to an average of 382 full-time equivalents in 2023, primarily in The Netherlands and the U.S Average Full-Time Equivalent Employees (2021-2023) | Year | Total Employees | | :--- | :--- | | 2023 | 382 | | 2022 | 332 | | 2021 | 285 | [Major Shareholders and Related Party Transactions](index=123&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) No shareholder owns over 5%, and the primary related party transaction is with associate company BioConnection [Major Shareholders](index=123&type=section&id=A.%20Major%20Shareholders) As of March 31, 2024, no shareholder beneficially owned more than 5% of the company's ordinary shares - As of March 31, 2024, there was no known beneficial owner of more than **5%** of the company's issued and outstanding common shares[617](index=617&type=chunk) - Executive officers and directors as a group beneficially owned **2.2%** of ordinary shares as of March 31, 2024[618](index=618&type=chunk) [Related Party Transactions](index=125&type=section&id=B.%20Related%20Party%20Transactions) The company's main related party transactions are with its fill and finish partner BioConnection, in which it holds a 22.98% stake - Pharming holds a **22.98% stake** in its fill and finish partner, BioConnection; in 2023, Pharming paid BioConnection **$4.7 million** for services[623](index=623&type=chunk) - The company has adopted a Related Person Policy requiring board or committee approval for all related party transactions[628](index=628&type=chunk) [Financial Information](index=127&type=section&id=Item%208.%20Financial%20Information) The company has no material legal proceedings and does not anticipate paying dividends, retaining earnings for business use - The company is not currently a party to any material legal or administrative proceedings[634](index=634&type=chunk) - Pharming has never declared or paid dividends and does not anticipate paying them in the foreseeable future, intending to retain earnings for business investment[635](index=635&type=chunk) [Additional Information](index=129&type=section&id=Item%2010.%20Additional%20Information) Key material contracts include license agreements for leniolisib and OTL-105, with details on Dutch and U.S. tax considerations - The license agreement with Novartis for leniolisib includes up to **$200 million** in potential milestone payments, plus tiered royalties[649](index=649&type=chunk) - The collaboration with Orchard for OTL-105 involves an upfront payment of **$17.5 million**, with up to **$189.5 million** in potential milestones and royalties[651](index=651&type=chunk)[652](index=652&type=chunk) - Dividends distributed by the company are generally subject to a **15% Dutch dividend withholding tax**, though exemptions or reductions may apply[681](index=681&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=142&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to liquidity, market (currency and interest rate), and credit risks, managed by the Board - The company's most significant financial risks are identified as liquidity, market risk (currency and interest rate), and credit risk[702](index=702&type=chunk) [Controls and Procedures](index=145&type=section&id=Item%2015.%20Controls%20and%20Procedures) Disclosure controls were deemed ineffective due to material weaknesses in internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **not effective** as of December 31, 2023[715](index=715&type=chunk) - Material weaknesses were identified across all five components of the COSO framework: Control Environment, Risk Assessment, Control Activities, Information & Communication, and Monitoring[718](index=718&type=chunk)[733](index=733&type=chunk)[737](index=737&type=chunk) - The independent registered public accounting firm issued an **adverse opinion** on the Company's internal control over financial reporting as of December 31, 2023[727](index=727&type=chunk)[784](index=784&type=chunk) - A remediation plan is underway, which includes implementing key controls, strengthening internal teams, and undergoing effectiveness testing in 2024[719](index=719&type=chunk)[720](index=720&type=chunk)[722](index=722&type=chunk) [Corporate Governance and Other Disclosures](index=149&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Disclosures) As a foreign private issuer, the company follows Dutch governance practices and discloses details on its audit committee and cybersecurity risk management - As a "foreign private issuer," the company complies with its home country (Dutch) governance requirements, exempting it from certain Nasdaq corporate governance standards[753](index=753&type=chunk) - The Board of Directors has determined that Mr. Leonard Kruimer, Chairman of the Audit Committee, qualifies as an "audit committee financial expert"[736](index=736&type=chunk) Principal Accountant Fees (2022-2023) | Amounts in $'000 | 2023 | 2022 | | :--- | :--- | :--- | | Audit Fees | (1,328) | (1,357) | | Total | (1,328) | (1,357) | - The Board of Directors, through its Audit Committee, has oversight responsibility for cybersecurity risks[767](index=767&type=chunk)[768](index=768&type=chunk) Part III [Financial Statements](index=156&type=section&id=Item%2017%20%26%2018.%20Financial%20Statements) The audited IFRS financial statements received an unqualified opinion, but the auditor issued an adverse opinion on internal controls - The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB[804](index=804&type=chunk) - The independent auditor, Deloitte Accountants B.V., issued an **unqualified opinion** on the financial statements but an **adverse opinion** on the company's internal control over financial reporting due to material weaknesses[783](index=783&type=chunk)[784](index=784&type=chunk) - A critical audit matter was identified related to **U.S. Revenue Rebate Accruals** due to the significant assumptions and judgments involved in their calculation[788](index=788&type=chunk)[789](index=789&type=chunk)[790](index=790&type=chunk)

Financial Data and Key Metrics Changes - The company reported over $227 million in revenue for 2023, representing a 10% growth compared to the previous year, significantly exceeding the expected single-digit growth for RUCONEST [6][45] - In Q4 2023, revenue grew by 49%, with RUCONEST achieving a record revenue of $73.3 million, reflecting a 34% increase in that quarter [26][33] - The total net loss for 2023 was $10.1 million, a decline from a net profit of $13.7 million in the previous year, primarily due to higher operating costs and adverse foreign exchange fluctuations [44] Business Line Data and Key Metrics Changes - RUCONEST's revenue growth was driven by increased patient reliance, with a 10% growth in 2022 and a record revenue since its launch in the US [45][56] - Joenja, launched in the US in April 2023, generated over $18 million in sales during its first nine months, with 81 patients on therapy by year-end [7][98] - Joenja's revenue grew by 21% compared to Q3 2023, reaching $7.9 million [98] Market Data and Key Metrics Changes - The company identified over 840 patients with APDS globally, with an estimated prevalence of approximately 1.5 patients per million [13] - The company expects continued growth in the US market for Joenja, supported by family testing and validation efforts [51] Company Strategy and Development Direction - The company aims to expand its portfolio through potential acquisitions and in-licensing of clinical-stage opportunities in rare diseases, particularly in immunology, hematology, respiratory, and gastroenterology [54][127] - A Phase 2 clinical trial for leniolisib in primary immune deficiencies with immune dysregulation linked to PI3K delta signaling is expected to significantly expand its long-term commercial potential [54][132] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about RUCONEST's growth despite increased competition, highlighting strong underlying market indicators [57][60] - The company provided revenue guidance for 2024, expecting between $280 million and $295 million, indicating a growth of 14% to 20% [48][134] Other Important Information - The company is actively engaged in genetic testing partnerships to identify patients with APDS and is working on a registry to follow APDS patients longitudinally [18][75] - The gross profit in Q4 2023 increased by $25.8 million compared to the same quarter last year, driven by higher revenues [33] Q&A Session Summary Question: Can we still expect seasonality for RUCONEST in first quarter sales as previous years? - Management indicated that similar patterns are expected, with strong underlying indicators continuing into the first quarter [35][44] Question: Can you provide any color on the duration of the patients on Joenja since its launch? - The company reported high adherence rates close to 90% and a steady inflow of new patients through family testing efforts [12][64] Question: What is the expected impact of the expiration of RUCONEST's exclusivity in the US? - Management expects no impact on RUCONEST, as there is no significant interest in developing a biosimilar for this product [116] Question: What is the risk profile for the second indication in primary immune deficiencies? - Management believes that many genetic dysfunction areas should respond positively, based on previous interactions with the immunology community [74] Question: When can we expect data from the registry for APDS patients? - The registry is just underway, with more substantial data expected in 2025, while expanded access program data will be shared at conferences this year [105][75]

Pediatric study for 1 to 6 years ongoing First patient dosed November 2023, enrollment continuing as planned 1. Rao VK and Oliveria JB. How I treat autoimmune lymphoproliferative syndrome. Blood 2011; 118(22):5741-51 2. Westerman-Clark et al 2021; Schwab C, Gabrysch A, Olbrich P, Patiño V, Warnatz K, et al. Phenotype, penetrance, and treatment of 133 cytotoxic T-lymphocyte antigen 4-insufficient subjects. J Allergy Clin Immunol. 2018;142(6):1932-1946 3. Eissing M, Ripken L, Schreibelt G, Westdorp H, Ligtenb ...

Sijmen de Vries - Chief Executive Officer Stephen Toor - Chief Commercial Officer Anurag Relan - Chief Medical Officer Jeroen Wakkerman - Chief Financial Officer Good morning or good afternoon, ladies and gentlemen. Iâm here with my three colleagues, Stephen Toor, our Chief Commercial Officer; Anurag Relan, our Chief Medical Officer; and Jeroen Wakkerman, our Chief Financial Officer and we are delighted to take you through the third quarter results of this year. And then, of course, you move to the middle p ...

| --- | --- | |-------|-------------------------------------------------------------------------------------------------------------------------------------------| | | | | | Performed well in leading revenue indicators in the U.S. including active patients, vials shipped, and number of physicians prescribing | | | Strong U.S. in-market demand – over 70 new patient enrollments for 3 straight quarters | | | | | | On track for low single digit revenue growth for 2023 | Strong commitment to HAE community 700 20 ...

And then, of course, the third pillar there on that slide is, of course, as important, if not more, for the – let's say, for the future significant inflection point that we believe that we can achieve with leniolisib, that is the second indication. And we, as you may have read already, have been already submitting our plans and have initiated discussions with the FDA on how – on our proposed development program for the second indication and Anurag will come back to that a little bit later. And next slide, p ...

| --- | --- | |-------|---------------------------------------------------------------------------------------------------------------------| | | Continued low single digit growth in RUCONEST® revenues | | | Joenja® approved by FDA March 24, 2023, commercializing in U.S. since early April 2023 | | | CHMP opinion in 4Q23, marketing authorization in Europe ~2 months later* | | | File leniolisib with UK's MHRA following ECDRP route* | | | Continued operating cost investments to accelerate future growth | | | F ...

On the next slide, we can see sort of the treatment options that were available to manage these patients prior to the approval of Joenja in the U.S. On the one hand on the left, you can see it was limited to trying to address the immune deficiency, so using antibiotics to prevent infections, to treat infections, but also using immunoglobulin replacement therapy as a way to augment their own immune system. Next slide. And when we looked at the open-label data, what we saw is over time a reduction in the numb ...