Hello, and welcome to today's Pharming’s Full Year 2022 Results Call. My name is Bailey, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, Sijmen de Vries, Chief Executive Officer. Please go ahead.

Thank you very much, Bailey. Good morning or good afternoon, ladies and gentlemen to our 2022 results call. I would like to start taking you through that. But before I do that, I would like to pay your attention -- you to pay attention to the next slide, which contains a statement on forward-looking -- on forward-looking statements, as we may be making forward-looking statements in this conversation. They are statements based upon our expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements, and you can read the rest for yourself, I assume. I'm today here -- next slide, please, I'm joined by my colleagues, Dr. Anurag Relan, our Chief Medical Officer; and Jeroen Wakkerman, our Chief Financial Officer. And we also have here, although not speaking on the conference, but to answer questions, our Chief Commercial Officer, Stephen Toor. And I would now like to start with the next slide, please and then next one. So where are we? We are -- we have developed over the years a very strong base with potential for significant growth. And that is based upon the commercialized asset RUCONEST recombinant esterase -- recombinant human C1 esterase inhibitor for the treatment of acute hereditary angioedema attacks, which is commercialized by ourselves on both sides of the ocean, as you can see in a lot of other markets as well outside of the US and the European Union, and of course, the UK. The potential for growth is represented here initially by the anticipated approval and launch for leniolisib PI3Kδ kinase delta inhibitor in development on the regulatory review for APDS where we anticipate in the not-too-distant future, the FDA approval and later…

Thank you, Sijmen. In the next few slides, what I'd like to do is review some information that we have on our understanding of the condition APDS, our understanding of the patient journey and what we've done in terms of developing leniolisib for APDS and then using this -- all of this information to help identify patients and then lastly, provide an update on where we are in terms of regulatory status. So on the next slide, we can see a schematic here of how this genetic defect in one of these two genes leads to this hyperactivity of this pathway. You can see that within the cell there on the left. And that hyperactive pathway then leads to this disregulated B and T-cell development. So these key components of the immune system do not develop properly. And as a result of not developing properly, patients suffer from a number of symptoms and conditions that you can see on the right. Most prominently, these patients develop recurrent infections. They also, because of this abnormal development of their immune system have what's called lymphoproliferation. So they get swollen lymph nodes, their spleen is enlarged. They have problems with expansion of lymphoid tissue, especially in the gut, and that can lead to a condition called enteropathy. And not only do these immune system cells not fight infection, they actually lead to the opposite problem, where they lead to a condition called Autoimmunity. And this can lead to autoimmune anemias and cytopenias and other autoimmune disorders. But it's also important to note that APDS is a progressive condition. So overtime, the disease worsens. And many of these patients, even at a young age, develop a condition called bronchiectasis, which is essentially scarring in the lungs that is irreversible. And many of these patients…

Thank you very much, Anurag. So the financial highlights for 2022 versus last year related to the P&L. To start off with, our sales grew by 3.4% in 2022 to $205.6 million. And in Q4, sales were $54.6 million, also a growth of 3%, in line with the single-digit growth guidance that we've given throughout the year. Gross profit increased from $178 million to $188.1 million. That's an increase of 5.8%. And therefore, we improved our gross margin. Operating costs grew from $167 million to $184.4 million an increase of 10.5%, and the operating profit grew to $18.2 million, which is an increase from last year of $4.5 million. The net profit decreased from $16 million to $13.7 million in 2022, which is a decline of 14.5%. And in the next few slides, I'm going to give you a bit more color and detail on the results on what happens. So next slide, please. The overall message is that, we grew our sales, and we also grew our investments in the launch and the preparation of the launch in leniolisib. Revenue grew to $205.6 billion, and that was supported by a price increase, which was well below the CPI level, but also an increase in the number of doctors prescribing RUCONEST and an increase in the number of patients. Regional split is that we had a growth in the US of 3% and the EU sales were flat over the two years. Moving to gross profit. Gross profit increased, and that was, amongst others, obviously, by the sales growth, but also by the improvement in gross margin from 89% to 91%. And that was driven by favorable production results but also an impairment on the inventory in 2021 of $2 million that we didn’t need to take this year. The…

Thank you. [Operator Instructions] Our first question today comes from the line of Sushila Hernandez from Kempen. Please go ahead. Your line is now open.

Thank you for taking my question. I just have two questions. The first one on leniolisib. So you have identified now more than 500 patients that have confirmed APDS diagnosis. Can you comment on what a realistic target is for the number of patients that you can identify and again receive leniolisib once approved? And could you also provide an update on your reimbursement discussions? Thank you.

I missed the first part of your question.

On the potential numbers, well, Sushila the -- I think you're referring to the label, which is now 12 and upwards, right? So we've started our first Pediatric trial. And I'm looking here at Anurag, I think, it's about 25% of patients are below 12 years of age. So they would initially not qualify for treatment until such time that we have the pediatric approval in our hands. Furthermore, I think, all of the other APS patients, we have no -- we have not seen so far APDS patients that would not qualify for treatment because the diagnosis is made by this genetic test and that's basically yes or no answer. It's pretty clear in that respect.

And there's a small number of patients, of course, that have already been transplanted. Some of those successfully, so those also would not qualify, but again, the vast majority of the other patients that Sijmen mentioned would potentially be eligible for treatment.

And then with regards to your second question about reimbursement. Obviously, these discussions are relevant for the Europe -- for outside of the US. Those have not started because we had – we don't -- we're not approved yet. And in Europe, normally speaking, those discussions start after you have the approval for the product. In the United States, we will be bringing -- sorry, we will be bringing leniolisib to the market as soon as possible after the PDUFA date and will, of course, inform the market about the pricing in the United States as and when there are discussions.

Okay. Thank you. And then just….

What’s your question?

Yes. Thank you. And just one more question. When can we expect to see additional assets entering your pipeline via internal projects or in-licensing acquisitions next to a second indication for leniolisib or your gene therapy candidate?

Yes. So basically, the secondary indications leniolisib in the second half of this year will be informing the market about that. And with regards to in-licensing and acquisitions, we're very active. We have a small, but very efficient business development group, turning over a lot of incoming assets that we get offered/that we find ourselves. We've had a evaluation in several stages. We've done a few due diligences even over the last year, and of course, as you can see, nothing has resulted in a deal. So until such time, we keep working beavering away at it and trying to find those assets that fit our portfolio. And we're really looking for serious rare diseases. I think leniolisib is a very good case in point where we are very comfortable to take Phase 3 risk because leniolisib, we only could look at the first cohort of patients that had to undergo on the dose-finding study and the Phase 3 study was ongoing. We're very comfortable with that provided that we have a good clinical proof-of-concept in our hands when we actually start to engage with the asset. Our preferred mode, obviously, for this is in-licensing as we are still a relatively small company. And of course, an in-licensing transaction is much easier to handle than mergers and acquisitions, especially, of course, when you are launching a product like leniolisib this -- that we do with leniolisib this year, which requires a lot of our focus. Does that answer your question, Sushila?

Yes, that's clear. Thank you.

Thank you.

Thank you. The next question today comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead, your line is now open.

Hey guys. Thanks for taking the question.

Hi Joe.

So, just looking at some of the internal workings company and the decisions that you're making. I've been covering you guys for a while, so now I've been also sort of BC and AC before cattle and after cattle. Sorry for the bad joke. So, with that said, I guess I wanted to get into the continuum of that decision where, obviously, you needed that potential capacity as RUCONEST was looking to expand into preeclampsia and AKI. So, I'm just wondering what percentage of your decision factored into sort of the projected needs for RUCONEST in HAE with -- versus your ability to expand your current rabid population for any needs?

Yes. Yes. Thanks, Joe. So, the answer to that is that there is more than sufficient production capacity -- manufacturing capacity in the rabid platform to serve hereditary angioedema and even has significant growth possibilities. And this is a very flexible system. It takes a while to upscale, but it is a very flexible system. And it is a very flexible manufacturing process. It takes also a while and it's a complex manufacturing system, but it is really -- has the capacity to actually deliver a lot more product. then we currently deliver. So, if we were to get a significant increase in market share in hereditary angioedema, we could actually master that.

That's great. And then just curiosity with cattle, is there any potential here to monetize the platform that you already have in place?

No. Unfortunately, we came to the conclusion that there's no significant possibility to actually monetize that and therefore, we have halted all the activities there. It's a different product, right?

Yes, absolutely. And I guess for your own, obviously, you said profits might be impacted further based on further investments in leniolisib. So, I'm just curious how much of that is the new indications that you'll give visibility on for the second half of this year versus where do you stand with regard to rightsizing the marketing and sales costs and investments that you still might have to do?

Yes. No, exactly. We expect that the marketing and sales costs for leniolisib will further increase in 2023, Joe. And that's just to support the launch in the EU and in the US, obviously. On the life cycle management, we hope to start with a clinical trial for example by the end of this year, but it will depend on the design of the trial, how much money we need to put into that. And probably for 2023, that impact will be fairly limited because if it happens, it would be towards the end of this year anyway. So, the impact of that would be more in 2024 than in 2023. But we foresee an increase again in the marketing and sales cost in -- for leniolisib.

Got it. Thanks a lot guys.

Yes, Joe.

Thank you. The next question today comes from the line of Hartaj Singh from Oppenheimer. Please go ahead, your line is now open.

Great. Thank you and thanks for the questions. Really nice update. We missed you all at our healthcare conference. We glad to hear your voices over the phone today. So maybe just talk a little bit about the 500 patients, there's a question before, I just want to build on that a little bit. You've estimated about 1,500 patients as your market opportunity. You've already identified $500 million. How do you think, Sijmen, of just the -- and Anurag of the overall opportunity sort of the incident patient, the prevalence patient. I mean, do you think that that 1,500 is now a reasonable figure, or do you think it could be larger? And I just had a question on -- a follow-up question on [indiscernible]? Thank you.

You want to?

Sure. Sijmen. Hartaj, so we've -- when we look at the prevalence, and we have good data, for example, in some European countries, if we take France, for instance, where there's already 60 patients identified in a country that's a population that's about $50 million. So, we know the minimum prevalence, again, really without our involvement as -- and without a therapy being available is about $1 per million. So we've conservatively estimated about $1 million to $2 per million in terms of the prevalence, and that's where that 1,500 number comes from.

Yeah.

Now, as we've been out there talking about the condition, obviously, we're finding more and more patients, including in places like France and across Europe as well as in the U.S. So that number we expect to continue to increase. I think a big driver also of diagnosis though is the availability of a potential therapy, a targeted therapy. So I think as -- and then hopefully, we can have a therapy available for these patients soon. But once such a therapy is available, I think that will drive even further diagnosis. I think we're fairly on conversion right now with the estimates that we're providing in terms of the prevalence. But certainly, I don't think it would surprise any of us if the numbers were significantly higher.

Yeah. That makes sense Anurag.

Yeah.

I mean just from being at ASH and talking to physicians and whatnot, that's our sense also in call checks. Just another question I got of to your regulatory question. I know you're very close to the approval. But just where are you in terms of any FDA audits or facility inspections and have you already have the laboring discussions and all? And thanks for all the questions.

Sure. So I can't comment on any specifics other than to say we're engaged in regular contact with FDA and those -- that contact includes the routine types of things, including inspections, audits as well as labeling discussions that have -- that are occurring.

Great. Thank you everyone. Good luck. And we talk soon. Bye-bye.

Thank you, Hartaj.

Thank you. [Operator Instructions] The next question today comes from the line of Christian Glennie from Stifel. Please go ahead. Your line is now open.

Hi. Good afternoon guys. Thanks for taking my questions. The first question on -- so let's start with RUCONEST. Just to get an idea of about the 3% growth last year in the U.S. sort of price versus the volume mix in terms of what was driving that and what your expectations are for the 2023?

Yeah. Yeah, we stated that we took a price decrease below the CPI. That's our normal modes and over the -- has been a normal modes over the years. So I think the price increase, of course, is the biggest driver of this growth. So you could say that the underlying volume growth is more or less flat to slightly maybe going up or down and there some quarterly fluctuations there as well. But I think that's how you should see that. So it means that nucleus continues to basically be prescribed by a wider audience of physicians. We think that's important. As I was saying in my earlier part of the presentation, also by more -- used by more patients and used by more prescribers, reflecting the fact that there is a continued need for this product in terms of especially, the breakthrough attacks that continue to occur under all the prophylactic treatments that are available in the market. And yes, some of them have improved significantly from the past, but no patients will always need and always have acute treatment at hand to be treating that unexpected breakthrough attack. Do not forget this is a stress related disease and people can be very nicely surprised by breakthrough attacks. Does that answer your question, Christian?

Yeah. Thanks. And it seems similar outlook to 2023 in terms of the price. Okay. And then on leniolisib, then a couple here. So just on the 500 patients, you've already said yeah it’s about 25% under the 12 years. But what's the rough sub-split of the $500 million in terms of the US and Europe?

Stephen, would you like to comment on that?

I would. Maybe I can take that one. So I think they're about equally distributed. Yeah, so I will also comment that a lot of the work that was done in finding patients was actually initiated in Europe through this group called the European Society for Immunodeficiency. So they have done a lot of the work. And in the US, there wasn't such a coordinated effort. So we're a little bit behind in terms of the process, but we're quickly catching up, I think, in the US in terms of disease state education and finding patients.

So it is fair to say that Europe had head start, right, on this whole thing?

Exactly.

But we're getting in the US.

Sorry. But just to clarify, I thought the -- is the $500 million just Europe and US, or I think it included some other markets maybe or not?

It does include other markets well. I was saying that amongst the -- if we look just at the US and Europe alone, they're about an equal number.

But it is more than $500 million right now, right, there as well, yes.

Okay. And then on the EMA side, obviously, you had the initial shift from accelerated standard review. The way you described at the time was obviously further data from the open-label extension. Is that a -- subsequent interaction with the EMA, is that still the case? I mean, is there anything additional thrown up there?

There has been no change there. We're collecting that additional year of data and intend to provide it to in our responses, and we're still expecting an opinion from the CHMP in the second half of this year.

Okay. Thank you. And finally, if I may, in terms of thinking about a bit on the modeling side. I mean, obviously you -- obviously, the nature of the agreement with the last -- probably confidential, but an idea of the potential milestones that might be applicable to Novartis on FDA approval? And to what extent that might actually be offset by the by them exercising the option on the priority review voucher that they should get. Just a bit of any insight you can give us there would be helpful. A – Sijmen de Vries: Yes, happy to do that. I can give you some guidance. I think for modeling purposes, it's probably a pretty neutral operation.

Okay. So the PRV might offset the milestone, yes. Okay A – Sijmen de Vries: Along those lines.

Thank you.

Thank you. There are no additional questions waiting at this time. So I'd like to pass the conference back over to Sijmen de Vries for any closing remarks. Please go ahead.

Thank you very much. Yes. Ladies and gentlemen, as we were referring to, we had a very good year 2022. We laid a very good base for transferring our company from the one product, one geography company into two products, multiple geography company. We believe that leniolisib has a very significant commercial potential significantly larger than the RUCONEST franchise. And of course, we're very proud what we have achieved and continue to achieve with RUCONEST, which is, of course, a very strong supporter and foundation and cash flow generator going forward. And we believe also that the high hurdle to entry the complex manufacturing of the recombinant C1 esterase inhibitor by means of our transgenic platform will, therefore, mean that there will be -- for a significant period going forward, RUCONEST will continue to create those -- generate those cash flows that enable us to invest in all these plans, including leniolisib secondary indications and also in licensing of additional assets to actually start launching products on a very regular basis going forward. Because the other nice thing is we are having a very nice scalable commercialization operations on both sides of the ocean and therefore, we can easily handle additional assets for commercialization over the coming years. So we look forward to catching up with you later in the year when we have the next set of results available and continue to embark on our journey into 2022, the important transformative year for the company. Thank you very much for attending this conference. And like I said, we look forward to updating you on the next occasion. Goodbye.