Good day and thank you for standing by. Welcome to the Pharming Group N.V. Full Year 2023 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, the company will only take questions from dial-in participants. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today Sijmen de Vries, CEO of Pharming Group. Please go ahead sir.

Thank you very much operator. Welcome ladies and gentlemen. Good morning, good afternoon wherever you are to our conference. Please next slide. And we're very happy to take you to the full year results. And you can give me the next slides because before I do that, I would like to point out to that forward-looking statements slides that you now see where we will be making forward-looking statements that are based upon our current beliefs and expectations, which may of course differ from what we expect. So, having said that, I would like to now go to the next slide where you can see my face and then move on immediately to the next slide. Thank you very much. That's the one. Yes, we are indeed looking back to 2023 as a very successful year where by delivering strong growth, we built the foundation for that global rare disease company that we are setting out to build. And that's -- we can build that. We can all finance that by of course the cash flows that come from the marketing of RUCONEST, which delivers considerable positive cash flows that can help us to build that foundation further. So, we delivered -- we're very pleased that we delivered to more than $227 million of revenue, which is a 10% growth versus last year which exceeded significantly the expected single-digit growth for RUCONEST. And we saw that because we had some very good parameters -- forward-looking parameters that we're really working, the number of patients increased, numbers of prescribers increased. And basically, it means that patients continue to be reliant on RUCONEST despite increased therapy options that are available in the market, which of course, are good for patients. But you can see that RUCONEST continues to be that reliable cornerstone…

Thank you, Sijmen. Good morning, good afternoon everybody. So this is a slide, I think, you'll be largely familiar with. And I think the key thing to take away from this is that the key features of RUCONEST. So namely the only recombinant C1 treating the root cause of the disease and 97% efficacy in one dose is what continues to fuel the RUCONEST growth and our success over the last nine years. These product features are allied to the excellent work our commercial medical and patient services teams deliver for customers on patients and their carers is also why RUCONEST remains a highly relevant part of the conversation in the U.S. HAE community and globally. That's remained the case despite three prophylactic launches over the last few years leading to generally better controlled patients and the genericization of a canape, and I fully expect it to remain the case even in the face of acute competition in the future. And that's because HAE patients using RUCONEST tend to have generally a more severe course of disease. And in that instance, the need for virtually guaranteed and fast efficacy that stops the attack in its tracks is critical, and it's typically the patient's only real objective. In most cases, that override in need for efficacy won't be replaced by a convenience play. So, looking at 2023 RUCONEST performance was characterized by the continued growth in both prescribers and new patient enrollments, and it was also successful despite that market-wide event we saw in Q1 last year related to government reimbursed patients. Now, we have seen some disruption from that this year, but it's been muted by you're almost having those patients out-of-pocket costs in the US. And moving into 2024, we've also seen that the strength of our leading indicators…

Thanks, Steve. So what I'm going to do today is talk a little bit about APDS and then provide an update on Joenja, as well as where we see some additional possibilities for applying leniolisib in the second indication. So on this slide you can see, a little bit of information about APDS, which is a rare primary immune deficiency that as Sijmen said was only characterized in 2013. We estimate the prevalence of APDS at approximately 1.5 patients per million. And to that end, we have already identified more than 840 patients across the world in key global markets. As with many rare diseases, the signs and symptoms of APDS can vary across patients even within family members who have the same variant. This unfortunately leads to many potential delays in diagnosis and care, and a lot of frustration amongst clinicians and patients as they try to treat these patients. Fortunately, a simple genetic test can provide a definitive diagnosis of APDS. And until the availability of Joenja in the United States, recently, treatments for APDS have really only been limited to addressing the symptoms of the disease. Again these symptoms manifest early in childhood, because these patients have this genetic condition that they're born with, but these treatments do not address the root cause of APDS. And without a specific indicated treatment, this was quite complicated for these patients to manage their condition and physicians to be able to treat them effectively. Next slide. And you can see now with the launch of Joenja, APDS patients have a choice now, specifically patients who are adult and pediatric patients ages 12 years in age and older. And we've been able to demonstrate this by a randomized placebo-controlled study, where Joenja met both primary and secondary end points with significant…

Yes. Thank you very much, Anurag, and I'm very happy to take you through the financial highlights. To start off with Q4 2023 versus last year, we had a revenue growth in the quarter of 49%. And RUCONEST grew by 34% in Q4 and recorded a -- had a record revenue of $73.3 million. You may remember that we were at a growth of 2% year-to-date at the end of Q3. So we're very happy with these Q4 sales results. And we saw strong performance in leading key revenue indicators in the U.S., including new physicians prescribing RUCONEST, new patient enrollments, including high-frequency attack patients and the total number of patients. Joenja revenue grew by 21% versus the previous quarter, so Q3 2023 and the revenue was $7.9 million. And by year-end, we had as Steve also said, 92 APDS patients enrolled in the U.S. and 81 patients on therapy on Joenja. The gross profit in the fourth quarter of 2023 increased by $25.8 million compared to the fourth quarter last year. And this growth was driven by higher revenues, partially offset by increased RUCONEST production costs and royalty payments on Joenja sales. The operating cost increased by $16 million into the -- in the fourth quarter compared to last year, and about half of this $8.3 million was directly related to R&D and marketing and sales expenses for leniolisib, respectively Joenja. And our expansion efforts driven by preparation for the launch and further commercialization of Joenja led to a $7.1 million increase in payroll expenses. An operating profit of $1.1 million was realized in contrast to an operating loss of $10.2 million in the fourth quarter of 2022. And this improvement was primarily driven by the rise in gross profit and partially offset by the increase in operating expenses.…

Thank you. [Operator Instructions] And your first question comes from the line of Christian Glennie from Stifel. Please go ahead.

Hi. Good afternoon, guys. Let's start-off with RUCONEST, I guess, just to get a bit more of a sense for these underlying drivers, obviously, a very strong fourth quarter. You seem to be guiding for mid-single-digit growth in 2024 now. Is there a scenario in which you could get north of that and do another sort of 10%? Just trying to get a bit more sense for some of the drivers on RUCONEST this year?

Yeah. Thanks, Christian, very nice question. Yeah. RUCONEST indeed has some very strong, and Steve was already alluding to it has some very strong underlying indicators in the market, which he says continue into the first quarter. We are, of course, aware of the fact that, we are in a market which is a very -- lot of competition around. We continue to be optimistic, let's say, it's year 10, right? That's the RUCONEST in the market. So we can be optimistic by saying that we have the mid to -- low to mid-single-digit growth. And as and when we see indicating -- indicators moving towards the north, obviously, we will update guidance during the year. But now we would like to stick to that in respect to RUCONEST.

A natural follow-up to that, I mean you touched on this Stephen touched on this in the remarks around potential new entrants here on oral and convenience next year. Just to get a bit more insight I guess in terms of the patient profile here and what the sort of your market intelligence tells you that you aren't going to lose patients effectively to that convenience option.

Yes, I think Anurag and Stephen both -- sorry Stephen alluded to it already of course. We see a very different patient profile that are using RUCONEST. And basically speaking when you look at the clinical results of those new acute options, you see that there is a necessity to A, have multiple doses and B, still need rescue therapy. If you look at the RUCONEST results, the word rescue therapy doesn't figure because RUCONEST is protein replacement therapy for that missing C1 or not functioning C1 inhibitor protein in patients with hereditary angioedema. Hence why we believe that these products in fact serve a different segment of the population that suffers from hereditary angioedema where we will see -- we expect therefore that these oral acute products, if approved, of course, will serve that patient segment that is now currently of course using a lot of convenience products as well such as subcutaneous injections that are by the way very stinging and painful and which you have to give repeatedly often to treat one attack and that the hurdle for those patients to actually step over into an oral would be fairly low. Whereas, I think that patients that rely on RUCONEST that are not used to any convenience in therapy but are relying on the reliability of efficacy of RUCONEST that hurdle will be a lot higher. What can never totally exclude of course that patients will try it and may be successful. But on the other hand we -- like we said, we serve a very different patient profile with very -- with higher attack frequencies then we see in all those clinical trials that are being done by those new oncoming competitors. I hope that answers your question sorry to be a little bit long line of here Christian.

No, that's very helpful. Thank you. And then one final one on Joenja and I get back in the queue. I guess your guidance implying RUCONEST 5% gets to about 240, so Joenja the balance is somewhere between 40 million and 55 million for this year if I'm understanding it correctly. And therefore what are your assumptions around the sales and markets that will contribute to that growth and what gets you to the low and high end of that? So, is it mostly still U.S.? Or will there be reasonable contributions from other markets?

I think what -- first and foremost, obviously, as you heard from Anurag a lot of -- and Stephen -- a lot of activities are ongoing to find those patients in the U.S. However, the first numbers of patients that we had of course are on drug. We will see inflow -- steady inflow in the United States during this year from for instance family testing efforts that will be systematically applied as we -- as you heard. The other thing is, of course, there will be small batches of initially small batches or U.S. tested and that will actually deliver, albeit in the beginning a limited number of additional patients as well, whereas by the end of the year, but that's more for 2025, of course, we expect that may experiment what Anurag talked about at combinatorial experiment to deliver the bulk of the U.S. And as soon as we have a bit more indication of what kind of percentage we actually have on POS we will of course update the market there as well. But it's a little bit early days for that at this point in time. Now that's for the US market. With respect to ex-US, we don't expect any significant sales from the European markets because obviously as you know reimbursement takes a lot of time. So the European market sales will only cut in -- in 2025 and further on even further on because some of those markets will take multiple years before you get an approval. So the ex-US sales will mainly come from those early access programs, paid early access programs in some of those markets and from the name patients that are actually already being served. And that's what you can also expect of course for instance in the 1Q results you will see that there is some sales reported ex-US because that's ongoing as we speak. So in other words the fluctuation in the Joenja numbers I think depend on mainly I think on the numbers of patients that will come of course from the US market. I hope I answered that question, Christian.

Yes. Thank you. Thanks, Sijmen.

Thank you. We will now go to our next question. And your next question comes from the line of Alistair Campbell from Royal Bank of Canada. Please go ahead.

Thanks, everyone. Thanks for taking my question this morning. I have a couple on Joenja if that's all right. First of all, obviously, Joenja is launching very well in the US and you talked about I think at over a 90% adherence rate which is good. But just in the context of that just sort of to confirm that what you're actually seeing in real-world use is kind of a line of what you saw in clinical trials in terms of side effect profile and stuff of that that will sort of get a sense of that? And then secondly, just thinking about the second indication the PID with immune disregulation, obviously that's going to cover a variety of different genetic causes. And I guess what I'm trying to get for myself as a feeling of the risk around the profile of this program. I mean basically is your expectation that all of those genetic dysfunction areas really biologically should respond? Or you think some of them will? Or do you think they're all high rates? I'm just trying to get a sense of what the risk profile looks like. I mean my feeling is that at least some of those should probably come through but just to get a sense of how you view that would be great? Thank you.

Happy to hand it over to Anurag, of course, here in this case. Anurag would you mind answering that question?

Sure. So maybe we'll start with the second question first about the additional indication in primary immune deficiencies with immune disregulation. And you're right we're looking at a number of specific genetic variance, genetic mutations that are causing these -- this altered signaling. And that already has been described, right? So it's known that patients with ALPS, that patients with CTLA-4, that patients with P10 deficiency have this abnormal signaling through that pathway. It's also known that they have immune dysregulation as a result of that. And then lastly, they're being treated with immunosuppressive therapies such as rapamycin to modulate that pathway. So we think it's quite logical to try to modulate the pathway with leniolisib in the same way that we did with APDS patients. So I think from our perspective and really this program came to us through our interactions with the immunology community. They -- through numerous through all the work that we're doing on APDS they kept on saying "Look there are other patients that they believe could benefit and they listed all of these reasons that I just mentioned to you" and it was really on that basis that we partnered again with the NIH who are leaders in the specifically in these areas of ALPS and CTLA-4 haploinsufficiency to come up with this clinical trial program, because they were so enthusiastic about being able to one address the unmet need, but two to be able to use something that they were very comfortable using for APDS and they have that confidence because they've been treating patients with APDS with leniolisib for several years. And I think that comes to your second -- or your first question, which was on the really the real world use of leniolisib, and how does that compare to what we've seen in the clinical trials. And I think what we're seeing is number one, we're seeing that it is continues to be generally safe and well tolerated. So we're seeing nothing new from our pharmacovigilance efforts on the real-world use suggesting a different safety or efficacy profile. But two, I think what we're also hearing is a lot of the other benefits that we didn't even capture in the clinical trial program. So -- and we're going to -- and we're trying to get all of that data. We -- in fact we have a registry underway in the US where we're going to be following APDS patients longitudinally and we hope actually to try to capture a lot of the data that we didn't address in the original clinical trial because we weren't aware of all of the possible benefits that these patients experience. So I think that's something else to look forward to as the year continues.

Just a quick follow-up on that. When do you think in the sense of timing you might have something from the registry that would be worth sharing with us and obviously with physicians?

So the registry is just underway, but we are continuing to collect and publish data from the use of expanded access. So these are again, this is essentially compassionate use patients in the US who don't qualify for commercial drug or outside the US who are on therapy. We are collecting that data and we've shared some of that last year. You'll see a lot more of that data from the expanded access program or case reports or case series of patients in the expanded access program. You'll see that at conferences this year. I think the registry because it's just started, I think that's more likely to be a 2025 type of data. But I think that you're going to see through the expanded access program data coming out this year that reinforces what we saw in the clinical trial program and really extends even beyond that

Great. Thank you.

Thank you. We will now go to the next question. And your next question comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead.

Hello, gentleman. Thanks for taking the question. So I have a couple of questions on Joenja. I'm going to start very specific and then just talk more to the broader disease if you don't mind. So first, Stephen earlier was talking about and of course you guys have great adherence rates. So I was curious on the other end what are some of the reasons you see for lack of adherence on the drug?

Thanks, Joe. Anurag, do you have any insights on that that you can share with Joe?

Yeah. I think it's really just one-off cases Joe, where in fact some of the cases where we've seen as these patients are underweight and they need to be put on a lower dose. So that's not possible in the commercial program. So that's one example that comes to the top of my mind, but it's not anything we're seeing from a safety point of view, that suggests any concern or something that we saw didn't see in the clinical trial program. So I don't think there's anything substantive here.

That's very helpful. Thanks. And then, I guess, Sijmen, if I heard you correctly earlier it sounded like you might be disclosing in the future the role or the amount or proportion of VUSs as part of your Joenja revenue profile. First was that correct? And then, second, when do you anticipate -- I know this is really forward-looking that the VUS could start to have a real impact on the revenue growth for Joenja?

Yeah, so Joe that is indeed forward looking. Yeah, I said, indeed something like that. We're seeing -- you see that slide from Anurag, you saw in the middle there that those individual VUSs are now being evaluated. And that's actually starting and happening as we speak. So the first small batches of those are expected to come through in the very near future, which may give us some early insights on that. It's gone not -- like I said earlier, it's not going to deliver bulk of patients, but it will deliver patients. And the bulk, I think will be seen following the closure of the MAVE experiment which we expected as Anurag was alluding to by the end of this year. So I think 2025 will be the year where the bulk of the VUS patients will become available for treatment. I think that's a reasonable forward-looking statement for now Joe.

Got it. No that's fair. And my broader question about the disease, sort of ties in with your recent data at Quad AI, obviously a very intriguing data with regard to the molecular diagnostics. And I guess, I would ask Anurag, the role that Joenja could play with regard to multiple statements made in describing the disease, where some patients do not have clinical actionability. So I'm just curious, first, can you -- for all of us help define why patients not -- might not be actionable from a clinical standpoint or medical standpoint and if Joenja could have an impact on that.

Yeah. So I think it's a good question. It's something we're doing a lot of work on is really educating patients and clinicians about APDS. I think it's a foregone conclusion amongst our team of course that this is a serious disease and that there's a significant mortality associated with it that many of these patients, unfortunately go on and develop lymphoma and lymphoma is key reason for the high mortality in these patients, the lymphoma that these patients develop is often not easy to treat. And the mortality rates are much higher than you'd see in other lymphomas for example, or in other patients. So I think there's a lot of education to talk about that. I think it's also important to recognize that these patients do have different clinical manifestations. So some patients that may be very obvious without a high infection rate, some patients infections may not be the most predominant feature, but it could be the Lymphadenopathy or the Enlarged Spleen. So I think it's really educating clinicians also on what to look for in these patients and to be able to monitor these patients. But really all of these patients, I think, have a serious condition and they all are potentially eligible for Joenja. So I hope that answers your question.

Yeah. It certainly does. And my last question and thank you for bearing with me, it's more towards your continued strengthening balance sheet. And with that said, do you feel that you increased cash helps leverage additional business development discussions? And can you talk to the potential -- or can you talk to the relative maturity of some of your ongoing discussions to in license potential assets? Thanks.

Yes, Joe. Yes, thanks. Yes, of course, it always helps to have a bit more cash at hand in case one wants to do an in-licensing -- pursue an in-licensing opportunity, which of course, as we said before is our preferred modus operandi, because that's much easier to deal with than merging acquisitions. Having said that, I think with the arrival of Alexander Breidenbach, our Chief Business Officer, he's been really proactively working and we've got a very nice pipeline. We are in advanced stage of discussions with the couple of possibilities. So, we have a nice line of sight as we call it for opportunities that we are evaluating. However, as you know in business development, I said this before it doesn't count until you have a deal. So yes, but we remain very active. And I think what also is what we see is with our commercial success and with the ongoing ability that we are very successful in being able to market against competition in the HAE market and that we are basically know how to develop a new market even in a new disease, we get a little more visibility now that we are a company that is potentially an interesting partner of choice for those companies that should not go into commercialization, because they will become single product companies and commercialization is very expensive and very risky. And we basically, therefore, like I said, because we have now got this under our belt, become more and more we see that on the radar screen and we're getting a lot more inbound than we usually get. So, we are continue to be optimistic that we get some opportunity this year to update you on a deal that we have launched and that we have actually expanded our pipeline.

Very helpful. Thank you for all the answers, guys.

Thanks, Joe.

Thank you. We will now take your next question. And your next question comes from the line of Hartaj Singh from Oppenheimer. Please go ahead.

Hey, everyone. This is Faee [ph] on for Hartaj. Thanks for the question. Two questions from our end. So, first one for RUCONEST. Can we still expect the seasonality for RUCONEST in first quarter sales as previous years? Any color on that? And the second one for Joenja, can you provide any color on the duration of the patients Joenja so far since Joenja was launched around like three quarters nine months and your estimates on the APDS patient number growth in 2024? Thank you.

Yes. Could I just hand it over to you Stephen, those questions, right?

Could you repeat the questions, because they weren't completely clear mind?

Sure. The first one for RUCONEST. So can you -- can we still expect seasonality for RUCONEST in first quarter sales as previous year?

Yes. So, thank you for clarifying. So yes, I think you can broadly expect to see similar patterns to those which you saw last year, because the same types of events are happening in the quarter. So for example, Q1 is the prior authorization season. And as we indicated last year, there is some disruption to government patients. So, as I said, we remain on track for what we expect to do this quarter. The leading indicators and the performance is where I expect it to be. But you should expect to see the same overall pattern through the year I imagine certainly in the first half.

Thank you.

And the second question?

For Joenja. So can we know some color on the duration of the patients on Joenja so far since it was launched around three quarters like nine months?

The duration of the patients?

Patients on Joenja --I don't know like if physicians these prescript like 30 days for each patient or like how long patients and the treatment

I've got you now. So as we mentioned earlier patients are adhering well unless there's either a weight issue or some such. So they're typically being prescribed on a monthly basis and dispensed on a monthly basis and we see that cadence with patients.

Thanks. So any estimates or projection on the APDS patient numbers growth in 2024 more specifically?

Yes. So like I said before we said we will continue to get new patients on product in the USA, right? The adherence rate is very high. It's of course chronic therapy. And we don't give any -- we will update -- sorry we will update the numbers of patients towards the future on a quarterly basis right when we get these results. Does that answer your question?

Yes. Understood. Yes. Thank you so much.

All right.

Thank you. We will now take our final question for today. And your final question comes from the line of Simon Scholes from First Berlin. Please go ahead.

Hello. Thanks for taking my question.

Hi, Simon.

So the exclusivity on RUCONEST in the US expired in two years' time a bit more than two years' time. I was just wondering if you -- what kind of impact if any you expect that to have on RUCONEST?

Yes. We expect no impact whatsoever on RUCONEST in that respect because we believe that there is nobody that actually is working on or has any appetite to develop the transgenic platform to make a biosimilar for this product given also that it is of course a great product but it has in the greater context not a huge commercial is not a huge commercial opportunity. So therefore no is the answer no effect. No impact.

Okay. And just -- I mean just a follow-up on that. I mean what's your current thinking on the likely timing of the first gene therapy in HAE, I mean, besides your own product of course?

I think that will be still a lot of years away -- only the first patients are being tested now gene therapy is not the quickest development pathway forward I would say. But maybe you can say something on that Anurag?

No. I think that said Simon that there's some initial results in a small number of patients, but I think this will require the typical development path Phase II, Phase III as well as long-term follow-up which will take several years at the minimum.

Okay. Thanks very much.

Thanks, Simon.

Thank you. I will now hand the call back for closing remarks.

Thank you very much. Yes, ladies and gentlemen, thank you for attending our full year conference. Like I said at the beginning, we laid in 2023 because of our very significant 19% growth in revenues related to foundation and the start of a long trajectory of growth which this company is now going on, embarking on. And of course, that's why we guide this year for additional significant growth for the revenues of fueled by of course, the continued growth expectations for RUCONEST and the continued growth of Joenja. And we feel very confident about the fact that we have started now all the systematic efforts to find those patients with the VUS patients, the VUS validation efforts we mentioned the family testing was mentioned. And of course the increasing availability of Leniolisib ex-U.S., where through our Named Patient Programs and other Early Access Programs we expect revenues. And of course, the completion of the clinical trials going forward that will support the approval in Japan in the future. This is of course not a 2024 story, as we all understand because, the file will only be ready to be submitted by the end of 2024. We look forward to receiving the regulatory feedback from the various regulatory authorities and expect approvals during 2024. And we are very, very excited of course, that we can significantly enlarge the potential of Leniolisib with that second indication PID with immunes regulation linked to the PI3Kinase Delta signaling to which Anurag alluded which is, a significantly larger opportunity going forward. And when there is, whether we believe there's a very, very strong scientific rationale underpinning and of course not something that we'll report in 2024, but we will be very happy to update you of course once this trial has started and once this trial of course has the results and hopefully brings us to the next stage in development of Leniolisib for that second indicated patient. And that is my ladies and gentlemen, not even the beginning, because we are looking at additional opportunities to look -- apply a Leniolisib in this -- in adjacent areas. And more of that -- no news that will be coming in the future about our efforts in that respect. And last but not least, as I was alluding to, we have a very interesting line of sight of opportunities to in-license or do M&A activities for clinical stage opportunities in rare diseases, where we are feeling most comfortable to deal in Immunology & Haematology Respirology and Gastroenterology. So thank you, again for attending our conference, our Full Year 2023 Results Conference. And we look forward to updating you on the next quarter results, sometime in May. Thank you very much. Goodbye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.