Publication date: October 24, 2024

The Dutch Pharming Group has been trading on the Amsterdam stock exchange for more than twenty years. In the first years, this popular biotech company experienced a huge rise in its share price and after that an equally large fall. For years now, the stock has been listed on the Amsterdam Small Cap Index (AScX) and is especially popular with retail investors because of its relatively low valuation and high potential. In this article we look at the rise, fall, and expectation of Pharming but most importantly the opportunities this company has for its shareholders!

Introduction

Pharming Group N.V. is a Dutch biotechnology company focused on the development of innovative products for rare diseases. Their lead product, RUCONEST®, is used to treat hereditary angioedema (HAE). One of Pharming's most recent successes is the launch of Joenja® (leniolisib), a drug for the rare disorder APDS (Activated PI3K Delta Syndrome), which is slated to enter the U.S. market in 2023.

Before we explain the background of the share price development over the past twenty years, below you will find the share price chart starting in 2002. In the first years from €2 to €50 and back again to €2. This history requires an explanation.

The Rise of Pharming from 2002

This can be attributed to several factors:

Scientific advances: Pharming made significant progress in the development of its lead product, RUCONEST®, a treatment for hereditary angioedema (HAE). RUCONEST® is a recombinant version of the human C1 inhibitor, a breakthrough product derived from transgenic animals (rabbits). The company's innovation in this area attracted attention, making Pharming a major player in the field of biopharmaceuticals.

Partnerships and collaborations: Throughout the early 2000s, Pharming formed important partnerships, including a collaboration with U.S.-based Santarus to commercialize RUCONEST® in North America. These partnerships not only generated revenue but also helped Pharming expand its market reach.

Financial restructuring: In the early 2000s, Pharming also underwent financial restructuring, including securing new investment and financing, which allowed the company to stabilize and drive its growth. This allowed Pharming to overcome previous financial difficulties and continue to invest in its product pipeline.

These combined factors contributed to Pharming's growth and the increase in its share price beginning in 2002, as the company transitioned from a research-based company to a commercial-stage biopharmaceutical company.


The decline in Pharming's share price in 2007

This can largely be attributed to several negative developments:

Financial problems: In 2007, Pharming faced significant financial difficulties. The company needed additional capital to fund its ongoing operations and product development, leading to concerns about its ability to remain solvent. Investors reacted negatively to these uncertainties, which exerted downward pressure on the share price.

Regulatory delays: Pharming had high expectations for approval of its flagship product, RUCONEST® (then called Rhucin). However, there were delays in obtaining approval from regulatory agencies such as the European Medicines Agency (EMA) and the U.S. Food and Drug Administration (FDA). These delays in bringing RUCONEST® to market reduced investor confidence, which contributed to the stock's decline.

Market conditions: The broader financial markets also experienced instability in 2007, especially as the global financial crisis began to take shape. This external environment likely exacerbated the volatility of Pharming's stock price.

These factors combined to create uncertainty about Pharming's future, which led to a significant decline in the company's stock value during that period.