First Berlin Equity Research has published a research update on Pharming Group NV (ISIN: NL0010391025). Analyst Simon Scholes reiterated his BUY rating and maintained his EUR 1.60 price target.

Abstract
Q2/24 was a strong quarter for Pharming. Group revenue climbed 35% yoy and 33% sequentially to USD74.1m (Q2/23: USD54.9m; Q1/24; USD55.6m). Recent operating losses have been primarily a consequence of higher marketing costs following the Q2/23 launch of leniolisib in the US for APDS (activated PI3K delta syndrome) in patients 12 years and older. A higher revenue base meant that the operating loss narrowed to USD3.1m in Q2/24 from USD16.3m in Q1/24. Despite the good numbers, the share fell 8% on the day of the results. We think the main reason for the decline was slowing growth in new leniolisib patient enrolment. Pharming has identified ca. 150 patients in the US who are eligible for treatment with leniolisib. Between end June 2023 (2 months after the US launch) and YE 23 the number of US patients on paid therapy with the drug rose from 43 to 81. By end June this year, Pharming had added only 10 more patients (2 in Q1 and 8 in Q2) for a total of 91. The good news is that growth in patients on paid leniolisib therapy is likely to pick up strongly in 2025 and remain robust into the 2030s. APDS is caused by variants in either of two genes, PIK3CD or PIK3R1. By end Q4 Pharming expects to have completed screening of 1,200 patients in the US with a VUS (Variant of Uncertain Significance) in the PIK3CD or PIK3R1 genes. The literature suggests that 20% of these patients will be found to be pathogenic/likely pathogenic. We expect VUS screening to boost US leniolisib patients on paid therapy from 101 at YE 2024 to 149 at YE 2025. We model the number of patients on leniolisib to exceed 600 by end 2028 following approvals in the EU, Japan and for under 12 year-olds (all 2026). Leniolisib patient growth should gain substantial further impetus from ca. 2029 following its approval for certain non-APDS PIDs (primary immunodeficiencies) whose prevalence is 3.3x higher than APDS. We expect revenues from non-APDS PIDs to make leniolisib a bigger product than Ruconest. We believe the dip in leniolisib new patient growth is temporary and an opportunity to purchase the Pharming share cheaply. We maintain our Buy recommendation and price target of €1.60.