First Berlin Equity Research has published a research update on Pharming Group NV (ISIN: NL0010391025). Analyst Simon Scholes reiterated his BUY rating and increased the price target from EUR 1.70 to EUR 2.30.

Abstract
On 13 March, the day it reported FY/24 results above guidance, Pharming announced the start of a second phase II trial of leniolisib for PIDs (primary immune deficiencies) with immune dysregulation beyond APDS (activated PI3KD syndrome). The second trial, which began in February 2025, is for CVID (common variable immune deficiency) with immune dysregulation. The first trial, for PIDs with immune dysregulation linked to PI3KD signalling, began in October 2024. The prevalence of PIDs linked to PI3KD signalling and CVID is respectively 5x and 26x higher than for APDS, for which leniolisib is currently approved in the U.S. Both indications have blockbuster potential. In mid-March, Pharming also completed the acquisition of the Swedish company, Abliva, and its flagship drug candidate, KL1333. KL1333 is currently undergoing a pivotal trial (read-out expected in 2027) and is positioned to become the first standard of care in mitochondrial DNA-driven primary mitochondrial diseases (mtDNA). Annual revenue potential is also >USD1bn. Ahead of the acquisition of Abliva, we had expected 2025 operating costs to be close to the 2024 level. Management has indicated that the acquisition of Abliva will add USD30m to 2025 operating costs (of which USD17m for R&D and USD13m for one-off transaction/integration costs). Total incremental KL1333-related cost ahead of FDA approval expected in 2028 is ca. USD133m. The purchase price for Abliva was USD66.1m. KL1333 is a small molecule compound and is expected to generate a gross margin of over 95% on sales if approved. Given that KL1333 has blockbuster potential, the sum of the purchase price and subsequent transaction/integration and development costs looks very modest. We have adjusted our valuation model to reflect the strong Q4/24 results, the news on leniolisib for CVID and the completion of the Abliva acquisition. We now see fair value for the Pharming share at €2.30 (previously: €1.70). We maintain our Buy recommendation.