First Berlin Equity Research has published a research update on Pharming Group NV (ISIN: NL0010391025). Analyst Simon Scholes reiterated his BUY rating and decreased the price target from EUR 1.80 to EUR 1.50.

Pharming’s orphan drug, Joenja, for the treatment of the rare disease, activated PI3K delta syndrome (APDS), was approved in the US at the end of March for patients 12 years and older and launched in early April. We expect Pharming’s sales to more than double by 2026 following the drug’s launch in the EU and UK by end 2023/early 2024 and subsequent launches in Australia, Canada and Japan. Pharming’s sole revenue generating product prior to Q2/23 was Ruconest, which is indicated for acute hereditary angioedema (HAE) attacks. Ruconest was approved in the EU in 2010 and in the US in 2014. Due mainly to reference pricing and entrenched competition in Europe, US sales of Ruconest accounted for 99% of gross profit in 2022. We expect pricing of Joenja in Europe to be much more favourable than for Ruconest. We assume a 40% discount to the US price level, which is in line with the average for orphan drugs in the EU. Against this background, we expect gross profit growth to 2026 (+88%) to almost keep pace with revenue. PI3K delta is an important factor in a variety of diseases. Pharming is currently exploring further indications for Joenja and has stated that it will update the market on this topic later in 2023. We now see fair value for Pharming at €1.50. Our previous valuation of €1.80 included the now discontinued Pompe disease programme and higher growth projections for Ruconest. We maintain our Buy recommendation.