March 30, 2010 / 2:24 PM / 10 years ago

UPDATE 2-Pharming investors ok share capital raise

* Biotech says raises share capital to 400 million shares

* Adjusts the nominal value of shares to 0.04 euros

* Shares turn lower, down 1.9 pct

(Adds CEO’s comments, updates shares)

By Aaron Gray-Block

AMSTERDAM, March 30 (Reuters) - Dutch biotech Pharming (PHAR.AS) said on Tuesday shareholders had approved raising its authorised share capital and lowering the nominal value of its shares in a move that could indicate a looming share issue.

The company said it would increase its authorised share capital to 400 million shares from 200 million and would adjust the nominal value of the shares to 0.04 euros from 0.50.

Pharming’s request to market its lead product Rhucin is currently being assessed by a European Medicines Agency (EMA) committee, with a decision expected in the third quarter, but analysts are still concerned over the firm’s cash position.

“We are now looking at all options to refinance the company,” Chief Executive Sijmen de Vries told reporters.

De Vries said the lack of institutional investors among Pharming’s shareholder base presents a “major risk” to the success of a rights issue, making a private placement of shares a more likely option alongside partnering deals.

He added Pharming is burning about 2 million euros in cash per month and will likely need financing in the short-term.

Shares in Pharming turned lower following the announcements on Tuesday, and were down 1.9 percent at 0.37 euros by 1507 GMT.

Pharming — which does not have a product on the market — has said doubling the authorised share capital and lowering the nominal value of its shares gives the firm “flexibility” ahead of regulatory and commercial events in the EU and North America.

Analyst Bernd Hilhorst at AEK said Pharming has several options for financing: such as returning to a standby equity facility with Yorkville Advisors, issuing convertible debt, or — as a last resort — holding a rights issue.

“They have to hurry up and today is a good step to take, but it is only a technicality, and they have to get this done and go back to investors,” he said.

Lowering the nominal value of the shares was considered necessary, given that Pharming’s share price is currently below the nominal value, preventing it from accessing capital markets.

Pharming’s Rhucin treats hereditary angioedema, characterised by acute attacks of painful swelling of the skin, intestine, mouth and throat. In January Pharming said no major concerns had been raised by EMA on its marketing application.

The EMA has twice rejected Pharming’s application to market Rhucin, but analysts are confident Pharming’s application will be approved this time.

“2010 will be a transformational year for Pharming in which we will make the switch from R&D oriented company to a company with its first product on the market,” De Vries said in a statement.

Shareholders also approved on Tuesday the appointment of Rienk Pijpstra as the company’s Chief Medical Officer, expanding the management board to four members from the current three. (Reporting by Aaron Gray-Block and Catherine Hornby; Editing by Jon Loades-Carter)

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