On Tuesday, H.C. Wainwright reaffirmed a Buy rating and a $37.00 stock price target for Pharming Group (NASDAQ: PHAR), a $602 million market cap company that according to InvestingPro analysis appears slightly undervalued. The company, which boasts an impressive 89.39% gross profit margin, announced its intention to acquire Abliva AB (ABLI.ST). The transaction is valued at roughly $66.1 million and involves a cash offer of SEK0.45 per Abliva share.
With a healthy current ratio of 3.53 and liquid assets exceeding short-term obligations, Pharming appears well-positioned for this acquisition. The deal has been unanimously approved by Abliva's board and received commitments from its three largest shareholders, who hold a combined 49.82% of the company's outstanding shares.
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The acceptance period for the acquisition is set to commence on January 16, 2025, and conclude on February 7, 2025. Pharming, which has demonstrated strong revenue growth of 30.64% over the last twelve months, has confirmed it possesses sufficient cash and anticipated future cash flows to cover the purchase and subsequent development and early commercialization costs of Abliva's leading candidate, KL1333. These future development costs are estimated to be between SEK100-125 million.
KL1333 is an innovative oral treatment targeting primary mitochondrial disease (PMD) in patients with mitochondrial DNA (mtDNA) mutations. The treatment aims to improve the NAD+/NADH ratio, thereby stimulating the formation of new mitochondria and potentially enhancing energy levels in patients who typically experience chronic fatigue, muscle weakness, and a reduced life expectancy.
Pharming's expertise in rare disease drug development is expected to complement Abliva's focus on mitochondrial disorders. The collaboration could significantly bolster Pharming's late-stage pipeline. KL1333 is currently in a pivotal clinical trial. In addition to the Abliva acquisition, Pharming is actively seeking further opportunities to expand its global rare disease portfolio.
In other recent news, Pharming Group experienced a range of developments. H.C. Wainwright reaffirmed a Buy rating on the company's stock, following positive results from a pediatric trial. The Phase 3 clinical trial evaluated leniolisib's safety and efficacy in children with activated phosphoinositide 3-kinase delta syndrome, meeting its primary efficacy endpoints and showing consistent improvements across all dose levels.
Oppenheimer maintained an Outperform rating for Pharming Group, albeit with a revised price target, following a 12% quarter-over-quarter increase in Q3 revenues. Despite revenues falling slightly below expectations, the company confirmed its full-year 2024 revenue guidance to be between $280 million and $295 million.
Jefferies initiated coverage on Pharming Group shares with a Buy rating, highlighting strong revenue growth and the company's strategy to expand its portfolio by acquiring additional late-stage assets in the rare disease category. Meanwhile, Pharming Group is actively seeking to tap into new commercial opportunities in significant markets, including Europe and Japan, starting from 2026.
Pharming Group also reported significant growth in its third quarter of 2024, despite a leadership transition with CEO Sijmen de Vries deciding not to seek re-election. The company's product sales showed robust growth, particularly leniolisib, which grew by a substantial 73%. The company is also expanding its pipeline with a Phase 2 trial for leniolisib and is actively seeking clinical stage opportunities in various therapeutic areas.
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