Pharming Group N.V. (PHAR) Stock Analysis and Metrics

Sector: Healthcare Industry: Biotechnology CIK: 0001828316

P/B 3.38

P/E 2,343.32

P/S 2.47

Market Cap 1.05 Bn

ROIC (Qtr) 3.47

Div Yield % 0.00

Rev 1y % (Qtr) 37.62

Total Debt (Qtr) 154.03 Mn

Debt/Equity (Qtr) 0.49

About

Pharming Group N.V., often recognized by its stock symbol PHAR, is a biopharmaceutical company operating in the biotechnology industry. The company specializes in the development and commercialization of innovative protein replacement therapies. Pharming's primary business activities involve the creation of novel pharmaceuticals and biologics, with a specific focus on protein replacement therapies. These therapies are designed to treat various medical conditions, including Hereditary Angioedema (HAE). Pharming operates in several countries, primarily...

Pharming Group N.V., often recognized by its stock symbol PHAR, is a biopharmaceutical company operating in the biotechnology industry. The company specializes in the development and commercialization of innovative protein replacement therapies.

Pharming's primary business activities involve the creation of novel pharmaceuticals and biologics, with a specific focus on protein replacement therapies. These therapies are designed to treat various medical conditions, including Hereditary Angioedema (HAE). Pharming operates in several countries, primarily in the United States and Europe, where it markets and sells its products.

The company generates revenue through the sale of its primary products, RUCONEST and Joenja. RUCONEST is a recombinant human C1 esterase inhibitor used to treat acute attacks of HAE. Joenja, also a recombinant human C1 esterase inhibitor, was recently approved by the FDA for the same purpose. Pharming's customer base includes healthcare professionals, patients, and payors. The company's success hinges on its ability to maintain market acceptance and sales of its products, which is influenced by factors such as safety and efficacy, pricing and reimbursement, and the presence of side effects or other safety issues.

Pharming holds a competitive position within the industry, competing with several major international pharmaceutical companies and smaller specialty pharmaceutical and biotechnology companies. The company's competitive advantages stem from its expertise in protein replacement therapies and its ability to develop and commercialize innovative products.

Pharming's products are used to treat HAE, a rare genetic disorder that causes recurring episodes of swelling. This condition can be life-threatening if left untreated. The company's product pipeline includes several product candidates, including a gene therapy product candidate in preclinical development, all focused on the treatment of rare genetic disorders.

Pharming's customers include healthcare professionals, patients, and payors. The company's sales and marketing capabilities are crucial, particularly outside of the United States. Establishing and maintaining internal medical and commercial capabilities carries an element of risk, and the company may need to enter into agreements with third parties to market and sell its products outside of the United States and Europe.

In terms of revenue, Pharming's products are used to treat a rare genetic disorder that causes recurring episodes of swelling, which can be life-threatening if left untreated. The revenue generated from these products is used to fund the company's research and development efforts.

References
Pharming Group N.V. (2023). Pharming Group N.V. - SEC Filings. Retrieved from https://www.sec.gov/cgi-bin/browse-edgar?CIK=Pharming+Group+N.V.&action=getcompany

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 62.74M provides robust 0.41x coverage of total debt 154.03M, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 156.54M provide 13.73x coverage of short-term debt 11.40M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of 62.74M provides exceptional 170.39x coverage of minority interest expenses 368235.29, showing strong core operations.
Strong tangible asset base of 398.66M provides 2.59x coverage of total debt 154.03M, indicating robust asset backing and low credit risk.
Robust free cash flow of 62.03M exceeds capital expenditure of 717647.06 by 86.43x, indicating strong organic growth funding capability.

Cons

Investment activities of 19.42M provide weak support for R&D spending of 106.50M, which is 0.18x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 156.54M provide limited coverage of acquisition spending of (67.62M), which is -2.32x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
The company's operating cash flow of 62.74M shows concerning coverage of stock compensation expenses of 14M, with a 4.48 ratio indicating potential earnings quality issues.
Operating earnings of 17.69M show weak coverage of depreciation charges of 18.48M, with a 0.96 ratio indicating high capital intensity and potential reinvestment needs.
Free cash flow of 62.03M represents just -5.01x of debt issuance (12.39M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer Comparison

Companies in the Biotechnology

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SMMT	Summit Therapeutics Inc.	1,349.40 Bn	-1,464.17	0.00	0.01 Bn
2	ONC	BeOne Medicines Ltd.	437.43 Bn	6,381.20	87.97	1.90 Bn
3	VRTX	Vertex Pharmaceuticals Inc / Ma	116.09 Bn	31.59	9.90	1.83 Bn
4	REGN	Regeneron Pharmaceuticals, Inc.	78.10 Bn	17.06	5.48	2.71 Bn
5	ALNY	Alnylam Pharmaceuticals, Inc.	55.87 Bn	1,282.42	17.40	3.21 Bn
6	ARGX	Argenx Se	52.85 Bn	35.08	27,559.65	-
7	BNTC	Benitec Biopharma Inc.	41.75 Bn	-998.33	0.00	0.00 Bn
8	INSM	INSMED Inc	37.80 Bn	-31.93	84.56	0.74 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	2.26	12.31
EV to Cash from Ops.	20.07	23.25
EV to Debt	8.18	738.44
EV to EBIT	71.19	-9.16
EV to EBITDA	25.47	6.95
EV to Free Cash Flow [EV/FCF]	20.31	21.90
EV to Market Cap	1.20	65.67
EV to Revenue	2.96	227.32
Price to Book Value [P/B]	3.38	22.34
Price to Earnings [P/E]	2,343.32	-11.77

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-11.94
Dividend Payout Ratio %	0.00	0.16
Dividend per Basic Share	0.00	0.01
FCF Dividend Payout Ratio %	0.00	-0.14
Interest Coverage	0.00	841.00

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	33.00	-27.13
Cash and Equivalents Growth (1y) %	132.25	734.65
Dividend Growth (1y) %	0.00	0.01
EBIAT Growth (1y) %	102.27	-46.93
EBITDA Growth (1y) %	2,565.45	-1.68
EBIT Growth (1y) %	192.57	-56.45
EBT Growth (1y) %	192.57	-12.70
EPS Growth (1y) %	0.00	-28.31
FCF Growth (1y) %	10,981.73	-31.90
Gross Profit Growth (1y) %	35.00	226.84

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.90	0.14
Cash Payout Ratio	0.00	0.00
Cash Ratio	1.51	3.85
Current Ratio	3.16	7.27
Debt to Equity Ratio	0.49	0.40
Interest Cover Ratio	0.00	841.00
Times Interest Earned	0.00	841.00

Profitability

Metric	Value	Industry
EBITDA Margin %	8.50	-18,234.31
EBIT Margin %	3.53	-18,580.80
EBT Margin %	4.15	-19,488.74
Gross Margin %	89.90	-7.59
Net Profit Margin %	0.10	-19,439.22

Pharming Group N.V. (NASDAQ: PHAR)