Pharming Group (PHARM) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Abliva AB and its lead asset KL1333 aligns with the strategy to build a global rare disease company and expand the pipeline with a first-in-class therapy for primary mitochondrial disease (PMD).

• KL1333 addresses a significant unmet need in PMD, a rare, progressive disease with no approved treatments, and has blockbuster potential, with over 30,000 potential patients in the U.S., EU4, and UK.

• The product is further advanced than other pipeline assets and is expected to reach the market before other internal programs.

• The acquisition leverages existing commercial infrastructure and expertise in rare disease markets, and combines Abliva's mitochondrial research expertise with Pharming's commercial capabilities.

Financial terms and conditions

• Public tender offer under the Swedish Takeover Act at 45 öre (SEK 0.45) per share, totaling approximately $66.1 million.

• Minimum acceptance threshold set at 90% of shares plus one, with undertakings from the three largest shareholders representing nearly 50% of shares.

• Funded from existing cash reserves, with over $170 million reported as of Q3; no external funding required.

• KL1333 is licensed from Yungjin Pharm, with modest single- to low-double-digit tiered royalties and milestone payments.

Synergies and expected cost savings

• KL1333 fits well with the current portfolio and can utilize existing sales and institutional teams, minimizing the need for significant expansion.

• Combining Abliva's mitochondrial research expertise with Pharming's commercial infrastructure is expected to accelerate KL1333's development and commercialization.

• Manufacturing costs are expected to be low due to the small molecule nature, supporting strong gross margins.