Pharming Group Is Expanding Production Capacity For Their COVID-19 Treatment
Nov. 3, 2020 9:20 AM ET| 4 comments
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About: Pharming Group N.V. (PHGUF)
Robert Vink
Summary
Pharming Group's stock has had a lacklustre performance since it announced Ruconest might be effective at treating severe COVID-19 cases.
Pharming Group's CEO announced that the company is planning to use genetically manipulated cows to expand production of Ruconest significantly.
Pharming Group has a strong balance sheet and a reasonable valuation.
Pharming Group's stock provides an opportunity to hedge vaccine risks in one's portfolio.
Introduction
Pharming Group (OTCPK:PHGUF) is a small biotech company in the Netherlands. As elaborated in my previous article, it has marketed only one drug called Ruconest. In the previous article, I discussed that Ruconest - which is a drug used to treat HAE patients - might be effective at treating severe COVID-19 cases. I recommend readers first to study that article to understand the scientific logic substantiating Ruconest's effectiveness in treating COVID-19 cases.
Since writing that article, Pharming Group's stock performance has been lacklustre; the initial surge in May due to Pharming's small COVID-19 trial has vanished entirely in the subsequent months. Nonetheless, in this article, I will showcase that the COVID-19 thesis is still alive.
Update COVID-19 trials
Pharming Group has begun multiple clinical trials to determine Ruconest's effectiveness at treating severe COVID-19 cases. The idea is that Ruconest can dampen the cytokine storm some patients experience; if Ruconest is effective at treating these patients, the pressure on ICUs can be lowered significantly. The COVID-19 crisis is a medical crisis where hospitals - and especially ICUs - get overrun with a huge load of patients with severe COVID-19 complications. It goes without saying that any treatment which has the ability to lower pressure on ICUs and hospitals, by improving the clinical picture of COVID-19, has tremendous value.
The first patient is enrolled in Pharming's multinational trial; Pharming will treat up to 150 patients with Ruconest in Switzerland, Brazil and Mexico. According to clinicaltrials.gov, the estimated primary completion date is June 2021. Additionally, Pharming has started a trial in the US, wherein it plans to have 120 participants. This study is estimated to be completed in March 2021. Considering the surge in COVID-19 cases in Switzerland, Brazil and Mexico, it might be realistic that the trial is completed before those estimated dates. It remains speculation when the preliminary results of these trials will be released by Pharming Group, but it seems appropriate that Pharming updates investors about the ongoing trials before year-end.
Pharming Group expanding production
Pharming Group has not provided any updates about the clinical trials related to COVID-19 over the last few months, yet in a way they actually did. Just last week Pharming Group CEO Sijmen de Vries gave an interview in the biggest newspaper of the Netherlands wherein he discussed Ruconest's effectiveness at treating severe COVID-19 cases. Whilst there was no new scientific information, Sijmen did state some other interesting facts related to Pharming Group. In 2000, Pharming Group was the first company ever to create genetically manipulated cows; this project was eventually halted due to capital predicaments. Pharming Group decided to use genetically manipulated rabbits instead to produce Ruconest; this was more cost-effective, which was vital for a company in dire need of capital.
Now, Pharming Group is a profitable company with a strong balance sheet, and it has decided to continue its project with genetically manipulated cows. The goal is to produce Ruconest with those cows. In the article, Pharming Group states it expects to acquire new use-cases for Ruconest, and the manipulated cows can produce larger quantities of Ruconest. While the company did not state COVID-19 as a use-case, it can be no coincidence that they are expanding production just before their COVID-19 trials are getting finished. I suspect that the company is preparing for a huge surge in demand, which is why they are expanding their capacity significantly.
Basel-Stadt: Can public data showcase Ruconest is effective?
As discussed earlier in this write-up, Pharming Group has initiated multiple clinical trials to determine the effectiveness of Ruconest. As discussed in my previous article, Pharming Group already performed a small trial at University Hospital Basel wherein five patients were treated with Ruconest, and the bigger trial is also partially performed at University Hospital Basel; actually, the first patient of the new multinational trial was treated at that hospital as well.
I decided to search whether Basel-Stadt, the region wherein University Hospital Basel lies, published data about COVID-19 patients in hospitals. I hypothesised that COVID-19 data from Basel-Stadt could showcase that Ruconest is effective. In other words, maybe, we can make our own guess how the trial is faring by using publicly available data.
And after some exploration throughout the internet, I did find public data distributed officially by Basel-Stadt. Basel-Stadt reports daily or bi-weekly the number of patients hospitalized with COVID-19, and the number of COVID-19 patients in ICU. They do not report the number of hospitalizations. They only report the number of people hospitalized with COVID-19 at the time of reporting. I was hoping for more useful data, but I figured it was worth a go either way.
I created a ratio: the total number of COVID-19 patients on ICU beds shared by the total number of patients hospitalized with COVID-19. Ruconest is a drug that should, in theory, dampen the load on ICUs, so in theory, Basel-Stadt should have fewer patients on ICU beds relative to the total number of patients hospitalized. Some countries published similar data, and some published other kinds of data. However, I was not able to show that Basel-Stadt's ratio was significantly better.
I think that the data is too general to make any assumptions about Ruconest's effectiveness. Even the IC patients/total patients ratio of countries like the Netherlands and the United Kingdom is vastly different due to cultural differences. While it was a nice attempt, the data is too general to find out whether Ruconest is effective. If Basel-Stadt instead published data per patient - instead of daily capacities - I might have been able to make a better guess, since the average time spent in the hospital could have been significantly lower.