Pharming Group NV

AEX:PHARM

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, welcome to today's Pharming Q1 Results Call. My name is Lydia, and I'll be coordinating your call today. [Operator Instructions]I'll now hand you over to your host, Sijmen de Vries, to begin. Sijmen, please go ahead when you're ready.

[Sijmen de Vries, CEO & Executive Director]

Thank you very much, Lydia. Good afternoon and good morning, ladies and gentlemen. Welcome to our first quarter 2021 results call. I'm here together with my colleague, Jeroen Wakkerman, our CFO, to take you through to a brief presentation that we have prepared for you.But before I do that, of course, I will share with you our forward-looking statements here as we will be making some forward-looking statements that are based upon our beliefs and expectations and based on current plans, estimates and projections as well as our expectations of external conditions and events.So without further ado, I would like to start with the next slide. And yes, as previously experienced in Q1 of -- Q2 of 2020, we were again impacted significantly by the effects of another COVID-19 surge that had took place in the United States in November, December and well into 2021. That led to declines revenue, 20% decline versus the first quarter of 2020. And that was, of course, the result of patient stocking recent during the surge in Q4. They always have possibilities to call up medicine earlier than expected to some extent. And that led, of course, in the first quarter to that lower prescription refill rates by patients that were still using their additional RUCONEST stock. We -- in our guidance for 2021, we said that we were expecting these kind of fluctuations, and they appeared.In addition to that, many -- a great majority of physicians offices closed for the routine and diagnostic patient visits, and that led to significant reduction in new patient enrollments for the first quarter. And in addition, as the great majority of patients renew their annual prescriptions, so-called prior authorizations in the first quarter of the year had also led to slower than normal renewals of their annual prescriptions.Now the good news is that towards the end of Q1 2021, these trends started to reverse, with a significant increase in new patient enrollment. Please do note, however, that it takes up to 2 months typically before patients that are enrolled obtain reimbursement, and you can see the new patients appearing in the revenues.Net profit, of course, decreased as well by 9%. That impact was significantly limited and Jeroen will take us to the numbers later. And we still maintained a positive cash flow from operations during the first quarter of some more than -- just over $7 million.So as stated before, we expect to return to growth during the second quarters. We see, if you look to the market, you see here the U.S. market quarterly volumes. You see that we had a similar sort of occasion last year in Q2 2020. You all remember that, I suppose. If we take a look at the total HAE market, we saw it was increasing again by the increasing use of prophylaxis. And we see actually no major shifts in volume and market shares between RUCONEST and competitors over the last period. And therefore, we expect to return to growth in Q2 '21 and beyond into the year.Revenues in Europe and rest of the world. As you know, they are relatively modest compared to the U.S. revenues. They remain stable, and we continue to build out the EU commercialization infrastructure and expansion of RUCONEST into new territories following the reacquisition of rights from Sobi for these territories.So if you take a little bit of a look a bit deeper into the market and see how RUCONEST is positioned and continues to be positioned in the changing HAE landscape and, as I said, there is a tendency for more use of prophylactic therapies, we see that because of the fact that none of the prophylactic therapies are perfect, they still have varying numbers of breakthrough attacks. There is the need and there's always on their treatment plan is always breakthrough medication included.So these patients have multiple medications. If they're in prophylaxis, they have 1 or 2 breakthrough medications as well at hand. Remember, they always treat themselves at home.So the new prophylactic treatments are far better, of course, than the previously IP plasma-derived C1 inhibitor prophylaxis treatments. So that meant it's gradually growing in popularity. But again, like we said, the regular -- to some products, regular use of breakthrough medication is really an issue. And the shift to predicating kallikrein inhibitors for prophylaxis that are blocking the main pathway for symptomatology call typically for C1 inhibitor to be available to treat those breakthrough attacks.So we do see that whilst the paradigm is shifting towards bradykinin and kallikrein inhibition prophylaxis that there's an increasing number of patients that are using RUCONEST to treat their breakthrough attacks, which we haven't seen in the past. So in other words, despite all of this, we continue to treat a gradually growing number of patients with RUCONEST. That's the underlying trend.So RUCONEST continues to be the enabler for our business to continue long-term sustainable revenue growth, and that is exactly why I wanted to share with you the 3-pillar growth strategy that we have formulated and which should now appear on the next slide with you. And as we see this slide appearing, on the left-hand side, you will see that RUCONEST is there, of course, that is the objective that we have, to continue to maximize the revenues from RUCONEST by gaining market share or keeping market share and by extending territories as well.Another important aspect is that we are hunting, as we stated before, for new technologies to treat HAE that are beyond what the competition is currently offering, and that means that we're hunting for that kind of assets which will be an early-stage asset for in-licensing. And we hope that we will be able to close on in-licensing such an asset later on in the year.That's an important aspect, but that is, of course, an early-stage asset and will take a time to come to the market. On the -- in the middle side is the expanding indications where we look for large unmet medical needs where we can apply a recombinant C1INH inhibitor, and we will come to that a little bit later.And on the right-hand side, it has become increasingly important is the in-licensing or acquiring late-stage clinical development products, which can become launched within the window of, let's say, from between now and 3 years. And leniolisib, of course, is the first one for APS that we in-licensed from Novartis, a good 1.5 years ago that we're working on towards getting approval for that. And we're actively hunting the market to acquire more of these kind of candidates or to do merger and acquisition activity to obtain such assets in our portfolio and change conforming in, let's call it, a 1.5 product company into a 2.5 product comp.But let me just first pause here a little bit and take you through some of the aspects of APDS and leniolisib because we have started, as you have seen in our presentation, we started in earnest to prepare ourselves for a successful launch of leniolisib which we anticipate to get approval in Q4 of 2022, so Q4 next year. So APDS is a primary immune deficiency, which is not that rare. And the presence is about 1 in 1,200, and these patients are already with the immunologist. They're just not diagnosed because there was no issue in diagnosis more precisely because they're 1 of the 400 gene mutations that are underlying primary immune deficiencies.And there is a growing understanding that these PID patients are not just about infections, they underline many types of autoimmunity and a wider range of diseases. So the more we know about this, the more it's repeating a larger patient population But currently, it is 1 in 1,200 prevalence in the total population. And of course, APDS represents a relatively modest subset of that.And that is the next slide. If you look at the market opportunity, as we would calculate it today, based -- sorry, if we look at here, the market opportunity, it is about 1.5 million per -- 1.5 patients per million estimated. We have -- the literature already found 240, but we found significantly higher rates when we did screening in subsets. It is caused by not somewhat dominant variation 1 of 2 genes into the APDS 1 and 2, as you can see here, has resulted in the hyperactivation of that enzyme phosphoinositide 3-kinase delta, and that suppresses and disregulates the immune system and the balanced signaling is essential for a normal immune function. That is what -- exactly what leniolisib can restore.And the good news, of course, is we have clear diagnostic criteria because there's a commercially available genetic test that we can find and identify these patients. Currently, those patients are often misdiagnosed, as you see here on this slide, for diseases like lymphoma and for instance, hyperimmunoglobulin syndrome because of very limited use, of course, of the genetic test.Now based upon the sort of estimated 1,350 patients, if you add it all up, there seems to be an open and significant opportunity around here and that is, of course, assuming that we don't find any further patients. However, they're widely -- they're just characterized across all the global regions, and they're often misdiagnosed. So therefore, it's important to find them and to stimulate diagnosis them already because it has a significant impact on their quality of life and of course, on their life span as well.And as you can see down there, it goes from permanent infections to damaging organs, swollen organs, autoimmunity and eventually, a significant patients -- a significant percentage of these patients succumb to fatal lymphoma. And therefore, it is a disease that has no treatment option at this point in time, only symptomatic treatment, as you can see on the right-hand side of this slide, antibiotics, steroids, immunoglobulin therapy on a very regular basis and mTOR inhibitors, which are not very nice drugs to take for the lymphoproliferative symptoms only. And then finally, a potential for an allogenic hematopoietic stem cell transportation that is associated with a very significant mortality, as you probably know.Therefore, leniolisib will offer a very serious opportunity to deal with the disease at a root cause because leniolisib is treating the root cause and has shown already that it actually works very nicely in the Phase II patient population that was treated and also with regards to precision biomarker response that we saw. And the good news, of course, is we have a commercially available genetic test to identify these patients, and that is in earnest, what we have started to work on.You see here that the regulatory targets is to get an approval during Q4 2022 for leniolisib. So we expect the trial -- the current last pivotal trial that we're engaged in with expect the trial to deliver results towards the end of this year, and we will then submit the file beginning of next year and expect an expedited review by the FDA and expect to -- and hope to get an approval in the fourth quarter of 2022.And in the meanwhile, of course, whilst it is very important that we get as many patients -- get to know as many patients as possible, as early as possible, we've started in earnest to identify activities to identify these patients. And you've seen the press release in the first quarter, announcing that we have started to navigate APDS program together with Invitae where we invite the immunologists that have these patients already in the population to check out the patients that identify with symptoms that should be suspect for APDS to offer them complementary genetic testing so that they can have an option as and when leniolisib becomes available to benefit from the treatment of leniolisib.In addition to this, we use AI algorithms to identify the patients within these patient population and data-based searches to identify these patients as well. So this program should gradually up to launch from between now and the potential launch of the product lead to discovery of many more patients that are suffering from APDS and currently have no treatment options.So in other words, we believe that leniolisib represents an important value proposition in APDS, a significant -- because it has significant PI3K delta inhibition, well-tolerated safety profile. It's an oral formulation for ease of use. It normalizes the biomarkers, targets the root cause of the disease. There's a commercially available genetic test so we can identify these patients within already. They're already being treated by the immunology, so we don't have to go search on them that much. And we have the potential to really improve their quality of life and reduce treatment burden.And APDS is a progressive disease, as you can see, that lead to organ damage, malignancy and early mortality. That is what we want to share about leniolisib as a growth opportunity for Pharming.And now I will shift to the middle pillar, the expansion of the C1 inhibitor franchise for larger indications. And there, of course, during this quarter, there were some -- finally some positive developments again. Because as you know, our clinical trial programs have been -- have came to a halt because of COVID-19 for a considerable period of time for more offer in a year. So we were very pleased that after the quarter ended last month, we were able to announce that Phase IIb clinical trial for acute kidney injury after myocardial infraction finally started, led by primary investigator in University Hospital in Basel.That study will treat double-blind randomized controlled study, various dosing regimens used and will treat up to 220 patients. And we expect that data of that study could be available towards the second half -- late in the second half of next year.In the meanwhile, of course, the COVID-19 trials are ongoing and continuing, so there's one protocol that is an investigator-sponsored protocol, again, also coordinated from the University Hospital of Basel, Switzerland. And that's an adaptive design trial that seeks up to 150 patients in Switzerland and Brazil and Mexico. Recruitment continues to ongo, and the second one is our own IND that we have started in Richwood in New Jersey, and that seeks to include up to 120 patients also in adaptive protocol, and recruitment continues there as well.In that these trials are, of course, open label and have to design means they can be changed in the middle of the trial as well. And they currently have different dosing regimen. The study in Switzerland actually has a high dose for smaller -- shorter duration of treatment, and the study in the U.S. has a lower daily dose and a longer duration of treatments. So we can potentially get some very valuable information out of that, and we expect to have some analysis data available to share with you probably sometime in the third quarter.Unfortunately, the trial in preeclampsia is still temporary halted due to COVID-19. But we hope that in the not-too-distant future, this will again be able to restart.And with that now, I would like to hand over to my colleague, Jeroen, to take you through to the financial slides. Jeroen, you have the slide control now, I believe.

[Jeroen Wakkerman, Chief Financial Officer]

Yes. Thank you very much, Sijmen.Yes, on the financial review, maybe good to start with saying that we changed our presentation currency from euros to dollars. We announced that last year already, so this is the first quarter that Pharming is presenting the results in dollars. So that is basically following the NASDAQ listing in Q4 2020.The summary is that, as Sijmen mentioned, revenues went down 20% versus the first quarter in 2020. Gross profit reduced in line, so the gross margin was stable in Q1 versus last year Q1. Operating results is $6.3 million versus $21.5 million, and that is because of an increase in the operational expenditure. I'll show you more about that later.The finance cost had a big swing. Basically last year, it was a cost of $7.8 million, and this year, it is a financial income of $6.6 million. More details about that later as well.The income tax is in terms of the tax percentage is similar to what it was last year. And a net result, despite the revenue decline of 20%, the net result went down by 9% from $9.3 million to $8.5 million.The cash is still at a very good level, increased significantly from Q1 last year, but obviously, the -- most of that increase was caused in the quarters 2 to quarters 4 of last year and not so much in Q1 2021. And the basic earnings per share in Q1 is $0.013 per share versus $0.015 in 2020.If I look at more detail in the -- on the income statements, the -- so the revenue is down 20%. As I said, a key reason for that is the surge in the U.S. cases of COVID at the end of 2020 and early 2021. And while Sijmen, at the beginning, already elaborated on several more specific reasons following that surge of COVID cases, but also important to note that at the end of Q1, the results were picking up again.And in these numbers, you can assume that Europe has been stable. Europe and the rest of the world at around $2 million revenue, both in 2020 and in 2021. Cost of sales went down as well and gross profit, obviously, at a similar margin as last year at 89%. The other income is at $2.59 million, and that is mainly grounds that we receive.The other operating costs went up by $5.4 million. The 3 big tickets, I would say. First one is the leniolisib launch preparation, and Sijmen gave a few of those examples already in terms of what the activities were. That was an additional cost of $2.7 million. On top of that, we have an increase in insurance costs. Biggest ticket there is the directors and officers liability insurance following the NASDAQ listing. And the third ticket is the share-based compensation, which increased by $1.1 million. And in general, we had an increase in cost because of compliance and control activities.So the operating profit was at $6.283 million. And on the fixed income, as I said, $6.6 million income this year versus $7.8 million cost last year. And this year, the key driver of this, almost all of the $8.1 million is the currency effect of the euro dollar went from 1.23 at year-end to 1.17 at the end of quarter 1. As you may know, we have most of the dollars in cash and euro reporting entity, Pharming Group, and therefore, there was a benefit of the decline of euros or an increase in the dollars.Last year, the EUR 8.4 million was largely related to the settlement of the loan at the time, the OrbiMed loan that was replaced by a much cheaper convertible bonds. We had a negative FX rate last year, and there was a milestone payment. So the picture in terms of finance cost on a net basis is completely different this year and much better this year than it was last year. And therefore, the -- if we look at the profit for the year, that is at $8.5 million versus $9.3 million last year and, obviously, it's because of this change in the net finance cost, a much better look than the gross profit development that we've seen in Q1.So from the income statement to the balance sheet, first, looking at the assets -- wait for the slides to go with me as well. Yes, sorry for that. So on the assets, noncurrent assets went from $155.2 million to $147 million. The decrease is mainly because of a regular depreciation and amortization and also an FX, foreign currency effect, as I just showed. The investment accounted for using the equity method that is Bioconnection, our minority share in the production facility. And the inventories were fairly stable, a slight increase. There was a mix in the inventory between raw material and semifinished and finished products and -- but overall, a stable inventory level.Moving on to the liabilities. Nothing unexpected here in terms of shareholder equity in terms of both the noncurrent and the current liabilities. You see that the payables went down a little bit, so that has obviously a negative cash flow effect. And having said that, moving towards the cash flow, you see that the -- wait for the slide to appear on your screen as well. Yes, the cash flow here, the profit before tax, as I said, was $12.8 million.The cash flow generated from operating activities is $7.1 million versus $21.8 million last year. We had limited investing activities in Q1. The $2 million that we spend on CapEx for property, et cetera, was mainly on the facilities like the DSP new production facilities. We spend on intangible assets, that's mainly on SAP licenses. We are working on an implementation of our ERP system, SAP. The acquisition of the license was related to leniolisib. And for the rest, if I look at the financing activities, not much happened, and it was basically -- the key driver there was the interest on loans.And last year, obviously, we had a big inflow of cash from financing activities because of the issue of the convertible loan in Q1. Cash went from $205.2 million to $206.6 million, so an increase in the cash on the balance sheet.And that is the overview of the finance for Q1. And with that, I would like to hand over to Sijmen again.

[Sijmen de Vries, CEO & Executive Director]

Thanks very much, Jeroen. So -- and that leads me to share with you our outlook for 2021, and that is now appearing on the next slide.So for the remainder of 2021, as stated before, we expect that the revenues return to growth from this -- the negative quarter, mainly driven by the U.S. and extended EU operations. But of course, it's still subject to progression of COVID-19 pandemic. We've seen it now twice and do expect additional quarterly fluctuation should the pandemic surge again because it will immediately have an impact on the business as we now twice. However, barring that, we expect that we return to growing revenues.We also continue to expect positive net earnings during the year and do not expect, therefore, to require additional financing to maintain the current business. We will continue to invest in acquisitions, as we discussed an in-licensing of new opportunities, we talked about an early -- potential early-stage opportunity for hereditary angioedema, and we're talking about late-stage assets in rare -- ultra rare diseases like leniolisib that we're hunting as we speak.We continue to invest in the expansion of the production of RUCONEST and the production of leniolisib. For instance, we're starting -- we will -- we expect construction to start on our purification plant in -- also in the Netherlands in the middle of this year. We will continue to invest in pre-marketing activities, as you have seen an example thereof and on the continued registrational study, of course, of leniolisib as well for the clinical trials in C1 and other development activities. And last but not least, close monitoring of the ongoing pandemic and the potential impact on the business.And that basically concludes the outlook. We give no further specific financial guidance for 2021.And with this said, I would like, therefore, to change back to the operator and open the floor for questions that analysts may have. Thank you very much for your attention.

[Operator]

[Operator Instructions] Our first question comes from Hartaj Singh of Oppenheimer.

[Yichuan Yan, Associate]

This is Jackie Yan for Hartaj. Just on RUCONEST, I think we've been seeing a negative impact on revenues across value file tax in the first quarter reported. I guess here, if you could talk about to which level has the current prescription activities recovered versus the last quarter where I assume COVID quite put down there? Also on the prefiling dynamics going forward, do you think the volatility by COVID in the past year or 1.5 years, where kind of make patients prefer stock more than before? Or it is hard to tell?

[Sijmen de Vries, CEO & Executive Director]

Yes. Very good questions. First of all, the patient dynamics In the first quarter dramatically dropped the new patients coming in. And of course, if you want to fuel your growth, you need new patients. Now if your salespeople are not on the street, that makes a significant difference. And of course, the physicians' offices are closed anyway. The good news is we saw towards the end of the quarter that new patient entries doubled basically versus what it was in the beginning of the quarter, so we saw back to sort of normal levels again, so that's good news.Do take, however, into mind that it takes probably 2 months for those patients to make it through to generate revenues because that is normally what it takes for them between coming into the program and getting a reimbursement. So that's why we say the recovery is now seen, but it will not be -- it will be a relatively slow recovery. That's not necessarily only in the second quarter, but will fuel out into the third quarter as well. I think that's -- you should keep in hand.With regards to -- yes, we saw this across user or industry -- across the industry. We see it also across the angioedema market. We do not see any shifts in market share. We also know that our competitors are suffering from it is and we have data available on that. And whether patients are stocking more search because they're afraid of this [ COVID ], that's very difficult to say. Hereditary angioedema is a very challenging disease anyway to model, as you know because these patients all have multiple medications. So for instance, if they are on prophylaxis, they will have 1 or 2 rescue medications, for instance. And if they're on acute treatments, they probably have also more than one acute treatment at hand.And remember, these patients all treat themselves at home, and they all -- for every attack they got, they determine -- they only determine what drug they take for that attack. So if their attack feels like a typical attack that they successfully treat with RUCONEST before, they will take RUCONEST. If it is something -- if there's another kind of type of attack, they feel more comfortable or they are out and about, they take something else. So that is really very individual. So no doctor tells them what to use for which attack. And no insurance company tells them what to use for which attack.So in this case, hereditary angioedema with multiple drugs at the patient's home with their own discretion to use it as and when they feel fit is a very difficult disease to model and to actually predict how much patients have at their homes. A bit long-winded, Jackie, but I hope I answered your question.

[Yichuan Yan, Associate]

Yes, yes, absolutely. This is super helpful. I guess then we switch on leniolisib to APDS. Again, thanks a lot for the color there. I'm wondering if you could talk a bit more on like the patient you already identified from a genetic testing program. I know we might be 1.5 years to that point, but also thinking about the initial products of patients. I mean do the patients currently on the treatment trial will flow into your commercial launch directly? Or will they still put out sort of like long-term extension study?

[Sijmen de Vries, CEO & Executive Director]

Yes, that's difficult. It's still early days. There are several hundreds of patients identified to start with. And it's still early days, of course, that collaboration just started. So we're just gearing up. I'm going in dialogues with more and more immunologists to invite them to bring forward their patients that display the typical symptoms for APDS. And that is really an initiative that's recently started. So it's difficult to say it on quantity. It's also difficult yet to say on how these patients will be offered to the therapy, of course, as and when it becomes available. So more about that in the coming time, I would say.But it is important to realize that we have kicked off the prelaunch activities for the preparations for leniolisib with this initiative. And the initiatives that were mentioned on the slide with regards to working together with this immunologist to bring this Invitae testing collaboration to a higher level. So I can't saying specific yet. We will become more specific in the subsequent quarters leading up to end of '22.

[Operator]

Our next question comes from Joseph Pantginis of H.C. Wainwright.

[Emanuela Branchetti, Biotech Equity Research Associate]

This is Emanuela on for Joe. A couple for us. Can you describe how is the total number of population-wide attacks changing over time? And as prophylactic therapies take hold, how would you describe from an early perspective, the level of breakthrough attacks by the C1 available for?

[Sijmen de Vries, CEO & Executive Director]

Yes, Emanuela, thanks. It's difficult to say the just any change in the attack frequency. What I do think -- or do think I observed is that over the time, patients have started to treat more of those attacks. In the past, they probably also probably buy scarcity, initially buy scarcity of medicine. Of course, they did not treat many attacks at all, which you still see in some of the territories outside of the U.S. where patients do not treat and suffer basically from these attacks. But in the United States, I would see a tendency to follow the good practice to treat upcoming attacks early so you do not have to swell actually. And therefore, the number of attacks for individual patients increases.With regards to the breakthrough attacks, I would say that if you look at the clinical data from for, let's say, for instance, the injectable C1 inhibitor prophylactic treatment, CINRYZE, used to be the standard of care. You could see that it was reducing 50 -- the attack frequency by 50%. It's 50% of patients. So it meant that almost all patients had breakthrough attacks from time to time. What you now see is a significantly higher reduction of the new generation of prophylactic therapies. However, it also looks like at varying results, of course, meaning that up to half of those patients still need breakthrough medication, albeit that the frequency of the breakthrough attacks has gone down.Having said that, the paradigm shifting away from C1 inhibitor for prophylaxis towards product bradykinin and kallikrein inhibition means that for RUCONEST as this segment was never available for RUCONEST and never call any prescriptions in that. Over the last time, we do see that more and more patients come to us, and we can see typically that they're using us because of their relatively modest consumption of RUCONEST for their breakthrough attacks. That means underlying, we see a gradual increase from beginning, we were already treating very severe patients that were using a lot individually to a more broader population that is using, on average, less RUCONEST. But we're treating a bigger population than -- continue to treat a bigger population than we used to treat before. I hope I answered your questions, Emanuela.

[Emanuela Branchetti, Biotech Equity Research Associate]

Got it. That's very helpful. And switching over to APDS. You mentioned that you have a target population of more than 1,350 patients. Are these all the patients expected to be eligible for treatment with leniolisib? And you touched a little bit upon this on your remarks and on the previous question. Could you provide more color on how do you expect patients in a real-world setting to access genetic testing for APDS?

[Sijmen de Vries, CEO & Executive Director]

Yes. So if these patients will, to a great extent, already be treated by immunologist because they suffer from very serious symptoms, and they're in this patient population that has been symptomatically treated, as you saw on that slide, for those symptoms. So at the moment, we identify them as APDS because of the genetic testing. And that is available to the immunologist without any limits in this population. We basically can identify them. And then if you find that genetic makeup as such that they have that genetic defects precisely, then I would say they're 100% eligible for leniolisib treatment because this is what leniolisib treats. It treats the root cause of that genetic mutation, that specific genetic mutation.So therefore, it's important that we branch out to as many -- reach out to as many immunologists as possible, and discuss with them, and that's what we started in our prelaunch activities, started discussing the typical profile of the APDS patients. We learn about that a lot more, and we actually help them to identify with AI and with other searches in their databases for those patients that are typically having these symptoms, and that should be brought forward to be offered genetic testing. And once that is done, of course, then we can 100% identify them. I hope that answers your question.

[Operator]

Our next question comes from Simon Scholes of First Berlin.

[Simon Scholes]

Just a quick one. On the current acute kidney injury trial, is it possible you'll be able to get leniolisib approved in this indication just on the basis of the current trial? Or is it likely that a further trial will be necessary? And you're also saying that in the press release in April that you expected recruitment to be swift for this trial. Is that proving to be the case?

[Sijmen de Vries, CEO & Executive Director]

Okay. I would say that the first question is that no, I don't think you can get an approval on the base of this because we -- for the simple fact that we're investigating different dosing regimens, that will be quite unlikely, I would say, that you get approval on the basis of that. So there will have to be a subsequent trial following this trial. With regards to swift recruitment, that's difficult to say. It's still early days, but we -- there's a lot of patients presenting with these symptoms, so I expect that this recruitment will go pretty swiftly. So means, of course, 220 patients will take time, as we said before, right? So the study -- expect the study to report somewhere towards the end of next year.

[Operator]

Our next question comes from Christian Glennie of Stifel.

[Christian Glennie, Analyst]

A few questions, please. First of all, on RUCONEST, just going to get a bit more sense for the phasing through the rest of the year. Obviously, you talked about return to growth. But So for example, after the down second quarter last year, I think Q3 then recovered very strongly, about 25% growth up sequentially. Is that the potential for that for 2Q? And then overall, for the full year, do you think that you see growth in the product to recover that 20% down in the first quarter? Or is it -- what are your expectations for the full year basically?

[Sijmen de Vries, CEO & Executive Director]

Yes. Christian, it sounds like a deja vu because we had the same discussion last year after the second quarter results, I believe. The issue is, of course, that's very difficult to predict. The additional complication that we saw here, of course, was that it actually -- and that was not the case last year, it happened in the first quarter, where now all this turmoil is ongoing anyway for the annual prescription renewals. So that's the added complication of -- that could potentially make the recovery somewhat slower. That's the first remark I would like to make on that.Other than that, I think also now that we know what happened last year, following that dip in the sales, we do have to conclude that, from our own perspective, we did suffer our total growth predicted for the year internally, according to our internal prediction, suffered from that Q2 dip. And therefore, we did not recover the total amount of growth we were expecting for the year. I expect that this year will be no different in that respect because coming up to growth again and then realizing the same growth that we were predicting internally might be a tall order, but we do expect to go back to growth.I'm -- I can't speculate at this point in time on how aggressive the bump back will be like last year, but we remain comfortable that we will be able to recover to more normal sales levels. And I think it's better to answer that question when we have second quarter results and we see trends -- underlying trends of income in new patients and prescription fill trends that have -- that should then also have some insights into how things are moving forward in the early in the third quarter when we speak about the 6 months result. A bit -- I hope that answers your question.

[Christian Glennie, Analyst]

Yes, that's helpful. I mean another sort of follow-up or related point. I mean what's the level of confidence you talk about new patient starts and so forth, but confidence that this is all -- this is a phasing, stocking, unwinding COVID-related element versus any change in the competitive environment? Obviously, we have had one new product launch that's been rolling out.

[Sijmen de Vries, CEO & Executive Director]

Yes. But I think as we explained before, if you look at the prophylactic, there's a general tendency to gradually use more prophylactic treatments. However, if I look at the published results of that new recently launched product, I would say that if patients shift away from one of the other current new products that are being -- the new prophylactic treatments, I would say that there is a bigger opportunity for breakthrough treatments arising from that product. I would say, it's actually a product that could be synergistic with RUCONEST.If I look at the results for the competition with regards to TESARO, I see that the results were flat, roughly speaking, over the year, over the last 4 quarters, at a rate of around 20 -- between JPY 20 billion and JPY 23 billion. So it basically confirms there's no movement in competitive market shares, and it remains to be seen where the new oral product is going to take more patients from, but it's on the old group that is still using the CINRYZE-injected prophylactic therapies that, for those patients, it could be a step a significant step forward, whether it would be from HAEGARDA, the twice weekly subcutaneous injections for prophylaxis for those patients.Efficacy-wise, it's doubtful, like I said before, if that makes a big step for, but for convenience certainly. But I do see an opportunity for that product to expand the market for people who are currently -- and that's quite a patient population still, they're still on steroids or long-term steroids that may now make the switch over to a modern prophylactic therapy because there's no needles involved.So there could be a possibility for market expansion, I would say there, in that respect for -- to create for that new oral product. And all in all, I see, therefore, an opportunity to further increase the number of patients that we're treating because of breakthrough attacks as a result of that. I hope that answers your question a little bit about the competitive dynamics that we observed.

[Christian Glennie, Analyst]

Yes. Yes. That's very helpful, Sijmen. Just to confirm in terms of leniolisib trial stages, apologies, if you talked about this before, my line dropped. There's recruitment or product trial true is ongoing, and the efficacy endpoint is 3 months, as I understand, it's a 3-month read and obviously, time to get the data and database and everything like that. You're still confident in data by the end of Q4. Is that right?

[Sijmen de Vries, CEO & Executive Director]

Yes, yes. Top line results by the end of Q4, submission in beginning of '22, and we're looking -- we're still aiming for PDUFA in Q4 '22.

[Christian Glennie, Analyst]

Okay. And then in terms of the COVID trial to be quite variable in terms of predicting this, but what's your best estimate for data from those 2 COVID trials?

[Sijmen de Vries, CEO & Executive Director]

I would say later in the -- late Q3, I would say that there should be some results. It could be earlier, but I'm being cautious here.

[Christian Glennie, Analyst]

Okay. And then on preeclampsia, obviously, it's still being suspended. What are you waiting for or from the presumably the -- I can't member how many trial spaces are involved. What's the trigger to get that ongoing again?

[Sijmen de Vries, CEO & Executive Director]

I'd say there's still some burden of COVID-related burden on those systems. And I would say that this quarter is now -- it could well be that this quarter, we could see at the start of that, we hope, but I said that last quarter as well. So it's very difficult to predict, I'm afraid.

[Christian Glennie, Analyst]

Sorry, remind where the trial sites are?

[Sijmen de Vries, CEO & Executive Director]

We have a trial in Mauritius, we have true in Australia and in the Netherlands.

[Christian Glennie, Analyst]

Okay. Okay. And then just finally on the business development side of things. Just to set expectations, I think you talked about -- there's a couple of things, obviously, one is it sounds like fairly early, maybe preclinical candidate that complements an HAE. Is that fair? And in terms of something maybe more advanced or near commercial or commercial, how is that -- what's the prospect of that looking like for this year?

[Sijmen de Vries, CEO & Executive Director]

Yes, it's always difficult business development to predict. We are looking at several opportunities for early-stage new technology for HAE. We think it could be well reasonable to expect that this year, we hope to come to the conclusion of that. That can also mean that we see no viable options, of course, but we obviously come to a positive conclusion.With regards to the late-stage assets, we -- our business development team are continuously evaluating in parallel, several opportunities for this kind of transactions. Given that, we remain optimistic that we could hopefully come to closure on those things as well on a transaction, but that's even more difficult to predict because not only do we have to be fully satisfied with such a product that falls within our remits, it has to be rare -- ultrarare disease. It has to be launchable between now and, let's say, 3 years' time from now. And we need to be totally satisfied with the due diligence, of course.And then, of course, last but not least, the other site, and we need to agree on the terms, conditions, not a small thing either. So that's far more difficult to predict, but this is a very clear objective that we have for this year. And it remains, of course, to be seen, but we continue to be optimistic about it.

[Operator]

Our next question comes from Alex Cogut of Kempen.

[Alexandru Cogut, Co]

I just have a few. On RUCONEST, I just wanted to clarify, when you mean return to growth, is there a growth in Q2? Or do you actually expect organic sales growth in the U.S. over the year?

[Sijmen de Vries, CEO & Executive Director]

Initially, Alex, we expect to return growth because we now had a big decline, so we expect to return to growth. And because it takes quite a while for those new patients to make their way through between getting into the program and being reimbursed, and we set it up typically 2 months, the growth -- we expect the growth trajectory to continue over Q2 and Q3. And like we said before, it remains to be seen, of course, like last year, whether the total year will be positive versus the previous year.Now last year, of course, we did suffer, and we did not totally, as I said before, not totally recovered the internal growth objectives that we had. And this year, unfortunately, we find ourselves in a similar type of situation that we have to see how the recovery goes going forward and whether we actually are able to achieve, again, growth over last year or not. And I can't comment on that at this point in time, as you may appreciate, given the turbulent market requirements. But we do see underlying that, as I stated to you before, that there is no shift -- as we stated before, there's no shift in market shares. There's no indication of competitive pressure that actually drives -- would drive our sales down. So therefore, we remain optimistic. And we also see, on top of that, an increasing number of patients that we are treating as an underlying trend that continues.So therefore, It's very difficult to predict, as you may appreciate, but we remain optimistic about this going forward. I hope I answered your question, Alex.

[Alexandru Cogut, Co]

Yes. That's clear. And just on the last point you mentioned, and the expanding pool of patients but reduce consumption. So if you look at where -- at your patients now, how -- what percentage would you say of revenue of patients are using RUCONEST as kind of prophylactically versus sort of the patients that appear to be using it on-demand only so presumably for breakthroughs?

[Sijmen de Vries, CEO & Executive Director]

Yes. The only way we can determine that is by sort of volumes and then we have to make a guess, right? I would still say that the majority of the patients that we have are still using the product for acute. And -- but there is an increasing number of patients that are using the product for breakthroughs when they're using other production prophylaxis. I also have to say to make it even more complicated for you, I'm afraid, that patients go backwards and forth. So we see -- we saw patients going out to, for instance, Exxaro and then coming back, then first using a modest amount of RUCONEST and then coming back to higher volumes of RUCONEST despite -- or maybe we don't know, even having stopped Exxaro and went back to RUCONEST.It's between all products. It's a coming and going. You see how difficult that market is to predict then. You also see that TESARO was decreasing in revenues over the last quarter as well. But basically, it also remained flat in quarterly results over the last year. So this is a very difficult market to predict, I'm afraid.

[Alexandru Cogut, Co]

That's clear. And just to be clear on the revenue stream between U.S. and Europe. You mentioned in the press release that it was flat in Europe. So does that mean $2 million?

[Sijmen de Vries, CEO & Executive Director]

Yes. The revenues in Europe did not decrease nor increase, so stable, but did not grow. So there was also significantly impacted by COVID because we were expecting them to grow, but they had the same hindrances. Our people couldn't go out. And there was hardly -- as you know, across the whole health care system, a lot of the care came to a grinding halt in favor of COVID. There's no exception, I'm afraid.

[Alexandru Cogut, Co]

Got it. And then just switching on to leniolisib. I appreciate the background on prevalence and such, but what about pricing? Where is your thinking there?

[Sijmen de Vries, CEO & Executive Director]

Well, I'd say it's an ultrarare disease compound, so we expect to have a typical price typical for these products. And I wouldn't be able to comment on that. Of course, it's also still very early days, of course, in this respect. And we will be making the appropriate underpinning for such pricing later on as and when we have more data in our hands. And then, of course, it will be known. But I will not speculate on that other than this.

[Alexandru Cogut, Co]

Is there any reference pricing that you're currently using sort of to benchmark or you're [ linear ]?

[Sijmen de Vries, CEO & Executive Director]

No, there's no specific reference pricing, but we just use typical price ranges that are being charged and reimbursed for a similar type of rare -- ultrarare diseases.

[Alexandru Cogut, Co]

And what would be this range?

[Sijmen de Vries, CEO & Executive Director]

Well, I think you should be able to find a number of these compounds in your own research. I will not comment on that at the moment.

[Operator]

We have no further questions on the phone line, so I'll hand back to you, Sijmen.

[Sijmen de Vries, CEO & Executive Director]

Thank you very much. Yes, thank you, ladies and gentlemen, for attending this conference and for your questions. I would like to conclude that, yes, we were affected by COVID. Yes, we have seen this before, and we are confident that given the underlying trends that we see in patients, new patients coming in, and our patients returning that we will return to growth of revenues as stated in the outlook for 2021. We will very much focus on our clinical trial programs to really start again after having had a long period of standstill.And as you heard before as well, we very much focus on trying to in-license a compound or acquire new acquisitions -- acquiring new compounds such that we can accelerate the growth in the short term by means of launching new products that we can acquire within now and 3 years' time. So we conclude that we have still have a strong business that is still profitable and generates a lot of cash. You saw we have a healthy cash balance.I would also like to point out that we went through NASDAQ and had that secondary listing at the NASDAQ with a clear objective that we have currency available in the form of American depository shares that we can use to in case we want to do M&A transactions. And that will, of course, help significantly the liquidity of our NASDAQ trading and will, of course, get a different view on valuation because it will also -- by that means expand, expose -- significantly expand the exposure to U.S. investors, which by, as you know, is a far bigger market for our kind of company than it's served by the European listing.So with that said, I thank you very much for your attention. I look forward to sharing with you next time our 6 months results, which will be in the beginning of August. Thank you very much for your attention. Goodbye.