Pharming Group NV

AEX:PHARM

Earnings Call Transcript 2020-Q4

[Sijmen de Vries, Executive Director & CEO]

Good afternoon, ladies and gentlemen, and welcome to the full year results conference call -- full year results 2020 conference call. Before I go into this, I would like to point you to the slide that says forward-looking statements as this presentation may contain some forward-looking statements, including statements about our beliefs and expectations that are based on our current plans, estimates and projections, as well as our expectations of external conditions and events. And after doing this, I would like to have the honor to introduce my new colleague, Jeroen Wakkerman, our new CFO, who joined us from, what is it, 16th of November. So he's very fresh still to the company, and who's sitting here next to me. And I'm very pleased Jeroen joined us. And I would like to hand over to you, Jeroen, to provide us with the financial highlights.

[Jeroen Wakkerman, Chief Financial Officer]

Yes. Thank you very much, Sijmen. Maybe first a bit about why I joined Pharming at this important period. I think we're in an exciting period in Pharming. We've been profit-making since 2017. We have been generating cash. And in fact, we're pretty cash-rich at the moment, more about that later. And we are scaling up at the moment and developing the business with RUCONEST for both -- for current use and alternative uses. And obviously, also building the product portfolio with new products. So I think I joined in an exciting time, and I look forward to working with the full team of Pharming to further develop the business. Then going on indeed to the financial highlights. We had a record revenue in 2020 with a 9.9% increase year-on-year to EUR 185.7 million from EUR 169 million last year. And this was underpinned by a record revenue in Q4 of EUR 51 million, which means a 10% -- 10.6% growth versus Q3. Gross profits also increased by 11.8% for the full year from EUR 147.7 million to EUR 165.1 million. Net profit was EUR 32.7 million and represented a decrease of 9.8% from EUR 36.2 million last year. And that was despite an increase in the operating profit. And that reflects the significant increase in finance costs of EUR 13.9 million, and that increase in finance cost was mainly caused by negative currency effects. We strengthened the cash position to EUR 168.3 million by year-end, and that compares to EUR 68.6 million on the 31st of December 2019. And that was on the back of strong cash flow from operating activities and the proceeds from the convertible bonds. And those were partly offset by the repayment of the loans and, as mentioned, the negative currency effects. In January 2020, Pharming successfully placed a EUR 125 million 3% coupon senior unsecured convertible bonds, which is due in 2025. And the proceeds of the issue were used to redeem the loan from Orbimed Advisors, reducing the company's financing costs. And the remaining balance of the proceeds will be to support the company's capital expenditure in relation to the expansion of commercialization and manufacturing infrastructure. With that, I want to hand over to Sijmen.

[Sijmen de Vries, Executive Director & CEO]

Thanks, Jeroen, for sharing the financial highlights. And it's now time for some operational highlights. So when we look back at the year, it was -- we had a lot of stuff happening. It started very early on in the year where the second starting material facility for RUCONEST was approved by EMA and FDA. This was, of course, a first for both Pharming and the EMA and the FDA. So we're very pleased that went relatively smoothly. Subsequently, we got the approval from the European Commission to treat HAE attacks in children with RUCONEST, and we also received the Orphan Drug Designation for leniolisib for the treatment of activated phosphoinositide 3-kinase delta syndrome, APDS, I should call it from now on. It's all easier to talk. Results were -- furthermore, we had results from a compassionate use study in patients with COVID-19 infections, hospitalized with severe -- with the related severe pneumonia. And out of that was another investigator-sponsored study that started to investigate these complications. And subsequently, we started our own study in the U.S. And then towards the end of the year, we successfully completed our secondary listing on the Nasdaq Global Marketing (sic) [ Nasdaq Global Market ] with our new ticker PHAR. And somewhere in March last year, we were promoted to the Amsterdam MidKap Index. So how does it look like for Pharming towards the future? I would like to take you along for how we are investing for long-term sustainable revenue growth here. And I first want to share you -- with you a very important slide here, our 3-pillar strategy for growth that we have defined. On the left-hand side, you see the main pillar at the moment. That is, of course, the RUCONEST sales. We are fully commercializing RUCONEST, and we intend to increase market share and sales -- continue to increase market share and sales from RUCONEST for the existing -- in the existing form through the treatment of acute attacks of hereditary angioedema. And on top of that, because this is our home market and our networks are already 20 years in this market, we, of course, are also searching for new technologies to basically provide even better medication or maybe even a cure for HAE. So we've set out to do that. And that is where we are looking into, of course. Hopefully, being able to in-license some new technologies from the outside that are probably in a very early stage to actually provide the next-generation medication beyond what is currently on the market. Secondly, of course, is the second pillar of the growth, means that we are expanding indications for C1 inhibitor. And that is, of course, the new indications that we are currently investigating like pre-eclampsia and acute kidney injury. On top of that, of course, the COVID studies that also have been started. And furthermore, where we are looking to actually further leverage our transgenic technology platform to deliver next-generation proteins. And one of those examples is alpha-glucosidase for Pompe. And the next one, of course, is a very important strategic step that we are taking and that we have started with in 2019 with the in-licensing of a late-stage asset, leniolisib for the treatment of APDS from Novartis. It's very important to realize that this becomes a very pivotal part of our strategy because we want to accelerate growth beyond what we have in our own pipeline. We are, as every other biotech that has made it through to commercialization, we have a significant gap in our pipeline. We already got the first product in the third pillar in leniolisib, but we're looking for more. And now, we're looking for very late-stage assets that are towards their end of their clinical development or even on the regulatory review that are rare or ultra-rare diseases because we are very good at commercializing in the rare disease area. That's our specialty. We would like to continue to play there and expand that and leverage our commercialization infrastructure and also development of rare or ultra-rare diseases that's overseeable from a financing point of view. So we feel that we have a very strong position there to add more late-stage products to our pipeline, and as such, drive growth in near term. And then you should think about the window '21, '22, '23, maybe even '24 for launches. So that's the third pillar of our strategy that becomes even more important going forward. So -- but first of all, of course, we take a look at how RUCONEST is doing in because that's the engine of our growth at this point in time. How is RUCONEST doing in the changing U.S. hereditary -- and especially U.S. hereditary angioedema market. So whilst RUCONEST is approved for acute use, we see, of course, a lot of patients that are currently going and are under prophylactic treatments in the U.S. market. Now the good news for the patients is that these new prophylactic treatments offer better attack reduction rates than the previous plasma-derived C1 inhibitor prophylaxis treatment. But still, according to published data, approximately half of these patients using those new prophylactic treatments continue to have breakthrough attacks. Some frequently and others less frequently, but they are from time to time, of course, and some more frequently, like I said, in need of regular use of breakthrough medication. And of course, according to their treatment plans, they should have breakthrough medication at hand at all times. And although the bradykinin-kallikrein inhibitors that are often used and in the past were standard use for breakthrough medications, they block the same pathway for symptomatology, the bradykinin-kallikrein pathway that are the prophylactic treatments are actually covering. Noncontrolled breakthrough attack can and does occur from time to time or sometimes more frequently and becomes then very serious if they have no C1 inhibitor therapy anymore available, because they don't have their C1 inhibitor prophylactic therapy at hand anymore. So we see there that increasingly, with the shift to the new paradigm for prophylaxis and the increased recognition for this prophylaxis patient starts to exist to have effective and reliable C1 inhibitor treatment for breakthrough attacks at hand. And we see, therefore, that new generational prophylactic therapies like the monoclonal antibody that is blocking the bradykinin-kallikrein pathway, also the new oral product that has recently been launched for -- and that is blocking the bradykinin-kallikrein pathway. We see, therefore, an additional growth opportunity for RUCONEST for the treatment of those breakthrough attacks that are associated with those prophylactic products. So that's how we see basically how RUCONEST can continue to be engine of our growth and supporting the investments that we are envisaging to make under the second and the third pillar. And of course, it's a very important aspect here. We have a very strong execution of commercial strategy. It's a highly competitive market. But as Jeroen already was saying, there -- we have been -- we're very proud about the increasing revenues that were driven in the U.S., and so important U.S. market. And in fact, they were beyond -- as you can see, they were beyond our expectations, especially in the last quarter of the year. And because we were surpassing the level of sales that triggered the final $25 million milestone payment that will be payable -- that has become payable to Bausch Health. And that milestone will be paid in the second quarter of this year. And you saw that the contingent consideration was actually brought to $25 million and, therefore, will be paid out of that. Then furthermore, we're very proud to have delivered the increasing revenues in Europe. It's now EUR 8.3 million business. It's still relatively small compared to the U.S. business, of course. But it is at least on a growth trajectory now, and that is also mainly driven by increasing demand in the last half of the year. And we continue to build out the commercialization structure in Europe. And we're also moving forward in bringing RUCONEST to new territories that were not served by our previous partner for the EU countries, Sobi. And of course, we're very happy to say that despite all the challenges that we saw in the -- during the COVID-19 pandemic, so far, no impact has been on the production or availability of RUCONEST to patients. So of course, we have to keep up with the increasing demand. And therefore, there's a lot of investment ongoing in the upscaling of production capacity. I was already referring to it earlier that we had the first new production facility for starting material approved beginning of the year. We start working and we're in full swing on the construction of a third facility to safeguard the future growth of the HAE supplies. And we're in the plans for a fourth facility, which can also serve as a manufacturing place for the subsequent products like alpha-glucosidase for Pompe's disease. And on top of that, we have also moved forward in terms of that we are now starting to build this year our own downstream purification plant to expand not only the capacity, but also to have it in-house. And of course, get even a better cost of goods out of this because purification is the mainstay of the cost of goods with RUCONEST. Now of course, we realized that if we were to be successful in any of the follow-on indications for the C1 inhibitor that we will need a lot more material. And therefore, we have been able to redevelop the C1 inhibitor line that we used to have from cattle to meet future demand for large indications. So in the not-too-distant future, we will be able to provide C1 inhibitor from cattle and we will be able to provide virtually unlimited amounts of C1 inhibitor to serve bigger indications in the future. So that is actually a very safe feeling when you're working on development programs going forward. And the good news is this can all be funded from current cash generation. So a moment to look at -- very briefly to look at the new opportunities for C1 inhibitor because, unfortunately, there is not very much to report here because the pre-eclampsia trial and acute kidney injury trial came to a grinding halt because of the COVID-19 taking capacity away in all these hospitals. And that is not yet changed, but we're optimistic, cautiously optimistic, I should say that with the waning of the pandemic and the progress on vaccinations that capacity will become available and that these studies can be started in the not-too-distant future. And of course, we will let the market know when these studies have been started because that is very important for our future development. What we got instead was that -- and the story is now well-known, that whilst we had medication in a university hospital in Basel already for the start of the acute kidney injury, the -- we got a request from the lead investor in Basel if we could use the medication for compassionate use experiment in 5 patients with COVID-19 with severe pneumonia. That was actually done by compassionate use. We reported back in that on the results in April. This will also be published in Frontiers in Immunology later on in the year. And out of that, the investigator came with a request if he could start another now bigger trial, and that trial started in the third quarter and is now running and is planned to study up to 150 patients in several centers in Switzerland and has expanded into Brazil and Mexico now as well, and recruitment continues to be ongoing. In addition to that, we got requests from a hospital in New Jersey in the United States, and that's where we started our own trial. We opened our own IND, and we started our own open-label parallel group-controlled clinical trial. And there, we are planning to try -- to treat up to 120 participants in the U.S. and the recruitment as well is ongoing there. And for further details, you can, of course, look at the clinicaltrials.gov website because these 2 trials have different treatment regimens and they are really hypothesis-confirming trials, we hope. So we will, of course, update the market when we have results from these trials. However, the trials are still running. And we cannot be sure about the date for that yet. Then I move to the third pillar of growth, which -- of which leniolisib, the late-stage products for APDS -- for the treatment of APDS is, of course, the first represented. And here, we're looking at an ultra-rare disease, APDS. It was recently discovered, and it's caused by an autosomal dominant mutation. And it means that the phosphoinositide 3-kinase delta is overactive, and it leads to malfunctioning B immune cells, which means that these children that are suffering from this have recurrent respiratory infections, damages to the lungs, organomegaly, malignancies and autoimmunity and a relatively short life expectancy. It's an ultra-rare disease. At the moment, the estimated prevalence is 1 and 2 per million. We have already identified in the literature more than 240. We've also found in screenings of a substance of these primary immune deficiency patients that are treated and well-known by the immunologists that rates can be significantly higher. And there is, of course -- it's quite a challenge to diagnose that. Thank God, there is a genetic test available. And in some countries in the European Union, this is already part of the standard panel of testing for these patients. But we're very pleased to -- earlier in the week, to be able to announce the navigateAPDS partnership with -- to actually support with Invitae to actually facilitate the free testing for patients that immunologists suspect they could have -- that they have the clinical symptoms of APDS so that we can test them and identify them. So we basically started trying to identify these patients already. And there is, at this point in time, no approved therapy for treatment. Leniolisib is a potent selector of that enzyme. It treats there for the root cause of APDS. It's also orally bioavailability, and we're currently in a registration-enabling a pivotal trial. The pivotal trial was halted last year. It has been started recruiting again. And therefore, we still expect to be able to deliver headline data later on in the year, definitely in H2 now, unfortunately. But we still expect that we can hold to launching -- be able to launch the product before year-end of 2022. We've got an orphan drug designation by both the European and the U.S. now as well. So we continue to invest in leniolisib production. We continue to invest in the clinical trial for leniolisib and in premarketing of leniolisib because it is an important first step of our third pillar of growth I just shared with you. So I almost come to the end of this update. I'll first want to share -- before I do that, I want to share some of the impact of the COVID-19 on Pharming's business. Like I said earlier before, we had no impact so far on the upscaling or continued production of RUCONEST. Despite a number of disruptions in supply chains for consumables used in production, we also spent some text on that in the press release, especially because this continues, these disruptions. There's heavy competition now for these consumers, for the tens of billions of COVID-19 tests that have to be produced. And of course, the billions of vaccines that have to be produced. So supply chains are really, I would say, in a difficult situation and continue to be in a difficult situation so far. But we knock on wood that we have not had any disruptions in this respect. And also this goes for testing of patients that have to be entered in clinical trials, which is also sometimes hindered by consumables not being available. But so far, so good, I would say. The recruitment, of course, that was the bad news that we discussed before, has been halted, and we're waiting, of course, for this to be restarted. And like I said before, leniolisib continues to recruit as we speak. Then a quick word on the Nasdaq listing. We're very pleased that we succeeded in getting a level 2 ADR program in place with a symbol PHAR and this listing is to get us ready to actually have -- to have access to the big, far bigger U.S. market investor-wise. But also not to forget, to have access to a U.S.-based currency to finance potential acquisitions. On top of that, we, of course, had to reorganize our company from a 2-tier Board into a 1-tier Board structure. That all took place at an EGM on the 11th of December 2020. So with that, I conclude the update of operational highlights and would like to bring back the microphone to Jeroen to actually share with you some more detailed financial review. Jeroen?

[Jeroen Wakkerman, Chief Financial Officer]

Thank you, Sijmen. Yes, as already mentioned in the highlights, our revenues increased by EUR 16.7 million or 9.9% to EUR 185.7 million. And the increase was a result of the increased sales of RUCONEST in the U.S. market, which increased from EUR 162.7 million to EUR 177.4 million in the year. Also the revenues in Europe and the rest of Europe -- the rest of the world increased. And there, we had a revenue of EUR 8.3 million in 2020. And that is basically due to the -- due to Pharming continuing to build the European commercial infrastructure and expanding into new territories following the reacquisition rights of RUCONEST from Sobi, which was in December 2019. The cost of sales for the year-ended amounted to EUR 20.6 million. And in 2019, it was EUR 21.4 million. And the gross profit increased EUR 17.4 million or 11.8%. And the main reason for that growth in gross profit was the increased sales in the U.S. and the EU, coupled with improvements leading to better cost of goods. Operating income increased to EUR 99.3 million from EUR 87.2 million the year before, and that was mainly because of increased sales activities in the U.S., increased research costs both for our current products and for the new pipeline and increased general and admin costs, amongst others, due to higher headcount. The operating profit improved strongly to EUR 67.4 million from EUR 60.9 million the year before. And that was an increase of 10.7%, despite the considerable increases in clinical and R&D activity. And obviously, it is mainly due to the strong sales growth. If we then go to the net results, where you see that the other financial income line decreased slightly, and that is because of decreased interest on the cash balances because of lower interest rate in the U.S. And the other finance expenses increased by EUR 13.9 million in 2020 versus 2019. And that was primarily because of a significant increase in the U.S. dollar versus the euro during the year -- or basically at the end of the year, I should say. And the significant negative currency effect of EUR 12.6 million were incurred on the cash reserves invested in U.S. government securities. Now in addition, in this line is the interest expenses on loans and borrowings. And they declined significantly, and that was because of the repayment of the Orbimed loan in January 2020. And hence, the interest cost, so that is recurring interest cost, went down by EUR 7 million, EUR 7.1 million from EUR 11.3 million in 2019 to EUR 4.2 million in 2020. At the beginning of the year, in January 2020, Pharming offered a EUR 125 million convertible bonds for 5 years maturity. The bonds were more than 3x oversubscribed in a book-building exercise by JPMorgan and the offer closed within a few hours. The net proceeds of the issue of the bonds were to redeem the loan of Orbimed. And on the repayment of this loan, we had to pay an exit fee of EUR 3.8 million. The remaining balance sheet of this bond issue will be used to support CapEx and commercialization and development of the manufacturing infrastructure and also serves as funding for the launch of leniolisib, if approved, as well as for other potential acquisitions or in-licensing opportunities. The income tax decreased by EUR 3.9 million from EUR 10.5 million last year to EUR 6.6 million this year. And that is mainly because of reduced profit before tax, federal and state tax true-up and some smaller differences. The total net profit in 2020 of EUR 32.7 million represents, for the reasons I just mentioned, a decrease of 9.8% over 2019. And -- so that was despite the increase in the operating profit and reflects mainly the increase in the financing costs. So then over to the balance sheet. The intangible assets increased, and that was mainly as a result of the payment of EUR 7.5 million related to the reacquisition of the European commercial rights, formerly owned by Sobi, Swedish Orphan Biovitrum. And as part of this acquisition, the company acquired multiple items, which are considered as one intangible asset. In PPE, property, plant and equipment, it increased. And that was by EUR 8.6 million. And it was largely due to the investment that Sijmen also mentioned, EUR 4.1 million in operational facilities, R&D facilities and laboratory equipment. And the investments were partly offset by regular depreciation charges. The inventories increased slightly from EUR 14.5 million to EUR 17.2 million, and that was because of an increase in work-in-progress, so the drug substance. And that is anticipating future sales growth. Then the cash and cash equivalents increased together with the restricted cash to EUR 168.3 million. And that was, yes, build on the strong cash flow from operating activities and the net proceeds of the convertible bonds offset by, already mentioned, the repayment of the loan and the currency effects. Then moving on to the liability side of the balance sheet. The equity went up, shareholders' equity, mainly because of the profit for the year of EUR 32.7 million. You see the convertible bonds now appearing on the balance sheet as a liability. You see also on the current liability convertible bond, that is the accrued interest that is on the balance sheet per year-end. And in loans and borrowings, you see from last year, the Orbimed loan that is now completely paid off. And in the other financial liabilities at the bottom of the table, you see EUR 20.357 million, which is $25 million, and that is for the payments to the -- milestone payment to Bausch. And with that, we have paid off all our liabilities for that transaction. Then moving to the cash flow. First, to start with the operating activities, profit before tax of EUR 39.2 million. The other finance expenses of EUR 29.2 million, as I explained before, brings us to an operating cash flow before changes in working capital of EUR 78.4 million. We had a slight change in the working capital, as I said, in work-in-progress. And therefore, the net cash flow from operating activities became EUR 73 million -- or EUR 74 million, I should say, in 2020 versus EUR 66.5 million in 2019. And then the overall cash flow. A few highlights here that I will take out, a few lines. First one I want to comment on is the investment in intangible assets, the EUR 7.9 million. EUR 7.5 million is because of the Sobi transaction. The acquisition of the license of EUR 1.4 million is 2 lines below, is the -- for the Novartis -- payments to Novartis for the leniolisib development. Further below, the repayment of loan and borrowings is the Orbimed loan, the EUR 50.1 million. And the payment on contingent consideration, EUR 18.1 million is, again, the Bausch milestone payments. The proceeds of the convertible bond and the transaction costs related to it is EUR 125 million, respectively, EUR 2.3 million. You see in the balance sheet. And you see also at the bottom, the exchange rate effects negatively on the U.S. dollar cash by EUR 12.6 million. So the total cash and cash equivalents went from EUR 66.3 million at the beginning of the year to EUR 167.1 million. And with that, I want to hand over for the outlook to Sijmen.

[Sijmen de Vries, Executive Director & CEO]

Thank you, Jeroen, for sharing the finance details. And yes, I would be happy to share with you the outlook for '21. And for the outlook for '21, we continue, as illustrated before during this presentation, that we believe that RUCONEST sales will continue to grow throughout '21, mainly driven by our U.S., of course, business and our EU expanded operations, but subject to the progression of the COVID-19 pandemic. And we make that remark here because we saw disturbances in the market last year. And therefore, we also would like to add here that we do expect quarterly fluctuations in revenues as -- from these disturbances in the market. Because the access to customers, as we already explained, is not so easy during the COVID-19 pandemic. Virtual marketing is not so good compared to face-to-face marketing. And of course, the phasing of ordering patterns, we've seen that patients last year ordered more. Insofar, they can do that because they have restrictions, how much they can order, how many -- what amounts they can order on a monthly basis. But we know that, for instance, in the fourth quarter, typically, patients order a little bit more because they have to go to their prior authorization. It means they get a new 1 year prescription as it were. Most of that in the first quarter. That is often a very lengthy administrative process, and they want to make sure they're not without medication. Therefore, they traditionally offer a little bit more in the fourth quarter. And we have also we have -- we think that there's also -- because of the COVID-19 pandemic wave in the U.S., that there may have been some additional ordering because of that in the fourth quarter. We also expect, of course, to maintain, I would say, net earnings during this year. We, therefore, do not expect to require additional financing to maintain the current business. We are, as I explained earlier, very keen to invest in acquisitions and in-licensing of new development opportunities and assets as these occur, which may require, of course, especially if we go into acquisition of a company that may require to use the new U.S. currency, the American depository shares as payment for such acquisitions, which, of course, will be discussed with shareholders at an EGM for such occasion. We continue to invest in the expansion of the production, as I explained, of RUCONEST before and the production of leniolisib now as well to be ready to launch leniolisib. And we continue to invest in those studies for leniolisib, in the pre-marketing activities for leniolisib, ongoing clinical trials for C1 inhibitor and additional development opportunities. And last but not least, of course, we continue the close monitoring of the ongoing COVID-19 pandemic and the potential impact on the business. And traditionally, I would say, we provide no further specific financial guidance for '21. And as you can see on the slide, we previously announced the company is changing its reporting currency to the U.S. dollar from 1 January '21 onwards. So this will be the last presentation where the euro is the reporting currency. Then summarizing, before we go to the Q&A. We continue to deliver against our growth strategy despite the impact of COVID-19. You've seen the growth strategy very well-defined as the 3-pillar strategy. Record revenues by our U.S. sales growth and expansion in the EU. Progression of the APDS development program. And we build on strong foundations to accelerate our long-term value creation. Strengthened financial position, followed by the -- from the convertible bond. We invest in the derisking and upscaling of our production capacity. We have a U.S. currency available after our entry into the U.S. -- into the Nasdaq Global Market and have a lot of wider exposure to a much bigger audience of investors on the Nasdaq Global Market. And of course, last but not least, we are positioned now, therefore, to make acquisitions -- investments and acquisitions and in-licensing of new development opportunities that provide us with additional near-term assets such as leniolisib. With this, I would like to thank you for your attention. And I would like to open the floor now for questions under the Q&A section of this meeting. Operator, we can switch to Q&A, please. Thank you.

[Operator]

[Operator Instructions] Our first question comes from Joe Pantginis of H.C. Wainwright.

[Joseph Pantginis]

Welcome to the company, Jeroen. Congratulations on the continued traction for RUCONEST. Very nice to see the update today. A couple of other questions here. First, Sijmen, I was wondering if you can give an update on your delivery technology for RUCONEST that you've been developing for quite some time now.

[Sijmen de Vries, Executive Director & CEO]

Thanks, Joe. And thanks for the question. Yes, that is quite an interesting one, Joe. As we already explained before, we had deprioritized that activity because of the fact that we were short of supplies to actually develop the high concentration version of RUCONEST. This is something that comes up in '21 again, where we may actually have built up sufficient inventories to be able to actually get that manufacturing step validated, upon which this program will continue. And I would like to speculate that the first bit will be, of course, not necessarily delivery technology, but will be concentrated form of RUCONEST that can then be tested, for instance, in whether we can deliver RUCONEST intramuscular rather than intravenous which is, of course, will require a clinical trial. Secondly, delivery technology is still -- there's still a search ongoing for that. But in the meanwhile, we've also seen that it is not trivial to actually deliver such a highly glycosylated protein through -- by other means than through needles. So far there is, therefore, no update on that at all.

[Joseph Pantginis]

That's still actually pretty helpful. I appreciate that. And then can you tell us or remind us, and forgive me if I don't recall this, but regarding the pre-eclampsia study. Were you able to enroll any patients?

[Sijmen de Vries, Executive Director & CEO]

Yes. We started with the pre-eclampsia study a while ago. And unfortunately, at this point in time, we're still -- that study was opened before COVID broke out. And of course, at the moment, we are -- we've come to a grinding halt. So also, that study, we hope, is actually going to be started again in the not-too-distant future.

[Joseph Pantginis]

That's good. And I guess I was going to get to the point of that -- like are you able to glean even some initial safety data in that population? But I don't know if you will discuss that at this point.

[Sijmen de Vries, Executive Director & CEO]

No. No, no, no.

[Joseph Pantginis]

Okay. Got it. And then -- no worries. And then my last question is, obviously, you have another commercial product potentially on the horizon here with leniolisib. I was just curious if you can add some color with regard to your pre-commercial activities.

[Sijmen de Vries, Executive Director & CEO]

Yes. Yes, certainly. We're preparing ourselves at this point in time for market entry of the product. As I said, hopefully, still late in next year, depending on, of course, further COVID impacts. One of the things you saw that is this partnership with Invitae that we started because we think it's important that we identify -- that we help immunologists identify these patients and provide access to genetic testing. And that's, of course, the first visible step that you see where we have entered into this partnership with Invitae and where patients -- eligible patients in the U.S. and Canada can actually get tested for free, sponsored by us. That's, I think, the first thing. Secondly, we started to work together with patient organizations to help them along as well. And there is -- I think there's a website, APDS website, specifically. It's coming online, say, in the -- today. All about APDS. I think it's, as of tomorrow, I believe, even. Yes, so that kind of stuff will be started to become visible that we are starting our premarketing activities.

[Joseph Pantginis]

Got it. Congratulations.

[Sijmen de Vries, Executive Director & CEO]

Thank you, Joe. Thank you.

[Operator]

Our next question comes from Simon Scholes of First Berlin.

[Simon Scholes]

Yes. I've just got one question. I was wondering what the likelihood of an extension to the U.S. label to pediatric patients is?

[Sijmen de Vries, Executive Director & CEO]

Thanks, Simon. That's a very good question. And that is not easy to answer at this point in time. We have a lot -- as you know, we have a label in the EU for children, in the U.S. for adolescents. And it is -- has to do with the challenges of organizing a study in children for -- in the U.S. And I think that's -- therefore, I can't give you any sort of concrete answer to that at this point in time, I'm afraid.

[Simon Scholes]

I mean is it something you would consider, though, I mean, once the pandemic is over? I mean running this -- organizing that kind of trial.

[Sijmen de Vries, Executive Director & CEO]

It could be that it is on the -- it could be that we start looking at that, but it's not yet in the plans.

[Operator]

Our next question comes from Alex Cogut of Kempen.

[Alexandru Cogut, Co]

The first one is just on your COVID trials. When do you expect to report some data from the 2 ongoing trials?

[Sijmen de Vries, Executive Director & CEO]

Yes, Alex. That's a very good question, Alex. And COVID is -- the pandemic is slowing -- thank God, it's slowing down somewhat in Switzerland. Mexico and Brazil continue. These are adaptive design trials so -- and different dosing regimens, as I explained before. I would say that this is purely speculative here, that in the third quarter, there could be some reporting from these -- from either one of these trials. And I'm not sure at this point in time which trial will actually be able to report first. Because our U.S. trials also -- our own trial is also very active and has a different longer -- lower dose per day, but a longer duration of treatment. And we're -- but yes, so the third quarter is probably a reasonable expectation that there could be some news from that.

[Alexandru Cogut, Co]

Understood. And just a second question on your financials. I noted a significant increase in sales and marketing costs in Q4, which have outpaced sales. Would you mind commenting on whether it's more related to U.S. or it's the buildup of the European organization?

[Sijmen de Vries, Executive Director & CEO]

I think it's a mixture of these things. Jeroen, I think, isn't it?

[Jeroen Wakkerman, Chief Financial Officer]

Yes.

[Sijmen de Vries, Executive Director & CEO]

And it's also a bit of phasing of -- but also premarketing activities, I would say.

[Jeroen Wakkerman, Chief Financial Officer]

Exactly. It's a combination of all of them. Obviously, in terms of absolute numbers, the biggest growth is in the U.S., as you would expect. But it's a combination of activities. And also because earlier in the year, it was more difficult to do marketing and sales activities in general. And I think that has been picking up in Q4 versus the other quarters. And that is obviously because of COVID.

[Operator]

Our next question comes from Christian Glennie of Stifel.

[Christian Glennie, Analyst]

A couple on RUCONEST and then one on sort of BD plans. RUCONEST Q4, clearly, very strong sort of 16% growth in sort of constant currency. It was, by my reckoning, your -- probably your best quarter so far in terms of the U.S. piece and potentially also European. But -- and then you alluded to this earlier in terms of the sort of potential fluctuation in quarterly numbers through '21. Before the fourth quarter, we probably would have assumed that Q1 would have been quite a tough comp given that Q1 last year in '20 was very strong. But then the flip side of that is that after a strong Q1 last year, you had a bit of a step down in Q2 as a bit of that stocking unwinded. You alluded to the Q4 performance having included potentially a bit of that sort of preordering and a bit of a boost from that. So I wonder if you could just explain a little bit how you think sort of the quarters will evolve on the U.S. side.

[Sijmen de Vries, Executive Director & CEO]

Yes, that's an interesting question. Thanks, Christian. There is a number of elements that I alluded to, right, and you alluded to as well here. So first of all, traditionally, in the fourth quarter, there's always a bit more -- the patients are stocking up a little bit because of the festivities -- the festive season and because of that prior authorization renewal in Q1. That's first. Last year, Q1 was actually quite normal until March. And March was really the first wave of the pandemic, which, of course, basically petered out in the second quarter. So -- and at this point in time, it's very difficult to say because you're absolutely right. Q4 was our best quarter ever. That is correct. And it's very difficult to gauge if there's any elements or what -- how big the element is of extra ordering by patients because of COVID-19 that will peter its way out in the first quarter. That's very difficult to say. Also because patients have limitations in the amount of products they can order. So it can only be a fairly limited amount. But of course, on top of that, the wholesalers' response to these kind of -- like we had last year, respond to that kind of extra demand by ordering extra. And then if demand starts dropping away, they order less. So we saw a very clear fluctuation like that in the second quarter. So we can't exclude this year, whether any of these fluctuations will take place. And that's why we said that because normally speaking, fluctuation is not that big, but we saw last year that because of COVID, they could be amplified a bit. But all in all, we said last year as well. It's probably better to expect to take a couple of quarters together. Like we said last year that the first half was more representative than either the first quarter or the second quarter. So again, this year, I would say, the second half is probably more representative of the sales results than the third or the fourth quarter in isolation because of those potential disturbances. And that's just a word of caution. But all in all, we see underlying trends that have a healthy demand for the product. And therefore, we basically guide that 2021 sales will be more than the 2020 sales for the product. I hope I gave you a bit of a long-winded, but I gave you an answer.

[Christian Glennie, Analyst]

No, that's great. It's good additional insight there. And then also it's worth thinking about the rest of world, Europe and rest of world sales as well. A nice step-up in fourth quarter. Is that potentially some similar dynamics there in Europe and rest of world as well? And/or is that starting to reflect the extra manufacturing capacity and availability of product that you always were a little bit constrained with outside of U.S.?

[Sijmen de Vries, Executive Director & CEO]

Yes. Well, thanks for that other question. We were never -- thank God, we were never constrained with supplies. That's first. We -- as pharmaceutical companies should do, we gave a very early warning, as you should do, to the EMA system. And we know that not all of our competitors are always that ethical. That's the first remark. So we never were constrained. But the first -- the strong results in the fourth quarter were a combination of things. We cannot exclude, again, this COVID dynamics, but it was also somewhat extra buying by the NHS ahead of the Brexit, I have to say in this respect. But we expect that this performance is now actually because there's underlying good demand here, and we expect that this performance continues in a positive sense. And that's very important not only because the European business becomes far more significant than it was in the years before, but it's also important to realize that we have the commercialization capabilities, and we're rolling out the commercialization capabilities across the entire European Union and Great Britain, of course, to make sure that we can launch leniolisib in a very swift way into the European Union and Great Britain. I think that's an important aspect here. That is as important, or maybe even more important, for the future of the European business. Because leniolisib is going to be quite a significant product compared to RUCONEST for our company going forward. So I hope I answered that question as well.

[Christian Glennie, Analyst]

Yes. And then my final one. Turning to BD actually, as it sort of relates to that then. You laid out sort of, let's say, the type of assets, but I was just wondering about sort of your preference on geographical regions, sort of global rights. Is it -- could it therefore be a scenario where you maybe just take European rights of a U.S. company? Or do you -- would you pretty much be weathered to making sure you've got U.S. rights to a new asset?

[Sijmen de Vries, Executive Director & CEO]

No. We are -- of course, we prefer global rights because we also have a possibility to extend geographically, for instance, to Japan, which we haven't done yet. That's one thing. But secondly, of course, we will be happy to take U.S. rights or we will be happy to take European rights for product as well separately because we feel that it's important to leverage our commercialization infrastructure as soon as possible. We have the space for that. We want to do that. So we're not going to be choosy in this respect, whether it's European or U.S. or global rights.

[Jeroen Wakkerman, Chief Financial Officer]

Prefer, obviously, global.

[Operator]

[Operator Instructions] There are no further questions on the lines.

[Sijmen de Vries, Executive Director & CEO]

Okay. So can I now maybe summarize the end of this -- was the end of this meeting, is that okay? Ladies and gentlemen, thanks again for being here. We're very happy to share with you our full year results for 2020, where we showed that we continued to deliver our -- against our growth strategy despite the impact of COVID-19. We already alluded to it, record revenues, driven in -- especially in the fourth quarter here, driven by U.S. sales growth and expansion in the EU, progression of the APDS program and expectation that we can still launch this product before year-end in '22, which is an important first step on our third pillar of growth, where we try to seek to bring more near-term assets into Pharming, to accelerate the growth in the near-term as well. And we have solid foundations here from a strong financial position following the convertible bond to invest in future growth, namely in investment in expansion of the production capacity. We have a U.S. currency in hand now in the form of American depository shares. So that we are well positioned in all these things together to make investments in additional in-licensing or near-term in-licensing opportunities and acquisitions as they come to us in rare to ultra-rare diseases that we can launch in the near term to leverage our commercialization infrastructure. Thank you very much again for attending, and this is the close of this conference. Thank you.