On Monday, Oppenheimer adjusted its stock price target for Pharming Group (NASDAQ: PHAR) to $30 from the previous $31, while still maintaining an Outperform rating on the stock. The firm's action follows Pharming Group's latest earnings report and business update released on Thursday.
Pharming Group announced a 12% quarter-over-quarter increase in 3Q revenues, reaching $74.8 million, which was slightly below the $78 million and $77 million expected by Oppenheimer and the consensus estimates, respectively.
This figure was nearly on par with the second quarter's revenue of $74.1 million. Despite the lower-than-anticipated revenue, management confirmed its full-year 2024 revenue guidance to be between $280 million and $295 million.
In response to the financial results and guidance provided by Pharming Group, Oppenheimer has revised its revenue estimate down from $297 million to $287 million for the year. The firm projects $243 million in revenue from Ruconest and $44 million from Joenja. Additionally, Pharming Group reported an ending cash balance of $173 million for the third quarter.
The future of Ruconest, one of Pharming Group's key products, is facing uncertainty due to the expected FDA approval of an oral competitor, sebetralstat, in June 2025. Furthermore, the anticipated retirement of Pharming Group's long-time CEO Sijmen de Vries is expected to introduce some uncertainty as the company seeks to broaden its portfolio beyond its current main products, Ruconest and Joenja.
In light of these developments, while reiterating the Outperform rating, Oppenheimer has adjusted the price target to reflect the latest financial data and the potential challenges ahead for Pharming Group.
In other recent news, Pharming Group NV reported significant growth in its third quarter of 2024, despite a leadership transition with CEO Sijmen de Vries deciding not to seek re-election after a 16-year tenure. The company's product sales have shown robust growth, particularly Joenja, which has grown by a substantial 73%. The year-to-date revenue for the company has increased by 25%, even though it reported a net loss in Q3.
The company has also been focusing on expanding its pipeline and in-licensing opportunities, with a specific emphasis on increasing its market reach in Japan and Australia. Pharming Group NV's sales of RUCONEST remain strong, reaching $64 million in Q3, and Joenja sales have surged by 210% year-to-date. The company is also expanding its pipeline with a Phase 2 trial for leniolisib and is actively seeking clinical stage opportunities in various therapeutic areas.
Despite a net loss of $1 million in Q3, largely due to higher finance expenses, the company's year-to-date revenues reached $204.5 million. The revenue guidance for the year is maintained at $82 million to $95 million, with expectations to hit the midpoint. These are recent developments that highlight Pharming Group NV's resilience and growth potential amid significant leadership changes and a challenging global healthcare landscape.
InvestingPro Insights
Pharming Group's financial metrics and InvestingPro Tips offer additional context to the Oppenheimer analysis. The company's revenue growth of 30.64% over the last twelve months aligns with the reported quarterly increase and supports management's full-year guidance. An InvestingPro Tip highlights Pharming's impressive gross profit margins, which is reflected in the 89.39% gross profit margin for the last twelve months.
Despite the revenue growth, another InvestingPro Tip indicates that analysts do not anticipate the company will be profitable this year. This is consistent with the reported operating loss and negative EBITDA. The company's market cap of $584.82 million and a price-to-book ratio of 2.58 provide perspective on its current valuation.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for Pharming Group, which could provide valuable insights into the company's financial health and future prospects.
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