Half Year 2021 Pharming Group NV Earnings Call (Webinar)

But these patients are using a lot less of our products because they only use it for breakthrough attacks, but however, there is a scope for growth here from <unk> and weakness certainly has a place and this market. Despite all the new innovations in brakes, and prophylactic therapies, because as I said before all of these therapies still suffer 2 different extends from the fact that <unk>.

I need breakthrough medication.

And for that breakthrough attacks. So therefore, we look forward with confidence to the future for Farooq and aster presence that Luke and his competitiveness in this and this had hereditary angioedema market andrukonis to be the continuing engine of our growth for our company.

I would like to switch briefly to led and your ownership for a P. D S.

A P D S.

As noted earlier.

Primary immune deficiency and primary immune deficiencies.

Patients that are suffering from and immune deficiency that havent. It hasnt all non course on known coast. These days means that you can probably do genetic testing and find a mutation that is responsible for that primary immunodeficiency, but as there is not many.

And many medicines against this mostly this is not done and these people are symptomatically treated so all these patients already treated by Immunologists.

Just but you have to do is do a genetic test.

Now let me Yosef.

Cause it's an effective oral select collective P. H E. B, a 3 kinase Delta inhibitor has the promise to be able to bring a new era for this AP so patients suffering from the over expression of this it is enzyme and and suffer from a P. D S.

So we're very excited to have these products in our portfolio and because there is a genetic test available that's commercially available and because these patients are already treated by a whole day immunologist. We are very confident that we will be able to find those patients and they are already and number of those patients diagnosed and to offer and the future ones.

And then you always have gets approved to offer them a cure for the disease as you can see on the top side on top and of the slide the U S. <unk> date is targeted at our Q4.2022, so it's not too far away and future that we are and that's why we are preparing ourselves already in all seriousness to treat.

To prepare to enter the market with any ownership.

And this is a serious disease as you can see on this on this slide.

And that's about the estimated 30 on is it 50 patients. So it's an ultra rare disease and in them and the top markets and as you can see 500 and in the U S 675, and the EU estimated and 119, Japan, that's based upon 1 and a half of these patients per million of population, but it could well be debt there is more prevalent there.

And we know because it's a recently discovered disease and 2013, new diseases and only discovered and they are characteristic across all global regions and of course, because it's a fairly on known disease and because it's so far has no consequence with diagnosing this disease because you can only 2 day symptomatically like many of the other primary immune deficiencies.

There is not much work being done and people spent and mostly young children of course, when the when the disease and establish itself in and childhood and spend a lot of time and.

Doctors' offices, and hospitals and on diagnosed and basically disrupted from their normal lives and even worse you see on the bottom end of the slide it goes back to work it starts with continuous severe infections permanent lung damage.

Gi disease.

So severe it impairs growth as these children.

And then severely swollen swollen and Oregon's eventually autoimmunity and unfortunately very high percentage of these patients die because of fatal lymphoma. So this is a disease that would like where 1 would like to discuss.

We'd like to develop a good.

Medication for and so far as you can see on the right hand side of the disease. The current treatment options are merely symptomatic you can see here and there's all sorts of course continues and to be all takes continuous steroids to suppress.

The the inflammatory reactions immunoglobulins.

EMEA globally and replacement therapy in them on a regular basis and all sorts of other symptomatic treatments and you can see hematopoietic stem cell transplantation as well that is not autologous, but allogeneic hematopoietic stem cell therapy transplantation, and there's really no approved therapy. So far that's why we feel that and then he owes him.

As a great potential to help these children and and and and all those people suffering from Aps.

So what are we doing at this point in time and I said, we are preparing ourselves for market entry and reinvesting in and in the prelaunch activities for <unk> for millennia always hip and we built and Apd S network at this point and time in the U S and in Europe as well so to the key opinion leader network and referral pathways.

Actively supported by field medical and diagnostic liaisons that we have coming into the market that they employ.

And those analytics and artificial intelligence that you find patients to identify patients the patients have been defined according to the most common symptoms and then of course artificial intelligence can help you to search databases of these patients that have the most likely chance to be able.

To suffer from a P D S and when you find these patients together with him and neurologist and their patient population than we can offer them.

Outreach and education, but also we can offer them on there our navigate a P. D S program and free to Air Corporation, we offered them free genetic testing. So in that case. They are they are now 100% confirmed to have the disease and therefore have a relevant.

For the future potential treatment of debt of their disease with millennials hit once approved.

And as of course, your sort of personal lives to personalized medicine. As you can appreciate because this is really treating the root cause of the disease. So we're very excited about Daniela shift.

Breasting seasoning and.

At this point and time in producing lineal and ship to have enough product available for future launches, we're seriously starting to invest and further clinical trials and the pediatric population because that is of course, the very relevant population.

And we're very seriously investing in these pre marketing activities and in these educational activities to identify and dose patients show. There is already a couple of hundred and total patients identified and Europe is a registry of patients and the U S. There's patients and would have been identified and we will start helping to build the patient organization that is still on.

The next system, but there is and primary immune deficiency.

And the patient to organization, we are who collaborate with us people to actually build up a registry as well so that we could identify and help these patients going forward.

So theres a lot of emphasis on this year on preparing ourselves Lenny OS hip and.

And there will be of course next year, well be even coming from closer to launch and also of the product.

Okay.

Let me now switch gear to the pipeline and the large unmet medical and indications for us he wasn't EBITA and.

As I was already alluding to and the beginning of the presentation.

We started.

Phase 2 b trial in.

To treat said to look at the efficacy of C..1 inhibitor in acute kidney injury. After myocardial infarction. This study is.

And is looking at treating up to 220 patients and it is randomized double blind placebo controlled of course.

And I think at the University of Basel Hospital in Switzerland as.

As the main site and other additional Swiss centers and we are extending we are planning to extend the study into a into further centers.

And across our across the world.

So quite a serious quite a serious complication it affects approximately 20% of all patients admitted to hospital and the incident and incidence may increase to more than 50% and seriously ill patients and the presence of risk practice. So this should not be underestimated and.

And we look forward to hopefully expeditiously executing on this study and sharing our results with you and in the future.

Unfortunately, our clinical trial for preeclampsia is still temporary halt due to COVID-19 complications.

As you are maybe we're all well aware off and that's.

The situation is still far from normal and most hospitals and doctors practices.

And the U S about 50% the doctors' practices are still closed.

For pharmaceutical work or pharmaceutical interactions because of other priorities that they have or because of COVID-19 situation, especially the delta for Aaron's.

And of course, you can understand that.

Acute care debt has been postponed.

<unk> has it takes priority over all the clinical trials.

First and therefore, we're very.

Of course disappointed that we haven't been able to.

Restart the preeclampsia study hopefully in the near future. This additional change.

What is still on going do is to 2 clinical trials on that we have started 1 of them. We are start ourselves and 1 is an investigator sponsored trial also in Switzerland, and extended to Brazil, and Mexico to treat patients hospitalized.

And with confirmed COVID-19 infections and to treat the complications of COVID-19.

And this investigator sponsored study and Switzerland, we look to treat up to 150 patients.

And in our own.

The trial in the U S and we look to treat up to 120 per participants in the trial now both of these studies are adaptive design trial and their hypothesis says.

And seeking trial confirming trials. So therefore, we can actually stop these trials at any point in time and do injury. My analysis, and then take a draw conclusions from dose and that's exactly what it is probably going to happen.

Because as you can appreciate the situation and Switzerland has improved with regards to COVID-19, and therefore, 1 of these things that were probably looking at and interim analysis results towards the end of the third quarter on this study and probably also in our own U S study and to do an interim analysis as well and draw.

Conclusions from those interim analyses and decide on next steps. Following the results of these trials, we will obviously when we have this data and our hands. We will obviously update you on that.

Per normal per press release.

And a few words on LTE all on all 5.

Oh tier 1 and 5 is or was the previously undisclosed orchard has been working on that.

Combined for a while already and therefore, we are very very pleased to have this compound and our hands because this combined already shown that it actually can name search.

1 O more functional copy of the relevant to surfing 1 gene that expresses the C..1 inhibitor into patients' own hematopoietic stem cell therapy stem cells and this is because it's ex vivo, it's not actually affect patients with fire Sis that bring the bring the relevant gene into the patient cells, but it's done.

Ex vivo to patients gives you a lot and.

The the gene gets inserted in the factory and then the patients get their own stem cells back weighted relevance with the correct Jean and then did you.

And is it should be producing C..1 inhibitor debt was.

King before.

And preclinical studies to date or already Oh, GL demonstrated the gene expression via it isn't empty collateral mediated transduction, that's done and the factory not and the inspections themselves.

And multiple human cell lines and also achieved production dose Airlines also achieved production of functional C..1 inhibitor as measured by the clinically validated assay that is why we are very excited about this because we already have seen some data on the on this and therefore, we look forward with confidence to develop this.

The orchard on the data on the the collaboration Orchard will do the preclinical development.

Or should we also take care of the manufacturing because that's a specialty of course every patient is more or less yourself batch.

And then we will do the clinical development.

It was still help us with a manufacturing and other products until such time that they come into the market at which time. We will also have had a tech transfer of foot and manufacturing on the product we will pay orchard apart from the upfront that we have paid and we will pay orchards.

Regulatory milestones and we will pay orchard undisclosed royalties typical for this stage of development and of course future success and our sales success milestones, which we are very happy to pay because it means we will have significant sales by then.

So we're very excited that we have been and to enable W have been able to deliver on this on this in licensing compound that's that extends our.

And our presence into and and not only extends our presence into HERA, Jerry angioedema market for a very long period of time, but also it.

Has the potential to provide a cure for her Terry angioedema.

Having said that I think is.

Talk to you too old of highlights from the first half this year and I would like to hand over to you now to take you through the financial highlights for the first half you're doing.

Thank you very much assignment.

And as you will remember in Q1, we saw that the U S health care economy significantly it was affected by the second wave of COVID-19, and.

And we saw a turnaround in Q2 doctors officers reopens and diagnostic and routine patient appointments and initiated a recovery across the whole pharmaceutical sector and for refinish sales sales as well so the start of the Ruger net recovery in the U S was driven.

By and increase in new patients and product demand and I'm, saying the start of it because as Simon just said maybe half of the doctor's offices are open and so the remainder of the offices hopefully we'll open the and this quarter.

And what did that do to the total revenues.

While the revenues and the first half came to 93 million 93.2, whereas last year, we had a revenue of $97.8 million and.

And that means that the revenues in Q2 increased by 15, 1.5% comparing it to last year, if I compare it to the first quarter of this year. It was an increase of 14% and.

And that by all means is a stellar.

Recovery and a sharp increase in revenues and if we look at the splits the regional split between the U S and and and the rest of the world as we saw a.

16% increase in the U S sales.

You have $48.4 million and a decrease in Europe and the rest of the world and that was mainly caused by phasing of ordering.

If we didn't go to the to the profit starting off with the gross profit.

That amounted to $83.8 million.

And this year and the first half, whereas last year. It was $86.9 so show a and.

Slight decline there, albeit the gross margin improved slightly and so the gross profit developed basically in line with the sales.

And if I look at the operating profit.

That was $17.2 million, whereas last year, it was 35.7 million and.

So the operating for profit for Q2 decreased by 23 per cent.

And that was because the operating costs increased it increased from $51.8 million to $68 million in the first half of this year.

And why was that why did the operating cash.

Costs increased while it was a deliberate choice.

And basically supporting the growth of the business.

A few elements of this is the combination of increased R&D expenditure that is $6.5 million the launch preparation and manufacturing costs for linear on the ship that Sam and just referred to for example, the navigate a P. D. S program the patient identification program.

We had an increase and employee numbers.

For this year, but also obviously the second half of last year, which is now reflected in the and the financial numbers and the cost and and we had a significant increase in cost of liability liability insurances share based compensation and increased compliance and control costs and the compliance and control costs. It's also to support the growth.

The company is also related to the NASDAQ listing that we got in December last.

Last year.

The net profit for the first half came to 14.4 million, whereas last year. It was 24.3 million and that is a result of the lower operating profit, but offset by currency visuals and lower funding costs.

Looking at the cash and the cash equivalents.

We ended with cash of $189.8 million.

And that compares to 2 and on a $6.7 million at the end of last year and.

That was a result of on the 1 hand, the positive cash flow from operating activities on the other hand cash outflows from from investments.

And a $25 million milestone payment to bausch and that was related to the re acquisition of the North American Ruger.

And <unk> commercialization rights and that deal was done in 2016 and is now complete and is in with this payment.

And going quickly through the income statement you see the numbers here and I've told most elements of the story revenue from <unk> 97, and 8 to 9 to 3 point to gross profit in line without going down. The other income went up and that is mainly.

Grants from increased R&D activities.

See here the increase in the and the operating cost and the biggest increase in R&D and again that is and the growth of the company going forward.

Operating profit of 17.1, and $5.2 million in the first half against 35.7 last year.

And if I look at the.

The other elements between operating profit and profit before tax 2 elements to mention there is from last year, we had a big on the financial expenses that was related to funding we had a 1 off settlement payment for a loan that we repaid you may remember that that was the Ob met loan we replaced it with.

A.

Convertible convertible bonds, which was cheaper for us.

And for this year, you see and all the finance income and a.

Plus a 5.3 and $9.8 million and that is the currency effects because we have.

Total deposits in a euro denominated legal entity.

So that was a positive impact.

Profit for the year of $14.3 million against 23 last year and the basic earnings per share 2.2 cents per <unk> per share, whereas it was 3 point true last year.

The balance sheet, the key changes and the balance sheets to inform you about is.

On the non current assets at the right of use of assets step to increase significantly because of the new leases, but also the extension of the existing leases related to production facilities and.

This is obviously related to the <unk> 16 accounting regulation.

Deferred tax asset went down because we use them against the current a current tax at the bottom you see the movement and the cash and cash equivalents that I just have just talked about.

<unk>.

On the liability side of the of the balance sheet.

Shareholders' equity, obviously went up because mainly of the profit for the year that we that we earns lease liabilities went up as well because of the reason I just mentioned the <unk> 16 and on all the financial liabilities at the bottom you see that last year. We had this liability of 25 million to 2 bausch and that is no.

Now completely repaid and those are the key developments in the in the balance sheet for the first half of this year.

And going through the cash flow quickly you see the on the second line net cash flow from operating activities and the op.

Operational cash flow went from 44.8 to 16.4, that's a decrease of $28.5 million and that is largely because of the operating profit and hence the increase in operational expenditure.

You see again in the middle of the $25 million payment for Bausch and so again thats not a P&L impact only a cash impact.

Impact and at the bottom again, the the cash and.

And cash equivalents development over the last 6 months and that was a decrease of 16.3 million on and I explained the key elements.

With that this was the financial review for the first half and I'd like to hand over back to Simon.

Thanks.

So.

Looking at our wealth business supported by our commercial sale and a growing pipeline for the treatment of rare diseases and unmet medical needs.

On the leaf products generating $93 million and throwing off a positive cash flows that enable us to fund all of these development programs without having to go and do financing rounds and that is a very pleasant situation to be and for a biotech company as you normally know a bite of companies make.

Loan losses.

And need a lot of financing rounds, and we've done a bit in that respect and the process.

Shareholders that have been with us for a longer period of time very well know.

And we are therefore, very proud of where and the situation. We are also cognizant of the fact that you know we are profitable and people expect us to continue to be profitable. We continue to be expect to be continued to be profitable, but as you can see we're also investing for the long term because of growth of course and development are from new.

Compounds actually is.

A time consuming and money consuming business and that is what this is all as well, but nevertheless, we have a potential near term inflection point at the end of next year with the anticipated launch at the end of next year or any early Sip in.

And in license for Novartis for the treatment of Aps as we talked about before so that as an immediate opportunity to accelerate our growth beyond the growth to connect and deliver.

And we're also targeting those new indications with C..1 inhibitor and that of course takes longer because it's the only phase 2 studies and there will have to be studies following pivotal studies following.

And as you know so that it will take longer but again, we have the wherewithal the financial wherewithal to execute on that without having to go to the market to refinance the company and then.

Of course, we have early stage compounds, such as that the gene therapy and the OTR 1 O 5 gene therapy that we have and license.

That is and preclinical and our pump.

Product to offer glucose a day, so enzyme replacement therapy and already stage pipeline. So our pipeline begins to become more balanced.

But we still have space of course.

To further leverage the commercialization structure that we have and the U S and Europe. So we're still hunting photos and new in licensed sports or acquired assets. So that we can actually.

Beverage that commercialization infrastructure and even further.

We are also expanding manufacturing capacity.

To support so they continue to supply and who connects and C..1 inhibitor for the bigger indications so that that part of social security. That's also quite costly operation of course, but comes or doesn't come from the from the P&L, but from the Capex side of the business of course and last 1 on leased we have and experienced leadership team and on board of director.

And with a strong balance sheet and this combination we feel very very confident that we can support is ambitious growth strategy towards the future, including potential M&A, our M&A transactions and that is of course also the reasons why we went to NASDAQ back in November and back in December of last year to get a secondary list.

And on NASDAQ. So do we have the currency available in the form of American depository shares should be fine and attractive M&A targets and that's where we can use this as payment for the shareholders and all that on that target. So that we can actually build a business combination and have additional near term assets to launch and probably also addition.

And our technology and can grow the company, even further and Derisked the company even further.

So let me share with you is the final slide for this presentation the outlook for the remainder of 2021.

Because we saw a normalization of the of the market conditions in the USA, but also in Europe, but the market conditions are far from normal.

We still remain optimistic about the future for the remainder of 2021 vaccination infection.

Vaccination per se.

And as you increase and at various populations. So we remain optimistic that we can continue do increase and revenue. So we saw between the first and the second quarter of this year for the following quarters of this year. However.

We cannot of course predicts and.

And further outbreaks over value and solve their COVID-19 virus that may result in periodic market disruptions. So barring that we remain optimistic for the 4 day to put it in your future.

We as I said before and despite.

Despite all the investments that we are doing we maintained positive net earnings for the remainder of this year.

We will continue to invest and those production facilities.

Both from a lady ownership and for FY <unk>, we will also.

Continuing to invest and dose of launch critical medical affairs, and pre marketing activities for linear on a sip and the registration enabling study and the ongoing clinical trials for C..1 and other development activities, including.

OTR, 1 O 5 and announcement of leased and we.

We'll continue to look.

And investments or M&A and transactions to in life as new development opportunities and assets. So that we can actually find additional assets to leverage our commercialization infrastructures and in the future I E.

Commercialization assets that can be launched within the periods between now and 3 years time. So that we have a nice launch agenda with linear only ship coming at the end of next year, followed by a compound and a year and a half and later after that and hopefully even more because once we set off on that synergy. We are really we are quite.

And to continue to execute on that.

So this leaves me for the end of the presentation and we give no further specific financial guidance for 2021, and we are now of course happy to answer questions that may have come through.

And I.

I see here that there is a number of questions that are that have arrived a day or so.

Questions that came before the webinar, which I will deal with the first and subsequently.

It'll be self questions that are.

And coming in as we speak.

So first of all you see here a question about the acute kidney injury clinical trial to start in Q1, what occurred situation is.

And when we could expect the first data. Okay. This trial has just started in Q1.

We are extending the number of centers and the near future and we have been stating that we aim to deliver and if data on this trial by the end of 2022. So next year end of next year that seems to us given the debt the beast.

The size of the trial and the frequency of the disease and the number of centers seems to us a reasonable expectation, but it is expectation.

And as Ken of course.

From different.

Also can become faster if we are successful and getting more centers engaged and and expedite the recruitment of those patients but it is for now the expectation that we and we have internally.

And we have communicated externally as well.

So when can we expect and update on the COVID-19 trials I think I already answered that.

Decorative design a study so we will be choosing for an interim analysis of this study and then of course, we will make make.

And make a we will communicate of course on this regardless of the of the re sales because that is how you do that.

Hugh you published results.

Whether it's positive or negative and then we will make a draw further conclusions and make further clouds. If the data of course and merits merits debt because he gets the way forward for the Covid trials as I stated before the expectation is this debt. This will happen later on in this and this quarter.

Dose dose interim analyses.

And then there's a next question about share price and that's an interesting 1 maybe I'll start with the second 1 you don't have share buybacks being discussed within the management team could you answer that 1 yes, I don't think so.

Farming engine and in the kind of development phase 2.

And to enter into into share buybacks. We also haven't paid dividends and for the foreseeable future I don't see us paying dividends. What we are doing is investing in and the growth of the business you've just seen that in and my explanation of the financial numbers that we want to invest in and new licenses, we want to invest in our own R&D.

And basically to further build and balance the product portfolio.

So in that context, it does not make sense to do share or share buybacks.

Because you know maybe you could also say about whats the plans to create short term and long term value for your shareholders. I mean, that's so along the same day exactly that's basically I shouldn't repeat here to complete a 3 pillar strategy right because that's what we that's what we doing 2 to create a short term and and also longer term value the short term and pod as the years and Ruger.

Net sales.

Driving international expansion, but also increasing our market share and in the U S.

And for the longer term well, we've got the <unk> the portfolio of <unk>.

Our own clinical and clinical studies and clinical development programs.

And the third pillar is is buying licenses or businesses that are that will create value for our farming yeah.

And all of the shareholders are disappointed and the development of the share price.

Do you have a view on the curve because I think it's always difficult as management to 2 to give you to be honest on the on the share price and I felt very happy right now.

Luckily, we probably should say the market is always right.

And the future future will tell tell whether that is the case.

And so I don't have a strong view to share on this on this call too. So there is there is of course this thing and the biotech industry debt. You know if you are not profitable then the company has low a promise and obviously and often you see a lot of value in these companies.

Promise for the future of course, because there is a promising programs going on.

On the tragedy of this disease.

And this industry is that once you become profitable.

And people start looking at the bottom line and expect that the bottom line increase all the time, but that is unfortunately in the industry, where we are where you have very long development cycles, and very low capital intensity of developments not always the case, because when you want to progress your growth further than the growth that you can get derived from 1 product you have to invest and therefore, you have to look at other per.

And so what are what is this company doing with the investments what are they actually going to deliver and this is going to create additional value and that is the beauty of course and once you start getting profitable there's too much attention to the short term and to the bottom line and that's my personal experience now having and that this company through a phase where it.

And it was continuously printing shares to stay alive and wherever you are now on a situation, where we are comfortable between and vertical mass because we could actually fund.

All the developments from our own cash and don't have to go back to the shareholders. All the time, but that's still you'll find this quite frustrating at least that is my experience. So yes, we should say day market is always right. We say that the market is always right, but now this is.

You could argue we've got almost 2 prongs of attack right first Ruger and asked that is generating the cash to invest in and all the other initiatives and so we are managing Ruger and asked for growth and also for effectiveness and efficiency.

And with that we create day cash to to invest and fuel the growth of the of the business and.

And I guess your room was already alluding to it as well we have incurred quite a bit of course debt will not go away because of the comply additional compliance.

Necessities for for the NASDAQ listing and it is a significant increase and our India liability insurance associated with and NASDAQ listing, but that is the price of doing business and does the price we're getting access to the U S markets and the U S investor market I suppose.

That we have to live with and where we will bear the fruit from once especially we execute on and on an M&A transaction and and at NASDAQ.

Share will become a lot more important than the Amsterdam share, which is currently the case and I think that's some sort of a see a situation where we are a new era of liberty and between net respect and it's it's a little bit frustrating as well to see debt costs are increasing that much and you don't see the direct benefits from it at least and it's my personal experience as well here and now and those.

And so I might want to get rid of it.

Yep Yep.

Business development.

You would be doing the acquisition of a late stage therapy, what kind of product what you'll be looking for that's an interesting 1.

And before that we primarily are looking for.

Rare diseases, and our ultra rare diseases, because that is the expertise that we have in commercialization and that is why we know what we're doing there and why we feel very confident that we can launch a product like and you always have been and ultra rare disease, although ultra rare is something else and heritage angioedema.

You have not heard as before and that we are intensely looking for identifying patients and heritage.

Demma, although there is still quite a few of them on diagnostics, because there's quite a few products in the market and quite where we were exactly.

First want to go into the market and it was already at a relatively well described disease from the 19 eighties on woods here, it's a different SKU and a P. D. S. We have to develop the market ourselves as a couple of hundred patients that have been discovered but this will be partly and new skill set that we will have to develop however, the intense.

And the and the sort of direct and personalized approach to this market is the same as higher carry angioedema and that's why we feel very comfortable to look for compounds that are either early career or rare and also rare because of the COVID-19 or from the contacts debt development programs that you have to do on these programs are overseas.

<unk> financially and overseeing both from an organizational perspective, so that's why we look at specifically.

Specifically at these kind of these kind of opportunities and I can tell you. There's plenty of dose we have continuous discussions with several potential partners are or targets on the on on opportunities.

And then there's a question that we are chose to list on NASDAQ and be prepared for the acquisition that would launch farming and the states that's correct.

And I just gave you. The update is there is no update our business develop but there's never any updates unless you have a deal of course, and then we announced the deal.

But the update is that we are actively discussing with lots of quite a few targets in our in parallel and debt we have a very well.

Balance the business development.

And the process in the company established by now.

Okay.

This is a nice month can you explain why operating expenses increased so much in 2021, yeah, I think I can.

And there's a bit of repetition here because the key element of the increase in operating expenses is in R&D, we increased the R&D expenses by $6.5 million.

And that is again in the future of our business part of that was in in a linear leadership development and.

And launch preparation and <unk>.

Also and manufacturing costs, we invest it so we're really preparing investing for a successful execution of successful launch of the land and yellow ship by the end of the next year.

And then there was the increase in insurance costs.

Costs share based compensation and the increased compliance and.

Control costs.

And the latter will.

Something that we need to do because of the NASDAQ listing, but it's also improving the business I am convinced that they will make.

The company more effective and more efficient over time, but for now we have to investing and that's.

And that shows in the and the P&L and the last bit is an increase in and in a number of employees again supporting the growth of the company.

And I don't think there was do a lot of in the increase in operating expenses between Q1 and Q2 right that was no corner.

That's correct, yes, and stayed more or less more or less flat. So that's not sold out we actually you can expect it to continue to go up significantly without US right now, but there is of course, the timing effect from the second half of last year, where we hired people that we that we didn't see now that will wash out and are in the second half of the year.

And.

Well the insurance gross for example is for the whole year. So some of it will come to you some of it will not as shown on it right now.

And of course, when new and new program starts and it will be a there will be some increase but also when programs come to 2 and and there will be some decrease so it didn't really elaborate and the Washington REIT debt okay.

And then a question about our Kettle line and when will the Kettle I'd be ready is everything still on track, yes, the coastline and still on track.

C..1 inhibitor line.

We are.

Working diligently on getting a getting the first milka.

From the from the cattle.

2 actually do process development, because obviously the manufacturing process, although its the same protein as as isolated from the rebate milk.

There's still and she can.

And I appreciate and co Milka as for instance, a lot higher volume and a lower concentration.

And therefore, there is a slightly different process necessary. So our scientists have to work on optimizing the process water purification on the compound.

And because we want to have obviously the optimized heels and we of course want to have a very good cost of goods. So that's work. That's that has been initiated subsequent to that there will be less scale production of.

C..1 inhibitor from cattle and debt will be used for a preclinical experiments to also show the regulators that we're dealing with the same with the same compound now we know that of course, but the regulators need to be convinced with data on.

We did.

And right. Some of these data back in 2011 on 2012 from the old Cat lines, but we obviously will have to show that again to the regulators. Although it's the same catch a line, but that's just that's the regulators for you and that's why we were working on subsequent to that and.

<unk> will be up beautifully and it'll be able to upscale the production to higher levels and sort of intermediate levels.

Where we actually will produce the batches that are there.

Non useful clinical trials and indications where of course, we will go ahead and so for instance, and 50 acute kidney injury study.

Share to be coming back and the positive results, we will be attempting to do the subsequent study if that was a pivotal study with the milk products from the from the cut on line because that is clearly where to cut line and step out for so so far so good everything is still on track, but there is of course, although we know that the same.

And although we know that we had good results from the from the Kettle lines about 10 years 90, 10 years back we will have to prove this again and have to build up a dossier, which we will have to submit to the regulatory authorities, but it is just execution mainly execution on this at this time and with a few new.

Tips and tricks from our scientists to make to you better debt of course the processes.

And was developed and long time ago.

But that I think is the questions that we have on the slides here I don't see any other questions coming in and there was 1 more question that also came in here.

And then your ownership and ask what will be the cost per treatment per patient on an annual basis, if any on as it would be approved for commercial use well. It's a very interesting question. What you do when you have and ultra rare disease like dots and you make a careful evaluation on the burden of illness and death.

What is actually happening as we speak.

You will also then incorporating that the results of your clinical trials.

And of course, if a clinical trial, if a drug is very efficacious.

Then you have a lot more to offer.

And then when you have a drug who said the fk's efficacy yourself. So true that will depend on that on the basis of that that will be the assessment then of added value of these kind of compounds and from that you will derive a typical treatment cost per head per year, but he always ship, it's an ultra rare disease. So we.

Did it come in the typical realms of ultra off price for ultra rare disease drugs, but of course, we can't say anything about it at this point in time.

We haven't determined that yet and if near future you will you will hear as and when the product will be approved what's the annual pricing will be debt. We have agreed with the authorities for reimbursement.

The net is an interesting question about a reverse share split could that debt.

Help.

That's interesting could that help and reverse share split.

Well, we have some ideas about attitude.

Although what will it help right.

And how are we going to increase the share price and I think in this and the first first instance is growing further.

Our current business and also the product portfolio and on.

And the on the reverse split.

No no concrete plans at the moment.

So I think its EBITDA.

A bit too early to say anything about that because there are no plans.

And well time will tell how are we going on there's probably 1 exception to that right when as and when we do.

And M&A such action of course, and we pay and are in a D. S. S. A we paid a targets and Eddie esses debt as the time and that's a very likely scenario that we will follow in that case, where we need and at the same time bring the Amsterdam share in line with the 80 S. I E. The share the avs scrutiny, Ken Emerson and I'm sure So and death case, they will be proposed.

So to put to shareholders to do at the same time, Florida for approving the transaction there will be at the same time the proposal to actually do a 10 for 1 reverse share split sort of debt and the Amsterdam share is the same as the as and NASDAQ share that's the only.

The reason why I at this point and time and I guess you are the same and opinion right because think of the offer and over refer our chefs, but otherwise it doesn't make any sense and our minds to do this a fiduciary for a share it with him.

It's more of a technical exercise and I'm, a value, creating and exercise.

But it also creates a lot more transparency of course from you have the similar.

Type of surety, and Amsterdam, and and and and and and New York when you've done that debt rehearse.

As a result debt of that transaction up and M&A transaction.

Hey.

So I think we're almost coming to the end of our time here, we have about 1 minute left and I was just checking here if we see any other questions coming in and I don't see anything on my on my screen here. So I think we're coming to the end and I would like to you know and therefore.

I'd like to close this this meeting with a couple of closing remarks.

As we said before the market conditions were quite abnormal during 2021. The first half we sold a recovery that we were already seen at the end of Q1, and we were very glad that the recovery actually.

But it was realized we remain.

And optimistic for the remainder of 2021 that revenues from sales will continue to increase.

And that's.

And we'll hopefully come back to more normal market conditions, we're very excited.

About the fact that we have been able to in license. The early stage gene therapy. We think that's a nice stool now as you all that we have and are in our portfolio now and we look very much forward to working on that and sharing.

And it results from any sort of pre.

Preclinical experiments that may come with you in the near future by means of press releases were also of course.

Very pleased that we have started and being able to start in earnest to prepare the market for the launch of that and you're obviously, because we look very much forward.

And 2 you know through the year.

And to delivering the file to the FDA. Once we have completed the clinical trial and all the other work is needed for regulatory filing and and get to Purdue for dates from the FDA and a date when the EMA will make a decision that's of course and next year.

Before that time, who really back of course with other results because as you know by now as we will have another RV sales call friends on the basis of our full year results, which is anticipated somewhere in the beginning of March of next year.

We thank you very much for your attention here Tonight, and we hope you found this and interesting a conference and we look forward to sharing more news with you via press releases and or.

Future a webinar on the basis of the full year sales for 2021, Thank you and good night.