Pharming completes spin-off of DNage
Biotech company Pharming Group NV announced that, following the settlement agreement of May 2010 with the former DNage shareholders, which agreement initiated the spin-off of DNage, the spin-off has now become definitive.
In May 2010, Pharming announced the initiation of the spin-off of its wholly-owned subsidiairy DNage. The specifics of this divestment were confirmed in an agreement with the former shareholders of DNage (from whom DNage was acquired by Pharming) ("the settlement agreement"). Under this settlement agreement, Pharming's future earn-out payments due to the former DNage shareholders of up to €10 million will be settled through a payment of 5 million Pharming shares and a 49% share in DNage. Pharming therefore initially keeps a majority interest of 51% in the share capital of DNage. All parties now signed the "New DNage shareholders agreement" which implies that the spin-off has become definitive and DNage ceases to be a wholly-owned subsidiairy of Pharming. Certain legal formalities such as the transfer of DNage shares and the 5 million Pharming shares will take place over the coming weeks.
Pharming's initial 51% in DNage is expected to further decrease as and when DNage secures new specialized investors who will share the risks and rewards by purchasing newly issued equity in DNage. Until such new financing is completed, Pharming will provide DNage with an undisclosed but limited bridge funding. Thereafter, Pharming will discontinue the funding of DNage fully.
The spin-off of DNage is part of Pharming's strategy to focus on the commercialization of lead product Ruconest for acute HAE attacks, its clinical development for follow-on indications in the field of transplantation and making Pharming financially sustainable on the basis of future revenues from these priority projects.
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