Welcome to the Pharming Group NV Half Year Results Webinar. Throughout the call, all participants will be in listen-only mode. And afterwards, there will be a question-and-answer session. Just remind you, this conference call is being recorded. Today, I'm pleased to present Dr. Sijmen De Vries, the CEO and Robin Wright, the CFO.

Please begin your meeting..

Thank you very much for the introduction. Ladies and gentlemen, good afternoon. Yes, I'm Sijmen De Vries, indeed the CEO of Pharming and indeed here with Robin Wright our Chief Financial Officer and we have the pleasure to present our first half results to you.

Before, we do that, of course, I would like to draw your attention to this forward-looking statement slide, I'm sure you are familiar with the statement. Please be aware that we will be making some forward-looking statements, which fall under the protection of this Safe Harbor statement.

Having said that, let's move on to the next slide dealing with the half year results and take you to Slide number 4, one of my favorite pictures, of course, from this presentation because as you can see, we are very pleased to report these results at this point in time, with very strong growth from existing and new patients using Ruconest to treat their HAE attacks and increasingly Ruconest also becomes a preferred therapy for breakthrough of HAE attacks, the patients using drugs for lactic therapies.

I will come to that in a minute. And, of course, I will not go into any details with regards to the numbers. I will leave that to the Chief Financial Officer would rather take you through a little more of the -- these things behind this sustained growth which we have now showing for the third year in succession especially the U.S. market.

So, let's move on to what is behind this growth of Ruconest and if we can see there is a changing HAE landscape, which is really a good news for patients suffering from HAE because multiple treatment options providing better management of HAE has become available.

However, first and foremost, I think behind the growth of Ruconest here is that, when you come late to the market, obviously you get severely affected patients that look for a haven which can help them and that was Ruconest.

And Ruconest, of course, is a very high dosed version of the missing protein, the protein replacement therapy and I think the biggest driver behind the growth of Ruconest so far has been that this has really affected patients who need a reliable C1 product to treat their attacks have come to really recognize the power of Ruconest.

Then, there is this change in landscape of new subcutaneous plasma derived C1 inhibitors products and a subcutaneous long acting monoclonal anti-body that has become available in the prophylaxis segment and has meant that there is a considerable improvement for the patients in the prophylactic management. It has definitely become better.

However, it's still a case that over half of those patients using prophylactic treatments and this is based upon published data and FDA analysis still suffer from breakthrough attacks.

That's become a lot better because it's used to be that the fast majority of patients were still suffering from breakthrough attacks, but still has a considerable amount of breakthrough attacks to be treated.

And there, again, we see big opportunity because we see patients coming in and Ruconest being used as the reliable treatment for their breakthrough attacks associated with these -- also with these new prophylactic products.

So, we are confident that Ruconest in its current form will continue to be able to drive the growth in their changing HAE landscape. Now, let's move on to investment -- to increase capacity due to strong demand, the next slide here.

So, we have -- we were of course planning for additional production facilities because we saw the demand growing from a couple of years ago. And we have our next second production facility in Netherlands already built, which is waiting for approval with the authorities.

We have a third larger in building design stage with construction to start in the not to distant future and will even as a fourth larger unit to follow. So at this point in time, we, however, have come to see that the underlying demand for Ruconest increase -- continues to increase both in the U.S.

and rest of the world beyond what we were expecting especially here. We see that because you have to very early on in the process of production which take quite a bit of time to production you have to dedicate the product to Europe or U.S. because there is different release specifications for both of these markets.

We saw that especially the ad hoc supplies that we have to divide that we have to provide for various EU markets as a result of temporary shortages of competitive plasma derived product has been putting pressure on our planning to supply the European markets.

And as we concurrently sell more than we can release, we foresee for the coming -- for the remainder of 2019 that we have some pressure on inventories especially here with regards to the European markets because of the -- of what I just told you about the fact that we were confronted with these unexpected demands in the European markets.

So, we will, however, be able to produce sufficient Ruconest to eliminate any supply pressure, once approved, once the second site is approved either by one of the main regulators, EMA or FDA, and we anticipate to have that in-hand by Q1 2020.

Also, we are already currently processing the milk from that new facility under current, such that you will be having inventory ready by the time the facility is approved. This site, by the way more than doubles the existing capacity and the third site will add 60% more capacity on top of this. So, let's look at it a bit further.

And let's look for the long-term sustainable revenue growth that we are striving to build here at Pharming. And then, if you take a little bit of a look to where we are now, we have all the capabilities at this point in time needed for sustainable high growth we believe. Today, we are really a profitable growing international biotech company.

We have one launch product, of course, in the market. We have $600 million market capitalization and we are fully integrated from primary research to production platform through to commercialization. And tomorrow, we have much more ambitions, we aim to become a real global we could say because we are not really global at this point in time.

Pharmaceutical company but notable products, the blockbuster potential in rare specialty diseases and in large unmet medical -- in large unmet medical need indications.

And then, first and foremost, I would like to draw your attention to the project that we started very recently that is to expand the C1 inhibitor franchise Ruconest into new indications and then pre-eclampsia is of course, the first and foremost plan that we have at this point in time.

So, life threatening multi-system condition in pregnancy that lead to increased maternal and neonatal mortality and mobility. And there is a lot of cases here. It's more than 250 million cases recorded and there is 50,000 maternal effects associated with patients who proceed to eclampsia.

And many more caused by long-term irreversible damage to organs of the mothers that were suffering from pre-eclampsia. So, it's a very, very high unmet medical needs.

And treatment, unfortunately is very limited ability to treat this point in view, it's really delivery of the baby and over half of this new born suffer from growth restrictions, learning difficulties or other disabilities because they have to be delivered prematurely.

And however, the season can be even more dramatic, the early stage of course, the disease need that you have to deliver the baby to save the life of the mother and when the baby is not viable, and of course, absolutely horrible and dramatic and absolutely no approved therapies.

So we were very pleased to receive the initial approval from the Dutch investigating center's ethics committee very recently. And we are working now at this point in time to start that the Phase I and II clinical studies in the first Dutch center.

And we are also waiting for the Australian authority, who are in final stages of review to also start the second site, where we will start initially and of course with the first stage of the study. And then, we will of course report as we said before as and when we finish this first stage of the study as we move to the next stage of the first study.

The main goal obviously is to prolong a safe pregnancy for PE patients as long as possible to improve the chances of a good outcome for delivery. So, this is a very, very important step forward as you could see, it's very novel as well to have a treatment available for pre-eclampsia.

And we look forward to bringing you further up to speed as and when in the future we get the first results from the first stage of the study. Then, we move on to a next very important indication that we are investing in Ruconest, again, we also intend to bring the franchise further forward here. This indication acute kidney injury.

It's an acute kidney injury that we look at as a result of exposure to medical imaging contrast material and has a huge unmet medical need here as well. There is 40 million contrast examination in the U.S.

alone and 100 million worldwide with about roughly 20% on -- which equals to about 8 million patients in U.S., with patients with known or suspected kidney function impairment.

And a considerable amount these patients between is estimated between 6% and 21%, go on to suffer serious kidney injury often irreversible despite ICU care depending on type of scan and medium used. And of course, a very important, we already had some data in this.

We had a -- I might remind you last year, we had the so called Basel study, we had very positive results from a Phase II properly designed 80 patients, double-blind placebo-controlled investigator study by Professor Gustaaf in Basel and with patients at risk of nephropathy resulting from these contrast and [use] [ph] determination.

And we found a statistically significant effect in reducing angle which was the primary endpoint for the study in patients undergoing, especially in patients undergoing the PCI, the percutaneous coronary interventions.

So, that is why on the basis of this data, we decided to move forward with a formal phase -- I will call it a Phase IIb study, where we will be looking at various dose and regimens of Ruconest in those patients, those group of patients undergoing the PCI procedures.

And we have indeed the attention that we foresee to be able to start taking the trial of course subject to approval, the regulatory authorities, I must say here, we foresee to be able to start this Phase II trial.

Later on towards the end of this year to prevent acute kidney injury in patients undergoing PCI, and again, will be led by Professor Gustaaf in Basel, we will be liking having some 5 to 6 edges in Switzerland and Germany possibly also participating.

And at this point in time, we are looking as there'll be a much bigger study than last time, it will be about 160 and we proceed to have probably three dose arms and the placebo arm.

We'll be again measuring angles the primary endpoint as well as of course create more classical measures of the renal impairment such as creatinine and we will be having and that's in contrast last year's study also of course a six month follow up to assess the long-term effects of this.

So, we're very excited to be able to move on to these new major indications for Ruconest which will of course no need to say that dramatically will change the future of Pharming because it's much larger indications of much larger patients groups and we currently are serving.

And that brings me to the last slide that I want to share with you on the other investments, but not the least one of course because the exciting bit is of course that we have other products in our pipeline that is alpha-glucosidase, again protein replacement therapy for treat pompous disease.

We have invested and we are investing of the production of alpha-glucosidase also from our proprietary transgenic technology platform, we have at this point in time dialogues ongoing with key opinion leaders on the design of the future clinical programs and at this point in time, the plan is for a multi-dose Phase I/II study, which of course will mean that we'll be starting some later than maybe originally intended and announced, but as this is purely due to the fact that we need a lot more material than for a single dose study.

But obviously, this time we'll be caught up more than that because we can skip one stage of investigations. Obviously, this still to be confirmed by the regulatory authorities. So we will of course update you further when we have further news from any interactions with the regulatory authorities on this one.

And last but not least in our strategy to further in-source of our manufacturing, we announced earlier this year that we completed an investment in our fill & finish partner BioConnection. The manufacturer of the final sealed vials of Ruconest and also the future probably for alpha-glucosidase.

It's a fast growing profitable private company with a global customer base and we're very proud to be able to actually help to support them to make a strategic investment to support our capacity expansion that will of course help us to meet the growing demand for Ruconest and for further products such as possibly alpha-glucosidase and others in the future.

That is what I want to share with you today. And I would now like to hand over to Robin, our Chief Financial Officer to share you a bit more -- talk to you a little bit more in details about the numbers for the first half.

Robin?.

Thanks Sijmen. So, it's always good to be in a position to report that we are continuing to deliver record revenues and that is what we have done again this quarter and this half. The first half revenue increased 31% to €77.9 million compared with €59.5 million last year in the same period.

And quarter-on-quarter, we also managed to lift revenue very significantly from by 21% to €42.7 million in quarter two compared with 35.2 in quarter one for the reasons that Sijmen has just outlined. U.S. product sales within that increased 33% to 75 million compared with 56.3 million last year.

Again on quarter-on-quarter growth was the same at 21% reaching €40.9 million compared with €33.7 million last year reflecting very, very strong growth in our highly competitive marketplace as Sijmen has just described. And in the EU and the rest of the world, the product sales were relatively flat. These markets are very competitive.

They are much lower priced; it's much harder to move the needle in those markets. We did see increased competition in certain eastern European markets which unfortunately affected our partner SOBI a little bit. And that was because of product launches by those competitive products.

At the same time, we've got limited growth from Pharming's own business, which were affected by national revenue caps which are a feature of operating in Europe.

These are caps in which the national government can say well you can sell up to so much, but then you have to give 90% of your sales price back to the government, which is all very well, but it does mean that it's very hard to progress sales beyond certain numbers.

When it comes to the investments that we've been making on the cost base, we did see our operating profit increase very slightly quarter-on-quarter but very significantly compared to last year up 51% to $24.6 million in the first half of 2019 compared with 16.3 million in the first half of 2018.

This reflects an improvement in our gross margin because 2018 was slightly affected by the three vials that we gave to help with the shortage of competitive products at the start of that year. Net profit increased by 60% to 13.6 million in the first half of 2019 as opposed to 8.5 million on a restated basis in the first half of 2018.

The restatement for those of you who don't recall is simply due to a change in accounting policy as to how we account for the redemption of the last of the convertible bonds. We had at the same time increased operating costs and increased investment in our pipeline and infrastructure to support long-term growth.

So, there were increased R&D expenses in quarter two compared to quarter one this year on pre-eclampsia and the kidney injury studies on production of alpha-glucosidase product for [indiscernible] material and on capacity improvements other than the big CapEx projects that Sijmen has just mentioned.

The net effect of the increased sales and the increased delays costs for investment has resulted in a stable cash position of 65.3 million at the end of the first half, which is a strong net cash position relative to our debt finance.

So, I'm just going to draw your attention to a very few of the numbers in the income statement, which I haven't already mentioned.

The cost of sales in the first half of the income statement improved over the half year -- this year and in half year last year because of the difference in the number of free vials that we were giving out last year, but also because of some improvements in the mix between U.S. and rest of the world this half.

In the research and development costs, I've already mentioned and in the marketing and sales costs that is the full effect of the additional staff that we added in 2018. So, costs rose quite significantly in the first half largely in the second quarter catching up on delays that we had in the first quarter as we outlined at the full year.

When we look at the bottom half of the income statement, the main feature is the gradual disappearance of the fair value gains and losses on revaluation of the royalties that has been such a milestone around Pharming's neck for many, many years.

These are now down to almost negligible levels because we now have a very clean capital structure with very few warrants, very few convertibles or no convertibles at all left to cause that sort of distress. At the same time, we are starting to cut back our debt and that balance is reducing.

You don't see much change in the financial expense because it's calculated under IFRS on an even basis quarter-by-quarter.

We have a much larger income tax credit relating to the much larger profits that is accrued but not paid in cash because it's set off against our existing net operating losses which are recorded in the balance sheet as a deferred tax asset. So, you'll see the deferred tax assets shrink in the next page.

The earnings per share have also lifted very significantly. The shares that we had at the start of the year haven't really moved very much until the current position. And as a result of that in earnings per share is not affected by dilution as has been the case in previous years.

When we do look at the balance sheet, the main numbers to call your attention to there are the right-of-use assets which have suddenly appeared. These are due to the implication of IFRS 16, which requires us to take the future value of all our lease assets onto the balance sheet.

And that sounds like it's going to be very expensive, but in practice it creates a right-of-use assets. It also creates a liability in this pretty much the same amount and the net effect is negligible. We also see the disappearance of long-term prepayments.

Those were the prepayments that were eliminated in the transaction with BioConnection and that's why those have disappeared. Again, as I mentioned the deferred tax asset balance goes down because of the tax effects of the tax charge that I mentioned just now.

Investments accounted for using the equity method is the investment in BioConnection, which is now brought onto the balance sheet and that enables us to record the investments there and the profits from that company which is a very profitable company as Sijmen mentioned as an income on our income statement.

You'll also see that inventories have dropped. This relates to the pressure that we've been under to effectively sell more than we can produce this year especially in Europe. And as a consequence of the increasing sales trade receivables is going up quite quickly as well.

The net result therefore is that our cash is pretty much neutral compared to the first half of the year, but because of the milestone that we paid in quarter one there is overall a net difference of approximately 17.5 million which is the amount of that milestone apart from that we are washing our face on the cash side.

When we come to the liabilities, really this is just throwing attention to the least liabilities numbers which have apparently ballooned. But that is just the opposite side of the new IFRS 16 implications that I just mentioned.

The two that one in current and one in non-current liabilities that are pretty much to the same number as in the top half of the balance sheet.

Our loans continue to decrease as we continue to pay down the OrbiMed facility and the other financial liabilities is the provision we make for the future milestones that we expect to pay to Bausch Health that used to be called Valeant in respect of the rights to North America Ruconest that we took back in 2016.

The reason there's nothing in current liabilities is that there is no milestone anticipated to be paid this year over the next twelve months.

When we look at cash flow, you can say that operating cash flows are extremely healthy generating almost $30 million in cash, which is up from last year by over $10 million or just under 10 million, I should say.

And we also see the change in inventories there which is effectively a release of capital that is tied up in inventory that's why that appears as a big positive number.

The result of all of that is that the cash that we generated from our operations before we get to interest taxes and other activities was 25.2 million, which is an extremely strong performance compared to the last year. When you look at how we managed to spend most of that cash to get back to where we started.

We had investments in capital expenditure for property plant and equipment to do to increase the capacity. We have an investment in the intangible assets, which is the contingent consideration. We have the investment in the associates which is the cash effect of the BioConnection deal.

And then, we have the usual suspects, we have the repayments on the loans and borrowings, which is two quarters worth. We have the milestone which was $17.6 million, and then the rest is as normal resulting in effectively a pretty neutral cash movement over the last 12 months. So that brings us to the outlook.

And I'd like to hand back to Sijmen to take you through the last part..

Thank you, Robin. Yes. And for the remainder of 2019 as you can see here, we do expect to continue the growth on revenues from the sales of Ruconest mainly driven by the U.S. market and also in some way by the Western European operations. We also continue to expect to achieve positive net earnings during the remainder of the year.

We, however, also remain continued investment in the expansion of production of Ruconest to supply the growing demand for Ruconest.

Investment in clinical trials as Robin was already alluding to for pre-eclampsia and acute kidney injury, you can expect increasing investments there and support for investigators wishing to explore additional indications for Ruconest.

And a very successful example was the one of course last year where Professor Gustaaf delivered great results from that double-blind placebo-controlled trial for acute kidney injury.

And then, there's something new here, we have taken a re-evaluation of the most advantageous new routes of administration while we focus on supplying all patients that look for Ruconest therapy. That's a different from the past. We were looking for more convenient indications in the rather narrow way.

We've listened very carefully to what patients tell us what they want. The market has moved on of course in this respect as well. And we have taken a very broad re-evaluation and we're looking at far more novel technologies to apply Ruconest in a very convenient way and hopefully in a painless way towards the future.

We also continued our investment in development of new pipeline programs such as Pompe disease, which you heard and also Fabry disease behind that.

And then, last but not least, you haven't heard anything about it of course there so far because there's nothing to report, but we are actively looking to purchase or license other new development opportunities and assets in the company's portfolio.

And, of course, business development is always something -- there's always something to report when a deal is done. That's why you've never heard of it, but we are actively looking in the market to expand our portfolio and we now have the wherewithal and the infrastructure of course to do this.

And then, last but not least, the supporting all our teams and marketing partners in order to enable the maximization of sales and distribution potential for Ruconest as in all territories. That completes the outlook for 2019. And now I would like to open the floor for any questions that you may have. Thank you for your attention..

Thank you. [Operator Instructions] And our first question comes from the line of Simon Scholes of First Berlin. Please go ahead. Your line is now open..

Yes. Hello. Congratulation on a greater result. Just with respect to supplies of Ruconest. I was wondering if there's a situation in which you can envisage pressure on supplies coming in the U.S. in the second half of this year before your new capacity starts up..

Yes. No, we do not anticipate that Simon. We anticipate specifically some pressure in Europe because as I said in my presentation very early on in the production process, we need to determine because there's different release specs for the territories for U.S. and EU. We need to determine whether Ruconest goes.

And that means that already a long time ago, we had to basically confirm all of this. And when you get confronted with unexpected demands -- demands in the European Union and outside of the European Union, but not in the U.S. you get these things.

So for clarity, no, we didn't expect the issues in the U.S., but we do expect that it could be some tension on the inventories that we currently have for the remainder of the year, for the year European territories..

Okay. Thanks very much..

Thank you. Our next question comes from the line of Christian Glennie of Stifel. Please go ahead. Your line is now open..

Hi. Thanks for taking the question. Couple of if I can.

Firstly, on the market dynamics, is it right to characterize it, or assume that it does seem to be issues from a competitive standpoint, the other players going after the prophylaxis seems to have almost retrenched a bit from an acute positioning of these products for acute treatment the likes of Firazyr and Berinert.

Is that a fair reflection in terms of what you're seeing in -- what seems to be improvement in terms of your market share?.

Well, it's more complex than that I think. It is really, as we move on into this market we begin to understand patient behavior more. So patients in the U.S.

have multiple medication in hands and it is considered a good practice to have also a number -- even if you're on prophylaxis, it is considered good practice in all patients have a number of rescue therapies at hand.

And when you then look at what kind of rescue therapies you have at hand because of the domination of the historical explanation of Shire in the prophylaxis treatment and in the acute treatment with Firazyr, you saw that and Ruconest, of course, just coming into the market and being used by severely affected patients only, you will -- you see that -- you first get using those for very severe patients.

And then, you gradually get credibility there as it were, and then you see that spending and then the next thing of course is that when we showed the Berlin study that said this, a real world study that we published last year in December where we showed the amount of breakthrough attacks that are associated with Firazyr treatments that are again probably opened the eyes of many towards now how effective C1 inhibitor therapy actually is in treating your breakthrough attacks.

I think every little bit helps here. So again, maybe being longer in the market by knowing better what patients want by really listening to patients and giving patients what they want.

I think we succeed in not only getting Ruconest in natural [Technical Difficulty] severe affected patients, but also now are beginning to get traction more -- far more traction than we had -- far more traction we had exactly in that that segment of breakthrough attacks.

It's an incredibly complicated market to actually analyze because every time you must realize it's all home treatment, so every time a patient gets an attack, the patient eventually makes not a doctor, but a patient makes the choice of which therapy the patient uses for that particular breakthrough attack.

So, that is very difficult to understand that you have to be really close to the patient.

And I think all these things together mean that we find a place for Ruconest and find an expanding place for Ruconest now also in the light of the new developments in the market where still a significant amount of patients more than half of the patients are suffering from these continued breakthrough attacks.

I hope that answers your question a little bit Christian. Sorry, for the long answer..

No, no. It's very helpful. I guess the one extension on that is, you've obviously seen very strong growth based on the existing formulation, the I.V. formulation which in general sense thinking of ideal world, something more, more convenient as you say more pain free option, but design maybe slightly reduced that given it is based on existing....

Yes.

Let me just -- sorry to interrupt you, but I think it's important to realize that when you need the most efficacious way to deliver C1 inhibitor is obviously self injection -- IV self injection because that brings immediately 100% of the drug available and that's what you need when you have an attack and you don't want that attack to actually happen.

And that is actually how this disease should be treated and is actually treated when you use Ruconest.

I think that is and of course the next level is of course when you can have a more convenient treatment, but if you need the power of Ruconest, because the attack is coming through and you can't control it logically speaking that is how patients have to come to rely on Ruconest power and direct availability.

So, yes, you may want something more convenient, but well if you can't get by on it, then that IV is of course the ideal way to deliver. And it's actually totally not creating any pain. This is just a procedure that is a little bit more complicated than just giving yourself a painful subcutaneous injection. I think that's what you should look at..

Okay. Thank you. And then just my follow-up in terms of production side of things. Just to confirm, I think you said already pretty clearly there's no impact in terms of the implied growth rate that you would expect in the U.S. There's no impact from a supply issue there.

Even if maybe you don't -- you won't be able to do the same sort of free vial sampling that you have done previously I know that some of that was related to competitor supply issues, but just to be clear there's no impact in terms of your expectations for current year in the U.S.?.

Correct Christian. Absolutely correct..

And then if I can now move on the expansion in terms of production, two more facilities potentially next year just that potentially eliminate the need or sort of how does it impact you, while you talked about before about may be needing to move back to cattle based production?.

No. Those are two different things. First of all, the first facility will be -- is expected to be approved at the end probably of Q1 2020. Now there's of course the regulators are still there so that is the expectation. The second site that will be built next year, so then will be approved next year or after.

The first site will be very sufficient to actually satisfy the needs for Ruconest production HAE. For the future, of course, the long-term future, we have reinstalled the cattle platform because the numbers of vials necessary for any of the new indications AKI and pre-eclampsia, the rabbit platform will be unpractical.

And that is why in the longer term, you will again hear, when we are switching over and there will, of course, have to be you know bridging studies in these programs AKI and pre-eclampsia.

So following the first proof of concept, we expect to do that, but that will be a switch over to the cattle project and that's a long-term -- that's a longer term -- this is a longer term solution to supply those new indications.

So HAE is rabbit platform, there will be more than sufficient capabilities to produce Ruconest by means of the rabbit platform and the new indications will move to the cattle platform..

You bet..

And if I could add to that Christian that the -- facilities that we're building for the rabbit platform are not simply for Ruconest. They will certainly help us, if Ruconest outperforms a long time, but we will also need them for although the case days and other protein rabbits as well. So it's long-term planning.

These are not particularly expensive facilities, but they did take a lot of cash and a lot of attention to get them right for the regulators..

Does that answer your question Christian?.

Yes. Thank you. I will now move on..

Thank you, Christian..

Thank you. Our next question comes from the line of Scott Henry of ROTH Capital. Please go ahead. Your line is open..

Thank you for taking the questions. I guess first question with regards to supply coming back on stream in the first quarter '20. How would you characterize the risk of that event? Is that a low risk event? Obviously, the regulatory agencies have to approve it, just want to get a sense of that..

Yes. I think it can be very clear on that. It's a low risk. It's a low risk event. We have already delivered all the data and shown that of course the whole thing is doubly the same. And the comparability protocols have been fulfilled. So, it's just a matter of going through the process with the regulatory authorities, they should do this.

So, that is really how we look at that..

Okay. Thank you for that color.

And just for my understanding, I think it's important to understand, why is it again that the supply issue would occur in Europe and not the U.S., what are the differences there that impact supply in one geography versus the other?.

Well, let me just again -- let me just repaint this picture. If we have milk coming out of all our rabbits, we need to go to purification. And very early on in the process, we have to actually decide and best in the specific batches for either the U.S. or the EU.

So you will have a long-term planning of course of your sales demands at the same time you have batches coming out of the factory. And then you have to decide that is how it works with the regulators, of course, they have to decide which batch goes where. So you have a long-term planning.

If then the long-term planning in an area in this case in Europe runs out of sync, you will very quickly run into problems with that. Especially, if you have a general high demand, which we of course are having, which is a very nice position to be in fact especially if you think about our recent history, but it is still a fact that we have to manage.

So, therefore, we are already pretty tight on the whole thing. We plan of course go ahead. And then you are confronted in the months that it takes to process that product to final product that the demands are running out of sync because of ad hoc requests that you get from the European Union countries.

And then, of course, you run into an even tighter situation. So, in other words, we were able to plan correctly and have necessary reserves with the U.S. market and we were able to plan ahead with the European markets.

And of course, also it's a function of volumes, we saw a lot more volume in the U.S., so therefore the absolute number of course is easier to manage and to actually have some inventory there and in the European markets the numbers are lower and you more quickly run into problems, if you got an unexpected ad hoc demands because your competitors are running out of products.

And I think that's the picture I can paint here and that is what it is. And the good news is that, we are already processing milk from that new facility throughout final product. So, the moment the facility is approved, we don't have to wait until we process that product.

But, we have the product right at hand to actually supply the markets and we will do so of course as soon as we have an approval by either EMA or FDA, and relinquish the pressure.

Does that answer your question Scott?.

That helps considerably. Thank you for that color.

If I could just shift over to the pipeline quickly, any idea when we might see data on the acute kidney injury or the pre-eclampsia programs?.

Well, that's just pre-eclampsia of course that's the first, obviously, this is a very critical indication, so the authorities have -- we are close to first look at safety, which is very understanding in these first woman that we are treating.

So, I would say at least a year from now, we will have to wait until we see the first data, the first stage maybe a little bit quicker, it depends, maybe a little bit longer. But then we can see the first stage of the study reporting, and then we move to the next stage of the study.

With regards to AKI, as we were alluding to, we expect this study subject to regulatory approval to start in the later on towards the end of this year.

So, again, if you sort of think about the study and there's a considerable follow up here, but maybe if we can organize in such a way that we can report, I know I'm speculating a little bit, my clinical development colleagues may not be so happy with this, but I'm just speculating that we can actually build in a peak when we have the acute phase behind us and we still have to wait for the follow-up then I could speculate that maybe towards the end of next year, we could have the peak -- of the first peak at the acute results whereas we still have to wait of course for the follow-up period for the longer term effects of the positive effects of this study.

I think that's more or less a reasonable fair sort of way of looking at this.

Okay for you?.

Okay. That's great. Thank you for taking the questions..

Pleasure..

Thank you. Our next question comes from the line of Joe Pantginis of H.C. Wainwright. Please go ahead. Your line is open..

Hey guys. Thanks for taking the question. Just two quick points of clarity if you don't mind and you did address some of it in your prepared comments. Sijmen with regard to the -- you called it the re-evaluation of the most advantageous new routes.

Is this sort of a mix of being able to have supply or just like you said give to patients versus you also mentioned about looking at more novel technologies. I'm just wondering to get a little more clarity about these changes here..

I think it's mainly -- we're listening to patients, I think is mainly looking at the markets what's going on here, because if you look at the market is moving on prophylaxis in the convenience direction. You see now, the standard of care becoming very quickly once every two weeks treatment.

You have to realize that to deliver a C1 inhibitor in high volumes, you have to get really compress it to a really low volume. And then, still the question is whether you can actually deliver a C1 inhibitor in meaningful quantities over such a long period of time. That's the first thing, I think technically speaking.

And then, again, product like CSL's [indiscernible] as a good example where you would -- you have to push in subcutaneously 6 and 4 mls twice a week, very painful and very long procedure. And if you compare that with the ease-of-use [indiscernible] where you have to -- every two weeks have to give yourself an injection.

I think patients are moving off and away from that kind of subcutaneous treatments and it's a convenience -- the move comes more of a convenience driven market.

Hence we decided and we are now of course a very different company than we were two years ago when we thought it was necessary for survival that we came up with something in this prophylaxis segment as well very quickly and follow [indiscernible] competitors where we don't think that's necessary anymore at this point in time because we've become much more confident of the current version of Ruconest and it's growth potential.

And secondly, we therefore have now the wherewithal to take a step back and look at really innovative technology that we can combine and look at what we can actually really deliver that will be ahead of the competition for a change and not chasing the competition. So I think that is actually the way forward..

Got it. That's very helpful. Thanks. And then, the second question is more semantic, I assume with regard to everything that was discussed today about supply and you talked about planning and logistics or geographies.

Do any of these supply -- temporary supply constraints impact the timing of the pre-eclampsia and kidney studies?.

No. They are not affected by that..

Great. Thanks a lot guys..

Thank you..

Thank you. And as there are no further questions on the line, I'll hand the call back to our speakers for closing comments..

Okay. Thank you very much. I think I will just thank you for all for being here. And I would just like to re-emphasize that we've been very pleased with the results. We see a company that's really changing very rapidly. We are very confident about delivering further growth on revenues from the sales of the current form of Ruconest.

I hope we explain to you that we see a lot more potential in the market for the current form of Ruconest than we were -- we were even thinking a year ago when we saw all these new competitors coming in the markets. We are confident that we can deliver these positive next earnings.

You are also aware that we are continuing to make big investments in the expansion, but also in clinical trials going forward.

And I think, it's very important to emphasize if we've become now a company that is actively looking for new assets to buy and to basically broaden our portfolio and leverage our existing commercial infrastructure because all those -- wonderful plans that we currently have of course are still quite far away from the market and therefore we're very keen to bolt-on some assets that we can actually launch before these products come to fruition.

Hence why, we're very keen on getting new assets on board. Of course, like I said before business development is only relevant when you can announce something and we have nothing to announce yet. But, again, let it be known that we are actively looking in the market. So thank you very much for being here.

And we look forward to updating you on our continuous progress as and when we have the final results -- the full year results for 2019 in our hands, that will be in March of next year. Thank you very much for being here. Goodbye..

This now concludes our call. Thank you for attending. Participants, you may disconnect your lines..