Orphazyme reports financial results in Interim Report First Half 2022


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company announcement
Orphazyme HOW
No. 36/2022

www.orphazyme.com
Company registration number 32266355

COpenhagen, Denmark, September 26, 2022 Orphazyme A/S (ORPHA.CO) (the “Company”) today announces its interim report for the first half of 2021 for the period 1 January to 30 June 2022.

Anders Vadsholt, Chief Executive Officer and Chief Financial Officer, said: “In the first half of 2022, we completed the sale of essentially all of them Orphazymes assets, including the advancement of Arimoclomolto KemPharm Denmark A/S, a wholly owned subsidiary of KemPharmInc. Our employees have shown an unwavering commitment during this difficult time, and I’m pleased that many of them are continuing their mission of bringing new treatment options to patients with NPC KemPharm. We are now focused on finding ways to realize value from the Company’s remaining assets and may engage in activities and investments related to biopharmaceutical research and development, participate in partnerships or collaborate with other companies.”

Company updates H1 2022

  • In January 2022, Christophe Bourdon, Chief Executive Officer (CEO), resigned from his position as CEO of Orphazyme to assume the role of CEO at another company. Anders Vadsholt has been appointed CEO of Orphazyme, in addition to his position as Chief Financial Officer (CFO), effective March 1, 2022.
  • In February 2022, Orphazyme was informed by the European Medicines Agency (EMA) Committee for Medicinal Products for Human Use (CHMP) of a negative trend vote regarding its Marketing Authorization Application (MAA) for arimoclomol in Niemann-Pick type C disease, or NPC, in Europe. The company withdrew the MAA in March 2022 ahead of the final CHMP vote.
  • On 11 March 2022, the Company’s board of directors (the “Board of Directors”) requested the initiation of judicial restructuring proceedings under the Danish Bankruptcy Act with the aim of examining whether a basis could be created for all or part of Orphazyme’s business to continue, including one Basis for injecting further capital and/or a basis for sale of all or part of its assets.
  • In March 2022, effective March 31, 2022, the Company voluntarily delisted the American Depositary Shares (ADSs), representing Orphazyme’s common stock, from the Nasdaq Global Select Market in the United States.
  • In May 2022, the Company signed an agreement to sell substantially all of Orphazyme’s assets and business activities, including those related to the development and approval of arimoclomol and full clawback liability related to the French Early Access program, to KemPharm Denmark A /S (“KemPharm”), a wholly owned subsidiary of KemPharm, Inc., for an aggregate consideration of $12.8 million in cash and assumed debt estimated at approximately $5.2 million (the “Asset Sale”) .
  • Stephanie Okey, Carrolee Barlow and Martin Bonde resigned from their positions as members of the Board of Directors effective May 23, 2022.
  • The restructuring proposal was approved by Orphazyme’s known creditors on May 30, 2022 and upheld by the Danish Maritime and Commercial Court; the court reorganization proceedings were terminated on May 30, 2022 and the sale of assets was completed on May 31, 2022.
  • In June 2022, Bo Jesper Hansen was elected Chairman of the Board and John Sommer Schmidt and Anders Vadsholt were elected to the Board. Georges Gemayel, former Chairman of the Board of Directors, and Andrew Mercieca, Member of the Board of Directors, did not stand for re-election at the Company’s Annual General Meeting.
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Financial highlights in the first half of 2022
Unless otherwise noted, comments in this announcement relate to H1 performance from continuing operations. From January 1, 2022, the operations and activities that were part of the asset sale agreement KemPharm were reclassified to discontinued operations. The figures for 2021 have been adjusted in accordance with IFRS.

  • Operating expenses for the continuing operations for the six months ended 30 June 2022 totaled DKK 27.3 million compared to DKK 57.3 million for the same period in 2021.
  • Loss from continuing operations totaled DKK 24.4 million compared to DKK 55.0 million in the same period in 2021.
  • The net result from operations held for sale (discontinued operations) was a profit of DKK 87.4 million compared to a net loss of DKK 408.8 million in the same period in 2021, mainly due to the sale of assets to KemPharm.
  • Total comprehensive income (both continuing and discontinued operations) for the first half of 2022 was a net profit of DKK 62.5m or DKK 1.79 per share (basic and diluted), compared to total comprehensive income of DKK 463.7m or DKK (13.27) per share (basic and diluted) for the same period in 2021.
  • As of June 30, 2022, Orphazyme held cash totaling DKK 49.5 million compared to DKK 102.3 million as of December 31, 2021.
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Subsequent Events

  • As announced in April 2022, the deposit agreement between the Company, The Bank of New York Mellon as Depositary and owners and holders of American Depositary Receipts (ADRs) has been terminated effective July 6, 2022.
  • On August 11, 2022, the U.S. District Court for the Northern District of Illinois granted in part and denied in part defendants’ motion to dismiss the amended complaint in the putative class action lawsuit, caption business v. Orphazyme A/S, et al., No. 21-cv-03640 (ND Fig.). The court dismissed all claims under the Securities Act of 1933 related to the Company’s registration statement for its initial public offering of ADS and dismissed as non-appealable a number of contested statements relating to lead plaintiff’s claims under the Securities Exchange Act of 1934. On August 26, 2022, the court amended its August 11, 2022 order to also dismiss certain claims against certain individual defendants. The court’s dismissal of claims in its orders dated August 11 and 26, 2022 is without prejudice to the filing of another amended complaint. On September 8, 2022, Lead Plaintiff filed a second amended complaint. Defendants have until October 6, 2022 to respond to the second amended complaint. Management does not believe these claims have merit and believes the outcome will not materially affect the Company’s financial condition.

outlook
As announced on September 25, 2022 (Announcement No. 35/2022), Orphazyme has adjusted its 2022 Outlook published on June 7, 2022. The change is due to the division of operations into continuing and discontinued operations. The discontinued operations are related to the sale of assets to KemPharm A/S. The continued business activity is the limited ongoing operational business activity with only two employees. For the full year 2022 we expect a loss from continuing operations in the range of 40-45m DKK and a positive result from discontinued operations related to the sale of assets to KemPharm of 87.4m-30m DKK). As previously communicated, we expect to end 2022 with more than 30 million DKK in cash and equivalents.

For more information please contact

Orphazyme HOW

Anders Vadsholt, Chief Executive Officer and Chief Financial Officer +45 28 98 90 55

Forward-Looking Statement
This corporate announcement may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including with respect to anticipated operating plans and performance, financial condition and the Company’s ability to continue as a business. Although the Company believes that its expectations are based on reasonable assumptions, all statements other than statements of historical fact contained in this corporate announcement about future events are subject to (i) change without notice and (ii) factors outside the Company’s control, including actions by regulators, the impact of the global COVID-19 pandemic and the impact of the sale of Company assets. These statements may include, without limitation, any statement preceded by words such as “goal,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “seek,” “believe,” “aim.” “estimate”, “plan”, “project”, “will”, “may have”, “probably”, “should”, “would”, “could” and other words and terms of similar meaning or their negation. Forward-looking statements are subject to inherent risks and uncertainties that are beyond the Company’s control and could cause the Company’s actual results, performance or achievements to differ materially from any anticipated results, performance or achievements expressed or implied by such forward-looking statements . Given these risks and uncertainties and other risks and uncertainties described in the “Risk Factors” section and other sections of the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission (SEC) on March 2, 2021 , and other filings the Company makes with the SEC from time to time (which are available at http://www.sec.gov), the events and circumstances discussed in such forward-looking statements may not occur, and the Company is actual results may differ materially and adversely from anticipated or implied results. Although the Company’s forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known to the Company. Therefore, you are cautioned not to rely on these forward-looking statements. Except as required by law, the Company undertakes no obligation to publicly update these forward-looking statements or to update the reasons that cause actual results to differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

  • 36-2022 Orphazyme Interim Report H1 2022

  • 36-2022 Orphazyme publishes financial results in interim report for the first half of 2022