Dutch Biotech Company Pharming Has $45 Million With Bankrupt Silicon Valley Bank

Pharming, a Dutch biotech company, holds $45 million with the bankrupt Silicon Valley Bank (SVB). It holds $26 million cash at SVB in the US and an additional US$19 million in deposits with SVB UK.

At present, Leiden-based company holds approximately 25% of all money. Unfortunately, due to the uncertainty surrounding its collapse, it remains uncertain how much of that money will be repaid and when.

SVB’s collapse

Pharming, a Dutch company with money on deposit at the now bankrupt Silicon Valley Bank (SVB), has $26 million in cash at SVB in the US and an additional US$19 million at its British subsidiary. Unfortunately, much of that cash is uninsured and Pharming doesn't know how much or when it will be returned.

The demise of SVB could have a profound effect on the future of many biotech and life sciences companies. SVB had invested heavily in health tech, digital health and biotech businesses, as well as providing banking services to more than 2,500 venture capital firms.

Many biotech and life science firms rely on SVB for funding, liquidity or other services, such as venture capital funds or business development teams. While the full extent of SVB's failure will take time to manifest, it is clear that the biotech and life sciences industry could experience long-term repercussions.

Bill Geary, co-founder of Flare Capital Partners and an investor in emerging health technology companies, expressed his shock at the bank's collapse as "profound". He added that it also caused concern among venture firms trying to raise capital due to rising interest rates.

According to The New York Times, SVB was the 16th largest bank in America and a financial partner to nearly half of U.S. venture-backed startups and more than 44% of healthcare and technology companies that went public in 2022.

As of Sunday evening, the US government had indicated that account holders with uninsured deposits would have access to their funds starting Monday. Whether Pharming can recover more or all its assets depends on any settlements from the US and UK governments or the sale of SVB to another bank.

At present, Pharming is confident that the collapse of SVB does not materially impact its operating plans, convertible debt service obligations or other material cash requirements. The Company remains actively monitoring the situation and intends to work towards recovering all deposited cash with SVB US and UK.

Pharming’s cash

Due to the collapse of Silicon Valley Bank (SVB), many companies now possess large sums of cash. One company in particular, Dutch biotech Pharming, has $45 million with the bank.

Though it may not seem like much, it represents 25% of all cash the Leiden company has. That is why knowing a company's financial status and potential risks should be taken seriously.

Cash on hand can make it simpler for companies to fund operations and settle debts when they arise. Furthermore, this frees them up to focus on running their business without worrying about raising more capital.

Unfortunately, the collapse of Silicon Valley Bank has made it difficult for many businesses to access their cash reserves. SVB was a bank that frequently did business with start-up businesses.

It had a large number of depositors. The bank's collapse has prompted thousands of savers to rush to withdraw their funds in mass amounts.

At present, it remains uncertain how much cash Pharming can recover from these deposits. That all depends on which settlements the US and UK governments reach in regards to a sale of SVB.

Even if they do, that won't be enough to cover all the company's expenses. That is why the company has begun spinning off its DNage unit in an effort to reduce cash requirements.

Money from a spinoff is used to pay down debt and retain some potential upside in DNage. This will reduce cash requirements in the future and enable the company to focus on developing an innovative product called Rhucin.

It's likely to take some time before this all comes together, and in the meantime the company could end up paying out a lot in taxes and fees. Furthermore, it could have to sell some assets in order to meet these obligations.

Pharming’s debt

Pharming's cash reserves are located in a bankrupt SVB US account, and it remains uncertain how much will be returned from that account. The US Federal Deposit Insurance Corporation (FDIC) has taken control of the bank while British government officials have indicated they will provide emergency support packages for companies who have lost assets to SVB.

The US and UK governments will decide if they will insure SVB's assets or sell them off to another bank. If insured, then a portion of uninsured accounts would be available for settlement; otherwise, both banks could be liquidated.

In addition to the FDIC and British government, other groups have also been investigating the SVB situation. One such entity, The American Washington Post, reports that if the bank cannot find a buyer, then perhaps even the US government may insure it - guaranteeing its assets for everyone in America.

SVB's collapse has had a devastating impact on many businesses. Without access to deposits, companies cannot pay salaries, purchase supplies, settle debts and close deals.

Startup companies face an extra obstacle when they lack cash for research and development. But, with professional guidance and assistance from banks that cannot supply them with necessary liquidity, startups can survive and even thrive in this increasingly unfavorable world.

Seasonality Risks A material shift in the Company's operating environment, including demand for its products, could negatively affect revenue and diminish profitability. This could be due to increased competition or lower prices of competing goods.

Interest Rate and Currency Risks A material change in interest rate or exchange rates could adversely impact revenue or reduce earnings, particularly since most of the Company's sales are invoiced and paid for in United States dollars. To protect against such potential impacts, management plans on continuing its external hedging strategies by purchasing US and Euros at forward rates.

Pharming’s future

Pharming, which is a combination of "phishing" and "farming," is an act of cyberattack that steals personal information through fraudulent websites. Unlike email phishing, where victims must click on a link to access the site, pharming redirects victims to a fraudulent site without their knowledge or consent.

This type of attack can result in significant financial losses for businesses and individuals alike, while also decreasing consumer faith in online security and the capacity to conduct transactions over the web.

Pharming attacks can occur on any device connected to the internet, including laptops, mobile phones and tablets. The phishing email usually originates from a well-known company and attempts to trick users into sharing their personal information.

Another way pharming attacks may occur is through the domain name system, which permits hackers to send targeted victims to a fake website that looks similar to an authentic site. By doing so, the pharming site can use their victim's username and password for access to their accounts.

However, there are ways to protect yourself against pharming attacks. One of the most reliable is choosing an established internet service provider (ISP). If they detect that you are being redirected to an untrustworthy website, they will automatically block out those links for you.

The next step in safeguarding your personal information is to regularly change passwords. Furthermore, make sure your device uses strong encryption that will protect these credentials from being stolen by malicious actors.

Finally, be wary of the privacy policies of companies you do business with. Many have strict regulations prohibiting them from sharing certain personal information with third parties - this includes storing it on servers outside your country where you live.

Pharming's cash and other assets are largely secured with Silicon Valley Bank in the United States and SVB UK, both of which are currently bankrupt. As a result, Pharming is taking steps to manage its risk by setting fraud risk governance policies and designing and deploying fraud preventive and detective controls.