The crisis of Pharming company is getting deeper in Finland
Genetically modified cows raise growing debate
Official Notice
Pharming company has been promoting genetic modified cows in Finland in Northern Savo area for several years. The aim of the project is to produce human lactoferrin for the company by means of 2000 transgenic cows in local farms. The project has continued with a very low profile until last year when a local peoples' action group started to debate and investigate the plans. One of the concerns has been the regional strategy of agriculture. Organic farmers have maintained that the region is the centre of milk production in Finland.

We want to develop organic farming and have a clean image without any bioreactors in our region, says Antti Hamalainen, organic milk producer from Lapinlahti community. Also ethical reasons have been raised under debate.

This cow project is the first time in the world when big mammals are so put for production. Before starting to invest in Pharming's business there should have been a deep discussion of the future development. People's Biosafety Association in Finland has tried to raise the discussion, but Pharming has answered with silence.

This is the first step to the new relation between human beings and animals. When speaking of animal rights we should see that genetically modified cows mean the beginning of the era of genetic slavery, says Hannu Hyvönen, chairman of People's Biosafety Association.

Has the risk analysis been withheld from the investors?

People's Biosafety Association is claiming that while Pharming was pushing the project forward and obtaining significant finance and support, it concealed from decision makers, farmers and citizens the kind of information, which it was obliged to tell investors in its explanatory prospectus in its listing on the Dutch stock exchange. The company has also left unsaid that in Holland the Dutch Minister for Agriculture in 1998 banned the genetic transfer techniques used by Pharming, reminds Asko Ali- Marttila an investigator from People's Biosafety Association.

Further all sorts of uncertainties as to the future activities of the company are causing raised eyebrows. On one hand there is talk of medicinal purposes and on the other of "clinical food additives". Also the possibility of producing baby food has been mentioned. Although the project is unclear and has lots of risks the farmers, who should invest totally the costs in their farms are not told anything about the problems and possible risks. According to the information available to People's Biosafety Association nothing has been mentioned of risk even to the Finnish public investors. At least Lapinlahti Council, The Northern Savo Employment Office, industrial ministry and Sitra, an entrepreneurial Finnish financial support foundation have supported Pharming«s project to the tune of at least 10,000,000 Finnish marks.

The role of Kuopio University under closer look

The beginning of the cow project started in the 90s when Dr Juhani Jänne with his group developed the first transgenic cow, named as Huomen (Tomorrow). The study group founded the company FinnGene Ltd which has been sold to Pharming.

The role of the professors of Kuopio University and A.I.Virtanen Institute should be clarified, says Hannu Hyvonen and reminds that for example Dr. Juhani Jänne has been one member in Pharming's organisation.

It is questionable if scientists who are themselves beneficiaries in Pharming«s business matters can present themselves as neutral experts for the governmental and provincial investors.

People's Biosafety Association comment on the latest news of the resignation of the managing director of Pharming in Finland (see news below) by saying that the whole project should now be stopped and put under examination.

We wonder how the investor has been carrying money for this multinational medicine company and at the same time there is deep and serious need for supporting organic agriculture. The future for Finnish agriculture is in organic not in genetically modified crops or animals.

More information:
People's Biosafety Association in Finland

Appendix 1
Summary of prospectus for the Dutch stock exchange

Summary Prospectus
dated June 7, 1999

The following summary is qualified in its entity by, and should be read in conjunction with, the detailed information and the consolidated financial statements, including the notes thereto, appearing elsewhere in this Prospectus. This Prospectus contains forward-looking statements which involve uncertainties. The company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under 'Risk Factors' and elswhere in this Prospectus.

The Company Pharming was established in Nowember 1988 and started operations in Leiden, the Netherlands. Pharmin, which was a wholly-owned subsidiary of US-based GenPharm International, Inc ('GPI') during a period from April 1989 until April 1995, has raised approximately NLG 91 million in private placements after it was spun off from GPI. In July 1998, the Company raised NLG 141 million in an initial public offering on EASDAQ.

Technological Uncertainty

... The transgenic production methods and all of the therapeutic product candidates which the Company is developing will require significant additional research, development and testing, and will require regulatory approval and the expenditure of substantial additional capital resources prior to commercialization. It will be a number of years, if ever before the Company will recognize any revenues or royalties from product sales. The use of transgenic production methods is relatively new and untested and has not yet resulted in any approved therapeutic products. Accordingly, product development utilizing the Company's transgenic technologies involves a high degree of risk, is highly uncertain, and could result in unanticipated developments, clinical or regulatory delays, or inadequate therapeutic efficacy, any of which have a material adverse effect on the Company's business, financial condition and results of operations. There can be no assurance that Company's technologies will lead to the discovery and development of any commercially viable product, that the Company's or it's collaborators'research and product development efforts as to any particular product candidate will be succesfyully completed, that any such product candidate will be proven to be safe and efficacious, or that required regulatory approvals will be obtained on a timely basis if at all. The Company or its collaborators may encounter problems and delays relating to research and development, regulatory approval, manufacturing and marketing. The failure by the Company to succesfully address such problems and delays would have a material adverse effect on the Company's business, financial condition and results of operations.

No assurance of Succesfull Product Development ...

No assurance can be given that the results of preclinical testing or early clinical trials will support the commencement of further clinical trials on any of the Company's product candidates, that the results of the preclinical studies or the clinical trials will support the Company's application for regulatory approval, or that regulatory authorities will not require the Company to conduct additional clinical trials either prior to, or after, regulatory approval is obtained.....

Appendix 2
Report from local Savon Sanomat on 13.2.2001

The producer and cultivator of Lapinlahti's genetically altered cow's medicinal milk, Pharming Ltd's managing director Pauli Seppänen has tendered his resignation. Officially Seppänen and Pharming parted company a week ago. "Yes, that is correct but I do not wish to make any comment" stated Seppänen and referred the matter to Pharming in accordance with agreed procedure. He nonetheless denied that last month's heated public discussion on the risk of genetically altered cattle had anything to do with his personal decision. "I won't speculate on what I will do next. The Sonera management (Finnish IT-company) don't comment, it's a fair game between one and other. Seppänen managed Pharming Ltd for five years before which he was employed in Kemira's biotechnic division for ten years. Deputy Managing Director, Dutchman Erik Smahl is presently responsible for Pharming's management. He has earlier been engaged in cooperation work as project leader of the Kuopio medicinal milk project.