Pharming announced a sluggish start to Ruconest sales in 2016 as a result of the changing sales strategy in the US by partner Valeant, and prior stocking issues from EU partner SOBI. We have reduced our near-term sales forecasts for Ruconest accordingly, and set a revised target price of €0.71 (previously €0.88). We believe Ruconest's positioning as a safe and efficacious alternative to the incumbent treatments for HAE should eventually translate into increased sales, but is taking longer than previously anticipated. Near term, we believe positive results from the Phase II trial in the prophylactic use of Ruconest in HAE (expected mid-2016) will be an important catalyst for investor sentiment as Pharming seeks to expand the Ruconest franchise. Buy.Sluggish 1Q16 but profits heading in right direction. Pharming has had a slow start to 2016, with flat sales for 1Q16 of €1.6m (versus €1.7m in 4Q15). This was primarily due to a change in sales focus in the US for Ruconest to fewer, higher-prescribing physicians which impacted sales in January and February, but looked to be bearing fruit by the end of the quarter. Income from US sales increased to €1.5m, versus €1.2m in 4Q15. Total Ruconest sales were also impacted by the absence of ordering by EU partner SOBI as a result of gradual stocking of inventory during 2015. Pharming's gross profits, however, have continued to increase, up from €0.8m in 1Q15 to €1.6m in 1Q16, as a result of the improving mix between US and EU sales. Cash at the end of 1Q16 was €27.7m.Ruconest forecasts moderated to reflect slower uptake. Based on the slow sales uptake we have delayed our outlook for Ruconest going forward. We now forecast in-market sales of $30m for 2016 (vs $48m) and reduced our peak sales estimate in 2020 to $200m (forecasts attached). We continue to believe that Ruconest's offering as a safe and efficacious alternative to the market incumbents should begin to generate increasing sales over 2016, but at present this is taking longer than expected. Pharming began selling Ruconest directly in Germany, Austria and the Netherlands (€0.1m) in 1Q16, with encouraging feedback. SOBI continues to do well in Eastern Europe, and the company has seen the first requests for Ruconest through its collaboration with Clinigen and the international patient organisation, HAEi.Investing in franchise expansion. Pharming expects to announce preliminary results from its Phase II study of Ruconest in prophylaxis of HAE in mid-2016, which we believe will be important in the context of longer-term expansion of the franchise to better compete with established products. Pharming is also investing in milk production sites in the Netherlands to ensure supply meets demand. Aside from Ruconest, the company is expanding its R&D center in France and is due to announce details of its other pipeline programs in the next few months.Reiterate Buy. Despite a lumpy start to Ruconest in 1Q16, we see a positive outlook for the product, and Pharming's improvement in profit mix is encouraging. Results from the Phase II prophylaxis trial and continuing focus on higher-prescribing physicians in the US should increase sales during 2016. Our NPV continues to suggest significant upside to the current share price.Olivia Manser Max Herrmann UK Sales desk