SOURCE: Basilea Pharmaceutica AG

February 10, 2011 01:58 ET

Basilea reports 2010 financial results

BASEL, SWITZERLAND--(Marketwire - February 10, 2011) -

Basilea Pharmaceutica AG / Basilea reports 2010 financial results Processed and transmitted by Thomson Reuters. The issuer is solely responsible for the content of this announcement.

Basel, Switzerland, February 10, 2011 - Basilea Pharmaceutica Ltd. (SWISS: BSLN) reports positive net income driven by partnerships, arbitration award and Toctino® sales. The company significantly increased its cash position, re- initiated isavuconazole global phase III program and completed patient recruitment into Toctino® U.S. phase III trial.

Business Review

Basilea Pharmaceutica Ltd. today presented its financial results for full- year 2010 with a strengthened cash position of CHF 283.0 million. Revenues increased to CHF 116.2 million as compared to CHF 26.5 million in 2009 reflecting substantial payments from isavuconazole and Toctino® partnerships, accelerated recognition of ceftobiprole upfront and milestone payments and growing Toctino® product sales. Other income increased to CHF 127.0 million in 2010, primarily resulting from a ceftobiprole arbitration award while R&D expenses decreased to CHF 56.0 million as compared to CHF 77.2 million in 2009. Basilea thus reports profitability in 2010 with net income of CHF 107.6 million.

In 2010 Basilea entered into a license, co-development and co-promotion agreement with Astellas Pharma Inc. for its antifungal isavuconazole resulting in a CHF 67.5 million net upfront payment. The isavuconazole phase III program was re-initiated at the beginning of 2011 underscoring Astellas' and Basilea's strong commitment to bring this innovative product to patients, offering an optimized profile over currently marketed antifungals.

In 2010 Toctino® showed continued sales growth of CHF 29.2 million (+69% year- on-year) in line with the company's guidance, with main contributions from countries where Basilea is marketing the drug, including Germany, France and the UK. During 2010 Basilea appointed distribution partners Almirall, S.A. for selected European markets plus Mexico and Actelion Pharmaceuticals Canada Inc. for Canada to extend the commercial availability of Toctino® beyond Basilea's initial markets. In the U.S., patient recruitment into the phase III HANDEL trial has been completed and results are targeted for the end of 2011.

Basilea has assumed sponsorship for ceftobiprole and initiated discussions for potential partnerships. The company is developing this novel antibiotic as a first-line empiric agent for the treatment of severe infections, including infections due to methicillin-resistant Staphylococcus aureus (MRSA).

At the end of 2010, Basilea initiated the first human study of its novel sulfactam antibiotic BAL30072. This compound is designed to treat infections caused by the growing medical threat of multidrug-resistant Gram-negative bacteria. In addition, Basilea has completed the research phase and has submitted protocols to health authorities and Ethics Committees to obtain approval to start clinical testing of the novel anti-cancer drug BAL101553 intended to treat drug-resistant cancer.

Ron Scott, Chief Financial Officer, said: "Toctino sales were in line with our guidance despite the continued weakening of European currencies against the Swiss Franc in 2010 and funding restrictions in European markets. We look forward to continued sales growth of Toctino in the countries where we are marketing the drug ourselves and growing contributions from our distributors. The successful partnering of isavuconazole with Astellas in 2010 strengthened our cash position and reduced our R&D cash contribution for this program through the cost-sharing structure foreseen under our collaboration. We look forward to bringing isavuconazole to the market together with our partner Astellas, leveraging their synergistic product portfolio and experience in the field of antifungals. In 2011, a key focus will be to identify the best partner for ceftobiprole to bring this important and novel antibiotic back to the market."

"Basilea had a strong financial performance and made significant progress at the operational level in the year 2010," stated Dr. Anthony Man, Chief Executive Officer. "The isavuconazole global phase III program in partnership with Astellas was recently re-initiated. Patient recruitment in the ongoing U.S. phase III HANDEL study for Toctino has been completed. With the return of ceftobiprole rights and our improved financial flexibility we are seeking the best strategic and operational partner to bring ceftobiprole back to patients as fast as possible. Furthermore, we have expanded our development pipeline by advancing our Gram-negative antibiotic BAL30072 and our anti-cancer compound BAL101553."


Key Figures

+-----------------------------------------+--------+---------+
| (In CHF million, except per share data) | 2010   | 2009    |
+-----------------------------------------+--------+---------+
| Revenues                                | 116.2  |   26.5  |
+-----------------------------------------+--------+---------+
| Other income                            | 127.0  |    0.3  |
+-----------------------------------------+--------+---------+
| Total operating income                  | 243.2  |   26.8  |
+-----------------------------------------+--------+---------+
| Expenses                                |        |         |
+-----------------------------------------+--------+---------+
| - Cost of sales                         | (2.2)  |  (1.6)  |
+-----------------------------------------+--------+---------+
| - Research & development                | (56.0) | (77.2)  |
+-----------------------------------------+--------+---------+
| - Selling, general & administrative     | (77.2) | (69.2)  |
+-----------------------------------------+--------+---------+
| Operating profit/loss                   | 107.7  | (121.2) |
+-----------------------------------------+--------+---------+
| Net income/loss                         | 107.6  | (120.7) |
+-----------------------------------------+--------+---------+
| Cash flow from operating activities     | 106.6  | (114.5) |
+-----------------------------------------+--------+---------+
| Cash and short-term investments         | 283.0  |  178.4  |
+-----------------------------------------+--------+---------+
| Basic earnings/loss per share, in CHF   | 11.22  | (12.61) |
+-----------------------------------------+--------+---------+
| Diluted earnings/loss per share, in CHF | 11.19  | (12.61) |
+-----------------------------------------+--------+---------+

Notes: Consolidated figures in conformity with US GAAP; rounding was consistently applied.

The consolidated financial statements of Basilea Pharmaceutica Ltd. for 2010 can be found on the company's website at http://annualreport.basilea.com.

Financial summary

Revenues (without other income) in 2010 increased significantly to CHF 116.2 million compared to CHF 26.5 million in 2009.

Revenues included contract revenue related to ceftobiprole in the amount of CHF 71.4 million (2009: CHF 8.4 million), which mainly resulted from the accelerated recognition of deferred revenue in connection with upfront and milestone payments due to Basilea regaining rights to ceftobiprole. Furthermore, revenues included product sales from Toctino®, which increased to CHF 29.2 million in 2010 (2009: CHF 17.3 million), despite the unfavorable impact of weakening European currencies against the Swiss Franc in 2010 and increased funding restrictions in European markets. In addition, revenues in 2010 included contract revenue related to isavuconazole in the amount of CHF 14.2 million in connection with the licensing agreement with Astellas (2009: CHF 0.0 million).

Moreover, the company recognized other income in 2010 in the amount of CHF 126.9 million, as an arbitration tribunal found Johnson & Johnson in breach of its license agreement with Basilea and awarded Basilea compensation for lost payments related to ceftobiprole.

Research and development expenses decreased to CHF 56.0 million in 2010 compared to CHF 77.2 million in 2009, mainly due to the license, co-development and co- promotion agreement that Basilea entered into with Astellas, under which the parties jointly participate in the development of isavuconazole, while Astellas bears the majority of the development costs. The R&D expenses in 2010 related primarily to conducting the phase III clinical trials for isavuconazole, the phase III clinical trial for Toctino® in the U.S., the phase I program with the sulfactam antibiotic BAL30072 and the late stage research program of the oncology drug candidate BAL101553.

Selling, general and administrative expenses amounted to CHF 77.2 million in 2010 (2009: CHF 69.2 million) and included expenses for the commercialization of Toctino® as well as legal expenses related to the arbitration against Johnson & Johnson.

Operating profit totaled CHF 107.7 million in 2010 compared to an operating loss of CHF 121.2 million in 2009. The net income of CHF 107.6 million (2009: Net loss of CHF 120.7 million) is primarily a consequence of the award of CHF 126.9 million from the arbitration against Johnson & Johnson, the accelerated recognition of upfront and milestone payments related to ceftobiprole, reduced research and development expenses for isavuconazole related to the license, co- development and co-promotion agreement with Astellas and increased product sales from Toctino®. Basic and diluted earnings per share amounted to CHF 11.22 and CHF 11.19, respectively, for 2010 as compared to a loss per share (basic and diluted) of CHF 12.61 in 2009.

In 2010, the net cash provided by operating activities amounted to CHF 106.6 million, whereas in 2009, the net cash used for operating activities amounted to CHF 114.5 million. The improvement in operating cash-flow was mainly the result of the arbitration award and the significant upfront and milestone payments that the company received in 2010 related to the execution of the licensing agreement with Astellas and the distribution agreement with Almirall. Combined cash and short-term investments increased to CHF 283.0 million as of December 31, 2010, compared to CHF 178.4 million at year-end 2009.

Financial outlook

During 2011 Basilea expects enhanced sales uptake of Toctino®. Product sales for 2011 are estimated at around CHF 40 million, mainly driven by new patients entering the first treatment cycle in Basilea's existing markets and in territories where distributors introduced the product taking into consideration the continued negative effect from European healthcare austerity programs. Total operating expenses are estimated at between CHF 13 to 14 million per month primarily as a result of Basilea's continued investment in isavuconazole with its partner Astellas, the company's two new compounds progressing into phase I and the initiation of development costs for ceftobiprole. Basilea's average operating loss in 2011 is estimated at around CHF 8 million per month.

Product and pipeline update

Toctino® (alitretinoin) - the only therapy approved for severe chronic hand eczema (CHE) unresponsive to topical corticosteroids Basilea currently markets Toctino® in Denmark, Finland, France, Germany, Switzerland and the United Kingdom and has appointed Almirall, S.A. as distributor for Toctino® in other selected European markets and Mexico in June 2010 as well as Actelion Pharmaceuticals Canada Inc. as distributor in Canada in August 2010. Neopharm Ltd. has been appointed as distributor for Israel. Patient recruitment into the 600-patient U.S. phase III HANDEL study was completed. Top line results including clinical relapse data at 24 weeks after completing treatment are targeted for the end of 2011. Following the availability of top line data, Basilea intends to discuss with the FDA next steps towards registration. Basilea intends to clarify with the agency the requirements of a REMS program and the extent of the safety data base. In addition, Basilea will assess the feasibility of new formulations of Toctino® with the objective to extend the product's life cycle.

Ceftobiprole - a novel broad-spectrum anti-MRSA (methicillin-resistant Staphylococcus aureus) cephalosporin antibiotic targeting Gram-positive and Gram-negative pathogens, including Pseudomonas aeruginosa Basilea was awarded USD 130 million (CHF 126.9 million) through arbitration as compensation for lost payments that resulted from deficiencies in Johnson & Johnson's conduct of ceftobiprole clinical investigations. Full rights to ceftobiprole will be regained from Cilag GmbH International, a Johnson & Johnson company, in February 2011. Basilea will begin auditing the phase III pneumonia trials and expects to have the first assessments completed by mid-2011. Basilea intends to consult with health authorities to finalize the development strategy and development plans for severe skin and lung infections.

Isavuconazole - a novel broad-spectrum antifungal with the potential to become the best-in-class azole for the treatment of severe invasive fungal infections Basilea entered into a license, co-development and co-promotion agreement with Astellas Pharma Inc. Following a temporary delay in recruitment the phase III program was re-initiated early 2011. Results of the phase III program including three studies that target respectively, invasive yeast infections, invasive mold infections, and rare molds and aspergillosis in renally impaired patients are expected in 2013.

BAL30072 - a novel sulfactam antibiotic against multidrug-resistant Gram- negative bacteria Basilea initiated the first human study of its innovative sulfactam antibiotic BAL30072. A second, multiple-ascending dose phase I study is scheduled to start 2H 2011.

BAL101553 - prodrug of BAL27862, a unique microtubule anticancer drug to treat drug-resistant cancer Basilea is preparing for first clinical testing anticipated to start in Q1 2011.

Key events for the twelve-month period in 2010 included:


Toctino® (alitretinoin)

  *   Inclusion in treatment guidelines in Canada
      Alitretinoin recommended as the systemic treatment of choice when
      clinical signs of severe chronic hand eczema persist or recur under
      treatment with potent topical corticosteroids.

  *   Milestone received from agreement with Almirall
      Basilea received a milestone payment of EUR 5.5 million relating to
      Italy under its distribution agreement with Almirall, S.A.

  *   Distribution agreement signed with Actelion Canada
      Actelion Pharmaceuticals Canada Inc. appointed as exclusive
      distributor for Toctino® in Canada. Agreement includes upfront
      and milestone payments totaling up to about CAD 3.7 million.

  *   Clinical profile of Toctino® confirmed under daily practice
      conditions
      First results from the German TOCCATA observational study showed high
      efficacy rates, excellent patient compliance and a safety profile
      consistent with the approved label.

  *   Italian guidelines include Toctino® for the treatment of severe
      CHE
      The Italian Society of Dermatology published its guidelines for the
      management of CHE recommending Toctino® as the treatment of
      choice when systemic treatment of severe CHE is indicated.

  *   Distribution agreement signed with Almirall, S.A.
      Basilea appointed the Spanish pharmaceutical company Almirall, S.A.
      as its exclusive distributor for Toctino® in selected European
      markets and Mexico. Basilea is eligible for upfront and milestone
      payments totaling EUR 27 million.

  *   Marketing authorization received in Italy
      Following the recommendation for regulatory approval under the
      European decentralized procedure, Toctino® received national
      regulatory approval in Italy and acceptance for reimbursement at
      national level.

  *   Toctino® integrated in expert consensus for management of CHE in
      France
      A French expert panel recommended Toctino® as the treatment of
      choice when clinical signs persist under topical corticosteroids in
      a position paper.



Ceftobiprole

  *   USD 130 million compensation awarded by arbitral tribunal
      The Netherlands Institute of Arbitration found Johnson & Johnson in
      breach of its License Agreement and awarded Basilea USD 130 million
      (CHF 126.9 million) as compensation for lost payments in relation to
      ceftobiprole, including milestones, other damages and interest.

  *   Sale discontinued in Canada and Switzerland
      Johnson & Johnson companies Janssen-Ortho Inc. and Janssen-Cilag AG,
      the holders of the market authorizations in the respective
      territories, discontinued the sale of ceftobiprole
      (Zeftera™/Zevtera™) in Canada and Switzerland.

  *   European CHMP concluded re-examination
      The European Committee for Medicinal Products for Human Use (CHMP)
      confirmed its previous negative opinion on the use of ceftobiprole
      for the treatment of complicated skin and soft tissue infections and
      recommended that ceftobiprole should not be granted marketing
      authorization in the European Union despite indications that
      ceftobiprole was beneficial to patients.

  *   Full global rights to be regained
      Johnson & Johnson company Cilag GmbH International gave notice that
      it will return global rights of ceftobiprole to Basilea with a
      one-year notification period ending in February 2011.



Isavuconazole

  *   Primary endpoint of aspergillosis study protocol amended
      In consultation with the FDA, Basilea and its partner Astellas have
      agreed to use 'all-cause mortality' as the primary endpoint of the
      phase III clinical study investigating isavuconazole for the
      treatment of invasive aspergillosis.

  *   Update provided on phase III program
      Following the review of the phase III clinical program certain
      protocol amendments were implemented and the process to re-open phase
      III clinical sites for the isavuconazole trials commenced.

  *   Partnership agreement signed with Astellas Pharma Inc.
      Basilea entered into a license, co-development and co-promotion
      agreement with Astellas Pharma Inc. for isavuconazole. Basilea
      received a gross upfront payment of CHF 75 million and is eligible to
      up to CHF 478 million in additional development and sales milestones.

  *   Successful phase III study futility analysis
      Based on a pre-planned futility analysis the Independent Data Safety
      Monitoring Board recommended the continuation of the study exploring
      isavuconazole for the treatment of invasiveAspergillus infections.



BAL30072

  *   First clinical phase I initiated
      Basilea started the first clinical phase I study investigating the
      pharmacokinetic profile, safety and tolerability of its innovative
      sulfactam antibiotic in healthy volunteers.

  *   Data presented at ICAAC and ECCMID
      Data presented at international congresses demonstrated the
      highin-vitro activity of BAL30072 against multi-resistant
      Gram-negative bacteria, elucidated structural elements involved in
      its unique antimicrobial activity and confirmed its potent in-vitro
      and in-vivo activity against clinically relevant Gram-negative
      bacteria.



BAL101553

  *   Data presented at AACR
      In-vitro data presented at the AACR confirmed that BAL101553 shows
      activity in a wide range of cancer types, including those resistant
      to current treatment options.

Conference call Basilea Pharmaceutica Ltd. invites you to participate in a conference call on Thursday, February 10, 2011, 4 p.m. (CET), during which the company will discuss today's press release.

Dial-in numbers are:

 +41 (0) 91 610 56 00   (Europe and ROW)

 +1 (1) 866 291 4166    (USA)

 +44 (0) 203 059 5862   (UK)

A playback will be available 1 hour after the conference call until Monday, February 14, 2011, 6 p.m. (CET). Participants requesting a digital playback may dial:

 +41 (0) 91 612 4330    (Europe and ROW)

 +1 (1) 866 416 2558    (USA)

 +44 (0) 207 108 6233   (UK)

and will be asked to enter the ID 11150 followed by the # sign.

Note to shareholders

The shareholders of Basilea Pharmaceutica Ltd. are kindly reminded that the Ordinary General Meeting of Shareholders of Basilea Pharmaceutica Ltd. will take place on Wednesday, April 6, 2011 at 2 p.m. at the Hilton Hotel in Basel, Switzerland. The invitation will be published in the Swiss Official Gazette of Commerce (Schweizerisches Handelsamtsblatt). Shareholders who are recorded in the share register with voting rights on March 25, 2011 will be entitled to participate and exercise their voting rights.

About Basilea

Basilea Pharmaceutica Ltd. is headquartered in Basel, Switzerland, and listed on the SIX Swiss Exchange (SIX: BSLN). Its fully integrated research and development operations are currently focused on antibiotics, antifungals and oncology drugs, as well as on the development of dermatology drugs, targeting the medical challenge of resistance and non-response to current treatment options in the hospital and specialty care setting. Basilea is currently marketing Toctino® (alitretinoin), the only approved treatment for severe chronic hand eczema unresponsive to potent topical corticosteroids, in Denmark, Finland, France, Germany, Switzerland and the United Kingdom and has appointed distributors for Toctino® in other selected European markets, Canada, Israel and Mexico. Furthermore, a phase III clinical program on alitretinoin for the treatment of severe chronic hand eczema is ongoing in the U.S. The company has entered into a global partnership with Astellas Pharma Inc. for its phase III compound isavuconazole, a potential best- in-class azole antifungal, for the treatment of life-threatening invasive fungal infections. Full rights to ceftobiprole for the treatment of potentially life- threatening resistant bacterial infections, are being transferred from Cilag GmbH International, a Johnson & Johnson company, back to Basilea.

Disclaimer

This communication expressly or implicitly contains certain forward-looking statements concerning Basilea Pharmaceutica Ltd. and its business. Such statements involve certain known and unknown risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievements of Basilea Pharmaceutica Ltd. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Basilea Pharmaceutica Ltd. is providing this communication as of this date and does not undertake to update any forward- looking statements contained herein as a result of new information, future events or otherwise.


This press release can be downloaded from www.basilea.com.



Basilea Pharmaceutica AG Grenzacherstrasse 487
P.O Box Basel Switzerland


Listed: Freiverkehr in Börse Stuttgart, Freiverkehr in Börse Berlin, Open Market (Freiverkehr) in Frankfurter Wertpapierbörse, Freiverkehr in Bayerische Börse München;


Press Release (PDF): http://hugin.info/134390/R/1487440/422910.pdf




This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Basilea Pharmaceutica AG via Thomson Reuters ONE

[HUG#1487440]

Contact Information


  • For further information, please contact:

    Media Relations

    Peer Nils Schroder, Ph.D.
    Head Public Relations &
    Corporate Communications
    +41 61 606 1102
    Email Contact

    Investor Relations

    Barbara Zink, Ph.D., MBA
    Head Corporate Development
    +41 61 606 1233
    Email Contact