Basilea Pharmaceutica AG

February 09, 2012 01:27 ET

Basilea Reports 2011 Financials With Better Than Expected Operating Results

BASEL, SWITZERLAND--(Marketwire - Feb 9, 2012) -

Basilea Pharmaceutica AG / Basilea reports 2011 financials with better than expected operating results . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement.

* Solid cash position of CHF 197.1 million

* Toctino® sales of CHF 31 million representing a 24 percent year- on-year volume growth

* Significant progress in its development pipeline potentially leading to a European regulatory filing for ceftobiprole in pneumonia and an alitretinoin filing in the U.S. in 2012

Basilea Pharmaceutica Ltd. (SIX: BSLN) today presented solid financial results for the full-year 2011 with a year- end cash position of CHF 197.1 million and a lower than expected operating loss of CHF 57.3 million. In 2011, sales of Basilea's hand eczema drug Toctino® (alitretinoin) increased to CHF 31.0 million in line with the company's guidance, representing a year-on-year volume growth of 24 percent.

The U.S. alitretinoin HANDEL phase III treatment and six-month relapse observation studies were completed in 2011. Topline data are expected to be available in the first quarter 2012. The filing of a U.S. New Drug Application (NDA) for alitretinoin is envisaged by the end of 2012 assuming positive data and successful pre-NDA discussions with the FDA.

Basilea has audited the hospital acquired pneumonia and hospital-treated community acquired pneumonia ceftobiprole phase III studies following the return of global rights of ceftobiprole in early 2011. The pneumonia study data has not yet been reviewed by health authorities. Based on the audit outcome and interactions with health authorities, Basilea decided to file a ceftobiprole application for marketing authorizations in Europe in the second half 2012 for severe pneumonia treated in the hospital and is preparing for a later filing in the U.S.

Isavuconazole is being tested in a global clinical program comprised of phase III studies in invasive candidemia, invasive aspergillosis, and rare mold infections plus renally impaired aspergillosis patients. Completion of recruitment of the aspergillus and rare molds studies is anticipated in 2012 and recruitment in the Candida study may continue into 2013. Reporting of topline data for all studies continues to be targeted for 2013.

BAL30072 is a novel antibiotic developed for the treatment of life- threatening multidrug-resistant Gram-negative infections. BAL30072 has demonstrated synergistic effects in combination with antibiotics from the penem class, expanding its spectrum of activity to almost all clinically important multidrug- resistant Gram-negative pathogens. In 2011 two clinical phase I studies were completed. Basilea is extending the phase I program in 2012 to evaluate additional dosing regimens.

Basilea initiated a phase I program for its small-molecule microtubule- targeting anti-cancer drug BAL101553 including patients with advanced solid tumors refractory to current standard therapies. Preliminary safety and pharmacokinetic results from this study are anticipated for the second half of 2012.

"Basilea remains resolutely focused on bringing its late-stage innovative products of high medical need to patients," stated Dr. Anthony Man, Chief Executive Officer. "We have aligned our R&D resources to support the two anticipated regulatory filings this year with the highest priority. With our decision to file ceftobiprole for the treatment of severe pneumonia, we started the year with strong momentum. Bringing ceftobiprole back to patients with severe infections is a priority as it has the unique potential for the early treatment of seriously ill patients hospitalized with pneumonia due to Gram- positive and Gram-negative bacteria."

Ronald Scott, Chief Operating Officer, said: "Toctino is the only approved drug for the debilitating condition of severe chronic hand eczema. Sales volume continued to grow at 24 percent despite significant pressure from European health care budgets. New opportunities for expanding the growth of Toctino are anticipated in 2012 both from increased revenue growth and data from our U.S. phase III HANDEL study which could form the basis of a potential U.S. regulatory filing." He added: "Our strong cash position allows us to focus on key portfolio value drivers to achieve clinical milestones and partner our assets, bring our drugs to the market and optimize the commercial value of Toctino."

Key Figures

| (In CHF million, except per share data)        |  2011   |  2010   |
| Product sales                                  |  31.0   |  29.2   |
| Contract revenue                               |  35.2   |  86.4   |
| Revenue from R&D services                      |   0.6   |   0.6   |
| Other income                                   |   0.2   |  127.0  |
| Total operating income                         |  66.8   |  243.2  |
|     Cost of sales                              |  (2.4)  |  (2.2)  |
|     Research & development                     | (70.0)  | (56.0)  |
|     Selling, general & administrative expenses | (51.7)  | (77.2)  |
| Total operating expenses                       | (124.1) | (135.5) |
| Operating loss/profit                          | (57.3)  |  107.7  |
| Net loss/income                                | (57.6)  |  107.6  |
| Cash flow from operating activities            | (82.4)  |  106.6  |
| Cash and short-term investments                |  197.1  |  283.0  |
| Basic loss/earnings per share, in CHF          | (6.01)  |  11.22  |
| Diluted loss/earnings per share, in CHF        | (6.01)  |  11.19  |

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

The consolidated financial statements of Basilea Pharmaceutica Ltd. for 2011 can be found on the company's website at

Financial summary

Product sales in 2011 amounted to CHF 31.0 million, which is in line with the Company's guidance.

In 2011 contract revenue amounted to CHF 35.2 million, comprised of CHF 11.1 million deferred revenue recognition from previous ceftobiprole license- related payments (2010: CHF 71.1 million). In addition, contract revenues in 2011 included CHF 21.3 million in connection with the licensing agreement with Astellas on isavuconazole (2010: CHF 14.2 million). In 2011, other income amounted to CHF 0.2 million, compared to CHF 127.0 million in 2010 of which CHF 126.9 million were awarded to Basilea by an arbitration tribunal as compensation for lost ceftobiprole payments. Total operating income decreased to CHF 66.8 million, compared to CHF 243.2 million in 2010, mainly due to reduced contract revenue and other income recognition related to regaining ceftobiprole rights.

Research and development expenses amounted to CHF 70.0 million in 2011, compared to CHF 56.0 million in 2010. This increase of CHF 14.0 million primarily reflects the investments in pre-filing activities for ceftobiprole and recruitment in the isavuconazole phase III clinical program.

Selling, general and administrative expenses decreased in 2011 to CHF 51.7 million (2010: CHF 77.2 million) mainly due to significantly reduced legal costs after successfully completing arbitration proceedings against Johnson & Johnson in 2010.

As a result of the aforementioned factors, operating loss totaled CHF 57.3 million in 2011, compared to an operating profit of CHF 107.7 million in 2010, and net loss amounted to CHF 57.6 million (2010: net income of CHF 107.6 million). Basilea reported a better than expected average operating loss of CHF 4.8 million per month through continued prudent cost management.

2011 basic and diluted loss per share amounted to CHF 6.01, compared to basic and diluted earnings per share of CHF 11.22 and CHF 11.19, respectively, in 2010.

In 2011, the net cash used by operating activities amounted to CHF 82.4 million, whereas in 2010 the net cash provided by operating activities amounted to CHF 106.6 million. The positive operating cash-flow in 2010 was mainly the result of the arbitration award and the significant upfront and milestone payments that the company received related to the execution of a licensing agreement with Astellas and a distribution agreement with Almirall. Combined cash and short- term investments amounted to CHF 197.1 million as of December 31, 2011, compared to CHF 283.0 million at year-end 2010.

Financial outlook

We expect continued growth in Toctino® sales during 2012 against a background of European health care budget constraints. Toctino® sales for 2012 are estimated to achieve low double-digit growth, assuming stable exchange rates, and representing strong volume growth. Our total operating expenses are estimated at around CHF 10 million per month primarily as a result of our continued investment in development. Our average monthly operating loss is estimated at CHF 6-7 million.


Toctino® (alitretinoin) - the only therapy approved for adults with severe chronic hand eczema (CHE) unresponsive to potent topical corticosteroids

Toctino® was the first treatment to show effective clearing of severe CHE, with clear or almost clear hands achieved in nearly 50 percent of patients treated with 30 mg Toctino®. The once-daily oral therapy for adults is given for 12 to 24 weeks, depending on patient response. Post-treatment observations in patients who responded to Toctino® indicate that treatment can provide long periods free from relapse and improve patient satisfaction.

Toctino® is a known teratogen (a substance that can cause birth defects when women are exposed during pregnancy). Strict pregnancy prevention one month before, during, and one month after cessation of treatment as well as monthly pregnancy testing are required for women of childbearing age.

Ceftobiprole - a novel broad-spectrum anti-MRSA (methicillin-resistant Staphylococcus aureus) cephalosporin antibiotic against Gram-positive and Gram- negative pathogens, including Pseudomonas and Acinetobacter species

Ceftobiprole is an investigational antibiotic for the potential first-line empiric treatment of severe multi-drug resistant bacterial infections. Available data demonstrate activity against a wide range of clinically-relevant Gram- positive as well as Gram-negative bacteria, highlighting the potential of ceftobiprole for the early treatment of severe infections such as pneumonia treated in the hospital.

Isavuconazole - a novel broad-spectrum antifungal with the potential to become the best-in-class azole for the treatment of severe invasive fungal infections

Isavuconazole has excellent in-vitro and in-vivo coverage of a broad range of yeasts (such as Candida species) and molds (such as Aspergillus species) as well as less common but clinically important molds such as Zygomycetes spp. Isavuconazole is available in two dosage forms: an injectable and a highly bioavailable oral form that very importantly provide for predictable dosing to ensure adequate effective drug levels in the body. This allows for a seamless intravenous-oral switch, which is a significant advantage for potentially allowing patients to be treated outside of the intensive care unit or the hospital setting.

BAL30072 - a novel sulfactam antibiotic specifically targeting multidrug- resistant Gram-negative bacteria

BAL30072 is a novel antibiotic that in in-vitro and in-vivo models demonstrated potent bactericidal activity against a broad range of multidrug-resistant Gram- negative pathogens such as Pseudomonas or Acinetobacter species. It overcomes bacterial resistance by several mechanisms and has enhanced stability against bacterial beta-lactamase enzymes, such as extended-spectrum beta-lactamases (ESBLs), carbapenemases and the recently characterized New Delhi metallo- beta- lactamase 1 (NDM-1), which cause resistance against many currently marketed antibiotics. The activity of BAL30072 is further enhanced when combined with penem-class antibiotics.

BAL101553 - prodrug of BAL27862, a unique microtubule-targeting anticancer drug to treat drug-resistant cancer

BAL101553 is a highly water-soluble prodrug of the synthetic small molecule BAL27862. It allows intravenous and oral administration without solubilizing excipients associated with adverse effects. BAL27862 arrests tumor cell proliferation and induces tumor cell death through a characteristic destabilizing effect on microtubules that is distinct from other anti- cancer agents, which are also directed against the microtubule network. Anti-tumor activity of BAL27862 has been demonstrated across a broad panel of solid tumor models, including those resistant against conventional microtubule- targeting drugs such as taxanes or Vinca alkaloids.

Conference call

Basilea Pharmaceutica Ltd. invites you to participate in a conference call on Thursday, February 9, 2012, 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 13, 2012, 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 12749 followed by the # sign.

Note to shareholders

The shareholders of Basilea Pharmaceutica Ltd. are informed that the Ordinary General Meeting of Shareholders of Basilea Pharmaceutica Ltd. will take place on Tuesday, April 17, 2012 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, SHAB). Shareholders who are recorded in the share register with voting rights on April 5, 2012 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). Basilea Pharmaceutica International Ltd.'s fully integrated research and development operations are 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 adults with severe chronic hand eczema unresponsive to potent topical corticosteroids, in Denmark, Finland, France, Germany, Norway, Switzerland and the United Kingdom and has appointed distributors for Toctino® in other selected European markets, Canada, Israel, Mexico and the Republic of Korea. A phase III clinical program on alitretinoin for the treatment of severe chronic hand eczema is ongoing in the U.S.

For its phase III compound isavuconazole, a potential best-in-class azole antifungal for the treatment of life-threatening invasive fungal infections, the company has entered into a license, co-development and co-promotion agreement with Astellas Pharma Inc.

In addition, Basilea is developing ceftobiprole, a late-stage novel anti- MRSA (methicillin-resistant Staphylococcus aureus) broad-spectrum cephalosporin antibiotic, for the first-line treatment of potentially life-threatening resistant bacterial infections. Ceftobiprole has a broad coverage of both Gram- positive bacteria, including MRSA, and many clinically important Gram- negative bacteria such as Pseudomonas spp.

Basilea's BAL30072, a novel antibiotic for the treatment of resistant Gram- negative infections, and the oncology drug BAL101553 for the treatment of drug- resistant cancers are in phase I clinical testing.


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.

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