Basilea Pharmaceutica AG

August 16, 2012 01:24 ET

Basilea reports its half-year financials

BASEL, SWITZERLAND--(Marketwire - Aug 16, 2012) -

Basilea Pharmaceutica AG / Basilea reports its half-year financials . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement.

  * Reported half-year cash and short-term investments of CHF 149 million;
    further strengthened in July 2012 by an additional CHF 224 million
    following completion of Toctino® transaction
  * Submission of Marketing Authorization Application for ceftobiprole in
    pneumonia in Europe
  * Strengthened focus on anti-infectives and oncology; financial
    participation in Toctino® U.S. maintained

Basel, Switzerland, August 16, 2012 - Basilea Pharmaceutica Ltd. (SIX: BSLN) today presented its financial results for the first half-year 2012. The company reported a solid cash position, including short-term investments, of CHF 149 million as of June 30, 2012, which was further strengthened by an additional CHF 224 million following the recently announced completion of the transaction with Stiefel, a GSK company, related to Basilea's hand eczema drug Toctino® (alitretinoin).

Basilea took a strategic decision to focus on anti-infectives and oncology drugs and entered into a global agreement with a license to know-how for its dermatology drug Toctino® with Stiefel. Stiefel gained exclusive worldwide rights to Toctino® and has assumed responsibility for the development, manufacturing and commercialization of the product. Basilea received an upfront payment of CHF 224 million and is eligible for a further milestone payment of up to GBP 50 million related to a regulatory milestone of alitretinoin in the U.S. In addition, Basilea will receive a participation in U.S. sales starting three years after launch. The upfront payment will be recognized as deferred revenue on a straight-line basis as contract revenue over the estimated contractual term through mid-2018.

All patients completed the 12-month post-treatment follow-up period in the alitretinoin U.S. phase III HANDEL study. Basilea is supporting Stiefel in the final analysis of the study that will form the basis of further interactions with U.S. regulatory authorities.

Dr. Anthony Man, Chief Executive Officer, stated: "We achieved significant value from Toctino through our agreement with Stiefel. The agreement allows us to create further shareholder value by using the non-dilutive capital to accelerate the development of our anti-infectives and oncology programs. We remain resolutely focused on bringing our late-stage innovative products to patients in these areas of high medical need, as demonstrated by our recent submission of a Marketing Authorization Application for ceftobiprole in pneumonia in Europe."

Basilea submitted a Marketing Authorization Application (MAA) in July of this year under the European decentralized procedure, seeking approval of ceftobiprole, its broad-spectrum anti-MRSA (methicillin-resistant Staphylococcus aureus) antibiotic, for the treatment of pneumonia in hospitals. The submission is supported by two international double-blind controlled phase III studies assessing the efficacy and safety of first-line empiric ceftobiprole versus single or combination drug comparators to treat hospitalized community- acquired and hospital-acquired pneumonia. Basilea is targeting a consultation meeting on ceftobiprole with the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2012, to discuss the existing SPA (Special Protocol Assessment) for pneumonia, the current guidelines, and requirements to support potential qualification of ceftobiprole under the U.S. GAIN (Generating Antibiotic Incentives Now) Act.

Ronald Scott, Chief Operating Officer, said: "Partnering remains an important factor in our strategy to achieve financial sustainability, as demonstrated again through our agreement concluded with Stiefel on Toctino. We continue our discussions with potential partners for ceftobiprole in order to fully recognize the value of this highly competitive asset and we continue to assess opportunities to strengthen our R&D pipeline in our focus areas."

Basilea's antifungal isavuconazole is currently being tested in a global clinical co-development program with Astellas Pharma Inc. This program includes phase III studies in invasive aspergillosis, invasive candidemia, and rare mold infections plus renally impaired aspergillosis patients. Recruitment into the Aspergillus study is scheduled to complete in 2012 resulting in topline data in 2013. Recruitment into the Candida study will continue through 2013.

BAL30072 is a sulfactam antibiotic targeting infections caused by multidrug- resistant Gram-negative bacteria and is in phase I clinical development. Following completion of initial pharmacokinetic studies further pre- clinical and modeling studies have been performed to determine relevant pharmacokinetic and pharmacodynamic drivers of efficacy and safety. Further phase I testing is planned during the second half of 2012 to determine an appropriate dosing regimen for future phase II studies.

Basilea is currently conducting a phase I program for its anti-cancer drug, BAL101553, in patients with advanced solid tumors refractory to current standard therapies. BAL101553 is a small-molecule microtubule-targeting and anti- vascular agent. Reporting of first phase I data is projected for the second half of 2012, depending on when the maximum tolerated dose is reached.

Key figures

| (In CHF million, except per share data)        | 1H 2012 | 1H 2011 |
| Product sales                                  |  17.7   |  15.0   |
| Contract revenue                               |  13.4   |  19.7   |
| Revenue from R&D services                      |   0.1   |   0.1   |
| Other income                                   |   0.0   |   0.1   |
| Total operating income                         |  31.2   |  34.9   |
|     Cost of sales                              |  (5.1)  |  (1.1)  |
|     Research & development expenses            | (31.6)  | (26.8)  |
|     Selling, general & administrative expenses | (28.7)  | (26.9)  |
| Total operating expenses                       | (65.5)  | (54.7)  |
| Operating loss                                 | (34.2)  | (19.8)  |
| Net loss                                       | (34.6)  | (20.2)  |
| Net cash used for operating activities         | (47.6)  | (37.8)  |
| Cash and short-term investments                |  149.0  |  243.3  |
| Basic and diluted loss per share, in CHF       | (3.61)  | (2.10)  |

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

Joachim Blatter, Chief Financial Officer, added: "Our strong cash position allows us to support the regulatory filing of ceftobiprole in Europe, complete the isavuconazole phase III program under our existing partnership and advance our phase I compounds."

The unaudited condensed consolidated financial statements of Basilea Pharmaceutica Ltd. for the first half-year 2012 can be found on the company's website at

Financial summary

Product sales in the first six months of 2012 increased to CHF 17.7 million (first six months 2011: CHF 15.0 million), in line with the company's guidance.

Contract revenue decreased from CHF 19.7 million to CHF 13.4 million in the first half of 2012. This decrease was mainly due to accelerated recognition of CHF 11.1 million associated with regaining ceftobiprole rights in 2011, partly offset by accelerated recognition of upfront and milestone payments from Toctino® distribution partners in 2012 as a result of the Toctino® transaction.

Total operating income in the first six months 2012 amounted to CHF 31.2 million (first six months of 2011: CHF 34.9 million).

Cost of sales increased from CHF 1.1 million in the first six months of 2011 to CHF 5.1 million in the first six months of 2012 mainly as a result of the write- down of inventory due to the Toctino® transaction.

Research and development expenses increased from CHF 26.8 million to CHF 31.6 million in the first six months of 2012. This was mainly due to pre-filing activities for ceftobiprole, recruitment in the isavuconazole phase III clinical program under the Astellas agreement as well as the ongo­ing phase I oncology program BAL101553 and continued investments in the antibiotic BAL30072.

Selling, general and administrative expenses in the first six months of 2012 increased to CHF 28.7 million (first six months of 2011: CHF 26.9 million) mainly due to the Toctino® transaction.

Net loss increased to CHF 34.6 million in the first six months of 2012 compared to CHF 20.2 million in the prior year's period as a result of above factors including the accelerated recognition of deferred revenue for ceftobiprole in 2011. Basic and diluted loss per share increased to CHF 3.61 for the first six months of 2012 compared to CHF 2.10 for the prior year's period.

Net cash used for operating activities amounted to CHF 47.6 million in the first six months of 2012. Cash and short-term investments amounted to CHF 149.0 million as of June 30, 2012 compared to CHF 197.1 million as of December 31, 2011.

Financial outlook

Total operating expenses for 2012 are estimated to remain at around CHF 10 million per month primarily as a result of continued development program investment. Average monthly operating loss is estimated at CHF 5-6 million which is an improvement of CHF 1 million per month compared to the previous guidance primarily as a result of the Toctino® transaction.


Isavuconazole - a novel intravenous and oral broad-spectrum antifungal, partnered with Astellas Pharma Inc., and being developed for the treatment of severe invasive and life-threatening fungal infections

Isavuconazole demonstrated 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 prevalent but often fatal molds such as Zygomycetes spp. It has reliable and predictable dosing, allowing a switch from IV administration to a convenient once daily oral dose and has the potential to overcome many of the limitations of current treatment options.

Ceftobiprole - a novel broad-spectrum antibiotic for the potential treatment of severe, multidrug-resistant bacterial infections

Ceftobiprole has activity against a wide range of Gram-positive bacteria, including the MRSA 'superbug' and clinically relevant Gram-negative bacteria. Ceftobiprole has met the study endpoints in several phase III trials and has shown a typical cephalosporin safety profile. A Marketing Authorization Application has been submitted in Europe through the decentralized procedure.

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

This innovative antibacterial drug has demonstrated broad in-vitro and in- vivo coverage of Gram-negative pathogens including multidrug-resistant Pseudomonas aeruginosa and Acinetobacter baumannii. It has robust activity against common strains of bacteria that produce antibiotic-inactivating enzymes including extended-spectrum beta-lactamases (ESBL) and metallo-beta-lactamases such as the New Delhi metallo-beta-lactamase 1 (NDM-1). In addition, BAL30072 has been shown to enhance the activity of antibiotics from the penem class.

BAL101553 - a novel small-molecule drug with a dual mode of action, targeting intracellular microtubules and in addition blocking the tumor blood supply

BAL101553 has shown potent activity in many tumor cell lines that are insensitive or refractory to taxanes or other conventional microtubule- targeting agents. In contrast to currently available microtubule-targeting agents BAL101553 is a small molecule and avoids many of the cancer resistance mechanisms against natural product derivatives. BAL101553 was developed as a highly water-soluble prodrug of Basilea's BAL27862 with anticipated good oral availability and an established injectable formulation without potentially harmful solubilizing additives.

Toctino® (oral alitretinoin) - the only licensed drug for systemic use in adults with severe chronic hand eczema unresponsive to potent topical corticosteroids

Toctino® was developed and successfully brought to market by Basilea. Basilea reached a global agreement for Toctino® with Stiefel, a GSK company, in June 2012. In the U.S., oral alitretinoin is an investigational drug in phase III and not approved by the FDA.

Conference call

Basilea Pharmaceutica Ltd. invites you to participate in a conference call on Thursday, August 16, 2012, 4 p.m. (CEST), 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, August 20, 2012, 6 p.m. (CEST). 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 13139 followed by the # sign.

About Basilea

Basilea Pharmaceutica Ltd. is headquartered in Basel, Switzerland, and listed on the SIX Swiss Exchange (SIX: BSLN). Through the fully integrated research and development operations of its Swiss subsidiary Basilea Pharmaceutica International Ltd. ("Basilea") the company focuses on innovative pharmaceutical products in the therapeutic areas of bacterial infections, fungal infections and oncology, targeting the medical challenge of rising resistance and non- response to current treatment options.


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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