Basilea reports 2010 financial results
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Basilea Pharmaceutica AG /
Basilea reports 2010 financial results
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Basel, Switzerland, February 10, 2011 - Basilea Pharmaceutica Ltd. (SIX: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(TM)/Zevtera(TM)) 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.
For further information, please contact:
+-----------------------------+--------------------------------+
| Media Relations | Investor Relations |
+-----------------------------+--------------------------------+
| Peer Nils Schröder, Ph.D. | Barbara Zink, Ph.D., MBA |
| Head Public Relations & | Head Corporate Development |
| Corporate Communications | |
| +41 61 606 1102 | +41 61 606 1233 |
| media_relations(at)basilea.com | investor_relations(at)basilea.com |
+-----------------------------+--------------------------------+
This press release can be downloaded from www.basilea.com.
--- End of Message ---
Basilea Pharmaceutica AG
Grenzacherstrasse 487
P.O Box Basel Switzerland
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Freiverkehr in Börse Berlin,
Open Market (Freiverkehr) in Frankfurter Wertpapierbörse,
Freiverkehr in Bayerische Börse München;
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Datum: 10.02.2011 - 07:16 Uhr
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News-ID 51309
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