Basilea reports 2010 financial results

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 drugresistant 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.”

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.

Contact
Media Relations Peer Nils Schröder, Ph.D. Head Public Relations & Corporate Communications T.: +41 61 606 1102 E.: media_relations@basilea.com

Investor Relations Barbara Zink, Ph.D., MBA Head Corporate Development T.: +41 61 606 1233 E.: investor_relations@basilea.com