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2020-08-11

Basilea reports strong financial results for half-year 2020, progress in R&D portfolio and successful completion of strategic projects, despite COVID-19

  • Financial results reflecting strong Cresemba and Zevtera performance and continued focus on expense management
  • Operating profit of CHF 12.8 million and net profit of CHF 9.9 million, including positive one-time effect from the sale of headquarters property
  • Solid cash and investments of approximately CHF 145 million, excluding cash proceeds from July bond transactions for improving debt maturity profile
  • No material COVID-19-related impact on operating performance and key studies for derazantinib and lisavanbulin and limited delay in phase 3 study with Zevtera
  • FY 2020 guidance on revenues and operating expenses confirmed;
    strong year-end cash and investments position expected

Basel, Switzerland, August 11, 2020

Basilea Pharmaceutica Ltd. (SIX: BSLN) announced today its financial results for the first six months ended June 30, 2020.

David Veitch, Chief Executive Officer, said: “We have achieved significant milestones in a highly volatile and challenging environment in the first half year of 2020. Despite the COVID-19 pandemic, the global in-market sales of our anti-infective brands, Cresemba and Zevtera, continued to show strong growth. We have also seen no material COVID-19-related impact on the key studies for our most advanced oncology drug candidates, derazantinib and lisavanbulin, and expect as previously announced, only a limited delay of potentially up to one quarter in the patient enrolment timelines for our phase 3 study with Zevtera in patients with Staphylococcus aureus bacteremia. Importantly, the U.S. FDA approved the extension to the maximum treatment duration in the study from four to up to six weeks, which will be beneficial for positioning, should the drug be approved, as it would allow for the treatment of more difficult-to-treat infections.”

He added: “We have also taken a major step forward in the optimization of our debt maturity profile, by the successful placement of new senior convertible bonds of approximately CHF 97 million and the repurchase of approximately CHF 47 million of our outstanding convertible bonds. Through this, we extended in an initial step the maturity of about 25 percent of our mid-term debt to 2027. In addition, we sold our headquarters property in preparation to moving to a new location in the Basel area in 2022. Based on both a strong underlying financial performance and the one-time effect from this sale, we are pleased to report an operating profit of approximately CHF 13 million and a net profit of almost CHF 10 million for the first half-year 2020.”

He continued: “We are looking forward to a number of important milestones in our oncology portfolio in the second half of the year and beyond. Following the recently announced completion of patient enrolment into the first cohort of the FIDES-01 derazantinib study in patients with bile duct cancer and FGFR2 gene fusions, we are expecting to present topline results in the second half of 2020. Interim results from patients with other FGFR2 genetic aberrations, who are included in the second cohort of this study, are also anticipated in the second half of the year. We are on track with patient enrolment in the urothelial cancer, FIDES-02 derazantinib study and are planning to start the FIDES-03 derazantinib study, in gastric cancer, in the third quarter of 2020. In addition, we are preparing the start of the phase 2 study with our tumor checkpoint controller, lisavanbulin, in patients with brain cancer within the next few months.”

Financial summary

Total revenue in the first half-year 2020 increased to CHF 69.3 million (H1 2019: CHF 63.2 million). Revenue contributions from the two marketed brands Cresemba and Zevtera increased by 17.2% to CHF 62.0 million (H1 2019: CHF 52.9 million), of which CHF 36.5 million (H1 2019: CHF 30.1 million) relate to non-deferred revenue and CHF 25.5 million (H1 2019: CHF 22.8 million) to recognition of deferred revenue. Deferred revenue is recognized for upfront, development and regulatory milestone payments received in prior years from partners. Other revenue amounted to CHF 7.2 million (H1 2019: CHF 10.1 million). This included CHF 6.6 million BARDA reimbursements (H1 2019: CHF 9.9 million), which are offsetting a substantial portion of the ceftobiprole phase 3 development expenses.1 The BARDA reimbursements year-on-year decreased in line with the reduced development expenses after the successful completion of the ceftobiprole phase 3 skin infection study and due to the COVID-19 related slower enrolment into the bacteremia study.

In the first half-year 2020, investments in Basilea’s pipeline resulted in research and development expenses of CHF 43.9 million (H1 2019: CHF 50.8 million). Such expenses were mainly driven by costs for the phase 3 program for ceftobiprole, the costs related to the ongoing preclinical and clinical program for derazantinib and the ongoing pediatric programs for ceftobiprole and isavuconazole.

Selling, general and administrative expenses decreased to CHF 14.4 million (H1 2019: CHF 16.2 million). As a result of increasing sales of products to partners, cost of products sold increased to CHF 13.1 million (H1 2019: CHF 9.4 million).

In the first half-year of 2020, the operating profit amounted to CHF 12.8 million (H1 2019: operating loss of CHF 13.2 million), leading to a net profit of CHF 9.9 million (H1 2019: net loss CHF 15.4 million), which resulted in a basic earnings and diluted earnings per share of CHF 0.92 and CHF 0.91, respectively (H1 2019: basic and diluted loss per share CHF 1.44).

Net cash consumption from operating activities (excluding cash inflow from the sale of the headquarters property) in the first half-year 2020 was reduced by 27% to CHF 33.2 million as compared to CHF 45.4 million in H1 2019. This is a result, on the one hand of the significant increase in cash inflow based on Cresemba and Zevtera performance and, on the other hand, of Basilea’s continued focus on managing its operating expenses by continuously optimizing its investments into its preclinical and clinical portfolio. Combined cash and short- and long-term investments amounted to CHF 144.7 million as of June 30, 2020, compared to CHF 161.0 million as of December 31, 2019.

Key financial figures

(In CHF million, except per share data)H1 2020H1 2019
Product revenue30.525.4
Contract revenue31.527.6
Revenue from R&D services0.20.1
Other revenue7.110.1
Total revenue 69.363.2
Cost of products sold(13.1)(9.4)
Research & development expenses, net(43.9)(50.8)
Selling, general & administrative expenses(14.5)(16.2)
Total cost and operating expenses (71.5)(76.4)
Profit from sale of assets15.0

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