Hello. This is David Veatch, CEO of Basilea. And I would like to welcome you to our conference call and webcast, reviewing our financial results and key achievements for the full year 2020 and discussing our upcoming milestones and financial guidance for 2021. I would also like to mention that this call contains forward looking statements. Joining me on our call today are Ritesh Kaur, our Chief Financial Officer and Doctor.
Marc Engelhardt, our Chief Medical Officer. This morning, we issued a press release and our financial report on our results for the full year 2020. These documents are available on our website atbasilea.com. I would first like to provide a brief summary of our key achievements for 2020 year to date in 'twenty one. As already outlined at the half year, we have remained fully operational despite COVID-nineteen.
We achieved significant clinical milestones. We started 2 new clinical studies for derazantinib and lease of Ambulin and our other clinical studies are progressing well. Our 2 marketed drugs, Cresemba and Zevtera, continue to show a strong commercial performance in 2020, leading to CHF 78,000,000 of non deferred revenue contributions, a more than 13% increase versus prior year. In the 12 months to September 2020, in market sales of Cresemba grew by almost 30% year on year. We have executed 2 strategic transactions.
We successfully issued a new convertible bond due 2027 and extended the maturity of a substantial part of our debt from 2022 to 2027 by repurchasing a proportion of our 2022 convertible bond. We have also taken the first step to move from 2 different locations in Basel into a new headquarters in mid-twenty 22 by a sale and leaseback agreement for our current headquarters property. These transactions resulted in a positive one off effect of about CHF 15,000,000 of Swiss francs on our P and L and generated a cash inflow of approximately CHF59 1,000,000. As of December for 31, 2020, Basilea's combined cash and investments amounted to approximately CHF 167 1,000,000. And results.
We also announced just yesterday the divestment of our Chinese R and D facility. This transaction provides us with both increased sourcing flexibility going forwards and reduced operational costs in the midterm. Adesh we'll now give you an update on our commercial progress and present more detailed financial highlights for the full year 2020 as well as provide our financial guidance for Q1.
Then Mark will provide you with detailed information on the progress of our clinical programs. I'll now hand over to Adesh. Thank you, David. In 2020, together with our partners, we continued to make significant progress and the commoditization of Cresemba and Zevtera. The most current public in market sales numbers for Cresemba show that in the 12 month period ending September 30, 2020, the global sales of Cresemba grew by more than 28% year for the year to US244 $1,000,000 Partnerships continue to play an important role in the execution of our global commercialization strategy of our brands and provide a strong basis for the future revenue growth.
In 2020, Cresemba was launched in key countries in Asia Pacific and gained regulatory approval in Russia. Cevtera was approved in China for the treatment of lung infections. These achievements triggered milestone payments of around CHF9 1,000,000 for both brands combined. In January 2021, Pfizer crossed the Cresemba sales threshold that triggered a and USD10 1,000,000 milestone payments to us. This is an impressive sign of the continued strong sales performance of Cresemba and the high medical need it serves.
In total, FASILIA has received to date more than USD260,000,000 in upfront and milestone payments from its Cresemba and Zektera partnerships and our potential milestones remaining of more than US1 $1,000,000,000 in total. Marketing application processes have been initiated in a number of additional countries, including for Cresemba in China, when the marketing authorization applications were accepted for regulatory review last year. Moving on to financials. I will highlight some of the key financial figures that were published in today's press release and in more detail in the full year I would like to mention that all figures I will refer to are in Swiss francs. And financials for the full year 2020 are characterized by a significant change in revenue mix and the positive impact from our headquarters property sale.
As already anticipated at the beginning of 2020, deferred revenue contributions from Cresemba and Zevtera, which which relates to upfront development and regulatory milestone payments received in prior years decreased 25.9 percent to $33,800,000 Most importantly, non deferred revenue contributions, which most closely correlate with the actual in market of our brands increased 13.8 percent to 78,200,000 Other revenue components decreased by 22 percent to $15,600,000 mainly driven by lower part of reimbursements due to lower costs incurred related to the completed ceftopiprole skin infection study and the impact of the slight and delay in recruitment in the bloodstream infection study due to COVID-nineteen. Considering all these factors, Total revenue decreased by 5.1 percent to $127,600,000 Cost of products sold increased by 27.6 percent to $24,100,000 mainly due to the increase in product deliveries to partners. And SG and A expenses decreased 4.4 percent to CHF126,800,000 reflecting our and continued focus on cost management. We reported an operating loss of $8,200,000 which is an improvement of 52.3 percent compared to 2019 and a net loss of $14,700,000 which is an improvement of 34.4% year on year. Net cash used for operating activities was reduced significantly by 15 from 2% to $54,100,000 And this does not even consider the proceeds from the headquarters property sale and our convertible bonds transactions.
As of December 31, 2020, Bolleo's combined cash and investments amounted to of €7,300,000 Moving on to our convertible bond transactions, which were completed in July. The main purpose of the transactions was to improve the debt maturity profile. At this end, we conducted 2 transactions. The first transaction concerns the issuance of a new bond with maturity 2027. The provisional allocation was very successful, reflected by the fact that we were able to allocate a maximum targeted amount of CHF 100 and of €25,000,000 The second transaction concerns using the proceeds from the new bond to repurchase approximately 50% of the 2022 bond.
Because many bondholders held onto their bonds rather than taking the opportunity to Seldom, at a cash premium, we reduced the size of the 2027 bond as we had no intention of significantly increasing our debt level through this transaction. We were therefore able to reduce the 2022 bond by around 25% in a first We have earmarked the majority of the cash from the issuance of the 20 20 7 bond not already used to repurchase the 2020 to further reduce the 2022 bond by another 25%. At year end 2020, we have reduced the outstanding nominal amount of the 2022 bond by more than CHF50 1,000,000. Hence, we remain confident and we will meet our initial goal of reducing the 2022 bond exposure significantly, but over time rather than in a single step. Yesterday, we announced that we have entered into an agreement with the custom manufacturing organization, PHT key international to divest our Chinese R and D subsidiary.
The total purchase price will be US6.3 million dollars of which US2.5 million dollars are due upon closing and the remaining US3.8 million dollars over the course of next 3 years. All 72 employees and the facilities will be transferred to PHD, which ensures continuity for our ongoing R and D projects and also provides sufficient time to optimize our external sourcing of R and D services. We expect closing off the transaction in the Q2 2021. With regard to the expected financial impact, the annual operating expenses related to our Chinese subsidiary are in the mid single digit million range. The transaction will have immediately a small positive P and L impact upon closing in 2021.
Due to the transition period and the continued support being provided by PHD to ensure continuity in our R and D activities, a positive impact on our operating expenses will be limited in the initial 12 months after closing. We expect to see increasing levels of cost savings thereafter as we can start leveraging increased flexibility in sourcing external R and D services. I'm turning now to our financial guidance for 2021. We expect a continued improvement of our revenue mix, reflected by an anticipated 38% to 51% increase to $108,000,000 to $118,000,000 in non deferred revenue contributions from Cresemba and Zevtera. And financial results.
As in the past, the range reflects several potential milestone events for 2021. This should be the last financial year that we separately discussed deferred revenue contributions from Cresemba and Zevtera after expected to decline by around 90% to $2,500,000 Now that we have fully recognized and past upfront and milestone payments from our partners Pfizer, Astellas and Gozun. Overall, we expect an increase in and total revenue to $128,000,000 to $138,000,000 Once again, we expect total R and D and SG and A and to remain approximately stable. Cost of products sold is expected to increase based on higher product deliveries to partners. Based on this, the anticipated operating loss amounts to $13,000,000 to $23,000,000 which is below the operating loss reported for 2020, excluding the one off positive impact from the sale of the headquarters property.
Finally, we assume a strong cash position of around €110,000,000 to €120,000,000 at year end, excluding any potential impact from a reduction of the outstanding convertible bonds. Our year end cash and investment guidance considers that certain milestone payments and product deliveries may actually occur towards the end of the year, which would result in us reporting the P and L impact in 2021, but the corresponding cash inflow only happening in 2022. Also, our guidance takes into consideration that part of the purchase price for our Chinese subsidiary is only going to be paid after 2021. You should bridge the cash guidance to the operating loss guidance. I will now hand over to Mark for the clinical development update.
Thank you, Adesh. Let me start with our antibiotic testorbypro. In Europe and several markets outside of Europe, testorbypro and approved for the treatment of community and hospital acquired pneumonia. One of our key priorities for ceftobiprole is to gain access to the U. S.
Market, which is by far the most of the country for the commercialization of branded hospital antibiotics. Based on special protocol assessment agreements with the U. S. FDA, through successful cross deposit free studies are necessary for registration in the U. S.
Our Phase 3 program includes 1 study called target in acute bacterial skin and construction infection and one study called ERADICATE in staphylococcus aureus bacteremia for bloodstream infections. The program is funded after approximately 70% by the Biomedical Advanced Research and Development Authority or BARDA, which is part of the U. S. Department of Health and Human Services. This allows you to advance the development of ZEPTOPAR portfolio as market in a cost effective way.
In 2019, we reported positive profile results from the TARGET study. For the ERADICATE study, we and patient enrollment will be completed by year end 2021, leading to the reporting of top line results in the first half of twenty detail. Istobapturimazda is also positive, but there are plans to dismiss new drug application to the U. S. FDA and CentroBIFRA has designated a qualified infectious disease product by the FDA for these indications.
If approved, it will be eligible to receive 10 years of market in the U. S. From the date of approval. Nearly 120,000 staphylococcus aureus bacteremia or SAB infections have reported in the U. S.
In 2017. The ERADICATE study targets complicated SAE, which are characterized by concomitant or metastatic infection such as bone, joint or heart valve infections, persistent pachydermia or pachydermia in patients on dialysis. SAD is an area of high medical need with substantial mobility and a 30 day mortality of approximately 20% and there are limited antibiotic treatment options with only 2 approved treatments in the U. S. Which are vancomycin and daptomycin that cover both methicillin susceptible and methicillin resistant saprolocorphic aureus or MSSA and MRSA.
In 2020, the FDA approved the protocol management extending the maximum treatment duration from 4 to now up in 6 weeks in the ERADICATE study. This is important because it allows for the inclusion of patients with more difficult to treat infections, including those with complications such as osteomyelitis and epidural or cerebral absence. And results. Now moving on to oncology. Our lead oncology drug candidate is derazantinib, which we in licensed in 2018 from the U.
S. Company ArQule, which is now a wholly owned subsidiary of Merck. Derazantin is a targeted orally available small molecule inhibitor of fibroblast flow factor receptor or FGFR fgflavkylases. FGFR genetic operations, for example, Infusions, mutations or amplifications has been identified as potentially important therapeutic targets for various cancers, and we will refer to derazantinib as a pipeline in the product. Our development strategy focuses on achieving differentiation over other FGFR kinase and results and leveraging the unique properties of terazantinib.
Key differentiating factors include its unique kinase inhibition profile and its clinical safety profile. Besides FGFR, darodontium also inhibits the cognitive stimulating factor 1 receptor or CSF1R kinase, which has been reported to play a role in immune responses to us. Derazantinib also inhibits the Vazpept endothelial Bulk Factor 2 or VHF R2 kinase, which is known as a therapeutic target in the anti angiogenic treatment in multiple cancers, including gastric cancer. And data. Basilea's clinical development program currently comprises 3 ongoing studies: PD-one in intra polycholangiocarcinoma or iCCA, KA, which is a type of Islay lung cancer, IL-two in urothelial cancer and PHIL-three, which was started in 2020 in gastric cancer.
In February 2021, we reported positive top line results from the Q1 of the PD-one study, which provides the clinical proof of concept for derazantinib as monotherapy with first indication. This first cohort includes 103 patients with MGF R2 gene fueling positive response iCCA in a second line and post second line treatment setting. FGFR2 fuel is occurring about 15% of patients with RCCA. The objective response rate in these patients was 20.4 spend with a median progression free survival of 6.6 months. These results are consistent with an earlier Phase III study conducted by ArQule and they also to confirm the interim results from the PD-one study that we reported in 2019.
The efficacy results shown with darlinib are consistent with the efficacy seen with to our inhibitors as a class in FGFR2 field of positive ICTA patients and the safety and tolerability data to support Derazantin's potential differentiation versus other FGFR inhibitors. It should be noted that the data from PD-one are not fully mature yet and the number of patients are still continuing their treatment. We have expanded the PD-one study with an additional cohort of ITCA patients with FGFR2 gene mutation and AMPLYNP in their tumor. In October 2020, we presented full efficacy data, including patients from the 2nd cohort, the ARMQUE Phase 1 study and our expanded access program. This pooled analysis demonstrated that darazantin also had antitumor activity in this patient population.
These are encouraging results as other FGFR inhibitors in advanced clinical development have so far only reported very limited clinic activity in this patient population. We are therefore looking forward to interim results from the Q2 of PD-one, which are expected in the first half of twenty twenty one. In the Phase III study with derazantinib as monotherapy and in combination with Roche, Hidarone, checkpoint inhibitor, in the month. This is a biomarker driven multicore clinical study in patients with advanced urothelial cancer expressing XPSR genetic operations and interim results from derazantinib monotherapy are expected to become available in the first half twenty twenty one. We recently reported the recommended Phase 2 dose for the derazantinib atezolizumab combination in patients with advanced poly tumors in this study.
Interim efficacy results for the derazantinotetalizumab combination in patients with urothelial cancer are expected to become available in in the second half of twenty twenty one. We also plan to amend the PD-two protocol to store a high dose of derazantinib in 2 cohorts of this study. This dosing increase is supported by the safety and tolerability profile of Derazantinib at the current dose of 300 milligram per day. This may provide and additional benefits in monotherapy and combination to patients with FGFR positive urothelial cancer and also consider the evolving highly competitive treatment landscape in in urothelial cancer in patients both with and without FGFR genetic operations. IL-three was started in 2020.
This study explores selazanumab as monotherapy and in combination with atezolizumab and with Lilly's anti antigenic drug bromosirumab in patients with advanced gastric cancer and gastric bar genetic operations. Infra results for derazantin monotherapy and the definition of the recommended Phase 2 dose for the combination of parazanib with romanosirumab plus another anticancer drug, in cocktail anticipated for the second half of twenty twenty one. We have decided to investigate darizantinib in gastric cancer based on the tumor kinase inhibition profile from the inclusion in Zevo data and the high medical median dose indication. Clinical supply room is unplaced of Roche and Lily who provide atezolizumab and ramozirumab. Moving to our tumor checkpoint controller lizavambulin formerly known as 511553.
We are focusing our clinical development activities with lizavambulin of glioblastoma, the most common and aggressive form of primary malignant brain in an area of high unmet medical need with poor survival, high morbidity and very few treatment options available. Lisavapolin is a novel microtubule targeting small which induces tumor cell death through spindle checkpoint activation. It can be administered orally and IV, positive for pain barrier and has and shown productivity in brain tumor models in monotherapy and in combination therapy. In line with our approach to both biomarkers early in clinical development, we have been evaluating a panel of biomarkers. One of those is end binding project Mona EV1, which was previously identified in preclinical model and a potentially response biomarker for glioblastoma.
We have completed Phase 1 glioblastoma from our clinical study with daily oral dosing, we have observed a profound and exceptional objective response in a glaucoma patient with tumor tissue with EB-one positive. This patient continues on treatment for more than 2 years now. Based on our encouraging clinical and preclinical data with EB-one, we have started a biomarker driven clinical Phase 2 study in glaucoma in 2020 using EB-one positivity as a patient selection criteria. And results from this study are expected in the second half of twenty twenty one. I will now turn over to David.
Thank you, Mark. In summary, we are on track with the execution of our strategy with our 2 business pillars of oncology and infectious diseases. We are significantly growing our cash relevant revenues from of brands Cresemba and Zevtera. We are also on track to have Cresemba launched in 60 countries by the end of 2021. We are also continuing to advance our clinical programs towards the next milestones through 2021 2022.
2021 holds a number of important milestones, especially related to our clinical programs. We anticipate the top line results from the isoficonazole Phase 3 study conducted in Japan by our partner Assai Kissei Pharma. We also expect completion of patient enrollment into the ceftobiprole Phase 3 ERADICATE SAB study. For derazantinib, we have already reported top line results for the FIDI1 FGFR2 gene fusion cohort in ICCA. And in the first half of the year, we are also expecting interim results from the 2nd cohort with other FGFR2 genetic aberrations.
In addition, we are looking forward to interim results for derazantinib as monotherapy and in combination in urothelial cancer, and we also expect the first data in gastric cancer in monotherapy and combination therapy for derazantinib. For lease of Ambulin, we are expecting interim results from the EB-one biomarker driven Phase II study in recurrent glioblastoma. And finally, as we've just recently announced, we have passed an important preclinical milestone for a compound that we hope can be in the clinic early in 2022, hopefully adding to our already exciting pipeline. Thank you for your attention, and we'll now open the line up for your questions.
The first question comes from Louise Chen from Cantor. Please go ahead.
Hi, congratulations on all the progress this year and thanks for taking my questions. So my first question for you is how do you plan to show the competitive advantages of and services of derazantinib through your clinical trial programs. You have several readouts coming up still through the end of the year. And then second question is, can you Elucidate more the market opportunity for lease of Ambulance, the competitive advantages of that product and where it would fit into the treatment paradigm if it were approved? And the last Can you provide any more color on your potential first in class small molecule kinase inhibitor that you had disclosed recently?
Thank you.
Okay. Thank you, Louise, for those questions. Actually, why don't we begin, Marc, with you in terms of how do we hope to show and advantages of differentiation for derazantinib. And then also, maybe you could also address Mark, the lease of Ambulance and its sort of positioning in the glioblastoma market. But why don't we start with you, Marc?
Yes, certainly, David. Thank you very much for the question. So as mentioned before, we are building on the intrinsic features of derazantinib, the kinase inhibition profile and the safety profile to show differentiation. I think one of the key studies that we're conducting are the combination with atezolizumab and also the combination with ramasirumab and paclitaxel because it's and the standard treatment of secondary cancer. So these readouts that we've done at sea during the year or at the end of the year will certainly provide us with a direction of how to pursue the development further.
And I in the FFR inhibition together with the CSF1R inhibition rationalizes this combination and considering that the CSF1R inhibition of Derazantin is unique amongst kinase inhibition among FGFR inhibitors. We think that this really could provide a differentiation in addition to the clinical safety profile. To the second question, the market opportunity of lizavambulin. Here, GBM is clearly a proof of concept indication. We have seen, efficacy signals in the Phase I study that we could link to EB-one positivity.
We have now relatively robust prevalence estimates for EBIT1 positivity in GBM, which is in the range of 5 at Ascend. So this will not be a huge market segment, but if we are successful in GBM in in a refractory setting. We would certainly be able in this indication to move directly in a first line newly diagnosed setting. And I just wanted to mention that we have a study with the adult brain tumor consultant in the U. S.
Ongoing to assess the recommended Phase II dose and the maximum tolerated dose in a radiotherapy combination. So that would report, study in a first line setting. In addition, we are conducting and We will be presenting later this year prevalence assessments in non GBM tumor types, and this would provide the basis for a market size estimate beyond GBM. I think that's in short the answer to these two questions, I'm not sure. Adesh, did you want to add anything to that?
I think the only thing I would add is that GBM, of course, is a high un and at the end of this, the market opportunity will also be driven by the expense of the clinical benefits that can be provided to this patient population. And then maybe on the earlier compounds that he asked, I think we have at this point in time, we have provided the level of specificity that we can give. Just as a reminder, this is an externally sourced compound as an example for a partnership that we have done on the preclinical side in 2018 and taken it now to this milestone. It's a small molecule. So our area of focus, a kinase with a unique kinase inhibition profile, which we believe would provide the opportunity for a targeted development on the one hand and also for a potentially first to market opportunity with this and specific mode of action.
But it is probably a little bit too early to disclose more about the compound. We will certainly provide more information when we enter the clinic, which is planned for the early part of 2022.
Thank you. Thank you.
The next question comes from Arsen Gokhwaan from Kepler Cheuvreux. Please go ahead.
Hello, gentlemen. Thank you for taking my question. First of all, a follow-up question on derazantinib. What is your strategy with this drug? Let's assume that the next results will be positive.
What will be your strategy. Are you seeking for a partner? Or if you could elaborate a little bit, would be great. And two quick questions. Could you remind me the patent expiration in Europe and in the U.
S. For Cresemba and Zevtera. And the last one for Adesh. I'm not sure to well understand. Could you give us more color on your guidance and mainly in the discrepancy between EBIT forecast and the cash expectation at the end of 2021?
Thanks a lot.
Okay. So let me I'll take the middle one of those questions in terms of the Cresemba. It's not always patent actually, but the exclusivity the effective exclusivity in the U. S. Is 2027.
It's the end of Q1 2027 without the pediatric program approved with the pediatric program, which is ongoing, it extends into the end of Q3 2027. And then in Europe, it's 2025, but with the pediatric program, which is ongoing, as I say, if that's approved, that takes you to 2027 in Europe as well. So in terms of Europe and the U. S, we talk about the effect of exclusivity as long as we complete the pediatric program, which is well on track to 2027 in those two areas, geographies. In terms of the strategy and the partnering strategy for derazantinib, I think the important point is that we've got a history, obviously, as a company of partnering at the end of Phase 2.
We aim to try and participate in the Phase 3 to enable us more participation sort of down the line. We participated well with pharma in the case of septic biopsy with the U. S. Government. That doesn't mean that forevermore we will always go down that model, but we have a view at the moment that for derazantinib to maximize this pipeline in a product that we would probably seek the partnering approach for the Phase 3.
But as I said, that's not sort of a rule cast in stone. That's just like our history and looking at the potential to maximize this pipeline in a product. It probably makes most sense. Having said that, for lease of Ambulin, it might be a very different situation and for lease abandonment in a smaller targeted niche area. If it was initially, for example, in GBM, we could even consider commercializing ourself in selected markets, not everywhere, but in selected markets.
So it depends a little bit on a number of factors, the strength of the data, the speed, the size of the market opportunity, etcetera. There are a few factors that come into play and obviously, clearly also the interest from potential partners. That's what I'd say a little bit about the strategy. Adesh, do you want to come back on the financial question?
Sure. So thanks for the question, Arvind. I suppose the biggest The gap between the P and L guidance, which is the operating loss guidance of $13,000,000 to $23,000,000 that we have guided for and the cash position at the end of the year is probably the timing when certain milestones What happened and when product deliveries happen. Because how this usually happens is, we hit a milestone, we get a notification at some point, we issue an invoice. And if such a milestone, for instance, is hit in November or December, we would of course record the milestone in accordance with U.
S. GAAP in our profit and loss statements, The cash would only be coming in after December 31. And because it's sort of really binary, either the invoice has been paid on on 31st December or not, we sort of have to assume the full, let's say, invoicing or the due date of invoices. So that's the whole secret behind it. In essence, it would almost like to say there is a buildup or an expected buildup and working capital towards the end of the year.
But the working capital does not relate to any product in the sense of inventory it relates to receivables.
The next question comes from Ram Selvaraju from H. C. Wainwright. Please go ahead.
Hi, guys. This is Robert Burns on the line for Ram. Thank you for taking my questions. Just 2, if I may. So the first one, could you discuss how you're thinking about the opportunity the revenue opportunity for derazantinib in the FGFR2 mutated biliary tract cancer space.
Given the relatively comparable median PFS to that of emigotinib and also taking into account emigotinib's lead time in that area? And then my second question is, how are you thinking about the kind of landscape Some of these next generation FGFR twothree inhibitors that are making their way through the pipeline, for example, Relay Therapeutics or Kinabe Biopharmins? Thank you.
Thank you for the question. Why don't Adesh, do you want to take the first one on the ICCA sort of Tuncie, how we're thinking about that? And then, Mark, you could comment maybe on the future FGFR compounds.
Yes, Sure. So, I think we are not looking at ITC now isolation, but I think it is a good case for and the point that we believe strongly in differentiation. So when it comes to ITCA, for instance, as you correctly pointed out, I think from the perspective of clinical benefit, a relevant factor is the progression free survival. And as such, we are actually quite pleased with the outcome of the FIDUS-one study that we have just announced with PFS of 6.6 months, so far, we believe we are in the range of what has been reported with other FGFR inhibitors, generally speaking as a class, but then the differentiation as a monotherapy in ITCA would from our perspective be driven by at the safety and tolerability profile of derazantinib, where we believe that the profile is actually quite competitive. If you look at the space, it's quite favorable and potentially the differentiation through the cohort 2, which is still ongoing, which is in other genetic aberrations than FGFR2 gene fusion, which is a patient population that is smaller than the and infusion patient population, but clearly would provide a differentiation versus, for instance, you mentioned and also other FGFR inhibitors that are in more advanced clinical development.
In essence, it is really about differentiation, and then also to be quite honest, our strategy is not necessarily to position derazatinib as an iCCA drug, But we believe that the scope for neozantinib is far beyond ITCA. So therefore, we are looking at
for the urothelial cancer indication remark
previously indicated that based on the unique kinase inhibition profile, we believe that there is scope for differentiation, especially in combination with immune checkpoint inhibitors, with also scope for differentiation on the safety and tolerability profile. And then in gastric cancer, where we are even we have a potential first in class opportunity. So we are looking broader at derazantinib and just looking at the ICCA opportunity. And then maybe on your second question, I would hand over to
Mark. Yes. I think the new FGFR inhibitors that we're seeing Now coming to clinical study, I think there's a number of them tested mainly in China, but also as you mentioned really for 1,008, I think there's little published data on these inhibitors out there, I think the real compound is supposed to be very selective for FGFR tool, we'll need to see how these play out, how much selectivity really plays a role also in terms of maybe the toxicity profile. It's too early to say I would make a statement at this point, we really need to see the clinical data whether Viacom must provide comparable efficacy and especially whether the Hyosel activity has an impact on the safety profile. One part maybe for the derazant differentiation perspective.
As I said in response to the first question, I mean, our differentiation part of our differentiation is really based on the activity to other kinases, especially CSF1R and also HFR2, where we think when used in combination actually this may provide advantages and unique profiling against other FGFR inhibitors. So it will be interesting to see how for very selective FGFR2 inhibitors, for example, how their benefit risk is in the end.
And
the results. Thank you.
Next question comes from John Preissner from Edison Research.
Congratulations on the progress and thanks for taking my questions. So I have 3. The first is really what are the key sales catalysts for Cresemba and Zevtera over the next few years that we should really be looking out for? And the second, I understand that Astellas and the University of San Diego have initiated a Phase III trial with Cresemba for the treatment of COVID-nineteen associated on the Pneumonia Aspergillosis. Can you really discuss the potential indications and benefits of Basilea if this trial was successful?
And then my final question really is given the involvement standard of care in gastric cancer, how important is the Suramzim, paclitaxelderazantinib cohort and how does this really expand the potential patient population for derazantinib?
Okay. Thank you for those questions. I mean, I'll actually I'll address the first one, the one around the sales catalyst. I mean, in terms of obviously, as you've seen from the data that Adesh has talked about, we're actually in the existing markets. We've launched Cresemba and Zevtera, and sales are going well.
We've highlighted before the majority of our sales are coming from Cresemba. And Cresemba actually is growing in all markets that it's in. So we have continued growth there. But sort of in terms of new catalysts for the future, clearly, 2 markets that are very important that Adesh actually alluded to, is China and the launch in China and also Japan. And obviously, China, we've as he said, we've had accepted our 2 marketing applications by the regulators.
We don't know yet how long that would take and whether we are required to do additional studies or not, but the good news is that regulatory process by our partner, Pfizer, is underway. And then Japan, where we did have to do a Phase 3. And as I said, that's actually completed enrollment now, and we expect the results later this year. If they're positive, then we begin or our partner, Asahi Kissei, begins the regulatory process in Japan. So they would be 2 very strategically important markets for us because they represent, we believe, about 25% of the global potential of the compound.
So they would be 2 major events. And then for Zevtera, ceftobiprole, it's clear the approval we got for China is important. So the launch in China in 2022, end of this year is very important. And then also the most important though is the U. S.
And Mark mentioned that. So the opportunity for Zevtera, we believe, is the U. S. And obviously then the next major event there is completing the Phase III study, as he said, at the end of this year and then the results of that in the first half of next year. And if that's positive, then obviously, every focus we will have is on seeking the regulatory approval in the important U.
S. Market. So that's sort of the answer to the major sort of catalyst for the Cresemba and Zevtera. Mark, can you comment on the Astellas San Diego collaboration with regard to looking at in terms of COVID-nineteen.
I can comment, but cannot provide a lot of details to this because it's not in our territories. We know also from Germany about K series of COVID-nineteen patients who acquired in invasive aspergolosis and the use of Cresemba. I think Cresemba is particularly opted to this because of the pharmacological profile and also the drug interaction profile that which allows to alleviate concerns regarding interactions with other compounds. The percentage of patients with severe COVID-nineteen and lung infections that suffer then from invasive as per the losses, I'm not sure whether that's entirely clear. But because of the relatively high prevalence of COVID-nineteen, this may be But I would consider that really the steven basis for arthololotinamide patient is secondary and that an antitumvir treatment, which has shown to work in coronary artery based plasma with low to slight isoprenorphine is very well suited to treat these infections.
I think the other question was the value of the Ramasiramapahrichtuxildaruzanib cohort. I would approach this from a perspective that ramucirumab paclitaxel is a key treatment standard in the second line metastatic setting of gastric cancer. And that's quite a large group of patients. And I think it's quite important to in the group of about 10% of FGFR operations industry cancer patients to target these patients or may improve their outcomes by adding an FGFR inhibitor to this combination. In our viewpoint, the romosumab partial complex combination is quite well established.
I also think it will stay a standard in second line treatment. Even if the treatment landscape may shift a little bit. It could be but in the perioperative setting, docetaxel is now increasingly used in the context of the FLOT regimen. So if these patients occur early, there may be a concern of reexposing them to paclitaxel, but this is probably a relatively limited group. But if the first line treatment change from a 5FU, platin to a 5FU, platin immunotherapy combination, I I think that would not necessarily impact the 2nd line.
And then we're also running a tezolizumab derilinib combination cohort, which then may actually help us if these data were positive to rationalize going in gastric cancer metastatic setting first line. I'm not sure whether that answers the question. So if you have any other questions please turn the line.
No, that's great. Thank you. Thanks for answering all my questions.
Thank you.
The next question comes from Ryan White from Cowden Partners. Please go ahead.
Yes, thanks. I've got a couple of questions actually. I'm still A little bit confused on the strategy for liso vandulin in terms of development. So looking at EB1, it sounds about 5% of GBM patients. Is the intention then to move on to other biomarkers?
There certainly appears to be and the relevant ones to look at or to move on to all comers or to look at other tumors where And then secondly, just again, I hate to ask another question about differentiation of derazantinib, But it's very clear that resistance is going to be an increasing issue for the FGR inhibitor class in general. I wondered if there was any merit in the additional activities in the CSF1R pathway, perhaps, which may help in terms of having
Yes. I mean, I think, Mark, why don't you kick off and then I'll come back in terms of the EV1, the strategy and the approach there?
Yes, Tanzi. So we are so I think EB1 Xylasis is a biomarker that we've known about for a long time. We've done animal experiments over this biomarker back in 2016. And we've seen that this was a response rate biomarker in of glioblastoma in animal models. And then the EB-one is a protein on the mitral tubules, which has a function regulating the dynamic of the mitral tables and there have been descriptions also from other authors that have shown that this is a potentially a prognostic marker For example, breast cancer.
So looking at the evidence we have in terms of animal models, it was quite, I think, intuitive to today, this biomarkers really is on the path of physiological pathway, so it makes sense. We have then proposed a relatively high threshold for EB1 positivity based on the clinical data we've seen in a couple of patients. And with this threshold, we are now selecting about 5% of into our Phase 2 study and this will provide proof of concept. We have not published, but we know that EB1 is our EB1 productivity also occurs in other cancer types. We have submitted this for publication later this year.
So we can provide a more detailed update then and talk about other counter types. This could go down either to a specific role if we see either one positive in a low percentage of the larger cancer types or even in an agnostic role, What we do in parallel is that we are sequencing all patients who go into our study and are EB1 positive. And there could be a refinement of the biomarker in the sense that we may see in this EB-one hundred and forty population and non responders. And let me define the situation further. For now, the program is really directed towards EB1.
But of course we try to get a deep understanding how EB1 is genetically characterized and whether the biomarker signatures can be further developed.
Just to add one thing on the EB-one strategy. What's clear though is we're not planning on starting the next non GBM studies until we've proven the concept that it works. The EB1 is a response predicted biomarker in GBM. If we prove that and it works and we'll know that we predict in the second half of before the end of this year, then we could look at moving into other tumor types in the way Mark described. But clearly, if it doesn't work, then obviously the program will stop and just to be clear on that point.
In terms of the other point about the your differentiation of derazantinib and whether maybe the resistance could be different having FGFR and CSF1R etcetera. Maybe Mark that's another question for you, best to answer that.
I think it's a very interesting thinking and I think recently people have talked more about that the FGFR just located such a central place in the signaling cascade that the FGFR inhibition may be involved also in modulating resistance to other protein kinase inhibitors. And certainly, if we could show that the CSF1R inhibition really changes the tumor immune microenvironment, I think that would just be an additional component to it. So, yes, that's certainly the XFR inhibition itself and the inhibition of other kinases like VJAKR2 and CSF1R could play a role in modulating resistance to other and earnings.
Okay. That's helpful. Thanks, Mark.
The next question comes from Paul Zellerbrakan from Research Partners. Please go ahead.
Yes. I have a few questions on Cresemba. The first, it comes based on the Astellas numbers in which they give an outlook for Q1 of this calendar year, which is quite cautious seeing a year on year decline. The question is, are they just being cautious? Or is there still a corona effect?
Or are there some underlying causes there? So that would be the first one. 2nd is on Also on Cresemba in the U. S, if I understand correctly, the in market sales were up some 9% last year. Can you give a little bit of a feeling of the development of the number of prescriptions versus average price development?
Because I can imagine if people are unemployed, the reimbursement goes through public rather than private health insurance. So what was the effect of debt influence last year? And the last one, if I may, on the handover of The manufacturing of Cresemba to Pfizer, is it now completed? And what was the impact on the numbers in 2020? Thanks.
Thank you for the questions. In terms of the U. S, what I would say is that to look at 1 quarter to the next is sometimes always not that meaningful. There's a little bit of a sawtooth effect from 1 quarter to the next. I can't comment on whether Astellas is being conservative, but what I can say is that the gross sales growth in last year for the full year, if my memory serves it correctly, is around 13%.
But it's so it's healthy from a gross sales point of view. You are correct, by the way, in your comment about the channel and the discounts because, obviously, more people in 2020 were out of employment and there was more Medicare, Medicaid lower, a bigger discount channels used, but that's obviously, hopefully, if COVID starts to be managed at a different level than 2020, that's sort of one off effects and that will affect gross to net. What we tend to look at is the underlying health being the gross sales. And so the double digit U. S.
In our most mature established market, the U. S, the double digit growth last year is what we focus on in terms of showing the underlying health of the business. And post COVID, we hope that the gross to net will also reflect go back to what it was before. So yes, that's for sort of the view on Cresemba in terms of the U. S.
In terms of in terms one other factor that obviously was a factor that I think we made a comment in a previous either half year or a different press release where we talked about, obviously, the U. S. Dollar to Swiss franc exchange rate, that was another factor that actually affects Basilea when the change rate goes in favor of the Swiss francs because obviously Astellas is selling in dollars. So there are a couple of factors that are that you hope are more like one off events rather constant events, which is why I say we tend to look at the volume growth, the organic volume growth, and that's looking very healthy in the U. S.
Even though it's been launched a number of years. That's my comment on Cresemba. In terms of the transfer to Pfizer of the supply. Adesh, do you want to take that question?
Yes. So, first, where do we stand? We are expecting in 2021 to actually keep on supplying Pfizer with API and with some bulk wires and the bulk wire supply will extend to in 'twenty three. So in essence, the handover is partially completed. On the APL level, it will be completed by the end of the year.
And then we may be carrying on supplying them with some Cresemba Labs for another couple of years. On the impact perspective, some numbers have been disclosed, some haven't. What we have disclosed in our financial report is that product sales to Pfizer amounted to about $38,000,000 in in 2020, the €38,000,000 included €20,000,000 in or €21,000,000 in deferred revenue. The actual product sales were in essence the €17,000,000 difference between the deferred revenues and the total and product sales related to Pfizer. So that gives you sort of a perspective on 2020, then as indicated in 2021, this will continue.
In 2022, we would, of course, expect this queue to sort of fade away, this will then have an impact on a positive impact in turn on our cost and products sold. Because as you know, on the product sales to Pfizer, we have sort of limited margin Because the margin is coming through the royalty payments and the milestones that we get from Pfizer on their sales. Does this answer your question, Paul?
Yes, yes, it's clear. Thank you very much.
Thank you.
The
next question comes from Kiran Bhanji from Goods Partners. Please go ahead.
Hi, gentlemen. Thank you for taking my question. Just 2 for me quickly. I know firstly, you don't break out the Zevtera versus Cresemba mix, but could you give us sort of indication on to whether Zevtera was better or worse than it did in the previous financial year because I think it sort of slightly underperformed versus your expectations. And then secondly, could you provide a little commentary on how you think the reimbursement environment for antibiotics is changing, especially in the U.
S. Ahead of the Zevtera launch? Thank you.
Adesh, do you want to comment on the product revenues, what we can say? And I can come back on the environment.
So with regard to Zevtera, I think there are 2 separate points. One is the in market performance, which, generally speaking, increased year on year. The other point is that unlike with Cresemba, for Zevtera, we are only doing product sales to our partners. So we don't have royalties. And hence, our revenues do not necessarily reflect exactly how the product is doing in the market in a given period.
And as we're not breaking it out, we can't comment on how our ZEPERA revenues have been doing, but the in market demand in key markets has actually increased in 2020 versus previous years. And an important factor there is, of course, the approval in China, which will have a significant impact or is expected to have a significant impact forward looking as China is probably the 2nd most important market after and the U. S. From a commercial perspective or commercial opportunity perspective.
Yes. And the segue to your sort of second question, because they're linked is that we believe that up to about 90% of the potential the revenue potential of Zevtera is in the U. S. Looking at other analogs. And so the U.
S. Opportunity is significant for us. And your question is a good one in terms of Could the environment, the external environment in the U. S, particularly given our opportunity there, could it improve? And we know there's our standard answer to that question is that as of today, the environment is what it is.
We think there seems to be momentum in terms of moving in terms of different change in legislation that could impact and separate be provided more of a pull for antibiotics and make them more commercially viable in the U. S. Market. And the 2 pieces of legislation or the DISARM Act and even more importantly, I think the Passover Act, we don't know if they'll become law or if they will when they would become law. But what we do know is there seems to be an increase in visibility that something needs to change.
And we believe that in the U. S, something will happen in this area. We don't know exactly when, but that can only then improve the environment for us with Zevtera. Obviously, what you you've got to bear in mind is that we're not, given the timelines we talked about earlier, if we have the results of our Phase III SAB study in the first half of twenty twenty two, but we're not going to be filing until if it's positive, filing until the Q3, Q4 2022, and then that will be an approval sometime in 2023, at which point our with the QADP, we would have 10 years of exclusivity following the approval date, but that's the sort of time line. So in one respect, we've got some time for the external environment to improve.
And if it did improve, that would obviously could only help us with regard to our future ceftobiprole revenue potential. Perfect. Thank you.
The next question comes from Bob Pooler from Valuation Lab. Please go ahead.
Good afternoon, gentlemen. Congrats again on The excellent results for 2020, especially in the face of COVID-nineteen and also the negative currency translation effect. Just on COVID-nineteen, do you expect the COVID-nineteen pandemic to have a lasting impact on your future operations? You had Work from home, less traveling. So do you see anything going forward in the future and potentially worth this also cost savings for hiring people abroad, not based in Basel, etcetera.
Yes, thanks for the question. It's a good question. It's probably maybe a standard answer you might get from a lot of companies, but I clearly, it's shown us, like a lot of companies, that we can work effectively by being remote. I mean, there are certain roles in our company like, for example, lab workers, whether they be researchers or analytical people in our company who actually need to have sort of lab use. So there are some roles that can't, but the majority of our people, I think it's taught us that we can work effectively from home.
We've changed our practices. We've changed our, like a lot of companies, sort of SOPs and things to align with remote working. And I think an element of that will absolutely stay. And I think that also plays to Your question about could we be more flexible with employment, I think, yes, we've proved that it's not where you sit, It's the job you do that's important. And so yes, I think the easy answer to that is yes, there will be some sort of things that stay on after COVID hopefully has disappeared or reduced to a much lower level.
Okay. Thank you.
Then on your pipeline, do you expect to extend that soon and then would be internally or externally and also then rather anti infectives or oncology?
Yes, I mean, what we said earlier was that we have this compound that we talked about earlier that we hope as long as the IND enabling studies are successful this year, we hope to move that into the clinic. That's an oncology. It's kinase we talked about. And we can, obviously, as we said, give more details of that as we're around that time, beginning of 2022. We hope to put that into the clinic.
We've also got other oncology and anti infective agents in the different degrees of preclinical stages that we're trying to push towards the clinic that they're not so quite too close as this last one I just mentioned, we are also continually looking, and Adesh can comment because he's responsible for this, but we're also looking for external assets that fulfill our criteria in oncology and anti infectives. I think the nature of the number of assets that are out there. There'll be more oncology than anti infectives. But maybe, Adesh, you want to comment on our external strategy?
There's not really much more to add. So we are being selective about what we are looking at in order to make sure that we can actually add value. It's more about ensuring that opportunities fit to our external expertise where we believe It could create value, which we can then later on really pass on and potentially even partner if needed. That's actually the only other element that I would add to this.
Okay. And then my final question, You're seeing that the revenues are going up. You're still heavily investing also in your oncology portfolio products here next to Xevtera. But it seems that, Vincent, you're going to break even. Would that be possible next year?
Adesh, do you want
to take that one?
Yes. Sure.
I think the breaking as you're saying, I think what we have now consistently demonstrated over the course of the last 2 or 3 years, our cash outflow is under control. We are sort of we have stable expenses on the R and D and SG and A side. Our cash Inflow reflected by the nondeferred revenues from Cresemba and Zevtera is constantly going up. And as such, we are it is now controlled to some degree, you could also say, whether or not or when do we actually reach profitability. In response to your question, I would say it is purely a function of what our choices are going to be related to our oncology pipeline, we are working towards a number of different readouts in the course of 2021 and the early part of 2022.
And based on the readouts, as David indicated, we will have to make decisions around partnering, taking things forward ourselves, and that will, at the end of the day, indicate or will drive where do we breakeven or when do we breakeven.
Okay. So, yes, also there it's the main driver is adding value and maximizing profitability depending on the indication Right.
Thanks, Gideon. We're looking at things from a perspective of creating value. Very clear. Thank
you. Thanks, Yanis.
Thank you. Thanks for the question.
The next question comes from Victor Floch from Bryan Gardner. Please go ahead.
Hi, guys. Victor Flot from Rangani.
Actually, most of my questions have already been answered, but I still have one regarding the ICC indication. Do you believe that the interim results from the 2nd cohort expected in H1 will be enough to give you confidence to move on? Or is there a possibility that you will wait for the top line results expected next year?
Yes. You mean in terms of a regulatory progression, a regulatory process, do you mean, for ICCA? Yes. Yes. Definitely.
Yes, because no, our view on this is that you're right that with regard to ICCA, that we need initially, the top line results in the first half of this year, but also in terms of our overall regulatory strategy for derazantinib, because we've got a number of data points, as we've explained, in quite quick succession across different tumor types, across gastric and across urothelial and iCCA. I mean, if we didn't have so many points, we'd probably come to a different conclusion, but we want to see how the data evolves across those different tumor types to understand what's the best overall regulatory strategy. So because these are quite quick succession, we think because we're focused on differentiation rather than just speed. And speed is useful, but also differentiation is useful. So we want to see how these different datas play out over the next 12 months to understand what is the best approach from a sort of regulatory point of view for the compound as a whole.
Okay, got it. Thanks a lot.
Gentlemen, so far there are no more questions.
Okay. Well, thank you all of you for your questions and your continued interest in Basilea. Enjoy the rest of