Ladies and gentlemen, welcome to the Basilia Pharma Chautica's Half Year Results 2019 Conference Call and Live Webcast. I'm Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to David Wych, Chief Executive Officer. Please go ahead, sir.
Thank you. Hello. This is David Veatch, CEO of Basilea. I would like to welcome you all to our conference call and webcast reviewing our financial results and key achievements for the first half year twenty nineteen and also review our upcoming milestones and financial guidance for the full year 2019. I would like to mention that this call contains forward looking statements.
This morning, we issued a press release and financial report on the results of the first half year twenty nineteen, and these documents are available on our website atbasilea.com. Joining me today on the call are Adesh Kaul, our Chief Financial Officer and Doctor. Mark Engelhardt, our Chief Medical Officer. For those on the call who are less familiar with Basilea, we focus on the research, development and commercialization of innovative medicines that address the medical challenges in the therapeutic areas of oncology and infectious diseases. Basilea has a proven track record of progressing brands from research through clinical development to commercialization.
We have successfully brought 2 anti infective brands to the market, our antifungal Cresemba and Zevtera, our broad spectrum antibiotic that also covers MRSA. We continue to make great progress establishing Cresemba and Zevtera as global brands. In the first half of twenty nineteen, we saw continued strong revenue growth, including a substantial increase in the revenue contributions from Cresemba and Zevtera. We also made significant progress in our clinical stage programs and have been able to strengthen our preclinical pipeline through in licensing collaborations. I would like to provide a brief summary of the financial results and development milestones we've achieved.
We significantly increased the revenue from Cresemba and Zevtera by 91% year on year to CHF 53,000,000, reflecting both the growth from the first launch markets, but also initial contributions from newly launched markets. We improved our operating result for the first half year twenty nineteen by 35% compared to the same period last year. I'm also pleased to report a half year cash position of CHF 178,000,000, which provides us with the necessary flexibility to continue moving forward towards additional value inflection milestones in 2019 and beyond. We also made significant progress in our late stage clinical development. We reported positive Phase III top line results for the target study with ceftobiprole in skin infections.
This is
a major milestone towards bringing ceftobiprole to the important U. S. Market. We also expanded our derazantinib clinical program. After reporting positive interim results from the Phase II study in intrahepatic cholangiocarcinoma, we recently initiated the Phase III study in patients with advanced urothelial cancer in combination with Roche's immuno oncology drug, Tecentriq, to broaden the therapeutic potential of derazantinib.
Adesh will now give you an update on our commercial progress and also present financial highlights for the half year twenty nineteen as well as our financial guidance for 2019. Then Mark will provide you with more detailed information on the progress of our clinical development programs. And then lastly, I'll provide you with an outlook for the remainder of 2019 beyond. So I'll now hand over to Adesh.
Thank you, David. In the first half of twenty nineteen, we together with our partners continued to make significant progress in the commercialization of our 2 hospital ant infective brands, Cresemba and Zevtera. The most current public in market sales numbers available for Cresemba showed that in the 12 month period ending March 2019, the global in market sales of Cresemba grew by 43% year on year to approximately USD 170,000,000 This impressive performance is driven by a continued strong sales uptake in the U. S. And early launch countries in Europe.
Going forward, we expect growing contributions from new and recently launched markets, adding to the continued growth in the more established markets. In the U. S, Astellas reports Cresemba sales for January to June 2019 of $67,000,000 For its fiscal year 2019, from April 2019 to March 2020, Astellas guided for $143,000,000 in Cresemba sales, representing an expected 20% growth year on year. Cresemba sales are increasing in Europe too. As reported in January, the strong sales performance in Europe triggered a US5 $1,000,000 milestone payment from Pfizer.
Whilst there is significant growth potential from the existing markets, an important factor for maximizing the global value of our brands is to continue to expand the geographic reach. We are pleased with the progress that our partners have made in 2019 so far in this respect. In the first half year twenty nineteen, Cresemba was launched in 14 additional countries. It is now marketed in 33 countries globally. Zevtera was launched in Jordan and has now been launched in a total of 17 countries and we expect further launches of Zevtera around the world over the coming months years.
Our partners are well on track to reach the goal of 40 launched countries for Cresemba by the end of 2019. This would double the number of countries from the end of 2018. We anticipate this number of launch countries will increase to 60 by the end of 2021. Our license and distribution partnerships for both our marketed products now cover more than 100 countries worldwide. They play an important role in the execution of our global commercialization strategy and provide a strong basis for future revenue growth of our brands.
Basilea participates in the commercial success of both Cresemba and Zevtera through royalties or a transfer price structure. In addition, we already realized around $245,000,000 in upfront and milestone payments and could receive up to $1,100,000,000 in potential future regulatory and sales milestone payments from our partnerships. Turning now to ceftobiprole, our anti MRSA broad spectrum antibiotic, which is marketed in most countries under the brand name Zevtera. Our key priority for Zevtera is to gain access to the U. S.
Market. MRSA remains an important healthcare issue and resistance rates are still high. In the U. S, MRSA rates of 45% have been reported, which are among the highest in the world. The U.
S. Clearly is the most important country for the commercialization of MRSA branded hospital antibiotics. For individual products, the value share may go up to 90% as seen for daptomycin, which is a standard drug for the treatment of MRC infections in the hospital and also for ceftarolene, which is a patent protected anti MRC cephalosporin based on the positive results of the Phase III target study. 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 half year report.
I'd like to mention that all the figures I will refer to are in Swiss francs. The financials for the first half year twenty nineteen are characterized by a significant increase of the revenue contributions from our 2 marketed products, Cresemba and Zevtera. This increase more than offset the impact from the completion of the non cash revenue recognition related to our former hand eczema brand, TOCTINO. Total revenue increased by 5% from $59,900,000 to $63,200,000 The increase was mainly driven by higher revenue contributions from Cresemba and Zevtera, which increased 91% from $27,700,000 to 52,900,000 dollars Our total cost and operating expenses declined by 5% from $80,300,000 to 76,400,000 The operating loss in the first half year twenty nineteen improved by 35 percent from $20,400,000 to 13,200,000 dollars Net cash used in operating activities was reduced significantly by 25 percent to $45,400,000 compared to $60,400,000 in the first half year of twenty eighteen. This improvement is a result, on the one hand, the significant increase in cash flow generated from Cresemba and Zevtera and on the other hand of Basileo's continued focus on managing its operating expenses by continuously optimizing its preclinical and clinical portfolio and targeting its investments into its R and D pipeline.
As of June 30, 2019, Basilea's combined cash and short term investments amounted to $177,900,000 In the first half of 2019, we lost $18,800,000 in revenue from the non cash deferred revenue recognition related to the TOKTINA transaction. We were able to more than offset this decrease through a €25,100,000 increase in revenue contributions from the 2 marketed products Cresemba and Zevtera. In addition, we reported $3,200,000 lower BARDA revenues in the first half of twenty nineteen. This decrease is a result of lower costs related to the completed ceftobiprole Phase 3 skin infection study, resulting in lower reimbursements from BARDA in the first half year twenty nineteen. Moving to expenses.
Total cost and operating expenses decreased from $80,300,000 in 2018 to $76,400,000 in the first half year twenty nineteen. The decrease is mainly driven by a $7,000,000 decrease in R and D expenses. Cost of products sold increased by $2,900,000 largely reflecting increasing product deliveries to our partners. SG and A expenses remained basically flat. Coming now to our financial guidance for the full year 2019.
Based on our key priorities for the second half of 2019, which David will outline shortly, we provide the following guidance for the full year 2019. Total revenue is expected to amount to between $128,000,000 $133,000,000 This is at the lower end of our previous guidance because of the lower than previously anticipated bottom reimbursement due to the lower than anticipated costs for the successfully completed Phase 3 skin infection study with ceftobiprole. Most importantly, we anticipate continued significant revenue growth from Cresemba and Zevtera in the range of 105 to $110,000,000 for the full year 2019, which is an anticipated increase of 28% to 34% over 2018 and at the high end of our previous guidance. For the full year 2019, we expect operating expenses to remain at approximately the same level as 2018, leading to an anticipated operating loss of $22,000,000 to 27,000,000 dollars narrowing our previous guidance around the same midpoint. We anticipate net cash used for operating activities to further decrease in the second half of twenty nineteen as compared to the first half year, resulting in an anticipated net cash consumption of $60,000,000 to $65,000,000 for the full year.
I will now hand over to Mark for the clinical development update.
Thank you, Adesh. Let me continue further with our antibiotic ceftobiprole. We have just reported positive top line results from the so called TARGET study, a Phase 3 study in patients with acute bacterial skin and skin structure infections, also known as ABSSSI. The target study was a randomized double blind Phase 3 non inferiority study and enrolled 6 79 patients. It was conducted at more than 30 clinical centers in the U.
S. And Europe. Patients received either ceftobiprole given intravenously 3 times daily or the comparator regimen of twice daily intravenous voncomycin plus atstreonam. Ceftobipro met the pre specified primary endpoint of early clinical response at 48 to 72 hours after start of study drug administration in the intent to treat population. This is the key endpoint according to the FDA guidance for the U.
S. And includes all randomized patients. To achieve this endpoint, the initial skin lesion size had to decrease by 20% or more from baseline. Response rates were 91.3% with testoviprole versus 88.1% for the comparator. Testoviprole also met the pre specified secondary endpoints of investigator assessed clinical success at the test of cure visit 15 to 22 days after randomization.
This is the key endpoint for the EMA in Europe. In the ITT population, clinical success was shown in 90.1% versus 89% and in the clinically evaluable or CE population in 97.9% versus 95.2%. The CE population is the subset of patients in the ITT population with no major protocol deviations. In the target study, approximately 85% of the ITT population. In summary, ceftobiprole was non inferior to vancomycin plus atstirinum for the treatment of ABSSSI and the key endpoints for the FDA and Europe were both met.
Success rates showed a trend in favor of teftobiprole and the lower bounds of the 95% confidence intervals were all well within the pre specified non inferiority margin of 10%. Positive results were consistent in an analysis by region for the USA and Europe. Ceftobiprole was well tolerated in the target study. The overall rates of drug related adverse events were 20% for ceftobiprole and 18% for vancomycin plus estrionum and thus similar between the two treatment groups. The most common drug related adverse events in both treatment groups were nausea, diarrhea and headache and the safety profile of teftopiprole in the target study was consistent with a known safety profile from earlier studies.
The successful target study is a major milestone towards the filing in the U. S. Importantly, the 2nd Phase 3 study in staphylococcus aureus bacteremia or bloodstream infections, a study called ERADICATE, is well on track and is expected to deliver top line results as planned in the second half of twenty twenty one. The Phase 3 program for ceftobiprole is funded up to 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 us to advance the development of Trypto by portfolio's market in a cost effective way. If the bacteremia study is also positive, Basilea plans to submit a new drug application to the U. S. FDA.
As ceftobiprole is designated a qualified infectious disease product by the FDA for these indications, if approved, ceftobiprole will be eligible to receive 10 years of market exclusivity in the U. S. From the date of approval. Now moving on to oncology. Our lead oncology drug candidate is derazantinib, which we in licensed in 2018 from the U.
S. Company ArQule. Derazantinib is a targeted orally available small molecule inhibitor of the fibroblast growth factor receptor or FGFR family of kinases with the strongest inhibition seen with FGFR1, 23. Deridantib also inhibits the colony stimulating factor 1 receptor kinase or CSF1R kinase, which has been identified as an important target in the modulation of the tumor immune microenvironment and this supports combination studies of derazantinib with immune checkpoint inhibitors. In January 2019, we reported encouraging interim results from the registrational Phase 2 study called FEDUS-one in the second line treatment of FGFR2 fusion positive iCCA.
The FEEDUS-one study is expected to report top line results in mid-twenty 20 in iCCA patients with FGFR2 fusions. This could potentially allow for accelerated approval in the U. S. In iCCA. We have furthermore expanded the FEDUS-one study in June with a new cohort of ICCA patients with FGFR2 gene mutations or amplifications in their tumors.
Through this new cohort, we intend to further define the full therapeutic potential of derazantinib in patients with iCCA. As mentioned earlier, derazantinib also inhibits the colony stimulating factor 1 receptor or CSF1R kinase, which is involved in the regulation of tumor associated macrophages and immune response in cancer. Preclinical data has shown that tumor macrophage modulation through CSF-one R Blockade renders tumors more responsive to T cell checkpoint immunotherapy, including approaches targeting PD L1 and PD-one. CSF1 R kinase inhibition may thereby improve the susceptibility of 2 months to immunotherapy. Additionally, in urothelial cancer, patients with low PD L1 expression, which has been associated with reduced responses to immunotherapy, show frequent FGFR genomic abnormalities.
Therefore, derazantinib combined with PD L1 inhibitors may address several oncogenic mechanisms and provide a new therapeutic paradigm. The inhibition of CSF1R by derazantinib seems to be a unique feature for derazantinib compared to other FGFR inhibitors, and this is supported by chemical structure analysis which show that derazantinib fits better into the CSF1R binding pocket than other FGFR inhibitors such as erdafitinib. The CSF1R inhibition may be important in the treatment of urothelial cancer, but may have a broader utility to support combination studies in other cancer types. We have recently started a Phase 2 study with garazantinib as monotherapy and in combination with Roche PD L1 blocking immune checkpoint inhibitor, atezolizumab, Articentric, in a biomarker driven multi core clinical study in patients with advanced urothelial cancer. The name of the new study is FEEDIS2.
FGFR operations play an important role in many other cancers beyond iCCA or urothelial cancer, including gastric, breast and lung cancers. We are currently conducting significant preclinical translational work and this is being done in order to identify and prioritize further indications and patient populations which may benefit from treatment with derazantinib as a single agent or in combination with other cancer therapies. Moving now to our tumor checkpoint controller, BAL101553. We continued our activities in the field of glioblastoma, the most common and aggressive form of primary malignant brain tumors, and also an area of high unmet medical need with very few treatment options available. We are currently conducting 3 clinical study with BIO101553 3 in this indication.
In Switzerland, a Phase 2a expansion study in patients with recurrent glioblastoma is ongoing using weekly 48 hour infusions. A separate arm in this study also includes patients with platinum resistant ovarian cancer. This study is anticipated to complete enrollment around year end 2019. In the U. K, the Phase 1 dose escalation study is ongoing in patients with recurrent or progressive glioblastoma using daily oral administration of BAL101553.
The study is close to completion with the aim to define the maximum tolerated dose. Finally, a Phase 1 study is ongoing in the U. S. In patients with newly diagnosed glioblastoma using oral BAL101553 in combination with radiotherapy. This study is conducted in collaboration with the Adult Brain Tumor Consortium, Cancer Institute.
Enrollment into this study could be completed by mid-twenty 20. For BAL11553, we had previously identified a potential response predictive biomarker called N binding protein 1 or EB1 based on comprehensive preclinical studies in glioblastoma models. In the ongoing clinical Phase 1 study with daily oral dosing of BAL11553 3 in patients with recurrent glioblastoma, we have seen an exceptional durable response with a patient who is ongoing for more than 15 months in the study and shows an approximately 70% area reduction of the GBM tumor. The GBM tissue investigations performed in this study showed a strong EB1 expression in the GBM tissue of this responding patient, while non responding patients did not show this pattern of strong EB1 expression. We are therefore assessing the potential utility of EB1 to support a biomarker driven clinical program in GBM and potentially other cancer types and the use of BAL101553 as a targeted therapy in patients whose tumors show high EB1 expression.
Moving on to our 3rd oncology drug candidate, the Panra SARS kinase inhibitor BAL3833. As previously reported, the first in human Phase 1 dose escalation study with the oral formulation of BAL3833 in patients with solid tumors was completed without defining a maximum tolerated dose. The oral formulation explored in this study did not achieve consistent drug levels in patients. Based on the observed pharmacokinetics in the Phase I clinical study, we do not intend to move forward in clinical development with this formulation. However, preclinical activities are ongoing to see if there are alternative ways forward with reformulated drug candidates.
Finally, Basilea has entered into licensing and research collaborations for preclinical compounds in its strategic focus areas of oncology and infectious diseases. Thus, we are strengthening our pipeline to provide potential clinical assets for the future. I will now turn over to David.
Thank you, Mark. In summary, we are on track with the execution of our strategy in terms of both significantly growing our revenues and advancing our R and D portfolio. We have already achieved the majority of the development goals we set for 2019. For this second half of the year, there are 2 additional milestones for BAL101553. As Mark indicated, we anticipate to complete enrollment into Phase 1 study with the oral formulation in patients with recurrent glioblastoma and we also expect to complete the Phase 2a study with 48 hour infusion in patients with ovarian cancer and glioblastoma.
Operationally, we will continue to focus on increasing our cash generating revenues from both our marketed brands Cresemba and Zevtera. We will advance the derazantinib registrational Phase 2 study in intrahepatic cholangiocarcinoma and the Phase onetwo study in urothelial cancer towards data readouts in 2020. We will progress the Phase 3 study with ceftobiprole and staphylococcus aureus bacteremia towards top line results in the second half of twenty twenty one. And finally, we will continue to explore opportunities to selectively expand our clinical and preclinical oncology portfolio through both in licensing and internal development. We will now open the line for your questions.
Our first question comes from Louise Chen from Cantor. Please go ahead.
Hi, thanks for taking my questions here and congratulations on the quarter. So my first question is the primary mechanistic advantage and disadvantages of the FGFR mechanism for the market or in development? Second question I had is back on derazantinib again. What other new indications will you pursue? Looks like you've already moved here on 2 and I know there are others in the wings here.
So anything on that front will be helpful. And then last one here is on BAL101553 for the treatment of glioblastoma. Is there any interest in combination therapy with this product? Thank you.
Okay. Thank you, Louise. Actually, given the questions you've asked, I'll ask Mark. Could you start off with the FGFR mechanism in cancer, the comment on any different indications we might be looking at? Actually, they're probably all for you initially.
And then 101553, the combination potential. Maybe, Mark, you could?
Yes. So as I've understood, the first question was about the mechanistics of the anti cancer effect in FGFR genomically altered tumors and the differentiation of darazantinib. So I think today we know that at least 2 tumor types are really have where FGFR is a strong oncogenic driver, which is iCCA and urothelial cancer, where several FGFR inhibitors have shown significant and really substantial therapeutic benefit. There are other indications that are currently being explored. Some companies do basket study, others look at indication.
We have done a lot of translational work and also feel confident to expand our reach in terms of cancer indications beyond urothelial and iCCA and we will update on these plans later in the year. In terms of the differentiation, we believe when looking at the various FGFRA inhibitor and clinical development that there is differentiation between these compounds on the kinase inhibition profile and one of the points we've made during our presentation is that darzantinib also inhibits CSF1R, which may be quite important in the combination therapy with immunotherapy agents. We also see differences in the safety profile of the various compounds. There are some compounds which cause a higher rate ophthalmic events, including retinal events. There's difference in nail toxicity and hand foot syndrome.
And this may all impact the ability to combine these compounds clinically. So in short, there is the 2 really established indications currently is iCCA and urothelial cancer. There are additional indications that we are in the process of moving into at least one other indication based on the substantive preclinical work. The differentiation is really about pharmacology kinase inhibition profile and safety profile.
And then the 101,553 combination potential?
It's certainly there. We have frequent data that have looked at combination with radiotherapy. Remember, we are conducting a study in the U. S. With the ABTC in newly diagnosed glioblastoma in combination with radiotherapy and the support by the ABTC that we obtained was really based on the preclinical data in combination with radiotherapy.
And we also have studies with triple combinations including temozolomide, which are very promising. In addition, we have several preclinical studies combining with Herceptin or Avastin that may become relevant when we talk about GBM. I said this would be future plans. At the moment, we are looking into the combination with radiotherapy. And as we've indicated during the presentation, we're looking into strong EB1 expressing tumors and may use this as a potential enrichment biomarker for future single programs.
Okay. Thank you.
Next question comes from Bob Pooler from Valuation Lab. Please go ahead.
Good afternoon, gentlemen. Congratulations for the excellent first half results and also the positive top line target results there. Mahesh, three questions, if I may. First on KRYSTENBA. At the moment, most of the sales are generated in the U.
S. You expect with the global rollout that Europe and rest of the world will overtake that and become more than the U. S. Going forward? Second question is on Zevtera.
Now with the target results in the pockets, do you expect to start negotiations on commercialization rights in the U. S? Are you still going to wait for ERADICATE results there? And then the third question is on derazantinib. What is the expected trial duration of this SITUS-two trial in urothelial cancer?
And could you indicate what kind of peak sales you're envisaging for this indication? Thank you.
Okay. Thanks, Bob. So I'll kick off with the sales of Cresemba and then I'll hand over to Adesh and Mark for some of the other questions. But in terms of the yes, you're correct. If you look at the sales now and you can look at this from the IQVIA Adesh alluded to, the $170,000,000 of 12 month sales to the end of March that more than half of them are from the U.
S. And that's largely because of the fact that the market access in the U. S. Was is quick, but also the U. S.
You may remember the FDA approval was before the EMA approval. So, we launched in the U. S. Or STELLARIS launched in the U. S.
In March, April 2015, whereas it wasn't really launched December until 2016 in Europe. So, the U. S. Got off to a strong start and it's growing still nicely, but it's a significant part of the sales. Ultimately, to come back to your question the other part of your question, ultimately, if you look at voriconazole, which I guess you could say is the best benchmark for us in terms of the previous gold standard for invasive aspergillosis, voriconazole global sales at peak were about 25% in the U.
S. So actually, unlike what Adesh was commenting on for Zevtera, where we believe the U. S. Is clearly the most important market for Cresemba, Ultimately, at peak, if we mirrored voriconazole, then the U. S.
Would be about a quarter of the global sales. Obviously, for us to materialize that and for that to happen, we need to launch in all the other major markets of the world, which we're currently planning to do. But that gives you an indication of ultimately the U. S. If it was to follow the voriconazole pattern, should be around the 25% of global sales.
Whereas at the moment, it's significantly more than that because of the reasons I've said. That's a comment on Qsymba. Maybe, Adesh, you could take the Zevtera commercialization strategy.
Yes.
Sure. And as you already implied, Bob, in your question, our preferred commoditization of Zevtera in the U. S. Will be partnering, so absolutely confirmed. We are constantly, as you know from our past discussions, in discussions with potential partners.
As part of our strategy, we will also discuss the positive target study results with partners. But we're not necessarily in a rush because from a registration perspective, the driving factor of the timing is driven by the bacteremia study readout, which will be in the second half of twenty twenty one. So for us, it will be important rather to find the right partner that will allow us in the right financial structure to optimize the value of the asset rather than rushing into a partnership.
And then, Mark, do you want to comment on the derazantinib FIDUS II trial duration?
Yes. So this is a study that will have several substudy or cohorts in different therapeutic setting, including a second line post chemotherapy, post immunotherapy patients, but also first line platinum ineligible. And we have a cohort in patients who had progressed on prior FGFR inhibitors to see how delisande works in that setting. So the entire study will if we run all cohorts, including follow-up, will go for approximately 3 years, but we expect in the next 12 to 18 months to have readouts from the ongoing cohort. So this will be a staggered approach with a staggered set of readouts, but the total trial duration is probably about 3 years.
And then the final point was around the peak sales potential of derazantinib in the urothelial cancer indication.
So as for other products, I'll take that question, Bob. This is Adesh. As for other products, other indications will not really provide peak sales estimates. However, I think it is safe to say that urothelial cancer is a significant market represents a significant market opportunity. It's the 6th most frequent cancer type in the U.
S. There are about 80,000 new cases reported in the U. S. On an annual basis. Of those, about 20% have an advanced disease or metastatic disease.
And within that population, I think there is some variance about estimates how many are FGFR positive, but I would guess somewhere in the range of 20% is a safe bet. So we're talking about 3,000 new cases in the U. S. Alone on an annual basis. And if you take sort of the G7 countries, would take that number probably to close to 8,000 cases per year.
So that should give you some indication. I think the peak sales at the end will then depend on the clinical benefit provided in this patient population, the duration of response, how long are they being treated and then ultimately, the pricing, which is also then a function of the clinical benefit that we'll be seeing out of the clinical trial. So therefore, there is sort of some guesswork that you would have to do.
Well, it's very clear, very describing the market there. So thank you for answering the questions.
The next question comes from Victor Flock from Bryan Garnier. Please go ahead.
Hi, guys. Thanks a lot for taking my question and congrats to the results. Actually, I have two questions about BAL553. First one, I was wondering if you have any epidemiological data regarding the frequency of the EB1 expression in patient with glioblastoma? And then second question, when are you expecting to present results from the Phase IIa study?
Okay. Thank you. Marc, I guess they're yours.
Yes. So I'll start with the second question. We'll report results from the Phase IIa study with a 48 hour infusion towards the end of the year. The other question about the EB1 epidemiology, that's currently something we are looking into. There is not much published on this topic and it also depends on the methodology of the staining method.
We believe that from what we've stained so far in the clinical trial that this is not a very frequent condition, which supports that this is could be quite something specific and targeted. So this is not this doesn't have a massive abundance. And we've been staying in a couple of samples from the clinical trials, as I said, which signals which points into the direction, and this is quite specific. And these are very good conditions to run a biomarker enrichment design because it could be quite a very specific biomarker for Bio11,553.
But it's a very just to reinforce what Mark said, it's a very good question and it's clearly the question one of the key questions we're asking at the moment and we're trying to find the answer to that and do the analysis to understand what is the epidemiology of EB1 incidence in GBM and for that matter other tumor types.
Correct. And to also understand whether there's a genomic underlying pattern for a strong EB1 expression, so we're not looking at this purely from a staining epidemiology, but we'd also like trying to understand the underlying genomic patterns of it.
Okay, got it. Thank you, guys.
The next question comes from Brigitte de Lima, Good Partner Securities. Please go ahead.
Good afternoon. I'd like to ask 3 questions on the anti infectives portfolio. The first one would be on Cresemba. Can you remind me if you expect Cresemba to be launched in the APAC region this year? And specifically, I'm wondering if that would trigger a milestone payment as well?
And then the other two questions on ceftobiprole. Can you remind me if it was ever on the cards to file the skin infection in Europe as a label expansion given the data is very strong? Maybe you've discussed this in the past, but I was just wondering if you look at your competitive environment is conducive to adding another antibiotic to skin infections. And then the third question would be on this recent initiative announced in July where the NHS will test a subscription service for anti infectives. So we've been seeing this coming.
The FDA talks about this. It seems to be happening now. To what extent might you be involved? Is IFTAIR potentially one of the antibiotics that could be trialed? And have you heard anything about other health system, other countries planning to do something similar in the near future?
And I'll stop here.
[SPEAKER JOSE RAFAEL FERNANDEZ:] Okay. Thank you, Brigitte. In terms of Cresemba and the APAC launches of Innodex, do you want to comment on that point?
[SPEAKER JACQUES VAN DEN BROEK:] So, hi, Birgit. The regulatory process in many countries outside of Europe and the U. S. Is not as clearly defined timing wise. So it's difficult to point to anything that is equivalent to PDUFA date.
So it's hard to say when exactly we would see launches in the APAC region. However, what is important is that our partner for the region Pfizer has made submissions in really a number of countries in the APAC region. And therefore, we are expecting to really see a launch in the very near future in the first countries in that region. With regard to milestones, what I would say is that the milestones in our transaction with Pfizer are predominantly sales milestones.
Just to add one thing. So, Adesh commented on Pfizer being our partner for APAC. The only it depends if you call it in the definition, but Japan is not with Pfizer. Japan is with another partner, Asahi Kissei. We previously explained that we're actually carrying out it's on track and we're carrying out Phase 3.
Our partner, Asahi Kissei, is carrying out a Phase 3 study in Japan with regard to a potential filing in Japan for Cresemba. So that's just in addition to what Adesh said with regard to the rest of Asia Pac.
And in that thank you, David. And in that collaboration, because that's more like a license agreement that we have, you would actually see regulatory and development milestones as well.
Okay. And then the comment about the skin with the strength of the target data, would we file I
can take that as well. So from a positioning perspective, just to be clear, for the U. S, we believe that the bacteremia study will be really the differentiator. However, as you pointed out correctly, the target data is actually quite positive. And given just the number of patients with skin infections, we believe that even in the skin indication, there may be an interesting market opportunity.
So that's generally speaking with regard to the U. S. Strategy. Outside of the U. S, we are evaluating with our partners on a more or less like country by country basis on the best strategy to leverage the data.
So there are considerations on the one hand of what kind of incremental sales would you be creating. On the other hand, you have to take into consideration what would be market access considerations, post regulatory requirements that you may have and so on. So that will be that's really very individual from country to country we're in discussions with our partners. What we can do in any event is we can, of course, leverage and our partner can leverage the data in appropriate medical communication in their territories. So we anticipate to publish the data and as such it will be available through the appropriate channels in the markets.
Yes. And just on the comment your comment about the UK policy initiative on antibiotics and have other countries come up with or thinking of coming up with other similar initiatives. I'll try and say this very briefly because it's quite a big topic, but of the so called sort of pull incentives that the antibiotic manufacturers are looking for from policy changes in terms of stimulating a sort of a greater commercial return for antibiotics. The 2 that we're aware of that have been sort of like announced are the UK one that you mentioned in July. There was also a U.
S. Policy initiative mentioned in August. And both are trying to deal with this issue of trying to separate the commercial return from the volume usage of the products and try and make it more financially viable for companies bringing out new antibiotics. The UK one, we are working with our partner. We obviously have a partner for a commercial stage partner in the U.
K, Correvio, and we are working with our partner and exploring the potential for Zevtera. It's been included in, admittedly, it's a pilot phase. The U. K. Have announced that there's, yes, 2 compounds that would be in the pilot phase of their initiative.
I mean, it's probably just worth saying whether or not we are included or not in the pilot phase, the U. K. Commercial potential for Zevtera is very small because of MRSA rates and looking at analogs for MRSA hospital antibiotics in the UK. The U. S.
Becoming more friendly, if you want to put it like that, environment for antibiotics is much more important for the reasons that Adesh said, the potential of MRSA agents in the U. S. And so therefore, the U. S. Policy initiative that was mentioned in August and there are other ones currently going through Congress that could potentially equally add to a more favorable commercial environment for antibiotics in the U.
S. They're much more meaningful for us. And actually, to the question of other countries like France or Germany or anywhere else, other countries might be taking part in discussions, but we haven't yet as yet seen any results of those policy announcements that have come out of the U. K. And U.
S. Hopefully that in essence some attempts to answer your question, Bridget.
Yes. Thank you. Very helpful. I'll go back in the queue. Thanks.
Thank you.
The next question comes from Brian White, Cantor Fitzgerald. Please go ahead.
Yes, good afternoon. I was wondering just on a couple of questions on derazantinib and the urothelial cancer indication and then also another one on the study itself. Just thinking about the recent positive results for the Tecentriq I'm bigger 1 in urothelial cancer. I know that there was no indication of response by PD L1 type, but I wondered if there was a risk that this might resolve some of the concerns that the regulators have with the use of checkpoint inhibition in urothelial cancer. As I guess, and I'll jump to that question.
I presume that you're measuring PD L1 status in the Phiris2 study as well? And then the final question, I guess, is that this is an open label study. So I presume you are able to feed some interesting data as and when you have it. Thank you. Yes.
It's an open label study, so we are seeing the data as they emerge. For the other question, the I think the Tecentriq data is in combination with chemotherapy. I mean, it's not a targeted treatment for FGFR alterations. So what we're seeing in urothelial cancer is that in the PD L1 low part of the urothelial cancers, there is nested an enrichment of FGFR alteration. That's what we're primarily targeting and trying to see whether we can leverage the potential synergy of derazantinib and atezolizumab based on the CSF1R inhibiting properties of derazantinib.
So we feel that this has quite a limited impact on any potential patient pool being accessible to of the Tecentriq study. And we are looking in every patients at the beginning at the PD L1 status.
Okay. Thank you.
The next question comes from Paul Verbraeken, Research Partners. Please go ahead.
Yes. Hello, gentlemen. Two questions, if
I may. The first one about Cresemba in Europe. When do you expect Pfizer to take over manufacturing? And is it going to be a gradual process per country? Or will it take place in one stroke?
And then the second about BARDA. BARDA revenues went down following the Phase III expenses, I guess. Should we, going forward, keep around this level? Or do you think the broader revenues are going to go down any further going forward? So that's it.
Thanks.
Thanks, Paul. Thanks for your questions. Adesh, you'll
Yes. So on the what thanks, Paul. So on your question about the Pfizer deferred revenues actually, as a matter of fact, you may have seen the footnote in our half year report that we are expecting the complete remaining portion of the upfront payment to be recognized within the next 12 months. And that, in essence, correlates with the time frame anticipated for Pfizer assuming responsibility for manufacturing. So that will happen in the course of 2020 or is anticipated as of today in the course of 2020.
Having said that, it is gradual in the sense not country by country, but step by step because as you may know, manufacturing is like a multistep process, starts with starting materials, API, drug product, secondary packaging and so on. So this has and is a gradual process stepwise, but not country wise. I hope this answers your question on the Pfizer manufacturing handover. The second question about BARDA is we wouldn't it is hard to really define in advance in on a 6 month period how much exactly will get sort of reimbursed by BARDA because the mechanism is simply that we are incurring costs and then we're being reimbursed for the costs. And the costs correlate or are driven by the progress that we're making on the studies, including the geographic mix, how many sites are active and so on and so forth.
Generally speaking, we wouldn't expect that portion to go down because with the SAP study, which is continuing, we're still expanding sort of on the number of sites being included in the study. So we expect some ramp up in the costs related to SAP in order to ensure that we have then the study completed and the top line results available as announced in the second half of twenty twenty one. So overall, I would think that the safest assumption is about flat going forward and then with a winding down in the first starting in the first half of twenty twenty one and then with the remainder in second half of twenty twenty two.
Okay, very clear. Thank you.
Thank you.
The next question comes from Jean Conroy from Edison. Please go ahead, sir.
Hi, there. Thanks for taking my questions. Just going to start with a couple on Cresemba. How do you see pricing strategies evolving as Pfizer looks to launch in additional markets? And can you provide any more guidance on how the sales milestones, which are based on cumulative sales, how they're staggered?
And then I've got another question about derazantinib afterwards.
Okay. Thank you, Sean, for the question. So in terms of the pricing strategies and the evolution of the pricing strategies, I mean the markets that we obviously we don't get involved in detailed pricing discussions with our partners. But what I would say is that the pricing, it has been usually benchmarked the isoreconazole Casemba launch price is usually benchmarked at the original VFEND branded price definitely in the U. S.
And across Europe. And obviously based on the fact that the data was superior in terms of safety in the pivotal invasive aspergillosis study and the fact that in the mucormycosis indication, the key drug that's really used there apart from isopeconazole that's active is liposomal amphotericin B, which is highly priced even though it's off patent, it's still highly priced in the market. So actually, that supports us having a good fair price for Cresemba at, like I say, at a sort of similar level to the old, the original Vifen branded price. And this is sort of like what we've noticed is the pricing across the globe that we've so far. So in terms of also has that affected the uptake, I think the answer to that is no.
You can see that from the in market sales that the $170,000,000 of 12 month sales to the end of March that we referred to earlier. That's in an environment where generic voriconazole is obviously, as you would usually expect with a generic pricing, is coming down all the time. But I think it's clear to say that the physicians see the benefit of isopeconozole. And so it hasn't precluded the uptake that we've seen so far of isopeconozole. So in terms of the pricing strategy, that's probably what I'd comment on.
In terms of Pfizer sales milestone and how that works and when they're hit? Adesh, do you want to comment on that?
Yes. So you may have seen in our press release that we announced that the Pfizer milestones work on cumulative sales from the start of our agreement. They're set up in a way that they're triggered on average every 12 to 18 months. But given that they're on cumulative sales, the individual milestones are sort of lower. So you can think about them as being more frequent coming every 12 to 18 months, but being lower than what you would be expecting on annual on an annual sales basis or with Astellas, for instance.
Okay. Brilliant. That's good. Thank you for that.
And the total just as a add up, sir, just as a reminder, the total for both territories together is still $645,000,000 in milestones that are outstanding from Pfizer. So that's for the APAC region and for Europe.
Okay. Thank you for that. And then if I could just ask one question about derazantinib. How do the development milestones and royalties that ArQule are eligible for, how do they vary as you expand the clinical development beyond ICCA?
So they are that's a very good question. So you may again, as a reminder, the milestones are there are a total milestones of EUR326,000,000 They are predominantly sales milestones, which are not indication specific, but also relating to the sales level that you'll be seeing for derazantinib. When it comes to the presales or pre commercialization milestones, they are largely separated by indication but then also by territories. So that's sort of the level of granularity that we can give. They are predominantly really sales milestones.
So if you think about the split, certainly, it's more than 50% that is towards sales milestones.
Brilliant. Thank you for that, Hitesh.
We have a follow-up question from Brigitte de Lima from Guttgartner Securities. Please go ahead,
madam. Hi. I'd like to ask 2 housekeeping questions, if I may. The first one is on backlink to Cresemba, the licensing deal and the deferred portion recognized that as you mentioned, quite a lot was already recognized in H1. My numbers tell me it was around 16, maybe you can comment on that.
And then the question is more, should we see a similar amount in the second half and then the balance next year? Or should we assume a smaller amount in the second half and then a bigger balance next year? And then the second question is relating to the total cost associated with the clinical trials for derazantinib. Just wondering if you can give us a very, very rough estimate of how much the UC trial, the FEEDIS II may cost.
Okay. So that's a simple question, but I'm we'll take a little bit time to explain. So yes, you're right. So maybe I'll start with the different buckets of deferred revenues. Pfizer, so Pfizer, we indeed, if you do a back calculation, you will conclude that we recognized $15,700,000 in deferred revenues in the first half of twenty nineteen.
The portion that we will be recognizing over the next 12 months is, as I alluded to in my response to Paul, will be the remaining 36 point €7,000,000 So that's the current portion of deferred revenues that is still sort of outstanding. And how this will split between the second half of 2019 and the first half of twenty twenty remains to be seen because that correlates at the end of the day with the product deliveries to Pfizer. So that's not on a linear basis based on in market sales. So that's sort of not maybe the perfect answer, but gives you some indication. But we have, of course, included our assumptions in our this is included in our guidance, in essence, for the second half.
The other deferred revenues that you're seeing are a little bit easier because they are largely on a linear basis. So if you look at our deferred revenues related to the Azai transaction, they are CHF 1,300,000 on an annual basis, EUR 600,000 per year. Gozun is EUR 600,000 on an annual basis, so €300,000 on a 6 month period. And then in essence, on a you'll be looking at about €1,000,000 for our distribution agreements on an ongoing basis. For Astellas, there are deferred revenues of around EUR 5,400,000 in the first half of twenty nineteen, and that's also more or less on a linear basis.
So until next year, we will be recognizing $8,400,000 for Astellas. Did this answer your question?
Yes, the first bit. I was specifically interested in the Pfizer one because it's the others are quite straightforward. The Pfizer one did surprise me a little bit. I thought it'd be recognized for the next 3 years. So it was quite a big chunk this year, but your answer perfectly explains it with a whole manufacturing process.
So thank you.
Okay. And then, Marc, do you want to get the one about the cost of the
Yes, sure. Brigitte, the as a framework, if you take everything together, what a study costs and you basically bring this down on per patient cost in general, these type of studies cost in a range of 50,000 to 100,000 Swiss francs per patient. And this depends on the geographic mix, how many patients are included in each cohort, the duration. And as we have a clinical supply room with Roche related to Tecentriq, one could assume that the average cost per patient over the entire study are rather in the lower to mid range of this estimate of 50 to 100. Now to then make a number really depends on how many patients will be ultimately enrolled in this study because we've set this up as a series of different cohorts, which are performed in 2 stages.
So you start with a Stage 1. And if that Stage 1 is successful, then the Stage 2 follows. And usually the size in terms of patient numbers Stage 1 to Stage 2 is roughly on average of 1% to 2%. So basically, the higher costs will also imply that the study is successful in a way. So that's how these studies are derisked.
That's very helpful. Thank you.
Thank you.
The next question comes from Ram Selvaraju, H. C. Wainwright. Please go ahead.
Thanks very much for taking my question. So firstly, with respect to ceftobiprole, within the context of the United States, I wanted to know if you could comment on the advantages that ceftobiprole specifically might have as an IV administered antibiotic within the U. S. Market environment, which historically has proven somewhat problematic for novel antibiotics that are administered intravenously.
Yes. Thanks, Ram. Mark, do you want to take that about the potential advantages of ceftobiprole?
Yes. There's a couple of advantages that will certainly play out for the Stavros bacteremia indication. I think there the differentiation of tefthopiprole is easier than for the ABLSSI indication where there's also some differentiation, but I think the SAB differentiation is quite straightforward. The first thing is, if you compare it to so there are only very few drugs that cover MRSA and MSSA at the same time. So this includes basically only vancomycin, which is considered to be not ideal from a safety perspective, but also has a weak activity for MSSA.
And at the outset of patients being treated, physicians usually don't know what they're dealing with. And then daptomycin is the other. And daptomycin has several limitations. 1st, it isn't effective in pulmonary infections and these patients often present in an ICU at least with a rule out diagnosis of a pulmonary infection. And septopibrosis approved for pneumonia in Europe, so it's clearly active in the lung, whilst daptomycin is inactivated in the alveolar.
And that's the problem on the pulmonary side. Also, people are looking for a tephalosporins traditionally are drugs that are preferred by physicians in the setting of a staphorastophoremia, they are bactericidal, rapidly active. And then with daptomycin, what's been reported is a kind of MIC creep of the staphylococcal. So whilst patients are on treatment, they can develop resistance. And the last point, and that's really not been described much with Tev2biprole.
And the last point is that Tev2biprole covers the gram negative spectrum compared to both daptomycin and vancomycin. So any patient with a suspected polymicrobial infection, including, for example, gram negative pathogens would be far better off with an initial empirical treatment with teftobiprole. So these are, in summary, the differentiation points for SAB, some of which also apply for ABSSI. But I said, the profile of ceftobab is certainly much stronger in the competitive landscape in the SAB indication.
Thank you very much
for that clarification. I also wanted to ask about what you expect the length of the regimen to be in the AbbVie and bacteremia settings once potentially ceftobiprole is approved in the United States, If you have some thoughts on that, please.
So in the study, usually, we the regular time of treatment is 5 to 10 days for ABSSSI, and it's going to be 4 to 6 weeks for the SAB indication.
Okay, great. And then just one question on darazantinib, please. If you could comment on specifically the potential of darazantinib in the breast cancer context? And also if you expect over the course of the next couple of years, any incremental clinical data to be generated by the other entity that holds some rights to derazantinib in China, Sinovant? And if you think that might potentially be incrementally beneficial as you continue to work on derazantinib?
Thank you.
So maybe I'll start with the press. There have been a few studies now with other FGFR inhibitor in FGFR amplified breast cancer populations, relatively small studies. We are also in the process of looking at this preclinically and then make a a decision whether we move forward in breast or in another indication. As said, we are quite advanced with our plans and we'll provide more information during the course of 2019. Yes.
We can't so Ram, we can't give direction on exactly which indications we're moving into. But as Mark said, we actually are planning on giving guidance later this year on our next steps in terms of, as Mark said, following a lot of the preclinical translational work we're doing, where we go next. So we can't actually specifically answer your question. In terms of the partner for derazantinib in the geography that we don't cover, yes, so Sinovant covers Greater China. And clearly, any data we generate and any data they generate is available for both parties to be aware of.
So actually any additional data they create on top of what we create can only be beneficial, I would imagine.
Thank you very much.
Gentlemen, so far we have no more questions.
Okay. Thank you all very much. Thank you for your interest in Basileo and enjoy the rest of your day.
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