Ladies and gentlemen, good morning or good afternoon. Welcome to Basilea Pharmaceutica's Half Year Results 2018 conference call and live webcast. I'm Alice, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Should you need assistance, please press star and zero to call an operator. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. David Veitch, Chief Executive Officer. Please go ahead, sir.
Thank you. Hello, this is David Veitch, CEO at Basilea. I welcome you all to our conference call and webcast reviewing our financial results and key achievements for the first half year 2018. We will also update you on our upcoming milestones and provide guidance for the full year. This morning, we issued a press release and financial report on our half year results. These are on our website at basilea.com. This is the first time our earnings call is supported by a webcast presentation. At the end of the presentation, we'll provide an opportunity for you to ask questions. Just be reminded that to ask questions, you have to be dialed in by phone using the dial-in details provided in the press release. They can also be found in the investor calendar on our website.
Joining me on this call today are Adesh Kaul, our Chief Corporate Development Officer, Dr. Marc Engelhardt, our Chief Medical Officer, and Donato Spota, our Chief Financial Officer. I would also like to mention that this call contains forward-looking statements. For those on the call who are less familiar with Basilea, we are one of few companies focused on new medicines to overcome resistance in the areas of hospital antibiotics, hospital antifungals, and oncology, our three strategic pillar areas. Basilea has a proven track record of bringing brands from research through clinical development to the market. We have brought two anti-infective brands to the market, our antifungal Cresemba and Zevtera, a broad-spectrum antibiotic that also covers MRSA. We are very pleased with our progress during the first half of 2018.
We saw continued strong revenue growth, made significant progress in our clinical stage programs, and have been able to strengthen our pipeline through in-licensing activities. I would like to provide a summary of the important milestones we achieved. We significantly increased our revenue by 30% to almost CHF 60 million, driven by our two marketed brands, Cresemba and Zevtera. We further strengthened our R&D pipeline by in-licensing the oncology drug candidate derazantinib from ArQule. Derazantinib is currently in a phase II registrational study. In addition, we entered into a licensing and research collaboration in oncology. The pre-clinical compounds covered by the agreement target an important kinase involved in cell division. We have started the two cross-supportive phase III studies for ceftobiprole, which are required for a future New Drug Application in the U.S. For Cresemba, our licensing partner, Asahi Kasei Pharma, started a pivotal phase III study in Japan.
We also made further progress in our phase I/II clinical programs in oncology. Marc will cover the more detailed progress here later in the call. However, I will highlight that we have started a phase II-A extension study for our tumor checkpoint controller, BAL101553, in patients with recurrent glioblastoma and in patients with platinum-resistant ovarian cancer. Adesh will now give you more insight into our commercial activities and partnerships. Marc will provide you with more detailed information on the newly in-licensed derazantinib and the progress of our clinical development programs. After which Donato will provide you with financial highlights for the first half year and also our guidance for the full financial year 2018. I will now hand over to Adesh.
Thank you, David. In the first half of 2018, our partners continued to make significant progress in the commercialization of our two hospital anti-infective brands, Cresemba and Zevtera. The most current in-market sales numbers available for Cresemba show that in the 12 months period ending March 2018, global sales of Cresemba doubled to CHF 120 million compared to the 12 months period ending March 2017. This impressive performance is driven by a continued strong sales uptake in the U.S. and the early launch countries in Europe, such as Germany and France, as well as increasing contributions coming from countries where Cresemba has been launched more recently, such as Spain. The strong sales dynamic continued through the second quarter this year.
You may have seen that Astellas, our license partner for Cresemba in the U.S., reported $54 million of Cresemba sales for the period of January to June 2018, which is a year-on-year increase of 59%. While there is significant growth potential from the existing markets, an important factor for maximizing the value of our brands is to expand their geographic reach. We are pleased with the progress that our partners have made in 2018 in this respect. Pfizer continued the rollout of Cresemba across Europe, leveraging the existing centralized regulatory approval for the brand in the EU. Grupo Biotoscana received the first approval for Cresemba in Latin America, triggering a CHF 2 million milestone payment to Basilea. For Zevtera, our partners in Latin America, the MENA region, and Canada have successfully launched the brand in the first markets in their respective regions.
We are very pleased with the regulatory progress and expect to be seeing a large number of new launches of Cresemba and Zevtera around the world over the coming months and years. We have strong regional and global partners covering most of the commercially relevant markets. Our license and distribution partnerships for both 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 the future revenue growth of our brands. Basilea continues to participate in the commercial success of Cresemba and Zevtera through royalties or a transfer price structure. In addition, we could receive up to CHF 1.1 billion in total milestone payments from our partnerships. One of our key priorities for Zevtera is to gain access to the U.S. market.
The U.S. clearly is the most important region for the commercialization of branded hospital antibiotics and is estimated to account for around 80% of the global sales based on value. For individual products, the share may even go up to 90% as for daptomycin, which is a standard drug for the treatment of MRSA infections in the hospital. Marc, in his section, will provide you with an update on the status of our phase III program to support a potential U.S. filing for ceftobiprole. I will now hand over to Marc.
Thank you, Adesh. Let me continue with our antibiotic, ceftobiprole. Under the Vanda contract, we have initiated two cross-supported phase III studies, one in acute bacterial skin and skin structure infections, also known as ABSSSI, and one in Staphylococcus aureus bacteremia. The skin study, called TARGET, is a global study with an enrollment target of approximately 680 patients. Enrollment into this study started in February this year, and we anticipate that it will be completed in the second half of 2019. The bacteremia study is called ERADICATE. It is also a global study. We recently initiated the study that will enroll approximately 390 patients, and we currently anticipate that the study will take around three years to complete. Both the skin study and the bacteremia study are required for a filing in the U.S. I would also like to mention the progress with our antifungal Cresemba, also known as isavuconazole.
In Japan, our licensed partner, Asahi Kasei Pharma, has initiated a phase III study earlier this year to support a future regulatory filing in Japan. Moving on to oncology. As David pointed out, we strengthened our R&D pipeline by in-licensing the clinical-stage oncology drug candidate, derazantinib, from ArQule. Derazantinib is a targeted, orally available, small molecule inhibitor of the fibroblast growth factor receptor, or FGFR, family of kinases. Derazantinib is a pan-FGFR kinase inhibitor, as it inhibits all four members of the FGFR family, with the strongest inhibition seen with FGFR 1, 2, and 3. It is currently in a registrational phase II study in intrahepatic cholangiocarcinoma, or iCCA. Derazantinib had previously demonstrated favorable clinical data in a biomarker-driven phase I-IIA study in iCCA. The current phase II study could allow for an accelerated approval in the U.S.
The study is anticipated to enroll approximately 100 patients, and an interim analysis is expected in the first half of 2019. Derazantinib targets important signal transmission pathways, which are considered to be relevant for various tumor types for which only limited treatment options exist. FGFR-mediated signaling is involved in many important pathways associated with cancer. Alterations in the genes coding for FGFR, such as mutations, translocations, or gene amplifications, may lead to increased activation of the tyrosine kinase domain of the FGFR receptor and to activation of downstream signaling pathways, such as the well-known MAP kinase or PI3 kinase pathways. iCCA is an indication with high medical need because patients with unresectable advanced iCCA who relapse after first-line chemotherapy have limited treatment options. There's also significant potential for pan-FGFR inhibitors such as derazantinib in other tumor types, including urothelial cancer, breast cancer, or gastric cancer.
We anticipate to start an additional phase II study with derazantinib in FGFR-driven solid cancer types around mid-2019. Moving to our tumor checkpoint controller, BAL101553. Basilea continues its activity in the field of glioblastoma, the most common and aggressive form of primary malignant brain tumors, and also an area of high medical need with very few treatment options available. Basilea is currently conducting three clinical studies with BAL101553 in this indication. In Switzerland, a phase IIa expansion study in patients with recurrent glioblastoma was started in June using weekly 48-hour infusion. A separate arm in this study includes patients with platinum-resistant ovarian cancer. This study is anticipated to be completed in the second half of 2019. In the U.K., the phase I dose-escalation study is ongoing in patients with recurrent or progressive glioblastoma using daily oral administration of BAL101553.
This study is primarily designed to assess the safety at various dose levels and is anticipated to complete in the second half of 2018. Finally, at the beginning of this year, Basilea started a phase I study in the U.S. in patients with newly diagnosed glioblastoma in a first-line setting using oral BAL101553 in combination with radiotherapy. This study is conducted in collaboration with the Adult Brain Tumor Consortium, ABTC, which is funded by the U.S. National Cancer Institute. These studies will contribute to an assessment of efficacy signals, and Basilea expects that initial results become available June 2019. Moving to our third oncology drug candidate, the pan-RAF/SRC kinase inhibitor, BAL3833. The first in human dose-escalation phase I study conducted by our partner, The Institute of Cancer Research in the U.K., enrolled patients with solid tumors, including metastatic melanoma. Patient recruitment was recently completed.
A broad dose range was investigated, and the maximum tolerated dose was not defined. The study is currently in the analysis phase, including biomarker data, and results are anticipated to be published at a future scientific conference. In addition to the three ongoing clinical programs, we have entered into another licensing and preclinical research collaboration. This project focuses on the biomarker-driven development of potential first-in-class selective inhibitors of a kinase involved in controlling the process of chromosome segregation during cell division. I will now turn over to Donato.
Thank you, Marc. I will highlight some of the financial key figures that were published in today's press release and in more detail in the half-year financial report. I would like to mention that all the figures I will refer to are in CHF. Half-year 2018 financials are characterized by a continued strong revenue growth driven by strong in-market sales performance, as well as increased investments in our existing clinical pipeline and its expansion through the in-licensing of derazantinib. Total revenue increased by 30% year-over-year and amounted to CHF 59.9 million, with contributions from our two marketed brands, Cresemba and Zevtera, growing by 25% year-over-year to CHF 27.8 million. This is particularly based on Cresemba's strong sales performance, resulting in royalties more than doubling to CHF 10.8 million.
The change in the commercialization model for both our products for Europe, which we implemented in the second half of 2017, is now also reflected in the revenue mix, with lower amounts recorded in product revenue and higher amounts recorded in contract revenue. The third major revenue item, other revenue, increased to CHF 13.3 million, including CHF 13.2 million BARDA reimbursements, compensating for a major part of expenses incurred related to our ceftobiprole phase III program. Moving to expenses. Operating expenses in the first half of 2018 mainly reflect, on the one hand, our investments in our clinical assets, including the in-licensing of derazantinib, as well as, on the other hand, substantial reductions in SG&A expenses following the change in our commercialization model for Europe, as mentioned before. Total operating expenses amounted to CHF 80.3 million in the first half year 2018, compared to CHF 65.3 million for the same period in 2017.
The increase is primarily driven by our R&D expenses, which grew to CHF 57.8 million in the first half of 2018. Key drivers of such increase were primarily the ongoing ceftobiprole phase III program, which started enrolling patients earlier this year. The $10 million US upfront payment for the in-licensing of, and the clinical development activities related to derazantinib, as well as the ongoing pediatric programs for ceftobiprole and isavuconazole. SG&A expenses decreased substantially by 54% or CHF 18.7 million to CHF 15.9 million for the first half year 2018. The decrease reflects the change in the commercialization model for both our products, Cresemba and Zevtera, for Europe. This change was implemented in the second half of 2017 following our agreements with Pfizer and Correvio.
Subsequently, our partners took over responsibility for the majority of the commercial activities, including sales and marketing in their respective territories, while we maintain a core commercial function to support our partners' activities. The operating loss in the first half of 2018 amounted to CHF 20.4 million, and the net loss was CHF 22.5 million, resulting in a basic and diluted loss per share of CHF 2.07. Our operating activities consumed cash of CHF 60.4 million, and the combined cash and investments amounted to CHF 247.3 million as of June 30th, 2018. Coming to the financial guidance for the full year. Based on our performance in the first half and our key priorities for the second half of this year, we update our guidance as follows.
We anticipate to increase total revenues to between CHF 120 million to CHF 130 million, despite the Toctino-related deferred revenue recognition ending in August, reducing its revenue contribution to CHF 4.9 million for the second half of 2018 from CHF 18.8 million in the first half. We expect a further acceleration of revenue growth from Cresemba and Zevtera, taking the full year estimate to CHF 75 million to CHF 85 million. With both ceftobiprole phase III studies now ongoing and the derazantinib program costs, we anticipate an increase in R&D expenses. Thus, the operating loss in 2018 is estimated to be in the range of CHF 25 million to CHF 35 million. I will now hand back to David.
Thank you, Donato. We are on track with the execution of our strategy in terms of both growing our revenues and advancing our R&D portfolio. We will continue to build on internal and external innovation in the areas of hospital antibiotics, hospital antifungals, and oncology to optimize our portfolio and create the basis for sustainable long-term growth. We are confident that revenues from our approved products will continue to grow significantly, providing us with the financial flexibility to selectively invest in internal and external innovation in order to expand and advance our R&D portfolio. Since the beginning of the year, we've made good progress against our objectives for 2018. Operationally, for the remainder of 2018 and into 2019, we will continue to support our partners in order to grow revenues from both our marketed brands, Cresemba and Zevtera.
We expect to see many new country launches this year and through next year. We will progress our phase III studies with ceftobiprole for a potential registration in the U.S., and expect to see top-line results from the skin study in the second half of 2019. We look forward to the interim analysis of the registrational phase II study with derazantinib in the first half of 2019 and anticipate to start an additional phase II study with derazantinib in FGFR-driven solid tumors in mid-2019. We expect top-line results from the phase II-A study with BAL101553 in platinum-resistant ovarian cancer and recurrent glioblastoma in the second half of 2019. Finally, we will continue to focus on selectively strengthening our pipeline in our core areas of hospital antibiotics, hospital antifungals, and oncology through both internal and external innovation. Thank you. We will now open the line for your questions.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on the touch-tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use only hands to ask a question. If you're watching the webcast and would like to ask a question, please dial one of the numbers on the bottom left corner of the webcast page. Please note only three questions might be asked in a row, then the line will be open to others. You can get back in line again for any follow-up. Anyone who has a question may press star 1 at this time. The first question comes from Bob Pooler, Valuation Lab. Please go ahead, sir.
Good afternoon, gentlemen. First of all, congratulations with the excellent first half and the upgraded full-year product revenues. My three questions, if I may, the first on the operating expenses, then two on Cresemba. Firstly, on the operating expenses, could you provide a bit more background on the first half, the operating expenses, because there were also some one-offs. Also could you look into the expected cash burn going forward, the operating expenses there and the cash burn as well. The second question is on Cresemba in Europe. Could you shed some more light on the background of product sales and royalties because you have a transition there. Basically, what is the underlying growth of Cresemba in Europe? The third question and final question, Cresemba in the U.S., excellent performance by Astellas. What are the key drivers behind the performance?
Do you expect Astellas to upgrade its full-year guidance? It is now at CHF 100 million, and they have already achieved CHF 54 million in their first half. Thank you.
Okay. Thank you, Bob. Good questions. Donato, you take the first one on the expenses for the first half of the year and cash burn.
Okay. Hi, Bob.
Hi, Donato.
With regard to operating expenses, I think operating expenses and particularly the R&D expenses in the first half actually characterize the progress that we're making in our existing clinical pipeline, and here, particularly with regard to ceftobiprole phase III program. We have started enrolling patients earlier this year, and this means we've basically started the most expensive part of a phase III program. That is a driver for the increased R&D expenses. On the other hand side, a second more important element is, of course, the in-licensing of derazantinib. You may recall that we paid $10 million U.S. upfront, and we are incurring some cost, of course, also regarding the ongoing program.
This is a second major element that adds to the expenses in the first half of the year, and as mentioned also some minutes ago, we have also in-licensed some preclinical assets, and this, to a lesser degree, also adds to the cost in the first half. To put that, I think, in a bit more context, you also should look at the SG&A expenses in that regard, and then we will see that we have actually substantially reduced expenses on that hand side. This compensates to some extent for the increase in our R&D expenses. A second element which is important to note and keep in mind is actually the reimbursements that we get from BARDA.
They are shown on the other revenue, amount to CHF 13.2 million for the first half, and basically also help compensating for the R&D expenses, in this case, particularly with regard to the ceftobiprole phase III program for the U.S. I think the second part of your question was with regard to cash burn. Here, I would also say that, as I mentioned, in particular, some one-time events like the in-licensing of Darolutinib and the preclinical assets, on the one hand side, but also the increase in working capital have contributed to a higher cash burn in the first half of the year. For the full year, though, we expect slowing the cash burn down quite significantly. Overall, we expect about 7 million cash burn on average per month. Going forward, of course, here we expect further increasing revenues.
You can see that from the full year guidance that we've just updated and increased in terms of revenue. Also then with new country launches coming, going forward, overall, the cash burn should benefit also from that angle.
The question around the Cresemba performance in Europe. First of all, I would just say that, and those on the webcast could have seen this, but you can see that the in-market performance of the European markets that are Pfizer markets has been a very good start in Europe as it has been in the U.S. The in-market performance has been very strong. Maybe, Donato, you just want to comment on the product versus contract revenue split in terms of our figures.
Yeah. As David mentioned, I think we can see both in the U.S. and in Europe, strong in-market performance of Cresemba. With regard to the U.S., you know that we participate through royalties and milestone payments. With regard to Europe, and particularly there in the Pfizer agreement, we participate actually through product sales. We are selling product to Pfizer, but on the other hand side also participate through milestone payment and royalties. For our distribution partners, we participate through a transfer price when we provide product to them or sell product to them. Overall, I think if you look at the P&L, you have to look at both line items, product sales and contract revenue together to get a feeling of how the in-market performance of these products actually translate into revenues to Basilea.
Bob, your final question around Astellas and the performance in the U.S. Maybe, Adesh, you can comment on that.
We are very pleased with, I think with the performance in the U.S. We have no indication of any slowdown. If you look at half-year-on-year sales, that was 60%. There's still quarter-on-quarter sales. What we can point to is really just that we have seen the pattern before, that Astellas goes out with a guidance initially, and then in the last two years, at least six months down their fiscal year, which would be at the end of September, they updated the guidance. We are very confident that the trajectory in the U.S. will continue. We have no indication of any slowdown.
Maybe that fits then into our own guidance that overall, you may have seen that we have increased our guidance for Cresemba contributions for the full year to CHF 75 million to CHF 85 million for this year from compared to CHF 27.8 million in the first half of the year. That, I think also underscores sort of the dynamic that we're seeing in performance.
Indeed, I agree. It's an excellent performance. Thanks for answering the questions. Very clear.
Thank you.
The next question comes from Brian White, Cantor Fitzgerald. Please go ahead.
Yes, good afternoon, gentlemen. Three questions from me also. The first one is a clinical question, a couple of strategic and a commercial question. Just thinking about derazantinib and what you're looking for this to be a pivotal registration study next year. If I look on clinical trials website, we can see that ORR is a primary endpoint, and you've got the kind of usual PFS and OS secondary endpoints. I just wondered there, what it is that you're looking for in terms of what kind of, do you do the primary and all of the secondary endpoints? Just the primary, what kind of magnitude of benefit would you like to see for this to be a registration study? Secondly, just looking at the importance of getting the right partner in place for your products.
Obviously, Astellas have done a great job with respect to Cresemba. Thinking about Zevtera, I know we're some way off having data for the skin and the bacteremia studies. I was just wondering what you're hearing about the thoughts of the pharma industry generally towards antibiotics. Just finally, just a thought with respect to the development of the pan-RAF program. What we're increasingly seeing is a triple therapy approach, Basilea, combination with an IO and a MEK inhibitor. Is that a kind of thing you're thinking about in the future for that particular program? Thank you.
Okay. Let's start with Marc. Do you want to comment on what are we looking for from the pivotal derazantinib study in terms of it potentially being on that accelerated approval track, et cetera?
Yeah. Thanks very much for the very good questions. What we're studying with derazantinib is intrahepatic cholangiocarcinoma and a molecular-defined subgroup in there is those with the FGFR gene two fusions. What's been seen with derazantinib in phase II-A studies, but also with a number of other compounds, is that overall response rates obtained are in the range of 20%-25%, and usually, progression-free survival is on average about six months. That's basically the expectation for selective pan-FGFR inhibitors. In the setting of a relatively small target population and a non-randomized study, that has to be put into a historic comparison. Usually, the published data on response rate in that population is low, so below 10%.
One will need to put the observed response rates, the duration of response, and also progression-free survival data into context of what these patients would have had with conventional chemotherapy. That's for the first question.
The other question was around how we think in a pan-RAF in terms of maybe combination therapy with immuno-oncology product, MEK inhibitor. How are we thinking of pan-RAF in terms of its future development?
I think that's something which we will decide once we have the full readout of the phase I dose-escalation study that was just completed. This study has been performed by our partner, The Institute of Cancer Research in the U.K., which also is the sponsor of this study. We're currently evaluating that study, including biomarker data, and then we'll make a decision on the next steps.
Okay.
Okay.
Your final question about how we're thinking about the U.S. in terms of the Zevtera. I think you are right. It's a little way before we would get an approval, because obviously we need the two studies, both studies to complete, be positive, and then we would file with an approval with both the studies. I think what I would say is that as we've done throughout our life, actually, we're keeping open at the moment. We're actively talking to potential partners with regard to being a commercial partner for the U.S. We would consider also looking at doing like we did in Europe, maybe launching ourselves. That's also an option we're considering.
Thank you.
Especially if there's a scenario, Marc explained there's one scenario where derazantinib in the U.S., if it got accelerated approval, could be on a similar timeline to the ceftobiprole U.S. approval. We could end up in a situation, it's obviously a few coulds and ifs there, but we could be in a situation where we have both products approved within a similar timeframe, and we might decide to launch ourselves. We're keeping our options open at the moment, is broadly the strategic answer to that question. We're considering a number of options with regards to Zevtera in the U.S.
Okay, that's great. Thanks very much.
Thank you.
As a reminder, if you wish to register for question, please press star and one on your telephone. The next question comes from Brigitte De Lima, goetzpartners. Please go ahead.
Hello, good afternoon. I'll start off with three questions as well. The first one is on derazantinib. I was just wondering how you're thinking about the next one or two indications you could develop the product, the drug in. Is it a question of unmet need, level of competition, any additional data you may have seen? I'm just wondering if you could shed any light on how you're going to make a decision. The second would be on Zevtera. Interesting that the first country in Latin America is Peru. I would have thought it's one of the biggies, Argentina, Brazil. Just wondering if you can shed some light onto why Peru and what the next countries will be now that the first approval has been received.
Should we expect additional countries to come online faster? The third question is on the ceftobiprole development program in the U.S. Just curious why the bacteremia studies is expected to take so much longer, even though it's a bit smaller than the skin study. Does it have anything to do with the inclusion criteria being different or the patient pool being smaller? I'm just hoping you can explain that. Thank you.
Yep. Thank you. Good questions. I think, Marc, if you took the ceftobiprole bacteremia question and the derazantinib other tumor questions.
I think the first question was regarding additional indications with derazantinib. Our main guidance is biology and medical need here. We will be looking into high medical need areas. Then we'll consider indications where there is a clinical proof of concept established, and that's, in our view currently, iCCA, so intrahepatic cholangiocarcinoma and urothelial cancer. Then we also look at other high medical need indications where there is or we have built a non-clinical evidence that treatment with derazantinib could help patients and benefit patients with a cancer disease. This will be our main kind of guiding principles to define the cancer types we will be looking in.
The ceftobiprole.
The ceftobiprole question regarding the SAB versus the ABSSSI study, I think for ABSSSI, there is a well-established clinical trial center structure as a couple of ABSSSI approvals have been seen in the last years. This is a highly prevalent disease that's easy to detect upon visual inspection. These trials are generally easier to enroll. The SAB study has a higher complexity. The patients are usually sicker, and the diagnosis made in a microbiology lab based on a blood culture. It's the complexity of the study that makes it take longer, and the 3-year estimate is based, to some extent, on the previous experience, for example, in the daptomycin registration study. We've extrapolated their enrollment then made the estimate that the SAB study will take approximately 3 years.
The final question was around Peru.
Peru.
Other potential countries in South America.
Yeah. They have been very efficient in Peru, but just in general, I think the sequence of approval does not necessarily reflect the sequence of submissions. The regulatory process in all these countries across Latin America, and actually also in Asia Pacific, is very different. How this works is that we have actually defined a set of countries that are being pursued as high-priority countries, but all these countries have different procedures for making submissions for the regulatory review. That's why while we are working with our partners on a submission simultaneously, the end result comes just at different times. Peru has, I think, just introduced a concept of a fast-track review for orphan drugs, and that's what Cresemba was benefiting from, basically, which led to a quite quick review period and approval. To answer your second question, there's nothing particular about Peru.
It was just part of the first priority list countries of a whole group of countries, and the procedure was just finished faster than anywhere else. To answer your second part of the question, yes, over the course of the next really month and throughout 2019, potentially even into 2020, we'll be seeing many more, or we anticipate to be seeing many more approvals and subsequently also launches, as there are really a whole set of different procedures ongoing, and we expect to have regulatory decisions in the coming months and years in many countries in Latin America, in the MENA region, and Asia Pacific.
Thanks. Do you mind if I throw in one more question on the revenue guidance? It's quite a big step up, and I know you talked about how Cresemba's growing very nicely in Europe and the U.S., but where was the biggest surprise compared to your thoughts at the beginning of the year when you first provided guidance? Which region has been outperforming your expectations?
This is Donato speaking, Brigitte. Well, I think we've seen good performance through all regions where, and countries where the drug is launched. Particularly, I think it's worth mentioning the U.S. I think it's fair to say that the U.S. is doing even better than what we expected. This is reflected in the updated revenue guidance for Cresemba and Zevtera for the full year, which we increased to CHF 75 million-CHF 85 million. Mm-hmm.
Thanks, Donato. I'll go back to the queue.
The next question is a follow-up question from Bob Pooler, Valuation Lab. Please go ahead.
Good afternoon, gentlemen. Just two more questions. In the first half, we also saw extremely some things happening. On one hand, Novartis dropped their anti-infective research, on the other hand, we saw the FDA, I think that's, for me at least, the first time that I saw an FDA commissioner coming with an incentive for anti-infective research by proposing a fee for a product proposal like a software that the hospitals actually have like a fee service program instead of just paying for a prescription there. My two questions are, do you see with, first the big pharma still continue to drop out on anti-infective research, some nice business development opportunities? Secondly, what do you think of this proposal of Scott Gottlieb of coming with a software subscription plan compared to what we traditionally have, a pay-for-prescription plan? Thank you.
Thanks, Bob. It's David here. First of all, on your first point about big pharma, more examples of, there was Novartis, there was Allergan, who are sort of divesting away from the antibiotic space. Clearly, yes, that does create options in terms of if their assets are interesting to us, and clearly, as I think we said, we're actively looking in the field of external development in terms of both antibiotics, antifungals, and oncology. In the antibiotic space, yes, we look at big pharma for assets as well as biotech and university establishments, et cetera. We look across the whole range. Yes, that does provide opportunities, I think is a short answer to that question, and we will consider all these opportunities. That's key.
In terms of the incentive you talk about, we firmly believe that the future will get better in terms of there will be, I think, pull incentives one day in place. The example you mentioned about countries like the U.S. providing the concept of a license where a hospital would have to license the use of an antibiotic, they pay a license fee, and it's independent of volume. That clearly is quite a neat and clever trick to balance commercial incentives. It balances antimicrobial stewardship. It's a clever idea. Obviously, it's not in place at the moment. It was a comment from the FDA commissioner, but it's not in place. Similarly, there was this REVAMP Act that you may have seen that was potentially going through Congress in the U.S.
Again, most of these, I think, the better ideas seem to be coming from the U.S., but this REVAMP Act didn't actually come into place this time, but maybe in the future it will do, and that would be the concept of a transferable exclusivity voucher, which then an antibiotic company could exchange, sell to a big pharma company to use for whatever they wish. Again, these are, I think, good ideas, and we think they're good ideas, and we think one day in the future, we don't know exactly when, but when they do see the light of day, then that will be a positive development, I think, for all antibiotic companies. I think in the meantime, it's very prudent of us, I think, to be focused on a number of strategic areas.
Antibiotics is one of our areas, but we haven't got, obviously, clearly, as you can hear from today's half year results, we haven't got all our eggs in the one basket. We have antifungal, we have antibiotics, and oncology. These are interesting ideas, Bob.
Okay, David. Thank you for the questions, and good luck and success for the second half.
Thank you.
We have another follow-up question from Miss De Lima, goetzpartners. Please go ahead.
Hello again. I've got two more questions, if I may. One is on the derazantinib on the additional indications again. Do you intend to wait until we get the interim analysis for the cholangiocarcinoma study before starting additional trials, sort of to de-risk the whole program? The second one, if we look at the R&D expenses, clearly there's been a step-up related to derazantinib, and have we just seen the tip of the iceberg? Or do you expect to see another leg up as we move into 2019 with regard to expenses related to the derazantinib development program?
Okay. Good questions. Maybe, Marc, you pick up on the timing of the phase II other tumor study with derazantinib.
Yeah. Thank you, Brigitte. The moving forward with an additional phase II study in additional indications is not dependent on the interim analysis outcome. We're moving this forward regardless. I think it's part of our development program that several activities run in parallel to kind of speed up and promote the development of derazantinib.
Yeah.
Brigitte, with regard to the R&D expenses, I think it's fair to say that we do not expect any significant increases beyond what we've guided for for this year. I think with the spending that we guide for this year, I think it's fair to assume that this may continue at a similar level over the next 12 to 18 months, reaching the inflection points that David mentioned before, based on the spending level. Thereafter, the cost for the skin trials for the U.S. program will go away, that should reduce the spending. In any case, while the spending, we want to maintain the spending flat, we of course anticipate increasing revenues, which should also help with reducing our loss and the cash burn.
Would it then be fair to assume that R&D expenses for next year would be roughly at the same level as for the full year this year, i.e. somewhere, I don't know, I'm just looking at my model, somewhere between CHF 105 million, CHF 110 million, maybe?
Well, I think from today's point of view, yes, I think this is a fair assumption, Brigitte.
Fabulous. Many thanks.
Thank you.
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