Basilea Pharmaceutica AG (BSLN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Basilea Pharmaceuticals Full Year 2020 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to David Veitch, Chief Executive Officer. Please go ahead, sir.

Hello. This is David Veitch, CEO of Basilea. And I would like to welcome you to our conference call and webcast, reviewing our financial results and key achievements for the full year 2020 and discussing our upcoming milestones and financial guidance for 2021. I would also like to mention that this call contains forward-looking statements. Joining me on our call today are Adesh Kaul, our Chief Financial Officer; and Dr. Marc Engelhardt, our Chief Medical Officer. This morning, we issued a press release and our financial report on our results for the full year 2020. These documents are available on our website at basilea.com. I would first like to provide a brief summary of our key achievements for 2020 and year-to-date 2021. As already outlined at the half year, we have remained fully operational despite COVID-19. We achieved significant clinical milestones. We started 2 new clinical studies for derazantinib and lisavanbulin, and our other clinical studies are progressing well. Our 2 marketed drugs, Cresemba and Zevtera, continued to show strong commercial performance in 2020, leading to CHF 78 million of non-deferred revenue contributions, a more than 13% increase versus prior year. In the 12 months to September 2020, in-market sales of Cresemba grew by almost 30% year-on-year. We have executed 2 strategic transactions. We successfully issued a new convertible bond due 2027 and extended the maturity of a substantial part of our debt from 2022 to 2027 by repurchasing a proportion of our 2022 convertible bond. We have also taken the first step to move from 2 different locations in Basel into a new headquarters in mid-2022, by a sale and leaseback agreement for our current headquarters property. These transactions resulted in a positive one-off effect of about CHF 15 million on our P&L and generated a cash inflow of approximately CHF 59 million. As of December 31, 2020, Basilea's combined cash and investments amounted to approximately CHF 167 million. We also announced, just yesterday, the divestment of our Chinese R&D facility. This transaction provides us with both increased sourcing flexibility going forward and reduced operational costs in the midterm. Adesh will now give you an update on our commercial progress and present more detailed financial highlights for the full year 2020 as well as provide our financial guidance for 2021. Then Marc will provide you with detailed information on the progress of our clinical programs. I'll now hand over to Adesh.

Thank you, David. In 2020, together with our partners, we continued to make significant progress in the commercialization of Cresemba and Zevtera. The most current public in-market sales numbers available for Cresemba show that in the 12-month period ending September 30, 2020, the global sales of Cresemba grew by more than 28% year-on-year to USD 244 million. Partnerships continue to play an important role in the execution of our global commercialization strategy of our brands and provides a strong basis for the future revenue growth. In 2020, Cresemba was launched in key countries in Asia Pacific and gained regulatory approval in Russia. Zevtera was approved in China for the treatment of lung infections. These achievements triggered milestone payments of around CHF 9 million for both brands combined. In January 2021, Pfizer crossed the Cresemba sales threshold that triggered a USD 10 million milestone payment to us. This is an impressive sign of the continued strong sales performance of Cresemba and the high medical need it serves. In total, Basilea has received, to date, more than USD 260 million in upfront and milestone payments from its Cresemba and Zevtera partnerships. And our potential milestones remaining of more than USD 1 billion in total. Marketing application processes have been initiated in a number of additional countries, including for Cresemba in China, where the marketing authorization applications were accepted for regulatory review last year. Moving on to financials. I will highlight some of the key financial figures that were published in today's press release. And in more detail in the full year report. I would like to mention that all figures I will refer to are in Swiss francs. The financials for the full year 2020 are characterized by a significant change in revenue mix and the positive impact from our headquarter's property sales. As already anticipated at the beginning of 2020, deferred revenue contributions from Cresemba and Zevtera, which relates to upfront, development and regulatory milestone payments received in prior years, decreased 25.9% to CHF 33.8 million. Most importantly, non deferred revenue contributions, which most closely correlate with the actual in-market performance of our brands, increased 13.8% to CHF 78.2 million. Other revenue components decreased by 22% to CHF 15.6 million, mainly driven by lower partner reimbursements due to lower costs incurred related to the completed ceftobiprole skin infection study and the impact of the slight delay in recruitment in the blood stream infection study due to COVID-19. Considering all these factors, total revenue decreased by 5.1% to CHF 127.6 million. Cost of products sold increased by 27.6% to CHF 24.1 million, mainly due to the increase in product deliveries to partners. R&D and SG&A expenses decreased 4.4% to CHF 126.8 million, reflecting our continued focus on cost management. We reported an operating loss of CHF 8.2 million, which is an improvement of 52.3% compared to 2019 and a net loss of CHF 14.7 million, which is an improvement of 34.4% year-on-year. Net cash used for operating activities was reduced significantly by 15.2% to CHF 54.1 million. And this does not even consider the proceeds from the headquarters property sale and our convertible bonds transactions. As of December 31, 2020, Basilea's combined cash and investments amounted to CHF 167.3 million. Moving on to our convertible bond transactions, which were completed in July, the main purpose of the transactions was to improve the debt maturity profile. To this end, we conducted 2 transactions: the first transaction concerns the issuance of a new bond with maturity in 2027. The provisional allocation was very successful, reflected by the fact that we were able to allocate a maximum targeted amount of CHF 125 million. The second transaction conserves using the proceeds from the new bond to repurchase approximately 50% of the 2022 bond. Because many bondholders held onto their bonds rather than taking the opportunity to sell them at a cash premium, we reduced the size of the 2027 bond as we have no intention of significantly increasing our debt level through this transaction. We were, therefore, able to reduce the 2022 bond by around 25% in the first step. If earmarked, the majority of the cash from the issuance of the 2027 bond not already used to repurchase the 2022 bond to further reduce the 2022 bond by another 25%. At year end 2020, we have reduced the outstanding nominal amount of the 2022 bond by more than CHF 50 million. Hence, we remain confident that we will meet our initial goal of reducing the 2022 bond exposure significantly, but over time, rather than in a single step. Yesterday, we announced that we have entered into an agreement with a custom manufacturing organization, PHT International, to divest our Chinese R&D subsidiary. The total purchase price will be USD 6.3 million, of which USD 2.5 million are due upon closing and the remaining USD 3.8 million over the course of next 3 years. All 72 employees and the facilities will be transferred to PHT, which ensures continuity for our ongoing R&D projects and also provides sufficient time to optimize our external sourcing of R&D services. We expect closing off the transaction in the second quarter 2021. With regard to the expected financial impact, the annual operating expenses related to our Chinese subsidiary are in the mid-single-digit million range. The transaction will have, immediately, a small positive P&L impact upon closing in 2021. Due to the transition period and the continued support being provided by PHT to ensure continuity in our R&D activities, the positive impact on our operating expenses will be limited in the initial 12 months after closing. We expect to see increasing levels of cost savings thereafter as we can start leveraging increased flexibility in-sourcing external R&D services. I'm turning now to our financial guidance for 2021. We expect a continued improvement of our revenue mix, reflected by an anticipated 38% to 51% increase to CHF 108 million to CHF 118 million in nondeferred revenue contributions from Cresemba and Zevtera. As in the past, the range reflects several potential milestone events for 2021. This should be the last financial year that we separately discuss deferred revenue contributions from Cresemba and Zevtera as they are expected to decline by around 90% to CHF 2.5 million now that we have fully recognized the past upfront and milestone payments from our partners, Pfizer, Astellas and Gosun. Overall, we expect an increase in total revenue to CHF 128 million to CHF 138 million. Once again, we expect total R&D and SG&A expenses to remain approximately stable. Cost of products sold is expected to increase based on higher product deliveries to partners. Based on this, the anticipated operating loss amounts to CHF 13 million to CHF 23 million, which is below the operating loss reported for 2020, excluding the one-off positive impact from the sale of the headquarters property. Finally, we assume a strong cash position of around CHF 110 million to CHF 120 million at year-end, excluding any potential impact from a reduction of the outstanding convertible bonds. Our year-end cash and investment guidance considers that certain milestone payments and product deliveries may actually occur towards the end of the year, which would result in us reporting the P&L impact in 2021, but the corresponding cash inflow only happening in 2022. Also our guidance takes into consideration that part of the purchase price for our Chinese subsidiary is only going to be paid after 2021. We should bridge the cash guidance to the operating loss guidance. I will now hand over to Marc for the clinical development update.

Thank you, Adesh. Let me start with our antibiotic, ceftobiprole. In Europe and several markets outside Europe, ceftobiprole was approved for the treatment of community- and hospital-acquired pneumonia. One of our key priorities for ceftobiprole is to gain access to the U.S. market, which is, by far, the most important country for the commercialization of branded hospital antibiotics. Based on special protocol assessment agreements with the U.S. FDA, 2 successful cross-supportive Phase III studies are necessary for registration in the U.S. Our Phase III program includes 1 study called TARGET in acute bacterial skin and skin construction infection and 1 study called ERADICATE in Staphylococcus aureus bacteremia for bloodstream infections. The program 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 you to advance the development of ceftobiprole portfolio to market in a cost-effective way. In 2019, we reported positive top line results from the TARGET studies. On the ERADICATE study, we expect that patient enrollment will be completed by year-end 2021, leading to the reporting of top line results in the first half of 2022. This bacteremia study Audio gap Nearly 120,000 Staphylococcus aureus bacteremia, or SAB, infections has been reported in the U.S. in 2017. The ERADICATE study targets complicated SAB, which are characterized by concomitant or metastatic infections such as bone, joint or heart valve infections, persistent bacteremia or bacteremia in patients on dialysis. SAB is an area of high medical need with substantial mobility and a 30-day mortality of approximately 20%, and there are limited antibiotic treatment options with only 2 approved treatments in the U.S., which are vancomycin and daptomycin that cover both methicillin-susceptible and methicillin-resistant Staphylococcus aureus, or MSSA and MRSA. In 2020, the FDA-approved a product commencement, extending the maximum treatment duration from 4 to now up to 6 weeks in the ERADICATE study. This is important because it allows for the inclusion of patients with more difficult-to-treat infections, including those with complications such as osteomyelitis and epidural or cerebral abscess. Now moving on to oncology. Our lead oncology drug candidate is derazantinib, which we in-licensed in 2018 from the U.S. company, ArQule, which is now a wholly owned subsidiary of Merck. Derazantinib is a targeted, orally available small molecule inhibitor of fibroblast growth factor receptor, or FGFR family of kinases. FGFR genetic operation. For example, infusion mutations or amplifications that can identify as potentially important therapeutic targets for various cancers, including intrahepatic cholangiocarcinoma or iCCA, urothelial, gastric, breast and lung cancer. Each of this broad potential will refer to derazantinib as a pipeline in a product. Our development strategy focuses on achieving differentiation over other FGFR kinase inhibitors by leveraging the unique properties of derazantinib. Key differentiating factors included unique kinase inhibition profile and its clinical safety profile. Besides FGFR, the reduction also inhibits the Colony-stimulating Factor 1 Receptor, or CSF1R, kinase, which has been reported to play a role in immune responsive tumors. Derazantinib also inhibits factor 2 of VEGFR2 kinase, which is known as a therapeutic target in the antiandrogenic treatment in multiple cancers, including gastric cancer. Basilea's clinical development program currently comprises 3 ongoing studies: FIDES-01 in intrahepatic cholangiocarcinoma or iCCA, which is a type of bile duct cancer; FIDES-02 in urothelial cancer; and FIDES-03, which we started in 2020 in gastric cancer. In February 2021, we reported positive top line results from the first cohort of the FIDES-01 study, which provides the clinical proof-of-concept for derazantinib as monotherapy with first indication. This first cohort includes 103 patients with FGFR2 gene fusion-positive advanced iCCA, consistent with the efficacy seen with FGFR inhibitors as a class, and FGFR 2 fusion-positive iCCA patients and the safety and tolerability data support derazantinib's potential differentiation versus other FGFR inhibitors. It should be noted that the data from FIDES-01 are not fully mature yet, and the number of patients are still continuing their treatment. We have expanded the FIDES-01 study with an additional cohort of iCCA patients with FGFR2 gene mutation and amplification in their tumors. In October 2020, we present full ethics data including patients from the second cohort, the arm 2 Phase I study and our expanded access program. This full analysis demonstrated that derazantinib also has antitumor activities in this patient population. These are encouraging results as other FGFR inhibitors in advanced clinical development, which so far only reported by a limited in this patient population. We are therefore looking forward to interim results from the second quarter FIDES-01, which are expected in the first half of 2021. FIDES-02 is a Phase I/II study with derazantinib as monotherapy and in combination with atezolizumab. This is a biomarker-driven multi-core clinical study in patients with advanced urothelial cancer expressing FGFR genetic aberrations and interim results from derazantinib monotherapy are expected to become available in the first half in 2021. We recently reported a recommended Phase II dose for the derazantinib atezolizumab combination in patients with advanced solid tumor in this study. Interim efficacy results for the derazantinib atezolizumab combination in patients with urothelial cancer are expected to become available in the second half of 2021. We also plan to amend the FIDES-02 protocol to explore a higher dose of derazantinib in 2 cohorts of this study. This dose increase is supported by the safety and tolerability profile of derazantinib at the current dose of 300 milligrams per day. This may provide additional benefits in monotherapy and combination to patients with FGFR-positive urothelial cancer and also consider the evolving highly competitive treatment landscape in urothelial cancer in patients both with and without FGFR genetic aberration. FIDES-03 was started in 2020. This study explores derazantinib as monotherapy and in combination with atezolizumab and with lilly antiangiogenic drug ramucirumab in patients with advanced gastric cancer and FGFR genetic aberrations. Interim results for derazantinib monotherapy and the definition of the recommended Phase II dose for the combination of derazantinib with atezolizumab thus another anticancer drug, paclitaxel, are anticipated for the second half of 2021. We have decided to investigate Audio gap And gastric cancer based on its unique kinase inhibition profile from derazantinib in vivo data and the high medical need in this indication. Pending for supply agreements are in place with Roche and Lilly will provide atezolizumab and ramucirumab. Moving to our tumor checkpoint controller, lisavanbulin, formerly known as BAL101553 is a type of tumor cell death through assembly checkpoint activation. It can be administered oral and IV and has shown code activity in brain tumor models in monotherapy and in combination therapy. In line with our approach to both biomarkers, early genetic development has been valued in the panel of biomarkers. One of those is in finding projects Audio gap This patient continues on treatment for more than 2 years now. Based on our encouraging clinical and creation data with EB1, we have started a biomarker-driven clinical Phase II study in recurrent glioblastoma in 2020 using EB1 positivity as a patient selection criterion. Interim results from this study are expected in the second half of 2021I will now turn over to David.

Thank you, Marc. In summary, we are on track with the execution of our strategy with our 2 business pillars of oncology and infectious diseases. We are significantly growing our cash relevant revenues from our marketed brands, Cresemba and Zevtera. We're also on track to have Cresemba launched in 60 countries by the end of 2021. We are also continuing to advance our clinical programs towards the next milestones through 2021 and 2022. 2021 holds a number of important milestones, especially related to our clinical programs. We anticipate the top line results from the isavuconazole Phase III study conducted in Japan by our partner, Asahi Kasei pharma. We also expect completion of patient enrollment into the ceftobiprole Phase III ERADICATE SAB study. For derazantinib, we have already reported top line results for the FIDES-01 FGFR2 gene fusion cohort in iCCA. And in the first half of the year, we are also expecting interim results from the second cohort with other FGFR2 genetic aberrations. In addition, we are looking forward to interim results for derazantinib as monotherapy and in combination in urothelial cancer. And we also expect the first data in gastric cancer in monotherapy and combination therapy for derazantinib. For lisavanbulin, we're expecting interim results from the EB1 biomarker-driven Phase II study in recurrent glioblastoma. And finally, as we've just recently announced, we have passed an important preclinical milestone for a compound that we hope can be in the clinic early in 2022, hopefully, adding to our already exciting pipeline. Thank you for your attention. And we'll now open the line up for your questions.

[Operator Instructions] The first question comes from Louise Chen from Cantor.

So my first question for you is how do you plan to show the competitive advantages of derazantinib through your clinical trial programs? You have several readouts coming up still through the end of the year. And then second question is, can you elucidate more the market opportunity for lisavanbulin? The competitive advantages of that product? And where what fit into the treatment paradigm if that were approved? And the last question is, can you provide any more color on your potential first-in-class small molecule kinase inhibitor that you had disclosed recently?

Okay. Thank you, Louise, for those questions. Actually, why don't we begin, Marc, with you in terms of how do we hope to show sort of advantage or differentiation for derazantinib? And then also, maybe you could also address, Marc, the lisavanbulin and its sort of position in the glioblastoma market. But why don't we start with you, Marc?

Yes, certainly, David. Thank you very much for the question. So as mentioned before, we are building on the intrinsic features of derazantinib, the kinase inhibition profile and the safety profile to show differentiation. I think one of the key studies that we're conducting are the combination with atezolizumab and also the combination with ramucirumab and paclitaxel because it's the standard treatment for second line gastric cancer. So these readouts that we're going to see during the year or towards the end of the year will certainly provide us with a direction of how to pursue the development further. And I think the FGFR inhibition, together with the CSF1R inhibition, rationalizes this combination and considering that the CSF1R indication of derazantinib is unique amongst kinase inhibition -- amongst FGFR inhibitors, we think that this really could provide the differentiation in addition to the clinical safety profile. To the second question, the market opportunity of lisavanbulin. Here, GBM is clearly a proof-of-concept indication. We have seen efficacy signals in the Phase I study that we could link to EB1 positivity. We have now relatively ROIs prevalence estimates for EB1 positivity in GBM, which is in the range of 5%, so this will not be a huge market segment, but if we are successful in GBM in a refractory setting, we would certainly be able, in this indication, to move directly in a first-line newly diagnosed setting. And I just wanted to mention that we have a study with the adult brain tumor consortium in the U.S. ongoing to assess the recommended Phase II dose and the maximum tolerated dose in radiotherapy combinations. So that would support a study in a first-line setting. In addition, we are conducting and we will be presenting later this year prevalence assessments in non-GBM tumor types, and this would provide the basis for a market size estimate beyond GBM. I think that's, in short, the answer to these 2 questions. I'm not sure, Adesh, did you want to add anything to that?

I think the only thing I would add is that GBM, of course, is a high unmet medical need area. And at the end of the day, the market opportunity will also be driven by the extent of the clinical benefits that can be provided in this patient population. And then maybe on the earlier compounds that you asked, I think we have, at this point in time, we have provided the level of specificity that we can give. Just as a reminder, this is an externally sourced compound as an example for a partnership that we have done on the preclinical side in 2018 and taking it now to this milestone. It's a small molecule. So our area of focus, a kinase with a unique kinase inhibition profile, which we believe would provide the opportunity for a targeted development, on the one hand, and also for a potentially first-to-market opportunity with this specific mode of action. This is probably a little bit too early to disclose more about the compound. We will certainly provide more information when we enter the clinic, which is planned for the early part of 2022.

The next question comes from Arsene Guekam from Kepler Chevreux.

First of all, a follow-up question on derazantinib. What is your strategy with this drug? Let's assume that the next results will be positive, what will be your strategy? Are you seeking for a partner? Or if you could to elaborate a little bit would be great. And 2 quick questions. Could you remind me is the patent expiration in Europe and in the U.S. for Cresemba and Zevtera? And the last one for Adesh. I'm not sure to well understand. Could you give us more color on your guidance? And mainly in the discrepancy between EBIT forecast and the cash expectation at the end of 2021?

Okay. So let me -- I'll take the middle one of those questions in terms of the Cresemba. It's not always patent actually, but the exclusivity, the effect of exclusivity in the U.S. is 2027. It's the end of Q1 2027 without the pediatric program approved. With the pediatric program, which is ongoing, it extends into the end of Q3 2027. And then in Europe, it's 2025. But with the pediatric program, which is ongoing, as I say, if that's approved, that takes you to 2027 in Europe as well. So in terms of Europe and the U.S., we talk about the effect of exclusivity as long as we complete the pediatric program, which is well on track to 2027 in those 2 areas -- geographies. In terms of the strategy and the partnering strategy for derazantinib, I think the important point is that we've got a history, obviously, as a company of partnering at the end of Phase II. We aim to try and participate in the Phase III to enable us more participation sort of down the line. We participated with pharma in the case have to buy property with the U.S. government. That doesn't mean that forever more we will always go down that model. But we have a view, at the moment, for derazantinib to maximize this pipeline in a product that we would probably seek the partnering approach for the Phase III. But as I said, that's not sort of a rule cast in stone, that's just like our history and looking at the potential to maximize this pipeline in a product it probably makes most sense. Having said that, the lisavanbulin, it might be a very different situation. And for lisavanbulin in a smaller targeted niche area, if it was initially, for example, in GBM, we could even consider commercializing ourself in selected markets. Not everywhere but in selected markets. So it depends a little bit on a number of factors, the strength of the data, the speed, the size of the market opportunity, et cetera. There are a few factors that come into play. And obviously, clearly, also the interest from potential partners. That's what I'd say a little bit about the strategy. Adesh, do you want to come back on the financial question?

Sure. So thanks for the question, Arsene. I suppose the biggest gap between the P&L guidance, which is the operating loss guidance of CHF 13 million to CHF 23 million that we have guided for. And the cash position at the end of the year is probably the timing when certain milestones would happen and when product deliveries happen because how this usually happens is we hit a milestone, we get a notification at some point. We issue an invoice. And if such a milestone, for instance, is hit in November or December, we would, of course, record a milestone in accordance with U.S. GAAP in our profit and loss statement. The cash would only be coming in after December 31. And because it's sort of really binary, either the invoice has been paid on the 31st of December or not, we sort of have to assume the full, let's say, invoicing on the due date of invoices. So that's the whole secret behind it. In essence, you could almost likely say, there is a buildup or an expected buildup of working capital towards the end of the year. But the working capital does not relate to any product in the sense of inventory, it relates to receivables.

The next question comes from Ram Selvaraju from H.C. Wainright.

This is Robert Burns on the line for Ram. Just two, if I may. So the first one, could you discuss how you're thinking about the opportunity -- the revenue opportunity for derazantinib in the FGFR2 mutated biliary tract cancer space, given the relatively comparable median PFS to that of pemigatinib and also taking into account pemigatinib's lead time in that area? And then my second question is, how are you thinking about the kind of landscape for some of these next-generation FGFR2/3 inhibitors that are making their way through the pipeline, for example, Relay Therapeutics or Cana Biopharmas?

Yes. Why don't -- Adesh, do you want to take the first one on the iCCA sort of opportunity? And how we're thinking about that? And then, Marc, you could comment maybe on the future FGFR compounds.

Yes. Sure. So we are not looking at iCCA now isolation, but I think it is a good case for the point that we believe strongly in differentiation. So when it comes to iCCA, for instance, as you correctly pointed out, I think from the perspective of clinical benefit, a relevant factor is suppression-free survival. And as such, we are actually quite pleased with the outcome of the FIDES-01 study that we have just announced with PFS of 6.6 months. So far, we believe we are in the range of what has been reported with other FGFR inhibitors, generally speaking, as a class. But then really differentiation as a monotherapy in iCCA, which, from our perspective, driven by the safety and tolerability profile of derazantinib, where we believe that the profile is actually quite competitive. If you look at the space, it's quite favorable. And potentially the differentiation through the cohort 2, which is still ongoing, which is in other genetic aberrations and FGFR2 gene infusion, which is a patient population that is smaller than the gene fusion patient population that clearly would provide a differentiation versus for instance, you mentioned pemigatinib, but also other FGFR enablers that are in more advanced clinical development. So in essence, it is really about differentiation, but then also to be quite honest, our strategy is not necessarily to position derazantinib as an iCCA drug, but we believe that the scope for derazantinib is far beyond iCCA. So therefore, we are looking at the cancer indication, where Marc previously indicated that based on the unique kinase inhibition profile, we believe that there is scope for differentiation, especially in combination with immune checkpoint inhibitors, is also scope for differentiation on the safety and probability profile. And then in gastric cancer, where we are, even -- we have a potential first-in-class opportunity. So we are looking broader at derazantinib and just looking at the iCCA opportunity. And then maybe on your second question, I would hand over to Marc.

Yes. I think the newer FGFR inhibitors that we're seeing now come into clinical study. I think there's a number of them tested mainly in China, but also, as you mentioned, relay I think there's little published data on these inhibitors out there. I think the relay compound is supposed to be very selective for FGFR2. We'll need to see how these play out, how much selectivity really plays a role also in terms of maybe the toxicity profile it's too early to say. I would make a statement at this point. We really need to see the clinical data whether these comments provide comparable efficacy and especially whether the higher selectivity has an impact on the safety profile. One part maybe for the derazantinib differentiation, is perspective. As I said, in response to the first question, I mean, our differentiation -- part of our differentiation is really based on the activity to other kinases, especially CSF1R and also FGFR2, where we think when used in combination, actually, this may provide advantages and unit profiling against other FGFR inhibitors. So it will be interesting to see how very selective FGFR2 inhibitors, for example, how that benefit risk is in the end.

Next question comes from John Priestner from Edison Research.

Congratulations on the progress. So I have three. The first is really what are the key sales catalysts for Cresemba and Zevtera over the next few years that we should really be looking out for? And the second, I understand that Astellas and the University of San Diego have initiated a Phase III trial with Cresemba for the treatment of COVID-19-associated pulmonary aspergillosis? Can you really discuss the potential implications and benefits for Basilea if this trial is successful? And then my final question really is, given the evolving standard of care in gastric cancer, how important is the CYRAMZA and paclitaxel derazantinib cohort? And how does this really expand the potential patient population for derazantinib?

Okay. I'll address the first one, the one around the sales catalysts. I mean, in terms of, obviously, as you've seen from the data that Adesh has talked about, we're actually in the existing markets, we've launched Cresemba and Zevtera in sales are going well. We've highlighted before the majority of our sales are coming from Cresemba. And Cresemba, actually is growing in all markets that it's in. So we have continued growth there. But sort of in terms of new catalysts for the future, clearly, 2 markets that are very important that Adesh actually alluded to is China, and the launch in China and also Japan. And obviously, China, we've -- as he said, we've had accepted our 2 marketing applications by the regulators. We don't know yet how long that would take and whether we need to or required to do additional studies or not, but the good news is that regulatory process by our partner, Pfizer, is underway. And then Japan, where we did have to do a Phase III. And as I said, that's actually completed enrollment now, and we expect the results later this year. If they're positive, then we begin -- or our partner, Asahi Kesai, begins the regulatory process in Japan. So they would be 2 very strategic important markets for us because they represent, we believe, about 25% of the global potential of the compound. So that would be 2 major events. And then for Zevtera, ceftobiprole, it's clear that the approval we got for China is important. So the launch in China in 2022, end of this year, is very important. And then also, the most important, though, is the U.S. and Marc mentioned that. So opportunity for Zevtera, we believe, is the U.S. And obviously, then the next major event there was completing the Phase III study as he said at the end of this year. And then the results of that in the first half of next year. And if that's positive, then obviously, every focus we will have is on seeking the regulatory approval in the important U.S. market. So that's sort of the answer to the major sort of catalyst for the Cresemba and Zevtera. Marc, can you comment on the Astellas San Diego collaboration with regard to looking at in terms of COVID-19?

I can comment but cannot provide a lot of detail to this because it's not in our territories. We know also from Germany about [indiscernible] of COVID-19 patients who acquired invasive aspergillosis and the use of Cresemba. I think Cresemba is particularly opted to this because of the pharmacological profile and also the drug-drug interaction profile, which allow us to alleviate concerns regarding interactions with other compounds. The percentage of patients with TB or COVID-19 in lung infection is that suffer then from invasive aspergillosis, I'm not sure whether that's entirely clear because of the registered high prevalence of COVID-19, this may be a sizable number, but I'm not -- I don't know whether there is a clear prevalent estimate of this. But I would consider that really that the invasive aspergillosis in these patients is secondary and that -- underfunded treatment, which has shown to work in Audio gap I would approach this from a perspective that raw material part deducted is a key treatment standard in the second-line metastatic setting of gastric cancer. And that's quite a large group of patients. And I think it's quite important to -- in the group of about 10% of FGFR aberrations in gastric cancer patients to target these patients or may improve their outcomes by adding an FGFR inhibitor to this combination. In our viewpoint, the ramucirumab paclitaxel combination is quite well established. I also think it will stay a standard in second line treatment, even if the treatment landscape may shift a little bit, that could be -- but in the perioperative setting, docetaxel is now increasingly used in the context of the blood regimen. So if these patients recur early, there may be a concern of reexposing them to paclitaxel, but this is probably a relatively limited group. Whilst if the first-line treatment changed from a immunotherapy combination, I think that would not necessarily impact the second line. And then we're also running atezolizumab derazantinib combination cohort which then may actually help us if these data are positive to rationalize going in gastric cancer metastatic setting first line. I'm not sure whether that answers the question. But so if you have any other questions at that then...

The next question comes from Brian White from Calvine Partners.

I've got a couple of questions, actually. I'm still a little bit confused on the strategy for lisavanbulin in terms of development. So looking at EB1, it sounds about 5% of GBM patients. Is it intended then to move on to other biomarkers? There certainly appears to be other relevant ones to look at. Or is it to move on to or to look at other tumors where EB1 is to into plenty of those? And then secondly, just again, I hate to ask another question about differentiation of derazantinib. But it's actually clear that resistance is going to be an increasing issue for the FGFR inhibitor class in general. And I wondered if there was any merit in the additional activities in the CSF1R pathway, perhaps which may help in terms of having potentially a better resistance profile than some of the competing already commercially available products?

Yes. I mean, I think, Marc, why don't you kick off? And then I'll come back. In terms of the EB1, the strategy and the approach there.

So we are -- so I think EB1 is a biomarker that we've known about for a long time with -- on animal experiments with this biomarker back in 2016. And we've seen that this was a responsive biomarker in glioblastoma in animal models. And then this -- EB1 is a protein on the microtubules, which has a function regulating the dynamic of the microtubules. And there has been descriptions also from other authors that have shown that this is a potentially a prognostic marker, for example, in breast cancer. So looking at the evidence we have in terms of animal models, it was quite, I think, intuitive to say that this biomarker is really on the physiological pathway, so it makes sense. We have then proposed a relatively high threshold for EB1 positivity based on the clinical data we've seen in a couple of patients, and with this threshold, we are now selecting about 5% of patients into our Phase II study, and this will provide a proof of concept. We have not published, but we know that EB1 is or EB1 positivity also occurs in other counter types, but we have submitted this for publication later this year. So we can provide a more detailed update then and talk about other counter types. This could go down either tumor-specific role if we see EB1 positive in a low percentage of the larger or even in an agnostic role. What we do in parallel is that we are sequencing all patients who go into a study and are EB1 positive and there could be a refinement of the biomarker in a sense that we may see in this EB1 positive population responded and nonresponders and that may define the signature further. For now, the program is really directed towards EB1. But of course, we try to get a deep understanding how EB1 is genetically characterized and whether the biomarker synergies can be further developed.

Just to add one thing on the EB1 strategy. What's clear, though, is we're not planning on starting up the next non-GBM studies until we've proven the concept that it works, the EB1 is a response predictive biomarker in GBM. If we prove that, and it works, and we'll know that we predict in the second half of -- before the end of this year, then we could look at moving into other tumor types in the way Marc described. But clearly, if it doesn't work, then obviously, the program will stop. And just to be clear on that point. In terms of the other point about the differentiation of derazantinib and whether maybe the resistance could be different having FGFR and CSF1R, et cetera. Maybe, Marc, that's another question for you, best to answer that.