Ladies and gentlemen, welcome to the Basilea Pharmaceutical's Full-Year Results 2021 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants are in listen-only mode, and the conference is being recorded. The presentation will be followed will be followed by a QA session. [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.

Thank you very much. Hello. I'm 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 2021, and in which we will be outlining our strategy for Basilea to become a leading global anti-infectives company. For further detailed information, please see the ad hoc announcement issued this morning, and also our financial report, 2021. These documents are both available on our Web site, at basilea.com. 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. Before outlining our new strategy, I would like to start with a brief summary of our key achievements in 2021 and the year-to-date 2022. This morning, we reported very strong financial results for the full-year 2021. The Cresemba and Zevtera non-deferred revenues increased by 65% year-on-year, to almost CHF129 million. Our strong financial performance is further highlighted by an operating profit of CHF1.2 million for 2021. These results are driven by the continued commercial success of Cresemba and Zevtera. The key revenue driver currently is Cresemba, which the 29% growth in royalty income directly reflected in the sales performance in the key markets form our partners. In addition to the positive developments for our commercialized products, we also made significant progress in our clinical studies. For our FGFR inhibitor, derazantinib, we reported positive results from a Phase 2 study in bile duct cancer, the first proof of concept indication. In anti-infectives, the last patient was enrolled in the ceftobiprole Phase 3 ERADICATE study in bloodstream infections, but also expanded our clinical oncology pipeline by adding BAL0891, a first-in-class mitotic checkpoint inhibitor, following an IND approval at the end of 2021. Our expertise in anti-infectives was once more recognized as we received a CARB-X grant of up to $2.7 million for the preclinical development of a novel drug for the treatment of infections with resistant gram-negative bacteria. Also in 2021, we conducted several transactions which further strengthened our financial position. We divested our Chinese R&D subsidiary allowing us, going forwards, to be more flexible with sourcing R&D services. Then, we carried out a strategic capital increase in the form of a private placement with institutional investors, which generated gross proceeds of around CHF46 million. Furthermore, we've continued to reduce our outstanding 2022 convertible bond by about CHF23 million, thus further improving our debt level. From this current position of strength, and after a thorough strategic review, we have announced today our decision to separate our anti-infective and oncology businesses. What this means is that, in the future, Basilea will focus on the research, development, and commercialization of innovative treatments to treat severe bacterial and fungal infections. We believe we have made great progress in both our anti-infectives and oncology areas over recent years. But from an external perspective, our hybrid two-therapy area model undervalues us, and the value would be better appreciated and reflected if the two therapy areas were separated. We believe our exciting oncology programs would benefit in the environment of an oncology-focused partner. Moving forward, the two areas would then be able to have the necessary focus on support they're required to be successful. As a leading global anti-infectives company, Basilea is uniquely positioned to create sustainable value in an area of increasing unmet medical need, and with our proven ability to advance anti-infective compounds, from research, through development, to commercialization. For our oncology assets, we aim to maximize the value through strategic transactions. These could be either for a portfolio of assets or on an individual asset basis. Why do we believe that we would be seen as a global leader in anti-infectives? We have significantly growing cash revenues from Cresemba and Zevtera. For Cresemba, with its 29% royalty growth and global sales already exceeding over $300 million, we are expecting marketing approvals in China in the coming months for the IV formulation and an approval in Japan later in the year with launches following soon thereafter. China is the number two market globally in commercial potential after the U.S. and Japan is the top five. Zevtera, as stated, following the recently completed enrollment of the Phase 3 SAB study, we are expecting the top line results around mid-2022. If these are positive, we will file an NDA around yearend to access the U.S. market by the end of 2023. The U.S. is by far the most important market for ceftobiprole, accounting for what we believe around 80% to 90% of the global potential. And with the QIDP designation, we would have 10 years of market exclusivity after the approval of ceftobiprole in the U.S. We also have a number of preclinical anti-infective assets, but would also look to supplement our current portfolio with additional externally sourced clinical and preclinical anti-infective assets. We would have a sustainably profitable company from 2023. And this would allow us to be active from a future financial transaction perspective. In short, we would have credibility as a leading global anti-infective company and would be well-positioned to take advantage of improving business environment. For the oncology perspective, we have generated valuable data for oncology assets to-date with in addition multiple data readouts for both derazantinib and lisavanbulin during the course of 2022, which are important to potentially add further value to the programs. For BAL0891 or novel TTK PLK1 kinase inhibitor, we are in preparations to enable to start of the Phase 1 study in mid-2022. We are also continuing to progress our preclinical assets. We will be exploring strategic transactions for our oncology assets either as a portfolio of assets or as individual transactions in order to maximize the future value of these assets. Given our financial strength, we did not have to look for frontload in the value from these transactions. We can therefore look to maximize the lifetime value of these transactions. Adesh will now provide an update on our commercial progress and present more detailed financial highlights for 2021 as well as provide guidance for 2022 and 2023. And Marc will provide you with a more detailed information on the progress of our development programs. I will now hand over to Adesh.

Thank you, David. I will highlight some of the key financial figures that we published today. All figures I will refer to are in Swiss franc. As announced last year, we have largely completed the significant change in our revenue mix in 2021. The non cash relevant recognition of deferred revenue that means upfront development and regulatory milestone payment received in prior years, has reduced by 92.6% year-on-year and will not be material going forward. We have reported CHF128.8 million in total Ceresemba and Zevtera non-deferred revenue, a 64.7% growth year-on-year. The other revenue components amounted to CHF16.8 million which mainly compromises part of reimbursements, which are offsetting a substantial portion of the ceftobiprole Phase 3 development expenses. Considering all these factors, total revenue increased by 16.1% to CHF148.1 million. Cost of product sold stayed flat at CHF24.1 million. SG&A expenses remained at a comparable level of CHF29.7 million in 2021 with CHF29.4 million in 2020. And R&D expenses decreased slightly from CFH97.4 million to CHF93.2 million. We reported an operating profit of CHF1.2 million compared to an operating loss of CHF8.2 million last year. For 2022, we recorded a positive one-off effect of CHF15 million from the sale of headquarter's property, which makes the improvement in operating result even more remarkable. Net loss was reduced by 53.7% to CHF6.8 million from CHF14.7 million in the previous year. Net cash used operating activities was reduced significantly by 14.9% to $32 million, which provides an indication of the significant improvement in the underlying operational performance last year. As of December 31, 2021, our combined cash restricted cash and investments amounted to $150 million, which includes a cash outflow of approximately $23 million related to the reduction of our 2022 convertible bond. We have consistently improved our net cash used for operating activities over the past years, driven by the significant increase in cash inflow based on the continued growth of Cresemba and Zevtera non-deferred revenue contributions, and our continued focus on managing operating expenses and improving our cost base. We expect the positive trends to continue and to report positive cash flow from operating activities as of 2023. In 2021, our partners continued to make significant progress in the commercialization of Cresemba and Zevtera. We see a strong increase in demand across the world, the latest in market sales numbers available for Cresemba show that in the 12 month period ending September 30 2021, sales grew by 26.5% year-on-year to $304.5 million. Additionally, in the U.S., where our partner Astellas is marketing Cresemba since 2015, January to December 2021 sales grew by 14% compared to full-year 2020. Increasingly markets outside of the U.S. are contributing to the global success of our brands as well. Partnerships continue to play an important role in the execution of our global commercialization strategy and provide a strong basis for future revenue growth. Cresemba is currently marketed in 56 countries and we expect further countries to be added leading to around 70 launched countries by the end of 2022. As already mentioned by David, our partner for Cresemba Japan, Asahi Kasei has filed an NDA in September 2021. Regulatory decisions on the application is expected in the second-half of 2022 and in China, the Chinese Health Authorities granted our partner Pfizer, the regulatory approval for oral Cresemba for the treatment of adult patients with invasive aspergillosis and mucormycosis. Zevtera is now on the market in 19 countries. In July 2021, we announced our latest distribution agreement for Zevtera, JSC Lancet for Russia and the other countries of Eurasian Economic Union. I'd like to highlight that we have had an excellent financial performance in 2021 and delivered financial results above our guidance on all key financial KPIs. For 2022, we expect continued strong in market sales growth for our key brand Cresemba more than compensating the expected decrease in COVID-19 related sales in 2021. Cresemba and Zevtera related revenue is expected to amount to $98 million to $104 million. The decrease versus 2021 is solely due to fewer milestone events expected in 2022, thus bringing the milestone payments closer to the level seen in previous years. R&D and SG&A expenses are expected to decrease to approximately $110 million, mainly due to lower anticipated costs related to the ceftobiprole Phase 3 program which is nearing completion. This results in an expected operating loss of $20 million to $25 million in 2022. Net cash used in operating activities is expected to improve further to $10 million to $15 million on the back of a strong top line performance and the anticipated decrease in operating expenses. For 2023, we expect continued growth of Cresemba and Zevtera related revenue and a reduction of around 30% in operating expenses versus 2022. This would result in us reaching sustainable profitability and generating positive cash flow from operating activities from 2023. I will now hand over to Marc for the development updates.

Thank you, Adesh. As mentioned by David, our future strategic focus is on research, development and commercialization of innovative treatments for severe bacterial and fungal infections. So, let me start with our anti-infective pipeline, which includes isavuconazole and ceftobiprole as our key anti-infective assays. Our partner also includes several research programs. One of these programs is focused on small molecule inhibitors EXR which is an enzyme essential for the survival from negative bacteria. And this program is supported by that, now turning to ceftobiprole, one of our key priorities for ceftobiprole is to gain access to the U.S. market. In January 2022, we have completed enrollment into the Phase 3 ERADICATE study, which is investigating ceftobiprole in the treatment of patients with Staphylococcus aureus bacteremia or SAB. Top line results are expected to become available around mid-2022. If the study is positive, we intend to submit a new drug application to the U.S. FDA. The funding of our Phase 3 program of up to approximately 70% by BARDA has allowed us to advance the development of ceftobiprole for the U.S. market in a cost effective way. The ERADICATE study which just completed the enrollment of 390 patients is a Phase 3 randomized double blind multicenter study to establish the efficacy and safety of ceftobiprole compared to optimizing in the treatment of adult patients with complicated SAB, including infective endocarditis. The primary endpoint is the overall success rate at 70 days after randomization. ERADICATE is the largest randomized study ever conducted for registration purposes of a new antibiotic treatment in SAB. SAB is an area of high medical need with about 120,000 SAB infections per year in the U.S. alone, with high morbidity and a 30 day mortality of approximately 20%. The ERADICATE study targets complicated SAB which is characterized by concomitant or metastatic infections, such as own joint or hard infections, persistent bacteremia, while bacteremia patients on dialysis. There are limited antibiotic treatment options with only two proof treatments in the U.S. which are vancomycin and daptomycin that cover both methicillin susceptible and methicillin resistant Staphylococcus aureus, or MSSA and MRSA to testify for if approved to address important medical need in this area. Ceftobiprole provides several key attributes supporting issues in SAB and is a better long-term antibiotic with rapid bactericidal activity against gram positive pathogens, including MSSA and MRSA, but also provides coverage against many gram-negative bacteria. Ceftobiprole demonstrated efficacy in Phase 3 clinical trials in Acute Bacterial Skin and Skin Structure Infections or ABSSSI, and in pneumonia, where the optimizer is not effective. It has also shown superior activity profile in predictive models of endocarditis or heart infections compared to vancomycin and daptomycin and has a low propensity for resistance development. Furthermore, ceftobiprole has an established clinical safety profile that is consistent with [indiscernible] class. The other pivotal Phase 3 studies are planned NDA submission is TARGET and acute bacterial skin and skin structure infections, this study was completed in mid-2019. TARGET was a randomized double-blind Phase 3 non-inferiority study and enrolled 679 patients, patients received either test of bipolar or the comparative regimen of vancomycin plus. Ceftobiprole is the pre-specified primary endpoint of early clinical response at 48 to 72 hours after the start of antidrug administration in the intent to treat population, which is the key endpoint according to the FDA guidance for U.S. Response rates were 91% with testified for versus 88% for the competitor and the lower bounds of the 95% confidence intervals were all well within the pre-specified non-biological margins of 10%. Now, moving on to our oncology pipeline, which includes derazantinib, lisavanbulin, 801, and several earlier programs from our research, in 2022, we will continue our preclinical and clinical activities in oncology to ensure project continuity, while we aim to optimize the value through either transactions of individual assets or a portfolio of assets. But derazantinib, our targeted orally available small molecule FGFR inhibitor, we are now focusing on two indications and these are Intrahepatic Cholangiocarcinoma or iCCA, a form of bile duct cancer in study FIDES-01 and advanced gastric cancer in study FIDES-03. We have to prioritize study FIDES-02 in urothelial cancer because of challenges in patient enrollment and the competitive environment in this space. In 2021, we reported top line results from the first quarter of FIDES-01 study, which provides a clinical proof of concept for derazantinib as monotherapy in this indication. This first cohort includes 103 patients with FGFR2 fusion-positive advanced iCCA in a second line and post second line treatment setting. The effective response rate in these patients was 21%. And the disease control rate was 76%. The median progression-free survival was eight months. We're also making good progress in core two of the study, which is enrolling iCCA patients with FGFR2 mutation and amplifications, and then another area of high unmet medical needs. We've just published updated positive interim results at the ASCO GI Cancer Symposium in January 2022. This recorded similar disease control rate and progression-free survival done in this patient group. So, that reported for iCCA patients with FGFR2 fusion. We are aiming to report top line results in the first-half of 2022. FIDES-03 explores derazantinib as a monotherapy and in combination with other content therapies and patients with advanced gastric cancer and FGFR genetic aberrations, initial results with derazantinib as a monotherapy and the recommended Phase 2 dose of derazantinib in combination with Ramucirumab and Paclitaxel, I expected in the first-half of 2022. Lisavanbulin, a microtubule directed checkpoint controller we are approaching target enrollment for Stage 1 in the Phase 2 study in patients with recurrent glioblastoma whose tissue is positive for implant protein 1 or EB1. And we expect top line results in the first-half of 2022. To even one positive patients on Phase 1 part of the ongoing clinical study are showing a long lasting clinical benefit that has been successfully treated for more than three years. Moving on to BAL0891, our latest addition to our clinical pipeline, BAL0891 is a unique dual inhibitor of TTK and PLK1 targeting key pathways in cancer cell division. The dual action of BAL0891 leads to a rapid disruption of the spinless empty checkpoints and cells are pushed through mitosis without adequate time for correct chromosome alignment and segregation. This ultimately leads to tumor cell death. BAL0891 has shown potent single agent on the conductivity in preclinical models of human cancer. In December 2021, the U.S. FDA approved the investigational new drug IND application. We are continuing the preparations of the plan Phase 1 study in patients with advanced solid tumors to enable a start around mid-2022. I will now turn over to David.

Thank you, Marc. Let me summarize then the key milestones for 2022. In order to implement our strategy in anti-infectives, we have a number of upcoming milestones, which would drive the value of our anti-infective portfolio. This includes the top line results and the staphylococcus aureus bacteremia Phase 3 study receptor bipro [Ph], and as stated, if positive, this would pave the way for future launch in the commercially critical U.S. market in 2023. In addition, we will continue to increase Cresemba and Zevtera related revenues from both the continued growth of existing markets, but also new country launches throughout the year. China and Japan, as stated are two of the most important global markets for anti-fungals, so we are looking forward to the potential market approvals and subsequent launches of Cresemba in China and Japan. We are also going to advance our preclinical anti-infective programs such as the CARB-X funded DXR inhibitors. And we then finally would also look the in licensing opportunities to further strengthen our clinical and preclinical anti-infective pipeline. In oncology, there will also be a number of important milestones, as stated by Marc, we expect multiple data readouts from our current clinical assets. Top line results from cohort 2 for the derazantinib and FIDES-01 study with FGFR2 non-fusion iCCA patients, then the interim results for derazantinib monotherapy and combination with ramucirumab/paclitaxel on the FIDES-03 gastric cancer study. And finally results from the lisavanbulin Phase 2 study with EB1 positive glioblastoma patients. In addition to our new clinical candidate BAL0891, we are preparing to enable the start of a Phase 1 study in the middle of the year. Furthermore, we will be advancing our preclinical oncology programs. Then, in parallel to the ongoing activities, we will also be ensuring the continuity of the oncology programs, and seeking to identify, as stated, and execute strategic transactions in order to maximize the future value of our oncology portfolio. Thank you for your attention. And we will now open the line for your questions.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Louise Chen from Cantor. Please go ahead.

Hi. Congratulations on all the progress this year, and thanks for taking my questions. So, I wanted to ask you what your go-to market strategy is for Zevtera in the U.S.? How we should think about the peak sales potential of this opportunity? And then lastly, just where are you with your portfolio optimization efforts, are you just at the beginning or has some progress already been made? Thank you.

Okay, thank you, Louise, for your questions. I'll kickoff. In terms of go-to-market strategy for the U.S., I think we've been consistent, and actually nothing has changed with the result of today's announcement. Our plan is still to seek a partner or a distribution partner for ceftobiprole for Zevtera in the U.S., in that way we would be cash flow-positive from the moment they start generating sales. And we are, therefore, in active discussions with potential partners, and that will continue to accelerate. And, maybe, it will need the results of the SAB study to clearly then secure a deal. But that's definitely the go-to-market plan. In terms of peak year sales of the U.S. opportunity, as I indicated, our belief, look, in analogues is that 80% to 90% of the global potential of Zevtera is in the U.S. I mean all I would refer to is probably analyst reports that have the opportunity, for Zevtera, anything 350 to 550 globally, of which the majority is in the U.S. So, we think this is clearly a multiple 100 million potential opportunity in the U.S. In terms of our -- your question three, around the optimization, maybe I'll hand that over to Adesh.

Yes, thank you. So, hi, Louise. So, with regards to the partnering, I think it is fair to say that we will -- we will kickoff the structure process as of today, in essence. However, especially with regards to the more visible compounds or projects likely lisavanbulin or derazantinib, over the years, of course, we have had already interactions. So, I think it is fair to say that for some assets we are more advanced because we've had -- it has been more visible in the past. For others, there has simply not been a lot of visibility, and hence there have not been a lot of discussions ongoing. So, the process will be kicked off, and it's a priority now for the company to get this executed.

Thank you.

The next question comes from Brian White from Calvine. Please go ahead.

Yes, thanks for taking my questions [indiscernible] as well. Just thinking, again, about the strategic realignment, I wasn't quite sure, Adesh, you were saying that you had already actively canvassed interest from your [Singapore] [Ph] partners. I guess you're looking at companies that may not have, for example, an FGFR [indiscernible] program. And to that extent, I would have thought it was unlikely that there would be a single new partner for all of the programs, given that your hope for these programs would fill in your gaps in other oncology portfolios. And with that in mind, I just wondered when, if maintaining perspective when you think and this may be best achieved? And then just [indiscernible], and I don't know if you can answer this, Adesh, it's just really a question regarding the guidance for 2023. I know it's a long way off, but if we're talking about a 30% reduction in overall operating expenses, that still, I think, looks like quite a sizeable chunk of money going into research and development. And I just wondering if your expectation is that there'll be zero percent contribution to, probably in the oncology portfolio, in that 2023 expenses guidance? Thank you.

Thanks, Brian. Actually, well, Adesh, why don't you?

Okay. So, maybe to your first question, I think it is fair to say that probably the different assets we may have to consider different kind of strategic transaction. So, it's not that we will sort of have to bundle everything together and that's sort of going to create most of the value. But we are open to a lot of different structures. Given the fact that we are in a strong financial position, that we have a good financial prospect, as you have seen in our guidance, hence we don't need to frontload transactions, so we can be creative, and we will be exploring both single asset transactions and licensing or bundling of any kind of products that we have in our portfolio. And the aim, of course is, and that's sort of also answering the question in your second -- your second question, is that we are aiming at having the strategic transactions completed in 2022. And hence, in 2023, sort of we will be looking at being focused exclusively on our new strategic priority in our infectives. On the cost base, I think the only thing I can say there is that we, of course, have certain ongoing activities also on the anti-infectives side, there is still some ceftobiprole Phase 3 activities ongoing, there are the pediatric programs, there's research studies ongoing on the anti-infectives side. And then especially, there is quite a lot of activity, of course, to support a commercial business. As you know, we have sort of -- we are responsible for pharmacovigilance, regulatory activities, and so on also in the context of managing our partners.

Okay, and that's great. Thanks, Adesh.

The next question comes from Jacob Thrane from Edison. Please go ahead.

Thank you very much for taking my questions. Some of them have been answered already, and also from me, congratulations on the excellent results. I just wanted to hear a little more about if you can add some color to Cresemba and the Chinese market. You mentioned it's the second largest after the U.S., so just to get a sense of the loss trajectory, that we're just going ahead and being approved or should we have both formulations ready? And could you say a little more about the situation with the NRDL. And so, another thing is just a little bit about the guidance that you have given, basically for 2023, where everything should be sort of in positive territory, if I could call it that. Is that as a going concern or does that have any sort of prerequisites about the strategic activities you are mentioning now or anything, let's say, that positive readout for -- or a potential positive readout from the ERADICATE study would just be a cherry on the cake? And then could you perhaps explain to us a little more about how you are going to handle your convertible bond that is maturing by the end of the year, and what you intend to do there, that's on, also, a little more sort of finance [triggering that] [Ph]. But if you could add a little color to that as well, I'll be very happy. Thank you very much again.

Okay, thank you, Jacob. I'll take the first one, on the Chinese opportunity. So, basically, they're looking at analogues, again, of other compounds like [voriconazole] [Ph], for example. We believe the Chinese market, as I said, is the second-biggest global market after the U.S. The U.S. is about 25% of the global potential; China is around sort of 18%-20% of the global potential, so it's a significant market. Just to be clear, and I think you understand this, but we -- so, we've got the regulatory approvals, that the applications were actually separate approvals for the IV and the oral. So, actually, we got the oral approved, in December, in very quick succession for mucormycosis and aspergillosis. And then in the coming months, we expect the IV to be approved, okay. So, -- but your question about the reimbursement listed in the inclusion on that is a very pertinent question, because actually our partner, who is a very competent partner in China, Pfizer, they are working on various scenarios. And so, all I would say is the one thing that's clear is that it's a big opportunity, but the sort of initial take-up, there's a range of scenarios from good to very good, depending how quickly we get on this list, this famous reimbursement list in China. So, actually, yes, there's -- all I would say is there's a range of some possibilities of how quickly the product takes off depending how quickly we get on this reimbursement list in China. In terms of the second question around guidance --

So, I'll take that because that's also then a little bit of a segue into the third question that you have. So, maybe what is our strategic -- what does financial guidance 2023 taking into consideration? So, we are assuming there is in essence no inflow or no positive impact from a strategic transaction. From the oncology bit, I think the only thing is and that's building on the answer that I gave to Brian before, but it is assuming that we will not be incurring any expenses in 2023 related to our oncology portfolio or our oncology business. So, that's sort of the only implication or the only consideration with regards to the strategic transactions and the oncology portfolio. With regards to ERADICATE and of course, having positive readouts from ERADICATE will have a significant impact certainly on the mid- to long-term on our cash flows potentially even in 2023 through partnering and so on. But in essence irrespective of the outcome of ERADICATE, we will be looking at actually being cash flow positive in [2023] [Ph]. And that's sort of then segue into your third question about the convertible bonds because that certainly also have consideration for us when looking at how to deal with the maturity of our upcoming -- of our convertible bond. So, we have a cash position of cash restricted cash and investments of CHF150 million at end of 2021. We are guiding for about CHF10 million to CHF15 million operating -- in a cash flow negative operating cash flow for 2022 that gives you an idea about where we stand at the end of the year. And what we have to say is that going forward, our aim is to reduce our debt level and to manage the debt level in a way or the refinancing -- if a refinancing we required in a way that minimizes dilution. But, the extent to which we have to refinance the convertible bond will be depend to some degree on the proceeds from a strategic transaction, on the outcome of the ERADICATE study, and projections that we will therefore have related to those. So, hence, we will only be able to make an important decision later in this year about how exactly to deal with the convertible bond.

Okay, both of you thank you very and congratulations again on the very interesting and nice results. Thank you.

Thank you.

The next question comes from Guekam Arsene from Kepler Cheuvreux. Please go ahead.

Hello. Thank you for taking my question, I have three. First of all on ERADICATE trial. What is clinically meaningful threshold for this trial compared to daptomycin? The second question, could you give us more color on BARDA reimbursement? What is the remaining part to fund? And do you include any in your reimbursement in your guidance? And the last one, regarding you guidance in term of operating expenses, you expect 30% reduction in operating expenses. Could you give us more detail in term of position of the central marketing expenses and R&D expenses? Thank you.

Okay. Thank you, Arsene. Marc, maybe you take the on the ERADICATE coming to meaningful outcome versus daptomycin, what we should be looking at?

Yes, sure. So, I think point number one is that the primary study objective is met, which is to demonstrate non-inferiority in the overall success rate between ceftobiprole and daptomycin. We have a non-inferiority margin of 15%. So, the 95% in the -- about the lower part of the 95% of the difference needs to be of this 15 percent point. I think this is the prerequisite and to move on to a regulatory procedure and the submission. And then certainly I think for positioning of the [indiscernible] also be important look at consistency of results over subgroups. There are a number of subgroups. One of which, for example, is methicillin resistance versus susceptibility but also in the study there are patient subgroups predefined such as right-sided infective endocarditis, patients on dialysis, resistant Staphylococcus auerus bacteremia. And in the statistical analysis, we have defined a couple of more groups in categories of patients who have the infectious foresight. This could be for example, septic arthritis or assimilators. We will need to see then in discussions with FDA and based on the results, what could be relevant for the U.S. prescribing information, but that's kind of what we will be looking at with this study.

And then in terms of the BARDA reimbursement and --

Yes, so maybe to start with the BARDA reimbursements, so as baseline for 2021 we had other revenue amounted to 16.6 million and out of that 14, one, four was related to BARDA reimbursements. So, about let's say 80% to 85% of our other revenue. For 2022, our guidance implies 8 million in other revenue, and again, the majority of that is going to be related to BARDA reimbursement. That gives you a little bit of direction of travel of the BARDA reimbursement in essence. As the study is also still ongoing, as you know, as the patient enrollment has completed, but the study is running and it will be also closed out activities then over the remainder of the year. Then maybe to -- if we look into 2023 or more color, the only thing to add at this point in time, I wouldn't really break down the individual line items about where the cost is coming from. But what we can say is that the majority is actually related to direct product costs. So, about 70% of the cost that I was mentioning before the 30% reduction, 70% of that is related directly to the R&D expenses on the oncology side. So, that gives you an idea about how the distribution is.

Okay. Thank you very much on the progress and the results.

Thank you, Guekam.

The next question comes from Raghuram Selvaraju from H. C. Wainwright. Please go ahead.

Hi, thanks very much for taking my questions. I also have three. The first was with respect to how you are thinking about strategically positioning the initiative to partner Zevtera in the United States. And if you think about the optimal point at which to have a partner on board being after the results from ERADICATE, but before the actual regulatory approval or if this would be post regulatory approval, and if you can give us a sense of what commercial preparations are likely to be required in order to position the drug optimally in the United States prior to getting regulatory approval. And then secondly, with respect to the R&D expense, I was just wondering if you could clarify, if we look at the 2021 R&D number, how much of that was related to the oncology programs. And lastly, if you can clarify for us whether you expect to in an ideal context complete the current and then your near-term envisaged oncology development programs with your pipeline assets. And after that point, no longer allocate further R&D development expenses to them, or if you are prepared to make additional R&D development expense allocation to these projects, assuming that you do not find an ideal partner or partners for them? Thank you.

Okay, thanks, Ram. In terms of your question about strategically the timing of the partnership with Zevtera in the U.S., I think we alluded to it in our words earlier, that, I think there's certainly value now, there's obviously significantly more value once the SAB study is positive in the middle of the year. So, and then the question about yes, but could you get more value if you've got the regulatory approval, I think and then that also Zevtera with your second question about commercial preparation, I think it's a sort of, it's a balancing act. Obviously, it depends on -- it takes two to tango, so to speak. So, we need the partners coming up with the right sort of offers, but my feeling is that it's that balancing those different sort of aspects. I think, post the SAB results, because the SAB results are we believe pivotal, as Marc was alluded to earlier. You know, the skin indication is important for that regulatory package, but in terms of the differentiating indication, and a sort of real proof of concept for key opinion leaders in the U.S., we believe the SAB indication is pivotal. So, actually, we think there will be markedly increased interest and increased valuation in the asset following the positive SAB study. And we think that so probably balancing that with wanting to do a deal and prepare -- the partner being prepared for the launch towards the end of 2023. If I was a betting man, I would say you'd get would start to get involved in very serious discussions after the SAB results, whether or not there happens at the end of 2022, or beginning in 2023, it's difficult to exactly say, but I think that's definitely when we believe probably the ideal time will be for doing a deal. In terms of your question about your R&D expense, how much it was oncology in 2021, Adesh, do you want to take that?

So, you can, again, it's almost like paying back into the 30%. So, that was indicating before. So, if you think about the 30% reduction in the $110 million in operating expenses in 2022, we are guiding for. That is sort of relating to the oncology business. So, we didn't just come up with the 30% number by chance that was based on the calculation or estimate about how much of the costs related to the oncology activities. And that may be done then is also the segue into your next question about, would we be prepared to take the assets further, I would say, in essence, we would be prepared to take the assets forward in the context of an agreement that we have because you can discuss about kind of structures that sort of required that we continue for a certain period of time. But as a matter of fact, we would not move forward or that's not the intent to move forward in the absence of having a partnership or strategic transactions executed.

Thank you.

Thank you.

[Operator Instructions] The next question comes from Bob Pooler from Valuation Lab. Please go ahead.

Good afternoon, gentlemen. Again, congratulations with the excellent results. Just on your strategic alignment, has something also changed also in the anti-infective area? In the past, you mentioned that there were not so much deals in the anti-infective area and a lot more agreements and potential agreements in oncology, is this also something that you're looking into as well?

Yes, Bob, I think the observation over the last years and definitely I think we feel that the anti-infective space is becoming more active. I mean, in the areas that we're playing, which is the antibacterial, anti-fungal space, I think it's becoming more active, we've clearly got a list of potential candidates assets that were interested in terms of in licensing in I think it's definitely becoming that's one factor in our thinking, the attractiveness of the area versus maybe a few years ago. And I think also as you're probably very aware of is the whole antimicrobial resistance topic is gaining more and more traction, I think globally by governments, organizations, lobby groups to try and push this agenda forward. And I think, again, the coronavirus pandemic has also helped, I think bring into focus the concept of resistant pathogens and the importance of globally addressing these issues. So, there's a whole number of reasons why we think this area is not going to become less active but become more active.

Yes, so the only thing I would add is that actually all will be I think, since about five years and about five years, there has been increasing investment on the early side, actually in discovery, on the early side of small companies in the space, because I think the whole question about is to medical needs is it's out of questions, put it that way. And I think those investments are finally resulting now in more and more projects, reaching a certain level of maturity that is becoming interesting for also companies like us to pick them up and actually leverage our experience and our infrastructure to take them forward. So, the opportunities, the scope of opportunities, the number of opportunities have certainly evolved over the last four to five years, based on the investments that have been made in early in early research and discovery.

Yes, so you'd be probably now looking well, if you look at your pipeline with ERADICATE is positive, then you actually only have early stage projects. So, you're probably looking at projects that have proof-of-concept or going to Phase 2 or Phase 3. Is that a correct observation then?

Yes, Bob. Completely, correct observation. I would just remind you that the ceftobiprole, if it's positive, the SAB study with this QIDP designation, we would get 10 years of exclusivity following the removal. So, Zevtera U.S. would be a big opportunity for us for a number of years. But you are 100% right, that our compounds behind that are in the preclinical stage. And that's why I think I said that we're looking to actively in-license both clinical and preclinical assets in anti-infectives.

Okay, thank you. And then second question, on Cresemba and Zevtera, where is the growth coming from, is it volume? Of course, you're having the country -- the [indiscernible] countries, but do you also see pricing power as well?

Actually, it's all coming from volume, Bob, because, yes, it's all volume growth in the U.S., our most established market, it's volume growth in the other markets we've launched in, and it's volume growth for new markets we're going to launch in. And it's not a question of a mix of price and volume, it's, I would say, it's almost exclusively volume -- more patients treated.

Okay. And then a final question just on FIDES-02 or bladder cancer, do you still have some hopes for a second-line treatment of bladder cancer?

[Indiscernible] We've reached for the second-line and post second-line monotherapy. We've reached the stage one required number of patients, and we will see, over the next months, the efficacy results evolving. That's why we're base -- where we will be reporting interim results of this cohort, except the two substudies that we did not continue was the ones in first-line [indiscernible] patients, which is extremely difficult to enroll because of the competition, and the FGFR inhibitor receptor, which is also is now very advanced, and hard to find a patient population. So, this was the reasons, but we are looking into the monotherapy data in second and post [indiscernible] setting, and they are maturing. And I think we've indicated that we expect having results for these -- interim results in the first-half of 2022.

Okay, thank you. And just one quick one, when do you expect to move to your new headquarters?

What we've said is, and it's still the case, at middle of the year, Bob, so, middle of the year.

Okay. Thank you for answering the questions.

Thank you.

Thank you.

Gentlemen, so far, there are no more questions.

Okay. So, from Basilea, thank you very much for your questions, and thank you for your interest. Enjoy the rest of your day. Thank you.

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