Ronald Scott - Chief Executive Officer Achim Kaufhold - Chief Medical Officer David Veitch - Chief Commercial Officer Donato Spota - Chief Financial Officer

Fabian Wenner - Kepler Cheuvreux Bob Pooler - valuationLAB AG Olav Zilian - Helvea-Baader Bank Group

Ladies and gentlemen, good afternoon. Welcome to the Basilea Pharmaceutica’s Conference Call on the Full Year Results 2014. I’m Sayan [ph] the Chorus Call Operator. I would like to remind you that all participants will be in a listen-only mode. After the presentation there will be a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it’s my pleasure to hand over to Mr. Ronald Scott, Chief Executive Officer. Please go ahead, sir.

Thank you, and hello, everyone. This is Ron Scott CEO of Basilea and I welcome you to our conference call to discuss Basilea’s 2014 full-year financials and update you on our operations. Joining me on this conference call are Achim Kaufhold, our Chief Medical Officer; David Veitch, our Chief Commercial Officer; and Donato Spota, our Chief Financial Officer. I would like to note this call contains forward looking statements. Basilea is one of the few companies with integrated research, clinical development and commercialization focused, on new medicines to overcome resistance in the areas of infectious disease and oncology. At the beginning of 2014, we indicated our major objectives for the year were, the regulatory filing of isavuconazole, the launch of ceftobiprole, and the commencements of phase 2 development for our oncology compound. I’m happy to report today that we achieved all our major milestones again in 2014. We submitted a European marketing authorization application and our co-development partners Astellas submitted an U.S. New Drug Application, seeking isavuconazole approval for the treatment of invasive aspergillosis and mucormycosis. We are very pleased with the recent positive recommendation by the FDA’s Anti-Infective Drugs Advisory Committee related to the U.S. submission. Turning to ceftobiprole, we successfully concluded national pricing and reimbursement agreements in Italy and France. In addition, we completed an agreement with Quintiles for the commercialization of the compound under their brand name Zevtera or Mabelio. Zevtera was launched in the German market at the end of last year. Finally, based on encouraging phase 1 data we initiated a phase 2 study for our cancer compound, BAL101553. I will now turn this time to Achim, who will update you on our development programs; thereafter, David will provide you with an update on our commercial activity; then Donato will provide you financial highlights for last year and guidance for 2015.

Thanks, Ron. We are excited about the advancements we made in our clinical pipeline last year. We were especially pleased with the timely regulatory filing of our antifungal isavuconazole. Serious fungal infections such as invasive aspergillosis and mucormycosis are on the rise due to the increasing number of immunosuppressive patients such as cancer patients undergoing chemotherapy or bone marrow transplantation. This is an area of significant unmet medical needs with high morbidity and mortality. Currently available treatment options are limited. Compared to the current standard of care for the treatment of invasive aspergillosis, isavuconazole has the potential to offer clinically relevant advantages. Isavuconazole has linear pharmacokinetics, leading to predictable drug exposure after both intravenous and oral dosing, a favorable safety profile, and a lower risk for drug addiction. In addition, isavuconazole’s broader spectrum of antifungal activity offers an improved possibility for imperics [ph] therapy when the diagnosis of causative pathogen is unknown, which is recently the case. In July 2014, we filed a European MAA and Astellas filed a U.S. NDA for the treatment of invasive aspergillosis and mucormycosis. We were very pleased that the FDA’s Anti-Infective Drugs Advisory Committee recommended last month to approve isavuconazole for the treatment of invasive aspergillosis and mucormycosis. A decision by the FDA is scheduled at around March 8, which is the PDUFA date. We are on track with the review procedure in Europe and anticipate the decision by the European Medicines Agency in the fourth quarter of this year. In addition, the enrollment for the third phase 3 isavuconazole study ACTIVE for the treatment of invasive Candida infection was completed in January and top line data is expected in the second-half of this year following completion of treatment and follow-up period. It is anticipated that this data will be subsequently submitted both in the U.S. and in Europe for this potential additional indication. Basilea also advanced its early stage development program for our Gram-negative antibiotic BAL30072. We initiated a phase 1 combination study with meropenem, an antibiotic of the carbapenem class to assess the safety and durability of BAL30072, alone and in combination. This study is being conducted on a contract with the U.S. Biomedical Advanced Research and Development Authority, BARDA, and we anticipate that data will be available at the first-half of this year. Immunocompromised cancer patients are the largest patient group suffering from invasive bacterial and fungal infection, creating potential synergy between Basilea’s anti-infective drug portfolio and BAL101553, our oncology drug candidate. Following successful completion of the phase 1 study of BAL101553, we initiated a phase 2a study in July of last year to include patients with solid tumors refractory to current therapies. We anticipate completion of this phase 2a study in the second half of this year. David will now provide you with information on our commercial activities.

Thank you, Achim. Let me expand on our commercialization strategy for ceftobiprole, which will be marketed either as Zevtera or Mabelio depending on the country. This new broad spectrum antibiotic is for the treatment of severe bacterial lung infections. It is the only antibiotic monotherapy that is approved for the treatment of adults with community-acquired pneumonia and hospital-acquired pneumonia, excluding ventilator-associated pneumonia. Ceftobiprole is active against the broad spectrum of the relevant pathogens associated with pneumonia, included methicillin-resistant Staphylococcus aureus or MRSA and Pseudomonas species. Pneumonia patients require effective fast-acting and well-tolerated treatment. An appropriate initial therapy is very important to decrease mortality, morbidity, and length of hospital stay. Treatment failure rates in pneumonia, especially pneumonia caused by MRSA are still high and have been attributed in part to inadequate initial antibiotic therapy. Last year, we entered into an agreement with Quintiles to commercialize Zevtera in Europe. This allowed us to launch quickly, retain operational flexibility and maximize economic upside. In addition, within about a year Basilea may have the unique opportunity pending regulatory approval to launch our second hospital product, isavuconazole, in Europe. Based on the facts with the target customer audience is very similar for both isavuconazole and ceftobiprole, this would afford our company significant commercialization synergies. Zevtera’s launch in Germany at the end of last year marks an important milestone for Basilea. Following country, pricing, reimbursement discussions, launches in further key European markets, Italy, France and UK, are planned for the first part of 2015. In Spain, our value drossier is currently being assessed by the pricing and reimbursement authorities. So the plan is to launch following the successful completion of that process. To maximize the commercial potential of Zevtera, we also plan to launch in additional countries. In geographies outside Europe such as Australia, South America and Asia, we’re also seeking regulatory approvals, and are searching potential license and distribution partnerships. We believe ceftobiprole has competitive product profile as compared to existing antibiotics. However, for any new antibiotic, hospitals do need to first test its effectiveness against pathogens prevalent in their hospital. When they have observed the local effectiveness, then ceftobiprole becomes an alternative treatment. This process means that initial sales of hospital antibiotics in Europe typically have a gradual start, but then accumulates steadily over time as more hospitals realize the effectiveness of the new antibiotic and it becomes a routine in use. We are active in pre-launch activities for isavuconazole in Europe, including preparing the pricing dossiers and gaining a better understanding of how doctors see isavuconazole being used in clinical practice, given the high unmet medical need. I will now turn over to Donato, who’ll update on our financial highlights from last year and provide financial guidance for 2015.

Thank you, David. All the figures I will refer to on Swiss francs unless indicated otherwise. Contract revenue in the financial year 2014 amounted to CHF 42.1 million compared to CHF 40.5 million for the financial year 2013. This includes CHF 36.9 million related to the global agreement with Stiefel for Toctino and CHF 3.9 million related to the license agreement with Astellas for isavuconazole. Total operating income in 2014 amounted to CHF 42.6 million compared to CHF 41.4 million for the respective period in 2013. Basilea continued to make focused investments in its key value driving assets. We invested CHF 54.4 million in our research and development activities compared to CHF 53.3 million in 2013. SG&A expenses amounted to CHF 30.1 million as compared to CHF 21.3 million in the year 2013. This increase is primarily due to the commercial activities to prepare and support the launch of ceftobiprole in Germany and further major European countries. In 2014, the operating loss amounted to CHF 41.8 million, compared to CHF 33.3 million in 2013. The net loss amounted to CHF 41.5 million compared to CHF 33.0 million in 2013. Basic and diluted loss per share was CHF 4.17 for 2014 compared to CHF 3.40 for the respective 2013 period. Net cash used for operating activities in 2014 amounted to CHF 71.5 million, compared to CHF 59.5 million in 2013. As of December 31, 2014 our combined cash and short-term investments were CHF 226.1 million, compared to CHF 273.9 million as of December 31, 2013. Regarding payments from partnerships, in 2014 we received the CHF 12 million payment from Astellas following acceptance of the U.S. NDA filing. We entitled to receive an additional regulatory milestone payment in the event isavuconazole is a proved for the treatment of invasive aspergillosis in the U.S. In case of a filing and the approval of the candidemia indication in the U.S., Basilea would also be entitled to regulatory milestone payments. Outstanding milestone payments totaled CHF 362 million, including sales milestones. Basilea also participates in Astellas product sales to double-digit tiered royalties. With regard to alitretinoin, Basilea is eligible for a milestone payment of up to £40 million, related to potential U.S. launch. We understand from GSK Stiefel that their preparation of a U.S. alitretinoin NDA filing is ongoing. Total operating expenses for 2015 are estimated at approximately CHF 9 million on average per month. Basilea’s average operating loss in 2015 is estimated at approximately CHF 4 million per month with the majority of operating income being driven by revenue recognition from upfront and milestone payments. Basilea will launch Zevtera in additional major markets this year. Initial sales I estimated at less than CHF 5 million as we established the brand in major markets during the year.

Thank you, Donato. As we move forward we are focused on achieving our key goals in milestones this year, which includes launching Zevtera in Italy, France and the UK. At the same time our commercial organization in increasing market awareness in preparation for a potential launch of isavuconazole in Europe in the event of approval. We’re actively negotiating distribution and licensing partnerships for ceftobiprole and isavuconazole outside of our core markets. We continue to support European authorities in their review of isavuconazole MAA, and Astella6s in their attraction with FDA for the U.S. NDA review. As indicated we anticipate a decision by the FDA around March 8 and expect a decision on the European filing in the fourth quarter of this year. Top line phase 3 results from our ACTIVE study for the potential use of isavuconazole on the treatment of invasive Candida infections is anticipated in the second half of this year. We plan to report phase 2a data from solid tumor patients for our anticancer compound BAL101553 in the second half of this year, and report additional phase 1 data for our Gram-negative program in antibiotic BAL30072. As always, we continue our prudent management of our expenses and our cash while now also focusing on building revenues from our products. We look forward now to answering your questions.

[Operator Instructions] The first question is from Mr. Fabian Wenner, Kepler Cheuvreux. Please go ahead, sir.

Hey, good afternoon, gentlemen. I hope you can hear me well. Thank you. I have basically one key question and it might split into smaller ones. But you’ve already talked about further launches in European key markets for Zevtera. I wondered, if you can speak a little bit about how you are planning the year for when you expect any meaningful revenues from any of these markets, France, Italy, and UK. You’ve been working on Germany for quite some time maybe you can update us on the progress there. Then also within this framework can you give us maybe an indication of how you see the costs progress you gave us an average OpEx number of CHF 9 million per month. So I’d be interested in the progression over the year, obviously towards the end of 2015. We should expect an increase I guess in both SG&A. And then also I’d be interested in how you see COGS develop. We haven’t really seen any COGS yet in your cost lines? Thank you very much.

Okay. So David here, I’ll start with the sales point of that question. I mean, from the sales point of view, like I said, the focus is very much, we launched in Germany at the end of last year. And we’re hoping to launch in - we’re planning to launch in Italy, France and the UK in the coming months. So they’re the three major next markets I referred to. And as I said, Spain would be after the pricing reimbursement process, which is still ongoing. As soon as that completes then we’ll - the plan is to move to focus on Spain. So the focus in terms of rollout is Germany is launched; Italy, France and UK are next; and then would come Spain and selected other markets subsequent to that. Just a couple of points, this was a decentralized regulatory approval process. So we don’t have the approval in all the 31 countries that you’d normally get approval, if it’s a centralized approval process, just to point that out. And then in terms of, like I said in my comments a moment ago, the other focus at the moment is getting hospitals in now Germany and as soon as we can in Italy, France and UK, testing microbiologically the product against the pathogens in their hospitals, so we provide the capacity for them to do that. So very much - what happens with antibiotics particularly in Europe is that they - the hospitals like to test their pathogens against the new antibiotic and when they’re convinced that it works against the pathogens in their hospitals and then they will subsequently going on and purchase the drug. So that’s the sort of process and the focus we have at the moment, allowing them to test and rolling out country-by-country in the order I just stated. So that’s very much the focus at the moment in terms of the commercialization.

Would you - sorry to interrupt. Would you then say we should expect some revenue contribution from these countries more towards Q3 or even Q4 this year?

Yes, Fabian, that’s a fair comment.

Okay.

Maybe I’ll pass over the other parts.

So this is Donato, Fabian, hello. With regard to your point on the operating expenses, well, actually as we indicated earlier, we’re planning to launch in these additional countries in Europe. So obviously we’re going to setup what is needed there, so at the beginning of the year cost will be with lower in that respect and increase over the year. But as you pointed out the average is estimated around CHF 9 million in overall operating expenses per month.

Per month. Can you give us an indication on how many sales reps are currently employed from Quintiles or is that not how it’s done? And how you expect that to ramp up over the year?

Yes, so it’s David again, I mean that is how it’s done, where basically Quintiles are our contract sales organization. We actually have sort of three roles of people in the different countries in the market. So we have sales people, we have a field medical people, field access people. The total team, the country, if you want to think about that, it’s about 15 people on average; so in Germany, UK, Italy, France, if you think of it, in terms of an average it’s about 15 people per country, who are employed by Quintiles or dedicated to this project. And this is dedicated team that we recruited for this project.

That’s very helpful. Thank you.

Your next question is from Bob Pooler of valuationLAB. Please go ahead, sir.

Good afternoon, gentlemen. Just on the guidance for 2015, which currency rates are you doing the Europe versus Swiss franc and also the dollar versus Swiss franc?

So, Bob, this is Donato speaking, hello.

Hi, Donato.

So actually I mean I think you’re pointing out to the S&P division just recently, actually with regard to our overall expenses about 50% is now denominated in Swiss franc. So we do not expect a major impact from this decision.

But still you will have some revenues coming from euros from the launches and also potentially miles - I know the Astellas milestones are in Swiss francs, aren’t they?

Exactly, so on the milestone payment there in Swiss franc with regard to the euro there, sort of a natural hedge actually because of sales in euro and also expenses in euro, with regard to our sales force for example. So as I said there is not any impact expected.

Okay. Just on the operating expenses roughly around CHF 109 million for this year, just in the split, do you assume that R&D will be roughly stable and that the jump will be more in SG&A because of the rollout of Zevtera to Europe?

Well, we expect a slight increase in the R&D expenses as well, that is related to preparing the launch actually of isavuconazole in Europe, so mainly with regard to, and the launch material, which will appear in R&D expenses. Then the remaining portion and the majority of the increase is in SG&A exactly, following the commercial activities.

Okay. With your guidance that implies roughly total operating income about CHF 61 million. Which milestones are included in that? Is that just the approval milestone for isavuconazole in the U.S.?

Well, actually both, this includes upfront and milestone payments which we received already also in the past, already in the [indiscernible] over a certain period of time. So you can see that in our financials that there is an amount already there. And this is the majority of what is included in the revenue.

So, yes, I sort of calculate the isavuconazole approval would be something roughly around the CBF 28 million will be just sort of the difference, so the jump from a year over year.

We have not actually indicated what was …

Now, I am indicating…

Isavuconazole [ph], there are analyst estimates which are in this range, yes.

Okay. Just one, and then it’s also a little bit in the guidance there on the operating income or the implied operating income guidance on Toctino as you stated in the press release there, the status of that is still ongoing. Do you expect approval and also the milestone payments in 2015? I assume that’s going to 2016 looking at where your operating income is.

Well, typically if you look at the timeline, review timelines, if that - at the U.S. FDA, I think you can assume that it’s 12-month period, so you can assume that it will be in earliest in 2016.

Okay, okay. And just a final question on the regional partnerships, you mentioned Australia and Asia and so. Are there any countries where you might expect some of this coming out in 2015?

This is Ron speaking. Hi, Bob? We are active in different territories around the world, in Asia and the Middle East and Central South America. So we are actively working on these potential transactions and we would expect that we will have some announcements this year in this regard.

Okay. Just one thing, that’s a follow, actually from Fabian on the COGS, the development there?

Well, I mean, as you know what the cost of goods sold there, following sales. So I mean as we will have sales coming and increasing, cost of goods will also increase along the light of the sales basically.

Okay. Thank you, gentlemen.

[Operator Instructions] The next question is from Olav Zilian from Helvea. Please go ahead, sir. Mr. Zilian, your line is open.

Yes. That’s Olav Zilian at Helvea-Baader Bank. Thanks for taking my question. I have a couple of questions, starting with COGS. So when would you start to book COGS?

Well, we’ll start probably to book COGS this year.

And that would ramp up - so would this ramp up proportionately with sales or would we expect to see some stocking effect?

The COGS are actually from an accounting perspective COGS are booked along the lines of sales. So this is goes into same line.

Okay. Then coming to the popping of Zevtera, would you expect that these popping discussions will advance upon the approval of isavuconazole in the United States and that’s the two dots together would then be partnered for markets outside of Europe?

Yes. Olav, this is Ron speaking. We are in discussions for both drugs outside of our core markets. So yes, we are doing discussions for both compounds. At the same time with the different potential distributors are our licensing partners.

Thank you. And then maybe finally for the anticancer compound, could you give us please and update on the ongoing phase 2a study, so where you are as for recording patients? How the study as such is progressing? Just comes to the mind that, actually the abstract submission deadline for ESMO is towards the end of April, so by when would you expect to publish the data?

Olav, hello, this is Achim. Olav, the trial is going according to plan, so where we investigate the drug in several different tumor types. And we anticipate to have results in the first half of this year.

So in other words you suggest that the data would be part of the abstract and you might present at ESMO.

This is not what I indicated. I think in terms of timelines, we need to see when the trial is done, it just takes the time if it takes, and this is someone unpredictable. So I cannot commit on a certain month.

So when it comes to the publication of the full set of data at a conference, what are your expectations by when this could occur?

This could occur at any time during the first half of this year. So, we will certainly choose the right type of forum in order to present those data.

I am not sure, if I miss understood you, but the official guidance for the phase 2a data is in the second half?

No, it’s in the first-half of…

First half?

…yes, in the first half of this year. So I think we have - so we have the major conferences, such as ASCO I think is in May, then we have other major conferences and…

So then for this trial to be more specific what percentage of patients you have enrolled and what is the treatment duration?

Sorry, could you please repeat your question?

Yes. What is the percentage of patients you have enrolled for the phase 2a study? And what is the duration of the treatment?

The trial is currently enrolling so that patients are carefully selected. We have announced that we plan to enroll up to 40 patients. And the trial duration per patient is actually - so it changes from patient to patient. So some patients are on for longer period, other patients are excluded because of disease progression then also dose [ph] events they may be excluded from further treatment. So, it’s a really highly individualized patient-by-patient.

Okay. Thank you so much. I step back into line. [Operator Instructions] There are no questions on this time.

So I’d like to - This is Ron Scott speaking again. I’d like to thank you all for your interest. As you can see we have a lot of milestone coming up this year from the potential regulatory decisions related to isavuconazole in the United States; and in Europe we have the candidemia study results for isavuconazole coming up in the second half of this year; we had a rollout of ceftobiprole in Europe, potential partnerships; and the potential data read out for our cancer compound in second half of this year. So we look forward to updating you on this as we go forward and we appreciate very much your interest. Thank you.

Ladies and gentlemen, the conference is now over. Thank for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Good bye.