Ladies and gentlemen, welcome to the Basilea Pharmaceutica Full Year Results 2022 Conference Call and Live Webcast. I'm Alice, the Chorus Call operator. [Operator Instructions]. At this time, it's my pleasure to hand over to David Veitch, Chief Executive Officer. Please go ahead, sir.

Thank you. Hello, I'm David Veitch, CEO of Basilea. And I'd like to welcome you to our conference call and webcast. We'll review our financial results and key achievements for the full year 2022 and also outline the progress we've made in the implementation of our strategy to become a leading global anti-infectives company and highlight the upcoming milestones. For further detailed information, please see the ad hoc announcement issued this morning, and also our full year report 2022. These documents are both available on our website at basilea.com. I'd 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. I'd like to start with a brief summary of our key achievements in 2022. We announced in February last year that we would exclusively focus on anti-infectives going forward, and we have indeed successfully implemented this new strategy by the end of the year. By the end of this transitional year, we had transacted 3 oncology assets, which resulted in CHF 15 million in upfront and near-term milestone payments. We also will not incur any material expenses on oncology activities in 2023 and beyond. The progress we made was also reflected in our financial results, underpinned by the continued commercial progress of our marketed brands, reflected by the 22.4% increase in royalty income. We are happy to report a significantly increased operating profit of CHF 18.5 million and a net profit of CHF 12.1 million. Moreover, we strengthened our balance sheet by fully repaying our 2022 convertible bonds. Most importantly, we achieved this debt level reduction without dilution of our shareholders. Cresemba continues to perform very well. As can be seen in the IQVIA reported increase in global in-market sales by 19% in the 12 months to September 2022. Important for the commercial potential going forward, we have completed the pediatric program for Cresemba in 2022. These studies will form the basis for seeking an extension of market exclusivity in Europe and the U.S. For Zevtera, 2022 was also an important year as we were able to report positive results for the ERADICATE Phase III study with patients suffering from Staphylococcus aureus bacteremia or SAB. In Q4 2022, we had a pre-NDA meeting with the FDA, after which we decided to also apply for a third indication, community-acquired bacterial pneumonia, in addition to SAB and skin infections. And we are on track to submit the NDA in March, April 2023. With Cresemba and Zevtera, we have successfully proven our expertise in advancing anti-infective compounds through research and development to the market. In addition, we have a number of early-stage anti-infectives in our portfolio, such as a DXR inhibitor program. To achieve our aim, though, to become a global leading anti-effective company, it's our goal to add further clinical-stage assets to expand our pipeline. This will be done, on the one hand, through advancing our internal research programs; and on the other hand, through the identification and subsequent in-licensing of promising compounds from external sources. We are focused on sourcing external assets from late preclinical stage to the end of Phase II because this is where we can generate most value when taken on drug candidates. We consider ourselves to be a partner of choice when it comes to advancing promising anti-infective compounds to clinical testing and beyond. So this is one key focus for us for 2023. I will now hand over to Adesh.

Thank you, David. I'd like to start with a short update on the commercial performance of Cresemba as this has been a key contributor to our strong set of financials. I will then highlight some of the key financial figures that were published today. I'd like to mention that all figures I referred to are in Swiss francs unless specifically stated otherwise. On a global level, Cresemba 12-month sales continue to increase and have exceeded USD 363 million by the end of September 2022. In the U.S., the most mature market, annual sales continued to grow double digit and have passed USD 200 million in 2022. Cresemba still has exclusivity until 2027 and is on a trajectory to become one of the most successful brands ever for the treatment of invasive fungal infections in the U.S. The continued strong performance in our established markets provide a strong foundation for sustainable growth of the brand. In addition, we expect significant contributions from new markets in the future. In particular, China and Japan represent a significant growth potential for Cresemba going forward. These 2 countries make up for 25% of the global market potential. In China, Cresemba has been included in the National Reimbursement Drug List, NRDL, making the drug more broadly available for patients within the Chinese public health insurance schemes. And in Japan, we expect the drug to be launched soon. In addition, with currently approvals in 73 countries and launches in 63, further launches can be expected in the future. The success of Cresemba is also reflected in our strong financial results for 2022 and our financial outlook for 2023. We were able to exceed our guidance on all key measures. Based on the continued commercial success of our marketed brands, our oncology asset transactions and our reduced operating expenses. Cresemba and Zevtera related revenue amounted to CHF 122.3 million, driven by an increase of royalty income from Cresemba by 22.4% to CHF 65 million. Total revenue amounted to CHF 147.8 million, which exceeded the upper limit of our guidance by more than 20%. We were able to keep total revenue at the same level as in the previous year, which is remarkable considering that we reported CHF 26 million less in milestone payments in 2022 versus 2021. Cost of products sold amounted to CHF 24.6 million, increasing at a smaller rate than our product revenue. Our operating expenses decreased more than expected to CHF 104.6 million as we were able to implement our strategic changes more quickly. In 2022, we reported an operating profit of CHF 18.5 million. This is significantly higher than our guidance. Consequently, we also reported a net profit for 2022. I would now like to provide more context on our Cresemba and Zevtera-related revenue. Product revenue showed a steady growth until 2019, 2020 when Pfizer took over responsibility for most of its supply as planned. Contract revenue consists of milestone payments and royalties. Royalties have been increasing year-on-year since 2015, reflecting the in-market sales performance of Cresemba in the major territories. Milestone payments are more volatile, but we have been recording milestone payments every year since 2017 with generally larger amounts since 2021. We expect this general trend to continue with 2023 milestone payments to be between 2021 and 2022. The increase in cash flow contribution from our marketed drugs has been driving the consistent improvement of our net cash used for operating activities over the past years. Supported by the factors just discussed, we became cash flow positive in 2022, which is 1 year earlier than expected. The general underlying positive trend is expected to continue in 2023. We have reduced our debt level by approximately CHF 48 million in 2022 through the non-dilutive repayment of our 2022 convertible bonds. We intend to further reduce our debt level through the repayment of the CHF 75 million loan from Athyrium by September 2024 through the cash flows anticipated to be generated from our commercial business. This would mean that the only remaining debt as of the end of 2024 would be our CHF 97 million convertible bonds, which are going to mature in mid-2027. Our strong financial prospects are reflected in our 2023 guidance. Cresemba and Zevtera-related revenue is expected to increase around 20% to CHF 145 million to CHF 148 million with a continued double-digit growth in Cresemba royalties to approximately CHF 74 million and milestone payments at a level between 2021 and 2022. Total revenue is expected to amount to CHF 155 million to CHF 158 million, taking into consideration that we expect lower reimbursements from BARDA and lower contributions from our past oncology transactions. Cost of products sold are expected to increase to CHF 25 million to CHF 28 million, in line with increase in product sales. And operating expenses are expected to decrease to around CHF 80 million, of which around 60% relates to R&D and 40% to SG&A. Bringing all this together, we expect a significant increase in operating profit to CHF 45 million to CHF 50 million and net profit to CHF 36 million to CHF 41 million. Our guidance excludes the potential impact from any in-licensing transactions. In any event, our healthy financial situation allows us to build and progress a strong R&D pipeline to support the long-term growth of Basilea. I will now hand over to Marc for the portfolio update.

Thank you, Adesh. So let me start with Cresemba, a drug for the treatment of invasive mold infections, which is on the market since 2015. In the EU, market exclusivities until October 2025 and can be extended by 2 years based on Cresemba's orphan designation, the completion of a defined pediatric program and the subsequent European Committee decision. The pediatric clinical study program with Cresemba included 2 clinical studies, and this program was recently completed. So we're on track with a pediatric label submission to EMA in the second half of 2023, and we expect the pediatric labeling will be obtained in the second half of 2024. The successful completion of this procedure would trigger the market exclusivity extension by 2 years to October 2027 in the EU. In the U.S., based on the qualified infectious disease product and orphan designation, the current market exclusivities until 2027, a pediatric submission is planned to FDA, and acceptance of this submission would extend the market exclusively by 6 months from March 2027 to September 2027. To support the utility of Cresemba in the pediatric population, we've also developed a smaller capsule. And we are convinced that Cresemba, if approved, will address important medical needs in the treatment of invasive aspergillosis and mucormycosis in children. Now let's move to Zevtera. As mentioned by David, 2023 is going to be an important year for our antibiotic Zevtera for the treatment of severe bacterial infections as we intend to submit an NDA in the U.S. in March, April this year. Just as a quick reminder, ceftobiprole, beta-lactam antibiotic with rapid bactericidal activity against compositive pathogens, including MSSA and MRSA, but also provides coverage against many from negative bacteria. Ceftobiprole demonstrated efficacy in Phase III clinical trials in acute bacterial skin and skin structure infections or ABSSSI and pneumonia where daptomycin is not effective. It has a low propensity for resistance development. And furthermore, an established clinical safety profile that is consistent with its cephalosporin class. There has already been improved and launched in selected countries for the treatment of bacterial lung infections. The U.S. is the most important market for commercializing branded hospital antibiotics and is estimated to account for up to 90% of global sales for anti-MRSA treatments, as shown by daptomycin and ceftaroline. This is why one of our key priorities is to gain access to the U.S. market for ceftobiprole. We are planning to submit an NDA in the U.S. in March, April this year, supported by data from our 2 recent Phase III studies, TARGET in acute bacterial skin and skin structure infections or ABSSSI; and ERADICATE in Staphylococcus aureus bacteremia or SAB, and data from a previously performed Phase III study in community-acquired bacterial pneumonia ammonia or CABP, that formed the basis for the approval of this indication in Europe. The recent Phase III program has been funded for approximately 70% of the total program cost by BARDA. Ceftobiprole qualified infectious disease product or 2 IDP designation in the U.S. Therefore, it will benefit from a priority review of the NDA, which means we expect a regulatory decision 8 months after the submission of the NDA. Also due to the QIDP status, if approved, the market exclusivity of ceftobiprole would be 10 years from approval, which provides a robust business case for the commercialization of ceftobiprole in the U.S. Our commercial strategy is to partner ceftobiprole in the U.S. and not to commercialize ourselves. And we intend to enter into a partnership prior to the regulatory decision. Based on its pharmacology, the antibacterial spectrum and the data from several Phase III studies and the post-marketing experience, we consider ceftobiprole an excellent treatment options in difficult to treat patients presented to the hospital with severe infections when the clinician suspect enrollment of composite pathogens, including Staphylococcus aureus. For these patients, ceftobiprole provides a single agent first-line bactericidal broad spectrum therapy with proven efficacy in SAB, ABSSSI and CABP, enabling to treat these vulnerable patients effectively early in the disease in order to increase the chances of recovery. If approved in the U.S., we would envisage the launch to be focused on SAB and infections directly associated with SAB, which we believe is the indication with the highest medical need and is supported by the data from the ERADICATE study, which was the largest randomized study performed in SAB for registrational purposes of a new antibiotic. However, based on the profile of ceftobiprole and the available data from clinical study in skin infections and pneumonia, we anticipate a broadening of the use into other disease areas over time. And ceftobiprole use in this indication [indiscernible] Staph aureus and especially MRSA are important causative pathogens over Gram-negative coverage provided by ceftobiprole also desirable. I will now turn it over to David.

Thank you, Marc. Before we open the floor for questions, let me close with a quick summary and outlook. 2022 was a very successful year as we both increased our revenues and reduced our operating expenses, leading to increased operating profit as well as a net profit for 2022, 1 year earlier than expected. We also fully implemented our new strategy and transacted on our oncology assets so that we can now fully focus on anti-infectives going forward. In order to achieve our goal of becoming a leading anti-infectives company, our focus for 2023, in addition to continuing to drive our revenues, will be to advance our current preclinical assets and complement them by the in-licensing of further anti-infective assets to build a strong R&D portfolio. Thank you for your attention, and I will now turn the line over to your questions.

[Operator Instructions]. Our first question comes from the line of Louise Chen with Cantor.

Congratulations on the success this quarter. So my 3 questions to you are: number one, what additional new anti-infective opportunities do you plan to advance this year? Even if you can't disclose them at this point, maybe you could talk broad level and if there's anything innovative here relative to what you currently have. And then second question is, what type of resources do you have to deploy towards business development? And where are you seeing the best type of deals? I know you mentioned what kind you like, but where is valuation opportunity that's attractive? And then last question is just, do you see any potential changes, reimbursement environment in the U.S. for anti-infectives because that's obviously an overhang on the uptick of some of these drugs?

Okay. Thank you, Louise, for the questions. I mean I'll kick off and then hand over to my colleagues. But in terms of business development, because you picked up on this point, and I obviously touched on it in the presentation, but the building of a pipeline so that we can have a sustainable business going forward is important for us, clearly. And we do have -- we have a cross-functional portfolio review team that looks continuously outside the company assets in the antibacterial and antifungal space. This team is coordinated by a dedicated business development team and then we selectively also consult with outside expert advisers, depending on the asset or the technology, as we're potentially reviewing assets. We're very keen and we think we have a very stringent list of criteria that we look at in terms of not just the differentiated product potential, but also the commercial viability of the product, the development pathway for the product. So we have a number of criteria that we look at as we're assessing external antifungals or antibacterials. We're not particularly stuck on one particular type of modality. It's more the fact that does it -- can it be differentiated in the marketplace as an anti-bacterial agent or antifungal agent, it's less what the exact technology is about. In terms of -- I'll also come back to the -- your question about the reimbursement environment in the U.S. I mean I think it's clear that obviously, all our assessments are done and the NPV calculations, et cetera, are done without believing that the environment is going to get better. So it has to make sense in today's world. I think it's the political discussions in the U.S. about antimicrobial pull incentives or incentives for antimicrobial developing companies are ongoing. It's not certain that there will be a solution in the short term. Therefore, it's very important for us to make sure that we focus on these opportunities that are clearly differentiated, address an unmet medical need. And like I said, the NPV of the potential asset makes sense, independent of whether the external environment improves. We believe actually external environment will improve, but as of now, it's not clear exactly when. So hopefully, that clarifies a bit our way of thinking of this. But Marc or Adesh, do you want to add anything?

Only with regard to the question on resources in essence, which was your second question. So with regard to resources and structures, in essence, we have a preference, as you know, from our history, more or less on in-licensing structures rather than ride-out acquisitions. And as such, just given our cash position, given the strength of our balance sheet and given sort of the guidance that we have also provided and the outlook that we have provided, we don't feel constrained, as a matter of fact, by financial structures. But the point is to get actually the right assets within the structure.

The next question comes from the line of Brian White with Calvine Partners.

Two questions for me. Just building again on the thinking about in-licensing, particularly in the antifungal field, where perhaps you do have a bit of a gap post Cresemba, it does look like a very competitive market for antifungal assets, and we've seen some big numbers, particularly for clinical stage assets. So I just wondered how realistic is to think of potentially getting a clinical asset or should we be thinking more along the preclinical lines for the antifungal field? And then separately, just also, you're in a very strong cash position and respective of we refrained ourselves in terms of the kind of U.S. antibiotic environment, does that put you in a position whereby you could potentially structure a partnership for ceftobiprole where you're maximizing the long-term royalties perhaps at the expense of some near-term upfront milestone payments?

Why don't you take that one first?

Okay. So the second one, you're exactly spot on. So the way that we are looking at the ceftobiprole opportunity, this is going to be a key value driver going forward. We don't necessarily need to maximize short-term cash flow. And hence, we'll be looking at overall value creation over the -- it's over the entire life basically of Zevtera, which if approved in the U.S., would be at least 10 years following the approval. So with that in mind, absolutely, we will balance sort of any milestone and upfront payments versus an appropriate level of participation over the life of -- commercial life of the product.

And then on your question about antifungals, I reiterate a little bit what I said in my talk a moment ago that actually, we are looking actively now assets between late preclinical and the end of Phase II in the antibacterial and antifungal space. There are interesting clinical stage and preclinical stage assets in the antifungal, as well as the antibacterial space that we're looking at. And we very much attack it as I said, from a point of view of could this be differentiated in the market, what would the clinical trial designs be, what questions do we have, can it have a commercially viable opportunity in the market. And there are antifungal compounds that fit into that bracket that we're looking at actively as we speak. And we think to build on something that Adesh said to the previous answer, we think that with our sort of financial position, we don't think that financial structure will be the reason why we didn't execute the deal. It's more the fact that we did it fulfill our stringent criteria that I just alluded to, rather than financial structure that would be the reason why we didn't go ahead, Brian.

The next question comes from the line of Soo Romanoff with Edison.

Congratulations on the strong quarter -- strong year. At the last -- I just wanted to understand the -- it sounds like the uptake in the U.S. was the key driver for the better-than-expected Cresemba revenues. Based on what you've seen so far, what are the anticipated peak sales in the U.S. and maybe also give an idea of what you think for China and Japan?

Yes. Actually, I'll make a comment, and then Adesh will jump in as well. I mean, just to be clear, I think that the reasons for the success of Cresemba in 2022 were the U.S., but also other markets as well. So actually, where we've launched Cresemba, generally, it's done better than we originally probably thought in every market. So I think there's potential everywhere. And what we're alluding to is that in Adesh's comments earlier was that when we look at the global market of these newer antifungals, that about 25% of the market is occupied by China and Japan. We haven't really started there yet. So we haven't started at all in Japan, and we literally -- we've just launched in China midway through 2022. So China is really very, very early days. So actually, there's a significant growth opportunity there. So really, the sort of growth that we're seeing so far in the royalty income, the 22% is really from the existing, what I call, the existing markets. But -- so there's solid growth from the existing markets. There's new growth from China and Japan. And then as Adesh said, there's about almost 10 markets that actually have been licensed, but not yet launched in. So we've got a number of other smaller markets than China and Japan to launch in. So there's sort of opportunity everywhere. We obviously don't give peak year guidance on Cresemba. What we tend to say is that voriconazole achieved CHF 900 million at peak. We've achieved CHF 363 million in market in the 12 months to September last year. So we're off to a very good sort of start of the compound. But actually, we've got -- we think this product can be big, but we don't know exactly how big. In terms of the other part to your question, in terms of -- have I answered your question, Soo?

Yes. Yes, no, that's great. I think you've done great there. Maybe we turn to the term real quick. I mean that's the next growth driver since you're filing in March and April. What do you think the anticipated market share is going to be in the U.S.?

Actually, our market share is a tough question to answer. What we just believe and what Marc showed was that when you look at where the sales are generated from other MRSA active antibiotics, you look at time and time again, for us when we look at the 80% to 90% of the revenue, the global revenues that they generate, whatever level they generate, it comes from the U.S. I mean analysts have us anything from sort of 350 million to 550 million peak year sales. Again, we don't formally as Basilea guide on peak year sales, but we know that -- we believe that the majority of the sales will come from the U.S., which is why the filing and then hopefully the approval at the end of the year, it's just a really important event for us, as well as obviously, in parallel, the partnering process because obviously, we want to find the right partner. And we're currently actively talking to a number of what we believe are suitable partners with regard to the commercialization of Zevtera in the U.S. So yes, that's what I'll probably say on that.

Yes. No, that's great. I think the last one you've kind of -- we've hammered you on a lot for the new refilling the development pipeline. So I'll let you off the hook on that one.

Okay. I mean on the -- in terms of the pipeline, just to add one thing, so we have -- we just briefly alluded to it in the words earlier, but we have preclinical assets that we're focused on moving towards the clinic as quickly as possible. But then we want to also complement that with external in-licensing of, like I said, late-stage preclinical to the end-of-stage Phase 2. Makes most sense for us, given our model, it makes less sense to look at in-licensing Phase III or commercial-ready assets given that we -- our current model is that we don't commercialize ourselves.

[Operator Instructions]. The next question comes from the line of Bob Pooler with ValuationLAB.

Congratulations again on the excellent results and also the better outlook for 2023. On that 2023 year guidance there, your total revenue, does that include any oncology transactions? You still have the lisavanbulin that might be sold.

Okay. Thank you, Bob. So the 2023 guidance includes some part of the still near-term milestones that we have indicated related to 3 transactions that we have completed. So you may recall that we have upfront payments and near-term milestone payments. We have collected CHF 15 million from those contracts so far in 2022, but there is still about CHF 2.5 million in near-term milestones that we have, to some degree, factored into our guidance. We have not factored in anything related to lisavanbulin, just as a reminder there. We are not expanding basically the clinical studies. We are supporting on the patients. And we will decide probably at a later point in time whether to explore parting opportunities or not. So it's not reflected in our guidance.

Okay. That's clear. And then more on the regulatory. For Zevtera, the Phase III trials, they were conducted on a special protocol assessment. Now compared to standard development, are there any benefits regarding the review time lines or the probability of success?

So Bob, thanks for the question. For the review time line, the benefits we have comes from the QIDP designation, which gives us a priority review. So that means the FDA's goal is to take an action on the application within 6 months rather than the standard time of 10 years- 10 months, sorry. And this starts 60 days after us filing the NDA. So the total review time we expect is 8 months from submitting. The FDA doesn't provide a time line advantage, but it reduces uncertainties related to the acceptability of our studies to support a market authorization in the U.S. because this provides a documented agreement with the FDA on key study design aspects and ensuring that the trial conducted under the protocol can be considered an adequate and well-controlled study that tends to go to marketing approval, of course, considering the results that have been obtained. So the time line really is driven through the priority review based on the QIDP. And the SBA is more an agreement that reduces uncertainty that there may be questions about study design, sample size, hypothesis and other things in the study design.

Okay, very clear. And then just my final question then, when do you expect to sign on this U.S. partner for Zevtera? Do you expect to before or after FDA approval?

Yes. What we say is -- and we believe this to be the case that we expect to sign a partner before the regulatory decision.

[Operator Instructions]. We have a question coming from the line of Arsene Guekam with Kepler Cheuvreux.

Three, if I may. First of all, a quick question on numbers. Does the launch of Cresemba in Japan will trigger a milestone payment? The second one is on your guidance. Does your guidance include revenue from Zevtera in the U.S. or any upfront payment from the signature of partnership for the U.S.? And last question, considering your cash position on your financial firepower, will you be able to license in late-stage anti-infective? Or will you focus on early-stage drug candidates?

The last one, just to reiterate, Arsene, thank you for the question, so I'll do the last bit and then Adesh will comment on whether our guidance includes the Japan or U.S. upfront. You'll come back to that. But on the question about -- with our financial situation, does it affect what we're looking at? Just to be really clear, we are -- we've got quite a big range of phase of development of compounds in the antibacterial/antifungal space that we're looking at. We are looking at products from late preclinical, i.e., what that we can get to an IND within 12 months. That's the earliest sort of we're looking at in terms of in-licensing, all the way through to the end of Phase II, yes? Because actually, what we were saying earlier was that it's more a question about our model where we don't have a commercial infrastructure. It makes little sense for the value we can add that then we would look to maybe license out the commercial stage. So actually, for us, it's -- our sweet spot is this late-stage preclinical or late-stage research all the way to the end of Phase II. And we think we have the financial strength to be able to look at assets in the antibacterial and antifungal space in that zone. So we don't think -- like I said earlier, I don't think that financial terms would be the reason why we wouldn't get into an agreement. It will be more stringent criteria we apply around the differentiation, the commercial viability, the development pathway, et cetera. So that's sort of the answer on the assets we're looking at. Maybe what's in the guidance?

On the other 2 points with regard to Zevtera transaction for the U.S., we have not factored in any specific upfront into our guidance. And the reason simply is to build a little bit on what Brian had asked before, we're looking at overall value for the transaction. So the goal is not to maximize sort of the upfront, and therefore, we have left it open. So not reflected in the guidance. Secondly, on Cresemba, Japan, I would just say we are not specifically indicating which milestone events we're looking forward to in this year. But overall, what we have indicated is that we are factoring in milestones -- milestone payments of somewhere between CHF 23 million and CHF 49 million, which are the numbers basically for '21 and for '22, respectively, or the other way around, '22 and '21, respectively. So there are a number of milestone payments. One we have already achieved, we already announced that we have achieved a sales milestone in -- with Pfizer. And there will be multiple -- or we are expecting to achieve multiple milestone events in the course of 2023.

We have a follow-up question coming from the line of Mr. Pooler with ValuationLAB.

Just following on that question on in-licensing, are for instance, external funding opportunities such as BARDA or potential QIDP designation also requirement? We're looking at new anti-infectors because, well, we already saw with Zevtera, you've got roughly 70% of the funding done by BARDA. So I assume that would be something you'd be looking at as well next to just the prospects of the commercial opportunity and also the message of activity.

Yes. So just -- Bob, just to be clear, what I was saying earlier was that it's clearly the -- one of the criteria that we have is in terms of, for example, in the antibacterial space, is it a -- is it an asset that is -- is it a pathogen that's on the CDC list of priority pathogens and, therefore, is it likely to get BARDA funding, for example, for a study? That's clearly a consideration. What I was just pointing out though was that we have to -- we don't know we're going to get any external funding, yes? So the deal has the sense without the funding in place. We obviously -- we would run the NPV with and without funding in our own calculations. But what I was trying to point out earlier on was that we don't actually -- the deal has to make sense without external funding because we don't know we're going to get it. But clearly, you're absolutely spot on that we look at assets where we believe that there's a high -- that's one factor, that there's is a likelihood of getting external funding, whether that be from BARDA or wherever, there are a number of different sort of funding pots that you can apply for funding for in this space. But Adesh, did you want to add anything?

So the only thing I would add there is that's also partially a reason why it makes actually some sense to structure transactions more as an in-licensing, which allows really both parties to participate in the actual value creation because there are many unknowns along the way and even more in the anti-infective space probably than in other spaces. And to come up with a fair thing with a fair distribution of value and in-licensing structure makes more sense.

There are no more questions at this time. I would now like to turn the conference back over to David Veitch for any closing remarks. Mr. Veitch?

Okay. No, thank you, everyone, for your time, and I wish you a great remainder of the day. Thank you very much.

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