Basilea Pharmaceutica AG (OTC:BPMUF) Q2 2022 Earnings Conference Call August 16, 2022 10:00 AM ET
Company Participants
David Veitch – CEO
Adesh Kaul – CFO
Marc Engelhardt – Chief Medical Officer
Conference Call Participants
Brian White – Calvine Partners
Harry Shrives – Edison Investment Research
Bob Pooler – ValuationLAB
Wayne Wu – Cantor Fitzgerald
Raghuram Selvaraju – H.C. Wainwright & Co.
Operator
Ladies and gentlemen, welcome to the Basilea Pharmaceutica Half Year Results 2022 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [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.
David Veitch
Thank you very much. I’d like to welcome you all to our conference call and webcast reviewing our financial results and key achievements for our half year 2022. We will 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 half year report 2022. These documents are both available on our website at basilea.com.
I would 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 Adesh goes into the details of the financials, and Marc will report on the progress and the implementation of our anti-infectives strategy, I would like to just start with a brief summary of our key achievements year-to-date in 2022.
This morning, we reported strong financial results for the half year 2022 with a 22.5% year-on-year increase in royalty income, which is most directly linked to the commercial success of Cresemba in the key regions. We also reported continued improvement of our operating cash flow, resulting in a solid cash position of CHF142 million. We confirmed our financial guidance for the full year and reiterate our expectation to reach sustainable profitability from 2023.
The foundation for these strong financial results are Cresemba revenues, which continues to develop favorably. On a global scale, USD 344 million have been reported as in-market sales for the 12 months ending March 2022. This is a 31% increase compared to the previous 12 months. In June, we also released positive top line results from the Phase III ERADICATE study with our antibiotic, ceftobiprole. This significant data now paves the way for an NDA submission and potential marketing approval in the U.S. Thus, ceftobiprole is on track to become our second important commercial brand.
In addition, we’ve also complemented our early stage anti-infective pipeline by in-licensing a novel first-in-class antifungal program, for which we are currently completing the preclinical profiling.
Access in new markets is an important factor for the continued long-term growth of our Cresemba business. Therefore, we’re very pleased that Cresemba has been launched recently in China, which we estimate represents about 20% of the global market for the best-in-class antifungals.
We have successfully proven our expertise in advancing anti-infectives through research and development to the market. We have a portfolio of early-stage anti-infectives and plan to selectively further expand our pipeline in our aim to become a global leading anti-infectives company.
There is also significant long-term potential for our 2 commercialized brands. In addition to continuing significant growth from launched markets, we have additional very important future markets such as Japan for Cresemba, and the U.S. for Zevtera, which have yet to be accessed.
The U.S. is by far the most important market for the commercialization of branded hospital antibiotics and is estimated to account for up to 90% of global cash sales for anti-MRSA treatments.
This can be shown by daptomycin or ceftaroline. This is why one of our key priorities is to gain access to the U.S. market for ceftobiprole.
I will now hand over to Adesh.
Adesh Kaul
Thank you, David. I will highlight some of the key financial figures that were published today. I would like to mention that all figures I refer to are in Swiss francs.
With the increasing underlying demand for our commercialized brands, product revenue reflecting our product sales to our partners has increased by 43.1% compared to the first half of 2021. Contract revenue decreased by 5.9% year-on-year solely due to higher milestone payments in the first half of 2021, which could not be fully offset by the 22.5% increase in royalty income year-on-year. Other revenue component amounted to CHF7.5 million. They mainly comprise BARDA reimbursements, which are offsetting a substantial portion of the ceftobiprole Phase III development expenses. Considering all these elements, total revenue increased by 8.2% to CHF58.6 million.
We continue to diligently manage our costs and expenses. Cost of products sold increased to CHF14.9 million, reflecting the higher product sales to our partners. SG&A expenses and R&D expenses amounted to CHF15.6 million and CHF37.1 million, respectively.
We reported a significantly improved operating results with an operating loss of CHF9 million for the first half year compared to CHF15.4 million in the same period last year. Correspondingly, our net loss was reduced by 38.6% to CHF12.2 million from CHF19.9 million in the previous year. Net cash from operating activities continued to improve in line with the long-term underlying trend, as you will see in a moment.
As of June 30, 2022, our combined cash, restricted cash and investments amounted to CHF141.9 million compared to CHF150 million at the end of 2021. The consistent long-term growth trend of Cresemba royalty income is most clearly seen when one looks separately at royalty income in the first half year and in the second half year periods.
Due to the tiered nature of our royalty structure, and our agreement with Astellas, the weighted average royalty rate tends to be higher in the second half of a given year compared to the first half.
The increase in revenue contributions from our marketed drugs has significantly contributed to the consistent improvement of our net cash used for operating activities over the past years. We expect the positive trend to continue and to report positive cash flow from operating activities from 2023.
We confirm our guidance for 2022. We expect continued strong in-market sales growth of our key brand, Cresemba. Cresemba and Zevtera related revenue is expected to amount to CHF98 million to CHF104 million. The decrease versus 2021 is solely due to fewer milestone events expected in 2022, thus bringing the milestone payments closer to the levels seen in previous years.
R&D and SG&A expenses are expected to decrease to approximately CHF110 million, mainly due to lower anticipated costs related to the ceftobiprole Phase III program, which is nearing completion. This results in an expected operating loss of CHF20 million to CHF25 million in 2022.
Net cash used in operating activities is expected to improve further year-on-year from CHF32 million to CHF10 million to CHF15 million on the back of a strong top line performance and the anticipated decrease in operating expenses. We also confirm that for 2023, we expect continued growth of Cresemba and Zevtera-related revenue and a reduction of around 30% in operating expenses versus 2022, mainly due to the fact that we do not expect to incur any material expenses related to oncology activities beyond 2022. This would result in us reaching sustainable profitability and generating positive cash flow from operating activities from 2023.
Our strong cash position, combined with the positive financial prospects going forward, put us in a good position for the implementation of our growth strategy, including the in-licensing of anti-infective assets and for managing our maturing convertible bonds. Our focus here is on reducing our overall debt level and on minimizing potential dilution. We, therefore, do not intend to make use of the CHF2 million condition capital approved by our shareholders at the Annual General Meeting in 2022.
I will now hand over to Marc for the development update.
Marc Engelhardt
Thank you, Adesh. As mentioned by David, the most important news for the implementation of our anti-infective strategy was the top line results from the Phase III ERADICATE study with our antibiotic, ceftobiprole. So let me start with just ceftobiprole.
Our regulatory strategy for accessing the U.S. market is to seek approval for acute bacterial skin and skin structure infections, or ABSSSI, and for Staphylococcus aureus bacteremia, or SAB, based on our two recent Phase III studies target in ABSSSI and ERADICATE in SAB. In addition, we will also explore the possibility of gaining approval for community acquired bacterial pneumonia, or CABP, as a third indication based on the Phase III study performed previously that formed the basis for the approval of this indication in Europe.
Ceftobiprole has Qualified Infectious Disease Product, or QIDP designation in the U.S. for ABSSSI, SAB and CABP. 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 [Technical Difficulty] that the recent ceftobiprole program, including TARGET and ERADICATE has been funded for approximately 70% of the total program caused by BARDA. The TARGET study in ABSSSI was a randomized double-blind Phase III non-inferiority study and enrolled 679 patients. It was conducted at more than 30 clinical centers in the U.S. and Europe. Patients received either ceftobiprole or vancomycin plus aztreonam. Ceftobiprole met prespecified primary endpoint of early clinical response at 48 to 72 hours after the start of study drug administration in the intent-to-treat population. This is the key endpoint according to the FDA guidance for the U.S. To achieve this endpoint, the initial skin lesion size had to decrease by 20% or more from baseline.
Response rates were 91% with ceftobiprole versus 88% for the comparator, and the lower bound of the 95% confidence interval for the difference between ceftobiprole and the comparator was within the prespecified non-inferiority margin of 10%.
SAB is an area of high medical need with about 120,000 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 bone, joint or heart valve infections, persistent bacteremia, or bacteremia in patients on dialysis. There are limited undeveloped treatment options with only two approved treatments in the U.S., which are vancomycin and daptomycin, that cover both methicillin susceptible and methicillin resistant Staphylococcus aureus, or MSSA and MRSA. So ceftobiprole, if approved, will address an important medical need in this area.
The relevance of SAB and the high medical need in this area has been recently highlighted in a large contemporary study from Canada showing that SAB is associated with the highest disease burden and with significant attributable mortality among bloodstream infections.
ERADICATE was a Phase III randomized, double-blind multicenter study to establish the efficacy and safety of ceftobiprole compared with daptomycin with or without its genome in the treatment of adult patients with complicated SAB, including infective endocarditis. ERADICATE is the largest randomized study ever conducted for registrational purposes of a new antibiotic treatment in SAB. 390 patients were randomized and 387 patients were in the modified intent-to-treat, or mITT population, which included patients that received study medication and had a positive blood culture for Staphylococcus aureus at baseline. The primary endpoint is the overall success rate at 70 days after randomization.
In the ERADICATE study, the primary objective was achieved and non-inferiority demonstrated for ceftobiprole compared to daptomycin with or without a genome. 69.8% of patients in the ceftobiprole group showed overall success at 70 days post-randomization compared to 68.7% of patients in the daptomycin group. These statistically adjusted difference on the overall success rate with ceftobiprole minus daptomycin was 2%, and the corresponding 95% confidence interval for that difference was minus 7.1% to 11.1%. The lower bound of this confidence interval is clearly within the 15% non-inferiority margin, confirming that the primary objective of the study was met.
Secondary efficacy endpoints such as all-cause mortality, microbiological allocation or the development of SAB-related complications were consistent with the primary study outcome. Based on the oncology, the antibacterial spectrum, 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, especially when the clinicians expect involvement of Gram-positive pathogens, including Staphylococcus aureus areas.
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 their disease in order to increase the chances of recovery.
Ceftobiprole differentiated versus competitors in various clinically important aspects including the strong bactericidal activity against MSSA and MRSA, a robust gram-negative coverage, efficacy demonstrated in pulmonary infections in Phase III studies, the renal safety profile and the low propensity for resistance development.
I will now turn over to David.
David Veitch
Thank you, Marc. We’ve already achieved a number of significant milestones in the first half of 2022. Going forward, we are working towards the submission of the ceftobiprole U.S. NDA around year-end. We’re also looking forward to the regulatory decision on the Cresemba marketing authorization for Japan expected later this year. By the year-end, we expect Cresemba to be launched in approximately 70 countries. In parallel, we are seeking to complete transactions on our oncology assets. This will then allow us to fully focus on anti-infectives from 2023.
In summary, we are on an excellent path towards our goal of becoming a leading global anti-infectives company, supported by increasing product sales and significant potential ahead. The progress in our preclinical anti-infective compounds and our efforts to in-license additional anti-effective compounds also form an important part of our future strategy.
Thank you for your attention, and we’ll now open the line to your questions.
Question-and-Answer Session
Operator
[Operator Instructions]. The first question comes from Brian White from Calvine Partners.
Brian White
A couple of questions. First one really is about the sustainable profitability from 2022 onwards. And that’s always a very impressive attainment. Is this the ultimate goal for the company financially? Or would you consider increasing R&D substantially, if you could find the right asset as you’re trying to become a global anti-infectives business?
And then secondly, just thinking about that leading role again in anti-infectives, and obviously the excellent partnering products so far. Don’t you think about taking on, for example, a rare disease anti-infective asset where a more limited investment in sales and marketing would be — it would be sufficient for you to attain more of the margin than you would in partnering with these programs?
David Veitch
Yes. Thanks, Brian, for your questions. I mean, Adesh, do you want to take the first one around sustainable profitability?
Adesh Kaul
Yes. Sure. Brian, thanks for your question. So we don’t think that it’s either/or. We think we can achieve both. So actually, on the one hand, we expect to be sustainably profitable, really based on the continued commercial success of Cresemba and the potential contributions from Zevtera, if approved in the U.S. and have actually the ability to make the investments in the pipeline that we need to do in order to ensure long-term growth. So both parts actually of your question will remain part of the overall strategy.
David Veitch
And then on the second one, why don’t I take that, in terms of would we focus on sort of rare diseases where we would need a limited direct sales force effort. I think it’s fair to say that our strategy is around focusing on the treatment of serious hospital infections, in areas of sort of high unmet medical need. And we would allocate the resources and the structures necessary for those assets rather than be driven by necessarily the size of a commercial structure being the driver for that decision-making process. So it will be more — we would focus more on the unmet medical need and then resource in appropriately.
Obviously, that doesn’t mean necessarily we’ll do it ourselves. I’m just saying in terms of we’re not driven by the size of the sales force that would be needed, and therefore, we need a small sales force to go after a small opportunity. That’s not how we think about it. We start with the unmet medical need and then understanding how we would resource that appropriately.
Operator
The next question comes from Harry Shrives from Edison Investment Research.
Harry Shrives
Congratulations on the results. It really seems like things are falling into place for the new strategy. So could you update us on a key lever we see that Cresemba’s uptake in China and maybe its potential inclusion on the NRDL? And comment on how the NDA preparations for Zevtera in the U.S. have come along?
David Veitch
Yes. In terms of the China question, Adesh, do you want to take that? And Marc, on NDA?
Adesh Kaul
Yes. So for China, what we can say is that actually, the oral formulation, which was a little bit earlier approved than the intravenous formulation, as you know, Harry, has been launched. So their first sales coming out of China. The process around inclusion in the National Reimbursement Drug List are managed by Pfizer, in essence, and in any event, take some time to fall into place. So from that perspective, the next milestone as of now, really the focus is on getting into Chinese markets. This is happening right now.
With the oral formulation, we’re looking forward to the launch of the IV formulation in the coming months. And in parallel, Pfizer is sort of working through the process of making the appropriate — taking the appropriate steps for the inclusion in the National Reimbursement List where and how appropriate. So this will be evolving over time, but we’re already seeing the impact.
David Veitch
In terms of the NDA submission and the progress there. Marc, do you want to comment on that?
Marc Engelhardt
As said, our goal is to submit the NDA around year-end 2022. The — there will be 3 studies that we intend to include into the NDA, if the target start enabled ERADICATE within SAB. These two studies were discussed with the FDA, and we have in the special protocol assessment. The third study is a study that was the basis for the CABP approval in Europe. We will have another discussion with the FDA in the context of a pre-NDA meeting. And this will confirm the — ahead of — with 3 studies with the objective to obtain 3 indications, so SAB, ABSSSI and CABP.
Harry Shrives
Okay. A couple of more quick questions. So on the cost side, the decrease in R&D that we’ve seen — R&D spend, we’ve seen this half. It was anticipated, but I wanted to get a little bit more granularity on the split between whether that’s due to sort of the winding down of the oncology activities or whether sort of the wrap-up of ERADICATE is leading into that as well?
Adesh Kaul
So actually, as of now, through 2022, we have not included any, or we’re not assuming, any winding down cost, so the related to the oncology assets. What you’re seeing is, on the one hand, natural fluctuation anyway, on that — basis or a half yearly basis depending on how progress is being made in recruitment in the individual studies, but then also bearing in mind that certain studies have indeed reached their end of recruitment. So for instance, the study of derazantinib have sort of completed recruitment. You mentioned ERADICATE. So it’s a combination of all factors in essence.
The actual effect of really focusing on anti-infectives from an R&D perspective will then be seen in 2023. So our guidance for a decrease in operating expenses of 30% in 2023, then factors in to a large degree, the effect of us exiting the oncology space.
Harry Shrives
Okay. And one final question. I realize you can’t speak directly to the discussions around the oncology transaction. But could you give us some context such as sort of the number of discussions or the overall interest or trends you’ve seen from figuring the account?
Adesh Kaul
Yes. So maybe I’ll refer back to what we announced in June, or let me take a step back. So we have started right away, but we made the announcement in February this year, a very broad marketing process, and we’re open to explore all kind of different avenues.
In June, we provided an update and as a result of that process, which was really broad we, on the one hand, decided to return the rights to derazantinib to Merck. And at the same time, related to lisavanbulin basically not expand the ongoing studies, but to continue to explore parting opportunities. And for the other 3 assets, which are BAL0891 and 2 preclinical assets that we have not disclosed in detail, we are in contract negotiations with potential partners with the goal still to complete those transactions in the second half of 2022.
So that’s, in essence, where we stand currently. We continue to believe that our aim remains to have taken all the decisions by the end of the year so that in 2023, we would not be incurring any material costs related to the oncology activities anymore and we’ll be focusing almost exclusively actually on the anti-infectives activities.
Operator
The next question comes from Bob Pooler from ValuationLAB.
Bob Pooler
Congratulations, also another strong first half. Just on Cresemba, that’s a strong — yes, product with the underlying growth there. You mentioned that you’re eligible for more than CHF1 billion in potential milestones that are remaining. So what kind of peak sales does Cresemba need to reach to capture all these remaining milestones?
Adesh Kaul
Okay. Thank you, Bob, for your question. Maybe also as a reminder, the structure of having CHF1 billion or more than CHF1 billion in milestones from the partnerships is across all our partnerships. This includes the Zevtera partnerships that we have, the Cresemba partnerships in all the different regions. And as you pointed out, it actually depends on the performance in each of those regions. So there is not like a single number where we say like this will trigger the amount X. It’s almost like the performance across all partnerships.
What we can say currently is that we are — I think we are very pleased with the performance of Cresemba in all the markets where — or all the regions where it has been launched. And we are on a good track to keep on recognizing milestones as we have been doing regularly over the past years. So it’s almost like every year through some of the agreements that we have, we have recognized some milestones, and we expect this to continue as we move forward.
Bob Pooler
Any areas or peak sales that you expect the drug maybe to reach? Maybe give a ballpark number?
David Veitch
Yes, Bob, it’s David here. So obviously, we don’t give guidance on peak year sales. But what we do actually say is that if you look at analysts’ forecast for Cresemba, it’s anything for peak year sales from sort of CHF550 million to about CHF850 million. Voriconazole, which is, you could argue, is the key competitor that we’ve been taking share from, that peaked at about $900 million. So that’s the sort of range.
And already, as you heard from what we said some moment ago, sort of half its worth lies in the U.S. and in Europe, it’s already at $344 million. So it’s on a nice trajectory in the markets it launched and we’ve got major markets still as we would. China is just starting. Japan, we have to get an approval at the year-end. There’s still even in the U.S., the most — you could argue the most mature market, it still double-digit growth.
So this product has got a lot of potential. It’s on a good track. Where it ends up, it’s difficult to exactly forecast or for us to predict. But obviously, linked to your previous question, and then the milestones, obviously get bigger as you get towards the top end of that range than the lower end of that range. We’re very happy with the track we’re on, and that’s all I can say in terms of the range or forecast they probably could end up.
Bob Pooler
Okay. I agree with that. It’s growing very steadily and very consequently also over time. Then on Zevtera, when do you expect to present more detailed results of the positive ERADICATE trial?
Marc Engelhardt
So we intend to publish data from ERADICATE at one of the next major infectious diseases conferences. And the earliest possible would be IDWeek, which takes place in Washington on 19th to 23rd of October 2021. So it depends — ’22, sorry. It depends on the acceptance of the submitted upside, but IDWeek would be the earliest.
Bob Pooler
Okay. And then just a final question on the CV third indication for — in the U.S. Yes, the line wasn’t very clear. How do you have talks with the FDA? Or are you planning a pre-NDA meeting with the FDA on this third education?
Marc Engelhardt
So we had interactions with the FDA last year where we raised that topic. And based on that interaction, we decided to include the CABP study into the NDA, and we look forward for a pre-NDA meeting later this year, and we’ll see whether that strategy is maintained.
Operator
The next question comes from Louise Chen from Cantor Fitzgerald.
Wayne Wu
This is Wayne on for Louise. Congrats on the progress this quarter. Just a couple from us. First one is what’s your latest thinking of potential partner in the U.S. for ceftobiprole? And what type of partner would this be ideal?
And then maybe if you could share with us any thoughts you might have on the U.S. pricing environment for anti-infectives?
David Veitch
Yes. Thanks for the question. So in terms of the partner, I mean, essentially, the antibiotic market, we believe, is a promotionally sensitive market, and I think there’s lots of evidence to support that statement. So actually, we’re looking for a partner that has got the presence, the sort of commercial presence, the medical affairs support presence to actually cover the major hospitals that this product would be used in.
So for us, it’s not — we’re going broad in terms of discussions with a variety of partners from larger companies to more medium-sized companies. But at the end of the day, the key requisite for us is that they need to have the structure in place to be able to promote successfully our product because — and preferably with the track record of success of launching and commercializing antibiotics in the U.S. So that’s a little bit about the partner that we’re looking for.
Adesh Kaul
And maybe related to pricing. Really — in the recent — if you look at the recent launches, the antibiotic pricing has been in the range of CHF250 to about CHF1,200 per day. So that seems to be the generally accepted range for hospital antibiotics, a little bit depending of course, on the market you’re targeting, the pathogens, the coverage, but generally, that’s the range.
But probably even more important than thinking about the range in general is also thinking about the business environment and the whole question about what kind of pull incentives may be introduced in the U.S., in the midterm, so to say, and when there are opportunities to benefit from that as well. So that will probably have more of an impact than the actual pricing, which is within this, I would say, generally accepted range of CHF250 on a really low end to up to CHF1,200 per day on the high end.
Operator
[Operator Instructions]. The next question comes from Ram Selvaraju from H.C. Wainwright.
Raghuram Selvaraju
I have three. Firstly, I was wondering if you could provide us with a little bit more granularity regarding the sustainable profitability that you believe you could report in 2023? Are you talking about sustainable profitability on a full year basis or to reach sustainable profitability before the end of the year? And do you expect the time line to effectively be more on the second half of the year versus the first half?
The second question is with respect to the development and regulatory pathway for ceftobiprole in CABP. If you could provide us with some clarity on that along with the expected time line?
And then lastly, and this is a somewhat reference to earlier questions. I was wondering if you could give us a sense of how you see the legislative and regulatory landscape evolving for anti-infective drugs, particularly in the U.S. market within the context of all of these multidrug-resistant infections and pathogens and whether or not that might also play a role in your decision-making process when it comes to thinking about allocating capital to doing further development work in this arena possibly even with novel agents that are not currently part of your pipeline?
David Veitch
Okay. Thank you, Ram, for those questions. Adesh, why don’t you take the profitability question again.
Adesh Kaul
So here, I would simply say that we expect to report on a full year basis to be profitable and to have positive cash flow. When exactly on which month and so on, I think that’s a little bit difficult to predict. But on a full year reported basis, we would be profitable and cash flow positive.
David Veitch
And then in terms of the development regulatory pathway for the CABP indication, Marc, just do you want to comment a bit more on that?
Marc Engelhardt
Yes. So the initial program that was done under a special protocol assessment obtained with the FDA back in 2017 included the TARGET and the ERADICATE study. So ABSSI and the SAB. The CABP study was performed earlier and as mentioned, from the basis for the approval of this indication in Europe. And we will — we are planning to submit all three studies together in this initial NDA or in this one NDA that we intend to submit around year-end. So that’s not going to be a sequential submission. So if we get positive signals in the pre-NDA meeting to proceed with the CABP study, we will include this into the NDA that we intend to be submitting around the end. Does that answer your question?
Raghuram Selvaraju
It’s an integrated approach, in other words?
Marc Engelhardt
The study will be integrated into the NDA. So, from efficacy — it’s not separate submission. From an efficacy perspective, these are three different indications. But the CABP study, for example, would also be included in the safety pooling in the ISS.
David Veitch
If that’s good round. Then moving on to your third question, which is I’ll try and make this succinct the legislative and regulatory landscape in relation to antibiotics. I mean that’s a — in terms of what we believe is that — and you said particularly as it relates to the U.S. So to answer your question, we believe that clearly, if you look at analyst reports, if you look at independent and other types of reports, you see that the peak year forecast for ceftobiprole was anything from CHF350 million to CHF550 million. So that gives you an order of magnitude from those sources, that’s independent of any sort of pull incentive being put in place because as you know, as we sit here today, there’s no clear pull incentive for antibiotics in the U.S., but there’s a lot of discussion around Pasteur, DISARM, about making more meaningful pull incentives for antibiotic developers.
We don’t know exactly how those will end up in terms of materializing, but we do believe that the environment is such that it’s a matter of time rather than — if it will happen. I mean other countries like U.K., Sweden, there are pull incentive pilots in place for antibiotic developers. And so we just think it’s a matter of time. Obviously, if these pull incentives do appear in the foreseeable future, then actually, I think that will only, particularly with the types of pathogens that ceftobiprole plays into, I think it could potentially help ceftobiprole on top of what the forecasts are already.
And then in terms of — your question is very valid, and I think you touched on this at the end, in terms of in novel antibiotics in development, and that would clearly have an impact in what we’re looking at in terms of licensing in, if we think that these pull incentives are in place, and we’re looking at assets then that can potentially comply with the rules of these pull incentives, that makes them, I think, only more attractive.
So clearly, that’s going to be — as we get more color on when and exactly what these incentives will look like then that will impact on our BD&L activity as well as our own internal activity. If that sort of answers your question as succinctly as I can, really.
Operator
Gentlemen, so far there are no more questions on the phone.
David Veitch
Okay. If there are no more questions, thank you very much for your interest and enjoy the rest of your day. Thank you.
Operator
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.
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