Werner Henrich	Dr. Anthony Man
Chairman of the Board	Chief Executive Officer

 

Dear Shareholders,
This year was remarkable for the number of high impact company milestones achieved that signal our transition from a pure research & development organization to a fully integrated biopharmaceutical company. Our successes in 2007 bring us much closer to making our innovative drugs available to patients and health care providers alike.

Completion of pivotal phase III clinical trial programs in 2007 enabled two of Basilea’s portfolio compounds to move forward into regulatory review in the USA, Europe, Switzerland and Canada. We anticipate completing the review process in several countries during 2008 putting us firmly on the path of product commercialization.

Positive results from three phase III trials with ceftobiprole, our novel hospital antibiotic, were announced in 2007. In May, we and our collaboration partner Johnson & Johnson filed the first registration dossier for the treatment of complicated skin infections with the U.S. (FDA) and then with
the European health authorities (EMEA) in June. Regulatory filings were additionally made in Canada and Switzerland where an accelerated assessment was granted. The clinical trial data from patients with serious community and hospital-acquired pneumonia will also be filed with regulatory authorities as potential additional indications.

Alitretinoin, our second late stage portfolio molecule, was also highly successful in clinical studies. Patients with chronic hand eczema who do not respond to topical steroid treatment have significant work or social disabilities and no approved treatments. We are developing alitretinoin specifically for these patients and have completed three phase III studies that all confirmed the efficacy and safety profile of alitretinoin in these patients. Regulatory submissions were filed in Europe, Switzerland and Canada and a new clinical study is planned for the US in 2008.

Basilea’s continued R&D innovation, with new programs against resistant Gram-negative bacteria and oncology, received international recognition at key scientific congresses. These programs address high medical need and represent significant future business opportunities. As ever, our research efforts receive solid support from our research center in China.

Our 2007 financial results reflect a sound cash position, judicious investment in key value driving activities and tight cost control. Additional capital raised in March 2007 is funding ongoing R&D programs, production of commercial product supplies and the essential commercial infrastructure to support successful product launches over the next few years.

Our achievements of 2007 have provided a solid springboard for commercializing products and as a result we have been successful in attracting talented and experienced individuals to build our international commercial organization. Assuming timely completion of several regulatory reviews on both ceftobiprole and alitretinoin, we anticipate marketing authorizations and potential product launches to begin in 2008.

We would like to thank our stakeholders for all their contributions in 2007 in bringing our innovative drugs closer to the market and look forward to a challenging year as we build a hospital and specialty biopharmaceutical business.

Werner Henrich Chairman of the Board		Dr. Anthony Man Chief Executive Officer