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UPDATE 2-Basilea eases funding concerns with Astellas deal

* Partners antifungal isavuconazole, in late-stage trials

* Gets 75 mln Swiss francs up front from partner Astellas

* Basilea may get up to another 478 mln francs and royalties

* Eases cash, income shortage

* Shares up 10.2 percent

(Adds more detail, comment, updates shares)

By Sam Cage

ZURICH, Feb 24 (Reuters) - Swiss biotech Basilea BSLN.S struck a licensing deal with Japan's Astellas Pharma 4503.T, bringing in an upfront payment of 75 million Swiss francs ($70 million) to help ease funding concerns.

The deal on Basilea’s antifungal isavuconazole comes after the group was hit by development problems on its most important drug, the superbug antibiotic ceftobiprole, leaving it short of cash and income.

“The licence agreement came earlier than expected and deal terms look attractive,” said Kepler Capital Markets analyst Martin Voegtli.

“Moreover, Basilea’s risk profile improves significantly and funding constraints are not at the top of the agenda any more.”

Basilea may also receive up to 478 million francs in milestones and will also be eligible for double-digit royalties on sales of the medicine, which is currently in late-stage trials. Analysts reckon it could be launched as soon as 2012. Basilea shares were up 10.2 percent to 77.8 francs by 1026 GMT, outpacing a 0.35 percent gain in the wider DJ Stoxx European healthcare sector .SXDP.

That reaction was prompted by easing concerns over the company’s cash burn rate. It had cash and short-term investments worth about 178 million francs at the end of 2009, a year in which it made a net loss of 121 million.

“We would expect that this partnership should significantly reduce the company’s burn rate in R&D and, therefore, secure its financing well into 2012, when we expect the company to break even,” said Helvea analyst Olav Zilian.

“The value of this partnership resides also in the fact that Astellas is a Japanese pharmaceutical company with global reach and a successful track record in developing and commercialising antifungals in the hospital sector internationally.”

The stock, which had plummeted from highs of nearly 300 francs in 2007, has now regained some 18 percent since Friday, when Basilea said it would take back rights to ceftobiprole from partner Johnson & Johnson JNJ.N.

Traders cited possible takeover rumours now Basilea would have full control over the medicine.

U.S. and European regulators have both said they could not approve ceftobiprole due to concerns about the reliability of clinical data, the source of the dispute between Basilea and Johnson & Johnson. [ID:nLDE60K225] (Editing by Will Waterman and Mike Nesbit) ($1=1.079 Swiss francs)

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