Basilea provided an update this morning, which reflects the strong execution delivered to date as management has endeavoured to build an anti-infectives powerhouse. The continued growth of antifungal Cresemba underpins ongoing profitability, investment in R&D, relevant product acquisitions, and in-licensing activities. As a reminder, Cresemba's success is due in large part to its extended-spectrum and benign safety profile. This, combined with the continued growth of the immunocompromised patient population driven by organ transplantation and more aggressive chemotherapy regimens. In the release this morning, we are reminded of Cresemba's continued success with sales in the 12 months to the end of September 2024 rising by 20% to $533m, making it the largest branded antifungal for invasive fungal infections globally.
With this success has been the realisation of the looming loss of exclusivity for Cresemba in key US and EU markets in Q4 2027. While some of the resulting shortfall should be offset by more recent launches in major markets such as China and Japan, we believe that the acquisition of the novel antifungal fosmanogepix provides longevity to the lucrative antifungal franchise at Basilea. First in a new 'gepix' class, fosmanogepix has the potential to take Basilea's antifungal franchise to new heights with positive data already delivered in Phase 2 trials in invasive moulds as well as the large candidaemia/invasive candidiasis indication. Our peak sales expectation for fosmanogepix is circa $1.2bn.
Fosmanogepix has already entered Phase 3 clinical trials in candidaemia/invasive candidiasis. With a second study in invasive mould infections due to commence in the "...coming months". We believe that the attraction of BARDA with up to $268m as part of an Other Transaction Agreement (OTA), and $29m available initially to support the development of fosmanogepix (and BAL2062), provides Basilea with significant financial flexibility and helps to de-risk the entire anti-infective platform at the company. Staying with the antifungal pipeline, we note that BAL2062 is moving towards completion of preclinical profiling, with Phase 2 planning underway and expected to commence in early 2026.
Although our enthusiasm for the investment case at Basilea is driven largely by the potential of the antifungal franchise, the outlook for the antibacterial franchise is looking altogether more promising. In particular, we note that the protracted US development timeline for ceftobiprole, a 5th-generation cephalosporin, has finally come to a successful conclusion. The attraction of a highly relevant commercial partner in Innoviva with an established antibacterial franchise gives us significant confidence that our peak sales potential of $400m can be realised (mostly from the bacteraemia indication). This is helped by the new technology add-on payment provided in addition to standard reimbursement. Given its strong financial position, Basilea has been able to secure a collaboration that should maximise long-term returns. In the update today, we note that launch is anticipated for mid-2025.
Elsewhere in antibacterial development, efforts to flesh out the pipeline have taken shape during 2024 with the successful award of funding from CARB-X for the first-in-class LptA inhibitor BAL2420 targeting Gram-negative infections. BAL2420's profile looks highly promising, with potent bactericidal activity against Enterobacteriaceae (WHO Priority 1), including those resistant to beta-lactams and colistin. BAL-2420 is scheduled to enter first-in-human studies in mid-2026. We also look forward to future updates on the tonabacase programme in the near term, which promises an alternative (to antibiotics) approach to killing bacteria as a potential first-in-class bacteriophage endolysin.
We believe that Basilea has successfully executed its plan to date, de-risking the investment case and building a global anti-infectives powerhouse focussing on antifungal and antibacterial opportunities. With this success, we expect management to continue to deliver with respect to the existing portfolio as well as future commercially relevant in-licensing and acquisition activities as the company seeks to address additional unmet medical needs in its chosen areas of focus.
We have a DCF-derived valuation of CHF 120 per share for Basilea.
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Basilea Pharmaceutica is a client of Calvine Partners, and as such, this publication is not independent and should be considered a marketing communication under FCA Rules. None of the information in this publication should be considered as any form of advice.
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