Basilea - a new Phase 3-ready antibiotic

Basilea announced this morning that it has acquired the global rights to the Phase 3-ready beta-lactam/beta-lactamase inhibitor, ceftibuten-ledaborbactam etzadroxil, for the treatment of complicated urinary tract infections (cUTI), including pyelonephritis (kidney infections), from Venatorx Pharmaceuticals Inc. We note that under the terms of the global license, Venatorx is scheduled to receive a total of $325m in milestone payments as well as tiered mid-single-digit royalties. In the near term, the addition of this programme to the Basilea development pipeline is expected to add CHF 15m to R&D spend, including an unspecified up-front payment and all agreed pre-commercialisation milestone payments.

While Zevtera has already been launched in the US, addressing important Gram-positive infections, including bacteraemia caused by Staphylococcus aureus (such as MRSA), this acquisition further extends Basilea's interests into targeting problematic Gram-negative infections.

Resistance associated with Gram-negative infections is particularly concerning, with few treatment options. WHO has published a list of critical bacterial infections, of which the majority are Gram-negative. The list is split into three priorities reflecting their risk to human life. The highest level Priority 1 pathogens are all Gram-negative and are deemed to pose a critical threat. These include Acinetobacter baumannii, Pseudomonas auruginosa, and, importantly, Enterobacteriaceae, where Basilea's ceftibuten-ledaborbactam etzadroxil is relevant.

Resistance to many Gram-negative infections can often be caused by the bacteria producing extended-spectrum beta-lactamases, and the development of beta-lactamase inhibitors has been a key element of targeting resistant infections generally, effectively restoring the activity of beta-lactam antibiotics, such as the cephalosporin class. Ceftibuten-ledaborbactam etzadroxil is a combination of the already approved cephalosporin antibiotic ceftibuten (Cedax) and the novel broad-spectrum boronic acid beta-lactamase, ledaborbactem etzadroxil. Preclinical data have demonstrated that the addition of ledaborbactam etzadroxil restores the activity of ceftibuten against resistant strains of Enterobacterales producing extended-spectrum beta-lactamases as well as class A and D carbapenemases, class C cephalosporinases and multidrug-resistant Enterobacterales. Notably, the combination has Fast Track designations and QIDP from FDA for cUTI as well as uncomplicated urinary tract infections. As the release today highlights, there are no approved oral beta-lactam (or beta-lactam/ beta-lactamase inhibitor combinations) against resistant strains of Enterobacterales.

Basilea has suggested that it expects to commence a Phase 3 programme in approximately 18 months, and we look forward to further details, along with the company's half-year results, on the 19th of August.

We have a DCF-derived fair value of CHF120 per share.

To read our recent research, please use the link here.

Please subscribe here to receive our research, articles and invitations as soon as they are available.

IMPORTANT:

Calvine Partners LLP is authorised and regulated by the Financial Conduct Authority.

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.

Link to full disclosures.