Basilea - Another BARDA instalment

Basilea has announced that it has received a further significant funding tranche of $13.3m to fund the development of the Phase 3-ready combination antibiotic ceftibuten-ledaborbactam. This brings the total BARDA funding received to date for this programme to $25m, with the existing BARDA contract potentially providing an additional $133m in non-dilutive funding.

Securing non-dilutive funding has been a rewarding characteristic of Basilea's anti-infective research & development efforts. This source of funding has facilitated the continued clinical development of Zevtera and ceftibuten-ledaborbactam in the key US market, as well as providing 60% of the funding for antifungals fosmanogepix and BAL2062. With a focus on developing anti-infectives targeting problem pathogens highlighted by significant health organisations such as the WHO, BARDA has proven to be an important source of funding. The 2024 award of a multi-year Other Transaction Agreement, for up to $268m, is a testament to the importance and relevance of Basilea's anti-infective programmes.

Ceftibuten-ledaborbactam comprises the combination of a beta-lactam antibiotic and a beta-lactamase inhibitor. It promises to be a significant addition to Basilea's anti-infective franchise, targeting complicated urinary tract infections (cUTIs) caused by Enterobacterales. Enterobacterales remain the principal cause of most uncomplicated and complicated UTIs, with beta-lactam antibiotics the usual first-line treatment. However, resistance has become a significant concern and infections caused by Enterobacterales represent a Priority 1 pathogen. Ceftibuten-ledaborbactam is active against multidrug-resistant bacteria, and its oral availability promises to be helpful for cUTI patients as an oral step-down therapy for those who have completed several days of intravenous therapy. The relevance of the combination in treating cUTIs is reflected in FDA's granting of QIDP and Fast Track designations.

The development of ceftibuten-ledaborbactam follows the same tried and tested route previously used to reverse resistance to other beta-lactam antibiotics, including ceftazidime-avibactam (Avicaz/Zavicefta), imipenem-relebactem (Recarbrio), and meropenem-vaborbactam (Vabomere). As a result, we believe that these previous successes bode well for the development and likely commercial success of ceftibuten-ledaborbactam. Given the unmet need and the need for an oral therapy, we have previously stated that even a modest 10% share of the market opportunity should result in peak sales approaching $450m following market entry in 2030.

Ceftibuten-ledaborbactam arrived at Basilea with successful preclinical and Phase 1 data. This is a Phase 3-ready asset and is currently under discussion with regulatory agencies regarding the final design of the Phase 3 programme. The current expectation is that the programme would likely compare ceftibuten-ledaborbactam to an IV carbapenem starting in early 2027.

As we have highlighted in our recent research note, Basilea is well-positioned for long-term growth. The company expects to continue generating strong cash flow, with approximately CHF 600 million from its existing commercial products, Cresemba and Zevtera, through 2030. With a rejuvenated late-stage pipeline and a track record of identifying high-value assets such as ceftibuten-ledaborbactam, Basilea remains on track to have four commercial-stage assets by 2030.

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

To read all our Basilea research, please use the link here.

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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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