Basilea announced this morning that its 5th generation cephalosporin antibiotic ceftobiprole has been filed for approval in the key US market. This represents another achievement in ceftobiprole's long development pathway to becoming available in the US, with the previous delay to filing being a minor frustration. Importantly, ceftobiprole has QIDP status meaning that 10 years of exclusivity starts when it is approved in the US. Also, Priority Review suggests that approval should be in Q2 2024, as previously guided.
Our optimistic view on the outlook for ceftobiprole, which drives our $400m peak sales potential, is based on the positive nature of the Phase 3 programme and the observation that Basilea had previously secured a Special Protocol Assessment (SPA) from FDA for both ERADICATE and TARGET. Additionally, the importance of ceftobiprole has been reflected in BARDA's provision of $112m (approximately 75%) of the funding for clinical development and regulatory activity. Basilea is seeking FDA approval for bacteraemia caused by Staphylococcus aureus (SAB), acute bacterial skin and skin structure infections (ABSSSI), and community-acquired pneumonia (CABP). Of the three, we believe there is a real unmet need for patients suffering from SAB, with Basilea noting that there are approximately 120,000 cases in the US. There is particularly a need where MRSA is involved and limited treatment options exist.
As we have previously highlighted, the key to ceftobiprole achieving its full market potential is the attraction of a suitable partner with a relevant franchise. Given the unmet need and the commercial potential, we remain confident that such a partner will be secured, noting that company guidance remains that a partner will be agreed before US approval. Clearly, successful partnering would be a major de-risking event for Basilea and ceftobiprole's prospects.
We calculate a discounted cash flow fair value of CHF 91 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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