The antifungal Cresemba (isavuconazole) has long dominated Basilea's anti-infectives franchise and now represents the largest antifungal by sales value in the important US market. As we have previously intimated, Cresemba sales have consistently outpaced our expectations, and we suspect that the investment community has overlooked the commercial importance of antifungals generally. While much of the success has been due to the specific attributes of Cresemba, in particular its extended-spectrum and benign safety profile, sales have also benefited from the attraction of highly relevant partners such as Astellas and Pfizer in key markets.
Underlying growth dynamics appear to be supportive of continued antifungal demand, such as the requirement for new effective options to deal with increasing resistance. The use of aggressive chemotherapy regimens, particularly as they relate to haematological cancers, has been a significant driver of invasive fungal infections. Furthermore, it is important to note here that the number of stem cell transplantations has effectively more than doubled in the past 20 years.
Cresemba has been a highly rewarding success story for Basilea, its licensees, and distributors alike. We forecast continued growth in major markets despite Cresemba's maturity, largely due to an increasing number of at-risk immunosuppressed patients. Cresemba has also enjoyed a protracted rollout as Basilea has identified new distributors and licensing partners. Currently, Cresemba is approved in 69 countries, of which it is marketed in 59. End market sales in the 12 months to 30 June 2022 were $352m, representing 24% growth. In particular, we have highlighted the potential for growth receiving a boost from availability in China (in particular) as well as Japan. The announcement today that Asahi Kasei, Cresemba's license partner, has received approval from the Japanese Ministry of Health and Welfare for the treatment of adult patients with aspergillosis, mucormycosis, and cryptococcosis is an important endorsement and suggests further longevity to the overall Cresemba franchise.
Cresemba's dominance has been a nice problem for Basilea, given its current growth trajectory. However, having been initially approved in the US in 2015, Cresemba is maturing in the launch markets, with IP protection waning from 2027 in the US and Europe. Consequently, the prospect of adding the 5th-generation cephalosporin antibiotic, ceftobiprole, in the US represents an important source of new revenues and additional growth, particularly given the unmet need in the lead bacteraemia indication. Our forecasts for ceftobiprole in the US suggest sales approaching $400m - a highly attractive proposition for a commercial partner. We look forward to Basilea attracting a relevant partner for ceftobiprole in the US in 2023, which would represent a major de-risking event for the company.
We calculate a discounted cash flow fair value of CHF 91 per share for Basilea.
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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 contained in this publication should be considered as any form of advice.