The closing months of 2021 at Basilea were characterised financially by the receipt of payments from licensee Pfizer as the antifungal Cresemba (isavuconazole) delivered strong sales momentum outside of the US. Today, the announcement of a milestone payment of CHF15m from Astellas, as Cresemba exceeded a preset 2021 sales target in the US, is a testament to its differentiated profile in treating invasive moulds. A further CHF260m in milestone payments are available.
As we have highlighted previously, Cresemba targets a growing market driven by an increase in the severely immunocompromised patient population, primarily due to aggressive chemotherapy and organ transplantation. The development of new antifungals has been slow, and we have previously highlighted the importance of novel therapies. This demand was reflected by Pfizer's acquisition of Amplyx in 2021 to access fosmanogepix. Pfizer's acquisition narrative reminded us that the FDA has approved no antifungal from a novel class for 20 years.
Cresemba is approved in the US for the treatment of invasive aspergillosis (IA) and invasive mucormycosis. Cresemba is also approved in the EU (and other countries) to treat adult patients with invasive aspergillosis, and adult patients with mucormycosis for whom amphotericin B is inappropriate. IA is a life-threatening disorder with a high mortality rate, resulting in potential hospitalisation of up to one month, and represents the major opportunity for Cresemba. Although mucormycosis is rarer, its prevalence is increasing rapidly. Mucormycosis results in unacceptable morbidity and mortality (90-100% in neutropenic patients and through disseminated infection) - it is a burden to the US healthcare system, costing circa $100,000 per patient.
For Cresemba, the growth story continues and represents an important source of cash for Basilea as it invests behind its emerging oncology portfolio. That growth potential has been reflected in impressive end-market sales, estimated at over $300m in the 12 months to September 2021, and representing excellent growth of 26.5% - the vast majority from the agreement with Astellas in the US.
For Basilea, 2022 represents an important year with clinical data anticipated from the ongoing development of its leading oncology candidate derazantinib in various FGFR driven cancers (bladder, gastric and biliary). Data, particularly at higher doses and in combination with the checkpoint inhibitor atezolizumab (Tecentriq), will inform its differentiated profile as well as filing strategy and ultimately commercial potential. Additionally, the ability of lisavanbulin to treat patients with glioblastoma using a novel biomarker is also anticipated. Glioblastoma represents a particularly challenging patient population and represents a significant source of upside to forecasts if supportive.
We calculate a discounted cash flow fair value of CHF120 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 contained in this publication should be considered as any form of advice.