The anti-infectives franchise at Basilea is currently dominated by the highly successful anti-fungal Cresemba sold through highly appropriate partners. Although the anti-MRSA antibiotic ceftobiprole is already approved and sold in Europe (as Zevtera) for pneumonia (excluding VAP), the US is the key market for antibiotics, with bacteraemia (SAB) a significant issue. There is a clear unmet need for an effective antibiotic with activity against both susceptible and resistant Staph aureus bacteraemia. There have been few trials in SAB and only one antibiotic approval in recent times, suggesting a significant market opportunity for the appropriate commercial partner. Our analysis of the market opportunity indicates that in total (both SAB & ABSSSI), ceftobiprole could deliver peak sales approaching $450m.
Regulatory approval for ceftobiprole in the US requires positive results from two Phase 3 trials in severe skin infection (ABSSSI) and SAB (TARGET & ERADICATE respectively). While TARGET has already delivered a positive result, we await the outcome from ERADICATE in a more challenging patient population. This morning's announcement has confirmed that enrolment in ERADICATE is now completed, with 390 patients enrolled. While SAB may represent a more challenging indication (than severe skin infections), we believe that previous data generated by ceftobiprole portend well for a successful outcome in ERADICATE. In particular, preclinical models, data from previous clinical studies with ceftobiprole, and real-world data from off-label use of ceftaroline (another 5th generation cephalosporin) are supportive of ceftobiprole activity. If the data in SAB prove to be positive, this will significantly enhance the appeal of ceftobiprole to physicians and payers alike and leave Basilea with a completed Phase 3 asset with which to attract a commercial partner for the key US market.
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.