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Basilea - Firing on all fronts

Following H1 results, we published a research note today reflecting on Basilea's progress in its oncology programmes and the anti-infectives portfolio. The financial performance at Basilea continues to benefit from the continued uptake and roll out of its antifungal Cresemba. This is set to continue as more patients need treatment, new geographies are added, and prescribing guidelines mature. Revenues from the anti-infectives franchise have been important in facilitating the development of Basilea's oncology franchise.


2021 is proving to be an important transition year for the two lead cancer programmes. In its FGFR programme, Basilea is seeking to optimally position derazantinib in FGFR driven cancers, recognising that the competitive environment is intensifying. Potentially differentiating features include broader applicability outside of FGFR gene fusions, activity in FGFR refractory patients, the potential to more effectively boost the activity of the checkpoint inhibitors, and a more acceptable safety profile. Data in proof of concept bile duct cancer has been encouraging, but it is the bladder and particularly the gastric cancer settings where we have high hopes for the combination with Tecentriq. The dose intensification strategy may be a late addition but Basilea is clearly following the science in this regard. Data are anticipated for the combination later this year (refractory patients) and with dose intensification during 2022.


Although still early, the impact of the tumour checkpoint controller lisavanbulin on selected glioblastoma patients could be transformational. Supportive upcoming Phase 2 data regarding the use of a novel biomarker (EB1) would allow the selection of patients who are most likely to benefit. If successful, other important cancers could be relevant to this approach. We suspect that the potential for lisavanbulin has been overlooked to date, and look forward to future data readouts with keen anticipation.


Finally, we shouldn't forget that the anti-infectives pipeline at Basilea is awaiting the readout of the Phase 3 bacteraemia trial in 2022 for ceftobiprole. This, along with the positive severe skin infection trial result, should be sufficient for US approval. Importantly, with few treatment options, the commercial opportunity in bacteraemia should be substantial, facilitating the attraction of a suitable partner. Basilea has a good track record in attracting relevant and appropriate commercial partners.


We have calculated a discounted cash flow fair value of CHF120 for Basilea and further success with lisavanbulin will provide an important upside.


See the full research note here.


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IMPORTANT:

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.

Link to full disclosures.

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