Basilea has reached profitability earlier than expected and has a strong balance sheet and high prospects within its anti-infectives franchise. Our research published today illustrates future opportunities for key drugs, Cresemba and ceftobiprole, together with strategic options for the group.
The early delivery of profitability for Basilea is a laudable achievement. The current anti-infectives franchise is highly profitable, and reducing oncology R&D spending has led to high cash generation. Consequently, Basilea has been able to repay debt and can continue to invest to maintain a strong anti-infectives franchise.
Cresemba is maturing but will continue to grow in the near term, primarily driven by adding new geographies. Ceftobiprole's Phase 3 data should allow US regulatory approval this year, and we expect Basilea to find an appropriate commercial partner. Ceftobiprole promises to be a valuable new treatment for patients with bacteraemia, and we forecast peak sales in the US alone approaching $400m. Basilea has a good track record of partnering assets, and ceftobiprole's potential should allow management to maximise shareholder value through an appropriate agreement. A robust balance sheet coupled with strong cash flows will enable Basilea to in-license relevant candidates and extend the longevity of its anti-infectives business.
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 in this publication should be considered as any form of advice.