Today, investors tend to focus on Basilea's developing oncology franchise, with FGFR inhibitor derazantinib showing potential to be a game-changer for the company.
Behind this, the anti-infective portfolio continues to deliver high revenue growth and provides capital for R&D investment. Basilea's anti-fungal, Cresemba, and antibiotic, ceftobiprole, are already commercialised; however, there remains a major additional opportunity for ceftobiprole in bacteraemia (bloodstream infection). We publish a research note today detailing the often-overlooked prospects for ceftobiprole and its potential to generate a step-change in Basilea's valuation.
Although ceftobiprole is already approved and sold in Europe as Zevtera for pneumonia, the US remains the major market for antibiotics. Additionally, emerging resistance and toxicity blight existing treatments for Staph aureus bacteraemia (SAB), and there have been few clinical trials conducted for SAB, with only one antibiotic approved in recent years. There is a clear unmet need that ceftobiprole could address.
US market approval for ceftobiprole requires positive results from two Phase 3 trials. The TARGET study in severe skin infection (ABSSSI) has already delivered a positive result, and we await the readout from ERADICATE in SAB during H1 2022. Ceftobiprole continues to benefit from BARDA's financial help, providing around 70% of the cost of the Phase 3 development.
As a completed Phase 3 pipeline asset, ceftobiprole is likely to be valuable, with current owners of anti-MRSA antibiotics, such as Merck & Co and Allergan, obvious partners. We believe that ceftobiprole could deliver total peak sales approaching $450m.
We have calculated a discounted cash flow fair value of CHF 120 for Basilea. The current share price is CHF 43.9.
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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.
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