Basilea's focus on anti-infectives is dominated by the ongoing success of the antifungal Cresemba. Historically, success has been due to a combination of an increasing immunosuppressed population (mostly aggressive chemotherapy regimens for haematological cancers), Cresemba's differentiated profile (extended-spectrum and benign side effect profile) and the existing franchises of partners such as Astellas (the US) and Pfizer (Europe ex Nordics, Asia Pacific and China). Importantly for Cresemba, competition from novel antifungals has been slow to emerge. However, this is beginning to change, although the direct competitive threat from products like olorofim (FDA action date June 17th) looks limited for now.
Given the maturity of Cresemba in major markets and the US in particular, replenishing the antifungal pipeline should be a near-term priority. Although novel anti-fungals appear to be highly sought-after assets, we believe that a combination of Basilea's existing expertise in anti-infectives and a strong cash position should position the company as a partner of choice for prospective licensors. Undoubtedly, Basilea is determined to ensure the longevity of the antifungals franchise as part of its anti-infective ambitions. As a result, we believe that Basilea would be a fully committed partner, ensuring speedy development and significant resources
While the Cresemba franchise may be maturing in the US and Europe, with loss of exclusivity likely from 2027, we have previously highlighted the potential for continued growth from new markets such as China and Japan. China is a particularly exciting prospect, representing approximately 20% of the global market. The announcement today of the receipt of a CHF5m milestone from partner Asahi Kasei with respect to launch in Japan is a reminder of the relevance of these markets to the future longevity of the Cresemba franchise.
Ultimately, the anti-infectives franchise at Basilea is more than Cresemba, and although the 5th generation cephalosporin antibiotic ceftobiprole is currently a modest contributor, the prospect of entering the important US antibiotic market with a differentiated label promises significant sales potential, with our peak sales estimate approaching $400m. Ceftobiprole has delivered overtly positive results in both bacteraemia (ERADICATE) and severe skin infections (TARGET), which bodes well for the attraction of a suitable commercial partner to ensure success in the key US market for antibiotics.
We calculate a discounted cash flow fair value of CHF 91 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 in this publication should be considered as any form of advice.