Basilea - More non-dilutive funding

Basilea has announced this morning that it has received a further $39 million from BARDA as a second instalment for the continued development of its novel antifungals fosmanogepix and BAL2062. We have previously stated that the award of an Other Transaction Agreement (OTA) for up to $268 million is an endorsement of the approach that Basilea has taken to populate its anti-infectives pipeline, as well as an important source of non-dilutive R&D funding, providing significant financial flexibility for Basilea as its programmes advance.

Overall, the BARDA funding is expected to provide approximately 60% of funding support for the development of the anti-infectives franchise over a 12-year period. Additionally, the receipt of a second instalment represents a reassuring indication of BARDA's continued commitment to these programmes. It is also worth remembering that Basilea has forged a long-standing relationship with BARDA, with the organisation funding most of the development of the antibiotic Zevtera (approximately $130m), recently launched through partner Innoviva Specialty Therapeutics in the key US market.

We have previously stated that fosmanogepix represents the jewel in the crown of Basilea's anti-infectives pipeline. Fosmanogepix recently commenced Phase 3 development for the treatment of candidaemia and/or invasive candidiasis, with a second Phase 3 trial targeting invasive moulds, expected to begin shortly. The profile of fosmanogepix suggests that it should provide longevity to the antifungal franchise following the expected loss of exclusivity for Cresemba in the US and Europe in Q4 2027. Importantly, its broad spectrum suggests it has activity against most of the critical fungal infections highlighted by the WHO. Furthermore, the importance of fosmanogepix as a novel antifungal has been reflected in FDA conferring Fast Track status for several key invasive fungal infections, including invasive aspergillosis, candidiasis and mucormycosis. Encouraging Phase 2 data suggests the Phase 3 programme has been substantially de-risked. Also, data from Expanded Access have provided a highly encouraging insight into the potential of fosmanogepix to help cure patients with otherwise intractable fungal infections. As a result, we forecast peak sales of fosmanogepix at £1.2bn, comfortably exceeding those of Cresemba.

The receipt of the second instalment from BARDA is a timely reminder of the importance of developing and introducing novel antifungals. Considering the competitive environment, we anticipate fosmanogepix to be a significant new treatment option in the fight against invasive fungi, which the WHO has deemed critical infections, particularly as resistance becomes more prevalent.

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