Basilea’s reported H118 total revenues include product sales (CHF6.5m vs H117 CHF9.8m), contract revenues (CHF40.1m vs H117 CHF31.4m) and other revenue (CHF13.3m vs CHF5m), which comprises mainly BARDA reimbursements related to the Phase III ceftobiprole trials. In-market sales for Cresemba amounted to $120m in the 12 months ending 31 March 2018 (+94% vs the comparable 2017 period). Cresemba continues to benefit from steady growth in the US and the increasing contribution from early launch countries in Europe. 

Management has updated FY18 total revenue guidance to CHF120-130m from CHF105-115m, reflecting stronger than anticipated sales of Cresemba. In the US, partner Astellas has reported Cresemba sales of $54m (+59%) for H118 ($34m in H117) and the drug looks easily on track to meet Astellas’ guidance of $100m for its fiscal year. Basilea expects a widening of FY18 operating loss to CHF25-35m from initial guidance of CHF10-20m, relating mainly to the in-licencing of derazantinib in H118 and its associated programme-related costs. Management expects cash burn per month to reduce to CHF7m (average) in H218. 

In H118 Basilea expanded its oncology portfolio by in-licensing the worldwide (exGreater China) rights to ArQule’s derazantinib (Phase II iCCA), an oral tyrosine kinase inhibitor (pan FGFR). It has initiated the two Phase III cross-supportive ceftobiprole registration trials needed for US marketing approval (acute bacterial skin and skin structure infections (ABSSSI) in February and Staphylococcus aureus bacteraemia (SAB) in August). 

Our revised valuation of CHF1,239m or CHF115/share (vs CHF1,285m previously) reflects an increase in our R&D assumptions as per guidance. Additionally, we roll forward our DCF and update for net cash of CHF51.3m at 30 June 2018.