Basilea has reported good momentum in 2019, with positive clinical data from key studies on Zevtera/Mabelio and derazantinib. Cresemba sales have continued to grow, benefiting from international launches by partners in new markets and growth in existing markets. Despite significant R&D investment, operating losses have narrowed to CHF13.2m (H118: CHF20.4m). Basilea is well funded, with gross cash and investments of CHF177.9m sufficient to fund operations beyond 2020 to multiple R&D inflection points. Pivotal data in 2020/21 could lead to filings for derazantinib (oncology) and Zevtera (US NDA for the treatment of resistant bacterial infections). We value Basilea at CHF1,077m.
Total in-market Cresemba (isavuconazole) sales reported by partners exceeded $170m (12 months to 31 March 2019). Basilea received a $5m milestone payment in January from partner Pfizer based on strong Cresemba EU sales (cumulative basis). Cresemba is available in 33 countries, including the US and Europe through multiple partners, and by year-end Basilea expects Cresemba to be available in 40 countries. Zevtera/Mabelio (ceftobiprole) sales remain lacklustre and the US remains the significant value driver for the product (potential launch in 2022/23).
Basilea recently announced positive top-line data on ceftobiprole from the Phase III TARGET trial for treatment of ABSSSI. TARGET is one of two cross-supportive Phase III trials required for the US filing. The other, ERADICATE, is expected to report in H221. Derazantinib posted positive interim results in the FIDES-01 registrational phase II study in iCCA and FIDES-02 Phase I/II has been initiated in combination with immunotherapy for urothelial cancer. Preclinical work in multiple other tumours types expressing FGFR genetic aberrations is ongoing.
Revised guidance for FY19 operating loss is CHF22–27m from CHF20–30m, due to the lower BARDA revenue expectations from the reduction in ceftobiprole Phase III expenses. Cresemba and Zevtera sales contributions guidance has narrowed to CHF105–110m (from CHF100–110m). We believe the growing revenue contribution from Cresemba translates into profitability from 2021.
Our revised valuation of CHF1,077m vs CHF1,082m previously reflects a slight adjustment of our 2019 revenue and operating loss expectations. We update FX, roll forward our DCF and revise for net debt of CHF19.5m at 30 June.
