Basilea is one of the few standalone European companies focused on developing novel antimicrobial drugs. It has two approved hospital-based products: Cresemba for severe mold infections and Zevtera for bacterial infections. Together these underpin the current valuation with upside potential from a US partnering deal for Zevtera and the early-stage oncology pipeline. A US Zevtera deal and potential sales progression for the antimicrobial portfolio are key near-term share price drivers. We value Basilea at CHF1,114.0m or CHF103.2/share.
Basilea has successfully obtained approvals for Cresemba for mold infections in the US and Europe and for Zevtera for bacterial infections in Europe. Both have a broad spectrum of activity, are suitable for empiric use in the hospital setting and offer advantages over current treatments. Basilea has a contract salesforce in place (via Quintiles) to commercialise these in the core European markets, with product overlap likely to drive future operational synergies.
There is an increasing need for novel antimicrobial agents; with efficacy against resistant strains of bacteria (eg MRSA), and/or improved side effect profiles. Hence the opportunities for Zevtera and Cresemba could be significant. We believe these two products more than underpin the current share price in regions where approvals have been granted, given their differentiated features. Partnering activities, particularly for Zevtera in the US, could provide upside.
Basilea has an earlier-stage oncology pipeline, focusing on cancer drugs that target resistance to current therapies. BAL101553 is in Phase I/IIa development, we expect analysis of data from all patients later this year. BAL3833, a panRAF kinease inhibitor, is in Phase I development.
Our Basilea valuation is CHF1,114.0m or CHF103.2/share based on an NPV analysis, which includes the main portfolio of products and net cash. Cresemba, based on $600m peak sales, is worth nearly 60% of our rNPV and underpins >100% of the current market cap. We also include Zevtera in Europe, in addition to risk-adjusted contributions for the US opportunity and the earlier-stage pipeline.