Last close As at 05/08/2026
CHF50.70
▲ 0.20 (0.40%)
Market capitalisation
CHF681m
Research: Healthcare
Basilea has announced an expansion of its portfolio to foster long-term growth, a key strategic priority for management, leveraging expertise in the commercialisation of its two key anti-infective products, Cresemba and Zevtera. The company will in-license GR-2397, a clinical-stage antifungal compound targeting invasive mould infections, mainly caused by the Aspergillus species. The Phase II-ready asset has Qualified Infectious Disease Product, Orphan Drug and Fast Track designations from the US FDA for invasive aspergillosis, which often leads to priority review post a New Drug Application (NDA) filing and grants 10 years of US market exclusivity. Basilea will make an upfront payment of $2m, followed by ~$69m in milestones and tiered royalties. Our valuation of Basilea remains unchanged, and will be reassessed once additional information becomes available.
Written by
Basilea Pharmaceutica |
Antifungal addition to bolster pipeline |
In-licensing update |
Pharma and biotech |
20 October 2023 |
Share price performance
Business description
Analysts
Basilea Pharmaceutica is a research client of Edison Investment Research Limited |
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Basilea has announced an expansion of its portfolio to foster long-term growth, a key strategic priority for management, leveraging expertise in the commercialisation of its two key anti-infective products, Cresemba and Zevtera. The company will in-license GR-2397, a clinical-stage antifungal compound targeting invasive mould infections, mainly caused by the Aspergillus species. The Phase II-ready asset has Qualified Infectious Disease Product, Orphan Drug and Fast Track designations from the US FDA for invasive aspergillosis, which often leads to priority review post a New Drug Application (NDA) filing and grants 10 years of US market exclusivity. Basilea will make an upfront payment of $2m, followed by ~$69m in milestones and tiered royalties. Our valuation of Basilea remains unchanged, and will be reassessed once additional information becomes available.
Year end |
Revenue (CHFm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
148.1 |
(6.6) |
(56.9) |
0.0 |
N/A |
N/A |
12/22 |
147.8 |
12.3 |
104.1 |
0.0 |
36.8 |
N/A |
12/23e |
158.2 |
43.5 |
332.2 |
0.0 |
11.5 |
N/A |
12/24e |
180.7 |
63.2 |
482.3 |
0.0 |
7.9 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
GR-2397 (to be renamed BAL2062) is a first-in-class, novel antifungal compound, being developed for intravenous administration, which has demonstrated rapid fungicidal activity in vitro against invasive aspergillus infections (including azole-resistant strains). The drug candidate has already completed a Phase I study at single and multiple ascending intravenous doses and has shown adequate safety and tolerability. Basilea intends to conduct a preclinical profiling programme to ascertain the optimal clinical development path for the asset. The company then plans to initiate a Phase II clinical study in H125.
We note that invasive aspergillosis is a tissue-damaging infection caused by the fungal pathogen Aspergillus fumigatus, and mainly affects patients with supressed immune function, often related to hematopoietic stem cell transplant, organ transplant and cancer therapy. The infection is associated with high morbidity and mortality. According to the Centers for Disease Control and Prevention, there were 15k aspergillosis-related hospitalisations in the US in 2014, with an estimated cost of $1.2bn.
Basilea will make an upfront payment of $2m, along with pre-approval milestone payments of $1.75m and $67m in total approval and commercialisation milestone payments. Additionally, Basilea will pay tiered royalties on sales, ranging from low-single-digit percentage to mid-single-digit percentage.
While Zevtera’s US approval remains a key regulatory priority for Basilea (NDA submitted in August 2023), we believe the new asset reinforces the company’s commitment to building its anti-infectives portfolio. Given the strong balance sheet and profitability guidance for FY23, we expect incremental in-licensing and acquisitions to support future growth.
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Research: Industrials
Epwin’s H123 results confirmed a solid performance that was characterised by weaker volumes offset by cost control, higher prices and some contribution from M&A in tough markets. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY23 and FY24 as material cost pressures become less of a headwind. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. We have maintained our forecasts but highlight the low valuation and attractive 6.7% yield.