Basilea Pharmaceutica — Final oncology asset (lisavanbulin) divested

Basilea Pharmaceutica (SIX: BSLN)

Last close As at 19/07/2024

CHF41.55

−0.45 (−1.07%)

Market capitalisation

CHF548m

More on this equity

Research: Healthcare

Basilea Pharmaceutica — Final oncology asset (lisavanbulin) divested

Basilea Pharmaceutica has announced an asset purchase agreement with the Glioblastoma Foundation for lisavanbulin (BAL101553), the remaining drug candidate from its oncology portfolio. Basilea’s other oncology assets were offloaded in 2022 (for initial consideration of CHF15m) following the company’s decision to right-size and focus exclusively on its anti-infectives franchise. Lisavanbulin is a tumour checkpoint controller and was being evaluated as a treatment for glioblastoma before Basilea decided to cease development following the strategic pivot. The initial purchase price is undisclosed, although Basilea will be eligible for a fixed double-digit share of any subsequent commercial partnerships.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Basilea Pharmaceutica

Final oncology asset (lisavanbulin) divested

Pipeline update

Pipeline update

Pharma and biotech

21 June 2024

Price

CHF40.60

Market cap

CHF487m

US$1.11/CHF

Net debt (CHFm) at 31 December 2023

46.6

Shares in issue (excluding 1.12m treasury shares)

12.0m

Free float

90%

Code

BSLN

Primary exchange

SIX

Secondary exchange

N/A

Share price performance

Business description

Basilea Pharmaceutica is focused on treating infectious diseases. Its marketed products are Cresemba (an antifungal) and Zevtera (an anti-MRSA broad-spectrum antibiotic). In late 2023, it expanded its clinical pipeline to include antifungal BAL2062, antibiotic tonabacase (evaluation licence) and Phase III-ready, novel broad-spectrum antifungal treatment fosmanogepix (two Phase III trials to start in 2024). In January, it acquired the preclinical LptA inhibitor antibiotics programme from Spexis.

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Basilea Pharmaceutica is a research client of Edison Investment Research Limited

Basilea Pharmaceutica has announced an asset purchase agreement with the Glioblastoma Foundation for lisavanbulin (BAL101553), the remaining drug candidate from its oncology portfolio. Basilea’s other oncology assets were offloaded in 2022 (for initial consideration of CHF15m) following the company’s decision to right-size and focus exclusively on its anti-infectives franchise. Lisavanbulin is a tumour checkpoint controller and was being evaluated as a treatment for glioblastoma before Basilea decided to cease development following the strategic pivot. The initial purchase price is undisclosed, although Basilea will be eligible for a fixed double-digit share of any subsequent commercial partnerships.

Year end

Revenue (CHFm)

PBT*
(CHFm)

EPS*
(CHFc)

DPS
(CHFc)

P/E
(x)

Yield
(%)

12/22

147.8

12.3

104.1

0.0

39.0

N/A

12/23

157.6

10.8

89.7

0.0

45.3

N/A

12/24e

187.2

28.0

233.6

0.0

17.4

N/A

12/25e

209.1

32.3

269.2

0.0

15.1

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Lisavanbulin was one of five oncology programmes in Basilea’s portfolio and the only one remaining to be divested. In June 2022, Basilea decided to return the rights to Phase I/II asset derazantinib (an FGFR inhibitor targeting urothelial cancer, gastric cancer and intrahepatic cholangiocarcinoma) to Merck and in September 2022, it sub-licensed the Phase I-ready BAL0891 (a TTK/PLK1 kinase inhibitor targeting advanced solid tumours) to SillaJen for an upfront payment of US$14m. Preclinical programmes were sold to Nodus Oncology in September 2022 (PARG inhibitor programme, for an upfront payment of CHF0.5m) and Redona Therapeutics in November 2022 (CLK kinase inhibitor programme; upfront payment of CHF1m).

Lisavanbulin, which was being evaluated by Basilea as a potential treatment for glioblastoma in two clinical studies (as a monotherapy and in combination with radiotherapy), had shown activity against brain cancer, with the ability to cross the blood-brain barrier. However, further development work was put on hold after the company’s decision to focus on its anti-infectives portfolio. Following the deal, the Glioblastoma Foundation has taken over complete rights to lisavanbulin and will undertake further development work. The initial purchase price remains undisclosed, but we note that Basilea will be entitled to a fixed double-digit share of any proceeds from a subsequent commercial agreement for the asset.

Basilea’s decision to focus exclusively on its anti-infectives portfolio has been positive, allowing it to optimise its pipeline for long-term growth and supporting it to turn profitable in 2022. Lead antifungal asset Cresemba continues to register strong demand momentum and the imminent US entry of Zevtera (the lead antibacterial asset) is a key upcoming milestone, in our opinion. We also look forward to the initiation of a Phase III clinical trial for fosmanogepix, a novel broad-spectrum antifungal therapy (with activity against both yeast and mould infections, including multidrug-resistant fungi) believed to be a successor to Cresemba, as it approaches maturity. The first Phase III study for the treatment of candidemia and invasive candidiasis is expected to commence by mid-2024 followed by the second study by end-2024, for the treatment of mould infections.

General disclaimer and copyright

This report has been commissioned by Basilea Pharmaceutica and prepared and issued by Edison, in consideration of a fee payable by Basilea Pharmaceutica. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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United Kingdom

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London │ New York │ Frankfurt

20 Red Lion Street

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United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Basilea Pharmaceutica and prepared and issued by Edison, in consideration of a fee payable by Basilea Pharmaceutica. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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