Basilea Pharmaceutica — From strength to strength

Basilea Pharmaceutica (SIX: BSLN)

Last close As at 24/04/2024

CHF40.55

−0.70 (−1.70%)

Market capitalisation

CHF532m

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Research: Healthcare

Basilea Pharmaceutica — From strength to strength

FY23 was another strong year for Basilea, marked by successive guidance beats and meaningful progress in fortifying its product pipeline. Revenues of CHF157.6m were ahead of guidance, driven by c 23% y-o-y growth in Cresemba- and Zevtera-related revenues to CHF150.3m. Top-line growth, combined with operational prudence (despite investments in growing its portfolio), supported Basilea in achieving a second successive year of net profitability (CHF10.5m, c 2x the guided figure). FY24 will be an important period, with the FDA decision on Zevtera (April 2024) and launch of fosmanogepix Phase III trials. As we update our estimates to reflect the latest sales trend, the outlook for the commercial assets and pipeline potential, we increase our valuation to CHF968.0m or CHF80.7/share.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Basilea Pharmaceutica

From strength to strength

FY23 update

Pharma and biotech

20 February 2024

Price

CHF36.5

Market cap

CHF478m

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

%

1m

3m

12m

Abs

10.0

3.89

(28.31)

Rel (local)

7.62

(2.13)

(29.21)

52-week high/low

CHF55.2

CHF34.3

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, the company expanded its pipeline to include antifungal BAL2062, antibiotic tonabacase (evaluation licence) and Phase III-ready, novel broad-spectrum antifungal treatment, fosmanogepix (two Phase III trials planned for initiation in 2024).

Next events

Regulatory decision on Zevtera NDA

Q224

Fosmanogepix Phase III initiation

H224

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Arron Aatkar

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Basilea Pharmaceutica is a research client of Edison Investment Research Limited

FY23 was another strong year for Basilea, marked by successive guidance beats and meaningful progress in fortifying its product pipeline. Revenues of CHF157.6m were ahead of guidance, driven by c 23% y-o-y growth in Cresemba- and Zevtera-related revenues to CHF150.3m. Top-line growth, combined with operational prudence (despite investments in growing its portfolio), supported Basilea in achieving a second successive year of net profitability (CHF10.5m, c 2x the guided figure). FY24 will be an important period, with the FDA decision on Zevtera (April 2024) and launch of fosmanogepix Phase III trials. As we update our estimates to reflect the latest sales trend, the outlook for the commercial assets and pipeline potential, we increase our valuation to CHF968.0m or CHF80.7/share.

Year end

Revenue
(CHFm)

PBT*
(CHFm)

EPS*
(CHFc)

DPS
(CHFc)

P/E
(x)

Yield
(%)

12/22

147.8

12.3

104.1

0.0

35.1

N/A

12/23

157.6

10.8

89.7

0.0

40.7

N/A

12/24e

183.1

25.5

212.9

0.0

17.1

N/A

12/25e

204.8

29.8

248.8

0.0

14.7

N/A

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

Cresemba stays strong

Cresemba remains a key facilitator to Basilea’s operational performance with strong demand across the globe led by the US (c 60% of sales) and growing support from China and Japan. Management expects Cresemba’s growth to continue into FY24, with guided royalties of CHF89m (+13% y-o-y) and another 15% uplift in milestone payments. Product revenues are expected to rise by c 40%, although we understand that this includes anticipated contribution from Zevtera as part of a US license and supply agreement. Given the momentum, we see Cresemba achieving peak sales of $686m and supporting the business to end of market exclusivity.

Growing focus on other pipeline assets in FY24

As Cresemba approaches maturity, we expect the focus on progressing other assets to intensify. FY24 is likely to be key given the upcoming US regulatory decision on Zevtera (PDUFA date of 3 April 2024; US likely to account for c 85% of Zevtera sales in the $3.8bn MRSA treatment market) and launch of fosmanogepix Phase III trials, which holds the potential to be the company’s next lead asset. We believe these events are potential inflection points for Basilea. We expect the announcement of a US commercial partner for Zevtera to be the next key catalyst.

Valuation: CHF968.0m or CHF80.7 per share

Our valuation for Basilea increases to CHF968.0m or CHF80.7/share (from CHF910.4m or CHF76.0/share previously) to reflect the FY23 guidance beat and better than anticipated traction for Cresemba (although the FY24 operating and net profit guidance is lower than our expectation due to higher R&D and SG&A expectations). It is also affected by rolling forward our model, FX rates and the updated net debt figure (CHF46.6m). We note the improving cash flows (operating cash flow doubling to CHF14.2bn in FY23) have allowed Basilea to repay its CHF75m loan from Athyrium earlier than expected (the remaining CHF15m will be paid in Q124) and should fund the current clinical/preclinical programmes.

A refreshed pipeline of anti-infective treatments

Basilea is focused on developing and commercialising therapies for the treatment of severe fungal and bacterial infections (Exhibit 1). Its two marketed products are Cresemba (or isavuconazole), an antifungal therapy for the treatment of life-threatening invasive mould infections, and Zevtera (or ceftobiprole), an antibiotic therapy. In line with the company’s previously disclosed plans of re-stocking its product pipeline, in late 2023 it announced three transactions for new assets, including fosmanogepix (an antifungal therapy), BAL2062 (an antifungal therapy) and tonabacase (an antibacterial therapy). Fosmanogepix is expected to commence two Phase III trials in 2024 (discussed in more detail below), while BAL2062 is expected to commence a Phase II study in H125, provided ongoing preclinical tests are positive. For tonabacase, Basilea holds an in-licensing option, which it plans to exercise if the anticipated preclinical studies in 2024 are positive. This will be followed by a Phase II study in 2025, provided the data are supportive.

Exhibit 1: Basilea’s portfolio of antifungal and antibiotic therapies

Source: Basilea FY23 results presentation.

Zevtera: US FDA decision marks key upcoming catalyst

Asset overview

We firmly believe that the key upcoming catalyst for Basilea is the regulatory decision on Zevtera in the US. Zevtera is an intravenous (IV) antibiotic that has shown rapid bactericidal activity against gram-positive bacteria, such as Staphylococcus aureus (including methicillin-resistant strains, MRSA), and gram-negative bacteria. The drug has already been approved in selected countries across Europe, Latin America, the Middle East, North Africa and Canada (marketed as either Zevtera or Mabelio). The US region is a key strategic priority for Basilea and could represent a potentially lucrative commercial opportunity, provided that regulatory approval is achieved, given that the MRSA treatment market is projected to be worth c $5.5bn by 2030. Furthermore, the US accounts for the majority of global market for branded anti-MRSA hospital antibiotics (c 85%, according to IQVIA, September 2023), see Exhibit 2.

Exhibit 2: The US represents the most important region for the anti-MRSA treatment market

Source: Basilea FY23 results presentation. Notes: LOE, loss of exclusivity; ROW, rest of world; MAT, moving annual total. Both daptomycin and ceftaroline are FDA approved anti-MRSA antibiotic therapies.

Targeted entry to the US

Basilea submitted the new drug application (NDA) for Zevtera in August 2023 and in October 2023, the company announced that the FDA had accepted its NDA, setting a PDUFA date of 3 April 2024 (Exhibit 3). Basilea is seeking approval based on positive clinical efficacy and safety data from three separate studies:

ERADICATE (for Staphylococcus aureus bacteraemia, or SAB);

TARGET (for acute bacterial skin and skin structure infections, or ABSSSI); and

a Phase III trial (for community-acquired bacterial pneumonia, or CABP).

The Phase III programme for Zevtera was majority funded by the Biomedical Advanced Research and Development Authority (BARDA), whereby it provided c $112m to fund the SAB and ABSSSI clinical studies (c 75% of the costs), alongside related regulatory activities and non-clinical work. We note that the ERADICATE trial, the results of which were recently published in the New England Journal of Medicine, was the largest double-blind, randomised registrational study conducted for a new SAB antibiotic treatment, which we believe that regulators should view favourably. We note that the FDA has already granted qualified infectious disease product (QIDP) designation to ceftobiprole, allowing up to 10 years of market exclusivity in the US, provided Basilea obtains regulatory approval. Management has communicated that it aims to enter a partnership for commercialisation in the US ahead of the 3 April 2024 PDUFA date.

Exhibit 3: NDA review process for Zevtera

Source: Basilea FY23 results presentation

Cresemba continuing to hold the fort…

Cresemba continues to be the flag bearer for Basilea’s operating performance, reporting another strong year of sales. FY23 was the best year yet from Cresemba, with the company netting CHF78.9m in Cresemba-related royalties (c 21% growth over the FY22 figure of CHF65m). In addition, Cresemba recorded CHF32.2m in milestone payments in FY23, including CHF26.2m from Pfizer (which included a $25m sales milestone from Europe and another three payments of $1.25m each in sales milestones for other European territories and China; totalling $28.75m, which translates to CHF26.2m at prevailing forex rates at the time of receipt), a CHF5m milestone from Asahi following Cresemba’s launch in Japan and another CHF1m in a first sales milestone from its distribution partner in Latin America, Knight Therapeutics. Collectively, these milestone payments cover various regions, highlighting the commercial success of the antifungal therapy worldwide. We also note that Basilea’s reporting currency (the Swiss franc) has been strengthening against other major currencies recently, making the top-line growth rate even more impressive on a like-for-like basis. This performance has been driven by the continued uptrend in Cresemba’s in-market sales, which reached $445m in the 12 months ending September 2023, c 22% y-o-y growth (Exhibit 4). Management has indicated that this includes growing traction from the Chinese market, where the drug was launched in 2022.

Exhibit 4: Cresemba in-market sales uptake

Source: Basilea FY23 results presentation. Note: MAT, moving annual total.

Based on US licensing partner Astellas’s reported sales figure for Cresemba in 2023 ($261m, 22.5% y-o-y growth from $213m in 2022), we calculate that the US is contributing close to 60% of Cresemba’s in-market sales, which highlights the continued importance of this key market. We note that Cresemba is the market-leading antifungal treatment in the US, accounting for 38% of US market share (in value terms) in best-in-class antifungals (31% market share in 2022), see Exhibit 5. By end 2023, Cresemba had been approved in 76 countries and marketed in 73, capturing 15% of the global market (Exhibit 6).

Exhibit 5: Cresemba US market share

Exhibit 6: Cresemba global market share

Source: Basilea corporate presentation, February 2024

Source: Basilea corporate presentation, February 2024

Exhibit 5: Cresemba US market share

Source: Basilea corporate presentation, February 2024

Exhibit 6: Cresemba global market share

Source: Basilea corporate presentation, February 2024

With sales in China and Japan tracking up (accounting for 20% and 5% of the global market opportunity for Cresemba, respectively), recent label expansion in paediatric patients in the US (which extends market exclusivity to September 2027) and a decision expected from the European Commission on paediatric expansion in mid-2024 (slightly later than prior guidance of Q124), we expect Cresemba sales to continue to increase until the loss of market exclusivity in late 2027.

While we expect some sales erosion from 2028 in the US and European markets, management is optimistic that its newly acquired asset, fosmanogepix, could be a worthy successor to Cresemba. We note that although Cresemba’s market exclusivity ends in the US and EU in 2027, it was launched later in other regions like Japan and China (comprising c 26% of Cresemba’s global potential) and revenues generated from these regions could grow beyond 2027.

…But a changing of guard is imminent

In the near term…

Fosmanogepix, a Phase III-ready, broad-spectrum antifungal therapy, is Basilea’s most advanced asset from its latest collection of new candidates, for which the company plans to commence Phase III trials from mid-2024. It has already received fast track, orphan drug and QIDP designations from the FDA. The drug was acquired from Amplyx Pharmaceuticals, an affiliate of Pfizer. We note that Basilea has already established a relationship with Pfizer as a collaborator in the commercialisation of Cresemba in parts of Europe, China and the Asia-Pacific region. We also note that Pfizer continues to hold the right of first negotiation for commercial rights for fosmanogepix, which we believe it will exercise (although it is not binding on Basilea), provided clinical data are favourable. Deal considerations for fosmanogepix include an upfront payment of $37m and potential milestone payments of up to $506m ($110m to Pfizer and $396m from previous agreements), the majority of which relate to regulatory and commercial milestones, as well as tiered single-digit royalties.

In our view, fosmanogepix has the potential to differentiate itself from currently approved antifungal therapies on multiple fronts. For example, it is being developed in both oral and IV formulations, which we believe could improve patient compliance as it may be administered in both inpatient and outpatient settings. This differs from the majority of antifungal therapies used as current standards of care, which are typically only available as IV formulations. Additionally, fosmanogepix has a novel mechanism of action, a key differentiator in our view, making it a promising new treatment option to combat antifungal resistance, an ongoing medical challenge. To further corroborate this, we highlight that fosmanogepix has already demonstrated activity against the pathogens listed in the World Health Organization’s critical priority group. Fosmanogepix also appears to have the broadest potential compared to alternative emerging therapies in clinical development, based on a comparative analysis (performed by management) of activity against different fungal strains (Exhibit 7).

For a detailed discussion of fosmanogepix and how it fits into Basilea’s portfolio of anti-infectives, please see our previous update note.

Exhibit 7: Broad potential of fosmanogepix

Source: Basilea FY23 results presentation

The planned Phase III programme for fosmanogepix will comprise two separate clinical studies, which we expect to have a duration of approximately three to four years:

For the treatment of candidemia and invasive candidiasis, the trial is planned as a randomised, double-blind, non-inferiority study, aiming to recruit c 450 participants. The trial will compare fosmanogepix (starting with IV administration, with step-down to the oral formulation) to caspofungin (starting with IV administration with step-down to fluconazole). The primary endpoints that have been agreed with the regulators will be survival at 30 days for the FDA (covering the US region) and overall response at end-of-study treatment for the European Medicines Agency (covering the EU region). Management has already obtained protocol and initial health authority approvals and expects this Phase III trial to commence in mid-2024.

For the treatment of invasive mould infections, the trial is planned to be a randomised, open-label study including a non-controlled salvage treatment arm, aiming to recruit c 200 participants. The trial will compare fosmanogepix (IV or oral formulations) with the best available therapies for cohorts of invasive mould diseased caused by Aspergillus spp., Fusarium spp., Scedosporium spp., Lomentospora prolificans, Mucorales fungi or other multidrug-resistant moulds. Planned endpoints include survival and overall response, and management plans to initiate this Phase III trial by end-2024.

…and more to come

BAL2062 was acquired from Gravitas Therapeutics (original patent owned by Astellas Pharma) and is a Phase II-ready antifungal candidate for the treatment of invasive Aspergillus infections. The drug has already received fast track, orphan drug and QIDP designations from the FDA for invasive aspergillosis, which in our view provides a strong foundation for further clinical development efforts. It has demonstrated clinical safety and tolerability in a Phase I study and is being developed as an IV formulation, and we note that it has a novel mechanism of action (Exhibit 8). Basilea plans to conduct a preclinical profiling programme to ascertain the optimal clinical development path for BAL2062. Phase II studies are scheduled to commence on successful completion of the preclinical work from 2025, for which management has communicated that it intends to target the first-line setting for invasive aspergillosis.

Tonabacase is being evaluated as part of a licence and option agreement with iNtRON Biotechnology. Tonabacase is an antibacterial therapy of the endolysin class for severe Staphylococcus infections, potentially offering advantages over conventional antibiotics (Exhibit 9). As part of the agreement, Basilea is evaluating the drug across various preclinical studies. If the results are favourable, this may lead to a licensing agreement for further clinical development. We note that this decision is at Basilea’s exclusive discretion. Management has communicated that it plans to complete these preclinical studies (including pharmacokinetic and pharmacodynamic profiling) by end 2024 and, if in-licensed, Phase II studies could commence from H225.

Exhibit 8: BAL2062 – intracellular targeting

Exhibit 9: Tonabacase – endolysin effects on gram-negative bacteria

Source: Basilea FY23 results presentation

Source: Basilea FY23 results presentation

Exhibit 8: BAL2062 – intracellular targeting

Source: Basilea FY23 results presentation

Exhibit 9: Tonabacase – endolysin effects on gram-negative bacteria

Source: Basilea FY23 results presentation

An antibiotic programme asset purchase agreement with Spexis was announced in January 2024. As part of the agreement, Basilea will pay Spexis up to CHF2m, consisting of an upfront payment, an asset-transfer payment and a potential final milestone payment related to the availability of near-term funding for further development efforts. The programme is focused on a novel class of compounds targeting gram-negative bacteria, which are highly resistant to antibiotics and hence remain a cause of significant morbidity and mortality worldwide.

Financials

Basilea produced a strong set of FY23 results, which beat company guidance and our estimates. Total revenue came in at CHF157.6m, ahead of the guided CHF154–157m. The figure included royalties of CHF78.9m for Cresemba (against guidance of CHF76m; FY22: CHF65m) underpinned by stronger than anticipated in-market sales ($445m for the 12 months ending September 2023) of the market-leading anti-infective drug. Top-line growth was also supported by CHF32.2m in milestone payments (CHF23.4m in FY22), including $28.75m in milestone payments by Pfizer, CHF5m by Asahi and another c CHF1m as a first sales milestone from its distribution partner, Knight Therapeutics, in Latin America. Product revenue for the year was CHF37.9m, c 16% y-o-y growth on CHF32.7m in FY22. With the conclusion of the Zevtera Phase III trials, reimbursements from BARDA have continued to fall (CHF4.2m in FY23 versus CHF8.4m in FY22).

Margin structure remained stable over the year, mirroring the trend seen in FY22. FY23 gross and operating margins were 83% and 12.2%, respectively, in line with the 83.3% and 12.5% recorded in FY22. In terms of absolute performance, opex increased by 6.7% to CHF111.6m in FY23 (albeit lower than the previously guided figure of CHF115m). R&D expense went up slightly to CHF77.9m (CHF73.8m in FY22), driven by increased investments in growing its clinical pipeline (c CHF40m according to management). This was offset by lower expenses related to Zevtera’s clinical development, following the conclusion of Phase III trials in 2023 and significantly lower expenses for the oncology projects, which were largely divested and stopped in 2022. SG&A expenses rose 9.6% to CHF33.8m, driven by commercialisation-related activities for Cresemba and Zevtera. Overall, Basilea reported an operating profit of CHF19.2m, materially ahead of the guided range of CHF11–15m and beating our estimate of CHF13.4m. Net income was CHF10.5m (FY22: CHF12.1m), materially higher than the guided range of CHF2–6m (our estimate was CHF5m).

Cash flow from operations for the period was CHF14.2m, doubling from the FY22 figure of CHF7.1m and contributing to cash and cash equivalents, restricted cash and short-term investments of CHF64.3m at year-end (CHF108.6m at end-FY22). We note that the cash balance includes the impact of additional investments in pipeline expansion and accelerated repayment of the CHF75m senior secured loan from Athyrium Capital (CHF59m of the CHF75m loan was repaid by the end of FY23, with the remaining CHF15.5m expected to be paid in Q124). Management has indicated that this early retirement of the loan will help save the company CHF1.5m in interest and fees (the loan bore an interest rate of 7.75% plus the lesser of the Swiss Average Rate Overnight or 3%, payable quarterly). Following this repayment, Basilea will be left with CHF97m in convertible notes on its books, which is due for repayment in 2027. If the cash position remains favourable, we believe the company may try to close this facility early as well.

With the FY23 results, Basilea also provided guidance for FY24.

Exhibit 10: Company guidance

CHFm

FY23 guidance

FY23 actual

FY24 guidance

Cresemba- and Zevtera-related revenue

147–150

150.3

c 180

Of which – royalty income

c 76

78.9

89

Total revenue

154–157

157.6

c 183

Cost of products sold

27

26.8

c 33

Operating expenses

115

111.6

c 120

Operating profit

11–15

19.2

c 30

Net profit

2–6

10.5

c 25

Source: Basilea corporate presentation, February 2024

We update our FY24 estimates to reflect management’s guidance. We now project revenues related to the two assets of CHF179.8m (slightly lower than our previous estimate of CHF182.1m). This includes a Cresemba-related royalty payment of CHF90.0m and milestones of CHF37.0m. We do not estimate any further reimbursements from BARDA in FY24. We project total revenue of CHF183.1m in FY24 (in line with management guidance and our previous estimate of CHF183.3m), although we concede that this figure may change as further clarity in relation to the regulatory decision on Zevtera and subsequent plans for commercialisation becomes available. Cost as a percentage of sales is now estimated to be 17.9% to mirror the historical trend (versus our previous estimate of 19.8%). We tweak our opex estimate (increasing it to CHF120m from CHF111m previously) to incorporate management’s higher R&D and SG&A expectations for the commencement of the Phase III trials for fosmanogepix and possible launch of Zevtera in the US in FY24, provided FDA approval is received. Overall, we now estimate FY24 operating profit of CHF30.3m (versus our previous estimate of CHF36.4m). In total, we expect an operating cash inflow of CHF22.1m, which, accounting for capex and the CHF15.5m outstanding under the Athyrium loan, results in a net cash inflow of CHF5.3m in FY24.

We introduce FY25 estimates, forecasting revenues of CHF204.8m (including CHF97.9m in royalties and CHF25m in milestones). However, the timing of milestone payments is difficult to predict and can vary over the period, so this figure is subject to change. We also estimate higher operating expenses (CHF130.7m), showing the full-year impact of both Phase III trials for fosmanogepix (expected to commence in mid-2024 and end-2024, respectively) and the possible entry of BAL2062 into the clinic in H125, as well as higher marketing costs following the potential launch of Zevtera in the US market. We do not factor in any inflows (upfront/licensing income) from a licensing deal for Zevtera, which could result in a change to our forecasts as the details become available. We believe Basilea is sufficiently capitalised to fund operations through internally generated cash flows in the foreseeable future.

Valuation

With the FY23 results, we have rolled forward our model and incorporated the latest net debt figure of CHF46.6m (including restricted cash). Along with the changes to our estimates discussed above, this results in our valuation for Basilea upgrading to CHF968.0m or CHF80.7 per share (from CHF910.4m or CHF76.0/share previously).

For Cresemba, our peak sales estimate is broadly unchanged at $686m, although the rNPV goes down to CHF600.2m (from CHF633.7m) as the asset approaches maturity. For Zevtera, we have made certain adjustments to our expected sales ramp for the drug in the US, which results in our rNPV increasing to CHF299.9m (CHF181.9m previously). We continue to anticipate peak sales of c $581m for the drug. For fosmanogepix, a recent addition to our valuation, we estimate peak sales of $802m (across the two targeted indications) but have made certain tweaks to our growth estimates, which results in our net present value (NPV) and risk-adjusted NPV changing slightly to CHF235.0m and CHF114.4m (from CHF248.2m and CHF133.0m previously) based on a 60% probability of success.

Note that our valuation does not currently consider the other two recently acquired Phase I assets, BAL2062 (invasive aspergillosis) and tonabacase (severe staphylococcal infections), which are both expected to commence Phase II trials in 2025 (the former in H125). As these programmes progress, they may add additional upside to our valuation, which is shown in Exhibit 11.

Exhibit 11: Basilea Pharmaceutica valuation

Product

Indication

Launch

Peak sales
($m)

NPV
(CHFm)

Probability

rNPV
(CHFm)

rNPV/share (CHF)

Cresemba (isavuconazole)

Severe fungal infections

2015 (US); 2016 (EU); 2018 (RoW); 2022 (China): 2023 (Japan)

686

600.2

100%

600.2

50.0

Zevtera/Mabelio (ceftobiprole)

Severe bacterial infections

2015 (EU); 2018 (RoW); 2024 (US)

581

319.4

90–100%

299.9

25.0

Fosmanogepix

Severe fungal infections

2029 (US, EU and Japan), 2030 (RoW)

802

235.0

60%

114.4

9.5

Net debt at end December 2023

 

 

(46.6)

100%

(46.6)

(3.9)

Valuation

 

 

 

1,108.0

 

968.0

80.7

Source: Edison Investment Research

Exhibit 12: Financial summary

Accounts: US GAAP, year-end: 31 December, CHF’000s

 

 

2021

2022

2023

2024e

2025e

PROFIT & LOSS

 

 

 

 

 

 

 

Total revenues

 

 

148,122

147,765

157,634

183,101

204,789

Product revenues (Cresemba and Zevtera)

 

 

131,382

122,315

150,275

179,801

201,489

Cost of sales

 

 

(24,072)

(24,603)

(26,794)

(32,797)

(39,962)

Gross profit

 

 

124,050

123,162

130,840

150,304

164,827

Research and development expenses (net)

 

 

(93,157)

(73,804)

(77,852)

(84,894)

(92,343)

SG&A costs

 

 

(29,721)

(30,815)

(33,783)

(35,152)

(38,326)

Exceptionals and adjustments

 

 

15

0

0

0

0

EBITDA (reported)

 

 

1,941

19,640

20,782

31,465

35,443

Reported operating income

 

 

1,187

18,543

19,205

30,258

34,159

Operating margin %

 

 

0.8%

12.5%

12.2%

16.5%

16.7%

Finance income/(expense)

 

 

(7,982)

(6,441)

(8,744)

(5,021)

(4,624)

Profit before tax (reported)

 

 

(6,795)

12,102

10,461

25,238

29,535

Profit before tax (normalised)

 

 

(6,610)

12,302

10,761

25,529

29,838

Income tax expense (includes exceptionals)

 

 

(37)

45

(10)

0

0

Net income (reported)

 

 

(6,832)

12,147

10,451

25,238

29,535

Net income (normalised)

 

 

(6,647)

12,347

10,751

25,529

29,838

Basic average number of shares, m

 

 

11.68

11.86

11.99

11.99

11.99

Basic EPS (CHFc)

 

 

(58.5)

102.4

87.2

210.5

246.3

Adjusted EPS (CHFc)

 

 

(56.9)

104.1

89.7

212.9

248.8

Dividend per share (CHFc)

 

 

0

0

0

0

0

BALANCE SHEET

 

 

 

 

 

 

 

Restricted cash

 

 

0

22,000

0

0

0

Tangible assets

 

 

2,018

4,277

3,757

3,942

4,061

Intangible assets

 

 

632

578

548

457

354

Long-term investments

 

 

2,390

1,266

0

0

0

Other non-current assets

 

 

1,161

17,363

16,839

16,839

16,839

Total non-current assets

 

 

6,201

45,484

21,144

21,238

21,254

Cash and equivalents

 

 

53,700

84,659

59,933

65,273

90,218

Restricted cash

 

 

1,253

1,908

4,389

4,389

4,389

Short-term investments

 

 

95,000

0

0

0

0

Inventories

 

 

22,783

24,244

26,410

32,327

39,389

Trade and other receivables

 

 

24,947

33,152

27,891

32,397

36,234

Other current assets

 

 

43,383

31,401

33,522

33,522

33,522

Total current assets

 

 

241,066

175,364

152,145

167,908

203,752

Convertible senior unsecured bonds (long-term)

 

 

94,544

95,000

95,455

95,455

95,455

Senior secured loan

 

 

0

36,360

0

0

0

Deferred revenue

 

 

11,926

10,693

9,460

9,460

9,460

Non-current operating lease liabilities

 

 

10

16,323

15,636

15,636

15,636

Other non-current liabilities

 

 

24,986

8,337

15,149

15,149

15,149

Total non-current liabilities

 

 

131,466

166,713

135,700

135,700

135,700

Convertible senior unsecured bonds (short-term)

 

 

123,505

0

0

0

0

Senior secured loan

 

 

0

37,467

15,453

0

0

Accounts payable

 

 

10,617

191

5,847

7,157

8,720

Deferred revenue

 

 

1,233

1,233

1,233

1,233

1,233

Current operating lease liabilities

 

 

896

1,988

2,062

2,062

2,062

Other current liabilities

 

 

38,157

33,971

22,997

22,997

22,997

Total current liabilities

 

 

174,408

74,850

47,592

33,449

35,012

Net assets

 

 

(58,607)

(20,715)

(10,003)

19,997

54,294

CASH FLOW STATEMENT

 

 

 

 

 

 

 

Reported net income

 

 

(6,831)

12,147

10,451

25,238

29,535

Depreciation and amortisation

 

 

754

1,097

1,577

1,206

1,284

Share based payments

 

 

4,322

3,598

4,762

4,762

4,762

Other adjustments

 

 

1,522

497

1,443

0

0

Movements in working capital

 

 

(31,787)

(10,282)

(3,988)

(9,113)

(9,336)

Cash from operations (CFO)

 

 

(32,020)

7,057

14,245

22,093

26,244

Capex

 

 

(581)

(3,138)

(813)

(1,100)

(1,100)

Short-term investments

 

 

6,023

94,951

0

0

0

Long-term investments

 

 

0

0

0

0

0

Other investing activities

 

 

(1,867)

(165)

(221)

(200)

(200)

Cash used in investing activities (CFIA)

 

 

3,575

91,648

(1,034)

(1,300)

(1,300)

Net proceeds from issue of shares

 

 

42,240

250

(381)

0

0

Movements in debt

 

 

(23,212)

(49,672)

(59,314)

(15,453)

0

Other financing activities

 

 

(2,388)

4,176

2,390

0

0

Cash from financing activities (CFF)

 

 

16,640

(45,246)

(57,305)

(15,453)

0

Cash and equivalents at beginning of period

 

 

66,256

54,952

108,566

64,322

69,662

Increase/(decrease) in cash and equivalents

 

 

(11,805)

53,459

(44,094)

5,340

24,944

Effect of FX on cash and equivalents

 

 

501

155

(151)

0

0

Cash and equivalents at end of period

 

 

54,952

108,566

64,321

69,662

94,607

Net (debt)/cash

 

 

(68,096)

(60,260)

(46,586)

(25,793)

(848)

Source: Company reports, Edison Investment Research


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

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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

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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