Last close As at 05/08/2026
CHF50.70
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Market capitalisation
CHF681m
Research: Healthcare
Basilea’s H122 revenues of CHF58.7m were roughly in-line with our annualised estimates (FY22e: CHF110m) and company guidance, including CHF28.9m in royalty payments from sales of Cresemba (H121: CHF23.6m, a 22.5% increase). We see this as a positive sign for the company as we expect Cresemba royalties to provide important support for the top-line. Following positive results from the Phase III ERADICATE study in June 2022 and winding down of oncology activities in H122, R&D expenses fell to CHF37.1m (from CHF41.7m in H121) resulting in a reduction in the operating loss to CHF9.0m, 42% lower than H121 (CHF15.4m). We see this as encouraging support for management’s goal of reaching operating profitability in FY23. Basilea reduced its December 2022-maturing convertible bond position by CHF6.6m in H122 and we expect further information on the company’s debt strategy in H222. Our financial estimates are affected only by our updated FX rate assumptions. We value Basilea at CHF893.8 or CHF75.5/share (previously CHF886.7m or CHF74.9/share).
Written by
Basilea Pharmaceutica |
On track for operating profitability in FY23 |
H122 results |
Pharma and biotech |
17 August 2022 |
Share price performance
Business description
Next events
Analysts
Basilea Pharmaceutica is a research client of Edison Investment Research Limited |
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Basilea’s H122 revenues of CHF58.7m were roughly in-line with our annualised estimates (FY22e: CHF110m) and company guidance, including CHF28.9m in royalty payments from sales of Cresemba (H121: CHF23.6m, a 22.5% increase). We see this as a positive sign for the company as we expect Cresemba royalties to provide important support for the top-line. Following positive results from the Phase III ERADICATE study in June 2022 and winding down of oncology activities in H122, R&D expenses fell to CHF37.1m (from CHF41.7m in H121) resulting in a reduction in the operating loss to CHF9.0m, 42% lower than H121 (CHF15.4m). We see this as encouraging support for management’s goal of reaching operating profitability in FY23. Basilea reduced its December 2022-maturing convertible bond position by CHF6.6m in H122 and we expect further information on the company’s debt strategy in H222. Our financial estimates are affected only by our updated FX rate assumptions. We value Basilea at CHF893.8 or CHF75.5/share (previously CHF886.7m or CHF74.9/share).
Year end |
Revenue (CHFm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
127.6 |
(29.6) |
(288.5) |
0.0 |
N/A |
N/A |
12/21 |
148.1 |
(6.61) |
(56.9) |
0.0 |
N/A |
N/A |
12/22e |
110.0 |
(29.5) |
(249.5) |
0.0 |
N/A |
N/A |
12/23e |
128.8 |
14.5 |
164.6 |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Cresemba royalty growth supports revenues
Continued growth in Cresemba royalties should support the company’s top line going into FY23. We expect future revenue growth to be driven by global Cresemba sales (the approval for Chinese state reimbursement will be an important catalyst) and the potential approval of Zevtera in the US (expected NDA submission in H222), following positive Phase III results in bloodstream infections in June 2022.
Targeting sustainable profitability in FY23
Management has confirmed that it expects a c 30% reduction in R&D expenses in FY23, due largely to the expected strategic exit from the oncology portfolio by end-FY22. R&D expenses for H122 were CHF37.1m; 11% lower than H121. We anticipate FY22 R&D figures will be roughly in-line with this as oncology activities cease and we have adjusted our forecast expense distribution accordingly. We continue to expect the company to reach operating profitability in FY23.
Valuation: CHF893.8 or CHF75.5/share
We have updated or model to reflect the H122 results and value Basilea at CHF893.8 or CHF75.5/share (CHF886.7m or CHF74.9/share previously). We include a net debt position of CHF71.2m at end-June 2022. Over H122, Basilea reduced its December 2022-maturing convertible bond position by CHF6.6m, we expect management to provide more information on its debt strategy in H222.
Exhibit 1: Financial summary
Accounts: US GAAP, Yr end: December 31, CHF:000s |
|
2019 |
2020 |
2021 |
2022e |
2023e |
|
PROFIT & LOSS |
|
|
|
|
|
|
|
Total revenues |
|
|
134,381 |
127,629 |
148,122 |
110,021 |
128,820 |
Product revenues (Cresemba and Zevtera) |
|
|
114,461 |
112,032 |
131,382 |
102,859 |
124,673 |
Cost of sales |
|
|
(18,868) |
(24,054) |
(24,072) |
(21,722) |
(26,135) |
Gross profit |
|
|
115,513 |
103,575 |
124,050 |
88,300 |
102,685 |
Research and development expenses (net) |
|
|
(102,662) |
(97,410) |
(93,157) |
(73,111) |
(63,751) |
SG&A costs |
|
|
(30,051) |
(29,422) |
(29,721) |
(36,894) |
(16,607) |
Other income/(expense) |
|
|
0 |
0 |
0 |
0 |
0 |
Exceptionals and adjustments |
|
|
0 |
15,035 |
15 |
0 |
0 |
EBITDA (reported) |
|
|
(15,561) |
(7,032) |
1,941 |
(20,992) |
23,077 |
Reported operating income |
|
|
(17,200) |
(8,222) |
1,187 |
(21,705) |
22,327 |
Operating margin % |
|
|
n/a |
n/a |
n/a |
n/a |
n/a |
Finance income/(expense) |
|
|
(5,182) |
(6,445) |
(7,982) |
(8,037) |
(8,014) |
Exceptionals and adjustments |
|
|
0 |
0 |
0 |
0 |
0 |
Profit before tax (reported) |
|
|
(22,382) |
(14,667) |
(6,795) |
(29,742) |
14,313 |
Profit before tax (normalised) |
|
|
(22,282) |
(29,602) |
(6,610) |
(29,542) |
14,520 |
Income tax expense (includes exceptionals) |
|
|
(40) |
(55) |
(37) |
0 |
4,968 |
Net income (reported) |
|
|
(22,422) |
(14,722) |
(6,832) |
(29,742) |
19,281 |
Net income (normalised) |
|
|
(22,322) |
(29,657) |
(6,647) |
(29,542) |
19,488 |
Basic average number of shares, m |
|
|
10.8 |
10.3 |
11.7 |
11.8 |
11.8 |
Basic EPS (CHF c) |
|
|
(208.5) |
(143.2) |
(58.5) |
(251.2) |
162.8 |
Adjusted EPS (CHF c) |
|
|
(207.5) |
(288.5) |
(56.9) |
(249.5) |
164.6 |
Dividend per share (CHF c) |
|
|
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
Tangible assets |
|
|
5,162 |
2,627 |
2,018 |
3,129 |
3,586 |
Intangible assets |
|
|
372 |
672 |
632 |
1,137 |
1,130 |
Long-term investments |
|
|
30,000 |
0 |
2,390 |
2,390 |
2,390 |
Other non-current assets |
|
|
1,073 |
2,967 |
1,161 |
19,405 |
19,405 |
Total non-current assets |
|
|
36,607 |
6,266 |
6,201 |
26,061 |
26,511 |
Cash and equivalents |
|
|
109,024 |
60,749 |
53,700 |
38,642 |
50,919 |
Short-term investments |
|
|
20,000 |
101,023 |
95,000 |
94,990 |
94,980 |
Inventories |
|
|
18,569 |
21,192 |
22,783 |
20,559 |
24,735 |
Trade and other receivables |
|
|
6,242 |
8,710 |
24,947 |
18,530 |
21,696 |
Other current assets |
|
|
31,025 |
31,854 |
44,636 |
40,136 |
40,136 |
Total current assets |
|
|
184,860 |
223,528 |
241,066 |
212,856 |
232,466 |
Convertible senior unsecured bonds (long-term) |
|
|
197,740 |
239,668 |
94,544 |
219,145 |
219,145 |
Deferred revenue |
|
|
16,471 |
13,158 |
11,926 |
6,436 |
946 |
Non-current operating lease liabilities |
|
|
548 |
896 |
10 |
18,254 |
18,254 |
Other non-current liabilities |
|
|
24,174 |
27,957 |
24,986 |
24,986 |
24,986 |
Total non-current liabilities |
|
|
238,933 |
281,679 |
131,466 |
268,821 |
263,331 |
Convertible senior unsecured bonds (short-term) |
|
|
0 |
0 |
123,505 |
0 |
0 |
Accounts payable |
|
|
6,765 |
13,151 |
10,617 |
9,580 |
11,527 |
Deferred revenue |
|
|
32,873 |
2,556 |
1,233 |
5,490 |
5,490 |
Current operating lease liabilities |
|
|
352 |
1,752 |
896 |
896 |
896 |
Other current liabilities |
|
|
35,504 |
32,702 |
38,157 |
38,157 |
38,157 |
Total current liabilities |
|
|
75,494 |
50,161 |
174,408 |
54,123 |
56,070 |
Net assets |
|
|
(92,960) |
(102,046) |
(58,607) |
(84,027) |
(60,424) |
|
|
|
|
|
|
|
|
CASH FLOW STATEMENT |
|
|
|
|
|
|
|
Reported net income |
|
|
(22,422) |
(14,722) |
(6,831) |
(29,742) |
19,281 |
Depreciation and amortisation |
|
|
1,639 |
1,190 |
754 |
713 |
750 |
Share based payments |
|
|
3,048 |
3,525 |
4,322 |
4,322 |
4,322 |
Other adjustments |
|
|
758 |
(13,365) |
1,522 |
1,096 |
0 |
Movements in working capital |
|
|
(46,859) |
(30,762) |
(31,787) |
10,872 |
(10,886) |
Cash from operations (CFO) |
|
|
(63,836) |
(54,134) |
(32,020) |
(12,739) |
13,467 |
Capex |
|
|
(294) |
(1,823) |
(581) |
(1,624) |
(1,000) |
Short-term investments |
|
|
30,000 |
(51,023) |
6,023 |
10 |
10 |
Long-term investments |
|
|
(30,000) |
0 |
0 |
0 |
0 |
Other investing activities |
|
|
(110) |
17,883 |
(1,867) |
(705) |
(200) |
Cash used in investing activities (CFIA) |
|
|
(404) |
(34,963) |
3,575 |
(2,319) |
(1,190) |
Net proceeds from issue of shares |
|
|
0 |
0 |
42,240 |
0 |
0 |
Movements in debt |
|
|
0 |
43,451 |
(23,212) |
0 |
0 |
Other financing activities |
|
|
1,309 |
1,616 |
(2,388) |
0 |
0 |
Cash from financing activities (CFF) |
|
|
1,309 |
45,067 |
16,640 |
0 |
0 |
Cash and equivalents at beginning of period |
|
|
173,908 |
111,044 |
66,256 |
54,953 |
39,895 |
Increase/(decrease) in cash and equivalents |
|
|
(62,931) |
(44,030) |
(11,805) |
(15,058) |
12,277 |
Effect of FX on cash and equivalents |
|
|
67 |
(758) |
501 |
0 |
0 |
Cash and equivalents at end of period |
|
|
111,044 |
66,256 |
54,952 |
39,895 |
52,172 |
Net (debt)/cash |
|
|
(68,716) |
(77,896) |
(69,349) |
(85,513) |
(73,246) |
Source: Basilea Pharmaceutica company accounts, Edison Investment Research
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|
Research: Investment Companies
European Opportunities Trust’s (EOT’s) manager, Alexander Darwall, invests in globally focused companies with unique technologies, favourable industry structures and multiple growth channels, with the aim of constructing a resilient portfolio capable of generating capital growth in all economic climates. EOT’s long-term performance is strong in absolute and relative terms, with average annualised returns of 11.4% on an NAV basis and 10.2% in share price terms over the 10 years to end-July 2022. This compares with a benchmark total return of 9.2%. Recent performance has improved notably after some setbacks in 2020 and 2021, providing confirmation of Darwall’s stock selection skills and vindication of his consistent, high-conviction, patient investment approach.