Currency in CHF
Last close As at 09/06/2023
CHF45.25
▲ 0.60 (1.34%)
Market capitalisation
CHF593m
Research: Healthcare
Management continues to execute its strategic plan and has announced the sale of its novel poly (ADP-ribose) glycohydrolase (PARG) inhibitor discovery programme to Nodus Oncology, a UK-based biotech company. Basilea is entitled to receive upfront and near-term milestone payments of CHF1m and potential future milestone payments up to CHF241m in total, in addition to royalty payments of ~5% in net sales. The transaction is part of the company’s broader strategy to cease oncology activities by the end of 2022 to focus on its core anti-infectives business. We anticipate the company to continue to monetise the balance of its oncology assets in the near future. Our valuation of Basilea remains unchanged at CHF893.8m or CHF75.5/share.
Basilea Pharmaceutica |
Strategic streamlining – sale of oncology assets |
Strategic update |
Pharma and biotech |
9 September 2022 |
Share price performance Business description
Analysts
Basilea Pharmaceutica is a research client of Edison Investment Research Limited |
Management continues to execute its strategic plan and has announced the sale of its novel poly (ADP-ribose) glycohydrolase (PARG) inhibitor discovery programme to Nodus Oncology, a UK-based biotech company. Basilea is entitled to receive upfront and near-term milestone payments of CHF1m and potential future milestone payments up to CHF241m in total, in addition to royalty payments of ~5% in net sales. The transaction is part of the company’s broader strategy to cease oncology activities by the end of 2022 to focus on its core anti-infectives business. We anticipate the company to continue to monetise the balance of its oncology assets in the near future. Our valuation of Basilea remains unchanged at CHF893.8m or CHF75.5/share.
Year end |
Revenue (CHFm) |
PBT* (CHFm) |
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 |
23.6 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Basilea has entered into asset purchase agreement with Nodus Oncology to sell its PARG inhibitor discovery programme. The financial terms of the agreement include upfront and near-term research milestone payments worth CHF1m, along with additional payments of up to CHF241m related to predefined development goals, regulatory and sales milestones, and royalty payments of approximately 5% in net sales. As a reminder, PARG is a key enzyme in repairing DNA damage and is essential for tumour cells to grow.
The monetisation of this oncology asset is the second leg of the company’s strategy to focus on its core anti-infectives assets, including Cresemba and Zevtera. Management is anticipated to optimise the balance of its oncology pipeline through separate strategic transactions with experienced oncology players.
The company has two remaining clinical oncology assets (lisavanbulin and BAL0891). The company has stated that it is in partnering discussions for BAL0891 and its second pre-clinical programme and plans to finalise these transactions before end-2022.
This announced transaction appears to complement Nodus Oncology’s business, which is focused on molecules inhibiting novel DNA damage response targets. Nodus plans to further partner with Lead Discovery Center (Germany-based pharmaceutical early-stage research company) to continue the development of this programme.
Basilea’s strong execution is reflected in the consecutive announcements (see our previous note To retire converts with senior secured and cash) and provides confidence in the timelines outlined in its strategic plan. We maintain our valuation of CHF893.8m or CHF75.5/share.
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Research: Healthcare
Shield Therapeutics reported H122 results reflecting the fact that its commercial activities for Accrufer are bearing fruit. US total prescriptions soared fourfold to 11,223 compared to H221, including an 87% q-o-q increase in Q222. This compares well with our existing and unchanged forecast for 26,700 prescriptions for 2022. We maintain our long-term Accrufer growth assumptions, and continued successful execution could lead to material upside in the shares, in our view, but we reiterate that Shield will need additional capital to execute its growth plans.
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