Currency in CHF
Last close As at 27/03/2023
CHF49.60
▲ −0.25 (−0.50%)
Market capitalisation
CHF653m
Research: Healthcare
On the heels of management’s January upward guidance revision, continued strong execution of Basilea’s outlined strategic plan (February 2022) has positioned the company to report (on a preliminary basis) its first year of operating and net profit. Management anticipates FY22 operating profit of c CHF18m, up from the previously guided CHF10–15m loss. We view this as a notable milestone for Basilea, which was achieved despite overall macro market challenges. The company continues to address an important unmet need in anti-infectives and its worldwide traction of the company’s antifungal product, Cresemba (isavuconazole), is a key driver of revenue. In FY23, we expect the company to maximize the potential of Zevtera in the US (new drug application filing anticipated in H123) while also refilling its development pipeline. Our valuation and financial estimates are under review and are expected to be updated following the release of full FY22 results on February 14.
Basilea Pharmaceutica |
Strong execution resulting in operating profitability |
Guidance update |
Pharma and biotech |
25 January 2023 |
Share price performance Business description
Analysts
Basilea Pharmaceutica is a research client of Edison Investment Research Limited |
On the heels of management’s January upward guidance revision, continued strong execution of Basilea’s outlined strategic plan (February 2022) has positioned the company to report (on a preliminary basis) its first year of operating and net profit. Management anticipates FY22 operating profit of c CHF18m, up from the previously guided CHF10–15m loss. We view this as a notable milestone for Basilea, which was achieved despite overall macro market challenges. The company continues to address an important unmet need in anti-infectives and its worldwide traction of the company’s antifungal product, Cresemba (isavuconazole), is a key driver of revenue. In FY23, we expect the company to maximize the potential of Zevtera in the US (new drug application filing anticipated in H123) while also refilling its development pipeline. Our valuation and financial estimates are under review and are expected to be updated following the release of full FY22 results on February 14.
Year end |
Revenue |
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 |
(6.6) |
(56.9) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The expected achievement of operating profitability tops a period of positive news flow for the company, including revised guidance, largely driven by Cresemba’s consistent expansion into new territories and revenue growth, and significant milestone payment receipts. Management recently guided that FY22 revenue related to Cresemba and Zevtera will be c CHF122m (FY21: CHF131m), exceeding the high end of its previous guidance by c 17%. The guided FY22 operating profit of c CHF18m includes one-time proceeds for the sale of Basilea’s oncology assets. Altogether, the company’s preliminary unaudited FY22 profit announcement increases our confidence that Basilea will be profitable (on a recurring basis) at an operating level in FY23, one of management’s key strategic goals.
A key focus for growing shareholder value will be the in-licensing or acquisition of new anti-infective assets in FY23, as Cresemba’s patents are expected to carry through in major markets to 2027. Management is assessing external preclinical and clinical stage anti-infective opportunities, but the company is also progressing existing preclinical programmes, including a 1-deoxy-D-xylulose 5-phosphate reductor isomerase inhibitor programme, which is expected to reach a key preclinical decision point in FY23. We believe Basilea has had a strong start to FY23 and anticipate management will continue to consider and potentially negotiate licensing deals.
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Research: Healthcare
AFT Pharmaceuticals has announced an exclusive licensing and distribution agreement for the Maxigesic intravenous (IV) formulation with Salus Pharmaceuticals (a Slovenia-based wholesaler of pharmaceutical products) for nine Eastern European countries across the Balkan and Baltic regions. Maxigesic IV is already registered in five of the nine countries, with launches planned in CY23. AFT will also file registration applications for the remaining countries during the year. Maxigesic IV is registered in 41 countries globally and has been launched in more than 10, including the key markets of France and Italy in November 2022. As AFT awaits Maxigesic IV approval in the US, we see this new agreement as an encouraging step towards expanding its international presence, in line with its strategic priorities for CY23.
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