Currency in CHF
Last close As at 17/03/2023
CHF50.00
▲ −1.00 (−1.96%)
Market capitalisation
CHF668m
Research: Healthcare
Basilea has announced the full repayment of the CHF113.8m outstanding amount under its 2.75% convertible bonds due on 23 December 2022, supported by growing cash inflows from marked drugs and the CHF75m senior secured loan raised in September 2022. The repayment reduces the company’s indebtedness from ~CHF287m to CHF173m and had been reflected in our estimates and valuation. FY22 has been characterised by Basilea’s efforts to right-size itself (focus on anti-infectives and sale of oncology assets) and the debt repayment should further improve investor sentiment. This news follows the recent announcement of licensing partner Asahi Kasei receiving marketing approval for Basilea’s flagship drug, Cresemba, in Japan, a key market for Basilea. Our valuation remains unchanged at CHF921.7m (CHF77.8/share).
Basilea Pharmaceutica |
Third leg of strategy executed with debt repayment |
Funding update |
Pharma and biotech |
4 January 2023 |
Share price performance Business description
Analysts
Basilea Pharmaceutica is a research client of Edison Investment Research Limited |
Basilea has announced the full repayment of the CHF113.8m outstanding amount under its 2.75% convertible bonds due on 23 December 2022, supported by growing cash inflows from marked drugs and the CHF75m senior secured loan raised in September 2022. The repayment reduces the company’s indebtedness from ~CHF287m to CHF173m and had been reflected in our estimates and valuation. FY22 has been characterised by Basilea’s efforts to right-size itself (focus on anti-infectives and sale of oncology assets) and the debt repayment should further improve investor sentiment. This news follows the recent announcement of licensing partner Asahi Kasei receiving marketing approval for Basilea’s flagship drug, Cresemba, in Japan, a key market for Basilea. Our valuation remains unchanged at CHF921.7m (CHF77.8/share).
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 |
12/22e |
120.7 |
(14.6) |
(123.2) |
0.0 |
N/A |
N/A |
12/23e |
131.3 |
9.0 |
66.0 |
0.0 |
0.72 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The 2022 convertible debt (initial aggregate principal amount of CHF200m; net proceeds of CHF194.7m) was issued in December 2015 to existing shareholders and institutional investor and was partially repurchased in July 2020 (CHF47.1m through a tender) and between Q420 and 2022 (CHF38.6m). The December 2022 repayment was financed by cash on hand as well as the CHF75m senior secured loan raised in September 2022 with Athyrium Capital Management. We see the company’s ability to honour its debt repayment obligations without resorting to equity conversion (and the associated dilution) as a positive catalyst for Basilea.
As a reminder, FY22 has been marked by Bailea’s focus to become a pure-play anti-infectives company, driven by its core assets Cresemba and Zevtera, as it continues to execute its strategy to dispose of and monetise its oncology pipeline. As part of this right-sizing, Basilea has out-licensed its kinase inhibitor BAL0891 to SillaJen and sold its PARG inhibitor discovery programme to Nodus Oncology as well as its preclinical CLK kinase inhibitors to Twentyeight-Seven Therapeutics.
We continue to expect future revenue growth to be driven by global Cresemba sales (global sales of US$352m in the 12 months between July 2021 and June 2022) and see the recent market authorisation received by partner Asahi Kasei in Japan as another key catalyst given the commercial potential for new antifungals in the market. In addition, potential approval of Zevtera in the United States (we now expect the new drug application submission in early 2023, from the previously communicated expectation of around year-end 2022), following positive Phase III results in bloodstream infections in June 2022, should be another key milestone as the company strives to turn profitable in 2023. We maintain our valuation of CHF921.7m or CHF77.8/share.
|
|
Research: Healthcare
Medlab Clinical moves a step closer to realising its plans for a secondary listing on the Nasdaq following filing of the IPO registration statement with the US Securities and Exchange Commission. As part of the offering, the company plans to issue c 1.8m share units (ordinary shares plus an equivalent number of warrants) at US$4.45/share and c 1.8m pre-funded warrants at US$4.4999/unit (nominal exercise price of US$0.0001/unit) to raise c US$8m in gross IPO proceeds (c US$7m net). Following this announcement, we believe that Medlab remains on track to meet its Q1 CY23 target for the listing. We expect the funds raised to be used in supporting the upcoming investigational new drug (IND) submission for NanaBis in the United States (to commence Phase III trials) and progressing Medlab’s development pipeline. We will update our valuation (currently A$236.1m or A$103.5/share) following the US listing.
Get access to the very latest content matched to your personal investment style.