Currency in CHF
Last close As at 02/06/2023
CHF45.90
▲ −0.15 (−0.33%)
Market capitalisation
CHF601m
Research: Healthcare
Basilea announced another successful oncology asset sale as a part of its strategic plan to focus on its core anti-infectives business. The company is anticipated to receive up to CHF3.0m in upfront and near-term milestones for its novel preclinical inhibitors of CLK kinases from Twentyeight-Seven (28-7) Therapeutics, a privately held US biotech. The deal will see Basilea with potential future development, regulatory and sales milestones payments of up to CHF351m. This is the third oncology sale in H222, and we view this latest development as a positive indicator for management realising its aim for the separation of its oncology business by end-FY22. We maintain our valuation of Basilea at CHF903.5m or CHF76.3/share.
Basilea Pharmaceutica |
Third oncology asset sale announced, as planned |
Strategic update |
Pharma and biotech |
2 November 2022 |
Share price performance Business description
Analysts
Basilea Pharmaceutica is a research client of Edison Investment Research Limited |
Basilea announced another successful oncology asset sale as a part of its strategic plan to focus on its core anti-infectives business. The company is anticipated to receive up to CHF3.0m in upfront and near-term milestones for its novel preclinical inhibitors of CLK kinases from Twentyeight-Seven (28-7) Therapeutics, a privately held US biotech. The deal will see Basilea with potential future development, regulatory and sales milestones payments of up to CHF351m. This is the third oncology sale in H222, and we view this latest development as a positive indicator for management realising its aim for the separation of its oncology business by end-FY22. We maintain our valuation of Basilea at CHF903.5m or CHF76.3/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 |
110.0 |
(15.3) |
(129.5) |
0.0 |
N/A |
N/A |
12/23e |
128.8 |
6.4 |
47.0 |
0.0 |
99.8 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
As a reminder, Basilea is focused on becoming a pure-play anti-infectives company (core assets, including Cresemba and Zevtera), and a key element of this pivot lies in the monetisation of its existing oncology asset pipeline. Following on from the recent agreements with Nodus Oncology, to acquire Basilea’s preclinical poly (ADP-ribose) glycohydrolase (PARG) discovery programme, and SillaJen, for BAL0891, a tyrosine kinase/polo-like kinase 1 (TTK/PLK1) inhibitor, the CLK deal becomes the latest development in the company executing its refreshed strategy.
The announced partner, 28-7 Therapeutics, has a wide-ranging preclinical oncology pipeline, primarily focused on the development of small-molecule inhibitors that regulate DNA and RNA expression. We believe 28-7 Therapeutic’s focus on oncology and, more specifically, its experience in CLK inhibitors, provides a strategic fit for the future development of Basilea’s CLK programme. Basilea’s remaining oncology asset is lisavanbulin, currently in a Phase II open-label study for the treatment of recurrent glioblastoma (an aggressive form of brain cancer). Management continues to explore partnering opportunities for lisavanbulin and maintains that no material expenses related to oncology will be incurred in FY23.
As a recap, we continue to 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 United States (expected New Drug Application submission around year-end), following positive Phase III results in bloodstream infections in June 2022. Basilea’s strong execution is reflected in the consecutive announcements and provides confidence in the timelines outlined in its strategic plan, including the repayment of its outstanding convertible debt in December 2022 and plans to turn operationally profitable in FY23. We maintain our valuation of CHF903.5m or CHF76.3/share.
|
|
Research: Healthcare
ReNeuron is a UK-based stem cell research company now strategically re-focused on the development of its exosome drug delivery technologies. Recent encouraging preclinical proof-of-concept data demonstrated the potential of ReNeuron’s exosomes to deliver complex therapeutic payloads with high tissue specificity. Drug delivery remains a major challenge in both central nervous system (CNS) and cell and gene drug development, and we view these as key markets for ReNeuron to offer differentiation. Positive preclinical data have led to the signing of substantial licensing deals within the exosome market which, if acquired, would represent a significant catalyst for the share price. To date, the company has established seven discovery stage collaborations with pharma, biotech and academic institutions, through which its proprietary exosome platform is being investigated for application in targeted drug delivery. We value ReNeuron at £47.3m or 83p per share.
Get access to the very latest content matched to your personal investment style.