Edison Investment Research Limited: Edison issues outlook on Basilea Pharmaceutica (BSLN)

London, UK, 7 January 2020

Edison issues outlook on Basilea Pharmaceutica (BSLN)

Basilea Pharmaceutica is a revenue-generating biotech company that is on the cusp of breaking even (2021e) and sustainable profitability thereafter. It has successfully brought two anti-infective drugs to the market: Cresemba (severe mould infections) and Zevtera (bacterial infections). Combined revenue contributions (as reported by Basilea, both assets are commercialised through partners) are expected to exceed CHF105m in FY19. Longer-term value creation is also dependent on crystallising the mid/late-stage oncology portfolio. Basilea is investing for future growth; multiple datapoints on derazantinib are expected in 2020. If data from the registrational FIDES-01 are particularly positive, they could form the basis of an accelerated approval in iCCA. We value Basilea at CHF1.18bn.

Our revised valuation is CHF1.18bn vs CHF1.08bn or CHF100/share previously. We have increased derazantinib peak sales in iCCA and include the urothelial cancer indication for the first time, leading to valuation uplift. Our valuation is based on an NPV analysis for marketed products, a risk-adjusted NPV for the pipeline and net debt of CHF19.5m at 30 June 2019.  

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