Event – Basilea hopes its antifungal fits the mould

Basilea Pharmaceutica has two opportunities this year to steady the ship. Two pivotal trials for the antifungal isavuconazole will read out data in the second half of 2013, leading to a potential launch next year and a chance to unlock a royalty stream forecast to be worth $65m in 2018.

The Roche spin-out put all its eggs in the anti-infectives basket a year ago when it sold off its European approved eczema treatment, Toctino, to GlaxoSmithKline’s Stiefel division, a transaction that topped up cash coffers to the tune of $227m. Its investors now appear to be betting on a win in treating aspergillosis and rare mould infections – shares are up 60% since the beginning of 2013.

Company   Basilea Pharmaceutica
Product   isavuconazole
Market cap   $714m
Product NPV   $196m
% of market cap   27% 
Event type   Phase III trial results 
Date   H2 2013

Betting on the pipeline

Switzerland-based Basilea has been treading water for several years after the disaster of failed trials for its antibiotic ceftobiprole, or Zevtera.

Rejection in the US and Europe because of violations of good clinical practices at trial sites run by its partner Johnson & Johnson set back launch of the antibiotic, once reckoned a potential blockbuster, by several years (J&J hands back ceftobiprole to set Basilea free, February 19, 2010). European approval in pneumonia is expected in the fourth quarter.

European launch of Toctino and subsequent US trial success has been a blessing, but Basilea’s willingness to sell off global rights in the wake of that study was a sign of management’s view of its strategic value – as a cash cow to support pipeline development (Toctino beauty is in the eye of the beholder, June 13, 2012).

Thus the readout of the Secure trial in aspergillosis patients and the Vital study in aspergillosis in patients with renal impairment and patients with rare mould infections will show whether the gamble has paid off. Failure would leave the group without an expectation of product revenues from its worldwide partnership with Astellas Pharma.

With SFr344m ($355.3m) at the end of 2012, Basilea is not in immediate need of cash. It recently signed a contract with the US Biomedical Advance Research and Development Authority to help develop the antibiotic BAL30072, and this could see it collect $17m in the next two years. It has the hope of collecting milestones from the Toctino contract – some $74m would be due on US approval, although Stiefel is not expected to file until early 2014.

However, a new source of revenue would be most welcome, and could demonstrate that management can deliver on the pipeline’s promise. Presumably, payments would be due on phase III trial success or on regulatory milestones, ahead of the royalty stream now forecast to begin in 2015.

Trials and tribulations

The Secure trial pits once-daily isavuconazole, now designated an orphan drug in the US, against Pfizer’s Vfend (voriconazole) dosed twice daily in 527 patients, with all-cause mortality at six weeks the primary endpoint, and clinical and mycological response among the secondary endpoints. It is an intravenous product that like Vfend can be stepped down to an oral dose.

The open-label Vital trial in 150 patients aims to target Vfend’s weaknesses – accumulation in patients with moderate or severe renal impairment who are undergoing an intravenous dosage, and those infected with emerging rare moulds resistant to Vfend. The primary endpoint will be overall outcome evaluated by the trial’s data review committee, based on clinical, mycological and radiological response.

The second half of 2013 promises to be an important one for Basilea, which could progress from being primarily an unlucky drug developer to an accomplished pharma group. But it needs to show that it can succeed with isavuconazole if it wants to sustain the seemingly growing faith of investors.

Trial ID
Secure NCT00412893
Vital NCT00634049

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @JonEPVantage on Twitter

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