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118. Bull, Bear & Beyond – Basilea Pharmaceutica executive interview
5 Plays4 months ago
In this interview, CEO David Veitch and CFO Adesh Kaul discuss Basilea Pharmaceutica’s strong H125 performance and the company’s key growth drivers. They outline the reasons for Cresemba’s continued strong momentum and Basilea’s strategy for growth beyond its lead asset’s maturity. They discuss Zevtera (recently launched in the US), fosmanogepix (on track for a new drug application filing in 2028) and the recently acquired oral antibacterial, ceftibuten-ledaborbactam etzadroxil, which together are the next growth drivers for Basilea. They also touch on the recent macroeconomic uncertainty in the US and how Basilea remains confident in its association with BARDA, which materially de-risks its R&D efforts. Finally, they discuss the key upcoming catalysts and milestones for the company over the next 12–18 months.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
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Original interview published on 01/09/2025 and reposted as a podcast
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Transcript
Introduction to Basilea and Guests
00:00:07
Speaker
Hello everyone and welcome to Edison TV. My name is Jyoti Prakash, a healthcare analyst here at the Edison Group. We are joined to today by David Veach, the CEO of Basilea Pharmaceutical and Adesh Kall, the company's CFO.
00:00:22
Speaker
Basilea is a Switzerland-based commercial stage specialty biopharma with expertise in the area of anti-infectives. David, Adesh, thank you for joining today.
00:00:34
Speaker
Thank you. Thank you.
Revenue Growth and Key Drivers
00:00:36
Speaker
So to kick off, Basilea recently reported strong first half 2025 results with a 36% year-on-year revenue growth. David, can you briefly discuss some of the key highlights from these results?
00:00:50
Speaker
Yeah, thank you, Giotty. The 36% total revenue growth was really made up of ah two two two two buckets. yeah One was the commercialised products, Crisemba and Zevtera, which are growing nicely at 24% growth, first half 25 versus first half 24, driven by Crisemba, our an invasive fungal infection drug, showing it really is meeting an unmet medical need. And then the the second part of that growth, the total revenue growth, is actually the other revenue, which actually is, ah you know, as a result of reimbursements from BARDA and CARB-X, which actually just show the fact that that the value of our relationships with CARB-X and BARDA in terms of offsetting the costs of our R&D expensive for our development stage assets. And so, you know, that's really the reimbursement from the increasing reimbursement from BARDA and CARB-X. And those two factors together have resulted in this total picture of 36% growth.
Successful US Launch of Zevtera
00:01:48
Speaker
That's great. And my next question is for you, Adesh. Zevtera's US launch earlier this year has been a key milestone for Basilea. What kind of early market response have you seen and how does this align with your expectations?
00:02:04
Speaker
Thanks a lot for the question. Yes, indeed. Very important milestone. Maybe to put that a little bit into perspective. So the period between executing our partnering agreement with InnoViva Specialty Therapeutics and having the product commercially available in the US was less than six months.
00:02:22
Speaker
This impressive achievement was only possible because the collaboration between InnoViva and us worked seamlessly on all levels. The actual launch of the product actually happened then by a fully trained field force in July.
00:02:38
Speaker
In order to really enable this successful launch in such a short period of time, there needed to be a lot of things in in place. Product needed to be available, promotional material ah had to be prepared, the medical and sales teams had to be trained, and market access had to be in place.
00:02:56
Speaker
Given that all this happened very quickly, We are very, very pleased with the progress that we're seeing and the reception that we that the product has. It's still very early in the launch phase, but the early signs are very encouraging.
00:03:11
Speaker
And Inaviva was actually able to report first sales even prior to the actual launch, which again speaks for the medical needs that is being addressed by Seftera and the capabilities and the collaboration of our partner and how we are working with them.
00:03:30
Speaker
That's great. Thank you so much, Adesh.
Phasmanogepix: Promising Antifungal Asset
00:03:32
Speaker
My next question is related to your novel antifungal asset, Phasmanogepix, which is positioned as a key future growth driver for the company. And two global phase three trials are now underway alongside an expanded access program. So David, maybe i can ask you this one. What drives your confidence in the asset? And can you touch upon the real world data which you've gathered so far from the expanded access program?
00:04:00
Speaker
Yeah, FOS Managepix for us is key. ah You know, we've got commercialized products, but obviously the lifeblood of a biotech is the pipeline behind your current commercialized products. And FOS Managepix, we were interested since about 2016, and we were glad to get finally get our hands on the asset in 2023, in-licensed the product. And actually, we in-licensed it based on the the preclinical approach And early clinical data we saw in phase one, phase two, the activity, the efficacy, the side effect profile of the asset. It's a novel class compound. It's available IV and oral. There was not nothing to dislike about the product. Like I said, we wanted it for a long, long time. So we're glad we could finally get our hands on it. In terms of where we are now, as you correctly say, two phase three studies ongoing, actively recruiting patients. And then the expanded access programme, which is sort of like in in parallel to the clinical phase three programme, That's got over 300 patients currently who've been, you know, received Phosphonageopics in that program. And I'll just highlight one example because we've reported several sort of examples of data from that at different scientific meetings. But probably one of the most interesting for me was the Fusarium cohort of patients that were treated on Phosphonageopics.
00:05:25
Speaker
US patients who have been administered the drug ah you know with with fusarium infections, and actually they they versus the population of patients before Fosmanogepix was added to standard of care, the mortality rate decreased significantly when you added Fosmanogepix to standard of care versus standard of care alone. So in this one you know single pathogen infection, a fusarium, you can see there's a real clear benefit of FOS Menegepix. And for us, that just excites us on top of the the ongoing clinical studies that are going on. And so, yeah, we are, as you can probably tell, we are very excited about this.
00:06:08
Speaker
Sigh, exciting developments indeed. Thank you so much, David.
Strategic Acquisitions and Growth of Crisemba
00:06:11
Speaker
And moving on to the next question, which is related to your recently licensed phase three ready oral antibiotic. And Adesh, maybe you can answer this question.
00:06:22
Speaker
How do you balance risk versus return when deciding on which assets to acquire? And how does this acquisition fit into the company's overall strategic plans?
00:06:34
Speaker
Thank you. And I'll address this first more from a general perspective before getting specifically to safety but in later world right time, our latest acquisition. ah With respect to the return dimension, we're always looking at normal assets from the perspective of medical need addressed and differentiation.
00:06:52
Speaker
Given our business model, it is also important to us to have a high conviction that we will be able to partner the asset once it has been successfully developed and um approved in the market with capable commercialization partners.
00:07:09
Speaker
From a risk perspective, it helps that we have more than two decades of experience in developing anti-infectors. This is key for the risk assessments. So we then take basically the risk and return perspective and structure our transactions in a way that allow us to share basically the risk and the return between the parties by having limited upfront payments and pre-approval milestone payments But then on the other hand, royalties and commercial milestone payments once a product comes to the market.
00:07:43
Speaker
More specifically, with respect to ceftibutene leadaborbactam, it actually ticks all the all the boxes in this respect. So it could be potentially the first oral beta-lactam, beta-lactamase inhibitor combination in the market addressing multi-drug resistant gram-negative infections in complicated UTI, which is a high unmet medical need. And it is therefore also clearly differentiated as being potentially first in class.
00:08:15
Speaker
Secondly, from a structure perspective, I would say it fits perfectly in what I described before. So we are basically paying less than 15 million Swiss francs in upfront and pre-commercialization milestones. And only once the product is on the market, there will be royalties and potential commercial milestone payments to our partner, Minotorix.
00:08:40
Speaker
Excellent. And Adesh, maybe you can take this next one as well. Chrisemba, which is your lead asset, continues to deliver strong broad-based growth. How do you plan to sustain this momentum and how should investors think about revenue evolution beyond Chrisemba?
00:08:59
Speaker
Thanks again. So first of all, for the foreseeable future, we expect continued strong growth momentum. Actually, what is very impressive is if you look at the growth in the first launch market, which was the US back in 2015, the drug is still growing 10 years later in market sales are growing still double digit.
00:09:23
Speaker
And we're seeing similar patterns across the world. So the drug has a search still is still addressing a high medical need. ah we have growth momentum in established markets and then also in new markets that have more recently been launched where the drug has moved beyond the launch phase like China and Japan, where we're not only seeing increasing sales contributions and growth contributions, but also we expect actually growth contributions beyond the loss of excessivity for Krasemba in Europe and US towards the end of 2027.
00:10:01
Speaker
So therefore, we expect that Crescmba revenues will peak around 2027, and then we will see a decline over time. How steep that is going to be remains to be seen.
00:10:15
Speaker
But overall, we will have other products that will have to take on the but baton. And there comes into play the the assets that on the one hand, David was mentioning, FOS Managepix, but then also our recent addition to the pipeline safety beauty and later, Borrektam, which both could actually start contributing revenues around 2029, and would have excessivity for an over 10 year period. So we would have basically Ceftera in the US, which we also discussed at the very beginning that still enjoys excessivity until 2034.
00:10:52
Speaker
We expect that to keep on growing up to that point in time. with our capable partner and FOS Monogepix and Sefti Butey and later Bauerbach Tam, provided they are successfully developed, would then also drive future growth beyond 2029.
Impact of Funding Cuts and Continued Support
00:11:11
Speaker
Basilea has had a strong collaborative relationship with BADA. David, what are your thoughts on the recent funding cuts by the HHS and do you see any potential impact on the anti-infective space?
00:11:24
Speaker
We've been working with Barda for for probably around 10 years or so. And you know this stems from the fact that you know Barda is interested in our assets, the various assets we've had in the different programs that they've supported. And we've had an ah incredibly constructive partnership with Barda. And you know the the day-to-day working relationships continue.
00:11:45
Speaker
And ah you know they continue to fund our our program that we've got currently with Barda. I mean what I would just say is probably the best evidence of that is the fact that we received during the first half of 2025, you know, the second tranche of funding ah under our current OTA to support the ongoing development of FOS Managepix and BAL 2062. And that was for 39 million US dollars. And that just, I think, is indicative of the fact that, you know, the BADA continue to believe in this program and want to fund it going forwards.
Future Milestones and Growth Strategies
00:12:19
Speaker
So just to wrap up, David, what are some of the key catalysts and milestones investors can expect from Basilea in the next 12 18 months? Yeah, we sort of, to to build on something Adesh said earlier, and these are in no order sort of priority really, but in terms of just the things that we're focused on in the next 12 to 18 months, what one is preparing for the Ceftabutin leadable Bactam phase three study, which we said at our half year results call, would take around 18 months to get sort of started because of the various activities we need to do to get that that phase three study started. So that's one one thing and one milestone, therefore, in 18 months, the start of that phase three study. And then it really it's the ongoing progress of the phase three program for FOSMENALGEPICS. It's the continuing to drive, as Adesh would say about Krasemba. He was mentioning that it's continuing to drive the Krasemba and Zeftera US s opportunities forward. So revenue growth there. And then we will selectively look to in license or acquire
00:13:24
Speaker
you know, additional assets to fulfill this this dual criteria of being novel, innovative, but also commercially viable, and also seek ongoing ah funding, non-dilutive funding for our portfolios, which we've successfully done in the past. We will continue to do that. And we believe, therefore, over the months and and years to come, we will be seen increasingly as a real leader in this anti-infective therapy area.
00:13:53
Speaker
Excellent. David, Adesh, thank you for your time today. We look forward to following Basilea's pipeline progress and commercial expansion. For audience interested to learn more about Basilea, please refer to our website, edisongroup.com.