Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cresemba's global in-market sales increased by 24% year-on-year, demonstrating strong performance.
- Basilea Pharmaceutica Ltd (BPMUF, Financial) reported a positive operating result of CHF9.3 million for the first half of 2024.
- The company successfully reduced its debt level using free cash flow.
- FDA approval of ZEVTERA in the US for multiple indications, with ongoing negotiations for commercialization partnerships.
- Significant expansion of the anti-infective pipeline with four new programs since October 2023, positioning the company as a leading anti-infectives company.
Negative Points
- Milestone payments were lower in the first half of 2024 compared to the first half of 2023, impacting overall revenue.
- Negotiations for ZEVTERA's US commercialization have taken longer than initially expected.
- Operating expenses increased to CHF48.9 million, reflecting higher costs associated with product revenue.
- The company faces potential challenges in securing non-dilutive funding for its Phase 3 clinical programs.
- There is uncertainty regarding the timeline for the completion of the Phase 3 study for Fosmanogepix, with primary readout expected in January 2028.
Q & A Highlights
Q: Can you provide an update on the negotiations for ZEVTERA's commercialization in the US? Have you been pleased with the level of interest and the quality of potential partners?
A: (David Veitch, CEO) The negotiations have taken longer than initially expected, but we are confident that it is just a matter of time. We have multiple partners in the process and are at the negotiation stage. The environment for antibiotics has not changed during this process, and we believe ZEVTERA has significant potential.
Q: Regarding Fosmanogepix, are you considering non-dilutive funding for its Phase 3 clinical evaluation?
A: (Marc Engelhardt, CMO) We will continue the Phase 3 studies regardless of external funding. However, we are seeking non-dilutive funding from organizations like BARDA and CARB-X, as our pipeline addresses high unmet medical needs in fungal infections.
Q: How do you intend to optimize the value of Fosmanogepix while minimizing risk? Will you consider partnering before concluding pivotal development?
A: (Adesh Kaul, CFO) We acquired Fosmanogepix based on extensive Phase 2 data, which reduces risk. Pfizer retains the right of first negotiations post-Phase 3. We plan to complete Phase 3 and then seek a commercial partner, likely starting with Pfizer.
Q: Are you committed to conducting clinical trials for BAL2062 and Tonabacase independently, or would you consider out-licensing them earlier?
A: (Adesh Kaul, CFO) We plan to take these assets through clinical development ourselves, adding value before partnering for commercialization. We may seek non-dilutive financing but will not out-license them before Phase 3 completion.
Q: What are the principal drivers for the increase in operating profit guidance?
A: (Adesh Kaul, CFO) The increase in revenues is the main driver. Our model shows leverage as sales increase without a corresponding rise in operating expenses. We also aim to reduce our debt level further.
Q: Does the increased guidance include any upfront payments from a ZEVTERA partner?
A: (Adesh Kaul, CFO) Our 2024 guidance does not include any material contributions from a US partnership for ZEVTERA. We expect more meaningful contributions in 2025. Upfront payments would likely be deferred over the agreement's lifetime.
Q: Can you provide any initial data or insights from the preclinical profiling of BAL2062 and Tonabacase?
A: (Marc Engelhardt, CMO) We are making good progress and expect to make a decision around year-end 2024. These projects offer high potential returns despite higher risks. We will seek non-dilutive funding for these compounds.
Q: Is the strategic focus now on developing the existing pipeline, or are you still looking at further acquisitions?
A: (David Veitch, CEO) We continue to look for assets in severe bacterial and fungal infections. We have built a strong portfolio and will keep looking for opportunities that fit our focus areas.
Q: Can we expect faster enrollment for the Fosmanogepix Phase 3 study than the timeline suggested on clinicaltrials.gov?
A: (Marc Engelhardt, CMO) The timeline on clinicaltrials.gov is based on realistic estimates from past experiences. We will have better visibility once the study starts accruing patients.
Q: Should we expect any more sales to be booked for Cresemba with Pfizer after this year?
A: (Adesh Kaul, CFO) No, according to our agreement, we will no longer be selling product to Pfizer after this year. This will be offset by lower costs of products sold.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
