Shares in Basilea Pharmaceutica AG (BSLN.EB) hit record highs Wednesday after the Swiss biotechnology company said late-stage testing of its superbug antibiotic ceftobiprole showed it to be effective in treating complicated skin infections.
The Basel-based company said ceftobiprole demonstrated high cure rates in a range of patients, including those with methicillin-resistant Staphylococcus aureus, or MRSA, and diabetics with foot infections. Basilea also said it plans to submit its first regulatory filing for the drug this year.
Analysts said the positive results weren't a surprise, given that the drug had already been proven successful in an earlier late-stage study, but are still good news for the company.
"A good outcome was expected, but this trial was perceived as slightly riskier than earlier ones, so this (outcome) is nice," said Denise Anderson, an analyst at Kepler Equities, who believes ceftobiprole will become best-selling antibiotic globally with annual sales of at least $1B.
Still, Anderson doesn't plan to change her estimates following the latest trial data, noting the stock is already generously valued. She has a reduce rating on Basilea with a CHF170 target price.
At 0953 GMT, shares in Basilea, which plans to jointly sell ceftobiprole with Johnson & Johnson (JNJ) unit Cilag GmbH International in North America and major European countries, were up 3.1% at CHF220.50 - off its earlier record high of CHF221.90 - in a lower Swiss market.
Basilea said 91% of clinically evaluable patients in the Phase III trial were cured with ceftobiprole, compared to 90% of patients treated with combination therapy.
The clinical response in patients with diabetic foot infections was 86% for ceftobiprole and 82% for comparator combination therapy, respectively.
Over 20% of microbiologically evaluable patients had confirmed MRSA infections. The cure rate for ceftobiprole in MRSA patients was 91% compared to 86% for the comparator regimen.
One third of patients had infections involving a Gram-negative pathogen. The microbiologic eradication rates in these patients were similar at 84% in both treatment groups. Markus Metzger, an analyst at Bank Vontobel, said in a note he expects ceftobiprole to hit the market in 2008. He noted the revenue potential of the antibiotic also depends on the results of testing against another condition.
"Ceftobiprole is reflected in our estimates with a peak sales potential of CHF1.5 billion...across all indications, with the potential to a large part being dependent on the second indication," hospital-acquired pneumoniae, or HAP, he said.
Results from that trial are expected during the second half of 2007, he added. Metzger's price target for Basilea's stock remains at CHF188.
Bacteria such as MRSA have developed resistance to conventional antibiotics in recent decades as major pharmaceutical companies have focused on treatments for chronic lifestyle diseases and new cancer therapies, leaving research to small biotech companies.
Basilea, which listed on the Swiss stock market in March 2004, first signed an agreement with Johnson & Johnson to develop, manufacture and sell ceftobiprole in early 2005. As part of the agreement, the Swiss company would get upfront and milestone payments of up to CHF370 million. It would also get double-digit royalties on worldwide sales if the MRSA drug made it to the market.
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