Daily Brief Health Care: Basilea Pharmaceutica Ag, D.Western Therapeutics Institute Inc., SIGA Technologies and more

Basilea has announced the FDA approval of its second lead asset, Zevtera (ceftobiprole), for the treatment of severe bacterial infections (three indications), marking a major commercial win. The US is the most commercially lucrative market for Zevtera, accounting for 85–90% of its total market potential. Zevtera is already approved in several countries (including in Europe) and the FDA nod is based on three Phase III studies (including the ERADICATE and TARGET studies with R&D partly funded by the BARDA). Note that the drug holds the Qualified Infectious Disease Product (QIDP) designation, which will provide up to 10-years of market exclusivity following approval. As we await more details on the US commercial partner (expected by mid-2024), we upgrade our US probability of success (PoS) to 100%, bumping our valuation to CHF1,008.6m or CHF84.0/share (from CHF80.7/share).

• Major milestones with high expectations coming in the next 2-3 years: 1) Phase IIb US trials for H-1337 as “first choice as a second-line Glaucoma drug” for patients who do not respond to PGs
• 2) 2024 application/approval and 2025 launch of DW- 1002 in Japan, 2023 application and 2024 approval/launch in China, as well as orphan drug designation for combination formula MembraneBlue-DualⓇ (DW-1002 + trypan blue) in the US,
• 3) in Japan, start P2 clinical trials in 2024, P3 trials in late 2025 though 2026, and normal schedule application for approval for regenerative cell-therapy DWR-2206 in 2027

SIGA Technologies announced a strategic step in fortifying its distribution partner, Meridian, allowing greater control over planning and executing its international development efforts, a key growth pillar. The amended terms allow the company to actively manage future promotion activities outside the US (effective 1 June 2024). While Meridian will continue to administer existing international contracts, we expect the renegotiated terms to benefit the bottom line in the medium term as SIGA gains traction internationally. In a separate development, and one that could have a positive read-across for SIGA’s TPOXX, Bavarian Nordic, a key vaccine peer, has commenced the commercial launch of its mpox vaccine Jynneos in the US, which has only been available through the strategic national stockpile to date. We view this as a positive milestone for this therapeutic group and SIGA as TPOXX is the only approved anti-viral treatment for a range of orthopox viruses (including mpox) in Europe and is currently undergoing clinical trials in the US for expansion into mpox (presently approved for smallpox).