Basilea Pharmaceutica - Strategic streamlining – sale of oncology assets

Management continues to execute its strategic plan and has announced the sale of its novel poly (ADP-ribose) glycohydrolase (PARG) inhibitor discovery programme to Nodus Oncology, a UK-based biotech company. Basilea is entitled to receive upfront and near-term milestone payments of CHF1m and potential future milestone payments up to CHF241m in total, in addition to royalty payments of ~5% in net sales. The transaction is part of the company’s broader strategy to cease oncology activities by the end of 2022 to focus on its core anti-infectives business. We anticipate the company to continue to monetise the balance of its oncology assets in the near future. Our valuation of Basilea remains unchanged at CHF893.8m or CHF75.5/share.