BioWorld International Correspondent

Shares of Basilea Pharmaceutica AG peaked at an all-time high of CHF190.90 during heavy trading on the Swiss Stock Exchange Thursday, on news that its broad spectrum cephalosporin antibiotic ceftobiprole achieved statistical non-inferiority as compared with vancomycin in a Phase III registration study in patients with complicated skin and skin structure infection (cSSSI).

A total of 323,264 Basilea shares changed hands that day, a volume far greater than on any occasion since the company’s IPO in March 2004. (See BioWorld International, March 31, 2004.)

Some investors took profits, as shares fell back to close at CHF181 (US$137), but it was still up 8.3 percent from the previous day. Several analysts upped their target price in the wake of the news, including Robin Campbell at Jefferies International in London, who moved his target from CHF130 - which he’d set last August, when Basilea was trading at CHF110 per share - to CHF210.

"It’s done well over the last six months," he told BioWorld International. "I think the bump-up is deserved."

Basel, Switzerland-based Basilea obtained the compound when it was spun out from F. Hoffmann-La Roche Ltd., also of Basel, in October 2000.

Last year, it partnered the compound with Johnson & Johnson, of New Brunswick, N.J., in a deal worth up to CHF370 million in up-front and milestone payments. Roche remains its largest shareholder, with a nearly 33 percent stake. (See BioWorld International, Feb. 9, 2005.)

In the Phase III study, called STRAUSS (Study of Resistant Staphylococcus Aureus Skin and Skin Structure Infections), 397 patients received 500 mg of ceftobiprole twice daily for seven to 14 days, while 387 patients received 1 g of vancomycin on the same basis. The clinical cure rates for ceftobiprole and vancomycin were 93.3 percent and 93.5 percent, respectively.

More than one-fourth of the microbiologically evaluable patients had confirmed methicillin resistant Staphylococcus aureus (MRSA) infections. In that subcategory, the respective clinical cure rates for ceftobiprole and vancomycin were 91.9 percent and 90.0 percent.

"The differentiating feature of ceftobiprole is that it is a broad spectrum cephalosporin but it has additional activity against MRSA," Basilea CEO Anthony Man said on a conference call. "The trial was designed to preferentially focus on Gram-positive organisms."

Bob Pooler, at Geneva-based Lombard Odier Darier Hentsch, who raised his price target on the stock from CHF182 to CHF195, said a clinical claim for anti-MRSA activity would further enhance the value of the compound.

"It’s already so prevalent," he told BioWorld International. "A lot of the drugs you use just won’t work. The odds are against you." The anti-infectives space is highly attractive, he said, both because of the precedent set by New York-based Pfizer Inc.’s $1.9 billion cash acquisition last year of Vicuron Pharmaceuticals Inc., of King of Prussia, Penn., and because of the pressing need for effective new antibiotics. "This is one of the few areas where the regulatory environment is very positive," Pooler said.

Basilea will publish further data from the Phase III trial in the coming months. A second cSSSI Phase III trial, STRAUSS II, began in October. That is recruiting patients with Gram-positive and Gram-negative infections, including those with diabetic foot infections.

The compound also began a Phase III trial in nosocomial pneumonia in April last year. The diabetic foot ulcer indication could push eventual sales of the product over the $1 billion mark, Campbell said, as it offers a bridge to outpatient treatment settings. "That could be an extremely large opportunity," he said. Its broad spectrum of activity would support its use as empiric therapy. "It’s shoot first, ask questions later," he said.

Basilea has a second compound undergoing a Phase III trial, alitretinoin (BAL4079), a vitamin A analogue that is in development for chronic refractory hand dermatitis. A third compound, the anti-fungal drug BAL8557, completed a Phase II trial last year. It is due to enter a Phase III trial later this year.

"Before, the money was riding on the antifungal," Campbell said. "Adding the diabetic foot ulcer to ceftobiprole, potentially that’s No. 1."

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