“Superbug” company hits the stock exchange
It was all smiles and champagne at the Zurich stock exchange on Thursday as biotechnology firm Basilea Pharmaceutica took the plunge by offering its shares to the outside world.
Spun off from pharmaceutical company Roche in 2000, Basilea is floating primarily to raise cash for ongoing and new clinical development and research programmes.
Basilea Pharmaceutica was founded in 2000 by the pharmaceutical company Roche.
Basilea has its headquarters in the former premises of the Basel Institute of Immunology.
The company’s research and development focuses on new antibacterial and antifungal agents to overcome the problem of drug resistance.
It has a staff of about 190, of which 100 are based in Basel and 90 at a subsidiary in China.
Although it has no products on the market, Basilea specialises in new treatments to fight multi-drug-resistant bacteria, known in the trade as “superbugs”.
It is developing drugs for treating bacterial and fungal infections, including skin diseases.
The company’s flagship BAL5788 drug is about to move into late-stage clinical trials. The antibiotic aims to treat the growing problem of pathogens that resist standard therapy and have spread from hospitals where they were once confined.
“Growing baby”
“I think that the baby has grown very, very considerably over the past three and a half years and it’s now about to launch on the next challenging stage of bringing products through to the market,” chief executive Anthony Man told swissinfo.
“Drug development is a long, complicated and expensive process. We’ve made very good progress to date in bringing our products through the early stages of development.”
“Now, because of our success, we face moving forward into more expensive trials in larger numbers of patients and that is why we need more financing,” he added.
Before the launch, Roche had an almost 50 per cent stake in the company, which made a loss of SFr55.7 million in 2003 and does not expect to make any profit before 2007.
But analysts see the Initial Public Offering (IPO) as a positive sign for the biotech sector, which has suffered from investor shyness for the past three years.
Before trading began at the SWX Swiss Exchange on Thursday, the Basel-based company announced an issue price of SFr98 ($76.82) on its share.
With 2.1 million shares – or 28.5 per cent of capital – to be sold, some SFr206 million should be raised.
At the start of trading, the share stood at SFr113, or SFr15 above the issue price.
“I think the fundamental issues that make us optimistic about the company are the quality of the molecules that we have – which we know satisfy significant needs for patients and doctors – and we have very, very sound research and very good people,” Man said.
Second drug
Roche has the right to license back Basilea’s flagship compound but did not exercise its opt-in rights for a second drug, BAL 4079, which treats chronic hand dermatitis.
After the IPO, Basilea has around 7.4 million shares outstanding, which means a market capitalisation of around SFr851 million.
This makes it Switzerland’s third-largest biotechnology company behind Serono of Geneva and Actelion.
The launch is the first biotech IPO since Berna Biotech listed its shares on the Swiss stock market in June 2001. In the meantime, Cytos Biotechnology has become a public company by merging with Askila, which was already listed.
“It’s the first IPO probably in two and a half years, after we had the high-tech bubble. We are very, very happy to have this IPO now,” SWX management committee member Daniel Keist told swissinfo.
“ In particular, it’s a success since other IPOs in countries like Germany and the United States have stopped after the terrorist attacks in Madrid.”
swissinfo, Robert Brookes in Zurich
Basilea Pharmaceutica was founded in 2000 by the pharmaceutical company Roche.
Basilea has its headquarters in the former premises of the Basel Institute of Immunology.
The company’s research and development focuses on new antibacterial and antifungal agents to overcome the problem of drug resistance.
It has a staff of about 190, of which 100 are based in Basel and 90 at the Jiangsu Innovative New Drug Research Centre subsidiary in China.
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