UPDATE 1-Basilea seeks antibiotic partners after European backing

Wed Oct 23, 2013 3:00am EDT

* Basilea wins European backing for superbug antibiotic

* Company in talks to partner ceftobiprole

* Shares surge 10.8 percent pre-market

* In talks over U.S. backing

ZURICH, Oct 23 (Reuters) - Swiss biotech group Basilea said it is in talks with potential partners for its superbug antibiotic ceftobiprole, after the treatment won backing from the European regulator to treat hospital and community-acquired pneumonia.

"We are actively discussing with potential partners, now that the regulatory risk is gone and the drug can be sold in Europe with some additional phases like national licensing," Basilea's chief executive officer Ronald Scott told journalists on a call on Wednesday.

Earlier, the Basel-based firm said ceftobiprole was given the green light by European regulators to treat MRSA, the methicillin-resistant Staphylococcus aureus which is estimated to kill some 20,000 people every year in the United States.

CEO Scott said Basilea is looking to exceed the 200 million Swiss francs ($223.40 million) in annual revenue of similar antibiotics with a narrower treatment range, but did not elaborate.

Bank J. Safra Sarasin estimates the antibiotic could generate peak sales of 500 million francs as a treatment for hospital- and community-acquired pneumonia.

Basilea's shares surged in pre-market indications following the news, which follows several stumbling blocks for the antibiotic, including Basilea's falling out with original partner Johnson & Johnson (J&J).

At 0621 GMT, the stock was indicated 10.8 percent higher at 91 Swiss francs. Trading in Zurich resumes at 0700 GMT.

The emergence of hospital superbugs such as MRSA has increased the need for new effective treatments and refocused attention on antibiotics.

After J&J decided not to back the drug and expressed doubts about the reliability of trial results, a Dutch arbitration tribunal in 2010 ordered the U.S. drugmaker to pay Basilea about $130 million for lost milestone payments and damages.

Basilea is still struggling with U.S. backing for the drug, and said on Wednesday that ongoing talks with the U.S. Food and Drug Administration centre on being able to submit the antibiotic without costly additional trials.

Basilea expects the antibiotic to reach the European market in three to five months, after it is licensed nationally and has clinched pricing approval, which is done country-by-country.

The superbug antibiotic's backing eclipses progress Basilea made on another drug, isavuconazole, earlier this year. The antifungal treatment won "orphan" drug status in the United States, which analysts estimate could be worth up to 150 million francs annually if it reaches the market.

Basilea has gone through a series of shake-ups this year, including the departure of its chief financial officer just two months after that of the firm's founder and chief executive.