Sep 27, 2023

Sentiment: Sideways

Type of Trade: Conservative, High Growth

Industry: Pharmaceutical

Sector: Health Care

As per FY23 financial report

CLINUVEL PHARMACEUTICALS LIMITED is an Australian biopharmaceutical company that focuses on developing and delivering treatments for patients with various skin conditions, particularly those with rare and genetic disorders.

The company’s key business involves research, development, and commercialisation of pharmaceutical products, with a primary focus on treating skin disorders. CLINUVEL’s key product is SCENESSE (afamelanotide), which is used to treat patients with erythropoietic protoporphyria (EPP), a rare genetic disease that causes severe intolerance to light.

CLINUVEL operates in various markets, including Europe, the United States, and Australia, and its products are distributed in over 40 countries worldwide. The company has subsidiaries in Switzerland, Singapore, and the United States, which manage regional operations and distribution.

CLINUVEL has recently launched the first of four healthcare product lines, starting with CYACÊLLE, a polychromatic screen that belongs to the next generation of solar care (λ3). This innovative product is formulated to protect the skin from various types of light, including ultraviolet B (UVB), ultraviolet A (UVA), and high-energy visible (HEV) light.

The Company’s key operating activities encompass:

  • the distribution of its novel pharmaceutical photoprotective
    SCENESSE® (afamelanotide 16mg) for patients with
    erythropoietic protoporphyria (EPP);
  • the development of pharmaceutical products, including SCENESSE®,
    PRÉNUMBRA® and NEURACTHEL®, and the conduct of clinical programs
    for patients who require medical solutions; and
  • the commercialisation of a range of PhotoCosmetic products to provide
    healthcare solutions for people at highest risk of UV and light, DNA-damage
    and requiring MSH-response as melanogenic (bronzing) protectant.

Recent Updates and Financial Activities as per Full Year Result of 2023

CLINUVEL PHARMACEUTICALS LIMITED has achieved a fantastic result recently. This is because the company has continued to focus on reaching out to more patients with erythropoietic protoporphyria (EPP) in Europe and the USA. As a result, the total number of SCENESSE® prescriptions has increased, and more patients are receiving the treatment.

In addition to this, more treatment centers have come onboard to offer SCENESSE® implants, and the company has managed to maintain price stability across the regulatory jurisdictions where revenues are generated. All of these efforts have contributed to the incremental growth in revenues since the commencement of commercial distribution.

What’s even more impressive is that company has showed seven years of consecutive annual growth in revenue, profit and cash reserves.

In February 2023, the company announced that the completion of manufacture of the first cGMP batch of PRÉNUMBRA® Instant, an immediate-release liquid injectable presentation of afamelanotide. The product will first be evaluated in patients who have suffered arterial ischaemic stroke (AIS).

The next step for CLINUVEL is to scale up the manufacturing process and validate the manufacturing data for regulatory submissions in the US and EU. The company can rely on pre-existing data from preclinical and clinical studies of the SCENESSE® implant to expedite the validation process for PRÉNUMBRA® Instant. The American and European regulatory pathway to marketing approval for PRÉNUMBRA Instant is shown as following:

During this stage could the company is likely to provide updates to the market that could be share price sensitive, but most importantly, the company is well financed in cased any things goes wrong or any delays in the worse cased scenario.

✅ The company is already well-known for developing the world’s first systemic photoprotective pharmaceutical, SCENESSE® (afamelanotide 16mg), which is used to treat patients suffering from erythropoietic protoporphyria (EPP), a genetic disorder that causes sensitivity to light. CLINUVEL’s extensive expertise in this field has enabled them to use their technological and clinical knowledge to develop non-prescription products that can protect individuals who are at high risk of light-induced skin damage.

✅ Revenues increase of 24% pcp to $83m in FY23

✅ The seven year compound annual growth rate of revenues of 42% exceeded by more than doubled growth of expenses of 20%.

NPAT (Net profit after tax) increased by 47% to A$30.6m

✅ Dividend (distribution) of 4c per share fully franked from 5c pcp up by 25%.

✅ With no equities rase since 2016, the group continue to add sustainable value to share holders, despite it has been moving sideways since 2020. The fact (ASX: CUV) has been moving sideways, it represents great opportunity to buy at the lows and sell at the highs, without the risk of undertaking a capital raise during the process.

Outlook for FY24

CLINUVEL’s strategic objective is to transform into a sustainable pharmaceutical group and diversify its activities establishing an integrated business.

Long-term Value of Integration and Diversification:

  • CLINUVEL’s business model aims to keep key pharmaceutical functions in-house.
  • The goal is to integrate functions while diversifying revenue streams.
  • This approach reflects the company’s desire for independence, control of quality, costs, and supply.

Functions Undertaken In-House:

  • Formulation R&D, including select pre-clinical development, Design and conduct of clinical studies, Regulatory affairs, pharmacovigilance, and quality assurance activities, including manufacturing
  • Direct distribution of SCENESSE® to European EPP Expert Centres and US Specialty Centers. Pricing and reimbursement functions, including patient support and the SCENESSE® Assistance Program in the USA.
  • Finance, facilitated by cash balance preservation for growth and expansion
  • Communications, branding, marketing, and investor relations

Diversification and Risk Management:

  • The company plans to diversify its activities, products, and markets.
  • This strategy aims to create new revenue streams and manage risks.
  • Implementation is mitigated through a thorough approach and leveraging existing expertise.

Infrastructure and Know-How for Expansion:

  • CLINUVEL has built infrastructure and know-how to support its expansion plans.

Enabling EPP Patient Treatment:

  • Focus on distributing SCENESSE® for EPP patients in existing jurisdictions.
  • Collaborating with external manufacturers and suppliers for product supply.
  • Commitment to the European EPP Disease Registry for long-term safety monitoring.
  • Proposal to expand the drug’s label to include adolescent patients (update expected in 2023). Aims to establish a network of 120 Specialty Centers in the USA for greater treatment access. Committed to gaining market access for SCENESSE® in other jurisdictions.

Melanocortin Drug Development:

  • CLINUVEL is a leader in melanocortins, developing pharmaceuticals for various patient groups with unmet needs. Expecting progress in clinical programs with afamelanotide for XP, vitiligo, variegate porphyria, and stroke.

🚩 Acquisitions:

  • CLINUVEL is interested in acquiring assets to support its organic growth. Criteria for acquisitions include a complementary management team, value addition, alignment with existing activities, and late clinical stage or manufacturing capabilities.
  • External finance, such as bank debt or capital raising, may be considered to facilitate acquisitions.
  • CLINUVEL monitors opportunities for acquisitions based on their potential value.

Primary Listing of the Company:

  • CLINUVEL is primarily listed on the Australian Securities Exchange (ASX) since 2001.
  • The company may consider a primary listing elsewhere if it benefits the Group and stakeholders. A dual listing is not preferred due to compliance and reporting costs and trading volume dilution. Any change in listing will be thoroughly assessed to ensure shareholder benefits.

Melanocortin Drug Development:

  • CLINUVEL is developing melanocortin-based harmaceuticals for various patient groups with unmet needs. The progress is expected in clinical programs with afamelanotide for XP, vitiligo, variegate porphyria, and stroke. Clinical studies in other indications are planned for 2024 and 2025.

PhotoCosmetic Products:

  • CLINUVEL is creating a new category of products called PhotoCosmetics. The goal is to establish the brand as a household name by 2026.
  • CYACÊLLE will have a wider launch in new jurisdictions, particularly the USA.
  • PhotoCosmetic products for DNA repair and melanogenesis will be developed in Singapore for planned launch in 2024 and 2025.

Cumulative Expenses Plan:

  • CLINUVEL has provided a five-year expense projection to achieve its objectives.
  • Excluding capital expenditures and PhotoCosmetics marketing expenses, $175.0 million in expenses are planned over five years ending in FY2025.
  • Expenses incurred from FY2021 to FY2023 total $92.8 million, representing 53% of the planned expenses.
Pharmaceutical Product Developments

We are likely to see the Commercialisation of Scenesse in adolescent EPP patients.

Clinical Programs
  • DNA Repair
  • Vitigilo
  • Arterial Ischaemic Strock (AIS)
  • Variegate Porphyria (VP)

Technical Analysis

If you have purchased the (ASX: CUV) shares 52 weeks ago, you would have copped a 54% drop with no big gains in the overall share price by only holding the stock until now. However, we’ve seen a couple of spikes of 75% each during July, August and December 2022 that presented a ripper trade opportunity to traders before that, and we are likely to see in the future as the company achieve new milestones.

The stock has recently dropped by 20% despite the strong FY23 report, as result of some regulatory hurdles from EMA (European Medicines Agency) has requested further data before approving the label expansion for SCENESSE in adolescent patients, which represents a potential delay in its treatment availability option for adolescents. On the flip side, clinical experts are increasingly requesting SCENESSE® for adolescent EPP patients due to a lack of treatment options. This highlights the limited options available for these patients, indicating the severity of their condition and the need for effective treatments. A soon as the company manages to go through EMA, we could see a significant share price increase.

The stock is currently sitting at the bottom of the channel, and provides a excellent opportunity to buy into a company with excellent fundamentals in all key metrics at technically discouned price.


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