The company's net profit was up just 2% over the previous year, however this was due to increased expenses, with staff costs up by $6 million and non-clinical and clinical costs up $5 million as the company invests in its Phase III Vitiligo trials and other programs. The first Phase III Vitiligo study has completed recruitment (210 patients), with the second Phase III study expected to begin later this year or in Q1 next year. Results from the first study are expected in the second half of next year.
Management estimates that revenue in the order of US$500 million is achievable within the first two years of launch for this indication. A topical cream for Vitiligo, Opzelura from Incyte, was approved in 2022 in the US and is currently generating sales from Vitiligo estimated at around US$230 million a year. It is approved for use on less than 10% of the body surface area and has a number of side effects, including 'serious infections' of the lung. It carries a black box warning from the FDA.
Clinuvel continues to see growth in the EPP market, both in the US and Europe. In Europe, sales have started in two additional countries, and in the US, sales are increasing with the number of specialty clinics to administer treatment, which has grown to 104. Growth has come from more patients as well as more frequent implants throughout the year per patient. The specialty clinics will also serve the Vitiligo market if the label for Scenesse can be successfully extended. In Vitiligo, up to eight depot injections of Scenesse will be delivered, at an estimated price of around US$12,000 per injection.
The EPP market is also expected to grow once approval is received in Canada (decision due in Q4 of this year) and from expansion into adolescents in Europe, with filing of that submission also expected next quarter. Adolescents represent 21% of the EPP patient population. Sales growth in Europe will also be driven if the number of doses approved, currently four a year, can be increased to six. A decision from the EMA on dosage expansion is also due this year. In the US, Scenesse is approved for use six times a year, with each depot injection lasting two months.
The third area of focus for Clinuvel is the high-value generic adrenocorticotropic hormone (ACTH) market. A new Drug Master File being prepared by a third-party manufacturer for this product is coming to the final stages according to the company, with a regulatory filing to follow in Europe and the US. An update on this process is expected by year's end. Once filed for approval, a regulatory decision from the FDA is expected to take around 12 months.
Summary
Clinuvel is reinvesting around 20% of its revenue into R&D, which is close to the standard for successful pharmaceutical businesses. Its maximum annual expenses over the next five years are not expected to exceed $55 million ($53.8 million spent in FY2025). The company is seeking to maintain a low-risk position by extending the use of its successful product Scenesse into other therapeutic areas, regions, and patient subgroups.
The company is capitalised at $534 million. Excluding the company's cash, it is trading at a price-to-earnings ratio of just 8.6.
Bioshares recommendation: Buy
Disclaimer:
Information contained in this newsletter is not a complete analysis of every material fact respecting any company, industry or security. The opinions and estimates herein expressed represent the current judgement of the publisher and are subject to change. Blake Industry and Market Analysis Pty Ltd (BIMA) and any of their associates, officers or staff may have interests in securities referred to herein (Corporations Law s.849). Details contained herein have been prepared for general circulation and do not have regard to any person’s or company’s investment objectives, financial situation and particular needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without consulting their investment adviser (Corporations Law s.851). The persons involved in or responsible for the preparation and publication of this report believe the information herein is accurate but no warranty of accuracy is given and persons seeking to rely on information provided herein should make their own independent enquiries. Details contained herein have been issued on the basis they are only for the particular person or company to whom they have been provided by Blake Industry and Market Analysis Pty Ltd. The Directors and/or associates declare interests in the following ASX Healthcare and Biotechnology sector securities: Analyst MP: 1AD, ACR, AVR, CGS, CUV, CYC, DXB, IMM, LBT, MX1, OPT, NEU, PAB, PXS,RNO,SOM. These interests can change at any time and are not additional recommendations. Holdings in stocks valued at less than $100 are not disclosed.
