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Robust Growth Expected to Continue for Clinuvel Pharmaceuticals

For FY2023, Clinuvel Pharmaceuticals (CUV: $18.15) achieved total revenues of $83 million, which was up 24% on the previous year. The net profit for the year increased by 47% to $30.6 million. The company finished the year with $157 million in cash.

CUV 944

For FY2023, Clinuvel Pharmaceuticals (CUV: $18.15) achieved total revenues of $83 million, which was up 24% on the previous year. The net profit for the year increased by 47% to $30.6 million. The company finished the year with $157 million in cash.

Analysing the results on a half year basis, the revenue for the first half of FY2023 was up by 19.2% and improved further in the second half, up 26.7% on the previous corresponding period (PCP).

At an investor briefing this week, CEO Philippe Wolgen said there is no reason that growth should stagnate, recognising the hard work of the growing Clinuvel team. Wolgen said that patient adoption had increased in all markets, with robust growth expected to continue.

Delay by the company's first potential competitor in entering the EPP (erythropoietic protoporphyria) market will obviously help Clinuvel on its current growth trajectory.

Delay for Clinuvel's First Potential Competitor in EPP

Clinuvel created the market for its photoprotective pharmaceutical, Scenesse, for the patients with severe intolerance to sunlight, called EPP.

The leading competitor with a drug in development for this condition is Mitsubishi Chemical Group Corporation, with its drug candidate MT-7117. A Phase II study was completed in 2019 in 102 patients with EPP and a similar condition (X-Linked Protoporphyria). A Phase III study involving 184 patients finished in July last year. And in August 2021, a two and a half year safety study commenced. This study was originally expected to recruit 175 patients (including patients from the Phase III study) and to be completed in September 2023. It is now scheduled to finish in December 2024, with just 151 subjects to be recruited. Previous studies had exposed side effects including nausea and the development of freckles. As indicated previously in Bioshares (see edition 924), given that this is a chronic therapy, the safety profile of MT-7117 will need to be extremely robust.

In the long-term safety study underway, subjects will be monitored for general adverse effects, as well as specifically the occurrence of freckles. Subjects with a family history of melanoma are excluded from the study. While the risk of developing a melanoma from changing melanin density in the skin is a small concern, it is one that needs to be understood prior to approval of the novel drug treatment for chronic use.

Given the level of scrutiny Clinuvel's Scenesse received prior to approval, noting that the drug had been sold under a compassionate use program since 2010 in Italy and in Switzerland in 2012, prior to European approval at the end of 2014 and US approval in 2019, the arrival of competition for Clinuvel is unlikely before 2026.

We note also that the safety extension study enrolment targets for Mitsubishi have fallen by 14% since last reported in Bioshares, perhaps indicating some patient concerns with the novel drug candidate in development.

Portfolio Expansion

Clinuvel is using its expertise in melanocortin chemistry and biology to broaden its product suite, to include not just pharmaceuticals but also its over-the-counter 'photocosmetic' products, continuing its path on building a fully integrated pharmaceutical business with a diverse range of products.

This broad approach is bringing manufacturing in-house for the next generation products, and created a consumer marketing division to build the global brand for its OTC products. Clinuvel has added a specialty generic in the melanocortin field (currently in development), called Neuracthel (ACTH), for which there are currently only two products on the market in the US generating annual sales of around US$200 million. Initial applications will be for the treatment of multiple sclerosis and of infantile spasms.

The company has developed an instant version of its lead product, called Prenumbra. Prenumbra has been trialed in three patients with mild-moderate stroke, following six patients treated previously with the sustained release version of afamelanotide (Scenesse), that generated encouraging results. That study will move into treating patients with moderate-severe and severe stroke.

Clinuvel is expanding the indication of Scenesse to the treatment of vitiligo (loss of skin colour), with a 150 person Phase III study due to begin. The company is already planning its distribution approach for this product for when FDA approval can be achieved, with the plan being to roll out the therapy through 120 trained and accredited vitiligo treatment centers in the US.

A DNA repair program of the skin is underway with Scenesse, which will pave the way for wider topical applications of active pharmaceuticals.

The first of the photocosmetic products has been launched with the initial target market being patients with EPP receiving Scenesse. The second OTC product will include an anti-oxidant agent. The third and fourth products will include the company's melanocortin peptide fragments, with one promoting DNA repair (supported by clinical data from Scenesse) and the other used for self tanning through 'melanocortin assisted stabilisation of melanogenesis'. All four OTC products will be applied topically, with limited clinical studies as the active molecules are not expected to be absorbed into the blood stream.

Clinuvel is likely to have at least three further years without competition in the EPP market, which currently generates 100% of the company's sales. Life cycle management for Scenesse is well advanced, broadening the product suite to include new formulations, introducing a generic pharmaceutical in the melanocortin field, expanding to new indications, and priming the market for its range of complementary OTC products that are being developed upon the scientific knowledge and expertise of its pharmaceutical treatments.

Clinuvel is capitalised at $897 million

Bioshares recommendation: Buy