Over the last two months, there have been some strong price movements in several major and minor biotech stocks. Following a downturn that has lasted almost two years, has the Australian sector finally bottomed?
We reviewed Clinuvel Pharmaceuticals, Dimerix, Imugene, and Neuren.
Clinuvel Pharmaceuticals (CUV) – Up 18% (up $129 million)
Clinuvel Pharmaceuticals' stock price is up 18% with an increase in market value of $129 million. The arrival of competition for the company's flagship drug Scenesse for the treatment of the skin disorder EPP is unlikely to occur for several years (more than four at least) and the company's growth path forward in other markets is becoming clearer.
In October the company commenced its global Phase III program in vitiligo. This new market opportunity may see a five-fold increase in sales achieved in the US alone over existing Scenesse sales for the treatment of EPP.
The attractive features for this program are that it involves the drug Scenesse which has been dosed more than 15,000 times, and a competing topical product from Incyte (Opzelura) has helped paved the way with respect to FDA approval/assessment and payor reimbursement for this new drug indication.
Another driver over the next two years will be the commercialization of Clinuvel's generic melanocortin, ACTH. The ACTH market in the US is serviced by just two products and is valued at US$200 million a year. Clinuvel has accessed a Drug Master File for the manufacture of this product which will help to accelerate regulatory approval. The company is seeking to get this product onto the market in two to three years' time.
Bioshares recommendation: Buy
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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.
