@Rick I last looked at $CUV in Aug-22, when it was on my watch list, but I haven't been following it too closely since that time.

Some notes I made at the time included:

• Will competition emerge for Scenesse? At the time Dersimelagon was in clinical trials - early stages of Phase III. But the trial is quite a long one. I don't know if it has reported or when it is due to report. Neither am I aware of any interim readouts.
• How likely will $CUV develop its OTC range/platform idea? (Does the recent ASX release indicate progress on that front?)

So, part of assessing where $CUV stands from a value perspective, I'd want to have an updated point of view on both of those questions.

I note there was a positive opinion from the EU recently on extending SCENESSE to the condition VP, a very rare (1 in 300,000 only) condition resembling EPP.

According to marketscreener.com, $CUV is covered by 7 analysts, with price targets ranging from $16 to $48, with an average of $30. The average PT has been in that vicinity for over two years, with the current average PT some 95% above the current SP! This is about the highest spread between SP and target that there's been for several years. Make of that what you will. I don't understand why the market has such a signficiantly and consistenly bearish view of $CUV, compared with analysts. But this does happen in the biotech space.

They've recently announced that the current CEO is extending his previously indicated leaving date by a year to 2026. So succession is an ongoing issue.

I never developed a good feeling about this firm that made me really invest the time to develop any conviction, and I personally wouldn't invest now just because its forward p/e at 23 is quite low, given its earnings growth rate (3-yr CAGR of 11%).

In summary, from a superficial glance, $CUV looks beaten up and I'm not clear why.

Thanks @mikebrisy. I found this note from James Mickleboro from The Motley Fool today which explains why the share price dropped 6% today. I think I might steer clear of it for now:

https://www.fool.com.au/2024/07/09/why-clinuvel-mesoblast-red-hill-and-resimac-shares-are-sinking-today/

“The Clinuvel Pharmaceuticals share price is down 6.5% to $14.50. This appears to have been driven by a broker note out of Morgans this morning. According to the note, the broker has downgraded the biopharmaceutical company's shares to a hold rating with a $16.00 price target. Morgans made the move partly on valuation grounds. It also highlights that there are risks around competition that investors should be considering.”

Not held

Hi @Rick

Have been following CUV for a few years and still hold some shares although I did sell out part of my holding last year. Have bought some shares back around the current valuation as I do believe they look a little undervalued here.

This business really has 3 main segments of which only really 1 is up and firing at present.

Scenesse for EPP

This is the main driver of the business. Scenesse is the only treatment currently available for EPP and therefore they are able to price it at whatever price they feel. Currently it is around $150k per year per patient, in most countries this is covered by insurance or some sort of Government rebate but you can see where the difficulty of access lies for those who can't afford it.

Nonetheless, growth is somewhat subdued as they have penetrated into most markets. Whilst they are still trying to enter into new markets, there has been difficulty in getting approval mostly on the financial side.

However given its high cash generation, it remains the main driver of the business going forward and although there are some competitors, none are currently close to becoming a true competitor to Scenesse.

Afamelanotide for other uses

Possibly the segment that may give the business an extra kick along. Given the Scenesse has approval in most countries, CUV have been trying to utilise the drug for other uses and getting approval should be easier compared to new drugs.

This graph taken from their website shows how far along they are for each new indication:

I expect some results from their Vitiligo and XP indications some time later this year but this may still take a few years to play out.

Photocosmetics

The newest segment, CUV have tried to utilise their experience in treating skin conditions to pivot into consumer products. At present they have 2 products released which are both sunscreens. I've been trying to find review online but they have been very hard to find which possibly shows the lack of reach currently that these products have. The price point is also very high at around 74 euros (around $120 AUD) for 1 bottle.

I personally don't mind them doing this pivot as the main Scenesse segment is very cash generative. And apart from paying this back to shareholders they have tried to utilise their R&D to create a new segment but it has taken them a very long time to get the products out into the public. The first release was over 1 year ago and at the last report the amount of bottles sold was less than 100. We may get a better indication of the traction at the upcoming results.

At the current price it is trading on a PE of around 24-25x which is as low as its been compared to its historical average. If the next report shows any growth in their new segments then we could see the share price increase and I guess this is the bet that I am taking having bought back in recently. However I feel the risk of this business going bust in the near future is low given how cash generative the main Scenesse segment is.

Disc: Held IRL and on Strawman.

@Rick Main negative I feel is the board and management especially the CEO. Maybe spend time viewing some of the investor podcasts and you will understand where I'm going.

Thank you @BoredSaint and @edgescape for your valued comments on CUV. What piqued my interest in CUV is their forecast growth (26%), forecast ROE (.20%), debt free balance sheet and reasonable valuation, which is usually where I start to get interested in a business.

It seems to be a decent business based on these criteria. However, I’m sensing a few orange flags eg. Increasing competition, subdued growth, management and the 3 year share price trend is certainly not its friend.

I think I’ll keep it on my watchlist and read through the FY24 report and go from there. Thank you once again for your valued comments. They are very much appreciated!

@Rick I got tricked by the ROE as well.

But when I looked at some of the podcasts on their twitter feed including the CEOs take on the buyback I immediately lost conviction even though the buyback is a change in management strategy. The buyback felt like an idea to scare off hedge funds from selling short then anything else. Also I didn't warm to his presentation style (ok I'm picky)

Understand that this is cheap compared to say CU6 which is the most polarising and unpopular biotech on Strawman right now. But after seeing Dr Alan Taylor do his pitch I'm willing to back him over the CUV CEO any day of the year.