Alive and Kicking: 'We are not alone in going through a lull in markets', says Clinuvel chair

Clinuvel chairman tells restless investors the company is on track despite share price weakness
Opthea to front prestigious New York investment conference
Compumedics is back in black as it tackles the sleep home-testing market

Alive and Kicking is renowned biotech journo Tim Boreham’s new daily wrap covering morning movers and shakers of note in the ASX Healthcare sector, Monday through Thursday.

While most companies bat away a weak share price as the market just being the market, skin disorders specialist Clinuvel Pharmaceuticals (ASX:CUV) has defended its performance in an expansive chairman’s missive to shareholders.

Clinuvel’s chair, Professor Jeffrey Rosenfeld admits that many investors have written to him directly about the lack of share price oomph, despite a “memorable set of financial results” that saw full-year revenue rise 15% (to $95 million) and net profit gain 16% to $35 million.

“I re-emphasise that a share price does not necessarily reflect the group’s actual health,” he writes.

“There may be many factors which influence a daily closing price, but perhaps a [fund] manager’s temporary decision to invest elsewhere while keeping Clinuvel ‘on the radar’ is one factor.”

He adds: “Clinuvel is not alone in going through a lull in markets; other profitable companies have followed a similar pattern.”

Clinuvel has an approved treatment in the US, Scenesse, for a rare disorder we will abbreviate as EPP.

EPP sufferers have an acute sun intolerance that means they can’t step out in daylight without agonising results.

Clinuvel’s revenue uptick reflects strong Scenesse sales.

But as Rosenfeld acknowledges, the share price was much higher earlier on because of speculation about Clinuvel’s “future markets” – presumably a reference to the company’s original remit of developing a safe-tanning product.

Expanding the geographical coverage of Scenesse aside, Clinuvel has a busy clinical program for conditions including the common pigment disorder vitiligo, strokes and Parkinson’s disease.

It’s also rolling out a side line in clinically verified cosmaceuticals – including for safe tanning.

Rosenfeld says the share price pattern is “typical of biotechs and it is likely that as clinical results in vitiligo and other clinical indications advance, value may start to increase.”

The ire of investors is understandable, given the stock is worth two-thirds less than five years ago, when the company was at an unprofitable, research and development stage.

The perversity is accentuated by the stock’s $730 million market cap being backed by $183 million of cash.

Clivuvel shares this morning were up 1.2% to $14.54 – so that’s a good start.

Opthea says its trial timelines are on track

Investors in back-of-the-eye disease house Opthea (ASX:OPT) might have the same sinking feeling, given their shares are worth 80% less than five years ago – before the company embarked on two pivotal phase III trials.

One reason is that Opthea has raised plenty of dough to fund the trials, but the good news is that investors won’t have to wait too long for the first results of the studies.

Enrolling a total of 1984 patients, the trials are aimed at securing US Food & Drug Administration (FDA) approval for its drug candidate sozinibercept (OPT-302). OPT-302 would be a new treatment for wet AMD – age-related macular degeneration – which is a leading cause of blindness among the over-50s.

While there are existing therapies accounting for US$15 billion of annual sales, 60% of patients can’t get a decent treatment because they have a particular variant of a protein that causes the problem.

The two trials – nautically dubbed Coast and Shore – will assess the safety and efficacy of OPT-302 in combination with existing therapies (Lucentis or Eylea), compared to the use of these standard-of-care drugs alone.

Opthea CEO Dr Frederic Guerard will outline the company’s progress – and reassurances as to the previously-enunciated trial timelines – to heavy-hitting investors at H.C. Wainwright’s annual investment conference in New York tonight.

For the record, the top-line results from Coast should be released in the June quarter next year and the Shore results in mid 2025.

The cost of the trials was funded partly by a novel deal with a US outfit, Launch Therapeutics, involving US$170 million of non-dilutive funding.

We say ‘unusual’ because Opthea repays only when (and if) it achieves revenue, with Launch’s returns capped at four times its investment. If OPT-302 is not approved, Launch gets a big fat nothing.

Opthea shares gained 7.5 cents to 57.5 cents

Compumedics back in black on record revenue

Just to recap Friday’s news, sleep and brain diagnostics specialist Compumedics (ASX:CMP) says it returned to a profit in the 2023-24 year – in underlying terms at least – and also achieved record sales and revenues.

Revenue came in at $49.7 million, up 17% with underlying earnings and tax before depreciation and amortisation (ebitda) of $2.5 million versus a $2 million loss the previous year.

Compumedics has diagnosis products for sleep, clinical electro encephalogram (EEG) scans, brain monitoring and ultrasonic blood-flow systems.

Its flagship product is called Orion Lifespan Curry MEG, which believe it or not is a ‘patented double relaxation oscillator super-conducting quantum interference device’.

We’ll stick with MEG.

Much of Compumedics’ attention is focused on rolling out its approved home-based sleep-testing device, Somfit, in the US market.

Compumedics points to ebitda of $5 million in the current year and revenue of $55 million, but cautions increased sales and marketing investment to support such products will impact earnings growth “in the short term”.

Compumedics has been a slow-burn export success story, having been founded by executive chairman Dr David Burton way back in 1987.

Compumedics shares were unchanged at 32 cents.