Health Check: At risk of third ‘strike’, Clinuvel argues its executive pay is ‘appropriate’

• Clinuvel bolsters its remuneration disclosure ahead of October 17 AGM showdown
• Avita Medical wins European approval for its Recell Go device
• Pacific Edge’s US reimbursement plea is in the hands of the experts

Clinuvel Pharmaceuticals (ASX:CUV) is taking pe-emptive action to avoid an embarrassing third ‘strike’ on its remuneration report at its upcoming AGM.

The developer of an approved skin disease drug, Clinuvel suffered a first strike at its 2023 AGM. It then copped a second strike at last year’s pow-wow.

In 2023, 39.7% of voting holders representing 16% of issued capital opposed the report.

Last year, 52% (20%) said ‘nay’.

A no vote of 25% or more triggers a strike, with a second strike resulting in a mandatory board spill resolution.

Only 10% of holders supported removing the board.

Fortunately for the company, third strikes don’t trigger a spill vote (but a fourth strike does).

According to PWC, 20 ASX 200 companies overall incurred a strike during last year’s AGM-fest. Four of them faced ‘extreme’ opposition of more than 50%. Six of these were second strikes.

Fundie Perpetual (ASX:PPT) tipped the scales at 88%. In the healthcare sector, Sigma Healthcare (ASX:SIG) incurred a 47% ‘no’ vote ahead of its merger with Chemist Warehouse.

Full Monty disclosure

Coming back to Clinuvel, the company’s annual report includes fuller disclosure of ‘rem’ structure. This includes better descriptions of short-term and long-term incentives.

Investors have focused on CEO Philippe Wolgen, who received total ‘rem’ of $5.24 million, up 40%.

Chairman Professor Jeffrey Rosenfeld says the company’s rem is“appropriate”. This is relative to a global peer group of 40 companies, including 12 ASX-listed ones.

Clinuvel shares have declined roughly 30% over the past 12 months.

But Rosenfeld says management should not be punished for this. He says the sagging share price is “disconnected from the value being added year on year”.

He adds if the company is judged on the share price, it “will not attract future talent nor retain current professionals”.

Clinuvel is one of the few consistently profitable biotechs, having recorded full-year net earnings of $36.1 million, up 2%. Revenue rose 10% to $105 million (up 10%).

The company sourced its sales from Scenesse, its treatment for the rare sun intolerance disorder we will abbreviate as EPP.

It’s all Go in Europe for Avita

Burns and wounds repair house Avita Medical (ASX:AVH) has won European marketing clearance for its next-gen device, Recell Go.

Recell Go is an easier-to-use version of Avita’s original autologous spray-on-skin device.

The company won approval via the CE Mark pathway, under revamped European Union Medical Device Regulation.

Avita CEO Jim Corbett says the consent is an “important milestone” for the company and patients.

“It enables us to bring this option to burn centres and clinicians in Europe to support their treatment of patients with acute wound injuries.”

The original Recell is already sold across Europe, while the US Food and Drug Administration (FDA) approved Recell Go in May last year.

Avita will sell Recell Go in select  European countries, including Germany, Italy, and the UK.

Earlier this month Avita presented ‘real world’ data to the European Burns Association Congress.

This showed Recell reduced hospital stays by an average 36%, compared to traditional split thickness skin grafts.

This pertained to adult patients with deep partial thickness (second degree) burns affecting up to 30% total body surface area.

MAC brings in CAC to determine LCD

US regulators have given Pacific Edge (ASX:PEB) a helpful sign in the company’s long-running quest to receive US Medicare coverage for its bladder cancer test.

Novitas, the company’s  Medicare Administrative Contractor (MAC) says it will convene an expert panel to consider the issue.

In April the company’s Cxbladder test was kicked off the US Medicare coverage rota.

But Pacific Edge’s assay, Cxbladder Triage, is included in the American Urological Association (AUA) microhematuria guidelines. Given the AUA would be considered ‘expert’, too, that’s a good start.

Known as a Contractor Advisory Committee (CAC), the panel is likely to be convened in early 2026, which we guess isn’t too far away.

Pacific Edge says the the committee “will be tasked with considering how to  bring Medicare policy into alignment with the 2025 update to the AUA guideline.”

The company adds that CAC meetings initiated by the MAC “generally precede the draft issuance of a new, or substantially revised, Local Coverage Determination (LCD).”

Pacific Edge is “pleased that Novitas has acknowledged the importance of the AUA microhematuria guideline and is taking a robust and credible approach.”

Given the company generated most of its revenue in the US, public reimbursement is a big deal.

Reflecting investors’ expectations of a breakthrough, Pacific Edge shares have climbed 27% over the last month.

Still, they have lost about two-thirds of their value over the last two years.

Cleo buoyed by FDA chat

Still on encouraging US news, Cleo Diagnostics (ASX:COV) has received positive feedback from the FDA on the company’s planned approval submission for its pre-surgical ovarian cancer triage test.

At Cleo’s second pre-submission meeting, the agency indicated that Cleo’s clinical trial design and regulatory positioning aligned with its requirements.

Cleo plans to submit under the 510(k) predicate device route, which is easier than applying via the new device channel.

The company went to FDA’s Maryland HQ for the in-person meeting.

It’s all happening at … Jeff’s Shed

Not all of the thousands of folk streaming into Melbourne this weekend will be headed to the MCG for the two blockbuster AFL preliminary finals.

By good design or otherwise, the Melbourne Convention and Exhibition Centre (a.k.a. Jeff’s Shed) is hosting the Gastroenterology Society of Australia’s and World Gastroenterology Organisation’s conference.

The organisers expect 2500 attendees, with at least 600 international delegates from as far-flung parts as Uganda, Uruguay and Rwanda.

We trust they have their accommodation sorted well in advance. Who knows, some may even snaffle a ticket to the oval-ball occasions. They may even sample the dubious gastronomy of a meat pie – for research purposes of course.