MENU

Clinuvel Pharmaceuticals Limited (ASX:CUV) shares have been smashed today

One of the worst performers on the market today has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price.

In late morning trade the biopharmaceutical company’s shares are down 9.5% to $19.63. At one stage they were down as much as 11% to $19.29.

Why are Clinuvel Pharmaceuticals’ shares being smashed today?

With no news out of the company or broker notes that I’m aware of, I suspect that today’s decline is due to profit taking from some investors.

After all, prior to today the company’s shares were up as much as 75% since the turn of the year.

This meant they were changing hands at a massive 81x full year earnings, which was always likely to put them under pressure when the market went into selloff mode.

Fellow high PE shares Afterpay Touch Group Ltd (ASX: APT) and Appen Ltd (ASX: APX) have also come under pressure today and dropped deep into the red.

Why have its shares rocketed higher this year?

Investors have been fighting to get hold of its shares due to its strong cash receipts growth and the potential of its lead compound, SCENESSE.

SCENESSE is the company’s proprietary first-in-class photoprotective drug. It has been approved for marketing authorisation under exceptional circumstances by the European Medicines Agency for the prevention of phototoxicity in adults with the orphan disease erythropoietic protoporphyria

Last month management advised that the US Food and Drug Administration issued a request for further documentation to support the company’s new drug application.

It sees this request as an integral part of the ongoing dialogue between the two parties and expects a decision on its Priority Review to be made following satisfaction of all agency requests.

Investors appear to believe that its cash receipts could be given a major boost if it is approved by U.S. regulators.

Should you buy the dip?

I think Clinuvel is an exciting healthcare company and well worth keeping a close eye on. However, I wouldn’t be a buyer until SCENESSE has been approved in the United States and sales are being generated.

Until then, I would stick to the likes of CSL Limited (ASX: CSL) and Mayne Pharma Group Ltd (ASX: MYX).

Alternatively, here's a top tech share trading at a bargain price according to one analyst.

Top Australian Stock Picker Just Issued Rare “Double Down” Buy Alert

Discover why this legendary Australian stock-picker just issued a “Double Down” buy alert to his exclusive group of insiders… and why he’s convinced this might be the single most attractive entry point for years to come.

Simply click here to get started and access our secure sign-up page.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!