One of the best performers on the local market this year has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price.
Since the start of the year the biopharmaceutical company's shares have risen a staggering 111%.
And that is despite its shares pulling back by over 30% since peaking at $24.10 in September.
Why has the Clinuvel Pharmaceuticals share price doubled in value this year?
For those that are not familiar with the company, Clinuvel is a global biopharmaceutical company which is focused on developing and delivering treatments for patients with a range of severe genetic and skin disorders.
Investors have been buying the company's shares this year due largely to the potential of its SCENESSE product.
SCENESSE has been developed as a first-line pharmaceutical product aimed at treating patients with the rare genetic disorder erythropoietic protoporphyria (EPP).
What is EPP?
The company explains that "EPP is a rare life-long genetic disease found mainly in fair-skinned people. It is characterised by severe phototoxicity (intolerance of light) of the skin resulting in intolerable pain, swelling and scarring, usually of exposed areas such as the face, hands and feet. Reactions can vary from mild to extreme with hospitalisation and powerful pain killers required in the worst cases."
Although the company estimates that just 4,000 people are affected by EPP in the U.S. and 10,000 globally, the product has the potential to generate meaningful revenues.
In fact, the product is available for sale in Europe at present and underpinned the company's latest jump in quarterly cash receipts.
Cash receipts rose 89% to $10.75 million in the September quarter.
And with its FDA filing now complete, it may not be long until the product is made available to U.S. sufferers. This would potentially give its cash receipts another sizeable boost.
Should you invest?
I like Clinuvel Pharmaceuticals and think it could be a good long term investment, however it is a reasonably high risk one.
So if you have a lower tolerance for risk you might be better off looking at the likes of CSL Limited (ASX: CSL) and Mayne Pharma Group Ltd (ASX: MYX) instead.
