Why the Clinuvel Pharmaceuticals share price is up 111% in 2018

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.

5 Companies we like better than Clinuvel Pharmaceuticals

When ace stock picker Scott Phillips has a buy recommendation, history suggests it can pay to listen.

Scott recently revealed what he believes are the five best ASX stocks for investors to buy right now… and Clinuvel Pharmaceuticals wasn’t one of them! That’s right — he thinks these 5 stocks are even better buys.

See the 5 stocks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.