The News Corp media is that morning reporting that sell-side broker Bell Potter has upgraded ASX stock Clinuvel Pharmaceuticals (ASX: CUV) to a "buy" rating.
Clinuvel is a global biopharmaceutical business headquartered in Melbourne that sells treatments for a range of genetic and skin disorders with its main product named SCENESEE that is used to treat a rare genetic skin disorder called erythropoietic protoporphyria (EPP).
Its shares are now up more than 150% over the past year after it reported a profit of $4.076 million on revenue of $8.98 million for the six month period ending December 31 2018.
The revenue and profit were up 27% and 189% respectively over the prior corresponding half year period. It also held no debt and $42.3 million cash on hand to fund its growth strategies.
Its SCENESEE product is approved and sold in the EU and the company has applied to the US healthcare regulator the FDA for permission to sell the product to certain classes of patients, with a decision from the regulator due in July 2019.
Management appear confident the product will be approved, with it reporting that approval would potentially double its EPP product's addressable market.
However, investors should remember that there's no guarantees for new product approval from the FDA, while anticipation of the product being approved may already be factored into the fast-rising share price.
Another ASX-listed biopharmaceutical company to have a product application delayed (at a minimum) by the FDA recently is Starpharma Limited (ASX: SPL), despite its management team telling investors they were confident their product application would be approved.
Clinuvel has a market value of $1.24 billion today based on a share price of $25.33, which suggests investors are confident it will get the US regulatory approval required. If not the stock could come under selling pressure.
