The CLINUVEL Pharmaceuticals Limited (ASX: CUV) share price has edged higher on Tuesday following the release of the biopharmaceutical company's third quarter update.
In late afternoon trade the CLINUVEL share price is up over 0.5% to $23.67. This small gain means that its shares have now rallied 101% higher over the last 12 months.
What does CLINUVEL Pharmaceuticals do?
CLINUVEL is a biopharmaceutical company focused on developing and delivering treatments for patients with a range of severe genetic and skin disorders.
Its lead compound is SCENESSE, which is a first-line pharmaceutical product aimed at treating patients with the rare genetic disorder erythropoietic protoporphyria (EPP).
The product has been a huge success and has significant growth opportunities ahead, notably in the United States where the US Food and Drug Administration has granted a Priority Review for SCENESSE on July 8.
If it can satisfy the FDA's requirements the drug could be on sale in the United States in the very near future, giving its sales a considerable boost.
Not that its sales aren't already growing at an explosive rate. This morning's quarterly update revealed that cash receipts in the March quarter were $5.9 million, up 126% on the previous quarter and 70% on the prior corresponding period.
This brought its year to date cash receipts to $19.2 million, which is an increase of 44% on the prior corresponding period.
Should you invest?
Whilst I think CLINUVEL is an exciting company and SCENESSE is a quality product, I wouldn't be a buyer of its shares at the current level for valuation reasons.
As strong as its growth has been this year, I'm not convinced it justifies its market capitalisation of approximately $1.15 billion.
In light of this, I intend to stick with fellow healthcare shares CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH), but will be keeping a close eye on CLINUVEL's progress.
