The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price had a good day on Thursday. Shares in the Aussie pharma group rocketed 9.2% higher to lead the S&P/ASX 200 Index (ASX: XJO) winners.
So, what's causing a surge in Aussie pharma shares like Clinuvel and is it still in the buy zone?
What does Clinuvel Pharmaceuticals do?
Clinuvel is an Australian-headquartered, global pharmaceutical company. The group focuses on developing and delivering treatments for patients "with a range of severe genetic and skin disorders".
The company has operations across photomedicine, pharmaceutical and photocare within the broader industry.
As at Thursday's close, the Clinuvel share price was trading at $21.51 per share with a market capitalisation of $1.1 billion.
Why did the Clinuvel Pharmaceuticals share price surge higher?
The big announcement yesterday was an expansion of Clinuvel's SCENESSE drug (afamelanotide 16mg) to treat the disease xeroderma pigmentosum (XP).
Clinuvel has made great strides in the development and application of SCENESSE for a number of years. Yesterday's announcement is the latest step as it looks to treat XP, a rare genetic disorder affecting one in one million people in the USA and Europe.
That was good news for shareholders who were quick to buy in and bid up the Clinuvel Pharmaceuticals share price.
Is the Aussie pharma share still in the buy zone?
Despite yesterday's surge, the Clinuvel Pharmaceuticals share price is down 24.9% for the year.
Given that it also trades at a price to earnings (P/E) ratio of 65.2, I'm not sure I'm keen on buying just yet.
Thursday's announcement was a promising step but I think I'd like to see more positive test results before buying.
In the meantime, I think there are some other strong candidates in the biotech and pharmaceuticals sector.
Personally, I like the look of Polynovo Ltd (ASX: PNV) as it expands into new, lucrative markets with its NovoSorb BTM technology.
