Clinuvel Pharmaceuticals Ltd (ASX: CUV) shares were out of form on Friday.
The ASX All Ords stock ended the week with a 10% decline to $10.01.
This leaves the biopharmaceutical company's shares trading close to a 52-week low.
While this is disappointing, the team at Bell Potter believes it has created a compelling buying opportunity for investors.
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What is the broker saying about this ASX All Ords stock?
Clinuvel is a biopharmaceutical company distributing its lead drug Scenesse (afamelanotide) across Europe, the US, and Israel. It is for patients with the rare disease erythropoietic protoporphyria (EPP).
In addition, Bell Potter notes that the ASX All Ords stock is looking to diversify revenues through undertaking clinical trials to expand the approved use of afamelanotide in additional indications (such as vitiligo) and is developing additional pharmaceutical products.
The broker highlights that Clinuvel's performance during the first half was mixed, with revenue falling short of expectations but earnings coming in stronger than expected. It said:
Revenue increased 4% on pcp to $36.9m but was 2% below our forecast and 3% below VA. Earnings were a $2.2m and $2.4m beat to our forecasts at the EBITDA and NPAT lines, respectively, due to opex reducing materially from the preceding half. The company maintained an impressive >90% gross margin. Closing cash balance was $233m with no debt and increased +$9m from 30-June-2025.
While Bell Potter expects a competing product to be approved for EPP in the near future, it is confident that its growth will continue thanks to new product launches. It adds:
Forecasts are updated to reflect lower topline growth and lower operating expenses. The reduction in opex more than offsets the revenue decrease, hence earnings are increased in the forecast period. As detailed in this note, we continue to expect at least one other EPP market entrant will eventually obtain approval in the future, albeit not for at least another 12 months, thus we currently forecast EPP sales peaking in FY27-28 before ACTH and vitiligo restore growth for CUV.
Huge potential returns
According to the note, the broker has retained its buy rating and $19.00 price target on the ASX All Ords stock.
Based on its current share price of $10.01, this implies potential upside of 90% for investors over the next 12 months. It concludes:
CUV's EPP franchise continues to provide a strong financial foundation, however the key driver of our investment thesis is the opportunity to expand Scenesse into the far larger vitiligo indication. The first vitiligo Phase 3 trial (CUV105) readout is quickly approaching (2H CY26).
A successful readout would drastically de-risk this step-up in market opportunity and see renewed investor enthusiasm. Lastly, the company's ACTH program could come to market in the next ~2 years and provides another interesting avenue for growth and diversification.
