FDA approval for Scenesse
The US Food and Drug Administration approved Clinuvel’s Scenesse treatment for EPP (erythropoietic protoporphyria) as a new molecular entity and medical innovation in the United States. EPP is a rare genetic disorder of the heme biosynthesis pathway which causes severe anaphylactoid reactions and burns (phototoxicity) following even brief exposure to visible light, both of artificial and natural light sources. With the approved new drug application (NDA), Scenesse becomes the first global systemic photoprotective drug for the treatment of patients with EPP, since the drug has been approved in Europe in 2014.
According to our estimates, 4,300 US-EPP patients could benefit from the approval. Since Clinuvel has adopted a uniform global pricing policy, we expect pricing in the US will be similar to Europe, where Clinuvel reached an agreement where annual costs of Scenesse therapy range between EUR 56,000 and EUR 84,600 per EPP patient depending on the number of implant injections. Therefore, we estimate total market for EPP treatment in the US between USD 260 mn and 400 mn.
Even after the FDA approval, we expect a steady positive news flow from Clinuvel in the following months. Main topics will be announcements regarding (1) submissions of New Drug Applications to authorities in Japan (PDMA) and Australia (TGA); (2) the Phase IIa proof of concept study where patients suffering from orphan disease variegate porphyria (VP) will be treated with Scenesse; (3) progress in the upcoming scientific vitiligo studies which would give Clinuvel access to an untapped market of substantial size; (4) announcements of a third indication, most likely xeroderma pigmentosum (XP), a disease which is defined by extreme sensitivity to sunlight (and therefore similar to EPP); and (5) the appeal against the decision of the UK National Institute of Health and Care Excellence (NICE) to not recommend Clinuvel’s Scenesse for use by English National Health Service for adult EPP patients (March 14, 2019).
Following the strong outperformance of the shares since initiation of our research coverage in January 2018 (+343.9% vs. ASX 200 +6,2% and DAX -8.4%), we confirm our buy rating for the Clinuvel shares with a base-case scenario equity value of AUD 58.40 per share. In a Monte Carlo simulation, we calculate bear and bull case scenario equity values of AUD 113.60 and AUD 33.10 per share, respectively.
Clinuvel Pharmaceuticals is a biopharmaceutical company engaged in the development of its drug candidate SCENESSE® (afamelanotide 16mg) for the treatment of a range of severe skin disorders. SCENESSE®, a drug targeting erythropoietic protoporphyria (EPP), has completed Phase II and III trials in the U.S. and Europe and has been approved by the European Commission for treating adults with EPP. Co.'s products aims at preventing the symptoms of skin diseases related to the exposure to harmful Ultraviolet radiation and at repigmentation of the skin due to a number of depigmentation disorders. Co. has operations in Europe, the U.S. and Singapore.
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