The light protection enabler
We are initiating coverage of Australian Clinuvel with a buy rating and a price target of AUD 31.70 per share, since we believe investors are not fully factoring in potential opportunities to Clinuvel’s long-term growth in the global skin protection market. The orphan disease drug company is dramatically expanding top-line growth in the near-term as we expect the company to expand its global footprint in EPP. Apart from these significant growth opportunities, that even a rare disease like EPP offers, we expect even more in the years to come, since (1) Clinuvel is expected to launch its vitiligo product in 2021e, representing a substantial larger market than the rare disease EPP, (2) the launch of a topical product should make room for the mass market of non-prescription skin care solutions, and (3) Clinuvel could also offer a treatment for various Central Nervous System disorders among them MS, dementia, Alzheimer's, Parkinson's, ALS, or Huntington's. Apart from EPP, none of these growth opportunities have so far been factored in into our company valuation, leaving substantial upside to our price target in the long-term.
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.
Founded in 2010, Sphene Capital is a German based pure-play research house offering state-of-the-art research and evaluation services to European small- and mid-caps by avoiding typical conflict of interests of traditional investment banks.
As a general rule, analysts of Sphene Capital strive to understand companies better than any other analyst or investor before publishing their initiation reports. Therefore, the comprehensive initiation research reports comprise of 50-80 pages, including an extensive analysis of the value chain of the IPO candidate, its unique selling proposition, an elaborate analysis of suppliers and clients, a thorough SWOT analysis, a commercial due diligence (i. e. market and competitive analysis), an integrated financial forecast model and a profound company valuation (both DCF methodology and peer group multiples). Before publication, each of Sphene Capital’s research report will be double-checked by a fellow research colleague (“Four-eyes-principle”), ensuring highest quality and avoiding careless mistakes.
After initiation of research coverage, Sphene Capital publishes regular updates of 12-30 pages following relevant news flow from the issuer or major peers, f. ex. after acquisitions or after publication of quarterly results.
Due to Sphene Capital’s extensive experience in equity and bond research, the team has established longstanding contacts to all relevant market players, i. e. institutional investors, family offices and high net-worth individuals as well as journalists. To each of these groups, Sphene Capital’s research analysts have regular contacts during analyst and management roadshows or via daily phone calls. Finally, analysts publish articles in selected stock markets magazines and websites in which the analysts help issuers to improve their popularity on the German capital markets.
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