Ann: SCENESSE Treatment in Europe-CUV.AX, page-10

18 months ago when the price of the implant was discovered I made some predictions regarding expected sales and share price.
Since then the share price has almost doubled so I am not riddled with guilt if anyone bought on the strength of my post however it has not proceeded as I had hoped for. Nothing ever does!

The German rollout has been, and remains an issue. Pricing negotiations were “difficult” however ultimately successful but much more unexpected was the log jam encountered at the doctor patient level. With patients being turned away due to lack of resources, this has resulted in a much slower take up in the largest non US market. This is expected to only slowly resolve over the foreseeable future tempering revenue expectations.

UK was expected to be done and dusted without incident. The HST/STA/HST debacle cost time with NICE recently delivering a negative preliminary assessment. Clinuvel’s second biggest market outside of the US is seemingly no closer to reimbursement also tempering expectations.

Switzerland, proceeded in the courts with Clinuvel escaping with a bloody nose and damaged reputation having been tarnished with the greedy pharma brush. A problem which seemingly could have been avoided with Swissmedic approval.

Italy has been slow to adopt the new price and some concessions by Clinuvel were given with an agreement to pay for the screening required as part of the EMA dictated post approval safety study.

Austria seems to be treating patients in the single digits and is of little consequence.

Holland is the shining light, with over 100 patients receiving treatment paying full price.

There remains no news from other EU countries or Norway. Wolgen in the AR has reported that a further 6 countries will be targeted in 2018. This has been perhaps disappointing. 5 US patients travel to Switzerland to receive the implant at an unknown price, this is subsidised by US insurance.

What is extremely positive is the reported rate of re-treatment with over 90% of treated patients re-attending for treatment in the second year. This is consistent with the long term data from Switzerland and Italy where the numbers actually increased over the 8 year observation period. This is outstanding for any intervention that treats a symptom only.

I was hopeful of a revenue of $100 million this year, 2018 with over 1000 patients being treated. Last year it was 17 million and with the issues discussed (no UK patients, very few in Germany) clearly Clinuvel wont get anywhere near 100 million this year. $5.5 million in the first quarter with reduced revenues expected for the next 2 quarters, maybe $20-25 million revenue this year. Expenses should be reasonably stable at 9 million. My predicted PE of 50 seems to be about right so a market cap of around 550 - 800 million is still achievable and reasonable IMO, share price $11 - $16. Still plenty of upside and limited downside.