After a pretty pointless newsletter from the CEO it was good he bought a few shares to: 'On-market purchase, reflecting confidence in, and commitment to, the business.' It is clear confidence has eroded and many long term supporters and shareholders have had their confidence smashed in a way that a tokenistic share purchase will not overcome. Since FDA approval the Chair/CEO combo have delivered ASX200 exit and large erosion of shareholder wealth, however the Chair commented in the AR on the 20% increase in the share price and Wolgen mentioned in his letter that some shareholders have 'taken profits' since the AR. Maybe this is a reference to short sellers because few others have profited from Clinuvel in the last 4 year olympic cycle. Yes, shorters are still there playing their daily manipulative games and even now are once again adding fake sell side liquidity to the low volume market as they have done for many years with carefree abandon and seemingly little fear that management will upset their plans. I have often said how CUV is financially peerless and the AR was a new milestone in this strength, however in regards to share price progression they have vastly underperformed peer stocks and in my opinion this must be laid at managements feet. One of the very best comparisons is Disc medicine, which is many years away from entering the EPP market where CUV enjoys a monopoly. Disc makes significant losses, which is ok for this stage, but they may never even get an approval and they certainly don't make great profits like CUV or have an FDA approved drug in their near term future yet they are valued at about $2 Billion AUD while CUV languishes at about 0.75 Billion (with $160M cash). Amazingly Disc should probably raise a bit of funding and offer cash/shares to take over CUV - CUV already monopolise the market DISC is seeking to enter with their lead drug candidate and they are already profitable - seems like good business sense rather than pouring money down the drain with no guarantee of success in 4-5 years time. What an absurd situation when the hopeful has a valuation ~3 times higher than the commercialised, highly profitable FDA approved market monopoliser. Valuations overall in healthcare stocks are still quite good, among the profitable ones CSL, COH, NAN and PME all enjoy vastly higher PEs than CUV. And higher valuations on the 'hope' of one day achieving are profit are much better with many, many loss making or development companies compared to CUV who have pretty much no valuation for any future indication or profit growth baked into the share price.
As I also mentioned it is weird CUV allows this state of affairs to continue, I said some weeks ago that by allowing short attacks, manipulation and an ultra weak share price that management is allowing the narrative to be all negative - which is strange for a company which likes to be very in control of everything. Why do they allow the share price to be slammed and create the narrative? It is the first thing many look at when examining a company for the first time. It is as clear as day they need to perform a share buyback, they are banking $1 Million NPAT about every 11 days and would have about $160 Million now. Just take ~12% of that cash or $20 Million and buyback at least 1 Million shares. This is more than 2% of shares on issue as CUV only has about 49 Million shares issued. If done properly and with some significant insider buying after the buyback is announced it would go a long way to restoring confidence while having lasting benefits to the company and to shareholders. Throw another $10 Million in at the next AR and I would be very surprised if they did not get back into the ASX200 by then if clinical progress also advanced. It would make the financially peerless balance sheet of CUV even stronger and provide relief for long suffering shareholders who have been very supportive over the years.
Setting aside clinical progress, there is a bright spot for all and no it's not voting at the AGM
. Mrs Arrom Bibiloni commented in Edition 1 of Clinuvel Bulletin just a few months ago in May 2023 that they are aiming to make Clinuvel a household name by 2026. The plain-speaking in this bulletin was a true breath of fresh air and 2024 will see the launch of DNA assisted skin repair and 2025 launch of the self-tanning risk-free product (Holy Grail?). I eagerly await her next communication and some traction in becoming that household name in such a short time. I would have liked to see much more about this in the AR rather than all the ESG box ticking I had to flick past, such a waste of paper, I would have much preferred to see all the ESG stuff replaced with a simple paragraph that Australian EPP patients can now receive Scenesse under the PBS, that would carry more weight with me.
All IMO DYOR
(20min delay)