Found this posted on another board - seems to answer your...

Found this posted on another board - seems to answer your question.
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The Australian
4 September 2007

BIOTECH companies are selling a vision more than anything, so we shouldn't be shocked they've been trashed by a market looking for hard cash, not fuzzy dreams.

Yet results from advanced drug developers usually have been encouraging, such as Pharmaxis's "stunningly successful" trials of its lung disorder drug Bronchitol.

Skin disorder group Clinuvel has been hammered, despite launching phase-three trials to test two uses for its photo-protective compound CUV1647.

The disorders are sun poisoning and absolute sun intolerance. The latter is fortunately rare, affecting 30,000-40,000 people globally.

Sufferers are called "shadow chasers" in that they can't leave their home in direct sunlight.

Clinuvel is still trying to divest itself of the more frivolous image of its former guise EpiTan, which aimed to perfect a fake tan.

Mention such cosmetic applications to new CEO Philippe Wolgen and chairman Roger Aston and they'll grimace.

In reality, though, Clinuvel's targeted sectors are very small so the company needs to find a wider application to make the game worthwhile.

The most obvious is a preventative drug for skin cancer. To this end, Clinuvel is working on phase-two trials involving kidney transplant patients, who have a high chance of dying from skin cancer.

But a non-therapeutic application could well emerge as the biggest market -- and we're really talking about a safe, fake tan. After all, CUV1647 is all about darkening the skin by producing more melanonin, which boosts the skin's immunity to harmful rays.

There's a classic precedent here: the frown-numbing Botox was first developed as an eye anaesthetic for a niche market.

Given the recent publicity about the dangers of solariums and moves to tighten industry regulation, Clinuvel might be able to hit more than one bullseye with the one stone.

The downside is that Clinuvel holds only one stone, with little else in development beyond CUV1647.

"We're working on the one drug, but one drug with the safety of multiple potential applications," Wolgen says.

Clinuvel reported a $9.17 million loss for the year to June 30, on revenues of $2.5 million.

Clinuvel has cash of $62 million after tapping investors earlier this year, and shouldn't need more.

According to broker Intersuisse, the stock has declined "simply due to a shift in the global perception of risk and capital to more conservative assets".

Criterion rates Clinuvel a hold, after last assigning an avoid at 83c in early February. The stock leaped 10c, or 12 per cent, yesterday.

Clinuvel is firmly on track, but its share price will remain vulnerable to poor news or, indeed, no news. As Wolgen notes, investing in biotechs at drug development requires more than skin-deep faith.

"You are selling the dream pre-revenue, an illusion that something is to come."