Cross post:
For quite some time Clinuvel has been criticised by many (myself included) for weak communications, inadequate responses to queries from at least some investors and for being passive in marketing the tremendously exciting long-term potential which brought us all here often by accident or luck.
In the last 6 – 9 months I think we’ve seen an improvement in this. Now that they are finally beginning to take steps to deliver action beyond EPP in the US, it’s pleasing to see communications rachet up. We’ve seen them continue to publish 4Cs beyond the statutory requirement to do so, we’ve seen better descriptions around these releases, and we’ve even seen their first ever webinar to discuss full year results. These have been useful steps, but the reality is, by their nature, these events tend to be mostly historically focused. I’m getting excited by the fact they appear to be on the verge of talking in more detail about the future.
Twice now the company has referred to providing a strategic update in October. Whilst we’ve seen deep background scientific updates from time to time, along with Newsletters of variable value, this is, as far as I can remember, the first time the company has broken out from the standard results/AGM cycle to focus only on forward strategy. If they get it right, this could deliver the narrative far wider and in more detail than they’ve achieved historically.
Obviously I have no idea what format they are delivering this update in, but I hope they do something along the following lines in terms of content and delivery:
- Multipage presentation, including descriptions, which goes well beyond a typical 2 page press release.
- Webinar/conference call, advertised in advance, open to all where the strategy is delivered and the opportunity to question directly is offered. Questions to management filtered by IR will never fully tick the transparency box.
- Set out the full suite of target indications for the product families and name the 2 (or is it 3?) new indications which have recently been referred to in the Bioshares piece and latest Newsletter.
- Answer the key outstanding questions about next steps in Vitiligo, VP, Enfance, Topical, OTC as well as the recent focus on Prenumbra and XP. Are these all still targets, or have some fallen by the wayside?
- For all of the above, indicate development priorities and expected timelines. I believe there is a tolerance for missing timelines if the rationale is fully and fairly explained.
- For all of the above, indicate some commercial expectations/potential. Give us a clue as to why the business is pursuing these particular priorities.
- Beyond product lines, tell us more about China. What are the other geographical priorities? What is the commercial potential?
- Tell us about acquisition plans. What is the vertical integration plan? What might be spent on this? I’d like to see some kind of policy guidance to enable us to estimate acquisition firepower. What quantum of balance sheet cash is envisaged as the minimum the company will carry? What is the dividend payout ratio policy? Under what circumstances would the company resort to debt/new equity issuance?
I’d love to see some of this presented and discussed by management who is not the CEO od CFO. In the last 12 months both the Director of Clinical Affairs and the Director of Regulatory Affairs have left the company. One would have thought the development of the company hinges upon success in the lab and with regulators. It’d be great to get a snapshot of the calibre of individuals now taking up these tasks. Given that Clinuvel doesn’t have a blemish free track record in trials or regulatory matters, establishing credibility in these areas is important.
I’m sure there are many other important points they should cover in such an update, and the above is just something of a wish list.
If they get this right, it could mark a turning point in the corporate profile and increase their visibility dramatically. It’s not long to wait till October now. I hope they hit it out of the park.
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