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09:03
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Originally posted by Silverchair:
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Did a little more research on DISC and found something interesting which makes the valuation difference with CUV all the more absurd. Clinuvel is only commercialised in EPP for now, and the leading drug candidate for Disc is targeting EPP, so it's a direct apples/apples comparison - although Clinuvel is much closer to expanding to the huge Vitiligo market than Disc is to progressing with anything so has nearer term greater potential. From what I read, even if Disc is successful in many years in entering the EPP market they will have to pay royalties to the company they purchased the trial molecule from and they will also potentially be making very significant milestone payments of tens (maybe hundreds) of millions of dollars! Clinuvel is vertically integrated and none of this is an issue for investors where profits are shared amongst just 50 Million shares. Loss making Disc makes significant losses, which is ok for this stage, but they may never even get that approval and they certainly don't make great profits like money-printing CUV yet they are valued at ~ $2.6 Billion AUD while CUV languishes at about 0.67 Billion (with $175M cash) ~ 4 times higher ( the phase III clinical trial underway for the blockbuster indication Vitiligo with their ALREADY FDA approved and safe drug
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I think the valuation difference is simply reflects the price premium that the market puts on good governance with competent, honest management - and the steep discount when these are below par. CUV would re-rate dramatically if governance were excellent and the C-suite inspired confidence.
(20min delay)