Clinuvel (ASX: CUV), arguably one the best biotechs on the market, is trading at 35-40% of its true value (based on my research, not advice). CUV specialise in treating patients who suffer from severe skin disorders. If the name CUV or Clinuvel sounds foreign, then I suggest reading our digestible, free and extensive report here. CUV’s decline is making the biotech of the most shorted stocks on the markets. However, if we put the share price aside, we are looking at a biotech with huge upside potential.
Today we are providing our readers with
- A CUV COVID-19 update.
- Uncovering Clinuvel’s price-sensitive announcement for tomorrow.
- Whether CUV is worth the investment and what are the best investment strategies to use.
CUV COVID-19 update
Unlike most companies, COVID-19 is not disrupting Clinuvel’s operations. While CUV remains unaffected, they started supplying their drug SCENESSE to both the United States and China during April.
The US distribution plan
- Phase 1: Three hospitals and Medicare centres are selected to administer SCENSSE to patients.
- Phase 2: Medciare-Medicad provide a review of SCENSSE. The review determines whether the drug should receive national coverage.
- Phase 3: Direct distribution of SCENESSE to 30 US centres. Each centre is then trained on how to administer SCENESSE.
The Chinese distribution plan
- CUV is linking arms with Winhealth Pharma to deliver SCENESSE to 10 Chinese patients.
- CUV is responsible for drug safety and clinical care. Where Winhealth is responsible for hospital management
- Success in these 10 patients should see CUV receive regulatory approval from the NPMA, Chinese authority, to distribute SCENESSE across China.
— CLINUVEL (@ClinuvelNews) April 23, 2020
There are no treatments for EPP, which is the disease SCENESSE treats, in China and the US. Thus CUV’s distribution in China and the US is the blueprint for increasing its revenue and improving lives.
What is CUV releasing this week?
On the 3rd of March CUV announced that on the 29th April the FDA would discuss the North American vitiligo-SCENESSE program. Vitiligo is where the pigment of your skin becomes damaged, causing a series of white patches around the face, chest, and arm area. The disease is strikingly more noticeable in patients with darker skin.
Tomorrow’s meeting involves the FDA providing CUV with guidance on how to bring their drug for vitiligo to the North American market.
The announcement alone on the 3rd of March caused a volcanic 22% surge. Just imagine, the market reaction to positive results from the meeting tomorrow. So what would be some positive announcements for the conference?
- FDA provides a clear, realistic, and relatively short path to market without any hurdles for CUV.
- No issues arise/
- The Food and Drug Administration gives CUV the green light to begin CUV104 and 105 trials in North America.
- The Global vitiligo experts don’t raise any concerns and give the green light.
In my opinion, a positive announcement is probable. Because there is currently no effective treatment for patients suffering from vitligio in North America. Also, CUV102 and 103 trials proved that SCENESSE, when combined with UVB (current treatment) effectively, treats vitiligo. Thus, making it in the FDA’s best interest to accelerate the development of a SCENESSE-UVB drug to market.
Moreover, CUV’s Chief scientific officer stated, “Our team has been waiting for this moment ever since we gained FDA approval for SCENESSE back October.” Considering the FDA approval triggered a 72% surge in the share price, we could be in for a big one this week (opinion, not advice).
Is CUV worth the investment?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
All kinds of traders are looking at CUV.
- Short term traders profiting off price-sensitive events
- Investors shorting stocks during COVID-19
- Long- term investors snapping up quality blue-chips.
CUV is an attractive investment. (opinion not advice) Especially considering Clinuvels H1 2020 financials and their impressive developments in Australia, America, and Asia.
I currently hold CUV shares. I topped up today in preparation for tomorrow’s announcement. The best investment strategies for CUV include a dynamic short term and a progressive negative. (opinion not advice)
Dynamic Short Term (DST)
A Dynamic Short Term is where you can either reap the rewards of a short-term spike or opt-out and hold for the long term. Thus, a DST on CUV would involve investing to reap the rewards of tomorrow’s announcement. In this scenario, you can cash in on potential gain or opt-out and hold for the long term. Opting out for the long-term might mean you take a paper loss on CUV until the markets return to normal. (opinion not advice)
I do not advocate DST’s on every stock. However, a DST on a quality blue-chip like CUV could work like a charm. (opinion not advice)
Progressive Negative (PN)
However, let’s say the announcement does not cause explosive growth, and CUV follows a bearish decline. If I already invested, I would not pull out and create a paper loss. Because CUV holds long term potential. (opinion not advice)
Instead, I would look to invest more as CUV declines. I would set predetermined percentages targets where I would snap up more shares. For example, every time CUV drops 10% in value, I might invest $1000.
Bear in mind that progressive negatives only work on stocks that have a high chance of recovery. (opinion not advice)
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Patrick McLoughlin, Senior Manager of YIG.