Quiet Contrarian. Ep53: Trades for February 2024

Buys

Clinuvel Pharmaceuticals Ltd – CUV.ASX – Continuing to increase my position. Revenue growth is slowing as they reach the end of the growth trajectory for the initial use for the drug (EPP treatment, rare condition, orphan drug status). They are currently seeking new uses for Scenesse to treat 5 other conditions, and have increased operational costs to do this. On top of that they have another drug, Neurachtel, in clinical trials, and a new product Cyacelle which is “next-generation photoprotection”. Overall, I like the way they are running the business and think there may be significant opportunities for them. Will continue to buy in when I see opportunities (currently 2/3 in. One more tranche to go for full position).

Sells

Neuren Pharmaceuticals – NEU.ASX – They had a huge run up after their release, with an extremely rapid uptake. However, there have been concerns about patient retention rates. The drug is very expensive and requires insurance to pay for it. Insurance will only pay if there are positive changes. There are uncertainties about the patient retention after 6 months, if there are no positive changes. Current high estimates are 68%, low estimates are 13%. Of the 5000 people diagnosed with Rett syndrome in the US, 800 have already tried the drug in the first 6 months. I have not seen any information on how many of the remaining patients will go on the drug? There will be more country roll outs, and these will probably also follow a large initial spike, then a pull back. I am nervous from the large amount of uncertainty, so pulled out for now. Will keep an eye on the sales rollout and re-evaluate as more information becomes available.