Managing Director’s Letter

Dear Shareholders,

Review of 2020-2021

I look back on a year marked by several distinct highlights within our Group, and it is fair to state that it has been far from easy to operate under the worldwide conditions. Despite the restrictions our teams faced, 2021 will go into our history as one with unforgettable moments to cheer our teams’ performances in serving targeted patient populations.

The zenith was undoubtedly our team’s ability to overcome the numerous delays occurring in the supply chain and drug distribution to hospitals under the COVID-19 conditions. We appointed new EU and US facilities providing cold storage for our hormonal therapy, we succeeded in overcoming stricter import criteria and managed to distribute, despite hospital restrictions. In categorising our treatment as innovative medical care administered within secondary care facilities, the greatest challenge had been to prolong the supply of SCENESSE ® to selected hospitals, which were all operating under very limited schedules.

Additionally, we faced restricted schedules of (EPP) patients’ appointments as critical care patients had obtained priority status within hospitals.

As our teams navigated barrier nursing and protective isolation in university centres and specialised centres, we spent most nights through various time zones finding novel solutions for problems nobody had ever faced before. There are quite a number of senior managers who deserve public acknowledgement for their mammoth achievements over the past 12 months, but I would risk short-changing all others in the Group who have equally pulled their weight behind the scenes and made 2021 the most successful year in the Company’s history. It is one not to forget.

Another critical observation is that the silent credit our team has built over the years vis a vis regulatory authorities, the EMA, HPRA and FDA, has led this year to a remarkable degree of collaboration and support in assisting CLINUVEL to operate a just-in-time drug supply in both continents. The intangible currency our team has accrued during two decades of dialogue with the three leading agencies had become quite apparent from the exchanges with the regulatory authorities, who are holding the final card when it comes to drug supply. I witnessed first-hand how longstanding relationships between our managers and regulatory decision makers in Silver Spring (USA) and Amsterdam (Netherlands) has led to constructive dialogues in seeking solutions to serve patient populations with a chronic disease, i.e., porphyria. The unscheduled by-product of longer term adherence to strict plans (namely risk management plans, and quality systems), but also the consistency of our lead managers, is a surprising working relationship between our technical staff and these three agencies, particularly at times when it really mattered.

This year, we disclosed how the Company has gradually balanced its clinical research attention between brain and genetic diseases. As part of our planning, we treated the first three patients with ischaemic stroke, a condition affecting large swaths of society. With great satisfaction, we observed how the first stroke patients with a history of heart disease responded to treatment as part of trial CUV801. Although early days, we recorded first safety data from this new population at risk. The COVID-19 restrictions caused delay in recruitment and, as the site was working with limited staff, clinical studies became secondary to clinical care of stroke patients.

We treated the first xeroderma pigmentosum (XP) patient, while Ethics Committees and National Competent Authorities deliberated at length and with great care so as not to expose XP patients too early to a novel hormonal treatment. At the time of writing, the first Ethics Committee has provided a green light for the first study in XP patients. The mid-term goal is to evaluate the effect of afamelanotide on photoproducts affecting the DNA helix of these patients. The scientific data generated in XP trials will further assist CLINUVEL’s scientific team in their innovative work on topical products, with the aim of demonstrating beneficial effects on UV-provoked damage on DNA.

Another highlight was the fifth consecutive commercial year, when we adhered to the uniform drug pricing policy in Europe, while setting a first and similar equitable standards across all US states. The response from insurers and healthcare providers has been undividedly positive, providing us with further affirmation of CLINUVEL’s differing approach to pharmaceutical markets. In addition, the first market access obtained in Israel was an unexpected event led by Mrs Colucci and her team, while discussions with the Ministry of Health and individual insurers had been encouraging throughout 2020 and 2021. As we obtained the green light from the National Committee for Healthcare (“Healthcare Basket”), we put the framework in place to import SCENESSE ® into Israel. In the meantime, the first Israeli EPP patients have received the drug.

A milestone was undoubtedly the 10,000th SCENESSE® implant administered, equating to 70,000 drug exposure days. This remarkable billboard requires a longer discussion about the product’s consistency concerning its safety profile and future implications for our programs; we will come back to this on another occasion. However, the statistics of safe drug administration allows for further developments of melanocortin drug candidates in humans.

Overall, we saw our headcount increase with professionals adding new skills to our existing teams. Working remotely brought out the advantages of saving time from commuting, while accentuating the frustration of working from home, deprived of human interaction. The lockdowns required from each staff member in our seven offices, longer term discipline and focus to communicate on-screen.

Other highlights were the progress of the PRÉNUMBRA ® program, the performance of the Singapore team and the innovation driven by leading managers Mr Choy, Ms Yu and Dr Ng and their loyal staff. All in all, our team in Singapore, led by senior managers to get through the circuit breaker, displayed a high level of discipline.

In staying with high-risk populations, albeit in a non-medical market, our division of Healthcare Solutions advanced the development of product lines to mitigate solar skin damage and skin cancers. With this total focus on the wellbeing of patients and selected populations, we expanded our company with scientific talent, a Communications, Branding and Marketing team, and additional professionals with expertise in chemistry, manufacturing, and control.

Quarter on quarter, we recorded better than expected revenues and higher net profits. We managed to expand our operations and investments in research-development-innovation, while restricting other variable costs to see the Group eventually increase total costs by a marginal 2%. Our financial management remained scrupulous when it concerned the overall profitability of the Group.

Our finance team expanded. New accountants and managers fitted in well, setting out to work on the financial households of our subsidiaries. We adopted a uniform accounting practice using new systems easing the consolidation of our financial reporting. Our finance team passed a 16th year of biannual audits, and it has been obvious that its accomplished leadership is one of the main reasons behind CLINUVEL’s performance. I have shared my views on the importance of having a robust finance team at various occasions during our frequent News Communiqués.

First-rate in execution, the excellent financial performance of FYE 2021 provides the Company with future choices and a basis for further growth. Our consistency in financial management answers my personal views to establish a Group able to withstand unexpected oscillations, not rendering the Company dependent on either equity or debt financing. While we remain aware of the cyclical nature and risks in our sector, we prolong our chosen course by investing wisely in people and technologies.

Common Thread

Our company’s operations are centred around the unaddressed needs of patients, and our overall success hinges on patients’ response to our therapies as well as physicians’ assessment of efficacy. As a pharmaceutical group entirely committed to improving the lives of patients, all our corporate functions are aligned to serve primarily medical communities. This year, we have added wider populations at risk; we now focus part of our efforts to serve populations at high risk of incurring a second fatal stroke, as well as XP patients incurring debilitating and fatal skin cancers.

Throughout all our work and all divisions runs a red line, longitudinal care. Our mission is to communicate and engage long term with our patient community, medical community, researchers, stakeholders, regulatory authorities and shareholders. Our management team has been together a long time, in some cases fifteen years, and part of our business is to follow up, manage and monitor the relationships we have built over time with all forementioned stakeholders. I regard tremendous clinical and therefore business value in longitudinal management of key protagonists. Patients who have remained on SCENESSE® therapy deserve a consistent and long-term communication with and from the Company, and we take the same approach to other stakeholders.

I look back at a fundamental discussion which took place in March. German-speaking shareholders posed questions about CLINUVEL’s mission and its broader position within the pharmaceutical sector. Here, my views remained unwavering, as I believe CLINUVEL is here to serve the needs of unattended patients and populations at risk.

By communicating and fulfilling this clear mission, we stay true to a common and recognisable course of developing and commercialising unique products. Central to our objectives are the various unaddressed medical populations and individuals prone to incurring cerebral damage, but also those in danger of incurring multiple often fatal skin cancers as a consequence of the genetic disorder XP. This clear mission has already provided value to first end-users, porphyria patients.

A pertinent question was why CLINUVEL had pursued the current strategy?

As commented on at previous occasions, this Board and managers take strategic decisions based on a variety of criteria which remain unique to CLINUVEL and befit our group of professionals. Our strategy could be interpreted as perhaps differing from that of peers, however in general there is little point of comparing with motives that apply uniquely to others. So why then this strategy?

In the case of porphyria patients, we had identified a group of individuals who had remained unattended; no other company in the history of drug development had bothered to pay medical attention to these patients. Having introduced the first systemic photoprotective therapy to these patients has doubtlessly been a meaningful cause, as we learn day to day from their families and caretakers.

In 2006, we first analysed XP and its impact on patients. It became our main objective to treat this population using a systemically-targeted melanocortin. For those who had followed CLINUVEL closely, a long road has been travelled to gain access to these patients who are highly prone to develop and succumb to four types of skin cancers. Unaffected by the passing of time, our quest to become the first company globally to offer a systemic therapy to XP patients had never faded. However, we were driven to execute a clinical and regulatory plan to gather necessary safety data “beyond reasonable doubt”. In selecting EPP, a condition characterised by absolute light intolerance, we started our journey towards XP. In simple terms, in EPP we first provide systemic photoprotection, while in XP we not only aim to achieve effective systemic photoprotection to slow down or mitigate the development of skin cancers, but we are on our way to prove the effect of melanocortins on photoproducts (DNA lesions) caused by UV and loss of cellular integrity.

When progressing the use of afamelanotide in brain diseases, in the stroke population, we had identified the life-threatening nature and dramatic impact a brain blockage (clot) has on patients and their immediate family. We realised that the majority of patients suffering a cerebral infarct do not receive therapy. Empathy, and the desire to do something about the problem, coupled with technological opportunity, drove our decision to take on this clinical challenge.

We selected a further indication for SCENESSE ® and are overcoming various hurdles to extract and retain value of the use of afamelanotide. As we progress with regulatory authorities, Institutional Review Boards and expert physicians, we plan the start of an innovative trial. We are aware of the risk of translating the use of afamelanotide, but collectively our teams assessed the long-term benefit being greater than the numerous risks.

Furthering our line of thoughts, by grouping the three addressable populations for our first over the counter (OTC) product line, we had strongly identified untreated and unattended groups in the general population. Immune compromised patients, patients with a history of skin cancer(s) and outdoors professional sportspeople at risk of chronic UV and HEV exposure are all populations poorly addressed by the dermatocosmetics sector. Armed with our expertise, understanding of the risks these three groups share and the long-term effects of UV and HEV exposure, it was only natural to focus on these populations.

In numerous past News Communiqués and corporate communications, we have highlighted the insidious enemy of CLINUVEL, its ongoing success and risk of complacency. With that, we try to instil in our managers and staff, but also at Board level, a continuous hunger to improve the business, vary our approach and sharpen decision making. We work on the basis of common objectives, and this cry to remain agile at all times is by no means sufficient to guarantee growth and success, but at least it eliminates a silent factor one seldom wishes to address in companies.

The ongoing analyses of the CUV business, the anticipation of unknown risks, the repetitive modelling scenarios, and courage to play out unthinkable options helps to deliberate extreme projections. This practice triggers discussions among Board members on dramatic scenarios one would most likely not contemplate if one would not push each other to fathom the unthinkable scenarios, both favourable and unfavourable.

When balancing CLINUVEL’s risks versus commercial present and future rewards, I use my experience and analyses of available information while surrounding myself with voices, minds and professionals one has come to respect owing to their ability to adopt unexpected viewpoints. I have exchanged with great minds, business leaders, entrepreneurs and analysts and have concluded that a sustainable business not only hinges on one’s ability to take risks, but equally on the ability to analyse and frame risks in such a manner that the execution of the adopted plan becomes measurable and segmented. The segmentation then offers frequent evaluation of direction and performance at set timepoints. It is a formulaic approach which has worked well for us thus far. In summary, CLINUVEL selects its direction and course of development, both for pharmaceutical products and OTC lines, on the basis of compassion for those in society who are left unattended, untreated and unheard.

Vision 2022

The new world, post-COVID-19, will not resemble the old one. Staff will operate in shifts, coming to the office once per week while working remotely the next. The time of large office spaces, all working under one roof every day of the week, seems to have fleeted and is not destined to return. We are already selecting staff, setting up people to work at distance while coming in for office meetings at short notice. In 2022, off-sites will be more frequent, while flexibility will be required from employer and employee.

In this company, we are all driven to fulfil this one common mission: we share a deep empathy for the patients and individuals at risk, who are not attended in society. Some of us are personally affected by these conditions, some of us have family members in our immediate environment and some of us deeply relate to these patients and selected groups. Under this roof, without a single exception, we are all connected by doing something meaningful for others, fulfilling a worthwhile cause for patients – and individuals at high risk – by restoring for them a balance to resume a normal life, one free of restrictions. In pursuing this mission, I dare to think that the first successes CLINUVEL has attained have already brought the medical community therapeutic advantage, relief and satisfaction. CLINUVEL will continue this journey with authority, empathy and passion.

In 2022, we are looking to further our Board’s views on the macroeconomic issues affecting the Company, whereby we generally seek to invite the most diverse and contradictory viewpoints asking for a healthy dissent to arrive at higher quality decisions.

This attitude to seek unorthodox discussions can be regarded somehow as counterintuitive to build value and it certainly requires much energy. As a Board, however, we will continue to operate from the principle that past decisions may have been sound to bring the Company to its present level of operational success, but that the constantly changing dynamics in the markets and tension within the sector require us to challenge each other frequently to take adequate decisions to generate incremental value.

The foundation and legacy of a company play indelible roles in taking decisions, and the first mandate to rebuild the Company’s ramparts may have been fulfilled, however the second part has been looming ever since the management team had shown commercial progress: how to build a sustainable company based on a variety of products and services.


Among all the euphoria of the recent increase in CLINUVEL’s value, I see the markets’ reaction as the consequence of a series of decisions our team has taken over the decades, rather than a short-term reaction to our financial performance. Management decisions led to a tenacious attitude to the development of a new drug product, and to a series of choices to independently distribute the innovative pharmaceutical among selected hospitals worldwide. During the first quarter of 2021, we saw how CUV as a momentum stock attracted many retail shareholders (>500) from Germany, Switzerland and Austria.

The biggest gain of 2021, however, lies in the direct corollary of these continuous decisions, since we witnessed how porphyria patients demanded continuation of treatment in spite of the travel to which they needed to commit under restricted conditions, but foremost the risk of nosocomial infections they were prepared to take in seeking treatment in hospitals. As far as I can try to be objective in my position, reflecting on 2021, I cannot see the patients’ response to treatment under the most severe travel restrictions other than as the best real-world evidence of efficacy of our lead product.

Without doubt, there will be many more challenges coming CLINUVEL’s way, nevertheless I place full trust in our current team. I see the ensemble as well equipped and trained to tackle the unforeseen and uncalculated events which may befall us, while this group of professionals has the stamina and vision to further develop programs and products for a variety of unattended populations.

I regard 2022 as a pivotal year when we enter non-medical distribution, expand our pipeline of pharmaceutical products and – pending the hospital restrictions due to COVID-19 – will see results in XP, AIS and arrive at agreements with FDA, institutions and National Competent Authorities to add another indication for the use of afamelanotide to our portfolio.

While progress requires much patience from all of us, I am confident that further benefit will be generated and received by all stakeholders. On behalf of the Board of Directors and management, I thank you for your continued support.

Dr Philippe Wolgen signature

Philippe Wolgen
Managing Director, CLINUVEL Group