CUV.AXCUV.AXASX
Loading
Stella Mariss: Hello, everyone. Thank you for joining CLINUVEL's Investor Webinar. I'm Stella of Monsoon Communications. In today's webinar, CLINUVEL will share their half year results and operational highlights for the 6 months ended on 31st December, 2025. I will now hand over to Malcolm Bull, Head of Australian Operations and Investor Relations, to conduct the proceedings.
Malcolm Bull: Thank you, Stella, for the introduction. I'd first like to welcome members of CLINUVEL's management team to the webinar. Not surprisingly, reflecting the focus of the webinar on the financial results for the half year to December '25, we have Chief Financial Officer, Peter Vaughan. We are joined by 2 executives who are leading the business in key operational areas: Director of Clinical Affairs, Dr. Emilie Rodenburger; and Director of North American Operations, Dr. Linda Teng. We're also joined by our Managing Director, Philippe Wolgen. I'd like to acknowledge there are several analysts on the line who cover CLINUVEL and we'll ask some questions in the webinar. It would be remiss of me if I didn't say on behalf of management and the Board that we appreciate your work on CLINUVEL, your role in telling our story to a wider audience than we could reach ourselves and your involvement in this webinar. It's pleasing also that there are over 175 participants to the webinar, reflecting increasing interest in CLINUVEL. So welcome, one and all. Before going further, I think it's appropriate to highlight why we have 5 executives in today's webinar. So you frequently see Philippe; our Chief Operations Officer, Lachlan Hay; Peter Vaughan; and Investor Relations presenting the company to a range of stakeholders. We have received feedback that it would be good to have greater access and the opportunity to hear from other executives. So for today's webinar, noting this is not the forum for a strategic review, but as a courtesy to you all, we include Dr. Rodenburger and Dr. Teng to answer questions and provide their insights direct to you. Today's webinar will be in 2 parts. First, a discussion of the half year results; and second, the analysts online will be called upon to ask questions of the CFO and management. We will be talking today about plans and intended outcomes. So I'll draw your attention to the forward-looking statement or safe harbor statement on screen that identifies a range of risks that can materialize and impact their achievement. So I think 10 seconds to review that is enough, and that is on our website and on all of our announcements. I now kindly invite the CFO to summarize the results. Peter?
Peter Vaughan: Thanks, Malcolm. Good evening, and good morning, everyone, from wherever you're calling in from. It's another set of very consistent results at CLINUVEL, I'm pleased to announce, with our revenues up 4% on the prior year, maintaining a steady growth pattern. Our expenses were up 22% for the period, and this really was part of the supporting the expansion initiatives that we'd foreshadowed previously that we were going to be undertaking during this period. We continued our strong positive net operating cash flows, and this saw our cash reserves over the 6 months increase by $9 million to $233 million. We're closely monitoring all of our expenditures and any discretionary spending is being scrutinized really closely. And the good news is that our profitability for this period, whilst lower, continues to be maintained despite the increasing level of expenditure during this expansionary phase.
Malcolm Bull: Thanks, Peter. I'll now ask Philippe to comment on the results.
Philippe Wolgen: Thanks, Malcolm. Welcome to all the analysts and shareholders. Well, in a nutshell, we follow a plan, a strategy, which is gradual and with purpose. And for this strategy to play out, we need to manage our finances tightly in a very controlled manner. In the past 12 months, we intentionally increased our expenses. And therefore, naturally, one expects to see the net profit decrease. These expenses towards R&D, the clinical trial in vitiligo and regulatory filings. We are very much in line with our own forecast, so we're content with the results, and we will proceed on this basis. And with positive cash flows, we can expand the activities of the company, the group. We gave expense guidance from 2021 to 2025. And for the financial year, we expect to spend about $55 million to $58 million, excluding the capital expenditures. So in summary, the business model we chose is playing out really well.
Malcolm Bull: I agree. So let's delve into the results and call on Peter to look at in turn revenues, expenses, profit and indeed the balance sheet.
Peter Vaughan: Thanks, Malcolm. So our revenues for the period continue to grow year-on-year. And this period, I'm pleased to say we saw our highest ever sales revenue result. This period marks the 20th consecutive profit for CLINUVEL since the commencement of our commercial operations. And our expenditure, as I touched on before, whilst increasing, is very focused, controlled and targeted around the specific areas of the business that we're focusing on. Our expansion saw key developments in our R&D activities across our ACTH-NEURACTHEL program; our vitiligo study, CUV105; and of course, our peptide drug platform that we developed at our Singapore Research Development and Innovation Center that we recently announced we'll be undertaking a large expansion of. Now all of this expenditure and all of this growth has been achieved without sacrificing our overall profitability, which is really a fantastic result for the organization. Only 4% of biotechs deliver a profit and even fewer are able to sustain a profit for an extended period of time. So where CLINUVEL has done this for over a decade, it's truly a remarkable outcome. In turning forward to our revenues, specifically, we saw our revenues from sales increased by 4% from the prior period to just under $37 million. As I mentioned before, this is our highest first half year sales results we've ever seen. This reflects the increasing and continued demand for SCENESSE right across our sales regions. In particular, we saw strong growth in volume of sales across Europe. And as we announced in September 2025, the approval by the EMA, lifting the number of maximum implants per year from 4 to 6, has already seen some of the patients take up that extra initiative, and we expect other patients to follow suit as well. In the U.S., our team and -- led by Linda has able to increase the number of sites to meet the target that we had for December, which was 120 sites across North America. The patient demand has been consistent throughout the period, and our U.S. team operates extremely well given the evolving U.S. medical reimbursement landscape that is constantly changing at the moment. Perhaps at this point, Linda, as our Head of -- Director of North American Operations, I might ask you, could you provide some insight to the people listening in around the U.S. reimbursement process and in particular, the prior authorization scheme that enables us to have such a high success rate of reimbursement?
Linda Teng: Sure, Peter. So first off, please excuse me for my raspy voice, as I'm still recovering from the flu. But thankfully, the technology allows me to share the insight without spreading the flu.
Philippe Wolgen: Linda, we can't hear you well. Linda, we can't hear you.
Linda Teng: Can you hear me now?
Philippe Wolgen: No. It's very muffled.
Malcolm Bull: Go off the headphones if you can.
Linda Teng: Is that better?
Philippe Wolgen: No.
Malcolm Bull: Not really.
Linda Teng: Is that better? Can you hear me now?
Philippe Wolgen: Yes. Much better. Okay, let's move on.
Malcolm Bull: Yes.
Linda Teng: Can you now hear me?
Philippe Wolgen: Yes. Okay.
Linda Teng: Can you hear me now?
Philippe Wolgen: Yes. Please proceed, Linda.
Linda Teng: Yes?
Philippe Wolgen: Yes.
Linda Teng: Okay. So all right. So we're going to continue with what Peter said about prior authorization. So in short, basically prior authorization is a way for health insurance companies to control their cost, by making sure that they are only paying for treatments that are medically necessary for their patients. And so because SCENESSE is the only FDA-approved treatment for EPP, and it has a strong and also a long-standing safety records. We haven't seen any prior authorization denials for the EPP patient. And we also have a dedicated in-house team that works very closely with the physicians to really streamline the submissions and also speed up the approvals. And for SCENESSE, most of our PAs that are already approved, they are only renewed annually. There really is minimal paperwork for the physician, and so they don't have to get approval for every single treatment visit. And for those who are familiar with the U.S. healthcare system, you might notice that our approach is very unique. Most high-cost drugs, they go through the middleman or the pharmacy benefit managers or we call them the PBM. And they usually drive up prices up even more. So we made that deliberate decision to avoid the PBMs. And I think that is moving like a smart moves, especially now because the government is increasingly the scrutiny of them. And we said the 2026 Consolidated Appropriations Act, which has really signed into law a few weeks ago, including the provisions aimed at the PBM industry. And as for the patients, the feedback has been consistently positive. And I think the reason for the continued treatment year-after-year is because they are seeing real clinical benefit. And we even saw some patients are increasing their treatment dose within the year because of the clinical benefit. And I do want to be clear that we don't pay physicians or patients for any testimonials. Everything is completely organic. The feedback from the patients are voluntary and genuine. And usually, they can share more within -- happily within their patient communities or directly with my team. So I hope this gives you some insight into our prior auth process. Peter, handing back to you.
Malcolm Bull: You're on silent, Peter.
Peter Vaughan: Thank you, Linda. As we look forward to the other areas of revenue for the period, our interest income was up to $5.3 million this period, which was a 14% increase on the prior year. And this was really the result of a larger cash reserves balance that we continue to maintain. We generally take our surplus funds that we have at the time and invest them into term deposits to help to build and grow on that balance. And at the moment, we're extending the length of our term deposits to be able to take longer-term maturities at higher yields. So we're seeing our average term deposit for about 300 days at the moment, and we're receiving an average yield of about 4.5% across the portfolio. Our other income, now this number has swung the other way from the prior period, and it's a difference of about $4.6 million. Now just to explain, this is an unrealized foreign currency translation that occurs each balance date, so each reporting date. It's really a non-cash transaction that's effective at balance date for accounting purposes. And it takes the process of taking all of our foreign currency balances and bringing them back to account at balance date into Australian dollars. So it's not a real loss. It's an unrealized loss just purely to be able to balance the books at balance date. So if we look at our revenues overall, I would mark them as being stable, growing and also consistent. Historically, our second half of our financial period generally tends to be proportionately higher from a revenue perspective, with the EU and U.S. summers coming into effect through that second half of the year. So we're really excited to see how the second half of the year plays out given we've still got that maintaining growth. Perhaps moving to expenses, Mel, now more specifically.
Malcolm Bull: Yes.
Peter Vaughan: So we saw a 16% increase in our personnel expenditure. And I'd probably -- I'd just like to provide some context around that for everyone to understand. This is a strategic part of our expansionary team and increasing the in-house capability of CLINUVEL. It provides greater control and oversight of our activities. But at the same time, we're upgrading the skill and expertise within our organization. Now as everyone will know, skill and expertise within the life sciences sector is really important. And recently, we've seen regulatory challenges and hurdles that some other life sciences and biotech companies have faced in just recent times. So this highlights the need to really develop and create the skill and expertise within that team and make sure we've got the right people around the decision-making process. And when we look at CLINUVEL, CLINUVEL's never had a market authorization knock back in over 20 years of being active in the pharmaceutical sector. Now if that was to occur in some shape or form, a regulatory rejection of some sort can really have a significant effect on an organization. It erodes shareholder and market confidence in the company. It raises doubts around management's decision-making and assessment of processes and events. It can push commercialization time frames back up to 3 years as seen in some of our peers where another study or more data may need to be gathered before a resubmission can take place. And clinical trial designs and endpoints around the quality of data may suit one region, which brings in revenue, but not always both revenues -- both regions to bring in revenue across the globe. And this can really affect the total revenue pie that's available from the advancement and the approval. Our people are really critical to the process. And in plotting the path forward, we're really confident that they'll be able to obtain the right outcome around our clinical programs. In turning specifically to our clinical and non-clinical expenditure, the expansion of our CUV105 expenditures was somewhat offset by the orderly wind down of some of our earlier phase programs. We've reallocated and focused our resources towards our later stage and strategically significant programs aimed at achieving the nearest-term commercial results and prospects we can. Preparation for CUV107 has already commenced and is well underway, and we'll start to see those expenditures flow through in the second half of the year also. Commercial distribution, if we look at that area, that was up 42%, but this is predominantly off the back of increased volumes of shipments, particularly in Europe, as I touched on before. So it's all increased proportionately. There has been some temporary one-off costs that have been associated with some transitions that we've made in our supply chain to some of our warehouse providers to ensure the long-term stability of that supply chain as well as being able to scale with us for the future. The other area that is somewhat affecting the commercial distribution area is also some of our regulatory fees. Previously we used to sit under an SME discounted scheme in some of those regions for the FDA and EMA annual fees. And now that our revenues have increased to the point that they are, we're no longer eligible for some of those discounts, so we're having to pay full annual service fees now to those organizations, which is also increasing the expenditure in that area. The next area to touch on is really finance, corporate, and legal. Now this did increase proportionately from the prior year to up 47%. And really, this is the direct cost of a lot of it is being our ADR program uplift from Level 1 to Level 2 that I'm sure you're all aware of as we uplift that program for the U.S. to list on NASDAQ. There's been a substantial amount of work undertaken across that area by the finance team, but also in conjunction with our accountants, auditors and legal firms, both here in Australia and in the U.S. And this process we had to go through undertook a 3-year reaudit of all of our financials into U.S. GAAP -- converted into U.S. GAAP financial presentation, and then that was submitted to the SEC for review. Our other expenses, that's up 191%, and it's predominantly driven by the increase in our R&D programs and all the consumable materials that we use within those programs, whether it be ACTH, PRENUMBRA or NEURACTHEL, any of those developments. Our non-cash expenditure was down for the period. This is usually a change in our inventories in our balance sheet differences from period to period, that's really what reflects quite a bit of that expenditure. This period, that's a lower number than it was previously because we've actually increased our manufacturing during the period, so therefore, there hasn't been as low a drop in our inventories. It stayed more on par. Our share-based payments have also been much lower this period than in previous years, and we recently changed our share plan at the start of 2025, which meant the expenditures will now appear differently, but also it's now a 1-year plan instead of a 3-year plan. Now I've spoken fairly at length around all of the expansionary activities that we're undertaking and some of the critical advancements to our program. But this expanding expenditure should really be seen as an investment in the organization rather than just being pure expenditure. So from a financial perspective, it does take time to build up these resources internally, but it is cheaper than outsourcing to a CRO. CROs can add 25% or more costs to the bottom lines of a clinical trial program. But by having that skill and expertise in-house, it's critically important for us to maintain that control and oversight of the program. We've got Emilie Rodenburger on the call, who's our Director of Global Clinical Affairs. Emilie, in speaking around our expansionary activities and what's been undertaken, I guess, would you be able to provide some insight into why that was necessary? And what are the specific advantages of doing them in-house?
Emilie Rodenburger: Yes, absolutely, Peter. I can give some additional context to the numbers. So first of all, good morning, good afternoon, good evening, everyone. It's good to be here. In my capacity as Director of Clinical Affairs, I really think more on the deliverable and how to achieve them, but it certainly ultimately impacts the numbers we report. So clinical expansionary activities are twofold. It's talent growth and building the infrastructure into which the talents operate. As Peter mentioned, the company has taken a conscious decision to build our capabilities in-house, which is not the norm in our industry. Where most are relying on outsourcing their studies, we have chosen not to rely on these models and not to work with CROs. It increases cost and can result in loss of control and oversight over studies and data. In order to deliver the CUV105 study, we had to invest in new talent and these professionals will be retained through the CUV107 and beyond. Currently, the clinical affair department that I lead is the largest department in the company spread across U.K. and U.S. with a great range of expertise, operations, data science with data management and statistics, and medical affairs and clinical quality. In addition to bringing new talents in, we have also trained and upskilled existing talent. So building and retaining the expertise in-house. And again, I repeat what Peter said, it's really critical for the health of our business. In terms of infrastructure, it's really the processes and the systems, and we've also been investing in this. This investment will continue further for us to be able to manage a significant data set that are coming from the vitiligo studies and deliver efficiently on the studies. So when we build in-house, we both supporting the present and investing for the future. I mentioned the talents, the expertise, the ownership, processes and systems. They can be seen as a platform assets that is transferable to any studies and programs that we will be conducting in the future. So in a way, we're building a CRO in-house.
Peter Vaughan: Excellent. Thank you, Emilie. In turning to our balance sheet, Malcolm. If we look at our balance sheet, it keeps going year-by-year from strength to strength. As I touched on, our cash reserves increased by $9 million to just under $233 million, and it's the highest cash balance we've had in the company's history. Our net assets have also increased by $8.2 million to just under $250 million, which again is the strongest point in the company's history. And we remain debt-free for the 21st consecutive year with no equity dilution since my March of 2016. A strong balance sheet with positive net cash flows is really a strategic priority for CLINUVEL as it enables us to see clinical programs through to commercialization without any additional funding required. It also provides resilience for any unforeseen events or economic uncertainty, particularly in the current geopolitical times. It provides flexibility to ensure expansionary opportunities, acquisitions or investments that align with our objectives, can be taken advantage of, which many peers in the industry aren't able to consider without having to raise additional capital. It also enables strategic objectives to be delivered such as the expansion of our Singapore research and development facility, which we've slated for over the next 5 years to provide vertical integration of ongoing peptide and formula development and innovation. A number of our peers have recently announced capital raisings, some as much as at a 45% discount to market to fund these sorts of activities that we can take on and that we can develop without having to raise any further capital. Some of these peers are raising for clinical program developments, for raw material supplier scale-up or for product rollout into a new jurisdiction. As already touched on, CUV is funded for our full clinical trial program for vitiligo.
Malcolm Bull: Thanks, Peter. I mean that was a comprehensive overview, I must say, but I'd like now to move to strategy. I mention and shared with you that a number of institutions, particularly in the U.S. have asked us why CLINUVEL stands out in its strategy. They even ask, are we a bit dogmatic and a bit rigid in our strategic focus and execution. Philippe, can you comment on this?
Philippe Wolgen: Well, I'll pick up the 2 words: dogmatic and rigid. The contrary, we've built in the flexibility and optionality in this business model, and that allows us to navigate markets and cycles in pharma. But the objectives are really clear, they're fivefold. We need to expand the EPP commercial market, advance the vitiligo programs as a focal point of the company, advance the NEURACTHEL dossier, which is a large opportunity in the use of ACTH in a number of indications, advanced PhotoCosmetics, and bring in-house the manufacturing of the new and next formulation. So in any given business model, there are a number of options. We can serially raise funds like most of our peers. We can change the business strategy altogether, step away from melanocortin and do something totally different. We can self-fund the program starting gradually as we've done. And the fourth option is, we can cease operations and say, ladies and gentlemen, it's too difficult, it's too hard, and let's give the cash back to the shareholders. And we haven't chosen that because we believe that there are a number of opportunities that we worked on for decades that are worthwhile pursuing. And there are a number of underlying assumptions that the Board and management take into account that we are privy to and no one else is. And first of all is, are we conducting an honest genuine business, no one indicated in further activities. Do we keep the teams in check? Do we have technologies that are safe and work? And third of all, do the patients -- do the investors have the patience to see out the strategies? But the most important underlying assumption is whether there is perpetual funds available for this company. And we've come to the conclusion that this model is very appropriate for the way we need to reach the vitiligo and the ACTH markets. So in summary, Malcolm, we needed to accumulate these funds to execute a program, which we all believe will lead to a sustainable multi-dollar a billion-dollar enterprise. But we also need to be conscious of the realistic risks that evolve around clinical, regulatory and execution. And for that, you need to have optionality and optionality is cash. And that will eventually lead to a diversified company. So that's how the company stands out.
Malcolm Bull: Thanks, Philippe. So moving to another area where we've had numerous questions, and this is on the readout of vitiligo. And Emilie, it's good to have you here, and this is where you come in. What can you tell us about the regulatory process and path to market on vitiligo?
Emilie Rodenburger: Thank you, Malcolm. I will address your question by providing a number of specific observations that support the regulatory process and path to market for SCENESSE in vitiligo. Some of these observations are unique to SCENESSE and some you might also be familiar with, but allow me to go through them. The first one is SCENESSE is already on the market for another indication, EPP. It's a product for which we have accumulated 2.5 decades of safety data and a safety profile that has been maintained over time. The regulatory agencies know the product well from the Annual Report or regulatory and pharmacovigilance teams are and have submitted for 1 decade now. In regards to vitiligo, vitiligo is a condition with visible symptomatology and the treatment effect -- skip that one. And the treatment effect that we desire, repigmentation, is visible. So from the cases we received and cases published by physician, one can gain much confidence that the effect of the treatment are visible. From an operational point of view, the trials can't be blinded. The work -- the drug either works or not and physician and patient can see the effect very quickly, the visible efficacy. So what I'm trying to say here is that in vitiligo, the photographs do not lie. And part of the analysis is to have centrally assessed photographs up to 32 per patient, which is up to 6,000 assessments. Very importantly as well is the patient experience and how they appreciate the return of their pigments. JAK inhibitors, some currently in Phase III, one recently submitted to the EMA and FDA for marketing approval, they take a long time to work, thereby suppressing the immune system. And last but not least, we are living in a very dynamic regulatory landscape where the concept of generating clinical evidence is evolving. EMA speaks about totality of evidence for drug approval, while as I'm sure you've seen the FDA recently announced that single trial will now be the default for drug approval. So what I really wanted to convey by all of this is that, these are positive considerations for SCENESSE to come to market for vitiligo, as we are continuing on the same trajectory. I can't tell you exactly when. But for sure, vitiligo is the natural home for afamelanotide, a pigment activating peptide, which is an analog of hormone that's naturally produced by our own body. Thanks, Malcolm.
Malcolm Bull: Thanks, Emilie. So before we go to analyst questions, all stakeholders want to know what's next. Philippe, can you summarize that for us, please?
Philippe Wolgen: Sure. So there are a number of catalysts that we're approaching over the next 2 years. The most immediate ones are the top line results from vitiligo CUV105 in the second half of 2026, the start of the vitiligo CUV107 study, and the preclinical results on the peptide formulation in the latter half of this year and the listing of the ADRs on NASDAQ that we await the SEC answers for. So the catalyst will naturally change the complexion of the company, and this is exciting, and we've navigated the waters over time to arrive at this point. And so we all need to get patients and see what the impacts are from these results. So there's much to look forward to, yes.
Malcolm Bull: Indeed. Thank you, Philippe. So let's go to analyst questions. But thank you, Peter, Emilie, Linda, Philippe for the discussion. Some good insightful comments there, and I hope those on the line also have got some insights and appreciate that. The first analyst to ask a question is Dr. David Stanton of Jefferies. Hello, David, are you there?
David Stanton: I am. Can you hear me?
Malcolm Bull: Yes, David. Please go ahead.
David Stanton: So my question is, do you have to wait until you have the results of CUV105 -- sorry, CUV105 and CUV107 before you file for approval in vitiligo? And in which geography would you file in first and why, please?
Emilie Rodenburger: I'm going to take this question, Malcolm.
Malcolm Bull: Okay.
Emilie Rodenburger: It's a -- yes, it's a good follow-up and from what I was mentioning a couple of minutes ago. So thank you, Dr. Stanton for this question, question that's relevant and often asked. Our intention is to complete CUV105 and CUV107 before going to the EMA and FDA. And the recent announcement on single trial for drug approval from the FDA doesn't change this strategy. So based on the ongoing interactions we have with both agencies, EMA and FDA on the specificity of our work that we are conducting, we will need the CUV107 study to complete our program. For the second part of the question, we opt to file with the EMA first and then FDA second. And this really -- this strategy really much follows the approach we had with EPP back in 2012. I want to say more. I think it's important for me when we speak about regulatory agencies, I want to give a bit more color. An agency, as you know, it's a conglomerate of thousands of people, so at the EMA in Amsterdam, there are more than 1,000 permanent staff and more than 4,000 part-timers and experts. We are dealing with 2 European reporters that are representing the National Competent Authorities, which are Lithuania and Poland, with a scientific adviser representing the Scientific Advice Working Party, a very knowledgeable German physician. At the FDA in Silver Spring, there are more than 8,000 permanent staff and another 6,000 elsewhere consultant part-timers. We interact with the Division of Dermatology and Dentistry now led by Dr. Jill Lindstrom in the Center of Drug Evaluation and Research. And we have a new Commissioner, as you know, Dr. Martin Makary, who has reshuffled the agency, bringing new procedures and new approach. In our EMA reporters, we find willing listeners and may I say more supportive of our regulatory and market strategy. We are the only company focusing on patients of darker skin color and this point resonated very well in our recent discussions with the EMA. The approach we have on vitiligo is so novel that we deem the European regulators to be the first protocol, and then it will make it easier for the FDA to assess similar data.
Malcolm Bull: Okay. Thanks, Emilie. The next question is for -- from Dr. Melissa Benson of Barrenjoey. Hi, Melissa.
Melissa Benson: So I had a question in regards to the ACTH program, so NEURACTHEL. Just to help us understand, you've mentioned there later this year, you expect to file with EMA. A similar question to the lining of vitiligo, but understand like how does filing with Europe first and then the FDA, how does that kind of expedite the U.S. opportunity? And then secondly, any color you can kind of provide on the differences, I guess, between the commercial landscape for a product like this in Europe versus the U.S.? Because I understand one market is quite a synthetic peptide-based and the other is a natural hormone based. So that would be great.
Malcolm Bull: Philippe, for you.
Philippe Wolgen: Thanks, Melissa. Yes, we've talked about this in the past. NEURACTHEL will first be filed in Europe through the route of mutual recognition. And as you know, the analogues of ACTH, in our case, NEURACTHEL are used by many institutions, both as a therapeutic and as a diagnostic. And so we opted to go to Europe first and U.S. second. Once you've filed through the mutual recognition procedure, you can file shortly in the U.S. after. ACTH products are mostly distributed to specialty centers in Europe. They prescribed by internal specialists, endocrinologists. And we believe that it's possible to make the first inroads directly to these centers in Europe. Reimbursement in Europe is albeit lower than in the U.S. So both markets are sizable and are attractive, but we have experience in leveraging the European regulators and the resonance there is high. So it's a slightly different strategy than most of our competitors, but so far it worked.
Malcolm Bull: Okay. Thanks, Philippe. We've just lost you on camera. So if you can try and get back to us, we'd like to continue to see you. Let's move to Dr. Thomas Schiessle of Parmantier in Germany. Thomas, you're a long way away, but let's hope you're connected.
Thomas Schiessle: I would like to ask a question, what does the recent FDA decision on Disc Medicine's Bitopertin mean for your business and growth outlook, please?
Malcolm Bull: Okay. Peter?
Peter Vaughan: Sure. Yes. No problem. I can answer that one. So I guess thank you doctor for your question. From a finance perspective, I'm happy to answer that. So I see it from a way of increasing our monopoly in the market with the other player, obviously, not being able to enter that market yet as we're really the only approved drug treatment for EPP with a proven safety and efficacy record in the U.S. So it could take them, I would estimate about 1 to 2 years to come back or even longer to enter the European market. So it could be quite an extended period of time that we still maintain a monopoly within that market. So I guess that's how I see it, doctor.
Malcolm Bull: I'll come back to you, Thomas, to ask another question because we've covered that fairly succinctly. But I'd like Linda to make some comment because some shareholders have asked what's our reaction to the FDA's decision on this. So can you make some comment on that, please, Linda?
Linda Teng: Sure. First, can you hear me okay?
Malcolm Bull: Yes.
Linda Teng: Okay. Right. So first, I definitely can comment. However, I do prefer not to comment on the setbacks of other companies or their management. And I will just leave that to the external observers. And while competitors may have made critical remarks about our work, I don't consider it to be elegant to respond in kind. However, what I will say is that it is not easy to get a regulatory approval in one go. Our team have done this by working thoroughly and diligently. And at the end of the day, it is really all about the patients, making sure that the drug is safe and that it shows significant clinical improvement in their quality of life. And the FDA really raised questions regarding the bioavailability and efficacy of Bitopertin, which, by the way, I'm sure most of you already know. This was actually originally developed for an antipsychotic drug for schizophrenia before it was abandoned by Roche. And so for EPP, the company had then had to increase the dose from 20 milligrams to 60 milligrams to achieve a statistically significant reduction on the biomarker of the protoporphyrin level. But higher doses also mean that there's going to be extra stress on the patient's liver or kidneys. And this is very concerning, especially for EPP patients because they are already at a higher risk of liver disease. And on top of that, oral pill higher dose also increased side effects, complications and drug-drug interactions with other medications. So as the pharmacist, I really cannot see how this is a benefit for the EPP patients. And the other point that the FDA also raised, a very valid concern, was its primary endpoint. And this was based on the change in the biomarker protoporphyrin IX. So in case -- I don't know how much you guys know about biomarkers. Well, biomarkers are a very helpful tool for scientists, for physicians to really understand what's happening in our body, but it does not always reflect real-world meaningful clinical benefit. And an example that comes to mind is there was a drug that was received an accelerated FDA approval back in 2016 for an advanced soft tissue sarcoma, and this was approved based on a biomarker endpoint. But once they came to real life, the real-world clinical outcomes did not show any survival benefit. And so at the end of the day, the FDA had to pull the approval soon after. And from a bigger picture pharmacological perspective, it also seems very unusual to me to prescribe a lifelong oral pill that affects the central nervous system to lower the protoporphyrin IX marker -- biomarker levels. So I guess, I suppose, we'll really have to wait to see the results of their future trials to see whether this drug can really show both the efficacy and the meaningful clinical benefits for the patients.
Malcolm Bull: Right. Very insightful. Coming back to you, Thomas, do you have a follow-up -- a quick follow-up question?
Thomas Schiessle: Yes, indeed. Thank you, Malcolm. Absolutely another issue. The FDA -- no, no, no, no. That's a second one. What impact does NASDAQ listing have on CLINUVEL's future regular reporting concerning frequency and content, please?
Malcolm Bull: Okay. Peter, for you.
Peter Vaughan: Sure. I can answer that one, Malcolm. So we'll be listing on the NASDAQ or uplisting our ADR program and listing over there as a foreign private issuer. So what that basically means is that we'll continue to lodge half year and full year financials. In the U.S., we'll be reporting in U.S. dollars and also in U.S. GAAP accounting. But I guess, in short, Thomas, it's -- it will be exactly the same as what we currently do every 6 months and then every 12 months for the half year in the annual reporting. So no real change to the frequency.
Malcolm Bull: Thanks for dialing in Thomas. I just mentioned that several shareholders have asked for an update on our listing application. So Peter, give us an update, please.
Peter Vaughan: Sure. No problem. So we lodged our initial filing, which was a 20-F document to the SEC in mid-December or 18th of December to be specific. And we did foreshadow that there may be some delay in the turnaround time because it was also -- it was Christmas period, but also the government was -- had come out of shutdown mode and the SEC that obviously affected them. So they needed to catch up and clear the backload of filings and other documentation they had. But we have had some further correspondence back and forward with the SEC, and we're refiling our response to them. So we're hoping to be able to receive clearance from them in the very near future and then move quickly to implement the ADR program uplift. So watch this space.
Malcolm Bull: Okay. We sure will. Let's now call on Sarah Mann from Moelis. Sarah, please.
Sarah Mann: My first question is just on the EPP market. Could you provide us any details around what percent of your patients are covered under Medicaid? And just curious how you anticipate some of the cuts to Medicaid potentially impacting your ability to reach those patients?
Malcolm Bull: Linda, for you.
Linda Teng: Sure. I'll take this one. Sarah, thank you for your question. So we're actually seeing less than 5% of our U.S. EPP patients on Medicaid benefits. So in short, we don't really have a noticeable impact. And in fact, like you mentioned the One Big Beautiful Bill, it actually broadens the orphan drug exclusion. It now allows orphan drugs to -- with more than one rare diseases to remain exempt from Medicare price negotiations and potentially so far looking like it's indefinite unless the drug is later approved for a non-orphan indication. So one can theoretically say that the TAM would increase through curing the federal programs. But given that most of our patients are commercial insurance patients, we don't really see a worthwhile impact in the U.S. market at this time.
Malcolm Bull: Okay. Sarah, a follow-up question.
Sarah Mann: Just on a separate topic. Just curious if you could provide more color around the cosmeceutical strategy. Obviously, it's been in market for a couple of years in, I suppose, prototyping or early stage testing. Yes, just curious how you expect it to ramp up this year and any learnings that you've had over the past couple of years as well, please?
Malcolm Bull: Philippe, can I call on you?
Philippe Wolgen: Sure. First of all, good to see you back, Sarah. It's been a long time. On numerous occasions, we mentioned that the PhotoCosmetics are in development, and they accompany a complement our pharmaceutical program. That's quite an unusual strategy to have both pharmaceuticals and the PhotoCosmetic franchise, not many pharmaceutical companies do that. And so the first was the P line, the photoprotection lines, providing polychromatic photoprotection in population of the highest risk and extreme conditions. And then that will be followed by the M line, the melanocortin containing peptides. And they intend to provide assisted DNA repair and self-bronzing or the so-called sunless tanning. And in all these properties, the endeavors goes really to launch products with a substantial marketing effort. And that needs to provide visibility to our products. And we started to gradually increase our marketing spending online to focus groups, advocates, target populations and channels. And so we are in the prelaunch phase where we get feedback on these products. But ideally -- and nothing is ideal, but that was the anticipation and the model, when the vitiligo trials start to yield results, we then see a parallel large-scale effort to promote the M lines, because the concept was that the medical tanning that you see in vitiligo follows a parallel path to the PhotoCosmetic self-bronzing properties. So in short, we advance, but we're not really ready to launch these products, not from a scientific point of view and not from a marketing. But what we aim to see is lotions and serums applied a number of times a day that assist the self-bronzing in the epidermis. And we're not quite there yet, but we're advancing. The other part is in order to make this a commercial success, the company needs to differentiate itself in all aspects. The retail experience needs to be changed or disrupted, if you wish. The primary packaging, the secondary packaging, the way we distribute it, the retail store concept and all that at a reasonable large scale. But thereby we are conscious of the spending and the budgets we put aside for this exercise while keeping the company profitable. So it's a balancing act that we do need to navigate all the obstacles, but to decrease the risk of failure and that we do that in a very gradual and deliberate manner.
Malcolm Bull: Okay. So let's move to Madeleine Williams of Canaccord. Please, Madeleine.
Madeleine Williams: So I think, firstly, I was just wanting to know, you've got a few things happening at the moment. Obviously, last year, Europe allowed the increased number of doses and then also in the U.S. as the Disc Medicine trial completes this year, I assume there's sort of going to be more patients available. Just thinking about how you're thinking about the growth in those jurisdictions and sort of the splits going forward.
Malcolm Bull: Well, Peter, do you want to comment initially on...
Peter Vaughan: For me? Yes, sure. No problem, I can comment on that. So I would say that there's a segment revenue note that we've included within the half year report that does show the breakdown. But I guess a quick summary would be the U.S. revenues have increased year-on-year. And this period, we saw a rise more predominantly in the European volumes, partly spurred on by some patients taking up that increase from 4 implants being a maximum during the year up to 6 that was announced in September 2025. I guess at the moment, the current revenue split is about 53% U.S., 47% for the rest of the world. So that kind of -- that's the insight that I can provide there. I guess on the peptides side, that's probably more Philippe perhaps might be able to answer that one.
Malcolm Bull: No, we'll park that. I think we'll move on to Mark Pachacz, because I think he's got to leave pretty soon. So Mark, if you're still there, can you ask your question?
Stella Mariss: Malcolm, looks like Mark is no longer here.
Malcolm Bull: Okay. That's all right. Well, fortunately, we have another analyst, Thomas -- Thomas Wakim of Bell Potter. Do you want to ask a question please, Thomas?
Thomas Wakim: Yes. It's a bit of a follow-on from the previous one actually. So in that revenue segment, the split between U.S. and non-U.S. sales for the period just gone, where we saw a decline in the U.S. and a significant increase outside the U.S. So can you just kind of explain in a bit more detail what those factors were that were at play there leading to that? And how does that look moving forward?
Peter Vaughan: Sure. So there was some effect on the U.S. side from the government shutdown. So the government shutdown met delays in Medicare processing as well as also the processing of reimbursements. So in some instances, some of the smaller centers didn't want that longer-term delay on their payment cycles and things like that. So that did cause some headwind there for them. And then we also passed on a CPI increase in 2025 and some of those have caused some negative reimbursement pressure on some of the centers. But overall, we anticipate that the U.S. is still stable and still growing across that, and that's where we've continued increasing the number of centers across North America. So we're seeing new centers come online and start to bring patients to the floor as well. So there is that difference between prior year and this year, but I think it's really explained by the U.S. government shutdown predominantly.
Malcolm Bull: Okay, Peter, thanks. And as I was talking with Madeleine before and also with Mark Pachacz, there was a fair bit of interest in peptides. So let's come back to peptides and ask Philippe to comment on the potential of that new area of development.
Philippe Wolgen: Well, we spoke for a long time in public about the skill set of the company and how it was expanding concentrically. So we started off as a company focused on clinical affairs. We understood the melanocortin peptides really well. Then we focused on the delivery methods, the best way to deliver and administer a drug into a human body. And from that, we built our Singapore labs and progressed fundamental research into new formulations. We call it formulations of the next generation using liquid injectable peptide platforms. And so naturally, once we mastered these technologies, it opened up the realm of fantasies of what other peptides could you use to deliver a product in a sustained or controlled manner. And that's where we are. So you're going to expect much more from that team and our activities in Singapore.
Malcolm Bull: Thanks, Philippe. Very exciting. It's about time that we wrap up, but I didn't want to conclude without addressing a couple of shareholders who asked me about the company's dividend policy and whether we have one, and I can say we certainly do. It's available on the CUV website, but I can tell you that it is the Board's intention to pay a dividend subject to the sufficiency of our funds and the operating and investment needs of the business and indeed future growth and needs to fund that growth. So the Board will determine that, and you can investigate, as I say, the dividend policy online. So I want to say thank you to all the analysts online for asking their questions. Peter, Emilie, Linda, Philippe for their contributions, good insights and all attendees, thank you very much. A link to the webinar will be posted to the CLINUVEL News website as soon as possible for other stakeholders to review. So I'll now close the webinar, wishing you all good health and fortune. Thank you.