At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains. The benchmark index is currently trading broadly flat at 5,898.8 points.

Here’s what is happening on the market today:

Tech shares rebound.

There are indications that the tech rout could finally be over. Overnight the tech-heavy Nasdaq index stormed almost 2% higher. This positive form has flowed through to the Australian tech sector, with the likes of Afterpay Ltd (ASX: APT) and Nearmap Ltd (ASX: NEA) pushing higher today. It isn’t just these two on the rise. At lunch the S&P/ASX All Technology Index (ASX: XTX) is up 1.5%.

Cleanaway shares continue to sink lower.

The Cleanaway Waste Management Ltd (ASX: CWY) share price has continued to sink lower. Investors have selling the waste management company’s shares this week after it confirmed reports of poor workplace behaviour by its CEO, Vik Bansal. While the board has given Mr Bansal a final warning, the market doesn’t appear to believe it went far enough given the allegations of bullying.

Bank shares weigh on the ASX 200.

The big four banks have given back yesterday’s gains and are sinking lower on Tuesday. All four banks have dropped into the red and are weighing heavily on the ASX 200 index. The worst performer in the group has been the Westpac Banking Corp (ASX: WBC) share price with a decline over just over 1%.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Tuesday has been the New Hope Corporation Limited (ASX: NHC) share price with a gain of over 7%. This comes amid reports of institutional buying in the coal sector. The worst performer has been the Cleanaway share price with a 6% decline. This follows the aforementioned reports of poor workplace behaviour by its CEO.

More reading

• Why Beach, BrainChip, Cleanaway, & Credit Corp shares are sinking lower
• KGL Resources (ASX:KGL) share price surges on big upgrade
• Borrowers on loan holidays are ignoring ASX bank communications
• Why Afterpay, Clinuvel, Mesoblast, & Uniti shares are storming higher
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The KGL Resources Ltd (ASX: KGL) share price could soon retest its 2020 high after it issued a resource upgrade for the Jervois Copper Project.

Shares in the explorer surged 35.3% to 23 cents in morning trade when the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) struggled to stay in the black.

The overnight jump in the copper price is helping the sector outperform the broader market. The OZ Minerals Limited (ASX: OZL) share price and BHP Group Ltd (ASX: BHP) share price gaining 0.5% each, but its KGL that’s being celebrated today.

KGL share price jumps on copper upgrade

Management significantly increased its copper estimates for its wholly-owned project in Northern Australia.

The copper grade doubled to 2.03% from 1.07%. KGL also reported a 30%increase in contained copper to 426,200 tonnes associated with a 31%reduction in the resource tonnage.

The project is also deemed to hold 21.4 million ounces of silver and 175,700 ounces of gold. Given the high prices of both metals, they will go a long way in lowering the costs of extracting the copper.

KGL also noted an increased confidence in the Jervois resource with 68% now in the Indicated Resource category.

Jervois looking better than thought

“We committed to a new strategy of concentrating on understanding the geological structures. State of the art technologies were employed to plan efficient drilling that would confirm the structures,” said KGL chair Denis Wood.

“Ultimately, this resource outcome – 30% more copper, a near doubling of grade and greater confidence levels – should have a positive impact on the mining and processing cost.

“A pre-feasibility study, including an Ore Reserve based on this Resource Estimate, and other project planning work is now being completed and is expected to be ready for release during the fourth quarter of 2020.”

The resource update includes the three main deposits considered for development –Reward, Rockface and Bellbird. Resources at Reward South will be re-assessed in the future.

Copper benefiting from multiple tailwinds

The outlook for copper looks positive for 2021 as output from the world’s largest copper producing mine, Escondida, is hampered by the COVID-19 outbreak in Chile.

Other significant copper projects have also suffered setbacks and supply of the red metal could tighten. The imbalance is happening at a time demand is rebounding.

Global factory output is recovering strongly after the sudden hit from the pandemic. Copper demand is closely linked to industrial activity.

What’s more, the trend towards electrification of vehicles will put even greater pressure on supplies. Electric vehicles use three times more copper than a conventional vehicle.

Despite today’s big rally, the KGL share price lost around 18% of its value over the past year.

More reading

• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• Can the Harvey Norman (ASX:HVN) share price push higher in 2021?
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises by 0.7%, Cleanaway (ASX:CWY) shares dumped
• The best ASX stocks to buy for the COVID-19 recovery play

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and OZ Minerals Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Tens of thousands of property borrowers are ignoring communications from ASX banks according to reporting by the Australian Financial Review.

The AFR is reporting that a fifth of the 400,000+ deferred home loan borrowers are not responding to phone calls, texts, letters and emails from banks. That equates to around 80,000 loans with a combined value of $30 billion.

The publication said that one senior banker explained that people were obviously not talking to the banks in the hope that the problem might simply go away. But, he added, this situation could not continue indefinitely. The AFR quoted that banker:

“The notes will get a little bit sharper to get a response. One month after, three months after, the letters will get more severe. Then, of course, we’ll get a bullying complaint.”

The article made no specific reference to which bank the banker came from.

There are a number of ASX banks in Australia: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), Macquarie Group Ltd (ASX: MQG), Suncorp Group Ltd (ASX: SUN), Bank of Queensland Limited (ASX: BOQ), Bendigo and Adelaide Bank Ltd (ASX: BEN) and MyState Limited (ASX: MYS).

These banks have collectively provisioned several billion dollars of COVID-19 credit provisions. So they are expecting some borrowers not to be able to repay.

What’s going to happen?

Australia has officially entered a recession, so it’s not surprising that the banks are seeing some difficulties with a material portion of their loans.

Borrowers currently have a lot of leeway with the ASX banks as everyone tries to collectively get through this without having a GFC-like meltdown. It’s working well so far, particularly thanks to the government’s jobkeeper and increased jobseeker schemes.

But government support is scheduled to reduce at the end of September 2020 and then drop further at the end of December 2020.

ASX banks can’t be lenient forever. They aren’t charities, they are meant to make profit. Banks can’t exactly make a profit from loan if it’s never paid, can they? Non-paying loans eventually become bad loans and then ASX banks would normally do what they can to get their money back.

The introduction of an effective vaccine could be a double edged sword for some of these troubled borrowers. Many industries like hospitality, tourism, travel and education are suffering because of COVID-19 impacts. A COVID-19 vaccine could help these industries return to somewhat normal, but it would also likely mean the ASX banks (and regulators) will be less forgiving for those struggling borrowers.

But who knows if a world-changing vaccine is possible at this stage?

Are the ASX banks a buy?

Some banks have fallen significantly since the COVID-19 crash around six months ago.

The Westpac share price is down 34%, the CBA share price is down 25.5%, the ANZ share price is down 35% and the NAB share price is down 36.5%.

They are clearly a lot cheaper than they were before. But I’m not sure if they are worth buying because it’s uncertain how many of these non-paying loans will turn into bad debts.

Not only are some loans worrying, but the banks’ overall net interest margin (NIM) is falling because of lower official interest rates in Australia and overseas. A lower NIM is bad for bank profitability and that’s bad for dividends.

If I had to buy one big four ASX bank it would be CBA because of its higher quality and strong balance sheet.

However, out of all of the financial businesses I named earlier in the article, I’d go for Macquarie because of its global earnings diversification and its smaller loan book (which is less likely to derail Macquarie’s overall profit).

More reading

• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?
• Top ASX dividend shares to buy in September 2020
• ASX 200 rises by 0.7%, Cleanaway (ASX:CWY) shares dumped
• NAB (ASX:NAB) penalised $57.5 million for ripping off customers

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is just managing to keep its head above water. At the time of writing, the benchmark index is up 0.1% to 5,905.7 points.

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher:

The Afterpay Ltd (ASX: APT) share price is back on form and is charging 4% higher to $75.47. Investors have been buying the buy now pay later provider’s shares after a rebound on the tech-focused Nasdaq index overnight. It isn’t just Afterpay on the rise in the tech sector today. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is up 1.5%.

The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price is up 4% to $22.18. This morning the biopharmaceutical company released an update on its attempts to expand the use of its SCENESSE drug to treat xeroderma pigmentosum (XP). This morning it revealed that the first patient diagnosed with XP has been administered the drug under a Special Access Program. Initially the company will be focused on its safety. If this is successful, it will conduct two further studies to test its efficacy.

The Mesoblast limited (ASX: MSB) share price has jumped 7% to $4.98. This follows the release of an announcement relating to its lead product candidate remestemcel-L. That announcement reveals that the product has been selected as the winner of the Fierce Innovation Awards – Life Sciences Edition 2020 for Biotech Innovation.

The Uniti Group Ltd (ASX: UWL) share price is up almost 15% to $1.40. Investors have been buying the company’s shares after it made an improved offer to acquire fellow telco OptiComm Ltd (ASX: OPC). Uniti has matched an offer of $5.85 per share made by First State Super last week. In light of this, Uniti and OptiComm have entered into an amended and restated scheme implementation deed.

More reading

• Uniti (ASX:UWL) share price surges higher on revised OptiComm (ASX:OPC) takeover offer
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?
• Why the Clinuvel (ASX:CUV) share price is storming higher today
• Buy Afterpay (ASX:APT) and these ASX shares before the tech rebound
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Uniti Group Ltd (ASX: UWL) share price is surging higher today after announcing an improved offer to acquire fellow telco OptiComm Ltd (ASX: OPC).

This follows the announcement of a competing offer by First State Super last week valuing OptiComm at $5.85 per share.

At the time of writing the Uniti share price is up 13% to $1.38.

What has Uniti offered?

This morning Uniti revealed that it has now increased its offer to $4.835 cash per share and 0.80537 Uniti shares per share from $5.20 per share. This implies a value of $5.85 per share, which matches First State Super’s offer.

This offer will be funded via existing cash reserves, an upsized $250 million new debt facility, and 84 million Uniti shares.

Despite the increased price tag, management notes that the acquisition remains highly earnings accretive. It estimates earnings accretion of ~20% on a combined proforma FY 2020 basis, including cost synergies. It also believes it will create the pre‐eminent challenger in national private fibre networks.

What now?

OptiComm appears happy with this offer and has entered into an amended and restated scheme implementation deed with Uniti, which is being recommended by the OptiComm board.

Uniti notes that it has already secured a 19.5% relevant interest in OptiComm through commitments from a number of OptiComm institutional shareholders, comprising call option agreements and share purchase agreements.

It believes this relevant interest is highly strategic for Uniti, placing it in a considerably strengthened position to successfully complete the acquisition this time around.

Uniti CEO & Managing Director, Michael Simmons, commented: “It is by now well understood that the combination of the Uniti and OptiComm businesses is both highly strategic and synergistic. We have been very thoughtful in preparing our revised offer, to ensure we have the best opportunity to secure the company we have sought to own for some time.”  

“To this end, the nearly 20% relevant interest we have secured in OptiComm delivers us a significant strategic stake in OptiComm. We are excited and ready to complete the OptiComm acquisition over the coming weeks and to welcome the OptiComm team as part of the Uniti Group. I am more confident than ever of being able to realise the many benefits inherent in the Acquisition and to taking up our position as the pre‐eminent challenger in the private fibre market,” he concluded.

All eyes will be on First State Super to see if it comes back with an improved offer of its own in the coming days.

More reading

• Why Afterpay, Clinuvel, Mesoblast, & Uniti shares are storming higher
• OptiComm share price rockets higher on competing takeover approach
• Why Jumbo, St Barbara, Sydney Airport, & Uniti shares are dropping lower
• Why Magellan, Nufarm, Opticomm, & Scentre shares are storming higher
• Why G8 Education, Monash IVF, NIB, & Uniti shares are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are few other stocks that have attracted as much love and loathing as the Afterpay Ltd (ASX: APT) share price. But risks of slowing growth could give the bears the kind of vindication they crave.

The 20% pullback in the shares of the buy now, pay later (BNPL) superstar from last month’s record high of $92.48 still leaves the APT share price with a gain of more than 700% from its COVID-19 low in March.

Supporters believe the pullback is healthy and gives Afterpay room to rally again, while detractors point to a long way down for the tech darling.

Slowing growth in the US

This is why a warning from Citigroup about increasing competition and flat growth in Afterpay’s US website hits are attracting attention. The US market is a key growth driver for the Afterpay share price.

Citi estimated that there were 10.6 million site visits in August with unique visitors up 1% month-on-month (MoM)to about 4.3 million, reported the Australian Financial Review.

Competitors catching up

There are signs that Afterpay’s competitors are also gaining ground while new entrants, including the Commonwealth Bank of Australia (ASX: CBA), are nipping at its heels.

“Further, while Afterpay’s Android app downloads increased +10% mom, Klarna regained the top spot with 392k downloads (vs. 351k for Afterpay),” said Citi.

“Klarna and Sezzle saw the strongest increase in website visits in August (up +8% MoM).”

Others feeling the heat?

There are also signs that fellow BNPL darling, the Zip Co Ltd (ASX: Z1P) share price, is coming under pressure.

The broker pointed to the 3% MoM decline in visits to Zip’s Australia and New Zealand website in August after a big jump in July.

However, Citi said it’s too early to be reading too much into the website stats. Shops have started to reopen in Australia and Zip’s falling website hits may be reflecting consumers going in-store to make purchases instead.

Foolish takeaway

Nonetheless, investors should be keeping a close eye on any early warning signs that growth is slowing.

This is because Afterpay and friends are trading on extremely high multiples that can only be justified if they can maintain a breakneck expansion pace (think triple digits) over the next two or three years, at least.

Any signs of cracks in the growth story will see the sector de-rate quickly. This is why buying these stocks now are only for the brave.

And in case you are wondering, Citi’s rating on Afterpay is “neutral” while its recommendation on Zip is “sell/high risk”.

More reading

• Why Afterpay, Clinuvel, Mesoblast, & Uniti shares are storming higher
• Buy Afterpay (ASX:APT) and these ASX shares before the tech rebound
• 5 things to watch on the ASX 200 on Tuesday
• Flexigroup (ASX:FXL) launches humm in New Zealand
• How this new red tape could send the Afterpay (ASX:APT) share price tumbling

Brendon Lau owns shares of Commonwealth Bank of Australia. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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COVID-19 has changed the way we work and play like very few of us would have imagined at the start of the year.

Both adults and children are spending so much more time at home. This means more spending per household on utilities like electricity, water and gas.

A uniquely 21st century utility is internet connectivity.

Households are now, more than ever, reliant on internet access through either mobile or fixed line for their work, study and leisure.

The wholesaler, National Broadband Network (NBN), even handed out extra capacity for no cost during the depths of the first national lockdown.

So telecommunications retailers should be cashing in, right?

The share prices of the two big players on the ASX, Telstra Corporation Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPG), would suggest they’re struggling.

Telstra was as high as $3.90 in January but now languishes at $2.88. TPG started at $8.90 at the end of June when it merged with Vodafone, but is now stumbling at $7.33.

That begs the question: Are they bargains about to shoot up, or is the telecommunications market too commoditised and too saturated?

Betashares senior investment specialist Cameron Gleeson is pessimistic.

“Changes to the way we work and study may not necessarily be a strong tailwind for Australian telcos,” he told The Motley Fool.

“With the full roll-out of the NBN and the reduction in monopolist revenue from fixed line services, Telstra faces increased price competition in reselling NBN plans and in mobile.”

An alternative to telecommunications

Gleeson told The Motley Fool that investors instead should look at a different, and often-overlooked, sector.

“Another sector perhaps better-placed to benefit from behavioural changes brought on by the global pandemic is the global cybersecurity industry.”

Hackers are exploiting the increased time we have online due to the pandemic, according to Gleeson.

“Increasing awareness of the cyber threat across business and government, coupled with the structural shift towards an online economy could prove to be the catalyst for expansion in an already rapidly-growing industry.”

More reading

• 3 ASX dividend shares to buy in a downturn
• Top ASX dividend shares to buy in September 2020
• Why I would buy Telstra (ASX:TLS) and this ASX dividend share
• Why ASX dividend shares are still king in 2020
• Insiders have been buying Cochlear (ASX:COH) and this ASX share

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tesla Inc (NASDAQ: TSLA) share price was an exceptionally strong performer on Wall Street on Monday night.

The electric vehicles company’s shares snapped their losing streak and zoomed a sizeable 12.5% higher to US$419.62.

Why did the Tesla share price storm higher?

There were a couple of catalysts for Tesla’s strong share price gain on Monday night.

The first was a solid recovery in the Nasdaq index. After a couple of weeks of declines driven by profit taking, the tech-heavy index rebounded with an impressive 1.9% gain overnight.

And although Tesla isn’t a technology share in the same vein as Amazon or Apple, many investors class it as one. As a result, it has a tendency to move with the Nasdaq index.

Strong demand in China.

The second catalyst for yesterday’s strong gain appears to have been comments out of Goldman Sachs.

According to CNBC, the broker’s research indicates that downloads of its app have been increasing at a solid rate. It feels this is thanks largely to the China market.

Goldman said: “Tesla global weekly app downloads have recently been tracking up on a year-over-year basis, with the most recent full week of global data up about 20% yoy.”

Though, the broker does note that Tesla traditionally performs strongest in the final month of the quarter.

It explained: “Tesla’s deliveries tend to be back-end weighted in part because in a given quarter the company typically starts building cars that have to be delivered the farthest away first, and this results in a lot of deliveries occurring in the final month of a quarter.”

Nevertheless, the trends are positive for Tesla app downloads, which appears to be an indication that its car sales and deliveries have been strong.

Following this gain, the Tesla share price is now up 388% since the start of the year.

More reading

• Did Apple and Tesla stock splits signal the stock market top?
• How to tell if this is the end of the ASX bull market
• 3 ways Aussies can buy Tesla (NASDAQ:TSLA) shares
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• Why Tesla stock jumped again on Thursday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Although some stocks have rebounded from the 2020 market crash, there are still a number of cheap shares available to buy. They may experience short-term uncertainty, but have the potential to produce impressive returns in the long run as the economy recovers.

Warren Buffett has previously purchased cheap stocks to benefit from their capital return potential. Through following his lead, you could improve your chances of making a million in the coming years.

Buying cheap stocks after a market crash

Many investors may naturally be cautious about the prospect of buying cheap stocks after a market crash. After all, the uncertain global economic outlook means there is a very real threat that their prices will move lower in the coming months.

However, undervalued stocks have historically been a sound investment. They enable investors to buy companies at prices that are, in many cases, significantly lower than their intrinsic values. As the economy’s outlook gradually improves, and investor sentiment does likewise, bargain shares are likely to have greater scope to register large capital gains than fairly valued businesses.

Therefore, the market crash has created numerous buying opportunities for investors. Previous bear markets have always been followed by bull markets, which is likely to be the case following the stock market’s recent decline.

Risk management

Of course, not every cheap stock will recover after the market crash. Some industries and businesses may struggle to compete in what could prove to be a very different post-coronavirus economy. For example, retailers that lack an online presence may struggle to compete with e-commerce rivals, while energy companies may need to reinvest more heavily in greener alternatives to fossil fuels.

As such, it could be a shrewd move to build a diverse portfolio of undervalued stocks. Through having exposure to a variety of sectors and geographies, you can reduce your reliance on one particular industry or region. Given the uncertain economic environment facing many companies, this could prove to be a logical step for all investors to take.

Making a million

Even though buying cheap stocks after a market crash could improve your chances of making a million, it is unlikely to be a quick process. Even Warren Buffett took many years to build his wealth through adopting a similar strategy.

However, by giving your holdings the time they require to implement revised strategies and for investor sentiment to improve, it is possible to make a million. For example, the stock market has produced annualised total returns of around 8% over recent decades. By investing $500 per month over a 35-year time period, you could generate a seven-figure portfolio through earning the market return.

By investing in cheap stocks after the market crash, you may be able to obtain an even higher rate of return, thereby making a seven-figure portfolio a more realistic aim over the long run. 

More reading

• Why the Tesla (NASDAQ:TSLA) share price zoomed 12.5% higher
• Why the Clinuvel (ASX:CUV) share price is storming higher today
• Catapult (ASX:CAT) share price charges higher on French Rugby deal
• AstraZeneca resumes UK clinical trials of its coronavirus vaccine after a safety pause
• Pfizer says it could know if its COVID-19 vaccine candidate works in October

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CLINUVEL Pharmaceuticals Limited (ASX: CUV) share price is pushing higher on Tuesday following the release of an announcement.

At the time of writing the biopharmaceutical company’s shares are up 3% to $21.96.

What did CLINUVEL announce?

This morning the company provided an update on its plans to expand the use of its SCENESSE drug (afamelanotide 16mg) to treat xeroderma pigmentosum (XP).

XP is a disease characterised by an inborn insufficiency to repair DNA damaged by sun exposure. Patients develop frequent skin cancers from an early age, with most experiencing their first malignancy before adolescence, and must avoid all forms of UV exposure.

The disease has a high mortality rate, with a median life expectancy of 30 years. At present, XP treatment is limited to management of symptoms, in particular regular surgery to remove cancerous lesions. An estimated 1 in 450,000 individuals in Europe suffer from XP.

CLINUVEL has high hopes for SCENESSE, noting that it belongs to a group of hormones which have been shown to reduce UV-induced damage to DNA and assist in DNA regeneration.

It took a step closer towards finding out whether SCENESSE is a viable treatment for XP this morning when it announced that the first patient diagnosed with XP has been administered the drug under a Special Access Program.

Initially, the patient’s safety will be evaluated over six weeks of treatment. Following confirmation of the safety of the drug product in this patient, CLINUVEL will conduct two further studies as part of the DNA Repair Program. Both studies will evaluate the impact of treatment with SCENESSE on DNA damage and restoration.

CLINUVEL’s Clinical Operations Manager, Dr Pilar Bilbao, commented: “We seek to provide meaningful benefit to XP patients, and these results will serve a wider population of fair-skinned individuals at risk of developing skin cancers. The next 12 months will be exciting for many patients, their families, the clinical experts and our own teams.”

More reading

• Here are the 10 most shorted ASX shares
• These were the best performing ASX 200 shares last week
• Up 9.2% in 1 day, is the Clinuvel Pharmaceuticals (ASX:CUV) share price a buy?
• ASX 200 rises 0.5%, gold miners glitter
• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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