# SRX - Sirtex Medical



## GreatPig (29 September 2005)

Currently forming a triangle. As I hold, I'm hoping for an eventual top-side breakout 

Cheers,
GP


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## DBking (30 September 2005)

*SRX stock*

Hi,

I have been noticing a bit of a trend on the SRX stock.  Its called Sirtex, they deal in state of the art liver cancer cures. They have been fluctuating between $2 and $2.25.   Does anyone know anything else about them?  Are they over priced?  Could a big price drop, or even price spike be on the cards?

How do people see this share reacting over the next 6 months.  They seem to have had a **** 18 months with a new c.e.o  but reading reports, long terms looks very good with solid plans and goals in place.


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## Buy low. sell high (26 December 2006)

Does anyone know the story behind the split in directors?


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## theasxgorilla (24 January 2007)

Buy low said:
			
		

> Does anyone know the story behind the split in directors?




I'd be interested to know the drivers for what has been happening on the board as well.  Regardless, the company founder Bruce Gray is off the board.

http://www.wabusinessnews.com.au/en-story.php?/1/48197/Gray-removed-from-Sirtex-board

Does the untidy web of legal proceedings surrounding this company make it a poor risk at the moment?  With Gray gone I think things just got a bit neater...but the UoWA claim that they are the "rightful" owners of the Sirtex IP (presumably the liver cancer "treatment") is my biggest a concern right now.


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## spooly74 (29 March 2007)

Ann out regarding clinical trials.

Loooks very promising.

"While acknowledging the small sample size, the investigators concluded that the combination treatment was generally well-tolerated by the patient group, and noted that the lack of liver toxicity was encouraging for the clinical advancement of a multimodality treatment approach. 

They also concluded that the patient outcomes are impressive when compared to equivalent statistics for FOLFOX4 chemotherapy alone, in this patient group. 

Of the 20 patients in the study, 18 (90%) showed a decrease in the tumour size by at least 30 per cent according to RECIST4 criteria and two patients (10%) had stabilisation of their disease. 
The tumours decreased in size sufficiently in two patients (10%) to enable their remaining liver 
tumours to be removed by surgery"


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## CAFA1234 (22 April 2008)

So, with $4m coming back from the court case - that puts their last years profits at about $5/6m, add in the $2m lost on currency (God knows how, but one assumes it was a one off event), and you have about $7/8m.

It would appear that they were operating at near capacity (from the reactor at Lucas Heights) and with such a short half-life it was always going to be difficult servicing the US market. Do you know how difficult it is to fly radioactive material into the US these days?

Now that Wilmington is fully operational and is capable of increasing capacity by some 200/300% it will be interesting to see the first set of results that include the new facilities. Should dramatically improve the bottom line, as production and delivery costs are much lower and they are able to service the US market in a more timely fashion.

Note - I hold a long term position and continue to accumulate on the lows.


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## CAFA1234 (17 May 2008)

CAFA1234; said:
			
		

> So, with $4m coming back from the court case - that puts their last years profits at about $5/6m, add in the $2m lost on currency (God knows how, but one assumes it was a one off event), and you have about $7/8m.
> 
> It would appear that they were operating at near capacity (from the reactor at Lucas Heights) and with such a short half-life it was always going to be difficult servicing the US market. Do you know how difficult it is to fly radioactive material into the US these days?
> 
> ...




Clearly no interest in SRX these days - not a miner of course!

However with the appeal not against SRX  and their costs relatively safe and all sorts of interesting news (there must be a return of all their R&D expenditure) I still think this share is going places over the next couple of years. 

Last quarter was a disappointment, but now that management time can be focused on making a good business rather than fighting a 3 years legal / court case I'm expecting a lot. 

Get to it Sirtex staff and lift the share price so all your options are in the big money - you deserve every $.


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## Solarfuture (5 October 2008)

I belive SRX will have a great QTR.  With a weaker AUD I expect great margins this Qtr.  Hopefully we bounce back to $5


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## Solarfuture (22 January 2009)

Sirtex in the News.
Microspheres Cancer Therapy Improves Survival Rate
http://wbztv.com/local/microspheres.colon.cancer.2.913364.html

Also Video Hunter Hall on Sirtex.
http://www.hunterhall.com.au/videoPlayer.aspx?mediaId=4&width=450&KeepThis=true&TB_iframe=true


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## studmuffin (25 March 2009)

More Sirtex in the news
http://www.genengnews.com/news/bnitem.aspx?name=51684463&chid=4

On CNN economic report 25th March
http://www.youtube.com/watch?v=KM4QmOQP9QI


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## suhm (26 October 2009)

I thought I'd give an update on this stock, its just announced its first div, 7c fully franked 2c ordinary and 5c special. Its also reached an all time high. 

EPS was 32.7 but with a large Fx gain. Profits will be hit with the increase in AUSD vs the USD but at least this biotech share is profitable and paying dividends (besides COH, BTA and CSL there aren't that many that can say that) and has no debt and good operating cashflow. If anyone knows anymore let us know.

Unit sales are only starting to increase <4k a year and at present being used as a salvage treatment for metastatic liver cancer. Big opportunities would be for it to be used in HCC mostly asian countries with Hep B or in IV drug users with Hep C and as a primary treatment for liver mets. Its a once off treatment at $US 10k a treatment adding operating fees it could meet QALY targets if it increased median survival by about 6 months, seems to be quite well tolerated but is a surgical procedure which would be delaying uptake as the medicos would need to be convinced to use it and then they need to learn how to do the procedure.

Disclaimer I hold.

Edit- With regards to the procedure it shouldn't be that hard, catheter up the fem artery and chemoembolisation is a fairly common procedure. This just uses radioactive spheres.


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## Bowlane (25 January 2010)

Anyone have a reason for the substantial drop 22nd Jan and today? Broker's changed recommendation? 
Disc: don't hold, but have been watching, and asking myself why didn't I buy last May!


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## adhitya (14 February 2011)

Bowlane said:


> Anyone have a reason for the substantial drop 22nd Jan and today? Broker's changed recommendation?
> Disc: don't hold, but have been watching, and asking myself why didn't I buy last May!




Yeah agree... Someone seems to know something that public didnt. Checked the morningstar recommendation on SRX; they just upgraded the fair value to aud 7.2 from 6.9 on the back of February announcement of 2Q11 sales volumes growth of 17.2%...
The announcement doesnt seems to provide a leg to a share weakness which went down to 5.46 on Friday closing. 

I've been following SRX as well so I tought this could be: (1) volume increase doesnt translate to profits (2) detriemental forex impact to profits (3) Bruce Gray continually to reduce his ownership (i.e. this explained Dec weakness)

If no. 3 is the case, we just has to ask whether this is to balance his portfolio or his court battle with SRX or he knew something that we dont (i.e. defect on product trial)...
If there is an unkown issue with product trial it would spell the end of the premium pricing for SRX.


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## robusta (2 March 2011)

Picked up some SRX today, broke one of my rules the price I paid is a bit above my calculation of IV but the IV in the future is rising at a decent clip.


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## craft (23 September 2012)

Dosage sales starting to accelerate.

Information flow from trials building and major reporting expected by 2014.

Potential revenue of 1 Billion+ If the trials result in Sir Spheres moving up the treatment chain.

Intellectual property tested and successfully defended in court.

Gross Margins of over 80%

Even at these early sale volumes the company can fund all its trials, marketing, research, distribution channel and manufacturing plant growth and still pay out dividends plus have 50 Million cash on hand. A small Bio paying its way – there’s a novel idea.

The reduction in trial expenses and leveraging the fixed costs through greater sales volume is going to see the net margin grow over time.

In my view (disclosure – I have held for some years) this has got to be one of the most exciting companies listed on our exchange and yet even as it makes all time market highs it get very little attention here. [obviously not as interesting as a hole in the ground]

I just hope it remains impendent from the big international pharma’s long enough to realise its potential as an Australian success story.


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## craft (4 October 2012)

craft said:


> Dosage sales starting to accelerate.





Todays Announcement



> 37 Per Cent Dose Sales Growth in First Quarter






> Sirtex has now reported 33 consecutive quarters of sales growth.





A huge market, Information flow from trials building, Dose sales growth accelerating, 80% Gross Margin..........  

No Interest on ASF


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## McLovin (4 October 2012)

Do I understand this correctly, these guys at the moment are only being used as a sort of last resort, once everything else has failed? The purpose of the continuing trials is to have a larger sample size so that the case can be built to use them as a frontline treatment?

The numbers are very impressive, no doubt.


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## skc (4 October 2012)

Lol tried to buy these on open and managed to get a fill for a grand total of 25 shares at $9.27. Didn't want to reach up and grab the rest at $9.33.

Sold my 25 shares at $10.11. Just enough to pay for a burger 

What's that saying about "Don't be a dick for a tick"


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## craft (4 October 2012)

McLovin said:


> Do I understand this correctly, these guys at the moment are only being used as a sort of last resort, once everything else has failed? The purpose of the continuing trials is to have a larger sample size so that the case can be built to use them as a frontline treatment?
> 
> The numbers are very impressive, no doubt.




This is a good introduction to the SRX investment case.

http://www.youtube.com/watch?v=N9HA4DaVtls


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## Ves (4 October 2012)

This is probably in the top-tier of investment grade companies listed on the ASX.  The problem is I don't 100% understand it, which means I have never been able to value it.  Which is dangerous in my mind when talking about companies that trade on high earnings multiples.  Unfortunately I thought the same thing at $5.50 and will probably think the same thing if it gets to $30.00.


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## McLovin (5 October 2012)

craft said:


> This is a good introduction to the SRX investment case.
> 
> http://www.youtube.com/watch?v=N9HA4DaVtls




Thanks craft, very interesting. If the trials are successful (and there doesn't seem to be any reason to think they won't be) then this could easily be the next COH.


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## suhm (5 October 2012)

The stuff seems to work but complicated to get it organised, minimal side effects in comparison to other therapies as long as it stays in the liver, i.e. they did the angio correctly. My no.2 pick in the biotech area, feel silly for selling this one off to hold onto my no. 1 pick though.

Game changer is the studies and uptake will become more widespread if they can reduce the complexity for administration.


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## CAFA1234 (11 October 2012)

I last posted in 2008 - when very few were even looking at this stock.

Still holding and managed to pick up another batch during the GFC at $1.72. Keep buying the lows, as now the traders are getting involved there is a good two way market forming. SRX if now a 0.5B$ company, and is on target to be a 1B$ company in the next 18 months. This is cause a lot of funds to start investing, if only they could get the stock in the volumes they need.

The clinical trail is sounding as if it will yield the result expected - 1st line approval. If so, then the increase on dose sales will leave the current 47% US increase, dead in the water. I'm forecasting dose sales of 30,000 within 3 to 4 years. Extrapolate that out in your own spreadsheet, calc a share price based on a PE or 30, and then 15 just for fun. Work out the present net value, and see where the share price should be.

*Do your own research*. And if you cant then at least check out 
*http://www.4-traders.com/SIRTEX-MEDICAL-LIMITED-6492517/consensus/*
A Thomson Reuter data consolidation site.

Disc - long term holder, buying the lows.


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## CAFA1234 (14 October 2012)

Sirtex spheres  used for primary treatment in Saudi  - interesting
re
مدينة الملك عبدالله الطبية تجري أول جراحة لعلاج أورام الكبد بالكريات المشعة نوويا
الشرق - ‎2 hours ago‎	



وبناء على توفر الإمكانيات البشرية والأجهزة الطبية الحديثة، قام فريق من وحدة الطب النووي برئاسة استشاري ورئيس قسم التصوير الطبي والطب النووي بالمدينة الطبية الدكتور خالد بن أحمد بن سلمان بحساب الجرعة اللازمة من كريات اليوتيروم-90 المشعة نوويا (SirTex) ...


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## RandR (6 January 2013)

hunter hall and perpetual used december to sell off some holdings, Bruce Gray also sold off a not insignificant amount of holdings ... Are they doing so because they believe the company to be fully valued atm?


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## RandR (6 January 2013)

I dont think ive seen a cash flow statement yet show a decrease in cash held due to the investment in short term deposits. I wonder if management have a plan to utilize the growing capital in the long run if they continue retaining cash profits, will it be used to fund internal growth or other. Are they going to need significant capital to fund increases in production ? There spending a decent whack of cash on marketing but thats fairly understandable at the point in product development there at. They seem to be converting about 20%+ of revenue to pre tax profit, im most interested  if the margins are going to be scalable.


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## CAFA1234 (6 January 2013)

RandR said:


> I dont think ive seen a cash flow statement yet show a decrease in cash held due to the investment in short term deposits. I wonder if management have a plan to utilize the growing capital in the long run if they continue retaining cash profits, will it be used to fund internal growth or other. Are they going to need significant capital to fund increases in production ? There spending a decent whack of cash on marketing but thats fairly understandable at the point in product development there at. They seem to be converting about 20%+ of revenue to pre tax profit, im most interested  if the margins are going to be scalable.




Biggest call on cash will be the ramping up of headcount to deal with the expected step wise increase in sales. Even this could be financed out of existing cash flow. There is a capital spend of about $6-8m for the new generators in the Us and Germany, buy even these could be from cash flow based on 40% sales growth.

Gillman and the board are very conservative with funding and will tend to retain a large buffer. However if they can't use this to generate a return on capital in excess of 20/25% then it should be paid as dividends.

If they do start to see the step wish growth that HH spoke about then they will have some huge exes in bringing on another 8 to 10 generator cores, and another huge increase in field support staff over the next 3/5 years. Lets hope this is the reason why they are conserving cash!

As I mentioned in a previous post, if they can get the trail result that gives them 'standard of care' status then 30 or 40,000 doses PA is more than doable, within 3/4 years. Unless Bayer et al take them out before then 

On a 80% gross margin this would be one very profitable business.


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## RandR (6 January 2013)

CAFA1234 said:


> Biggest call on cash will be the ramping up of headcount to deal with the expected step wise increase in sales. Even this could be financed out of existing cash flow. There is a capital spend of about $6-8m for the new generators in the Us and Germany, buy even these could be from cash flow based on 40% sales growth.
> 
> Gillman and the board are very conservative with funding and will tend to retain a large buffer. However if they can't use this to generate a return on capital in excess of 20/25% then it should be paid as dividends.
> 
> ...




80% gross ? You sure ?


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## CAFA1234 (6 January 2013)

RandR said:


> 80% gross ? You sure ?




I guess it depends on how you define gross - example from Coca Cola, 2006

Consolidated Statements of Income
(In millions) 
Net Operating Revenues 	$ 20,088
Gross Profit 	                $ 15,924
Operating Income 	          $ 6,318
Income Before Income Taxes 	  $ 6,578
Net Income 	                  $ 5,080

SRX has a declared operating margin of 30%, close to Coke. What do you think the Gross margin is? My 80 % is a shot in the dark. With a sales value of about $15k US$, my call is that the core product, including production costs in a generator is not more than $3k. Would be interested to hear of any technical dudes that can put some numbers on production costs in a generator. 

The capital costs of the generator at $4m (give or take) is less than $100 a dose based on a 5 year life. The costs of the Strontium is very cheap  (Cost, pure: $100 per 100g on one web site). The beads are also very cheap. So where is the cost of this product? I think $3k is about right, but happy to be corrected for missing analysis.

Marketing, field support, training, transport, research and development, head office etc etc take the lions share IMO.

Long term holder.

Cheers


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## RandR (23 January 2013)

CAFA1234 said:


> I guess it depends on how you define gross - example from Coca Cola, 2006
> 
> Consolidated Statements of Income
> (In millions)
> ...




Yes, once including admin/QA/regulatory and marketing expenses etc margin on sales appears to be just a tick under 30%

Appear to be selling a dose for a tick over $13k and then earning a tick over $3.5k of direct EBIT after all expenses

The million dollar question can it be maintained while they dramatically increase number of doses. Has the company or board made any specific targets for dose numbers as they progress up the treatment phase ladder?

You mention 30-40,000 is this coming from anywhere?

30,000 doses at 13k a pop would put revenue at $390million? There not cheap for me yet but even now there at a market cap of about 650-700million. Is this level of growth in revenue realistic?


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## CAFA1234 (23 January 2013)

RandR said:


> Yes, once including admin/QA/regulatory and marketing expenses etc margin on sales appears to be just a tick under 30%
> 
> Appear to be selling a dose for a tick over $13k and then earning a tick over $3.5k of direct EBIT after all expenses
> 
> ...




*You mention 30-40,000 is this coming from anywhere? *- wild guesstimate! However if the results of the big trial in the US (9/15 months from now) show the sorts of results comparable to recent small scale  papers (adding 12 months to expected life over and above existing treatments) then Y-90 should be accepted as the new standard of care for liver mets. The market is about 0.5m new cases each year, so 30/40k doses is less than 10%, and then we have HCC on top of that.  More difficult place to be but puts the market to well over 1m PA. A standard of care treatment would cause a large % increase in dose sales for a few years. Well over 40% compound - IMO.

If you then add in the additional work that is being done in R&D then that is a bonus.

Are there risks? God, yes. But that is why we dabble in the stock market.

DYOR


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## robusta (25 February 2013)

Held SRX in my SMSF but took profits way to early about a year ago and have regretted it ever since, back in today at $10.21. While SRX is not cheap I really like the quality of the balance sheet and the growth.


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## RandR (25 February 2013)

robusta said:


> Held SRX in my SMSF but took profits way to early about a year ago and have regretted it ever since, back in today at $10.21. While SRX is not cheap I really like the quality of the balance sheet and the growth.




It's definitly exciting but I think there is a real risk with a company that is essentially a 'one trick pony' in the technology space. TBH im just not interested unless this dives down a bit more then what it has already. This is just so risky for me I need it to be a real bargain to feel comfortable with anything sizeable in it.


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## craft (25 February 2013)

RandR said:


> It's definitly exciting but I think there is a real risk with a company that is essentially a 'one trick pony' in the technology space. TBH im just not interested unless this dives down a bit more then what it has already. This is just so risky for me I need it to be a real bargain to feel comfortable with anything sizeable in it.




An interesting discussion on this stock – All points of view are certainly defendable. 

For me this stock has the widest range of possible outcomes of any stock I own – by far. 

Giving those outcomes a probability weighting – I defiantly come down on the side of having exposure.  But this is basically going to be an all or nothing outcome for me - the only way I can ensure I’m not shaken out until the big trial results come through. The potential loss is 100% the potential gain is probably the brightest of any self funding growth company on the ASX.  

I have a maxed out exposure with an Av cost –sub $3.00 – So have not given any real thoughts as to whether building a position at $10 makes sense. As R&R points out price and position size are critical to this type of holding.


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## craft (25 February 2013)

RandR said:


> 80% gross ? You sure ?




2012

Revenue from sale of goods $82,627

Cost Of Sales  $15,669

Gross Profit Margin 81.04%


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## craft (20 June 2013)

Some companies are nice to have a stake in for more reasons than one.

Anecdotal evidence continues to increase anticipation of the trial results.  

http://******************/post_threadview.asp?fid=1&tid=2025862&msgno=9445361#9445361

SRX may become unprecedented for an Aus Bio stock – It may also not live up to expectations or it might get bought out before realising its full potential – maybe somebody will discover an outright cure for cancer and SRX is dead in the water.  Risk and reward both high here for share holders but a very exciting product for patients – capitalism doing good.


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## RandR (22 June 2013)

craft said:


> Some companies are nice to have a stake in for more reasons than one.
> 
> Anecdotal evidence continues to increase anticipation of the trial results.
> 
> ...




I have held back from pulling the gun on this. I have not been able to justify the risk of the unknown at the price points available.

I would like to though  

I actually have very similar reservations even when it comes to a company like COH. Despite the immense success of COH I believe there is a level of risk in its product longevity that I cant justify unless at stupidly low prices (which it looks like it may be heading to)


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## clinta44 (7 August 2013)

Lots of reasons while owners sell but this is certainly interesting... perhaps some school fees are due? 

http://www.brisbanetimes.com.au/bus...-sells-down-share-holding-20130807-2rfah.html


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## robusta (15 August 2013)

Well the bottom line was not that spectacular but the cash flow seems to be very nice as long as they earn a good return on the funds they are reinvesting into the business.


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## piggybank (24 September 2013)

Fourth time lucky...


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## robusta (9 January 2014)

Looking at the chart above we may be going for fifth time lucky. Investing on quarterly sales can be dangerous, 4% growth the previous quarter compared to 18.7% in the most recent.

38 consecutive quarters of growth is nothing to sneeze at however. 

Here is a view from a major shareholder predicting $100 per share.

http://www.youtube.com/watch?v=ry15oAg_1qw


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## piggybank (9 January 2014)

Daily P&F Update:-


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## craft (31 January 2014)

Qtly Dose Sale Numbers




The last qtly figure was an all time record and to my way of figuring looks to confirm the current sales growth trend in the high teens. This is really encouraging considering we are still pre major trial data and bodes very well for what might already be being seen from those on the frontline. 

What really matters though for SRX is the upcoming trial data – if that results in thermosphere’s climbing up the generally accepted standard of care chain then dose sales will undergo a paradigm  shift. 

Advised with the full year results was Manufacturing set to triple with new facilities in Germany and USA, so the company has already laid bets and invested in anticipation.


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## VSntchr (11 February 2014)

Have been looking into SRX a little bit lately and I still have some questions around moving up the treatment chain.

I understand that getting positive data will give them a stronger case to present to oncologists, but is it a sure thing that they will really be able to move up the chain? 
Is there some sort of commission or incentive program that would lead the physicians to recommend and oncologists to provide the SirSpehere treatment?

BigPharma is very powerful and despite the success of Sirtex's product thus far, it would seem a difficult task to begin shunting them out of the way for first priority?
An analyst from Hunter Hall touched on this subject in a video I watched on youtube, but I couldn't really answer my above questions based on what he covered.


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## craft (11 February 2014)

VSntchr said:


> Have been looking into SRX a little bit lately and I still have some questions around moving up the treatment chain.
> 
> I understand that getting positive data will give them a stronger case to present to oncologists, but is it a sure thing that they will really be able to move up the chain?
> Is there some sort of commission or incentive program that would lead the physicians to recommend and oncologists to provide the SirSpehere treatment?
> ...




These trials are at the standard of what is accepted as proof of efficacy by the profession. The whole intention is to overcome the inertia in the system to change – it is these type trials that redefine the standard of care.

Is it a sure thing that any successful trial will results in oncologists prescribing the best possible *proven* treatment?  Nothings a sure thing, but we are talking about professionals and dying patients – so I’m optimistic that a successful trial will result in move up the treatment chain.


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## VSntchr (11 February 2014)

Thanks for the reply.
I agree with that would like to think that the above holds true, even moreso for patients than for shareholders!


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## piggybank (18 February 2014)

Well the half yearly report was released today to the market. From a very amateur fundamentalist it looked good to me with all the arrows pointing in the right direction but hopefully the likes of previous contributors Craft, Robusta, VSntchr, etc can give us their opinion(s) on the results. The link below (when clicked) will take you to todays presentation...

http://stocknessmonster.com/news-item?S=SRX&E=ASX&N=782809

​


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## robusta (18 February 2014)

Nothing very deep to add, with no debt and strong cash flows, it's the really nice 14.8% compound annual growth rate of revenue over the last five years I really like. The market is really starting to price in success in the clinical trials and a real step forward of revenue growth. The profits should multiply *really* quickly if a C.A.G.R. north of lets say 25% is achieved over the next five years.


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## craft (18 February 2014)

piggybank said:


> Well the half yearly report was released today to the market. From a very amateur fundamentalist it looked good to me with all the arrows pointing in the right direction but hopefully the likes of previous contributors Craft, Robusta, VSntchr, etc can give us their opinion(s) on the results. The link below (when clicked) will take you to todays presentation...
> 
> http://stocknessmonster.com/news-item?S=SRX&E=ASX&N=782809
> 
> View attachment 56859​




Piggybank

Nice to see your charts and words

Dose sales are the most important indicator for me with SRX and they are published separately. 
The financials at this stage are somewhat secondary for me as there is so much being spent on the trials, marketing and manufacturing capacity in preparation for the results, that underlying profitability is understated for current sales levels, which makes all those profit up arrows and balance sheet strength all the more impressive though they are now capitalising some of the expenses.  FX lent a hand to these results as 95% of the revenue is earned in other currencies.

Most other Aus Biotech’s that have anything near SRX’s upside are still burning cash flat out.

Most relevant information to me was the change in SIRFLOX timeline from late 2014 to early 2015 and the strong recruitment numbers for the other trials.

Some people will probably think they have missed SRX already because it is priced in dollars rather than cents.  – but IF (don’t miss the big if) the trials move SIR-Spheres up the treatment chain, we have only had entree so far.  SRX is still capitalised under 1 Billion. Being self funded has kept the number of shares on issue stable.

If the trials fail – It’s not worth $15 but it’s not a total disaster either. DYOR on likely trial outcomes.


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## VSntchr (18 February 2014)

Pretty much nothing for me to add on what you've said right there craft.

The result was perhaps a little softer than I was expecting, but the FX impact did polish it up quite well.
They really are investing quite heavily and I agree with you that this investment as a precursor for what may be to come clouds the picture and thus measuring dose sales is the most important factor.


Continuing on from your point at the end there about the trials failing...what are your thoughts around the double edged sword effect of the trials. 
For example; dose sales are growing quite nicely now, but if the trials were to fail...I imagine the growth path will remain fairly consistent with the recent past. The downside would be that the product would be harder to promote and other alternatives may become preferred, especially new innovations over the years which may promise more in the way of effectiveness and reduced side effects. 
The flip side is that they receive positive data and with that a large amount of credibility to have their product further prioritised. 

What I am getting at here, is that SRX is clearly undervalued should the results come back positive. BUT! how overvalued is it if they do not....
..My thinking is that if growth was to continue over the next 10 years similar to what it has achieved over the previous then it is not all that expensive. 

With investing though its never that simple, and as I touched on above - negative results in the trial will probably have more of an impact than just eliminating the 'blue-sky' potential.

Just some rumblings of me trying to understand the risks of the investment - not holding yet but have been watching intently and building a war chest for this (and a few others  ).


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## robusta (19 February 2014)

craft said:


> Most relevant information to me was the change in SIRFLOX timeline from late 2014 to early 2015 and the strong recruitment numbers for the other trials.




Just listened to the conference call, the delay is due to the vast amount of data that needs to be compiled even for any preliminary findings.

https://www3.gotomeeting.com/register/763706734


----------



## piggybank (20 February 2014)

craft said:


> Piggybank
> 
> Nice to see your charts and words




Thanks Craft for your kind words - they are much appreciated.


----------



## piggybank (12 May 2014)

A Daily P&F Chart:-

There is a PDF file below the chart which is of the Investors Presentation delivered on the 8th May 2014.

​


----------



## craft (3 July 2014)

craft said:


> Qtly Dose Sale Numbers
> 
> View attachment 56595
> 
> ...




SRX's latest quarterly sales figures are a game changer for me. My expectation was that dose sales growth would go exponential if the trials were successful. I think it may have started early, which bodes well for the trial results when released early next year. Somebody somewhere is seeing something to cause the dose sales to increase pre-result release.


----------



## robusta (12 July 2014)

New all time highs, Peter Hall does not seem so outlandish now with his prediction SRX could go to $100.00. Interesting story in the SMH.
http://www.smh.com.au/business/mark...-league-after-share-surge-20140709-zt15d.html

I really hope SRX is not acquired by one of the big international companies in the short term.


----------



## piggybank (23 August 2014)

Going from strength to strength...

​


----------



## crypto (23 August 2014)

I had them in the ASX game - bought at 18.42 and sold at 20.27 after trying to predict movement based on graphs.

Live and learn


----------



## piggybank (22 October 2014)

Update:-


----------



## robusta (22 October 2014)

crypto said:


> I had them in the ASX game - bought at 18.42 and sold at 20.27 after trying to predict movement based on graphs.
> 
> Live and learn




Yep seems people are jumping onboard this growth story, I thought I paid too much around the $10.00 mark


----------



## coolcup (15 December 2014)

Does anyone know why this stock tanked so much today? Down 8% but can't find any reason why. Volume seems modest too!


----------



## craft (16 December 2014)

coolcup said:


> Does anyone know why this stock tanked so much today? Down 8% but can't find any reason why. Volume seems modest too!




Tank or Blip? Depends on your time frame really.





Large Sirflox trial primary end point result should be known by March.  Full data (assuming it’s met its primary end point) should be released July. 

Volume was second highest for the year. Not ‘public’ news driven type volume but good technical move volume.   Closed reasonably strongly off the lows.

A negative trial outcome and you could expect the price to half, Positive and it could double. I expect a lot more volatility running into the results – This stock has been far too easy a hold recently with low volatility, one way traffic.  The tree needs to be shaken to flush out non-conviction volume before trial results are out.  

Perhaps it was driven by some inside information – every blip is going to carry the fear that somebody knows something early regarding the trial, which will exaggerate the moves regardless of the actual move trigger. 

So my conclusion as to the reason: No idea.


----------



## coolcup (17 December 2014)

craft said:


> Tank or Blip? Depends on your time frame really.
> 
> The tree needs to be shaken to flush out non-conviction volume before trial results are out.




Very insightful post craft, many thanks.

I think you are right, we have seen strong volatility even since then with intraday lows of 5% down on the prior day followed by strong recoveries. And yet no announcement. It would be great if the ASX gave them a speeding ticket and that way they could provide a market update!


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## craft (18 December 2014)

coolcup said:


> Very insightful post craft, many thanks.
> 
> I think you are right, we have seen strong volatility even since then with intraday lows of 5% down on the prior day followed by strong recoveries. And yet no announcement. It would be great if the ASX gave them a speeding ticket and that way they could provide a market update!




2nd day action and then to recover from that does start to seem a bit unusual. 

Wonder if Peter Halls new high conviction fund has anything to do with it? I'm not sure if they can be on both sides with different funds and I'm not implying anything but the volatility 'may' have been strategically beneficial.(reduced tax in funds with stock exposure limits that are constantly being triggered by the rising price  - lower cost base in another where a good start will help attract funds???)

Maybe it was just the market doing what the market does.


----------



## skc (18 December 2014)

craft said:


> 2nd day action and then to recover from that does start to seem a bit unusual.
> 
> Wonder if Peter Halls new high conviction fund has anything to do with it? I'm not sure if they can be on both sides with different funds and I'm not implying anything but the volatility 'may' have been strategically beneficial.(reduced tax in funds with stock exposure limits that are constantly being triggered by the rising price  - lower cost base in another where a good start will help attract funds???)
> 
> Maybe it was just the market doing what the market does.




Found something here... again not sure if it's relevant (feels like a long bow to draw).

http://www.sharecafe.com.au/roger_m.asp?a=AV&ai=33065



> In the end, we uncovered what we believe is a rather benign event – a major broking house (whom we currently do not use) – hosted a lunch earlier this week with BTG International, a global specialist healthcare company. BTG own the look-a like product to Sirtex’s SIR-Spheres known as Theraspheres and if you are interested in this, here is a link to the website.






> Theraspheres have never run a trial (small or large scale) whilst SIR-Spheres have already six previously completed, albeit smaller clinical studies and the results of two large scale retrospective analyses, which were all positive in salvage.  There has not been a failed study of SIR-Spheres to date.
> 
> And whilst of course competing products such as Theraspheres and their progress (albeit slow) is a development to watch for risk of substitution later on, we believe that Sirtex have a material head-start (5 to 7+ years) on Thereaspheres.


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## robusta (10 February 2015)

Interesting to see what the brokers targets are for this business, between $14.03 and $36.70!!!!

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=35673E6D-DF5C-CA3C-6866B3980BB7BBB2


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## craft (11 February 2015)

robusta said:


> Interesting to see what the brokers targets are for this business, between $14.03 and $36.70!!!!




A few weeks ago it was volatility to the down side - now the upside. Trial data release closing in.

10+ Bagger now for me on a full clip at purchase price and facing a fairly binary outcome at these levels from trial results is starting to do my head in - As per normal mental comfort zone seems a few steps behind what the market dishes up.

I suspect the upgrades will keep escalating with successful trial data, bad results and we will take the lift straight down to a lower level.


----------



## VSntchr (11 February 2015)

craft said:


> A few weeks ago it was volatility to the down side - now the upside. Trial data release closing in.
> 
> 10+ Bagger now for me on a full clip at purchase price and facing a fairly binary outcome at these levels from trial results is starting to do my head in - As per normal mental comfort zone seems a few steps behind what the market dishes up.
> 
> ...




Good stuff Craft.
Balls of steel for sure. Are you planning to hold the entire position through the clinical results? I can imagine that CGT for a 10x investment on a full size position is a factor to consider
Joe Hockey may have the 15/16 budget deficit call pending on your answer


----------



## craft (11 February 2015)

VSntchr said:


> Are you planning to hold the entire position through the clinical results?




A question I keep asking myself and one I'm having trouble answering. 

The original investment thesis and buy price allows for a decent return on only the salvage end of treatment. Moving up the treatment scale was then basically free upside. This upside is very hard for me to value, so my determination was to stay firm until we have the results - one way or another. A stunning return or an adequate return was the expectation and that outcome is still valid.

On the other hand, A fair bit of the upside is now priced in on expectation - and pre trial data upside valuation is not much more then a guess - so the risk probabilities of the hold in progress have changed and the portfolio weighting is causing some pressure.


My latest thinking is -  the original thesis is in tact and despite the psychological pressure to remove some risk - my risk control parameters are not breached by the holding - so GULP, I will wait for the information I need to make decisions on business developments.


----------



## skc (12 February 2015)

craft said:


> My latest thinking is -  the original thesis is in tact and despite the psychological pressure to remove some risk - my risk control parameters are not breached by the holding - so GULP, I will wait for the information I need to make decisions on business developments.




Is there an options market to hedge a bit? 

*Thinking like a pu$$y.


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## skyQuake (12 February 2015)

skc said:


> Is there an options market to hedge a bit?
> 
> *Thinking like a pu$$y.




No options, IG not accepting GSLs on the stock.

However there are some warrants - SRXKOC $22.63 calls
They're citi minis which are essentially barrier options with 1:1 delta

I guess if the news is REALLY bad those calls can save you some money...


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## craft (18 February 2015)

Dose sales are the key indicator for me on SRX and they are up 26.3% for the Half (PCP)
Applying that sort of growth to a gross margin of 84% is rocket fuel. (even if you are wearing expenses to the P&L to grow)

In the US they put the price up US$1,000 to $16K per dose and still achieved a 28% dose volume increase  – their biggest and most established market.

All this growth is pre the clinical studies outcome.   

Perhaps there is some oncologists pre-empting the data – perhaps the salvage end of the business is performing well.  Either way the results are strong and telling.

Next important dates will be whether the SIRFLOX trial has made its primary endpoint (March) and then data released at the American Society of Clinical Oncology meeting 29thMay.

The unquantifiable potential of SRX is that it is not only developing a liver cancer treatment it is building a (self funding) efficient sales and distribution network into Oncologist clinics all over the world that could be leveraged through getting some of Australia's excellent medical research and innovation to market.

Aussies own BIG pharma? One day maybe - We have got to aim for something more then just mining.


----------



## Huskar (5 March 2015)

craft said:


> A question I keep asking myself and one I'm having trouble answering.
> 
> The original investment thesis and buy price allows for a decent return on only the salvage end of treatment. Moving up the treatment scale was then basically free upside. This upside is very hard for me to value, so my determination was to stay firm until we have the results - one way or another. A stunning return or an adequate return was the expectation and that outcome is still valid.
> 
> ...




Awesome craft - pretty sure some wag says the punters go broke by holding too long and the experienced go broke by selling too soon. Now I am not experienced but I still have found it very hard to hold on for the ride. For example VTG I bought at 35c then sold at 65c feeling pretty pleased with myself. Now it is at $1.70


----------



## craft (12 March 2015)

craft said:


> Some people will probably think they have missed SRX already because it is priced in dollars rather than cents.  – but IF (don’t miss the big if) the trials move SIR-Spheres up the treatment chain, we have only had entree so far.  SRX is still capitalised under 1 Billion. Being self funded has kept the number of shares on issue stable.




Mains are nearly ready - will it be delicious or will it be burnt?


----------



## craft (12 March 2015)

UBS probability matrix for SRX.




Basically they are saying 90% probability of a positive announcement regarding primary end point which should be announced very soon and 80% chance then of positive data when full results are announced in late May.

So they come up with pre announcement value of $50.40 – you can then take from the table a value of $54.20 if the endpoint is positive and you still hold an 80% expectation that full results will be positive or $15.95 if endpoint is negative.

Post full results the price valuation goes to $63.80 if the full results are good or $15.95 if bad – although bad full results following a positive end point is very low probability so the $15.95 valuation becomes a very unlikely possibility if Primary end point announcement is positive.

Personally and based on latest current dosage sales I have a higher valuation than $15.95 if the trial is a failure based on the continuation of the salvage level treatment.   I can’t assign accurate probabilities to the trial outcomes other than being confident based on past evidence. I am unable to do much more than guess at the upside valuation at the moment – So I can’t produce a precise table like UBS has – but a continuing hold is still my judgement. 

I’m thinking that this sort of report by UBS if people act on it might push the price higher in the next few days prior to the end point announcement then I would otherwise expect.   They have finally stopped chasing the price higher with their price targets and declared high probabilities of success to get a target price ahead of the pack.


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## craft (12 March 2015)

This is how the Average analysts target prices have been chasing the SRX price. As typical - a very accurate *lagging *indicator.


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## SuperGlue (12 March 2015)

craft said:


> Mains are nearly ready - will it be delicious or will it be burnt?




Or will it be buy the rumor sell the fact.

Positive results, then SP goes down.
Some analyst will say SP has been factored in for the positive result.

Hate it when it happens.


----------



## coolcup (12 March 2015)

I'm not super informed on Sirtex but if the SIR Spheres become an approved front line treatment, will this cannibalise their existing revenues, because they won't be used for second line treatment or is it simply additive? I think the latter but wanted to check.


----------



## craft (12 March 2015)

coolcup said:


> I'm not super informed on Sirtex but if the SIR Spheres become an approved front line treatment, will this cannibalise their existing revenues, because they won't be used for second line treatment or is it simply additive? I think the latter but wanted to check.




In addition and many multiples of where they are today.

If you have an hour+ this will help your understanding. 
http://www.sirtex.com/au/investors/investor-videos/investor-clinical-lunch-learn/




SuperGlue said:


> Or will it be buy the rumor sell the fact.



 If the price keeps anticipating the results as it has over the last few weeks - that's entirely possibility.


----------



## craft (16 March 2015)

SRX has gone into a trading halt pending an announcement on the SIRFLOX study.

Probably not good that I experienced an adrenalin rush when the announcement notification first popped up -  Try as I may to keep investing, analytical and unemotional – my natural responses  sometimes just won’t stay at bay. 

For better or worse we are locked and loaded and now we wait.


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## galumay (16 March 2015)

craft said:


> Probably not good that I experienced an adrenalin rush when the announcement notification first popped up -  Try as I may to keep investing, analytical and unemotional – my natural responses  sometimes just won’t stay at bay.




craft, there is no problem with getting an adrenalin rush, natural responses are just that - natural, what matters is how we respond to them! Isolating the response and recognising it as an emotional one is the important thing, then you can isolate it from the decision making process.


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## craft (16 March 2015)

galumay said:


> craft, there is no problem with getting an adrenalin rush, natural responses are just that - natural, what matters is how we respond to them! Isolating the response and recognising it as an emotional one is the important thing, then you can isolate it from the decision making process.




Hi Galumay

I agree with what you are saying.

I was just surprised at the level of my emotional reaction to something that was not unexpected and I had had plenty of time to think through prior.  Normally under such circumstances my prior reasoning would have moderated the natural response to a degree. The size of the emotional reaction has me questioning if my subconscious thinks my conscious reasoning needs some scrutiny or do I just have to drag my sub-conscious into another level of comfort zone. Nice to have the trading halt whilst pondering that question.


----------



## Ves (16 March 2015)

So far this company is a massive error of commission for me.  I think it was under $5 when it was first mentioned to me.  

Mistakes sometimes double as education benefits - but only if they improve or redefine your thinking in some way.

It does raise a few themes / biases for me and certainly not limited to SRX:

Circle of competence  vs  an excuse / laziness / fear / underestimating own ability of looking at some complex

Yes circle of competence can be expanded,   and indeed,  companies that have niche understanding,   or are completely & widely misunderstood can be very fruitful investments.

Future cash flow growth  (uncertainty)  vs existing profitable cashflow but lower growth opportunities  (alternatively seen as low yield vs higher yield)   -   it is easy to have a bias towards something that already exists,  but it's potentially less profitable as an investment unless there is widespread uncertainty of its continued existence.   For me it is kind of an issue of sooner vs later.

In a sense,   when it comes to business analysis,  it doesn't matter,  because all businesses need to be evaluated on their future cash flow not their current or past cash flow (although these can be certainly used to _inform_ forecasts.  Effectively though, it is a false dichotomy that I am myself guilty of creating,  and often.


----------



## skc (16 March 2015)

Ves said:


> So far this company is a massive *error of commission *for me.  I think it was under $5 when it was first mentioned to me.




Error of ommission.



craft said:


> SRX has gone into a trading halt pending an announcement on the SIRFLOX study.
> 
> Probably not good that I experienced an adrenalin rush when the announcement notification first popped up -  Try as I may to keep investing, analytical and unemotional – my natural responses  sometimes just won’t stay at bay.
> 
> For better or worse we are locked and loaded and now we wait.




May be it's because the news is coming a bit earlier than the "late March" flagged by most? This information alone, however, shouldn't be an indication of one way or another. And in your mental "preparation", were you expecting a trading halt? May be that element was unexpected?

Anyhow, no amount of quality analysis and decision making can influence the actual outcome. So an adrenalin rush from facing the unknown seems perfectly normal. 

P.S. Brushing up on the stock now... my guess is the open price will be a massive over or under-reaction!


----------



## Ves (16 March 2015)

skc said:


> Error of ommission.



Yep,  my bad....


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## VSntchr (17 March 2015)

So it failed on primary endpoint (colectoral) but achieved the secondary endpoint (liver).

I don't know the company and its operations well enough to add my thoughts, but it would appear that this "failure" isn't as bad as it might first seem due to SirSpheres being designed for use on the liver?


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## craft (17 March 2015)

> In the first-line treatment of non-resectable metastatic colorectal cancer:
> 
> o SIRFLOX study *does not *show a statistically significant improvement in overall Progression-Free Survival.
> o SIRFLOX study *does* show a statistically significant improvement in Progression-Free Survival in the liver.
> ...




That's a mixed result at best and as the primary endpoint was not achieved its not a pretty headline. I suspect the uncertainty until the data is presented is going to cause a fair bit of volatility in finding a new lower price level. 

Fun and Games in the market today.


----------



## skc (17 March 2015)

VSntchr said:


> So it failed on primary endpoint (colectoral) but achieved the secondary endpoint (liver).
> 
> I don't know the company and its operations well enough to add my thoughts, but it would appear that this "failure" isn't as bad as it might first seem due to SirSpheres being designed for use on the liver?




I don't know my medical stuff any better than you, but here's my interpretation.

- A study doesn't just choose primary end point randomly. It choice one for a specific reason so a fail is a fail.

- This update will highlight further risks in the failure in the June result (the chance of the failure perhaps hasn't change, but it will be brought top of mind).

- SRX ran really hard into the result... it's set up for a large fall even just for the froth to come out.

Definitely the stock to watch today.

P.S. It's a shame that the test wasn't a booming success. It would have been very good for the cancer sufferers.


----------



## skyQuake (17 March 2015)

skyQuake said:


> No options, IG not accepting GSLs on the stock.
> 
> However there are some warrants - SRXKOC $22.63 calls
> They're citi minis which are essentially barrier options with 1:1 delta
> ...




Free money!


----------



## McLovin (17 March 2015)

So 90% of patients with mCRC die from liver failure. The Sirspheres have been shown to improve the chances of progression free survival in the liver. How does that not improve overall progression free survival?


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## galumay (17 March 2015)

McLovin said:


> So 90% of patients with mCRC die from liver failure. The Sirspheres have been shown to improve the chances of progression free survival in the liver. How does that not improve overall progression free survival?




I dont know, but Mr Market doesnt like it!!


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## Ves (17 March 2015)

The SRX preso on 12 December 2014,  from about page 41,   explains the "What does it all mean" questions in layman's terms, and even defines the language used "progression free survival", "primary end point" etc.    

Might be worth a read if you're stuck.

Edit:  the October 2014 "Clinical Studies Update"  is also pretty handy.


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## skc (17 March 2015)

McLovin said:


> So 90% of patients with mCRC die from liver failure. The Sirspheres have been shown to improve the chances of progression free survival in the liver. How does that not improve overall progression free survival?




I am sure it does but it's about the p-value. They didn't actually announce the p-value so u don't know whether it's a big miss or small miss.

Anyway... had a plan to buy <$15 so loaded quite a few on open. Feels good that the plan worked. Out of most of them now and will hold a small lish position for the next few days.


----------



## omac (17 March 2015)

McLovin said:


> So 90% of patients with mCRC die from liver failure. The Sirspheres have been shown to improve the chances of progression free survival in the liver. How does that not improve overall progression free survival?




Im not up on medical studies, but is it possible that it improves the PFS in the liver, but the tumours elsewhere progress (eg colon for mCRC) and a patient dies not of liver failure but of other organ failure?

I've interpreted the definition of PFS in liver not as patient survival but a measure of tumour progression in the specific organ (guess you could also have a PFS of kidney, lung, etc), eg PFS = the amount of time from treatment until tumour progresses. I interpret overall survival as patient survival.


----------



## craft (17 March 2015)

McLovin said:


> So 90% of patients with mCRC die from liver failure. The Sirspheres have been shown to improve the chances of progression free survival in the liver. How does that not improve overall progression free survival?





We do not know from the announcement whether the primary end point failed because there was no clinical improvement in OPFS or if the trial failed to achieve statistical probability that any OPFS change was due to the treatment arm.

We will have to wait for the trial data to clarify but it is possible that there is clinical improvement in Overall Progression Free Survival but the trial failed to establish beyond 95% probability that it was due to the treatment arm.   

We know from the announcement that secondary endpoint of progression free survival in the liver is both statistically significant and clinically significant – we don’t know how significant until the data. (At the minimum this is positive for the Sarah trial, which is looking at HCC, primary liver cancer)

Perhaps the reconciliation of the two outcomes is that the primary endpoint of OPFS only failed statistically.  In which case that failure is not going to temper too much how the secondary end point results are viewed when full data is released.

The study data is still going to be presented – this would only happen if they have data they want to shout out to the oncology world – you sweep the bad trials under the carpet not present them.

If it’s a statistical failure with a positive clinical outcome – then we only need to look towards the next trials (or a new bigger trial) for the statistical proof. In the mean time oncologists aren’t going to totally ignore the clinical results, just as they haven’t to date which is why there has been 40 consecutive qtrs of dose sales growth.

We really know little from the Announcement – The market unsurprisingly didn’t like it, but then how smart is the market?

Gotta love the market - goes from pricing in near nose bleed probability of successful result to well below my total trial failure price on mixed and largely uninformative information. 

Bring on the data.


----------



## johnpendles (17 March 2015)

Hi Guys,

I am not an investor in SRX. If someone has a link to the specific study, I can read it and perhaps interpret why the market has reacted poorly to it.


----------



## johnpendles (17 March 2015)

McLovin said:


> So 90% of patients with mCRC die from liver failure. The Sirspheres have been shown to improve the chances of progression free survival in the liver. How does that not improve overall progression free survival?




The devil will be in the detail. Oncologists won't be using such drugs based on statistical trends, there must be a very clear statistically significant benefit for the use of a particular drug, they are very particular about this sort of thing. It's not easy to get medicos to change their practice or to suggest new drugs to patients unless there is evidence that shows that it works. The cost of such treatments also comes into play. If the data only shows a trend (not statistically significant), you can pretty much ignore the results until a new trial comes out that has a large enough sample size to show a statistically significant result, obviously if the treatment has strong evidence behind it then the cost doesn't particularly matter, but if the result clearly isn't in its favour then the cost comes into play, particularly in the public system. 

In terms of primary endpoint and secondary endpoints. It's important to understand the differences between these two. A study is usually designed to study a primary endpoint. The whole trial is designed around this possible finding. The secondary endpoints are aspects of data that are studied along the way but aren't necessarily designed for if that makes sense. As such, the secondary endpoints often (not always) aren't definitive enough to go by from a clinical point of view as their results can often be skewed by various confounders. 

Hope that makes sense. Its hard to comment on the SRX results without reading the paper.


----------



## craft (17 March 2015)

johnpendles said:


> Hi Guys,
> 
> I am not an investor in SRX. If someone has a link to the specific study, I can read it and perhaps interpret why the market has reacted poorly to it.




Hi John.

No report or data to interpret until ASCO at the end of May.

The market is reacting to this. 
http://www.asx.com.au/asxpdf/20150317/pdf/42xbhv2z2jp7f4.pdf

This is the trial website.
http://www.sirflox.com/information-for-physicians


----------



## johnpendles (17 March 2015)

craft said:


> Hi John.
> 
> No report or data to interpret until ASCO at the end of May.
> 
> ...





Thank you. I'll have a close read this evening and get back to you.


----------



## Wysiwyg (17 March 2015)

A good reason for not putting more than 20% of total equity into any one stock.


----------



## qldfrog (17 March 2015)

Wysiwyg said:


> A good reason for not putting more than 20% of total equity into any one stock.



I hope that was not your case with SRX


----------



## Wysiwyg (17 March 2015)

qldfrog said:


> I hope that was not your case with SRX



No but the gap down risk, although being low, is ever present. Maybe higher risk on single outcomes. Of course if it goes the other way one can be a bloody genius.


----------



## craft (17 March 2015)

Ves said:


> So far this company is a massive error of [c]ommission for me. .




Hey Ves I'll see your error and raise you.  -$21.47 x XXXXX

Time to sit down and have a laugh at myself.

Actually I'm pretty relaxed with the trade management and the development but the funny thing is how I had raised my expectation of a statistically positive primary end point - to such a level that I brought a bottle of great grandfather yesterday for the release. I think I'll drink it anyway - at least if it gives me liver cancer there will be one more dose sale

Thankfully I was disciplined enough (although I almost faulted) to adhere to my portfolio concentration rules as the price rose strongly pre release even though I was almost sure I was throwing profit away. Replaced the holdings today set aside a the requisite donation to the government(because they do such a good job) and think I might take a holiday until the data is released with some of the rest. 

False expectations were my biggest hurdle to overcome today - because I thought the result would be positive and the price would jump - I envisaged selling heaps post announcement due to portfolio concentration at really good prices - obviously that didn't happen. Overall I'm happy to be back to original number at current prices with given information. 

ps it goes without saying - don't listen to me - I lost a small fortune of market value today and I could change my mind on SRX tomorrow. But my read is that whilst this trial data won't provide the certainty needed to raise SirSpheres  to first line it will add to the weight of positive evidence and lay important groundwork for the trials to come; Foxfire and Sarah. Hopefully next time we won't have the speculative run into trial preliminary releases. 


Bottoms up


----------



## johnpendles (17 March 2015)

craft said:


> Hi John.
> 
> No report or data to interpret until ASCO at the end of May.
> 
> ...




Ok i've just read the press release. 

The following is my interpretation. It's hard to comment accurately without reading the actual study, but this is what i think is going on.

Basically, every now and then various cancer treating drugs will come on the market that have evidence to stop the progression of disease. This is typically measured by if the cancer that is seen on imaging has gotten bigger (or spread) or not. More often than not though, these drugs dont actually help the cancer patient live longer. And that's really what the goal is. The idea isn't to make the scans look better, but it's to help someone live longer. Most people think that by making the cancer not continue to grow that that will def lead to longer survival, and that's commonly the case, but not always. Oncologists will always mainly look at if a particular drug has proven benefit for making someone live longer. 

From what I can gather, the problem with this Sirtex study is that it did not show that patient who used their treatment lived longer.  It looks like the study did show that by using their treatment those with colorectal cancer who have had spread to their liver had their liver lesions stop growing. This is not insignificant, but remember, the idea isn't just to stop liver lesions from progressing, the goal is to help someone with metastatic colorectal cancer to live longer and unfortunately the study did not show this. 

The news is not all bad though. It seems there will still be a use for the SIR-spheres treatment. Let's say someone has colorectal cancer and their cancer has spread ONLY to the liver, then the sir-spheres treatment should prove to be beneficial, since the study did show that the treatment reduced the progression of these metastatic liver lesions.  So in that circumstance there will still be a role for the SIR-spheres treatment. But, what Sirtex wanted was to be able to give the SIR-spheres treatment to EVERYONE who had metastatic colorectal cancer, i.e. patients who had colorectal cancer and had disease spread to sites other than the liver as well, by failing to show there was any benefit in the context of these patients it means that the overall take up of the SIR-spheres treatment will be much less than what was initially hoped. Going by this study, there may only be benefit in those who have colorectal cancer and have metastatic lesions ONLY in the liver. 

I am not familiar with how Oncologists are currently using the SIR-spheres treatment, if they are currently using it for widespread metastases (i.e. mets in multiple sites), then we might see that the use of the treatment is scaled back to only treat those with liver mets exclusively. 

i hope that makes sense.


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## johnpendles (17 March 2015)

I'm not sure what SRX promised the world that it's SIR-Spheres could do? 

It seems to me that they said they would treat liver mets, and today's announcement confirmed that they could do that? 

I reckon they got a bit greedy looking at all the metastatic colorectal patients, i.e. patients who had mets elsewhere in the body too. If they had only studied the effect of the treatment on liver mets exclusively then i think the market would have responded very positively today. 

this stock may have been massively oversold today.


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## craft (17 March 2015)

johnpendles said:


> I'm not sure what SRX promised the world that it's SIR-Spheres could do?
> 
> It seems to me that they said they would treat liver mets, and today's announcement confirmed that they could do that?
> 
> ...




My thoughts exactly. 

Never really understood why they also recruited liver 'predominant' metastases, maybe because it was the current chemo treatment group for the control arm - maybe they overreached for market size, maybe the expectations at the start of this first major trial were broader, maybe they were prepared to fail the primary to recruit quicker and get the secondary end point data out there.

I know Oncologists need a lot of convincing and rightly so, but I think they will be a bit more objective about the data once they have it then the market has been on very little information.


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## johnpendles (17 March 2015)

craft said:


> My thoughts exactly.
> 
> Never really understood why they also recruited liver 'predominant' metastases, maybe because it was the current chemo treatment group for the control arm - maybe they overreached for market size, maybe the expectations at the start of this first major trial were broader, maybe they were prepared to fail the primary to recruit quicker and get the secondary data out there.




I also think the company deserves some criticism for the wording of today's press release.


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## craft (17 March 2015)

johnpendles said:


> I also think the company deserves some criticism for the wording of today's press release.




Yep, but they are also constrained by the likes of ASCO as to how much can be divulged and still be allowed to present as only unrealised findings are accepted. 

The competing regimes for information release are a tight rope.


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## Ves (17 March 2015)

craft said:


> Hey Ves I'll see your error and raise you.  -$21.47 x XXXXX



I picked the perfect time to make that post and make myself look like an idiot,  didn't I?  

If it wasn't for the sadness of the result on a medical progress basis,   I'd probably be happier for my mistake to reduce in value over time.    



craft said:


> Time to sit down and have a laugh at myself.



Often a good bottle of wine and a good laugh is the best medicine.  You might need something else tomorrow though for your head!

The dollars you invested in the last few years are no doubt worth more today,  so not the end of the world.   These guys don't strike me as being a one-trick pony either,   it's entirely possible if they can maintain strong cash flow that they will bounce back.

Thanks everyone for all of the posts today,  some good reading.


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## Faramir (17 March 2015)

Hi Everyone.
I posted my regret of not buying Sirtex last year.
https://www.aussiestockforums.com/forums/showthread.php?t=21438&page=3

Well I jumped in today with 112 shares at $17.75. I didn't think I would get that when it was hovering around $18 this afternoon. In hindsight, maybe I should have set my buy price at $17.60. It might drop even further tomorrow???? Maybe I should have waited? Maybe there may be no bounce tomorrow? I just want this stock. Now I must learn not to love it.

It was oversold. It managed 42 consecutive quarters of growth. Other positive aspects of Sirtex are already stated in this thread as well as the counter comments.

It is my 10th share. My 3rd biotech. The third time I managed to get a bargain in my view. (Others include NVT and MMS in a dip.)

Sorry that I can't contribute anymore. I can only say I waited 11 months for this opportunity.

You can all say that I'm wrong or I'm right. I know that I am in "Stage 2" of a very long learning process. I hope I have thick skin. Thank you to all those who have helped my learning. Constructive comments (either negative or positive) are welcome.


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## galumay (18 March 2015)

Faramir said:


> Well I jumped in today with 112 shares at $17.75.




Good luck Faramir, I was sorely tempted at around $17 yesterday, my gut instincts told me it was being oversold on bad news and that there was value at that price. Oddly enough I am happy I didnt buy, the fact was that SRX were not on my watch list, I have never done any in depth analysis of the company and buying in yesterdaywould have been contrary to my investment strategy and really just an emotional response.

I guess another sign of 'Stage 2" is recognising FOMO and then avoiding it!

I realise you were much more across this company and hopefully your diligence is rewarded.


----------



## qldfrog (18 March 2015)

and my buy yesterday around th $18 mark was not something I am proud of;
As per other threads, was pure gut feel..
Even if I make money out of this, and it is not a given, I will not be proud of it,I  still have not reached "stage 2" after all these years...


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## Wysiwyg (18 March 2015)

Cracked 20 bucks today. Not a bad bounce from yesterdays open of $15.


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## TPI (18 March 2015)

johnpendles said:


> I'm not sure what SRX promised the world that it's SIR-Spheres could do?
> 
> It seems to me that they said they would treat liver mets, and today's announcement confirmed that they could do that?
> 
> ...




But the criteria for eligible patients in the study was: unresectable liver-only or liver-predominant colorectal cancer metastases, with no prior chemotherapy or advanced disease...


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## craft (18 March 2015)

TPI said:


> But the criteria for eligible patients in the study was: unresectable liver-only or liver-predominant colorectal cancer metastases, with no prior chemotherapy or advanced disease...




You are right with the no prior chemo but not the advanced disease - only stipulation was at least 3 months life expectancy without active treatment.

It's the 'predominant' liver definition that allowed candidates with non liver Mets to be recruited. 


> Limited extra-hepatic metastases in the lung and/or lymph nodes are permitted (Lung: 5 lesions total, < 1 cm, or 1 single lesion of up to 1.7 cm; Lymph nodules in one single anatomic area (pelvis, abdomen or chest): any number, < 2 cm).




SIRsperes were never directed at these other Mets so no reason why there would be a difference in OPFS between the two arms in those patients. Unless the thought was that liver Mets were the only critical path to mortality. 

Why they chose the primary endpoint they did and the cohort they did is beyond my grasp yet - but the more I probe the less concerned I become about failure of the primary and more confident I become that positive evidence will be added when the data is released. Its actually quite possible that overall survival has improved whilst OPFS has failed on this trial. The Sirflox results in this respect of OS are compatible with the Firefox trial which make a combined 1000 sample and give the statistical power to validate OS. Its OS and/or tumour reduction to resectable size that is the real goal.


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## notting (18 March 2015)

Nice easy head and shoulders reversal for shorters on this day trade today!


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## skc (18 March 2015)

craft said:


> SIRsperes were never directed at these other Mets so no reason why there would be a difference in OPFS between the two arms in those patients. Unless the thought was that liver Mets were the only critical path to mortality.
> 
> Why they chose the primary endpoint they did and the cohort they did is beyond my grasp yet




It seems so obvious now... but how come no one pointed that out before yesterday?!


----------



## notting (18 March 2015)

skc said:


> It seems so obvious now... but how come no one pointed that out before yesterday?!




There were a few people saying that the report release was really badly worded.

Poor bastard, such a terrible thing to happen to guy - 

http://www.smh.com.au/business/markets/a-nightmare-why-veteran-investor-peter-hall-has-been-buying-sirtex-20150318-1m1t5g.html#ixzz3Ui7MpP2t

Is there a word for this, like 'reverse boasting?'


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## skc (18 March 2015)

notting said:


> There were a few people saying that the report release was really badly worded.




No... BEFORE yesterday. It has nothing to do with how the release was worded. The question is around study design... in particular the selection of the primary end point. It seems that many people are saying that the primary end point was difficult to achieve in the first instance... but I have yet to see anyone who 



skc said:


> It seems so obvious now... but how come no one *pointed that out before yesterday*?!


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## TPI (18 March 2015)

craft said:


> You are right with the no prior chemo but not the advanced disease - only stipulation was at least 3 months life expectancy without active treatment.
> 
> It's the 'predominant' liver definition that allowed candidates with non liver Mets to be recruited.
> 
> ...




They must have set the definitions for a reason.

The vast majority of deaths from metastatic colorectal cancer (up to 90% according to another blog) are from liver failure.


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## craft (18 March 2015)

skc said:


> It seems so obvious now... but how come no one pointed that out before yesterday?!




Is it obvious? As I said its beyond my grasp yet to understand. Its not black and white that its just bad trial design that has caused the failure of the primary end point- the cohort selected, clinical outcomes expected and the sample size all interplay to hopefully avoid false results.   

There is huge academic debate over clinical trial design and appropriate primary end points argued by much smarter people than me.  Until there was a contradiction in primary and secondary outcomes I never delved into it - wish I had.   

The trial design is a convenient explanation for the seeming contradiction of the two outcomes in the announcement. Another possibility is that OPFS has achieved clinical improvements but failed to do so with enough statistical confidence  Until we have the data we don't know.


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## robusta (18 March 2015)

Should be interesting to see if and how they spend the $10 mil put aside for sales and marketing of this study. 

Page 11
http://www.asx.com.au/asxpdf/20150218/pdf/42wp679dx8m3d3.pdf

No quarterly dose sales reports anymore either.

http://www.asx.com.au/asxpdf/20140703/pdf/42qm29vwg7g410.pdf

Well time will tell...


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## omac (19 March 2015)

craft said:


> Is it obvious? As I said its beyond my grasp yet to understand. Its not black and white that its just bad trial design that has caused the failure of the primary end point- the cohort selected, clinical outcomes expected and the sample size all interplay to hopefully avoid false results.
> 
> There is huge academic debate over clinical trial design and appropriate primary end points argued by much smarter people than me.  Until there was a contradiction in primary and secondary outcomes I never delved into it - wish I had.
> 
> The trial design is a convenient explanation for the seeming contradiction of the two outcomes in the announcement. Another possibility is that OPFS has achieved clinical improvements but failed to do so with enough statistical confidence  Until we have the data we don't know.




were the patients who had liver + others mets treated with Spheres only or spheres + chemo? ethically you couldn't deny an effective treatment to experiment with another so you would do standard + test compared to standard only and look for a difference. I don't think they were looking to treat extra-liver mets with spheres at all, more looking to supplement the chemo with the liver targeted therapy.


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## craft (19 March 2015)

omac said:


> were the patients who had liver + others mets treated with Spheres only or spheres + chemo? ethically you couldn't deny an effective treatment to experiment with another so you would do standard + test compared to standard only and look for a difference. I don't think they were looking to treat extra-liver mets with spheres at all, more looking to supplement the chemo with the liver targeted therapy.




The control arm was FOLFOX ( ± bevacizumab) which is current first line treatment. The trial arm was exactly the same thing but with the addition of SIR-Speres.

SIR-Spheres are only directed at Liver Mets. Up to  40% of patients  recruited to the trial may have had other small  tumours  in other parts of their bodies  -  Not being fully across clinical trial design –  and given the contradictory outcomes of primary and secondary outcomes . It does seem there’s a mismatch between  SIR-Spheres application, Overall progression  free survival as the primary end point, and recruiting patients with other tumours.  But I know enough to know there is more to the story then just somebody making a nieve mistake in trial design.  There are so many competing factors in trial design and whilst some compromises may have been made the sample size given the clinical expectations in relation to the primary end point should of been set for probable success.  Failing the primary end point has been a big deal to the market – to me it’s not that important because of the PFS result in the liver and that data will assist the FOX FIRE studie’s primary end point of overall survival in mCRC – the real money shot. 

That’s it for me for a while. 

Cheers


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## Knobby22 (19 March 2015)

Good points craft.

Medically, I would have thought rectal cancer would have to be quite advanced to start using the Sirtex treatment as if it was minor they would remove the tumour by operation. Since it is late stage and metastatic i.e. it has spread through the body, I can't see how it could possibly make any difference. I don't even know why they did it. 

With liver disease you are trying to keep the liver going as this is what will kill you. The fact there are other cancers throughout the body which would be expected to be smaller and generally less important and their cancer load would be initially less though increasing. in this case if the treatment works then life should be extended.

I was affected due to my holding of HHV Hunter Hall Global who have a large interest in Sirtex. Though the news could have been better. The complexities of such a treatment and testing would make me want to see where the smart money is going rather than the flash crash guys. The improving SP suggests that we should not be overly concerned.


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## McLovin (19 March 2015)

This has been a very informative thread. I thought Tuesday was an overreaction and it appears that that is the consensus.



			
				craft said:
			
		

> But I know enough to know there is more to the story then just somebody making a nieve mistake in trial design.




Yes. I think waiting for May will bring much more light.


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## skc (19 March 2015)

McLovin said:


> This has been a very informative thread. I thought Tuesday was an overreaction and it appears that that is the consensus.




I don't know... it feels like the consensus is too consistent. All the arguments I hear and read are very valid and reasonable... but they could all have been made PRIOR to the test results. Yet I have not read any analyst who gave the heads up BEFORE the announcement.

Anyhow... it's been very good trading SRX. I trade many stocks through an average day, but I think I was literally dedicated to SRX for much of Monday. 

And FWIW, the share price now is basically the same as it was in Oct last year. The only news since then (other than the test announcement) was growth in dose sale (which was expected). You could argue that the trial result was not that bad, and the current price simply reflects the stock's value like it had been valued a mere 6 months ago. The announcement simply took the last $20 of bull run out of it. 

It reminds me of MMS. Everything is sort of the same, but the share price isn't going back to where it was in a hurry.


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## Huskar (14 May 2015)

Hurried back up a fair bit this morn... Up 36% although I do not completely understand why from the announcement


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## craft (14 May 2015)

Huskar said:


> Hurried back up a fair bit this morn... Up 36% although I do not completely understand why from the announcement




8 Months progression free survival in the liver - with a very small statistical P value. 

Its the progression in the liver that generally kills you. 

Better than I expected - I thought it may come out around 5-6 Months.


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## McLovin (14 May 2015)

Looked pretty good to me. Eight months PFS in the liver. The mCRC in the liver has the highest mortality of all mCRC by a long way. p-Value very good too.

ETA: I see craft beat me to it.


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## lemongrass1 (14 May 2015)

Was this announcement out of the blue or was there some way of knowing when it was coming? 

I thought there would be no updates until late May.


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## craft (14 May 2015)

lemongrass1 said:


> Was this announcement out of the blue or was there some way of knowing when it was coming?
> 
> I thought there would be no updates until late May.




Bang on Schedule - refer link.

http://am.asco.org/embargo-and-release-information


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## skc (15 May 2015)

craft said:


> Bang on Schedule - refer link.
> 
> http://am.asco.org/embargo-and-release-information




The abstract result clearly showed that the contents were market sensitive... and obviously SRX knew about its content before the abstract release.

Question:

Why does the ASCO meeting guidelines / rules trumpt the ASX disclosure rule?


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## craft (15 May 2015)

skc said:


> The abstract result clearly showed that the contents were market sensitive... and obviously SRX knew about its content before the abstract release.
> 
> Question:
> 
> Why does the ASCO meeting guidelines / rules trumpt the ASX disclosure rule?




Good question and it’s not just the ASX they also seem to trump the SEC disclosure rules.

Medical profession has power in the right places I guess.

The initial release is the token gesture to appease the ASX disclosure rules but the partial information really just clouded the issue and created lots of volatility – this is the start of the real information flow.


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## coolcup (29 May 2015)

In trading halt today ahead of the presentation in North America. Any thoughts on whether this is just "good practice" by the company or a sign of something different?


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## craft (14 June 2015)

We have more data now and plenty of detail to come. Still plenty of confusion out there with analyst price targets ranging from $13.42 to $38.45. But there is a bottom line to me that erases much of the confusion -  Based on the SIRFLOX study, if I had inoperable liver cancer I would want SIR-Spheres without question.  It’s additional to the current standard of care rather than a replacement so no risk there, toxicity is highly acceptable for the outcome and a statistical significant 8 month improvement in the organ most likely to kill and a threefold increase to 6% in complete response rate. Sure Overall survival is not yet proven – but I’m not going to die waiting for that. 

Investors cared a great deal about the primary end point miss but Oncologist didn’t seem to give much of a hoot and in fact SRX was awarded as one of 71 “best of ASCO” from thousands of data presentations and all key opinion leaders were positive on the results.

The data to mandate 1st Line is not there without OS data which won’t be available until 2017 but patients and oncologists are going to be much more exposed to the data and it’s much more compelling than it has been previously. Not forgetting to date SRX has already achieved 40+ quarters where growth in dose sales has been ~ 20%pa.

SRX has always said they expected the ramp up to be more like turning on a tap then flicking a light switch. I’m looking for that tap to start winding from now – enough flow (growth in dose sales) and SRX could still be a bargain @ $30.00

Back to watching dose sales and hoping in the meantime Bayer or Roche don’t think us Aussies under appreciate our SRX and lob in something opportunistic.  

I think from memory SRX have hotcell capacity to approx quadruple sales. There’s a reasonable lead time for a new facility – this is a space to watch because any further expansion in the medium term could be an early indicator of what management thinks the growth trajectory is shaping up like.


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## craft (1 July 2015)

More data out, looks good to me.

Considering how extremely expensive bevacizumab is – it will want to be doing something pretty incredible for extra-hepatic disease to continue justifying its inclusion in standard of care. Because this latest data shows Sir-spheres trounces it in effectiveness in the liver (at a fraction of the cost) and Spheres is a one off treatment compared to ongoing for Bev.


This data surely has to have implications for Roche who sell bevacizumab and they are one of the threats to SRX staying Australian.


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## Knobby22 (1 July 2015)

That's enough for me.
I owned Sirtex indirectly through my HHV shareholding but have just bought them directly also.

Been eyeing this one for years, should have bought in more seriously earlier.


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## McLovin (1 July 2015)

More great data. If they can knock Avastin out of the treatment regime that has the benefit of not only being far cheaper but also from a patient QoL a much better outcome during treatment. The platinum based chemo drugs are bad enough without having to take regular doses of Avastin as well.


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## VSntchr (13 August 2015)

Plugging the numbers into the spreadsheet...it just doesn't get much better in terms of textbook operating leverage.
Increased dose sales at close to 20% combined with increased selling prices = big earnings jump.

Outlook statement refers to the continuation of historical growth rates going forward.


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## McLovin (13 August 2015)

There was some interesting discussion around the ASCO conference and what it would mean going forward. 3,500 oncologists the majority of whom had not heard about Sirtex or Sirspheres. The study data has become a powerful foot in the door for the salesforce on the ground. Also the trend toward personalised courses of treatment and away from the historical standardised treatment will benefit SRX. The call is well worth listening to you can pretty much skip over the CFO's presentation, but Dr Cade's presentation is worth the time.

On the other forum there is at least one oncologist posting about SRX.


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## Knobby22 (13 August 2015)

It appears to me that the share price is still reasonable and in the end that is what matters.
I would be expecting 250% growth of profit with 120% increase in sales over the next few years. 
It appears realistic to me. Do you guys agree?


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## Faramir (13 August 2015)

Sirtex Full Year NPAT increase 69%

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01650081

Global Dose Sales: +19.8%
Revenue: +36.1%
Cash Flow: +61.6%

Plus investing in this company gives me a nice fuzzy feeling that they are helping those suffering from cancer. Cancer got my dad 5 years ago.

My regret was not buying more back in March when it dropped to around $15-$18 dollars. Got my around $17 I think. My bigger regret was not buying them around Jan-Feb 2014 just before it really took off.

Wish Craft was here to celebrate these results.

I have so much to learn. I was only prepared to put roughly 10% of my total portfolio in SRX when I should have risked more. I had no idea back in March that SRX will recover so quickly. This is one of my best beginner's stock pick. Waiting roughly 12 months (Mar 2014 to March 2015) for an opportunity felt like a long time. (I need to learn patience. I need to save more - my business is going through tough times.)


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## VSntchr (13 August 2015)

McLovin said:


> There was some interesting discussion around the ASCO conference and what it would mean going forward. 3,500 oncologists the majority of whom had not heard about Sirtex or Sirspheres. The study data has become a powerful foot in the door for the salesforce on the ground. Also the trend toward personalised courses of treatment and away from the historical standardised treatment will benefit SRX. The call is well worth listening to you can pretty much skip over the CFO's presentation, but Dr Cade's presentation is worth the time.
> .



Yep. I posted just before the conference call, which was indeed a good one.
One of those speakers was pretty horrible...but the part your referring to was certainly the takeaway for me.

He also mentioned that a number of the new sales-force personnel are coming in from big pharma and have come with significant "refer dex" of contacts (i've never spelt that phrase out before, so excuse any errors). The fact that SRX can now give this well connected sales-force the clinical data should make their job alot easier.. 
The mind boggles just thinking about the fact that one conference (albeit a leading one) can give them access to 3500 (majority unfamiliar) professionals.


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## skc (13 August 2015)

McLovin said:


> There was some interesting discussion around the ASCO conference and what it would mean going forward. 3,500 oncologists the majority of whom had not heard about Sirtex or Sirspheres. The study data has become a powerful foot in the door for the salesforce on the ground. Also the trend toward personalised courses of treatment and away from the historical standardised treatment will benefit SRX. The call is well worth listening to you can pretty much skip over the CFO's presentation, but Dr Cade's presentation is worth the time.
> 
> On the other forum there is at least one oncologist posting about SRX.




I haven't looked at the report in details... just glanced some of the headlines.

Back in May they said does sales growth to 10 months in FY15 was 22%. The data released today had growth = 19.8% for the year. It seems that growth slowed a bit in Q4... there's not enough information to work out the precise number, but back-of-envelope calculations suggest that Q4 growth was <10%. Not something of a huge worry... but the timing coincide with the ASCO conference.

It could very much be nothing, or a short term one-off reaction to the study headline by the doctors (in similar fashion to the share price dip). And otherwise it was a strong set of numbers demonstrating the operational leverage of the business.


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## McLovin (13 August 2015)

skc said:


> I haven't looked at the report in details... just glanced some of the headlines.
> 
> Back in May they said does sales growth to 10 months in FY15 was 22%. The data released today had growth = 19.8% for the year. It seems that growth slowed a bit in Q4... there's not enough information to work out the precise number, but back-of-envelope calculations suggest that Q4 growth was <10%. Not something of a huge worry... but the timing coincide with the ASCO conference.
> 
> It could very much be nothing, or a short term one-off reaction to the study headline by the doctors (in similar fashion to the share price dip). And otherwise it was a strong set of numbers demonstrating the operational leverage of the business.




One of the analyst questions was about seasonality in dose sales. Although there isn't any seasonality they did say that there are peaks and troughs in dose sales and not to expect a completely flat sales curve. This was the reason they stopped producing quarterly dose sales numbers. The emphasis should be on meeting yearly dose growth. They were very upbeat about ASCO and the potential to move to first line treatment because of it. There was a quote (which I thought I had written down, but looks like I didn't) about SRX becoming a well known company and Sirspheres becoming a well regarded treatment option, or something similar.


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## notting (13 August 2015)

Still seems to be plenty of selling interest when it gets to that 34 level.


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## Knobby22 (16 September 2015)

notting said:


> Still seems to be plenty of selling interest when it gets to that 34 level.




Seems to be stabilising, building a base for the next jump.


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## craft (28 October 2015)

> I am pleased to report that the 2016 financial year has commenced strongly with global dose sales thus far tracking slightly ahead of our expectations. Indeed, in September the Company recorded for the first time ever in a single month over 1,000 dose sales globally. At this juncture our expectation is that dose sales in the 2016 financial year will grow at least in-line with historic trends, which over the last five years has shown a compound annual growth rate or CAGR of 19.7 per cent.





It was the confirmation I was looking for - Market didn’t react much though.

However today its up nearly 10%.  Delayed reaction or response to Media piece on speculation that SRX is readying for bid defence?  

http://www.smh.com.au/business/markets/sirtex-prepared-for-bid-action-while-flagging-robust-growth-20151027-gkjkjl.html


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## Faramir (28 October 2015)

This stock is my first stock to gain over 100% for me. It may or may not last long but at least today I can say I gain 100% on paper. Even though it was a very small amount of money in your eyes, it took me a long time to save it.
With Their expansion into China and Japan, I expect things to be better.
That big drop in March 2015 gave me an entry point that I had waited for.
I know everyone else here have made bigger gains and made wiser choices than me but I am new to this. All of you can celebrate your bigger victories. I just want to smile about my small victory on paper. Thank you.
Thank you for all of the discussions that we are having.


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## craft (4 December 2015)

Sirtex today makes ASX10.0 Price is hovering around all time highs. 

Last time we were at $40 it was on anticipation of SIRFLOX results. With a bit of mis-understanding in the meantime we are now back at $40 informed with information about progression in the liver from the SIRFLOX results.

Still to come is overall survival data for mCMC and perhaps even more promising HCC data from the other ongoing trials. 

In the mean time I have little problem justifying current price on existing growth levels and margins.  Hold with potential for upside - which is subtly but powerfully different to holding just for the upside. The difference becomes apparent if the upside doesn't materialise, which is what keeps me away from non-self funding biotech's.


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## craft (23 February 2016)

Sirflox results getting published where and in a fashion that has real impact.



> Dr Cade further commented “The additional recognition the SIRFLOX study will receive from publication in the Journal of Clinical Oncology is substantial, as this journal is consistently rated in the top 1% of all journals as measured by impact factor and is the leading oncology journal as measured by citations. It now provides our global sales force with a high impact, peer-reviewed publication to discuss with medical practitioners and other oncology professionals.”
> 
> The Journal of Clinical Oncology is the pre-eminent journal for medical professionals from all oncology disciplines and sub-specialities with more than 26,000 subscribers globally.






> *JCO has published the SIRFLOX study as a “Rapid Communication1”, which they define as a commitment to freely disseminate ground-breaking and practice-changing information so that it may benefit all readers and patients of the Journal*.


----------



## skyQuake (23 February 2016)

craft said:


> Sirflox results getting published where and in a fashion that has real impact.




Thanks craft

Also, any idea when the next major annc is out?


----------



## craft (23 February 2016)

skyQuake said:


> Thanks craft
> 
> Also, any idea when the next major annc is out?




Next Major trial results are the HCC trial result from The SARAH study due around April 2016 - then the Overall survival results for mCRC from the Firefox studies due early 2017.

But really the dosage sales are the key early indicators of how the oncology community is interpreting and pre-empting the outcomes via off label usage.  On that front we have an update due tomorrow with earnings. Earnings could also be a catalyst if there is anything else at play. New R&D initiatives, acquisitions etc. 

On the dose numbers for the first half - I would see anything below 5850 as an unexpected negative, above 6000 as an unexpected positive and anything in-between as neutral.


----------



## craft (24 February 2016)

craft said:


> Next Major trial results are the HCC trial result from The SARAH study due around April 2016 - then the Overall survival results for mCRC from the Firefox studies due early 2017.
> 
> But really the dosage sales are the key early indicators of how the oncology community is interpreting and pre-empting the outcomes via off label usage.  On that front we have an update due tomorrow with earnings. Earnings could also be a catalyst if there is anything else at play. New R&D initiatives, acquisitions etc.
> 
> On the dose numbers for the first half - I would see anything below 5850 as an unexpected negative, above 6000 as an unexpected positive and anything in-between as neutral.




Dose sales came in at 5728, I suspect that is lower than anticipated by the market. SARAH endpoint doesn't look like it will be out until near end of 2016 not April as above post.


----------



## skc (24 February 2016)

craft said:


> On the dose numbers for the first half - I would see anything below 5850 as an unexpected negative, above 6000 as an unexpected positive and anything in-between as neutral.




Numbers came in at 5728. +15.7% against guidance of 20% growth for the full year. Revenue growth was much higher than volume growth due to FX and $1000 price increase (to $16k a pot).... May be the price increase is having an impact? 

The short term market probably won't love it that much today.


----------



## VSntchr (24 February 2016)

skc said:


> Numbers came in at 5728. +15.7% against guidance of 20% growth for the full year. Revenue growth was much higher than volume growth due to FX and $1000 price increase (to $16k a pot).... May be the price increase is having an impact?
> 
> The short term market probably won't love it that much today.




The US$1000 price increase, went through in June 2014 the results pack mentioned and was this for the US market only. The slower growth areas were EMEA (took longer to get additional reimbursement coverage), APAC (Distributor issues in Korea). I think they have been increasing prices in APAC though, so perhaps it is a bit of a drag on faster growth in these areas. I am not sure what they charge in these markets.

Americas growth has a nice tailwind with the 2.8% increase in US reimbursement and suspension of the medical device tax - another 2.3%.


----------



## craft (24 February 2016)

> The first half result is consistent with our dose sales objectives for the full financial year which as previously indicated is anticipated to be least in-line with our five year compound annual growth rate or CAGR of 19.7 per cent.




They will require 6544 doses 2nd half to achieve the 19.7% CAGR objective that they put out there.   Things that will help 2nd half over first half:  Catch up from resolution of known Korean distributor dispute, recent increased EMEA reimbursement approvals, Yesterdays JCO publication of Sirflox results as a rapid communication.

Dose sales are volatile – this chart puts into perspective longer run trend and required 2nd half 2016 (in red) to meet forecast management are sticking too.





Too me it looks O.K but SKC’c comment of 15.7% against a forecast of 20% could see weakness for a while on a perceived guidance miss and slowing momentum.  Here’s to loving the volatility, end of the day even 15% CAGR justifies the price for me. (but not if its the start of continued slow down in growth, though I don't think it is)


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## McLovin (24 February 2016)

The first half of last year had a big spike in dose sales (26%). It was always going to be hard pull a 20%+ on top of that. Looks steady as she goes to me.

craft, your dose sales chart really puts things in perspective.


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## McLovin (18 March 2016)

I know SRX is on the nose at the moment, but a 5% fall because the Americas' President is leaving? People do move on to other things. He's leaving at the end of the FY, so it seems more routine than if he were leaving effective immediately.


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## skc (18 March 2016)

McLovin said:


> I know SRX is on the nose at the moment, but a 5% fall because the Americas' President is leaving? People do move on to other things. He's leaving at the end of the FY, so it seems more routine than if he were leaving effective immediately.




Agree. I read the news and didn't even bother putting it on my close watch list. Would have been a good short trade from open if I thought people would make a big deal out of it.

So now I am small long... let's see if common sense returns over the next few sessions.

P.S. $30 is an important technical level FWIW so the break below that is bearish. Given the dose sale disappointment from H1, this new is enough to trigger a cascade. 
P.P.S. Big fall from key management change are very common on the ASX, and feels rather irrational on most instances. On another thought... it's perfectly normal for the market to be irrational!
P.P.P.S. On a brighter note, Mr Mangano can put on his CV how the market value of SRX reduced by >$120m on news of his departure... and demand everyone to address him as the "9 Figure Man".


----------



## Knobby22 (18 March 2016)

The growth didn't meet expectations and this company is priced for very high growth. The price always seem volatile also.

I sold near the top due to luck more than anything as I needed the money but I am now looking seriously at this company. Even if the growth is a bit slower $28 looks an OK price to me,  that is what I think is the technical level. Will wait a bit to see whether the downtrend continues. 

I would like to buy at $25 as it would give me a level of comfort. I really would expect growth much better than 15% in the future otherwise I will be disappointed.


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## McLovin (18 March 2016)

skc said:


> P.S. $30 is an important technical level FWIW so the break below that is bearish. Given the dose sale disappointment from H1, this new is enough to trigger a cascade.




The funny thing about the dose sales is that have historically been weighted toward the second half (obviously when growing at 20% it helps that second half beat the first). Compared to previous years the first half split doesn't make the second half target overly onerous. Clearly I'm in the minority on this point though!





PS it's just by coincidence that that chart is in the SRX fan colours.

I don't see SRX going up any time soon, seems to have a lot of negativity around it, and $30 did look like support.


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## McLovin (13 April 2016)

There's some interesting commentary in the JCO regarding SIRFLOX, what the data shows and some of the shortcomings of the data, as well as how the cohorts may have influenced outcomes. 



> The site and pattern of first disease progression in control and SIRT patients offer insight into the apparent discordance between PFS at any site and PFS in the liver. Whereas control of intra- and extrahepatic disease is required to achieve a benefit in PFS at any site, the analysis of first progression site suggests that progressive disease in nonliver sites (7.9% v 27.7%) may mitigate the benefit of controlling liver disease with SIRT. Furthermore, the appearance of new lesions accounted for a substantially greater proportion of first progressions in the liver in SIRT (Appendix Table A2). *Collectively, these data suggest that although SIRT used in conjunction with systemic chemotherapy provides prolonged control of evident liver disease, this is insufficient to influence PFS at any site. The increased incidence of progression within the lungs for SIRT patients would seem to reflect lung progression destined to occur in patients receiving a liver-directed intervention.*
> 
> Other factors that may have compromised the ability of SIRT to significantly affect PFS at any site and the gains achieved in control of liver metastases include the 21 patients (7.9%) randomly assigned to SIRT but not receiving SIRT and the 19 patients (7.7%) with bilobar disease who received SIRT in only one liver lobe. *Ultimately, only 84% of patients allocated to SIRT received SIRT as per protocol. This is explained partly by the random assignment of patients before consideration of their suitability for SIRT, but, on the basis of previous experience, the proportion of patients not receiving SIRT as per protocol was unexpectedly high.*14,15,24* Also unanticipated was the large proportion of patients (approximately 45%) with an intact primary tumor; this had an uncertain impact on the primary study end point of PFS at any site and was reported to be associated with inferior survival outcomes.*25 There are also uncertainties regarding the 10 patients (3.8%) who withdrew consent after being randomly assigned to control (and may have received SIRT off protocol as part of first-line therapy) but were included in the ITT population PFS analyses for control.
> 
> The median 20.5-month liver PFS for patients treated with chemotherapy plus SIRT represents a substantial prolongation of local disease control compared with systemic chemotherapy alone (median, 12.6 months). Because, to the best of our knowledge, this is the first study to evaluate PFS in the liver, there are no other studies that provide context for this result. *However, recently reported data from the Chemotherapy + Local Ablation Versus Chemotherapy (CLOCC) study, which combined radiofrequency ablation with FOLFOX-based systemic chemotherapy in patients with unresectable mCRC confined to the liver, demonstrated that improved control of hepatic metastases can translate to a substantial impact on OS.26 In contrast to those in SIRFLOX, all patients randomly assigned in the CLOCC study, which also demonstrated an improvement in PFS at any site (HR, 0.57; 95% CI 0.38 to 0.85; P = .005), had a low burden of liver disease and no extrahepatic disease, and all had had their primary CRC resected.*




http://jco.ascopubs.org/content/early/2016/02/24/JCO.2015.66.1181.full

The bit about the CLOCC study is interesting, because in the HY earnings call one of the analysts questioned whether management could be confident of increasing OS and cited CLOCC as an example that the opposite occurred, iirc it was something along the lines of "if the disease is controlled in the liver it will just spread elsewhere so how can you be confident of an OS improvement?" Management seemed pretty confident that this would not be the case, the lack of extrahepatic disease in CLOCC probably matters. 

Anyway, it's all food for thought. To me it seems like there is a product that has gained acceptance as a salvage treatment, and has the possibility of moving up the treatment chain.


----------



## craft (1 June 2016)

craft said:


> They will require 6544 doses 2nd half to achieve the 19.7% CAGR objective that they put out there.   Things that will help 2nd half over first half:  Catch up from resolution of known Korean distributor dispute, recent increased EMEA reimbursement approvals, Yesterdays JCO publication of Sirflox results as a rapid communication.
> 
> Dose sales are volatile – this chart puts into perspective longer run trend and required 2nd half 2016 (in red) to meet forecast management are sticking too.
> 
> ...




Chart updated at the 16% (6164 doses) mid range guidance. Below trend, not statistically significantly so, but if you look really closely trend is marginally lower with the addition of this latest data point.  






> it is important to recognise the impacts on the business outside of the Americas are timing related



  ?????

That's what management say when its really management related isn't it? Either way, timing or management related Its probably not product related when America is trucking along just fine.


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## VSntchr (1 June 2016)

craft said:


> *That's what management say when its really management related isn't it?* Either way, timing or management related Its probably not product related when America is trucking along just fine.



Timing isn't great when you have the investment community watching with extra scrutiny for movements in growth rates that could be related to the recent clinical data. 

Your point about US sales moving along well is the saving grace in that respect...unless of course you consider the argument that the Americans are the most inclined to respond to the "reach and frequency" model..and other regions such as EMEA and APAC are less responsive to sales reps and may be becoming more data driven?

Not suggesting anything, just considering the possibilities..


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## McLovin (1 June 2016)

Ahh...I thought as we were almost through confession season and hadn't heard a peep from SRX that they were going to hit their target.

When you look at the reasons given, it does leave you wondering why management were so outwardly confident of hitting its dose target. It's not as though the ASCO publication is a surprise that has popped up in the last few weeks. The performance in the US, leads me to think that it is partly a timing issue although whether the delays are due to ineptitude on the part of management or some other factor or a combination I don't know.


----------



## McLovin (1 June 2016)

So with of 18%-20% growth in the Americas, my guesstimate is that FY dose sales growth for EMEA/APAC will be ~10%.


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## skc (1 June 2016)

craft said:


> Chart updated at the 16% (6164 doses) mid range guidance. Below trend, not statistically significantly so, but if you look really closely trend is marginally lower with the addition of this latest data point.




FY15 dose sale was 10,252 units. With 19.7% growth it should have been 12,272 units, or +2,020. With the revised 16% growth (for the full year), it will be 11,892 units, or 1,640 units. However, given that H1 16 dose sales was 5,728 units, management originally expected H2 to be 6,544. So the actual miss is ~380 units. That's about 6%.

The market reaction today isn't overly dramatic. It's still within the recent established range of ~$29-32. It would be an over-reaction if it trades down to the low-mid $20s on the back of this. That would be nice.

SRX is trading at PE~30 but with a pretty good growth runway that is arguably better than other companies in the same PE bracket (e.g. COH, TNE)... 



craft said:


> That's what management say when its really management related isn't it? Either way, timing or management related Its probably not product related when America is trucking along just fine.




The whole idea of periodic reporting is timing. So "a timing issue" isn't really an excuse. Nonetheless, historical growth suggests that this should be an one-off issue.



McLovin said:


> So with of 18%-20% growth in the Americas, my guesstimate is that FY dose sales growth for EMEA/APAC will be ~10%.




Given American sales achieved +20% for the year, sales should be 7,076 x 1.2 = 8,490 units. American H1 dose sales was 4,028, so H2 was 4,462. This leaves H2 EMEA and APAC to be 6164-4462 = 1,702 units. In H1, EMEA + APAC = 1,219 + 481 = 1,700. So half on half growth is basically flat... while the year on year growth = ~7.8%.


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## McLovin (1 June 2016)

skc said:


> Given American sales achieved +20% for the year, sales should be 7,076 x 1.2 = 8,490 units. American H1 dose sales was 4,028, so H2 was 4,462. This leaves H2 EMEA and APAC to be 6164-4462 = 1,702 units. In H1, EMEA + APAC = 1,219 + 481 = 1,700. So half on half growth is basically flat... while the year on year growth = ~7.8%.




I took the mid-point of both estimates (16% overall sales growth; 19% Americas sales growth) to get to 10% (actually it was 9.3%). The second half will be weak. In October they were tracking ahead of expectations, now they're going to miss. The loss of the Asia CEO late last year probably didn't help, although the changeover of CEOs in the Americas has evidently not hurt sales.

One of the big issues for SRX is it trades on a high pe and the market doesn't really understand the product – look at how poorly it interpreted SIRFLOX last year – so dose sales are the proxy it uses for efficacy. We end up getting these big swings in reaction to what is a smallish miss.


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## craft (2 June 2016)

skc said:


> Given American sales achieved +20% for the year, sales should be 7,076 x 1.2 = 8,490 units. American H1 dose sales was 4,028, so H2 was 4,462. This leaves H2 EMEA and APAC to be 6164-4462 = 1,702 units. In H1, EMEA + APAC = 1,219 + 481 = 1,700. So half on half growth is basically flat... while the year on year growth = ~7.8%.






McLovin said:


> I took the mid-point of both estimates (16% overall sales growth; 19% Americas sales growth) to get to 10% (actually it was 9.3%). The second half will be weak. In October they were tracking ahead of expectations, now they're going to miss. The loss of the Asia CEO late last year probably didn't help, although the changeover of CEOs in the Americas has evidently not hurt sales.





The numbers I get using annual mid guidance of 16% total and 19% America.

America 1st  Half 4028  (pcp 3390) growth rate 18.8% 
America 2nd Half 4392  (pcp 3686) growth rate 19.2%

Rest  1st half 1700 (pcp 1560) growth rate 9.0%
Rest 2nd Half 1772 (pcp 1616) growth rate 9.7%

Total 1st Half 5728 (pcp 4950) growth rate 15.7%
Total 2nd Half 6164 (pcp 5302) growth rate 16.3%

A chart for some perspective on 'rest of world' historical pcp growth rate variability.


----------



## VSntchr (2 June 2016)

craft said:


> The numbers I get using annual mid guidance of 16% total and 19% America.
> 
> America 1st  Half 4028  (pcp 3390) growth rate 18.8%
> America 2nd Half 4392  (pcp 3686) growth rate 19.2%
> ...



A very illuminating post craft, thanks.
Viewing it like this with an increase in growth rate for ALL regions in H2, it is hard to justify an argument that the business is facing any significant growth rate issues. 
What is perhaps more clear though is an expectations problem - something that management may have to improve upon. Perhaps the ditching of the quarterly dose updates was their attempt at beginning to do so?


----------



## craft (2 June 2016)

VSntchr said:


> A very illuminating post craft, thanks.
> Viewing it like this with an increase in growth rate for ALL regions in H2, it is hard to justify an argument that the business is facing any significant growth rate issues.
> What is perhaps more clear though is an expectations problem - something that management may have to improve upon. Perhaps the ditching of the quarterly dose updates was their attempt at beginning to do so?




They ditched the quarterly dose figures because they claimed concerns on how the market reacted to the normal variability in the growth trajectory.  Then they go and lob a 12 month forecast out there, to the decimal point mind you. Go figure that one out?????

Anyrate - all good for me.


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## Klogg (24 November 2016)

Sorry, derailing the thread a little from dose sales here.

I decided to ignore the seemingly expensive price tag on this one and look at it in more detail. Specifically, what I'm trying to approximate is the level of expense actually required to maintain the _current_ level of dose sales.

Marketing is their biggest expense by a country mile at ~$80m. I have a couple of approaches to determining the required 'maintenance' level of marketing, just trying to think out aloud here. I've come up with the following (conflicting) arguments:

1) Use last year's marketing expense as a guide for this year's dose sales. Hugely flawed, as it would take more than one year's worth of marketing in some cases to win clients (oncologists).

2) Once an oncologist has chosen the drug, virtually zero marketing is required to keep them using it. Hence the ~$80m is all (or mostly) 'growth' 


Using option 1, there's an extra $15m PBT, or ~10.5m PAT.  Taking out approx. $107m in cash/term deposits, that's about 23 times for a company investing at a ridiculous ROIC, with no real end in site (the nearest competitor in this space isn't even close).

Using option 2, it becomes ludicrously cheap given ROC, so I won't go through those figures.


For those that know the company, please let me know your thoughts on the above.


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## McLovin (28 November 2016)

I faded marketing expense in as a % of sales as sales rise. My theory is that this is an industry that probably trades on word of mouth more than most so that getting clinical acceptance by key opinion leaders will somewhat reduce the need for marketing spend. And of course, if they can move up the treatment regime they will have years of growth marketing spend.

I don't know if once you have an oncologist on board they don't need to be marketed. Oncology generally has moved away from a standard regime of treatment to a treatment plan that is tailored to the patient. And something like SirSpheres is not a binary sort of drug, as liver cancer isn't a binary disease; it's use and where it is indicated will continue to evolve. To my non-medical mind that would seem to require more face time between the sales force and oncologists than if they were selling Nurofen.

I think what Gilman Wong said about turning on a tap, rather than opening a floodgate is pretty good way to think about this business.


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## Klogg (29 November 2016)

McLovin said:


> I faded marketing expense in as a % of sales as sales rise. My theory is that this is an industry that probably trades on word of mouth more than most so that getting clinical acceptance by key opinion leaders will somewhat reduce the need for marketing spend. And of course, if they can move up the treatment regime they will have years of growth marketing spend.
> 
> I don't know if once you have an oncologist on board they don't need to be marketed. Oncology generally has moved away from a standard regime of treatment to a treatment plan that is tailored to the patient. And something like SirSpheres is not a binary sort of drug, as liver cancer isn't a binary disease; it's use and where it is indicated will continue to evolve. To my non-medical mind that would seem to require more face time between the sales force and oncologists than if they were selling Nurofen.
> 
> I think what Gilman Wong said about turning on a tap, rather than opening a floodgate is pretty good way to think about this business.




Thanks - I thought about this for a bit before responding, and I think the underlined sections are what I'm not sure of. As I understand it, it's either chemotherapy, SirSpheres or both.
TBH - I'm oversimplifying it because I don't understand it well enough. I think I need to read a little more and come back to this one...


----------



## McLovin (29 November 2016)

Klogg said:


> Thanks - I thought about this for a bit before responding, and I think the underlined sections are what I'm not sure of. As I understand it, it's either chemotherapy, SirSpheres or both.
> TBH - I'm oversimplifying it because I don't understand it well enough. I think I need to read a little more and come back to this one...




Don't forget resection. That's actually the best outcome. I guess the point I'm making is the path of the disease is not straightforward, there are complications that can alter the course of treatment etc. There's a pretty good SRX discussion on the other board with a few posters who work in oncology.


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## Klogg (29 November 2016)

McLovin said:


> Don't forget resection. That's actually the best outcome. I guess the point I'm making is the path of the disease is not straightforward, there are complications that can alter the course of treatment etc. There's a pretty good SRX discussion on the other board with a few posters who work in oncology.




In my mind I was limiting it to inoperable liver cancer - of course it helps if I say as much in my posts...

I'll check out the posts too - thanks.


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## Klogg (9 December 2016)

Have people lost their minds?
Take out excess cash and you're talking 12times earnings (approx.)

The company is still growing, and a fair chunk of marketing spend is discretionary.


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## Klogg (9 December 2016)

Shame I hadn't completely finished my research. I knew enough to have a rough valuation, so bought half a position on the open.
Seems a little obvious TBH


----------



## Ves (9 December 2016)

Klogg said:


> Shame I hadn't completely finished my research. I knew enough to have a rough valuation, so bought half a position on the open.
> Seems a little obvious TBH



I probably would have done the same if I had the funds.

It does seem a little obvious though.  It's one of those situations where the rough calculations seem to make it look very cheap indeed.  Which in itself, makes me wonder if there's not something going on in the background.


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## Klogg (9 December 2016)

Ves said:


> I probably would have done the same if I had the funds.
> 
> It does seem a little obvious though.  It's one of those situations where the rough calculations seem to make it look very cheap indeed.  *Which in itself, makes me wonder if there's not something going on in the background.*




I wondered that too... But it's not like sales growth is negative, nor is the balance sheet risky even in the slightest (the only company I can think of with a decent business and more cash relative to market cap would be UOS)

On balance, the risks are quite low.


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## Ves (9 December 2016)

Klogg said:


> I wondered that too... But it's not like sales growth is negative, nor is the balance sheet risky even in the slightest (the only company I can think of with a decent business and more cash relative to market cap would be UOS)
> 
> On balance, the risks are quite low.



I only parsed the announcement quickly this morning,   but I always ask more questions when I see the words 'competition' used by businesses with fairly decent ROE and/or profit margins.

I don't know the industry and treatment regime well enough to know the context and possible meaning of said 'competition' though.

But competition + high marketing expenses is always a combination to watch out for.


----------



## JTLP (9 December 2016)

It looked like the competition was the big one in all of this. Who knows how many others will come online and stifle growth? Yes it's still moving along but the more players, the more you have to spend to differentiate etc. you can see the cycle and how investment requirements could change.


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## skc (9 December 2016)

Klogg said:


> Have people lost their minds?
> Take out excess cash and you're talking 12times earnings (approx.)
> 
> The company is still growing, and a fair chunk of marketing spend is discretionary.




Add this to the ASX shocker list. 

When I saw the news I thought this would be a 15-20% fall. Dose sale _growth _has slowed... I'd be very concerned if dose sales were negative (as it indicates bigger issues), but a slowing growth seems a lot less fatal. Certainly not -50% fatal.

They are investing more in sales effort yet getting weaker dose sales growth... so I'd think again if marketing spend is truely discretionary. There's also the mention of new competition in the market... which signals to me further that some marketing spend is "sustaining" expense. 

The market is certainly edgy. There's simply been too many high expectation stocks issuing disappointing updates. It's the hangover from the "negative interest rate, buy-anything-with-any-growth" period we have had in 2016. Although to be frank SRX's valuation wasn't nearly as stratospheric as some of the others.

Remember the old saying that profit warning comes in 3's. This is number 2. So the opening price probably reflects the market pre-empting number 3.

P.S. Now just imagine the spectacular that'd be of a DMP or COH _market update_.


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## omac (9 December 2016)

Given the competition drug is relatively new, it is impressive to gain that much traction in a few months (cheaper, more effective or more marketing dollars?).  Any idea on what the drug is?


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## Ves (9 December 2016)

omac said:


> Given the competition drug is relatively new, it is impressive to gain that much traction in a few months (cheaper, more effective or more marketing dollars?).  Any idea on what the drug is?



I'm assuming it's Theraspheres.  Not sure if there are others.


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## omac (9 December 2016)

a quick search suggests:

Regorafenib (Bayer)

Lonsurf (aka tipiracil from Taiho)

Approved in 2012 and 2015 respectively but a couple of studies released earlier this year. Add weight to the line in the report about clinicians waiting for OS data from SIRFLOX et al, as if the above two were waiting for study data it shows how quick the clinicians may move.


Edit: more likely to be Cyramza (Eli lilly).


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## Klogg (9 December 2016)

skc said:


> They are investing more in sales effort yet getting weaker dose sales growth... so I'd think again if marketing spend is truely discretionary. There's also the mention of new competition in the market... which signals to me further that some marketing spend is "sustaining" expense.
> 
> The market is certainly edgy. There's simply been too many high expectation stocks issuing disappointing updates. It's the hangover from the "negative interest rate, buy-anything-with-any-growth" period we have had in 2016. Although to be frank SRX's valuation wasn't nearly as stratospheric as some of the others.
> 
> ...




_They are investing more in sales effort yet getting weaker dose sales growth... so I'd think again if marketing spend is truely discretionary. _
Good point - it's not guaranteed that management can just cut their marketing by 50% (or any other number for that matter). But dosage growth has slowed before in a half, it's not uncommon (although not by this much in the US). The marketing spend wouldn't track exactly to sales on a half to half basis, but it would over time.


As for competition - SRX said this:
_"...increased competition for patients with liver-directed therapies, a new drug approval in salvage metastatic colorectal cancer and restrictions in reimbursement..."_

So there's potentially a new drug to provide treatment for metastatic colorectal cancer. I don't know the breakdown (I will attempt to find it), but SIRT can also be used for primary liver cancer. So it's not their entire market. Nevertheless, until I know the split, it could be a significant part of it.

Not sure what they mean by "competition for patients with liver directed therapies"... What would cause increased competition for such patients?

Restrictions in reimbursement is easily understood - but the causes would indicate the duration of these restrictions. More info required.


Appreciate the feedback though - always good to know where I should focus my efforts.


And if DMP released something like this, the world would explode. Trading on ridiculous multiples for a pizza place...


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## Ves (9 December 2016)

Klogg said:


> And if DMP released something like this, the world would explode. Trading on ridiculous multiples for a pizza place...



It's also a pizza place that needs a distribution/branding license to sell that brand of pizza in a jurisdiction.   They're not due for renewal for a while,   but imagine if they weren't renewed...

I made a post in the DMP about this issue at one point.


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## McLovin (9 December 2016)

omac said:


> a quick search suggests:
> 
> Regorafenib (Bayer)
> 
> ...




It's Lonsurf. 

SRX have handled expectations atrociously. The AGM was barely six weeks ago. Given how far into the first half we already were they should not have given such bullish dose sales estimates. It's pretty apparent this info leaked too, given the weakness in the SP of late. 

In summary, the salvage market has rapidly become much more competitive, and without OS data SRX is not able to move up the treatment chain. Management also seem to have been blindsided by Lonsurf's entry. It's been approved and for sale for barely 12 months, and has already had a noticeable effect on SRX sales. I'd take any dose sales estimate with a grain of salt, and I would not extrapolate it at all. SRX used to reassure us that if the trials were unsuccessful they'd still have the salvage market. To me, the trial results are now extremely important.

The lower bound of the FY estimate seems to imply dose sales could go backward in the 2H, doesn't it?


----------



## McLovin (9 December 2016)

Ves said:


> I'm assuming it's Theraspheres.  Not sure if there are others.




I think if you gave someone radio-emobolization orally you'd probably kill them well before the spheres got to the liver.


----------



## Ves (9 December 2016)

McLovin said:


> I think if you gave someone radio-emobolization orally you'd probably kill them well before the spheres got to the liver.



It's probably a good thing I'm not treating patients!! 

Thanks for the summary above by the way. Actually helps a lot that you mentioned that it's the 'salvage' market that is where they are getting hit.  

I remember at one point a lot of investors were considering the move up the treatment chain was a bonus or cream on the top and the salvage market earnings alone justified the market price.   I can see why this has been thrown off the cliff today if that is actually the case.  If there are any doubts about the sustainability of the salvage market earnings,  which in the past have funded any growth and research,  this becomes a bit more speculative IMO.


----------



## omac (9 December 2016)

McLovin said:


> It's Lonsurf.




thanks. 

geez its gained traction quickly  http://www.otsuka.com/en/financial/pdf.php?financial=454

any opinions on the reclassification by NCCN of SIR-spheres to category 2A? or are 2A/2B/3 neither here or there? (within reason)


----------



## McLovin (9 December 2016)

omac said:


> thanks.
> 
> geez its gained traction quickly  http://www.otsuka.com/en/financial/pdf.php?financial=454




From what I understand SS are a better drug, but Lonsurf is being used first then several months later SS are used. In the intervening couple of months some patients die and some become too ill to receive SS. The drug has in effect reset the salvage market.


----------



## skc (9 December 2016)

McLovin said:


> SRX have handled expectations atrociously. The AGM was barely six weeks ago. Given how far into the first half we already were they should not have given such bullish dose sales estimates.




Absolutely. December profit downgrades are always bad if the AGM was only a few weeks ago. Not to mention the MD sold about 80k shares last month...



McLovin said:


> It's pretty apparent this info leaked too, given the weakness in the SP of late.




May be. But aren't there public data available on these sort of stuff? Like a rebate schedule or something?



McLovin said:


> In summary, the salvage market has rapidly become much more competitive, and without OS data SRX is not able to move up the treatment chain. Management also seem to have been blindsided by Lonsurf's entry. It's been approved and for sale for barely 12 months, and has already had a noticeable effect on SRX sales. I'd take any dose sales estimate with a grain of salt, and I would not extrapolate it at all. SRX used to reassure us that if the trials were unsuccessful they'd still have the salvage market. To me, the trial results are now extremely important.
> 
> The lower bound of the FY estimate seems to imply dose sales could go backward in the 2H, doesn't it?




FY16 sales = 11,931. H1 5728, H2 6203.

Now FY15 H1 growth of 4-6% = 5957-6072. Fully year range = +5-11% or 12,527 to 13,243. So take the lowest full year number less the highest H1 number get 6,455... so still H2 growth of 4%.

I think the market will take some convincing on the forecast for obvious reason.


----------



## Klogg (9 December 2016)

The more I read, the more I realise I don't know. 
Sold my holding, writing it off as an ill-informed mistake. It was profitable, but that's beside the point.

I'll do more work over the next week or so and act accordingly.


----------



## Ves (9 December 2016)

Klogg said:


> The more I read, the more I realise I don't know.
> Sold my holding, writing it off as an ill-informed mistake. It was profitable, but that's beside the point.



Well done for admitting that to yourself.  I would probably have been in the same boat if I had the ability to act this morning.


----------



## McLovin (9 December 2016)

skc said:


> Absolutely. December profit downgrades are always bad if the AGM was only a few weeks ago. Not to mention the MD sold about 80k shares last month...




I can smell litigation. It's a very bad look for the CEO to have offloaded a few million dollars of shares after giving upbeat, albeit opaque, guidance and then a few weeks later do a 180 on the outlook. To be honest, the way Gilman Wong has handled this whole thing he should be handing in his resignation.





skc said:


> May be. But aren't there public data available on these sort of stuff? Like a rebate schedule or something?




In the US it's private health that does most of this stuff. I don't think they have such info made public. Could be wrong.


----------



## Klogg (9 December 2016)

Ves said:


> Well done for admitting that to yourself.  I would probably have been in the same boat if I had the ability to act this morning.




What's odd about this is I've done it 5 times (see something that looks cheap, buy, then realise I don't know enough), and 4 out of 5 times it has been profitable - talk about luck...




> I can smell litigation.




If you listen to the other forum, capital punishment is on the cards.
I can't believe directors were even allowed to trade during that period, given the forecasts provided to the market.


----------



## Ves (9 December 2016)

Klogg said:


> What's odd about this is I've done it 5 times (see something that looks cheap, buy, then realise I don't know enough), and 4 out of 5 times it has been profitable - talk about luck...



I've had a similar experience but with stocks I've looked at closely  but not purchased have seen big share price growth.

They did look superficially cheap value-wise,  but upon looking a bit closer decided that I either didn't understand enough or on a risk-adjusted basis they were more expensive than they looked.

A big part of this is that you don't see the long-tail earnings risk happen in the first few years (sometimes not for decades perhaps).

I think some of it also has a lot to do with something that skc said earlier in regards to the investing climate of the past few years  (the bolded part):



> There's simply been too many high expectation stocks issuing disappointing updates. It's the hangover from the *"negative interest rate, buy-anything-with-any-growth"* period we have had in 2016




And also the unwinding of that when the market potentially goes too hard on the downside.

Other than that I'm probably too sceptical at times.  

A big part of investing is knowing your own personal discount/hurdle rates.  In some cases the market can be seeing the same kinds of things as you,  but using a completely different rate for valuation purposes.


----------



## skc (9 December 2016)

McLovin said:


> I can smell litigation. It's a very bad look for the CEO to have offloaded a few million dollars of shares after giving upbeat, albeit opaque, guidance and then a few weeks later do a 180 on the outlook. To be honest, the way Gilman Wong has handled this whole thing he should be handing in his resignation.




I don't know if there's that much of a case on the guidance change.. previous guidance was double digit growth. Mid point of revised guidance was 7.75%. If you take it at face value it's a 2.25% miss or about 250 doses missed. 

Wong actually gave a reason for his sale... so if anyone was to investigate it could easily review if any of that was true.



McLovin said:


> In the US it's private health that does most of this stuff. I don't think they have such info made public. Could be wrong.




Lonsurf's number were in the public domain as omac found. Poor homework by analysts imo.



omac said:


> thanks.
> 
> geez its gained traction quickly  http://www.otsuka.com/en/financial/pdf.php?financial=454






Klogg said:


> What's odd about this is I've done it 5 times (see something that looks cheap, buy, then realise I don't know enough), and 4 out of 5 times it has been profitable - talk about luck...




Better lucky than good.

Now where's Craft? A few of his holdings have had a forgettable year.


----------



## notting (9 December 2016)

If you're in with a Wong something will be wrong 

Very wrong- 







> The company said that soft sales of its treatment doses in the Americas, Europe, the Middle East and Africa meant that worldwide dose sales growth would only be between 4 and 6 per cent in the six months to December 31, compared to 15.7 per cent in the prior corresponding period.
> 
> Sirtex said sales growth will be between 5 to 11 per cent in the 12 months to June 30, compared with 16.4 per cent.
> 
> Full-year earnings will be flat at $74 million at best, the company said, but could drop by up to 12 per cent.




Ban Wongs


----------



## McLovin (9 December 2016)

skc said:


> I don't know if there's that much of a case on the guidance change.. previous guidance was double digit growth. Mid point of revised guidance was 7.75%. If you take it at face value it's a 2.25% miss or about 250 doses missed.




Wouldn't the mid-point of "double digit dose sales growth will continue" be 15%? There were no qualifiers to the statement to lead one to think it was going to be at the lower end, and given where growth has been historically, an aticipated 10% growth rate would surely have required some sort of heads up  about "low double digit".



skc said:


> Wong actually gave a reason for his sale... so if anyone was to investigate it could easily review if any of that was true.




Sure he may have had a reason, but the timing seems very convenient. SRX has always had pretty good corporate governance, so I'm willing to give them the benefit of the doubt, but it's not a good look at all.



skc said:


> Lonsurf's number were in the public domain as omac found. Poor homework by analysts imo.




Yes, you are right.


----------



## craft (9 December 2016)

skc said:


> Now where's Craft? A few of his holdings have had a forgettable year.




Toes in the sand, beer in the hand – you would think the market would have more respect for a person’s holiday.

Are you talking about the gifts that just keep giving?

Just a bit of noise.  The two companies in my portfolio having a wild ride at the moment are VOC & SRX.  I’m comfortable with both. Business is never just up over my time frame.

In respect to SRX. This latest growth forecast is outside of what could be considered statistical noise for the historical growth path.  So logic suggest to be very careful here unless you are entirely comfortable enough with your understanding to bet against the market. Without wasting holiday time and elaborating nothing in the update bothers me too much.

Bottom line. If it was me I would want SIR Sphere’s and I would want them very early in the treatment program. Lonsurf is irrelevant in how I would want to fight, but its easy for the oncologist who's just going through the motions. Nothing will shake me from riding this until all the clinical trial outcomes are known. To the moon or bust!   

Wong’s reason for selling was to cover tax on shares that had vested – would have to check to see if he only sold enough to cover tax on recently vested shares, but if he did and it’s his regular practice I would have some sympathy for his actions, as selling as close to your deemed purchase price for taxation is a sensible risk mitigation practice when part of your salary comes from equity. If he sold more than required to mitigate tax commitment risk than I’m on the band wagon saying the company is in the w(r)ong hands.


----------



## mcgrath111 (11 December 2016)

I understand wongs reasoning, but something about that jist stinks imo.


----------



## McLovin (12 December 2016)

craft said:


> Bottom line. If it was me I would want SIR Sphere’s and I would want them very early in the treatment program. Lonsurf is irrelevant in how I would want to fight, but its easy for the oncologist who's just going through the motions. Nothing will shake me from riding this until all the clinical trial outcomes are known. To the moon or bust!




Which is why I'm still holding. Even if OS from SS is only as good as Nexavar, it will likely replace Nexavar given the price difference and patient QoL. 



craft said:


> Wong’s reason for selling was to cover tax on shares that had vested – would have to check to see if he only sold enough to cover tax on recently vested shares, but if he did and it’s his regular practice I would have some sympathy for his actions, as selling as close to your deemed purchase price for taxation is a sensible risk mitigation practice when part of your salary comes from equity. If he sold more than required to mitigate tax commitment risk than I’m on the band wagon saying the company is in the w(r)ong hands.




My issue isn't with Wong selling shares – or the reasons for it – it's what the internal outlook for dose sales was at the time of the sale, beyond the vague forecast of "double digit growth continuing". Six weeks later, after he had offloaded his shares, they were able to firm up that forecast not just for the half year, but also the full year. Maybe I'm jumping at shadows, and as I said SRX has a pretty good corp governance record, but it's not a good look at all.


----------



## McLovin (19 December 2016)

Wong is being investigated by SRX's lawyers, and has stood aside. 

Listening to the call what confused me was management were at pains to stress how little visibility they have wrt dose sales, and then in the next breath were giving full year dose sales estimates.


----------



## craft (20 December 2016)

McLovin said:


> Wong is being investigated by SRX's lawyers, and has stood aside.
> 
> Listening to the call what confused me was management were at pains to stress how little visibility they have wrt dose sales, and then in the next breath were giving full year dose sales estimates.




No way back to confidence in these guys without either daily dose sale released so that the market can make an independent judgement that there's nothing to see here or some pretty wholesale changes in management and board. 

If this company didn't have good prospects the price would be even more toast. Very much more a binary investment on trial data due to the current circumstances than if market had faith in Management.

Shame - internally funded growth to date could have been a great legacy - Only very decisive action here has hope of not overshadowing that legacy and we don't seem to be getting it. Last hope is that the investigation is not just a whitewash but a crossing of the T's and dotting of the I's before decisive action.

SRX board/management has a bad hand at the moment - No matter what the truth of the situation around continuous disclosure, inside trading etc. It can not be denied that SRX dealt the hand to themselves. They have to play this bad hand very decisively or fold quickly so as to not permanently damage SRX's prospects.


----------



## luutzu (23 December 2016)

I'm in. 

So far, cannot find anything wrong with this company. 

Seems to me the past 16 years could just be its beginning.


----------



## McLovin (13 January 2017)

Wong has been sacked. The contents of the report by SRX's lawyers are confidential. My reading of the announcement is that he will not be paid from today (date of termination). Does that imply some wrongdoing on his part? Under normal circumstances I would have expected him to either resign or be retrenched with a period of gardening leave. The fact he was terminated would lead me to think the lawyers found something.

I think his position had become untenable within the company, but I'm disappointed it had to end this way for him, especially if he acted in poor judgement. He really built SRX up over the period of his leadership from a small biotech to a legit mid-cap healthcare stock.


----------



## skc (13 January 2017)

McLovin said:


> Wong has been sacked. The contents of the report by SRX's lawyers are confidential. My reading of the announcement is that he will not be paid from today (date of termination). Does that imply some wrongdoing on his part? Under normal circumstances I would have expected him to either resign or be retrenched with a period of gardening leave. The fact he was terminated would lead me to think the lawyers found something.
> 
> I think his position had become untenable within the company, but I'm disappointed it had to end this way for him, especially if he acted in poor judgement. He really built SRX up over the period of his leadership from a small biotech to a legit mid-cap healthcare stock.




Friday afternoon announcement after close... never a good thing.

You'd have to imply there's some wrongdoing. Remember that Wong actually had the audacity (for want of a better word) to issue a statement after his share sale... may be he acted in poor judgement but to lie in a statement to cover the poor judgement was a further mistake.

What I am also concerned about is how this reflects on SRX's response to ASX on how they forecast sales. On one hand they are saying everything was above board as there is no transparency beyond a short window (no forecast was revised until early Dec), then on the other hand the CEO was able to predict the downgrade 6 weeks beforehand (assuming that's the reason for the share sale). 

So if Wong did something wrong by acting on the poor outlook information that should not have existed... then the Board also potentially did something wrong with regards to their ASX response on how quickly they can determine changes in sales and forecasts.


----------



## McLovin (13 January 2017)

skc said:


> What I am also concerned about is how this reflects on SRX's response to ASX on how they forecast sales. On one hand they are saying everything was above board as there is no transparency beyond a short window (no forecast was revised until early Dec), then on the other hand the CEO was able to predict the downgrade 6 weeks beforehand (assuming that's the reason for the share sale).




Like I said in a post up thread, the downgrade conference call was management stressing they only have near term visibility, then going ahead and making a full year estimate. The visibility thing is arse covering, and the lawyers have evidently seen straight through it, and the deliberate vagueness of the AGM guidance. They've got field reps who would be getting feedback from customers and relaying it. I doubt Gilman was sitting by the fax machine watching new orders roll in and updating his spreadsheet. 



skc said:


> So if Wong did something wrong by acting on the poor outlook information that should not have existed... then the Board also potentially did something wrong with regards to their ASX response on how quickly they can determine changes in sales and forecasts.




I don't think it's over yet. The board has to be brought to account, and really needs a bit of rejuvenation. The tenure of the board in years is 12, 11, 1, 14, 11. Time for some new blood me thinks.


----------



## DeepState (14 January 2017)

Craft, what's the implied growth rate (whatever measure you see as most impt for valuation) impounded into current prices as you see it? Pls.


----------



## craft (14 January 2017)

DeepState said:


> Craft, what's the implied growth rate (whatever measure you see as most impt for valuation) impounded into current prices as you see it? Pls.




Most important growth figure is Dose Sales.


I’m not sure reverse engineering a single market implied growth rate out paints the whole picture as this company's future is pretty diverse depending on the outcome of some pretty major trials reporting over the next few years.  Probably better having a positive outcome value, a negative outcome value and a probability assigned to both – pretty hard to reverse engineer three variables.


However for the exercise and giving you the assumptions I need to make to isolate dose sales as the implied variable.


Implying rate of scale benefits declines over time from historical. Which is conservative as they have a large current excess manufacturing capacity in place in case of positive trial outcome.  Trials expenses are a known upfront expense that will come to an end.  Also Nothing has come of R&D spend to date so this assumption also implies that they continue the same level of R&D and nothing ever comes of the investment.


On top of implying no scale benefits, I’ll make the assumption that fixed expenses increase quicker than revenue and brings return on equity down slightly over time.


Implying no other profitable use for the excess cash flow beyond funding the implied growth rate. So payout ratio goes up accordingly.


@ 10% after tax discount rate, A dose growth rate of ~5% would solve my valuation model at current market price.


But once again let me just emphasise the range of possible outcomes for this particular business is huge – I contemplate a range of stories and probabilities ranging from management quickly burning through fast dwindling cash flow unsuccessfully trying to plug the hole from a failed trial scenario to an increase from a current 2% penetration to 40% penetration over time with positive results and management using rivers of cash flow profitably (R&D and acquisitions) to leverage their distribution channel.


----------



## luutzu (14 January 2017)

craft said:


> Most important growth figure is Dose Sales.
> 
> 
> I’m not sure reverse engineering a single market implied growth rate out paints the whole picture as this company's future is pretty diverse depending on the outcome of some pretty major trials reporting over the next few years.  Probably better having a positive outcome value, a negative outcome value and a probability assigned to both – pretty hard to reverse engineer three variables.
> ...





Keep it Simple, Smarty Pants.

Current price of $15.84 implies a growth forecast (expectation) of about 4.2%p.a. over next decade. 

Note how very close this is to the recent release from SRX of 5.6% global growth for the last six months, and around the edges of your sophisticated models?







Note that at the previous $30s to $40 price range of previous couple years, the market implies (expect) growth in the 15 to 20%p.a. Hence, any decline will bring a whole lot of disappointment.

But at 4% growth expectation... unless some company managed to cure liver cancer, and we all hope that someday there will be one, but unless that happen, SRX is not going to grow at this single digit rate. Not when it's about to launch into Asia big time... note that APAC delivered 10.2% growth, slightly above expectation. 

*Historically...




*
growth has been in the 20s to low 30s p.a. 

So while our Gilman might have sensed the sales decline, might even believe that the upcoming test results will disappoint... will the company's business really shrink from the 20s to the 5s due to those new R&D (misad)ventures?

Not trying to be too clever since all these are what I reckon Graham was teaching... but we're in the investment business, not the accounting and appraisal business. (hey that's a good line )


----------



## galumay (15 January 2017)

craft said:


> ....But once again let me just emphasise the range of possible outcomes for this particular business is huge....




Great and thoughtful reponse, craft. I think it highlights the difficulty of valuing different businesses in different sectors. Developing pharmas are probably some of the most difficult, zero to infinity the range of possibilities! 

As well as valuations I think one needs to keep a sharp eye on management and look at their level of experience and expertise in the field, and the capital management of the business given the large appetite for R&D in the sector.

I have never looked very closely at SRX so I cant comment other than in general terms, but these sort of businesses tend to be quite exciting to own!


----------



## DeepState (15 January 2017)

Thanks for your thoughts Craft.  Much appreciated.  It's good to learn a little about how you think about such situations. Scenario oriented, dcf, with probability attachment is just great. Best practice framework.

Only if you are prepared to answer further questions:

1. Have you materially varied your distribution of likelihoods arising from difficulties facing management right now?  

2. How do you go about assessing likelihoods for trial successes?


----------



## craft (16 January 2017)

DeepState said:


> Thanks for your thoughts Craft.  Much appreciated.  It's good to learn a little about how you think about such situations. Scenario oriented, dcf, with probability attachment is just great. Best practice framework.
> 
> Only if you are prepared to answer further questions:
> 
> ...



1. I have factored in more downside mainly  because the last dose sales numbers are beyond statistical noise on the downside.  Many possible causes for that, but it clearly generates from the Americas having its first hiccup and being the main contributor to current geographical mix. No coincidence it occurred with changes to head of America's management in my view.

Sacking Wong is mainly noise for me, he had kept good custodianship of self funding the business and front running production capabilities but the business needs something else now. It's sad for him it ended this way, probably some hubris from being atop something successful, some misjudgement in mixing personal finances with corporate responsibilities but mainly a lesson in overstaying for the whole board I suspect. One possible problem is attracting the management calibre possible which  would be attracted by a  good trial result prior to the result. Get the right person and my upside goes up. Wrong person and it goes down - whilst it's unknown widen both ways.

2. Add one part reading/research, one part thinking and mix together with some SWAG.


----------



## DeepState (17 January 2017)

craft said:


> mix together with some SWAG.




...learned something today.  Thanks for taking the time to provide a response to my questions.


----------



## mcgrath111 (25 January 2017)

Down she goes. Seems people arent too fond of the new CEO, however maybe some profit taking from the bounce @ 14.

Ive always had a fondness for SRX, however wong and results just doesnt settle well for me at the time being.
Will look again if we enter 13 territory.


----------



## McLovin (25 January 2017)

mcgrath111 said:


> Down she goes. Seems people arent too fond of the new CEO, however maybe some profit taking from the bounce @ 14.




They haven't announced a CEO to replace Wong, just a new APAC head.


----------



## luutzu (25 January 2017)

McLovin said:


> They haven't announced a CEO to replace Wong, just a new APAC head.




You reckon there'll be some sort of class action?


----------



## mcgrath111 (25 January 2017)

McLovin said:


> They haven't announced a CEO to replace Wong, just a new APAC head.



My mistake!


----------



## luutzu (31 January 2017)

Class action. Sometime we do get real lucky.


----------



## mcgrath111 (1 February 2017)

luutzu said:


> Class action. Sometime we do get real lucky.



Hey luutzu,
Will you buy into the dip given the class action?
I don't think the issue will be so much whether SRX will have to pay (they will) but more the amount required to pay.

It seems like corporate governance is a trendy word, but not one followed by more than a few companies these days.


----------



## luutzu (1 February 2017)

mcgrath111 said:


> Hey luutzu,
> Will you buy into the dip given the class action?
> I don't think the issue will be so much whether SRX will have to pay (they will) but more the amount required to pay.
> 
> It seems like corporate governance is a trendy word, but not one followed by more than a few companies these days.




I was hoping for a class action.

Didn't know it was coming when I first bought in a few weeks ago when it rebounded to the $14.20s but after Ballamy got one and GW got sacked, was kinda waiting for one.

Now that it's here, I'm sucking my thumb because I know SRX is great value at current $14s but am greedy and fear that a the market might pull another MRM, MND and STO on me again 

I'll take a closer look at management's holdings and dig a whole lot more into SRX meds and wait to see. There's no hurry at the moment, I don't think.

But yea, at current price it's great if you're long term and don't mind the dips and bounce and bottom feeding.


----------



## craft (21 April 2017)

Big day for Srx tomorrow, with Sarah trial data being presented. Also two more oral presentations at ASCO announced for other two big trials with abstracts due 18 May.

Things about to get interesting again.


----------



## McLovin (21 April 2017)

craft said:


> Big day for Srx tomorrow, with Sarah trial data being presented. Also two more oral presentations at ASCO announced for other two big trials with abstracts due 18 May.
> 
> Things about to get interesting again.




You got that bottle of port out again, craft. I'm not sure if that's a good or bad sign!


----------



## skc (21 April 2017)

craft said:


> Big day for Srx tomorrow, with Sarah trial data being presented. Also two more oral presentations at ASCO announced for other two big trials with abstracts due 18 May.
> 
> Things about to get interesting again.




A long feels like a free shot on the Sarah outcome, with the downside risk protected by the existing business and the other trials next month....

I had a look with IG Markets as they offer "controlled risk" positions with OTC CFDs. Apparently you can get guaranteed stop on SRX provided that your stop has a minimum distance of... wait for it... 75% away. So there's no such thing as a free lunch unfortunately.



McLovin said:


> You got that bottle of port out again, craft. I'm not sure if that's a good or bad sign!




I think he drank it already...


----------



## craft (21 April 2017)

skc said:


> A long feels like a free shot on the Sarah outcome, with the downside risk protected by the existing business and the other trials next month....
> 
> I had a look with IG Markets as they offer "controlled risk" positions with OTC CFDs. Apparently you can get guaranteed stop on SRX provided that your stop has a minimum distance of... wait for it... 75% away. So there's no such thing as a free lunch unfortunately.




Trading halt in so everything is now locked and loaded.

I don’t take my own advice as I continue to be exposed at my portfolio exposure limit but I suspect there might be a good risk mitigated opportunity around for a while following the Sarah results. I suspect once again the data is going to be more nuanced than the markets preferred black and white – so likely some over/under reaction to play against if you know what you are looking for.  

So much of the gyrations that have felt huge at the time has just been noise from a long term perspective.


----------



## craft (21 April 2017)

McLovin said:


> You got that bottle of port out again, craft. I'm not sure if that's a good or bad sign!




Factoring my will power into the equation – didn’t take much mental arithmetic for me to conclude that a good bottle of port is equally good to console as it is to celebrate.

But hey no problem - they're still Making it.


----------



## skyQuake (21 April 2017)

Had a look at SRXKOD and others, but stock went into trading halt before I could call the MM's for a quote


----------



## skc (21 April 2017)

skyQuake said:


> Had a look at SRXKOD and others, but stock went into trading halt before I could call the MM's for a quote




They really should have halted this morning, or not halt at all. It's scheduled news so no one should be caught by surprise when the news get released. A randomly timed halt at 1:30pm the trading day before seems, well, random. I have avoided trading them for the past week as a randomly-timed halt also happened last time. 

Although I have a long bias mentally I am not holding anything into the news. I think (hope) the market will probably over-react to negative news or under-react to the positive news.. either scenario will offer better R:R from a trading perspective.



craft said:


> So much of the gyrations that have felt huge at the time has just been noise from a long term perspective.




There is this presentation out there somewhere about 100-baggers - by Chris Mayer at some small cap conference (can't find the link just now). He talked about some of the common traits of these stocks... one is about long holding time (median time for a stock to achieve 100x was something like ~16 years), the other is about volatility.

Netflix, which is a multi-100-bagger, lost >20% of its value in a single session 4 times during it's ascend. The ability to hold thru huge short term volatility is difficult to say the least.

Incidentally, SRX almost joined the 100x club back in 2015, but it did join the 90x club from the low.


----------



## craft (21 April 2017)

skc said:


> They really should have halted this morning, or not halt at all. It's scheduled news so no one should be caught by surprise when the news get released. A randomly timed halt at 1:30pm the trading day before seems, well, random. I have avoided trading them for the past week as a randomly-timed halt also happened last time.



I suspect the timing is related to the company receiving the embargoed information prior to its release tomorrow. I suspect given the recent history they asked for the trading halt prior to even opening the file.


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## craft (24 April 2017)

Headline looks terrible with primary endpoint of Overall Survival not achieving its objective of 4 months but coming in nearly two months worse.


Market commentator's response in the AFR.


http://www.afr.com/brand/rear-windo...medical-chairman-richard-hill-20170423-gvqsmt

The more nuanced interpretation is that overall survival on a “protocol basis” (those that received treatment) is equal with lower side effects and higher quality of living from SIRT.

I suspect when you are at the stage where you have 10 months on average left to live, quality of life is everything.


A Key opinion leader Oncologist’s more considered response:

“In patients with liver-limited inoperable HCC, the question now is, why not start treatment with SIR-Spheres / this technology, and reserve sorafenib for progressive disease – until we know from SORAMIC if a direct combination is even more favourable?”


In my view the safety outcome here supports not only using SIRT before sorafenib for salvage but much earlier for the small chance of downsizing and resection.  Why not use it at its most effective point?  How effective can a liver specific directed intervention administered through the blood supply be after you have had Chemo applied directly to the liver (TACE) intended to impede the blood flow.  Yet it still matched OS on a per protocol basis.



Initial Market reaction seems a little less knee jerk this time.


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## skc (24 April 2017)

craft said:


> Initial Market reaction seems a little less knee jerk this time.




They definitely learned the lesson from the last time with much more effort put into educating the market about various possible outcomes... one was "No worse" which seems to be the case here. There's opinion leaders' quotes, more detailed discussions around secondary endpoints etc.

SRX is trading down ~11.5% but it's really just in line with the YTD trading band. There was a bit of run up prior to today, so adjusting for that the share price response is weaker but not sensationally so.

Not quite the "free shot at Sarah" scenario though.


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## McLovin (24 April 2017)

craft said:


> In my view the safety outcome here supports not only using SIRT before sorafenib for salvage but much earlier for the small chance of downsizing and resection.  Why not use it at its most effective point?  How effective can a liver specific directed intervention administered through the blood supply be after you have had Chemo applied directly to the liver (TACE) intended to impede the blood flow.  Yet it still matched OS on a per protocol basis.




It's around half as effective, iirc. If it was me I'd want SirSpheres as soon as possible. The fact that a quarter of patients randomised to SIRT did not receive SIRT makes the headline figure not particularly useful.

I think this is a pretty strong result, but as usual the strength is hidden in the detail not the top line number. It's a lot better than when I read the presser on Saturday afternoon. It's not a hit it out of the ballpark stuff, but if the two treatment options have similar OS and one absolutely blitzes the other in terms of QoL, tolerance and ORR then it has to be considered a better product. That's before the cost stuff (not just the difference in the drug price but also the number of adverse events that require hospitalisation or at least a trip to a doctor), but presumably Bayer will lower the price of Nexavar if SIRT starts to eat into its market share.

Or as someone more qualified put it...

“In terms of what matters for patients, the findings from this first large head-to-head comparison of liver-directed Selective Internal Radiation Therapy (SIRT) and systemic chemotherapy with sorafenib also show clearly that liver-directed procedures with SIRSpheres result in a significantly better tolerance of treatment and quality of life.* I believe this consideration should be a critical factor in selecting first-line treatment for this patient population in the future*.”

Anyone know what the status is of the Tryphon (TACE v SIRT) study?


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## skc (24 April 2017)

McLovin said:


> I think this is a pretty strong result, but as usual the strength is hidden in the detail not the top line number. It's a lot better than when I read the presser on Saturday afternoon. It's not a hit it out of the ballpark stuff, but if the two treatment options have similar OS and one absolutely blitzes the other in terms of QoL, tolerance and ORR then it has to be considered a better product. That's before the cost stuff (not just the difference in the drug price but also the number of adverse events that require hospitalisation or at least a trip to a doctor), but presumably Bayer will lower the price of Nexavar if SIRT starts to eat into its market share.




This from Wiki. Not sure how current it is though.



> In January 2014, Bayer's CEO stated that Nexavar was developed for "western patients who [could] afford it". At the prevailing prices, a kidney cancer patient would pay $96,000 (£58,000) for a year's course of the Bayer-made drug. However, the cost of the Indian version of the generic drug would be around $2,800 (£1,700).[35]


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## McLovin (24 April 2017)

skc said:


> This from Wiki. Not sure how current it is though.




My understanding is that you cannot sustain 12 months on sor, or even 9.9. The toxicity will kill you before the cancer does. So you'd need to factor in actual time on drug.



> *RESULTS:*
> With a median of 78.5 days of treatment, 15% discontinued sorafenib due to adverse events. The duration was significantly longer in patients with Child-Pugh class A liver function (233 ± 240 days) than in those with Child-Pugh class B (100 ± 136 days; p = 0.006). The overall progression rate was 53% (43/80), with a median time to progression of 105 days (95% confidence interval, 59-150 days). After progression, 14 patients received conservative care only (group 1), 14 continued sorafenib monotherapy (group 2), 6 changed to treatment without sorafenib (group 3) and 9 underwent additional treatment with concomitant sorafenib (group 4). Survival after progression was significantly better in groups 2, 3 and 4 than in group 1 (p = 0.001).




https://www.ncbi.nlm.nih.gov/pubmed/22563643


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## VSntchr (28 June 2017)

Another update today.
SRX cutting the fat out of the employee cost base and zoning their focus on SIRT.
$90m impairment post trial failures. 

Dose sale growth of 5.5%, lower end of guidance. Underyling EBITDA also within recent guidance (65-74m) at $72m. 
Market likes it with price ripping 13.6% at time of posting.


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## skc (28 June 2017)

VSntchr said:


> Another update today.
> SRX cutting the fat out of the employee cost base and zoning their focus on SIRT.
> $90m impairment post trial failures.
> 
> ...




I thought I'd trade a bit stronger but not 16%. To me it's a mixed update at best...
Good bits - dose sale not getting worse, EBITDA reaffirmed and at the higher end, lower cost going forward.
Bad bits - dose sale didn't recover and only hit the low end of a large range (5-11% guidance), no real clear growth path forward.

I had a trading position which I happily took profits on the spike... but it kept running a mile after I sold. D'oh.


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## mcgrath111 (28 June 2017)

skc said:


> I thought I'd trade a bit stronger but not 16%. To me it's a mixed update at best...
> Good bits - dose sale not getting worse, EBITDA reaffirmed and at the higher end, lower cost going forward.
> Bad bits - dose sale didn't recover and only hit the low end of a large range (5-11% guidance), no real clear growth path forward.
> 
> I had a trading position which I happily took profits on the spike... but it kept running a mile after I sold. D'oh.



Yeah agreed.
I thought maybe a 4-6% range but it went like a rocket and closed up 16%.
I think 'market darlings' such as srx (although not in recent times) seem to bounce back even off standard reports.

I got in at $11 and hopimg foe $18, hopefully some tech analysis will provide me insight as to the likelihood within the coming months?


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## luutzu (30 January 2018)

Trading Halt pending a significant corporate transaction.

Takeover target or targeting someone else?

The Intelligent Investor blog made some good point about the new CEO dressing up SRX for a sale. What with gutting R&D and some 15% of the workforce; focus the company to its existing line of business. 

Would be a shame to be taken over. Its numbers and potentials are very impressive.


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## SuperGlue (30 January 2018)

Spot on.

To be acquired by Varian Medical Systems for $28.00

https://www.asx.com.au/asxpdf/20180130/pdf/43r5095mw67lms.pdf


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## Faramir (30 January 2018)

Craft, I wish you were around to give your opinion. I held onto thru highs and lows. It will all end around May this year. My average is around $16.64 I think. I didn't buy that many stocks. At least I am in profit. Sorry that I can't provide any productive conversations about SRX. I was considering selling but instead I did nothing. I was wondering how the new CEO would compared to the old CEO. I wonder if $28 is a good deal??? Does anyone have an opinion?


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## McLovin (31 January 2018)

That's one of the bumpier rides I've been on. Price looks very good for where the biz is post (failed) trials, Faramir.


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## luutzu (31 January 2018)

Faramir said:


> Craft, I wish you were around to give your opinion. I held onto thru highs and lows. It will all end around May this year. My average is around $16.64 I think. I didn't buy that many stocks. At least I am in profit. Sorry that I can't provide any productive conversations about SRX. I was considering selling but instead I did nothing. I was wondering how the new CEO would compared to the old CEO. I wonder if $28 is a good deal??? Does anyone have an opinion?




$28 I think is a pretty decent price. You could probably, maybe, make a case that IF its expansion into Asia/China goes well, it could be worth $30 to $40 in 5 to 10 years - assuming no new discovery and moderate growth from the latest trials into potential use in right-sided colon or whatever it was. 

But as things are with SRX, $28 is a fair bit higher than I would like to pay for it so it's nice to get lucky some time. 

Don't know much about the two CEOs. Though Wong might have been a more visionary of the two CEOs. His funding of R&Ds suggests he want to grow SRX into a large independent pharma while the current one, and this is definitely hindsight and that II article speaking, seem to be dressing SRX up for a sale into the current global M&A binge big pharma is on.

So I guess who's better depends on what you prefer as shareholders. Lots of money now or potential lots of money later and being your own man.


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## galumay (31 January 2018)

Faramir said:


> Does anyone have an opinion?




Take the money and run!! Thats a wonderful price, one I doubt investors would ever have seen otherwise.


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## Knobby22 (31 January 2018)

I bought in again at the profit upgrade announcement in mid January. Lucky.
They will make more money as part of big Pharma. it's an important lesson that relates to Mesoblast and StarPharma also. Once the technology is mature, the company will be taken over and looking at what they can make as a small company should be doubled once they become part of a powerful big pharma company.


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## Faramir (1 February 2018)

This might sound dumb - I am at a lost of what to do next??? A bit over 66.6% profit. If they paid me today, it would just sit in my account as I do not know what to do next. I think I might at least wait for the dividend. It should be due out soon. Gee, I need to find time to study SRX more even though it will be unlisted later this year. Very limited chance of a second suitor making a higher - actually: no chance. I could sell now, pay brokerage and get less than (even though close to) $28. Or wait, get the dividend and pay no brokerage. I don't think there will much action for the next few months. I can't see the take over being voted down.

When the price started to rise prior to any news coming, I felt something nice was going to happen. I felt relief.

Once I suffered from FOMO. Now it's FODSD - Fear Of Doing Something Dumb. I just do nothing. By luck and not by judgement, decision making, etc that SRX worked out for me. No wonder I forgot to top up on SPL or CCP 4-5 months ago. Last time I experienced a take over was Veda (VED). I made a profit with that but I purchased a very small position because I was nervous about my decision to buy. That was 3 1/2 years ago.

(PS: No need for advice. It is something I need to work out myself. I know the answer/s seem obvious to all of you.)


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## galumay (2 February 2018)

Faramir said:


> I know the answer/s seem obvious to all of you.




@Faramir, dont sell yourself short - or over estimate the rest of us! We all struggle with decisions like this, its the nature of investing and all you can do is try to improve your mental models and get better at ddecision making. Its a constant journey and anyone that thinks they know enough to stop learning will get an unpleasant surprise!


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## luutzu (4 February 2018)

Faramir said:


> This might sound dumb - I am at a lost of what to do next??? A bit over 66.6% profit. If they paid me today, it would just sit in my account as I do not know what to do next. I think I might at least wait for the dividend. It should be due out soon. Gee, I need to find time to study SRX more even though it will be unlisted later this year. Very limited chance of a second suitor making a higher - actually: no chance. I could sell now, pay brokerage and get less than (even though close to) $28. Or wait, get the dividend and pay no brokerage. I don't think there will much action for the next few months. I can't see the take over being voted down.
> 
> When the price started to rise prior to any news coming, I felt something nice was going to happen. I felt relief.
> 
> ...




I remember looking up their dividend before. They only pay it once a year, around Sept? So unlikely we'll get any before/if the takeover goes through. Haven't read the proposal but scanned through the summary and didn't mention any dividend, special and such, there either. 

Unless I miss something that is.  Is there a coming dividend?

-----------------

As to making decisions and not sure if it was luck or your own work... It's often both I reckon. 

We can always work harder to increase the results from hardwork rather than relying on luck more than not... but Fortune always play a role.

But to not sell myself too short, SRX was one of those companies we should know is a quality business. Have an idea as to its value... and the luck bit is whether or not we're lucky enough to have studied it, had it on our radar when the price dropped to the $10s to $16s, preferably around the $12s if luck... and have the cash on hand to load it up. 


Some charts showing metrics that you'll find in all quality businesses. 







Note the rising Green, the stable Black, the increasing Purple... the higher operating cash than reported profit with rising trend.

That's quality.






Out of this world Cash Conversion. 
Inventory flying off the shelves; Credit policy are tight and get tighter with the years. Payables are laxed... i.e. suppliers are either happy with SRX's business or aren't paying attention, or both.







All Cash flowing the right way.

All quality businesses show this... at least more often than not. Some might have one or two year that's a bit off, but often it's just like above.






The old ROE measure. 


So why we can't predict corporate actions, the result of lawsuits or medical trials... Businesses of this quality, with zero debt, selling at very reasonable prices... back the truck up and chances are it should end up alright.


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## Faramir (4 May 2018)

Trading Halt

Counter Offer!
https://www.asx.com.au/asxpdf/20180504/pdf/43tsrfb0d53jxs.pdf

$33.60 is a better than $28. Will Varian counter this new offer?

This morning I felt remorseful for not selling for during the past 2 months. Then a Trading Halt. Now FODSD has helped me again.

Please start trading again. I guess I have to wait until Tuesday

@craft where are you??? Do you have any opinions?


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## luutzu (4 May 2018)

*-------------*
*Australia's Sirtex gets $1.4 billion takeover offer from China's CDH Investments*

https://www.reuters.com/article/us-...fer-from-chinas-cdh-investments-idUSKBN1I50BR

(Reuters) - Australia’s Sirtex Medical (SRX.AX) said on Friday China’s CDH Investments has made an offer to buy all shares of the company for A$1.87 billion ($1.41 billion), or A$33.6 per share, in cash.

Sirtex said in statement that an acquisition by CDH would be conditional to the approval of Australia’s Foreign Investment Review Board. 

The Australian company, which had earlier received an offer from U.S. company Varian Medical Systems (VAR.N) for A$28.0 per share, said the directors continue to unanimously support and recommend the Varian offer. 

------------------

Can the board really recommend a lower priced offer? Seriously?

If Foreign Investment Review Board would accept an offer from a US company, a Chinese one would be different?


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## VSntchr (4 May 2018)

http://www.cdhfund.com/index.php/a/show/catid/162/id/1/index.html

They seem fairly legit from first look..


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## Knobby22 (5 May 2018)

Talk about last minute offer though. Not sure whether to sell or wait. Probably should wait as bidding war might occur.


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## luutzu (22 May 2018)

Hard for the board to reject this offer. 

With the Chinese telling our dear leaders to take their rosy, star spangled glasses off and smell the Yum Cha nearby, I'm guessing the FIRBs can't say yes to Varian but reject the Chinese on national interest grounds. 


https://www.reuters.com/article/us-...inese-bid-for-australias-sirtex-idUSKCN1IN0XS
*Varian says will not match Chinese bid for Australia's Sirtex*
*(Reuters) - Varian Medical Systems (VAR.N) said it would not increase its offer to buy Australian liver cancer treatment provider Sirtex Medical Ltd (SRX.AX) after Sirtex on Tuesday said Chinese private equity firm CDH Investments had submitted a formal bid.

CDH Investments this month made a last-minute offer of $1.4 billion, or A$33.60 per share, for Sirtex Medical, topping Varian Medical Systems’ proposal days before the U.S. firm was set to seal a takeover deal.


Varian continues to believe that its offer is superior to the CDH bid, the company said in a statement.

*


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## Knobby22 (23 May 2018)

luutzu said:


> Hard for the board to reject this offer.
> 
> With the Chinese telling our dear leaders to take their rosy, star spangled glasses off and smell the Yum Cha nearby, I'm guessing the FIRBs can't say yes to Varian but reject the Chinese on national interest grounds.
> 
> ...



Yes, we might not see the money till March next year, CDH bid is marginal for that reason, but hopefully we get a decent dividend (up to 30c allowed) to help with patience.


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## luutzu (23 May 2018)

Knobby22 said:


> Yes, we might not see the money till March next year, CDH bid is marginal for that reason, but hopefully we get a decent dividend (up to 30c allowed) to help with patience.




How come next year? The FIRB and other admin stuff? I didn't read their proposal properly, just know that it's higher


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## Knobby22 (23 May 2018)

luutzu said:


> How come next year? The FIRB and other admin stuff? I didn't read their proposal properly, just know that it's higher



According to Varian, the offer might take that long because of all the hurdles and paperwork.


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## luutzu (23 May 2018)

Knobby22 said:


> According to Varian, the offer might take that long because of all the hurdles and paperwork.




Is that what Varian in their letter of not competing with the Chinese?

I thought the Varian offer got approved by FIRB, finished their due diligence etc. in only a couple of months. It was due to be voted on and settled by mid June [some 3 months?] after initial bid. 

Not sure why the Chinese bid would take until next year.


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## Knobby22 (23 May 2018)

luutzu said:


> Is that what Varian in their letter of not competing with the Chinese?
> 
> I thought the Varian offer got approved by FIRB, finished their due diligence etc. in only a couple of months. It was due to be voted on and settled by mid June [some 3 months?] after initial bid.
> 
> Not sure why the Chinese bid would take until next year.



Yea, maybe scuttlebutt. Anyway we shall get the recommendation from the Sirtex Board soon. the low share price seems to suggest that investors are thinking that they might not pursue the new offer.


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## luutzu (24 May 2018)

Knobby22 said:


> Yea, maybe scuttlebutt. Anyway we shall get the recommendation from the Sirtex Board soon. the low share price seems to suggest that investors are thinking that they might not pursue the new offer.




Just re-read the offer from CDH again and it seem a lot superior to Varian. 

There's the higher price of $33.60 vs $28 [20% higher].

$200M to Sirtex's account when they enter into the agreement. If FIRB and its US version etc. were to reject the takeover, Sirtex get to keep the $200M [I think I read that right].

Keeping it meann giving CDH and its partner exclusive commercialisation rights in China. That's not a bad thing, possibly a very good deal in that foreign operators always need a Chinese partner when they want to enter China. 

Deustche bank just add another 1% to their 6.25% [?] holdings of Sirtex. 

But yea, too many trade wars and political pressure it's hard to predict these things. That and what the heck do I know


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## Knobby22 (24 May 2018)

luutzu said:


> That and what the heck do I know




Me too.


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## Faramir (12 June 2018)

Rightly or wrongly, on Fri 1 June 2018, I sold my tiny 244 shares for $29.59. I need money. I brought my first 112 shares Mar 2015 @ $17.75 and my second 132 shares @ $15.21 Jan 2017.

Besides needing money desparately for partner health reasons. This announcement got to me.

https://www.asx.com.au/asxpdf/20180522/pdf/43v6w9kwn7b064.pdf

Especially page 2, where they said they were distracted from selling more doses due to the takeover??? That's. It an excuse! Also Allan Gray stopped being a substantial holder. I know CDH offer $33.60. Yes I have been ripped off $942 - I should have waited until I don't know when?? How many months???

After selling, I felt so (I can't explain it???) Maybe relief that I didn't make a loss?? Maybe ripped off for being a bit impatient??? I felt that this sale was a fluke. Whether I'm right or wrong, I will pay a doctor bill or two and then find another company????

@craft - are you still in SRX??


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## luutzu (13 June 2018)

Faramir said:


> Rightly or wrongly, on Fri 1 June 2018, I sold my tiny 244 shares for $29.59. I need money. I brought my first 112 shares Mar 2015 @ $17.75 and my second 132 shares @ $15.21 Jan 2017.
> 
> Besides needing money desparately for partner health reasons. This announcement got to me.
> 
> ...




Money in your pocket, and at a profit, is never a wrong call I reckon 
Can't make all the money in the world... and getting out now for emergency/needing the cash and going above a more certain offer price... that's quite sensible regardless what happen.

Allan Gray reducing his holdings could just be being responsible. Taking a substantial profit with some [?] still on the table for more, or not exposed enough if it were to go south... quite clever without really implying that the business or the takeover is shaky.


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## Knobby22 (13 June 2018)

Yes, and it will be a long wait I think.


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## luutzu (14 June 2018)

Woohooo. 

$33.60 offer got accepted/recommended. 

The Board's rationale that those condition precedents - FIRB etc. - should be approved sounds reasonable enough to me.

But even if it falls through, SRX would still get to keep $200M+GST, and a partner to conquer the Chinese market with. 

Sounds like a win-win for SRX shareholders.


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## Faramir (14 June 2018)

Damm, I made the wrong call to sell too soon. Anyway, I needed money last week.


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## luutzu (14 June 2018)

Faramir said:


> Damm, I made the wrong call to sell too soon. Anyway, I needed money last week.




That's just hindsight talking. And it's not over yet so might still be right. 

But I think it was a very reasonable call, for what it's worth.

To make you feel better, I sold out my RIO holdings back last year intending to load up a bit more of SRX around that $10 to $11 market.

Sold RIO at about $60... SRX moved up ten or forty cents during settlement. I got greedy and thought I should waited for it to drop. 

Didn't drop. I sat there with cash and watch as RIO goes to $80s. 

Dam it! 

Hope your partner is doing alright man.


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## Knobby22 (15 June 2018)

Good news indeed.
We are going to get a 30c dividend and should see the money by September, I really thought November would be the earliest we could hope for.


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## luutzu (16 June 2018)

Knobby22 said:


> Good news indeed.
> We are going to get a 30c dividend and should see the money by September, I really thought November would be the earliest we could hope for.




Was thinking... with all the trade wars going on, particularly between US/China. Wouldn't the US just block the takeover just to spite the Chinese? 

I mean, event he Canadian are considered "national security threat" with their imports, forget about China getting their hands on nuclear anything right?

And if that were to happen... I suppose SRX will have to live with that additional $200M+GST and a partner into China.


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## Knobby22 (16 June 2018)

luutzu said:


> Was thinking... with all the trade wars going on, particularly between US/China. Wouldn't the US just block the takeover just to spite the Chinese?
> 
> I mean, event he Canadian are considered "national security threat" with their imports, forget about China getting their hands on nuclear anything right?
> 
> And if that were to happen... I suppose SRX will have to live with that additional $200M+GST and a partner into China.



Such a small company and it has an Australian base, surely not?


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## luutzu (16 June 2018)

Knobby22 said:


> Such a small company and it has an Australian base, surely not?




Yea, true. Too small to bothered with. 

Guess I was thinking on human scale where a few million is a lot of money.


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## Knobby22 (25 September 2018)

I still haven't received the money. When are we supposed to get it?


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## luutzu (25 September 2018)

Knobby22 said:


> I still haven't received the money. When are we supposed to get it?




last thursday?


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## Knobby22 (25 September 2018)

Not me. Hmmm.


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## Knobby22 (25 September 2018)

Knobby22 said:


> Not me. Hmmm.



It went into my old Comsec account. [emoji1]


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## McLovin (26 September 2018)

McLovin said:


> My issue isn't with Wong selling shares – or the reasons for it – it's what the internal outlook for dose sales was at the time of the sale, beyond the vague forecast of "double digit growth continuing". Six weeks later, after he had offloaded his shares, they were able to firm up that forecast not just for the half year, but also the full year. Maybe I'm jumping at shadows, and as I said SRX has a pretty good corp governance record, but it's not a good look at all.




Turns out I wasn't jumping at shadows...



> The corporate regulator has charged the former chief executive of Sirtex Medical Gilman Wong with one count of insider trading.
> 
> The Australian Securities and Investments Commission (ASIC) last year was investigating events at Sirtex that took place during the second half of the 2016 calendar year, including the sale of a parcel of 74,698 shares on October 26, 2016 by Mr Wong.
> 
> ...




https://www.afr.com/business/health...-charged-with-insider-trading-20180926-h15vt8


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## System (26 September 2018)

On September 24th, 2018, Sirtex Medical Limited (SRX) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between SRX and its shareholders in connection with the acquisition of all the issued capital in SRX by Grand Pharma Sphere (Australia Bidco) Pty Ltd, an entity owned by CDH Genetech Limited and China Grand Pharmaceutical and Healthcare Holdings Limited.


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## greggles (3 July 2019)

Interesting SRX postscript for those interested:

https://asic.gov.au/about-asic/news...cal-limited-pleads-guilty-to-insider-trading/


> Wednesday 3 July 2019
> 
> *19-168MR Former CEO and director of Sirtex Medical Limited pleads guilty to insider trading*
> 
> ...


----------

