SRX - Sirtex Medical

[Knobby22]

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?

 

[Faramir]

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.)

 

[VSntchr]

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.

 

[skc]

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.

 

[McLovin]

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.

 

[notting]

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

 

[Knobby22]

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.

 

[craft]

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

 

[Faramir]

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.

 

[craft]

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.

 

[craft]

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]

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]

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]

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]

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]

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]

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)

 

[McLovin]

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.

 

[McLovin]

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.

 

[skc]

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".