Sirtex Medical - If you can keep your head, when all about you are losing theirs...

Stuart Roberts

Days like today make me wish I was back in stockbroking because Sirtex's 'Trading Update' has created the kind of contrarian play I love. Thanks to slower SIR-Spheres sales, Sirtex's constant currency EBITDA in 1H17 will fall 9-16%. As I write Sirtex stock is down 41%, making people think the world's just ended for this company. I argue, by contrast, that nothing serious has gone wrong. Yes, you heard me right. Sirtex has cited increased competition for patients, a new drug approval for salvage metastatic colorectal cancer, and tighter reimbursement. None of these should really worry Sirtex management because once SIR-Spheres are used for more than salvage therapy, Sirtex's growth profile will be assured. We know from numerous small studies that the product works in liver cancer. That's started to be borne out in the larger studies Sirtex has designed to move SIR-Spheres from 'last line' to first line', which is where the big money is. We at NDF Research don't cover Sirtex (yet), but I suggest investors taking a medium-term view may find a lot to be encouraged about.


Stuart Roberts

By background I am an investment professional who did Australian equity research from the late 1990s until 2015. For a lot of that time I focused on healthcare and biotechnology, and the Life Sciences has become a passion of mine. My forte is...

Expertise

life sciences ASX:SRX NDF Research ndfresearch.com/blog

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