By Carmen Lee
Thu, 17 May 2007, 08:17:47 SGT

Market Pulse: Biosensors & FCT (17 May 2007)

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Biosensors International Group: More shine for Biosensors as CoStar fizzles out

Summary: Biosensors International Group?s (BIG) competitor, Conor Medsystems (acquired by JnJ), announced on 7 May 07 that its CoStar stent failed to meet its end goal in the COSTAR II clinical trial against Boston Scientific?s (BSX) Taxus stent. JnJ has stated that Conor will stop all clinical trials of the CoStar stent and will not submit the product for approval to the U.S. FDA. Conor will also stop sales of the stent in all countries where it is already approved. BIG now remains the sole up-and-coming player with a new integrated Drug Eluting Stent (DES) delivery platform coupled with a proprietary drug and biodegradable polymer. BIG also announced a US$15m payment from Guidant from legal proceedings that will likely be added to its FY08 bottomline. With the COSTAR II failure, JnJ has indicated that they may explore putting sirolimus drug on Conor?s stent system and this could result in licensing revenues flowing to BIG due to its issued US patent (6939376) that covers the use of all limus derivatives for use on biodegradable polymers in stents. We continue to like BIG for its strong competitive edge in its IP standing even prior to its CE mark approval. We have not factored in possible licensing revenue streams. Our fair value stays at S$1.05 based on a 25% discount of its first year of substantial net profit to present value. Maintain BUY. (Kelly Chia)