Biosensors International Group: In transition

Shifting gears

with product sales rising 10% YoY to US$9.2m despite the difficult industry

conditions. But BIG expectedly reverted back to a net loss of US$11m for

the quarter. Gross margins dropped across all product segments due to

shifting of manufacturing to low cost base for critical care products and

shift of focus from present Axxion Drug Eluting Stents (DES) to Bare Metal

Stents (BMS).

A foot in China's door.

foot in the Chinese DES market. This accretive acquisition is synergistic

with BIG's plans for growth as it latches onto JWMS' state-of-the-art, yet

low cost manufacturing facilities. We expect BIG's access to JWMS'

extensive national sales network of 5,400 healthcare organisations and

2,700 hospitals along with JWMS' strong brand equity in China to introduce

unique Drug Eluting Stent (DES) products to the Chinese healthcare market

in the future. (Table 1 for JWMS projections)

Indonesia a good potentia

distributor will help it achieve its plan of capturing part of Indonesia's yearly

estimated 5k-7k interventional procedures. An MOU with state-owned PT

Kimia will help boost sales as BIG aims to have its coronary products

distributed to the >390 hospitals under its jurisdiction. However, we do not

expect Indonesia to contribute significantly in the near term.

When is CE coming?

data have been required by authorities and that it expects positive news

about CE mark going into CY08. It also indicated that its IDE application in

the US is in progress though US$100m (BIG may need to raise funds 2-3

years later) may be needed to get approval to sell in the US.

Its still up in the air.

are inappropriate until the CE mark is approved. Despite the patchy info,

we remodel our financials as we assume CE mark approval between Jan

and Mar 08, Terumo licensing revenue to start in CY09 and consolidation

of JWMS.

We still like them

BIG's first substantial year of profit (in FY10) back to present day.