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Went to listen to the video conference for the Q1 2011 results.
New CEO seems to be quite positive. DES sales is US$17.6m vs Q4 of US$17.9m, but when adjusted for Euro weakness, it would have been US$18.8m.
CEO mentioned that J&J, Medtronics and Boston Scientific show a drop in sales - that means that mkt share has increased for the newcomer Abbot as well as Biosensors (especially thru Terumo, which saw an increase of 24 % from previous qtr, ie Q1 2011- US$3.6m licensing fees vs US$2.9m in Q4 2010.)
THat is, sales of DES was disappointing (in my view), BUT it is offset by increased sales by Terumo (above expectation), as well as increased sales by JWMS. (Q1 2011 - US$5.2m vs Q4 2010 - US$2.4m).
Without the one-time charge of US$6m, their net profit would have been US$9.9m, vs Q4 2010 US$9.1m
ALSO, in the video conference, for the first time, there were a few NEW analysts present, namely DBS Vickers, as well as Lim & Tan.
Looks like Biosensors is attracting interest, and it remains to be seen whether there will be NEW COVERAGE by these new amalysts.
For Info - Not a call to but/sell.
Kind of interesting headline.
Biosensors Q1 profit down 23%
But sales were up 39 per cent to US$33 million
By CHEW XIANG
BIOSENSORS International has reported net profit of US$3.24 million for the first quarter ended June 2010, down 23 per cent year on year.
In the US, Europe & Australia the head line would have read
Biosensors Q1 profit before extraordinary items more than double same period prior year's profit of $4.8. One off charge of $5.7M due to closing US operations reduces profit to .......
People who only focus on headlines sure can get the wrong idea.
BIOSENSORS International has reported net profit of US$3.24 million
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Sales rose 39 per cent to US$33 million from US$23.8 million a year ago.
Diluted earnings per share came to 0.29 of a US cent, down from 0.39 US cent for Q1 2009.
Profit before exceptionals totalled US$11.5 million, up from US$4.8 million last year
. But there is a one-off charge of US$5.97 million for restructuring its
The company, which sells healthcare products, said that it had US$58.1 million in cash and cash equivalents at the end of June, down marginally from last year due to acquisition of new assets.
Biosensors said that higher revenue was due to a 53 per cent jump in sales of drug-eluting stents and 14 per cent sales growth in other interventional cardiology products. The increase in drug-eluting stents sales represents increased sales of the BioMatrix system in existing markets and continued expansion through regulatory approvals in new geographic areas,
the company said.
Overall gross margins for product revenues came to 73 per cent, up from 69 per cent for the same period last year, but operating expenses increased by about US$3 million to US$17.5 million due to higher sales and marketing expenses.
On the charge taken due to closure of its
The company said that profit for the current financial year was expected to grow on an overall basis, with profit for the second half of the fiscal year expected to be much higher than in the first half.
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Biosensors International BIG SP
BUY NOMURA SINGAPORE LIMITED RESULTS FIRST LOOK Biosensors (BIG) posted a good set of results: 1Q11 net profit (excluding one-off) exceeded our quarterly forecast by 15%. Core DES (drug-eluting stent) revenue was mildly impacted by the weak Euro, but Nobori sales and JWMS outperformed our expectations. Perhaps a reflection of its confidence, management has maintained its revenue guidance of US$135-145mn set earlier this year despite the weak Euro (vs. our Euro-adjusted forecast of US$133mn). Reiterate BUY: our PT of S$1.20 suggests 46% potential upside. |
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Price target: SGD 1.2 Price (27 Jul 2010): SGD 0.82 Research analyst: Jit Soon Lim 65.6433.6969 jitsoon.lim@nomura.com Research analyst: Yuan Yiu Tsai 65-6433-6964 yuanyiu.tsai@nomura.com publish Date: 27 Jul 2010 1QFY11 results above expectations Earnings vs. our Forecast: Earnings Estimates: Dividend Estimates: Price Target: Long-term View: CONFIRMED Results mildly impacted by weak Euro. NO CHANGE NO CHANGE NO CHANGE ABOVE Likely Impact: 1Q DES revenue declined 2%q-q, largely due to the weak Euro during the quarter. Adjusting for FX fluctuations, DES revenue would have increased by 5%q-q, which reflects the growing market acceptance of BioMatrix in existing markets (no new approvals in the quarter). Gross margin for interventional cardiology (DES and other related products) remains robust at 77% despite the FX weakness.Good momentum in France, sales weighted towards 2H. Management highlighted that BioMatrix has achieved a 5% market share in France over 6 months, which we think is commendable given that it is distributed through Biosensors' own sales force. We believe the growth momentum in France will continue, supporting management's guidance that sales growth will be weighted towards 2HFY11.Positive surprise from Nobori. BIG's royalty revenue was up 153%y-y/24%q-q, underpinned by Nobori sales outside of Japan (ex-US), exceeding our forecast by 20%. Relative to BioMatrix, we understand that Nobori has been relatively slow in its initial ramp-up when it was approved in 2008. In our view, Nobori's strong results this quarter suggests that it is beginning to gain market traction, which bodes well for its impending approval in Japan.Strong performance by JWMS. 1Q JV contributions met 30% of our full year forecast; the outpeformance was driven by JWMS' strong revenue growth of 45%y-y, which reinforces our positive view on the Chinese stent market. Net margin has also recovered to 48% from 27% in the previous quarter. Management remains cautious on its guidance for the approval of BioMatrix in China.US restructuring: one-off charge of US$6mn. The group has closed its US operations (mainly R&D) and made a one-time provision of US$6mn, which mainly includes severance and personnel costs. Going forward, BIG will be consolidating its R&D efforts in Singapore, which involves the relocation of its key R&D personnel in California. The group expects to save US$4~6mn/year starting in FY12.Revenue guidance unchanged despite weak Euro. Management maintains its product revenue (ex-royalty) guidance of US$135-145mn in FY11 despite the weak Euro. We remain conservative and maintain our forecast of US$133mn, leaving room for potential upside. |
Results are out
Rather solid showing on the gross revenue side. Big uptick from 1st qtr last year but just a slight uptick from last qtr. Net income would have been up substantially without the $6M reserve for closing the US compared to same period last year and the last qtr of last year. US Closing should generate recurring savings $5M+ some of which will flow to the bottom line. It should also significantly reduce the annual income tax resrve as most of that is attributable to the US and enable BIG to substantially reduce its $25M+ tax reserve. This should positively impact the bottom line and retained earnings.
Nomura seems to have the best track on this company, wonder if others will finally re-evaluate and upgrade their estimates.
All in all a solid quarter that more than met management's guidance. Company is in a growth industry in the fastest growing geographic locations in the world.
Any thoughts on how this will be viewed by other investors???
Nomura Singapore reiterates ‘buy’ on BIOSENSORS and $1.20 target price
Analysts: Lim Jit Soon, CFA, and Tsai Yuan Yiu
Biosensors is the No. 5 player in the drug-eluting stent market.
Three pillars of growth
Pillar #1: core DES franchise, global #5 player
Since the launch of BioMatrix in April 2008, BIG has emerged as the number five player in the global drug-eluting stent (DES) market,which is traditionally dominated by the Big Four. With growing market acceptance, BioMatrix looks set to achieve further market share gains in the EU, Asia and LatAm. We estimate a 23% CAGR for DES revenue over FY10-13F.
‚ Pillar #2: well positioned JV in China
JWMS remains well positioned as the number two or three player in China’s profitable DES market. Strict SFDA regulatory standards should raise the entry barrier, and stent pricing pressure appears to have abated for now given repeated delays in the central tender.
ƒ Pillar #3: accelerating royalties from Terumo
Nomura Japan medtech analyst Mr Kohtani expects Nobori to receive approval in Japan by end-FY11F (March 2011) and achieve 20% market share in the world’s second-largest DES market worth US$600mn. With the increased cashflow visibility, we have raised our NPV estimate for Terumo royalties from US$85mn to US$132mn.
„ Adjusting for euro exposure; attractive valuation
We revise down our FY11F earnings forecast by 4% to reflect the weak euro, while FY12F earnings is buffered by a potential boost in Terumo royalties. Reiterate BUY— BIG is trading at 17.2x FY11Fearnings, on an EPS CAGR of 40% over FY10-13F. The group also appears to be well placed to grow, given its prudent net cash balance sheet.
We reiterate BUY on Biosensors (BIG), highlighting three key growth pillars:BioMatrix’s growing market acceptance, the valuable JV in China and growing royalty income from Terumo. We believe the market is not pricing in the full potential of Terumo’s royalty payments, which should see accelerating growth with the approval of Nobori in Japan, which we expect by end-FY11F (March 2011).
~ Catalysts
Continued momentum in the forthcoming results, potential value-unlocking of its 50% stake in a domestic DES supplier in China, JWMS, and Japan approval of Terumo’s Nobori, whose technology is licensed from BIG.
Anchor themes
The US$5bn DES industry is one of the most profitable segments in the medical technology space, with market-share changes driven by innovation. Start-ups like Biosensors with leading-edge technology are subject to takeovers by incumbents.
sheet.
Closing price on 16 Jul S$0.82
Price target S$1.20
(from S$1.17)
Upside/downside 47.2%
Difference from consensus 39.5%
FY12F net profit (US$mn) 62.0
Difference from consensus na
Source: Nomura
Nomura vs consensus
We believe consensus is irrelevant
given the lack of active analyst
coverage.
Biosensors CEO kickstarts acquisition path For future growth firm will look out for small companies with complementary technologies JUST weeks after taking up his new role as president and CEO of stent maker Biosensors International Group, Jeffrey Jump has already created a milestone for his company through an acquisition in California-headquartered CardioMind Inc.
Mr Jump: Biosensors acquired certain assets in California-headquartered CardioMind because of the unique features of its Sparrow stent system, which could potentially open the neurological market for the group The acquisition of certain assets in CardioMind, at a price of $1.1 million, marks the first investment in a technology developed externally, and could kick-start more similar acquisitions ahead.
As Mr Jump, 51, told BT recently, the strategies that Biosensors will adopt for growth in future will include hunting for small firms with complementary technologies that can become its 'arsenal'. 'Because we have the sales & marketing, regulatory, and relatively low cost manufacturing (capabilities), we can attract lots of new technologies from smaller companies which don't have the muscle to distribute their product or get it approved or even make it,' said Mr Jump, who was formerly the managing director of Biosensors' Europe operations. 'And while we develop core competencies in these areas, we're beginning to be known for that.
And companies are coming to us more and more every day.' In the case of CardioMind, Mr Jump said Biosensors was attracted by the unique features of its Sparrow stent system which could potentially open the neurological market for the group
. 'We can use it in the cardiology space for side branches of stents and for small vessels,' added Mr Jump.
'But we can also go into a new space completely - the peripheral space, which is in the feet, the legs, below the knee where the stents are the same size - they're very small. '
And even more exciting, into the neurological space, the brain.
Neurology is where cardiology is 15 years ago. People are just starting to experiment with stenting in the neurological space, and CardioMind already has some experience in that with some physicians in Japan.
So we are very excited about the possibility of exploring the neurological space, which could be as big a market as the interventional cardiology space.'
According to Mr Jump, CardioMind's Sparrow stent system, with a 70 per cent smaller diameter than approved stents in the market, is the world's smallest stent today.
The bare metal version has already obtained CE Mark approval. Biosensors is in the process of transferring the technology and related assets to Singapore,
so that it may manufacture Sparrow stents here and develop a version that integrates its proprietary biodegradable polymer and Biolimus A9 drug. The acquired technology will be complemented by Biosensors' internal R&D programmes, which are supported by a team of about 50, based largely in Singapore.
In the immediate pipeline is the polymer-free drug eluting stent BioFreedom, which could dramatically reduce the anti-platelet medications required in most stent implants. Apart from bringing more new products to the pipeline, Mr Jump said he will also continue to leverage on existing sales & marketing and distribution networks to grow the company's topline. In addition, he will continue to focus on watching expenses closely, despite the group having cut operating expenses 15 per cent from US$73.3 million in FY2009 to US$62.4 million in FY2010.
'We'll continue to spend money where we're generating revenue, and not spend money where we are not generating revenue,' he explained, while pointing out that the US is one of the locations where Biosensors has yet to generate revenue. This, he added, is a strategy that has panned out well, given that many biotech firms are running out of money because they underestimated the time and money needed to take a product to market in the US,
he said. 'Therefore we were able to acquire the (CardioMind) technology at an affordable price,' he said. 'We won't go to the US until we can properly fund it and feel comfortable doing so.'
Driven by rapid launch of its flagship BioMatrix drug eluting stent, which was approved in 20 markets in the last 24 months, Biosensors made a substantial turnaround for the year ended March this year.
Net profit came to US$32.1 million, from a loss of US$1.1 million in the year-ago period.
The group is awaiting regulatory approvals in Japan and China. However, shareholders looking forward to dividends may have to wait a while longer, as the company prefers to deliver share value through growing its topline and improving profitability. 'I want to build a well run company that delivers patient benefit,' said Mr Jump. 'If we do that, the value should be self evident.
We are a growth company and there are very few companies that are growing at our growth rates. 'Companies that are not growing at our growth rates are the ones that are more quickly, more easily led to offering dividends. Although you never say never. But this growth rate is exciting now and I think we would like to make the most of the opportunities in front of us.'
gbleng ( Date: 13-Jul-2010 10:54) Posted:
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Health Care & Pharmaceuticals | Singapore
Biosensors International BIG SP BUY NOMURA SINGAPORE LIMITED COMPANY QUICK COMMENT Our Japan medtech analyst, Motoya Kohtani, has raised his projections for Nobori in light of its favourable clinical data presented at EuroPCR. He believes Nobori will be approved for sale in Japan just before end-FY11 (Mar 2011) or early FY12. This is earlier than previous expectations, and he expects the first Japan-made DES to capture a 20% market share over the longer term. With the revenue-sharing agreement, Biosensors is well-positioned to benefit from Nobori's launch in Japan, in our view. Reiterate BUY - our earnings estimates are under review with an upward bias beyond FY11. |
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Price target: SGD 1.17 Price (02 Jul 2010): SGD 0.78 Research analyst: Jit Soon Lim 65.6433.6969 jitsoon.lim@nomura.com Research analyst: Yuan Yiu Tsai 65-6433-6964 yuanyiu.tsai@nomura.com ublish Date: 05 Jul 2010 P Benefiting from Nobori's impending launch in Japan We highlight key excerpts from Motoya Kohtani's Terumo flash note, Positive Findings in Nobori trial data (2 July 2010):Positive data on Nobori Japan and Nobori 2. We turn our attention to findings in the trial data for Nobori Japan (for approval in Japan) and Nobori 2 (post-market surveillance in Europe) drug-eluting stents (DES), which were announced by Terumo at the EuroPCR event on 25 May. Nobori Japan was evaluated in trials over a one-year period for non-inferiority in safety and efficacy compared to Nobori and Cypher, which is made by a rival company. Nobori Japan was proven to have similar target vessel failure (TVF), the primary end point, as Cypher. The retreatment rate due to vascular restenosis was 0.5% for Nobori Japan, a significant difference to the 3.9% for Cypher, and there were no cases of late stent thrombosis. We think these finds represent a major step toward the approval of Nobori in Japan. Post-market surveillance for Nobori 2 hinted at the competitiveness of Nobori, in that the rate of major adverse cardiac events (MACE) was 3.7%, a significantly lower level than that for other DES, including off-label treatments that included critical thrombosis, a condition that Nobori does not target.Nobori drug-eluting stents likely to take off from FY12 (March-end). (See note: http://www.nomura.com/research/getpub.aspx?pid=379426) We raise our long-term sales project for Nobori in light of the favourable findings in trials. We now assume that Nobori will be approved for sale just before end-FY11 (Mar 2011), or soon after the start of FY12, earlier than we previously thought. We expect domestic sales of Nobori to amount to Yen4bn in FY12, considering the product's superior performance and because it will be the first domestically produced DES. We look for a rapid proliferation to ensue, but its spread could be undermined by high prices set due to a high royalty ratio. We expect Nobori to capture a 20% share of the domestic market over the long term.Biosensors' licensing agreement with Terumo. Under a licensing agreement, Terumo has the right to produce and market Nobori, which shares similar technology with BIG's BioMatrix, in geographies outside of the US and exclusively in Japan for a timeline of 5 years from the product launch. Biosensors enjoys payments from Terumo amounting to an undisclosed percentage of Nobori revenue ("X") globally (ex-US and Japan) and a different percentage ("Y") in Japan. "X" has been revised downwards previously with an upfront payment of US$40mn in Q109 while "Y" has remained the same since the agreement signed in 2003. In this regard, we believe Biosensors is well-positioned to benefit from Nobori's potential launch in Japan, where Terumo is a dominant player.Reiterate BUY - earnings under review. We are currently reviewing our earnings estimates in light of this positive development and the negative impact from EUR.Valuation Methodology and Investment Risks: Note: Ratings and Price Targets are as of the date of the most recently published report (http://www.nomura.com/research) rather than the date of this email. We value Biosensors on a SOTP methodology- DCF for is base business, Terumo royalties and BioMatrix (9.7% WACC), 9.2x exit P/E to account for DES business valuation. We value its 50% stake in JWMS at 22x P/E. Key risks: i) High exposure to weak EUR; ii) Stent pricing pressure in China. |
Just discovered Terumo's website for the Nobori DEs. It is call www.noboristent.com
Inside, they have all the detail presentations on the Nobori DES during EuroPcr 2010 in May.
ALso, they have listed down some randomised clinical trials that they are currently in the midst of. THey are :
Sort Out V - started Sep 2009, Patients - 2,400 - Nobori vs Cypher
Compare II - Started Feb 2009, Patients - 2,700, Nobori vs Xience
Security - Started Jun 2009, Patients - 4,000, Nobori vs Resolute.
I must say that I am surprised at Terumo's aggressiveness in conducting these trials - much more than what Biosensors is doing at the moment. At the moment, Biosensors only big trial is the 'Leaders Trial' at 1700 patients.
However, both Biosensors and Terumo currently have ongoing e-registries involving at least 1000-5000 patients.
The trials will probably cost Terumo a lot of money, and shows their seriousness in promoting Nobori - Augurs well for Biosensors.
Personal Observation - Not a call to buy/sell.
Laulan ( Date: 01-Jul-2010 11:56) Posted:
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