SRX 0.00% $33.55 sirtex medical limited

sirtex is not a short term story

  1. 221 Posts.
    Given Sirtex has increased spending in the area of marketing & trials quite significantly plus the temporary margin decline due to FX (this one might not be temporary), new plant start up as well as provision of sir spheres for trials, it will take longer for the increase in revenue to come through in increase in net profit. So we probably will have to wait a little longer before we see a substantially higher share price. Based on the half year results, share price of $8 is UNLIKELY THIS YEAR as eps in FY08 is almost certain to be below 20 cents even if all the legal costs are recovered in the second half.

    However, this is insignificant to shareholders with a 5 years plus time frame. As long as there is no better treatment developed elsewhere, we will see a substantially higher share price in 2-3 years time.

    I suspect revenue will realy accelerate once the data of large scale trials become available (still 2-3 years away).
    Doctors are conservative by nature so it will take time & a lot of data to convince them sir-spheres is a better treatment (and then they have to be trained...). I think it is fair to say that Sir-spheres is still at an early stage of the product cycle so we still got a long way to go as far as revenue growth is concerned.

    I think this will be a long, but potentially hugely rewarding, journey.
 
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