Wilsons - Pretty positive from one of the SRX Bears in the research world...
HOLD: Positive view on the SARAH trial results
We maintain our HOLD rating with a revised price target of $15.75 per
share. Results from Sirtex’s liver cancer trial (SARAH) suggest that SIRSpheres
offers similar survival benefits to the standard of care
chemotherapy, but with significantly better tumour control and safety. If
these data are accepted following peer review, we expect to see treatment
guideline recommendations strengthening for SIR-Spheres in HCC, at the
expense of Nexavar (sorafenib). SARAH also forms the basis for a broader
marketing clearance in the USA, with Sirtex planning FDA submissions in
the 2H. The breadth of those new claims will depend on how close the
data can get to claiming “non-inferiority” to chemotherapy in a formal
way. The stream of major clinical trial results expected between now and
June heighten the near-term risks. We acknowledge that the stock
appears cheap versus international medical device peers.
Key points
SARAH trial results suggests that SIR-Spheres offers similar survival
benefits to standard of care chemotherapy, but with better safety. We take
a positive view on the SARAH clinical trial results reported at the EASL/ILC
meeting in Amsterdam. The trial supplied the first “Level 1” evidence that SIRSpheres
controls hepatocellular carcinoma (HCC) tumours better than
chemotherapy. We expect this clinical finding to support treatment guideline
upgrades, enhanced reimbursement coverage and a modest sales boost. There
is still much work to be done before Sirtex can firm up a claim to “non-inferiority”
versus chemotherapy. That said, we are confident that these data and other
studies (SIRveNIB, VESPRO, SORAMIC) can secure some form of HCC
marketing approval in the USA, where currently Sirtex has none.
Forecasts. Modest upgrades to HCC dose sales, the highlight of which is a 6%
lift in FY19e EPS. The sales impact from SARAH will take time to develop as
medical oncologists and hepatologists subject the results to peer review.
Valuation. Price target revised up to at $15.75 per share, reflecting DCF
forecast changes. Importantly, at this stage our model still denies any explicit
volume upside that may result from positive Phase III clinical trial results in the
metastatic colorectal cancer (mCRC) setting. Sirtex stock is trading on a FY18e
EV/EBITDA multiple of 12.1x which represents a 16% discount to the
international peer group median (14.4x). HOLD maintained.
Risks and catalysts
Catalysts: a) dose sales; b) SARAH, FOXFIRE and FOXFIRE GLOBAL Phase
III clinical trial results; c) new reimbursement coverage decisions.
Risks: a) adverse clinical trial outcomes; b) reimbursement; c) safety and
quality risks.
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Last
12.0¢ |
Change
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Mkt cap ! $50.90M |
Open | High | Low | Value | Volume |
11.0¢ | 12.0¢ | 11.0¢ | $57.98K | 503.1K |
Buyers (Bids)
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6 | 6621826 | 11.0¢ |
Sellers (Offers)
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12.0¢ | 1246645 | 13 |
View Market Depth
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6 | 6621826 | 0.110 |
3 | 4033769 | 0.105 |
6 | 8220000 | 0.100 |
1 | 23000 | 0.098 |
2 | 219877 | 0.097 |
Price($) | Vol. | No. |
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0.120 | 1246645 | 13 |
0.125 | 323346 | 4 |
0.130 | 422423 | 3 |
0.135 | 80000 | 1 |
0.140 | 39091 | 2 |
Last trade - 16.10pm 29/03/2024 (20 minute delay) ? |
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11.0¢ | 11.5¢ | 11.0¢ | 170727 | ||
Last updated 13.50pm 29/03/2024 ? |
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