You are using an older browser version. Please use a supported version for the best MSN experience.

Sirtex shares plummet on earnings warning

AAP logoAAP 8/12/2016 Trevor Chappell

More than $500 million has been wiped from market value of Sirtex Medical after device developer warned its earnings could fall due to weaker than expected sales growth.

Sirtex shares dropped $9.49, or 37 per cent, to a two-and-a-half year low of $16.00, reducing its market value to $923 million.

Sirtex's lead product, SIR-Spheres Y-90 resin microspheres, is a targeted radiation therapy for liver cancer, and the company on Friday said sales in the Americas, Europe, the Middle East and Africa had been soft in the first half of the financial year.

Chief executive Gilman Wong said market conditions had been volatile, with increased competition for patients, a rival drug approval and restrictions in reimbursements.

"We have implemented a range of strategic initiatives across the regions to address the disappointing first half, which we anticipate will result in an improved second half and full year dose sales performances, irrespective of the results from our three major clinical studies that are due to report findings in the first half of calendar year 2017," Mr Wong said in a statement.

"It is important to recognise that our SIR-Spheres Y-90 resin microspheres business represents a long term growth opportunity, with a large contestable market, and low penetration to date."

Sales had grown by between four and six per cent, slower than growth of 15.7 per cent in the prior corresponding period, Sirtex said.

Half year earnings are expected to be between $30 million and $32 million, on a constant currency basis, down by nine to 16 per cent from a year earlier.

For the full year, sales growth is anticipated to be between five and 11 per cent, compared to 16.4 per cent a year earlier.

Full year earnings on a constant currency basis are expected to be in the range of $65 million to $74 million, a decline of up to 12 per cent.

Mr Wong told the company's annual general meeting on October that Sirtex anticipated double-digit sales growth would continue in the current financial year.

image beaconimage beaconimage beacon