Sirtex Medical (SRX)
How long have you held the stock?
Since May 2015.
What do you like about it?
The company has a unique medical device to treat patients with liver cancer. SIR-spheres are micro resin spheres coated with yttrium-90 to deliver targeted radiation therapy. The spheres are sized to ldge in the vasculature supporting liver tumours and can deliver a more direct treatment with lower side effects.
The treatment is approved in the US as a combination therapy in inoperable secondary liver cancer and, more broadly, as a medical device across Australia, New Zealand, the EU and many countries in Asia.
How is it better than its competitors?
It is a more targeted approach than broad radiation and chemotherapy, which helps to reduce side effects and improve efficacy. It has the opportunity to be approved for first line treatment in primary liver cancer, which would significantly increase the size of the addressable market.
Even without this, it should be able to deliver strong earnings growth, as it continues to increase its penetration of the existing market.
What do you like about its management?
Sirtex has a solid management team that has been together now for almost 10 years.
The team has successfully restructured the business, repositioned the product and has grown revenue by more than 10 fold.
What is your target price on SRX?
$45.00, but that would move higher if the $A continues to fall.
At what point would you sell it?
Aside from the development of new cancer treatments, there are a number of clinical studies globally looking at the effectiveness of SIR-Spheres in treating liver cancer.
Should these trial results not support expansion of the product as a first line treatment we would reconsider our position.
How much has it added (subtracted) to your overall portfolio over the last 12 months?
It has added a modest amount to portfolio performance in excess of the market.
Is it a liquid stock?
Yes, it is in the top 100 largest stocks listed on the ASX and turnover recently has been in excess of $11 million per day.
Where do you see the value?
The use of SIR-Spheres for the salvage liver cancer market is still very under penetrated and more so outside of the US. In Asia for example, where there is a high level of primary liver cancer, SIR-Sphere’s penetration is less than 1%.
We should continue to see double-digit volume growth from the business in the foreseeable future, which could accelerate with the approval for use in more indications.
Sirtex Medical (SRX)
Source:Yahoo!7 Finance
*Sean Fenton is Portfolio manager with Tribeca Investment Partners. Tribeca funds are distributed by Grant Samuel Funds Management.
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