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SRX - Sirtex Medical

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The stuff seems to work but complicated to get it organised, minimal side effects in comparison to other therapies as long as it stays in the liver, i.e. they did the angio correctly. My no.2 pick in the biotech area, feel silly for selling this one off to hold onto my no. 1 pick though.

Game changer is the studies and uptake will become more widespread if they can reduce the complexity for administration.
 
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I last posted in 2008 - when very few were even looking at this stock.

Still holding and managed to pick up another batch during the GFC at $1.72. Keep buying the lows, as now the traders are getting involved there is a good two way market forming. SRX if now a 0.5B$ company, and is on target to be a 1B$ company in the next 18 months. This is cause a lot of funds to start investing, if only they could get the stock in the volumes they need.

The clinical trail is sounding as if it will yield the result expected - 1st line approval. If so, then the increase on dose sales will leave the current 47% US increase, dead in the water. I'm forecasting dose sales of 30,000 within 3 to 4 years. Extrapolate that out in your own spreadsheet, calc a share price based on a PE or 30, and then 15 just for fun. Work out the present net value, and see where the share price should be.

Do your own research. And if you cant then at least check out
http://www.4-traders.com/SIRTEX-MEDICAL-LIMITED-6492517/consensus/
A Thomson Reuter data consolidation site.

Disc - long term holder, buying the lows.
 
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Sirtex spheres used for primary treatment in Saudi - interesting
re
مدينة الملك عبدالله الطبية تجري أول جراحة لعلاج أورام الكبد بالكريات المشعة نوويا
الشرق - ‎2 hours ago‎



وبناء على توفر الإمكانيات البشرية والأجهزة الطبية الحديثة، قام فريق من وحدة الطب النووي برئاسة استشاري ورئيس قسم التصوير الطبي والطب النووي بالمدينة الطبية الدكتور خالد بن أحمد بن سلمان بحساب الجرعة اللازمة من كريات اليوتيروم-90 المشعة نوويا (SirTex) ...
 
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hunter hall and perpetual used december to sell off some holdings, Bruce Gray also sold off a not insignificant amount of holdings ... Are they doing so because they believe the company to be fully valued atm?
 
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I dont think ive seen a cash flow statement yet show a decrease in cash held due to the investment in short term deposits.:D I wonder if management have a plan to utilize the growing capital in the long run if they continue retaining cash profits, will it be used to fund internal growth or other. Are they going to need significant capital to fund increases in production ? There spending a decent whack of cash on marketing but thats fairly understandable at the point in product development there at. They seem to be converting about 20%+ of revenue to pre tax profit, im most interested if the margins are going to be scalable.
 
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I dont think ive seen a cash flow statement yet show a decrease in cash held due to the investment in short term deposits.:D I wonder if management have a plan to utilize the growing capital in the long run if they continue retaining cash profits, will it be used to fund internal growth or other. Are they going to need significant capital to fund increases in production ? There spending a decent whack of cash on marketing but thats fairly understandable at the point in product development there at. They seem to be converting about 20%+ of revenue to pre tax profit, im most interested if the margins are going to be scalable.

Biggest call on cash will be the ramping up of headcount to deal with the expected step wise increase in sales. Even this could be financed out of existing cash flow. There is a capital spend of about $6-8m for the new generators in the Us and Germany, buy even these could be from cash flow based on 40% sales growth.

Gillman and the board are very conservative with funding and will tend to retain a large buffer. However if they can't use this to generate a return on capital in excess of 20/25% then it should be paid as dividends.

If they do start to see the step wish growth that HH spoke about then they will have some huge exes in bringing on another 8 to 10 generator cores, and another huge increase in field support staff over the next 3/5 years. Lets hope this is the reason why they are conserving cash!

As I mentioned in a previous post, if they can get the trail result that gives them 'standard of care' status then 30 or 40,000 doses PA is more than doable, within 3/4 years. Unless Bayer et al take them out before then :)

On a 80% gross margin this would be one very profitable business.
 
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Biggest call on cash will be the ramping up of headcount to deal with the expected step wise increase in sales. Even this could be financed out of existing cash flow. There is a capital spend of about $6-8m for the new generators in the Us and Germany, buy even these could be from cash flow based on 40% sales growth.

Gillman and the board are very conservative with funding and will tend to retain a large buffer. However if they can't use this to generate a return on capital in excess of 20/25% then it should be paid as dividends.

If they do start to see the step wish growth that HH spoke about then they will have some huge exes in bringing on another 8 to 10 generator cores, and another huge increase in field support staff over the next 3/5 years. Lets hope this is the reason why they are conserving cash!

As I mentioned in a previous post, if they can get the trail result that gives them 'standard of care' status then 30 or 40,000 doses PA is more than doable, within 3/4 years. Unless Bayer et al take them out before then :)

On a 80% gross margin this would be one very profitable business.

80% gross ? You sure ?
 
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80% gross ? You sure ?

I guess it depends on how you define gross - example from Coca Cola, 2006

Consolidated Statements of Income
(In millions)
Net Operating Revenues $ 20,088
Gross Profit $ 15,924
Operating Income $ 6,318
Income Before Income Taxes $ 6,578
Net Income $ 5,080

SRX has a declared operating margin of 30%, close to Coke. What do you think the Gross margin is? My 80 % is a shot in the dark. With a sales value of about $15k US$, my call is that the core product, including production costs in a generator is not more than $3k. Would be interested to hear of any technical dudes that can put some numbers on production costs in a generator.

The capital costs of the generator at $4m (give or take) is less than $100 a dose based on a 5 year life. The costs of the Strontium is very cheap (Cost, pure: $100 per 100g on one web site). The beads are also very cheap. So where is the cost of this product? I think $3k is about right, but happy to be corrected for missing analysis.

Marketing, field support, training, transport, research and development, head office etc etc take the lions share IMO.

Long term holder.

Cheers
 
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I guess it depends on how you define gross - example from Coca Cola, 2006

Consolidated Statements of Income
(In millions)
Net Operating Revenues $ 20,088
Gross Profit $ 15,924
Operating Income $ 6,318
Income Before Income Taxes $ 6,578
Net Income $ 5,080

SRX has a declared operating margin of 30%, close to Coke. What do you think the Gross margin is? My 80 % is a shot in the dark. With a sales value of about $15k US$, my call is that the core product, including production costs in a generator is not more than $3k. Would be interested to hear of any technical dudes that can put some numbers on production costs in a generator.

The capital costs of the generator at $4m (give or take) is less than $100 a dose based on a 5 year life. The costs of the Strontium is very cheap (Cost, pure: $100 per 100g on one web site). The beads are also very cheap. So where is the cost of this product? I think $3k is about right, but happy to be corrected for missing analysis.

Marketing, field support, training, transport, research and development, head office etc etc take the lions share IMO.

Long term holder.

Cheers

Yes, once including admin/QA/regulatory and marketing expenses etc margin on sales appears to be just a tick under 30%

Appear to be selling a dose for a tick over $13k and then earning a tick over $3.5k of direct EBIT after all expenses

The million dollar question can it be maintained while they dramatically increase number of doses. Has the company or board made any specific targets for dose numbers as they progress up the treatment phase ladder?

You mention 30-40,000 is this coming from anywhere?

30,000 doses at 13k a pop would put revenue at $390million? There not cheap for me yet but even now there at a market cap of about 650-700million. Is this level of growth in revenue realistic?
 
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Yes, once including admin/QA/regulatory and marketing expenses etc margin on sales appears to be just a tick under 30%

Appear to be selling a dose for a tick over $13k and then earning a tick over $3.5k of direct EBIT after all expenses

The million dollar question can it be maintained while they dramatically increase number of doses. Has the company or board made any specific targets for dose numbers as they progress up the treatment phase ladder?

You mention 30-40,000 is this coming from anywhere?

30,000 doses at 13k a pop would put revenue at $390million? There not cheap for me yet but even now there at a market cap of about 650-700million. Is this level of growth in revenue realistic?

You mention 30-40,000 is this coming from anywhere? - wild guesstimate! However if the results of the big trial in the US (9/15 months from now) show the sorts of results comparable to recent small scale papers (adding 12 months to expected life over and above existing treatments) then Y-90 should be accepted as the new standard of care for liver mets. The market is about 0.5m new cases each year, so 30/40k doses is less than 10%, and then we have HCC on top of that. More difficult place to be but puts the market to well over 1m PA. A standard of care treatment would cause a large % increase in dose sales for a few years. Well over 40% compound - IMO.

If you then add in the additional work that is being done in R&D then that is a bonus.

Are there risks? God, yes. But that is why we dabble in the stock market.

DYOR
 
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Held SRX in my SMSF but took profits way to early about a year ago and have regretted it ever since, back in today at $10.21. While SRX is not cheap I really like the quality of the balance sheet and the growth.
 
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Held SRX in my SMSF but took profits way to early about a year ago and have regretted it ever since, back in today at $10.21. While SRX is not cheap I really like the quality of the balance sheet and the growth.

It's definitly exciting but I think there is a real risk with a company that is essentially a 'one trick pony' in the technology space. TBH im just not interested unless this dives down a bit more then what it has already. This is just so risky for me I need it to be a real bargain to feel comfortable with anything sizeable in it.
 
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It's definitly exciting but I think there is a real risk with a company that is essentially a 'one trick pony' in the technology space. TBH im just not interested unless this dives down a bit more then what it has already. This is just so risky for me I need it to be a real bargain to feel comfortable with anything sizeable in it.

An interesting discussion on this stock – All points of view are certainly defendable.

For me this stock has the widest range of possible outcomes of any stock I own – by far.

Giving those outcomes a probability weighting – I defiantly come down on the side of having exposure. But this is basically going to be an all or nothing outcome for me - the only way I can ensure I’m not shaken out until the big trial results come through. The potential loss is 100% the potential gain is probably the brightest of any self funding growth company on the ASX.

I have a maxed out exposure with an Av cost –sub $3.00 – So have not given any real thoughts as to whether building a position at $10 makes sense. As R&R points out price and position size are critical to this type of holding.
 
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Some companies are nice to have a stake in for more reasons than one.

Anecdotal evidence continues to increase anticipation of the trial results.

http://******************/post_threadview.asp?fid=1&tid=2025862&msgno=9445361#9445361

SRX may become unprecedented for an Aus Bio stock – It may also not live up to expectations or it might get bought out before realising its full potential – maybe somebody will discover an outright cure for cancer and SRX is dead in the water. Risk and reward both high here for share holders but a very exciting product for patients – capitalism doing good.
 
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Some companies are nice to have a stake in for more reasons than one.

Anecdotal evidence continues to increase anticipation of the trial results.

http://******************/post_threadview.asp?fid=1&tid=2025862&msgno=9445361#9445361

SRX may become unprecedented for an Aus Bio stock – It may also not live up to expectations or it might get bought out before realising its full potential – maybe somebody will discover an outright cure for cancer and SRX is dead in the water. Risk and reward both high here for share holders but a very exciting product for patients – capitalism doing good.

I have held back from pulling the gun on this. I have not been able to justify the risk of the unknown at the price points available.

I would like to though :)

I actually have very similar reservations even when it comes to a company like COH. Despite the immense success of COH I believe there is a level of risk in its product longevity that I cant justify unless at stupidly low prices (which it looks like it may be heading to)
 
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Well the bottom line was not that spectacular but the cash flow seems to be very nice as long as they earn a good return on the funds they are reinvesting into the business.
 
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Fourth time lucky...

SRXs.gif
 
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