BIOSENSORS, ocbc maintain BUY with target price $1.02
-Positive LEADERS trial. Last week, Biosensor¡¯s LEADERS clinical trial
results at nine months succeeded in showing that it was non inferior
(of
equivalence) to the J&J Cypher sirolimus-eluting stent in terms of the
primary end point of cardiac death, myocardial infarction (MI), and
targetvessel revascularization (TVR). The lead investigator indicated
that
the results can be representative of ¡°real world¡± settings, as the
trial
recruited all-comers¡± (real world patients with minimal exclusions).
In an
unprecedented occurrence, the results were published online
simultaneously
in Lancet, a world renown high impact scientific journal.
-A SYNTAX error? The SYNTAX trial showed that stents were not
statically
equivalent to bypass surgery for complex left main and multi-vessel
disease
cases. But until recently, tackling left main disease was ¡°taboo¡± for
stenting, and the vast majority of multi-vessel disease cases were sent
directly to surgery. However, clinicians now see the results as a
further
option to the painful process of bypass surgery for serious cases like
left
main-stem and multi-vessel situations. It was stressed that stenting
was
hardly done for left main-stem and three-vessel disease before, and now
there is data that shows some safety profile for stenting vs bypass
surgery.
-Risks still remain. We are aware that Biosensors still face risks with
bigger companies like J&J, Medtronic, Abbott and Boston Scientific as
they
have 1) stronger balance sheets; 2) Capabilities to bundle and discount
products; 3) Capabilities to give big research grants for clinical
centres
and to clinicians and; 4) Able to embark and sustain a price war.
-Overall, future looks good. Analysing the various industry
interactions
and data, we are positive on the overall future for Biosensors. More
news
flow at TCT 2008 in Oct 08 will help provide greater visibility to
Biosensors end purchasers - the clinicians. As long as Biosensors¡¯
cost
cutting and sales/marketing execution continue to be on track, we are
confident that they will be able to meet guidance and become a rising
force
to be reckoned with in the DES industry. Biosensors reported a good set
of
1Q09 results with revenue growing 303% YoY to US$58m while net profit
rose
107% YoY to US$16.5m. Maintain BUY with fair value of S$1.02.