Sirtex Medical

Last week, liver cancer treatment company Sirtex reported third quarter dose sales rose 34%. That’s the largest ever increase in the number of quarterly doses sold. Importantly, dose sales in the US, which accounts for more than 60% of the company’s total, rose 47%. It’s clear that the SIR-Spheres technology is becoming increasingly accepted by the medical profession.

It bodes well for revenue growth in 2012 and beyond. A few years of this sort of growth and Sirtex’s profits will explode, even taking the expensive clinical trial program into account. At the very least it suggests the company shouldn’t have trouble financing its research activities.

It’s impressive news, but shareholders should remember that biotechs—even profitable ones—are more prone to upsets than other companies. Sirtex boasts that it has now had 31 consecutive quarters of sales growth, but that won’t always be the case.

The stock has jumped 17% since the first half results update (see 29 Feb 12 (Speculative Buy – $5.06)). It’s now close to the price at which we first recommended it in Sirtex enters remission on 8 Nov 10 (Speculative Buy – $5.90). The news confirms that the business momentum is strong and, for now, Sirtex remains a SPECULATIVE BUY.