The share price of radiotherapy maker Sirtex Medical fell 7% following an announcement that sales growth in the second half of the financial year would be below expectations. Management said dose sales for the year to June would be 15–17% higher than 2015, compared to prior guidance for growth of around 20%.
The company said that strong growth of 18–20% in the Americas was offset by lacklustre performance in other major markets. The main culprits were: restricted marketing due to the late publication of clinical study results; less generous funding in several European markets; delayed insurance reimbursements; and supply constraints in Asia.
'It is important to recognise the impacts on the business outside of the Americas are timing related,' said chief executive Gilman Wong. 'The long term growth potential of our innovative SIR-Spheres Y-90 resin microspheres product remains strong, with approximately 2% of the addressable market penetrated to date.'
Sirtex’s share price has risen almost fivefold since we first upgraded it on 8 Nov 10 (Speculative Buy – $5.90). We won’t lose any sleep over this year's slightly lower sales growth, particularly as a large part of the slowdown seems to be due to temporary issues. We continue to recommend you HOLD.