Sirtex records massive result, but Gray warns of slowdown

Sirtex Medical has reported an increase in revenues of 1368 per cent, recording more than AUD$10 million in revenues for the 12 months ending June 30, and an after-tax profit of $3.15 million.

But the interruptions caused by the unsuccessful Cephalon takeover bid, in addition to delays in the European roll-out of the SIR-Spheres cancer therapy meant that the results were not as good as the company's management would have liked, chairman and CEO Dr Bruce Gray warned today.

"It slowed the accelerator a bit. There's no doubt we've lost a considerable amount of time," he said. "We were pleased with the US results but not overall."

Sirtex originally planned to roll out its European operations early this year, but management changes and delays due to the Cephalon bid have meant that establishment of a European marketing headquarters in Germany have been stalled up until now. A total of four British and one German hospital have started using SIR-Spheres.

"For the last six months we've had no one in Europe," Gray said. "But we expect to be up and running in Europe very soon."

The company plans to relocate some staff to Europe, in addition to recruiting new staff, primarily in sales and marketing.

In the meantime, Sirtex has continued to expand its operations in the US, with 20 hospitals offering the company's treatment at June 30, and the company plans to continue recruiting new hospitals at a rate of two per month for the foreseeable future. In addition, Sirtex plans to expand its marketing in the US to reach patient groups and the wider medical community.

The company also announced that it would commission two new manufacturing units, one at the Australian Nuclear Science and Technology Organisation (ANSTO) in NSW, and a second one at a yet-to-be determined site in the Northern Hemisphere, to ease logistical issues resulting from shipping the short half-life radioactive product to the USA and Europe. According to Gray, the two sites, which will each cost about AUD$1 million, will be fully operational in around a year.

Among the milestones projected for the 2003-2004 financial year, Sirtex plans to seek regulatory approval in Japan, South Korea and South America, and will subsequently set up sales and marketing operations in those regions.

The company also intends to continue clinical trials on new applications of its technology, including an increase of the labelling indications for use of the product in the US. The use of the technology in combination with chemotherapy and in hyperthermic applications will also be evaluated.

Gray said that both the trials and the new facilities would be funded out of the company's ongoing revenue stream and its cash reserves, which stood at $10.14 million at June 30.