Losers’ Corner #1:
Shares in Sirtex Medical took a real hammering yesterday, losing 28% of their value in the space of a couple of hours after the release of poor research results for a much hyped new treatment for liver and colorectal cancers.
As a result of the poor research outcome, reported earlier yesterday, Sirtex says it will now undertake a review of its existing business and operations, especially following continued sluggish sales overseas even as a key UK competitor has just disclosed continued robust sales of a cancer treatment similar to Sirtex’s.
“Sirtex intends to examine all aspects of our business following the data,” the interim chief executive, Mr Nigel Lane, said yesterday in a statement to the ASX.
The company’s shares lost 28.3% to end at $10.75, the lowest the shares have been since 2013.
In October 2015, the shares were trading at $40.32, so the loss of value has been dramatic. The company was valued at just over $A620 million at yesterday’s close, a quarter of what it was at its peak.
Trading in the shares had been suspended until early yesterday afternoon, to allow the company to finalise its response to the results of the clinical study of its therapy for colon and liver cancer called SIR-Spheres Y-90 resin microspheres.
Sirtex had hoped the new chemical would allow it to potentially replace chemotherapy as the primary treatment for colorectal cancer and also for liver cancer. But with the metatastic colorectal cancer cases, the research results showed its radiospheres produced no improvement in overall survival.
Sirtex also revealed that the head of its American operations, Kevin Richardson, “has ceased employment with the company, effective immediately”.
"We are conducting a very extensive review of our entire business," Mr Lane said, "and felt a change was needed in the US."
The company’s weak sales, particularly in the US has worried investors, particularly with UK drugs group BTG, doing well with its rival product to the Sirtex treatment. Earlier this week BTG revealed a 16% jump in sales of its product.
Losers Corner #2
Vita group shares took a breather yesterday a day after another hit after Telstra delivered more bad news.
A week after the mobile phone retailer issued a profit downgrade on the back of an unfavourable renegotiation of its lucrative relationship with Telstra, Vita group shares fell 30% on Wednesday.
Yesterday the shares were steady on 90 cents, despite the big sell off on the wider market for a second day.
On Wednesday Telstra said it would reduce remuneration to Vita by around 10%, and by a further 10% at the start of each of the 2019 and 2020 financial years.
Vita fell 2.8% to 88 cents yesterday, but they ended the day steady on 90 cents – with a market value of just $136 million. In September last year they peaked at $5.35.
