Biosensors International's regional peers suffer from industry woes

Terumo's licensing and royalties revenue became a drag.

According to OCBC Investment Research, Biosensors International Group’s (BIG) regional peers Lepu Medical and Microport Scientific Corp recently announced their FY12 results in end Mar. 

OCBC noted that for Lepu, its management attributed the slowdown in topline growth to a deceleration in growth in percutaneous coronary intervention (PCI) surgeries in China and more intense competition in the drug-eluting stent (DES) market.

For Microport, its DES sales rose 1.7% to CNY741.7m, driven by a 5.2% increase in volume but partially offset by an estimated 3.3% decline in ASPs.

Here's more:

Its management also highlighted higher competitive pressures as four new local players entered the Chinese DES market. Tenders by some provincial governments have also led to stent price cuts and we expect BIG to be adversely affected by this as well.

However, this would be partially mitigated by continued market share penetration in its key markets, such as the EMEA region, which is still growing at doubledigit pace. 

Licensing and royalties revenue from Terumo Corp’s (Terumo) Nobori™ DES sales in Japan used to be a key growth driver for BIG when it was launched in May 2011.

However, with the increased competitive pressures caused by new product launches, this component became a drag on BIG’s overall revenue growth in the last two quarters. Hence, BIG is stepping up its collaboration with Terumo to promote the Nobori™ DES system at specific specialist cardiology centres in Japan. 

However, we are cognisant of the negative impact which would result from a further depreciation of the Japanese Yen (JPY) due to stimulus measures by the Bank of Japan.