Sirtex Medical shares have surged after the liver cancer treatment specialist flagged improved first-half earnings and a turnaround in second-half sales.
The company, which suffered a $26.3 million loss in 2016/17 after writedowns and failed clinical trials, now expects underlying first-half earnings of $34 million – a 16 per cent improvement on the previous first half.
Sales of the company’s SIR-Spheres microspheres – a product used to deliver medication to cancer sites inside the body – were flat in the first half but Sirtex CEO Andrew McLean, who took up his role in May, said the company expects higher sales in the second half of 2017/18.
“As a result of recent management initiatives, we anticipate higher sales in the second half, with ongoing targeted reductions in operating expenditure to drive business efficiencies and productivity gains, resulting in forecast full year EBITDA in the range of $75-85 million,” Mr McLean said in a statement.
Underlying earnings was $61.5 million in 2016/17.
Sirtex suffered slowing sales growth last year, including in its key US market, and the company took a $90.5 million writedown on research and development assets after a disappointing clinical trial result.
Wednesday’s announcement lifted Sirtex shares to their highest level since April, 2017, before the announcment of the trial outcome in May.
Sirtex shares closed $2.18, or 13.9 per cent, higher at $17.83 in a broadly lower Australian share market.