Following its latest earnings guidance released to the market this morning, the Sirtex Medical Limited (ASX: SRX) share price has risen 13% to $17.67. This is a new 52-week high, with shares up 13% over the past 12 months:
Sirtex management this morning stated that first half earnings before interest, tax, depreciation, amortisation (EBITDA) is expected to be around $34 million for the 6 months to 31 December 2017. However, full year EBITDA is expected to be around $75 million to $85 million, a strong improvement from underlying EBITDA of $61.5 million last year.
Higher earnings are due to lower costs, with Sirtex recently scrapping its research & development division to focus more directly on sales. Dose sales however were flat, and are expected to pick up somewhat in the second half. With no R&D expenditure, Sirtex faces a challenge in growing in the future, especially given the recent failure of several of its clinic trials.
