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Australia's Sirtex profit cheers investors after weak healthcare results, shares surge

Published 13/08/2015, 01:09 pm
© Reuters.  Australia's Sirtex profit cheers investors after weak healthcare results, shares surge
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* Annual profit of A$40.3 mln, in-line with consensus

* US sales of liver treatment up 21 pct

* Profit growth also helped by price rise, lower AUD

* Shares surge 14.5 pct; up 17 pct YTD

By Swati Pandey

SYDNEY, Aug 13 (Reuters) - Shares in Australia's Sirtex Medical Ltd SRX.AX rose to a five-month high on Thursday after the company outperformed its healthcare sector peers and posted a 69 percent jump in annual net profit.

The A$40.3 million ($29.78 million) profit for the year to June 30 was within forecasts, but analysts said it cheered investors after a week of lower-than-expected earnings and weaker outlooks by peers such as hearing implants maker Cochlear Ltd COH.AX , CSL Ltd CSL.AX condom and rubber glove maker Ansell ANN.AX .

"The result is robust but within our estimates. But in a week where the market's been disappointed with major healthcare players may be this is looking more positive than normal," said Morningstar analyst Chris Kallos.

The stock rose 14.5 percent - its biggest gain since May 2015 - to A$34.4, outperforming the healthcare sector index .AXHJ which was largely unchanged. Sirtex trades at 48 times to earnings, compared with a sector average of 20 times.

The company attributed its profit growth partly to strong demand for its liver cancer treatment, and said it expected sales to continue to grow as it was researching the possible use of the drug for other cancers, including those of the bowel and kidneys.

Analysts, however, said Sirtex's future sales growth hinged on its ability to convince oncologists to use its drugs in the beginning of treatment, and not as salvage therapy. ($1 = 1.3532 Australian dollars) (Editing by Miral Fahmy)

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