Price at 10 Jul 2013 (SGD) 1.06
Price target - 12mth (SGD) 1.15
52-week range (SGD) 1.40 - 1.02
Competitor’s DES approved in Japan
Royalty revenue is likely to decline further in 2013
We anticipate further market share decline in Japan for Nobori with competitors’ launch of new products, such as Xience Xpedition. We estimate royalty rate at 32-34% for Japan sales of Nobori, where Biosensors does not have a guarantee for minimal royalty payment. Since achieving 30% market share after product launch in May 2011, Nobori market share has declined to 16%-17% as of 1Q13 by our estimate. We model 10% sales decline in Japan for FY14.
What’s New? Xience Xpedition approved in Japan
Abbott (ABT) announced today that Xience Xpedition, a next generation DES (drug eluting stent), was approved by Ministry of Health, Labor and Welfare (MHLW) for the treatment of coronary artery disease (CAD), the most common form of heart disease, in Japan. Abbott noted that the Xience Xpedition's enhanced deliverability, combined with the broadest size matrix in the Japanese market that includes a unique 3.25 mm diameter for more accurate vessel sizing, will help physicians in Japan address a wide range of patients with CAD. We highlight that Xience Xpedition has already been launched in US, EU and other EM countries.
Japan DES market and Nobori sales
Japan DES market is approximately USD 500M as of 4Q12. Of four leaders, Medtronic (MDT) indicated 20% market share by 4Q12 with USD 30M sales in 4Q12, while Abbott previously expected market share recovery to 50% with the launch of Xience Xpedition. For Boston Scientific (BSX), the company mentioned share gains in Japanese market with the launch of PROMUS Element but did not quantify market share during 4Q12 earning call. In addition, Terumo management indicated that Nobori is likely to maintain 20% market share in 2013. However, we found quantification of the market share by different manufacturers is slightly different. We estimate Nobori has 16- 17% market share with JPY 1.9B sales run rate by 1Q13.
Reduce PT to SGD1.15
We reduce PT to SGD 1.15, based on 7X FY2014 EPS of USD 0.064, plus expected cash of USD 0.434 per share. This translates into an effective P/E multiple of 14X. We slightly reduce our FY2014 EPS to USD 0.064 from 0.066. The revised EPS represents no earnings growth for FY2014. We continue to anticipate stock volatility ahead as Biosensors is likely to miss consensus in the following quarters.
Source/Extract/Excerpts/来源/转贴/摘录: Deutsche Ba