A relatively small company based in Singapore that has lost money year after year, BioSensors International suddenly finds itself on the front line of the fierce battle for market share with drug-eluting stents (DES) and facing international giants with deep pockets for investment and global distribution networks that are formidable after years of having the market to themselves.
Speaking with analysts this past Friday, company CEO/Chairman Yoh-Chie Lu made no effort to mask his glee, saying it is “with utmost pleasure that we announce the long-awaited BioMatrix approval in Europe,” quickly adding that he is excited for “this opportunity to become a revenue-turning company.”
With a line of conventional cardiac care products and a line of both bare-metal and drug-eluting stents, BioSensors has struggled in recent years and the enthusiasm for the market potential of BioMatrix shows up clearly in what CFO Kevin Sayers admits are “aggressive numbers” for the company’s projections for the coming year.
BioSensors’ fiscal year runs from April 1 to March 31.
For fiscal 2008, the company reported six months results ending Sept. 30, 2007, of $18.3 million for product revenues, compared to $16.1 million for the prior year, an increase of 14%. Gross margin was 37%.
Full revenues and margins for the current year will not be reported until mid-2008. Yet simply doubling the first-half results would give a ballpark annual revenue figure of $37 million.
Looking forward to mid-2009 with its enthusiasm about BioMatrix, BioSensors projects revenues of $100 million to $115 million from products. A new category of licensing, chiefly to Terumo (Tokyo) with its new Norobi stent based on BioMatrix technology, is expected to produce between $12 million and $14 million of this total.
The start of the 2009 fiscal year on April 1 will mark the date of the launch of BioMatrix sales in some 20 countries of Europe and Asia that recognize the product’s CE-mark.
Even though the company said sales of DES products are diminishing in the current fiscal year, it said sales of BioMatrix are expected to boost this category to between $58 million to $66 million in 2009. Sayers said the majority of the revenue is expected to be realized in the third quarter, between October and December 2008.
BioSensors will offer direct sales of BioMatrix in 10 countries, including seven in Asia and three in Europe, specifically France, Switzerland and the UK. In Asia, BioSensors will have direct sales in the key markets of China, India and Indonesia. Sales in Japan are exclusive to Terumo.
The company expects operational losses for 2009 due to additional expenses involved in consolidating its acquisition of JW Medical Systems (Weihai, China) a privately-owned DES manufacturer, and the costs associated with the launch of BioMatrix.
Sayers said that expenses related to clinical trials worldwide would depend on the timing of those studies. “We will break even at some point in the third quarter of fiscal 2009, and following this we will be very well positioned to go forward in 2010.”
He said pricing will impact revenues, especially in a DES market that is “very competitive,” and revenues will depend on how BioSensors is able to mix direct sales and distribution.