Cancer treatment specialist Sirtexâ Medical has begun to clear the decks following a steady flow of bad news over the past year â including the departure of its chief executive â by writing down asset values and moving to cut costs, which pushed shares sharply higher Wednesday.
Only weeks after his appointment as chief executive, Andrew McLean has slashed by $90 million the value of intangible clinical and research and development assets, and has moved to cut staff numbers by 15 per cent with a $5.3 million restructuring charge, which will also see the chief medical officer leave.
![Sirtex has suffered a loss of sales momentum in its key US market.](http://web.archive.org./web/20170629161642im_/https://www.fairfaxstatic.com.au/content/dam/images/g/t/b/m/t/6/image.related.articleLeadwide.620x349.gx0fu6.png/1498637651477.jpg)
The write-down had been expected since the company disclosed poor research results earlier this quarter, which pushed shares in the company to long term lows.
News of the shake-up saw the shares pushed 17 per cent higher to close at $15.80, near the day's high of $15.86 in active trading, which saw the shares recoup part of their recent declines.
Sirtex has developed a treatment for late-stage liver cancer, using irradiated beads. It had been hoping to expand the use of its treatment beyond so-called salvage treatments, although its recent research results failed to signify sufficient benefit to justify this optimism.
"These structural changes ... are designed to optimise the way we engage with our key clinician stakeholders and more effectively target new users, while ensuring as many patients receive our innovative therapy through new or expanded reimbursement," Â Mr McLean said.
The company confirmed earlier guidance for dosage sales growth of 5.5 per cent in the year to June, which was at the bottom end of the earlier forecast range of 5.5-11Â per cent.
Earnings before interest, taxation and depreciation were also reiterated at $72 million for the year, which is towards the upper end of the earlier forecast of $65 million to $74 million.
With fiscal 2017 dose sales of about 12,600, Sirtex estimated its addressable market at up to 184,000 patients worldwide, with growth to come through any expansion into China, Japan and further moves into Latin America.
The main problem confronting the company has been loss of sales momentum in the key US market, which accounts for more than two-thirds of dose sales, with moves under way to regain sales in that market, it says.
Mr McLean's appointment followed the exit of chief executive Gilman Wong following questions about the sale of shares held in the company.
Sirtex also recently saw off a threatened class action court case. The company's woes have seen most institutional investors sell down their holdings.