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Prepared by:
Anna HAN Huixin
Executive Summary; Industry Analysis and Risk Assessment; Proofread Report.
Angeline HO Hwee Min
Investment thesis, Internal Analysis Qualitative Analysis; Proofread report; Compiled Presentation.
Janna KEE Jun Ling
Executive Summary; Business Model; Sustaining Growth; Concluding Words; Proofread Report.
Zita SETIAWAN
Executive Summary; Quantitative Analysis: Financial and Investment Metrics; Proofread Report
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TABLE OF CONTENTS
Executive Summary ........................................................................................................................................................ 3
Introduction ..................................................................................................................................................................... 4
Investment Thesis ........................................................................................................................................................... 4
High Growth Potential ................................................................................................................................................... 4
The First Biodegradable DES and Strong Clinical Trial Results ................................................................................... 4
Access to Strategic Markets .......................................................................................................................................... 4
Healthy Financial Position ............................................................................................................................................. 5
Business Model ............................................................................................................................................................... 5
Revenue Drivers and Competitive Strategy .................................................................................................................. 5
Costs ............................................................................................................................................................................. 5
Products ........................................................................................................................................................................ 6
Business Process .......................................................................................................................................................... 6
Industry Analysis and Risk Assessments .................................................................................................................... 6
Industry Analysis ........................................................................................................................................................... 6
Internal Analysis ............................................................................................................................................................ 7
Risk Assessments ......................................................................................................................................................... 8
Quantitative Analysis: Financials and Investment Metrics ....................................................................................... 8
Balance Sheet Analysis and Earnings per Share Projections ...................................................................................... 8
Peer Comparison .......................................................................................................................................................... 8
ROE ...................................................................................................................................................................... 8
Asset Turnover ..................................................................................................................................................... 9
Enterprise Value to EBITDA................................................................................................................................. 9
Gearing Ratio ..................................................................................................................................................... 10
Current Ratio ...................................................................................................................................................... 10
Qualitative Analysis: Corporate Governance and Management Team.................................................................... 11
Good Corporate Governance ...................................................................................................................................... 11
Key Management Team .............................................................................................................................................. 11
Sustaining Growth ........................................................................................................................................................ 11
Concluding Words ........................................................................................................................................................ 12
References ..................................................................................................................................................................... 13
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EXECUTIVE SUMMARY
This report is intended to portray a clear investment thesis for existing and potential investors.
Biosensors International (“Biosensors” or “The Group”) is an emerging player in the interventional cardiology and
critical care medical devices industry, striving to develop innovative products that positively impact human lives. The
company was established in 1990 by Singaporean Yoh-Chie Lu, starting as a contract manufacturing company for
critical care products. It has since grown into a global company with its own in-house research and development and
products specializing in drug-eluting stents (DES). In 2005, Biosensors was listed on the Singapore Exchange.
Four reasons why investors should invest in the Group have been identified in this report. Firstly, there is high growth
potential in the DES market. Coronary artery disease (CAD) is a leading cause of death worldwide, spurring the
demand for stents. The global stents market is expected to grow at a CAGR of 9.5% to reach $25.2 billion by 2016.
Secondly, BioMatrix™, the Group’s star product, is the first DES that uses biodegradable polymer, hence having a
first-mover advantage over its competitors. Thirdly, Biosensors is well positioned to access the China DES market due
to its 100% stake in JWMS as of January 2012. Biosensors has also licensed its BioMatrix™ to Terumo Corporation,
allowing the company to access the Japan market. The US is the next target market for Biosensors to enter as it
represents 56% of the global DES market. Lastly, the Group has a healthy financial position as shown by its improving
ROE. In 2011, the earnings per share grew by 45.47% as compared to the previous year – it is expected to rise
steadily over the years.
This report also identifies risk factors in the industry relevant to Biosensors. As a small company in the medical device
industry, Biosensors is disadvantaged when forming preferred-supplier agreements with large hospitals that prefer to
buy all their products from one company. In the healthcare industry where there are regulations requiring complete
submissions of clinical trial and efficacy data, Biosensors has to undergo a longer time before new products can be
commercialized. In addition, the declining prices of DES and competition from local manufacturers are also a risk for
the Group.
In conclusion, Biosensors is highly specialized with a firm understanding of the healthcare regulatory and approval
processes. To shape its competitive edge, the Group has extensive research and development measures in order to
stimulate innovation and ensure the quality of its products, of which DES is its current focus. In addition to its expertise
and experience, Biosensors’ addressable markets are substantial with significant growth potential. All these contribute
to Biosensors’ historical and future growth, making the company an attractive investment.
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INTRODUCTION
The Biosensors International group of companies develops, manufactures and markets innovative medical devices for
interventional cardiology and critical care procedures. The Group aims to improve patients' lives through pioneering
medical technology that pushes forward the boundaries of innovation. Singaporean Yoh-Chie Lu, who first founded
the company as a contract manufacturing company for critical care products, established the company in 1990.
INVESTMENT THESIS
High Growth Potential
Coronary artery disease (CAD) is a leading cause of death worldwide with annual medical costs amounting to US$150
billion, spurring the demand for stents. The global stents market for coronary and peripheral procedures was valued at
$16 billion in 2011, and is expected to grow at a CAGR of 9.5% to reach $25.2 billion by 2016. The major driving
factor for these markets would be the increasing demand for minimally invasive endovascular treatment. As the
incidence cases of coronary and peripheral artery diseases continue to rise along with increasing trends in co-morbid
conditions such as obesity and diabetes, the vascular interventional devices market for treating these diseases is
showing significant growth. In particular, Asia Pacific countries are experiencing rapid economic growth, greater
access to affordable health care and an expanding elderly and obese population. The stents used in interventional
procedures represent the largest segment of the market. In the global stents market, DES contributed the largest
share with 76% of the total market, generating revenues of $8.9 billion in 2011, and is expected to reach $13.7 billion
by 2016. The key driving factors for the growth of the DES market are expected to be
1. World-wide increase in patient population that require stenting
2. Acceptance of DES as a preferred and more effective means of treatment
3. Reimbursement of stents by government health care plans
With global trends heading towards the DES market, it indicates large market potential for Biosensors and high growth
of the industry, which the Group can leverage on for the next three years.
The First Biodegradable DES and Strong Clinical Trial Results
BioMatrix™ is the world’s first commercially available DES that addresses the issue of late stent thrombosis giving the
Group a first-mover advantage. Unlike earlier generations of DES, BioMatrix™ employs a biodegradable polylatic acid
polymer, which breaks down into water and carbon dioxide after serving its purpose. Subsequently, BioMatrix™ was
combined with Biosensors’ own anti-restenotic drug – Biolimus A9 – to form BioMatrix™ flex, an improved version that
was shown to lead to significantly lower cardiac death in the high risk group among competitors during clinical trial.
Biosensors has been supported by strong clinical trial results collected over three years. The data from its LEADERS
clinical trials has also proven that BioMatrix™ is not inferior to leading competitor products such as Johnson &
Johnson’s Cypher Select DES.
Access to Strategic Markets
The China Market
According to industry estimates, the China stent market is worth approximately US$500 million. Biosensors has the
critical advantage of being one of the new entrants in the DES market in China through its recent acquisition of
Shandong Weigao’s JW Medical Systems (JWMS). JWMS is one of the top three DES players in China with a strong
distribution network nationwide with around 25% share in the domestic medical equipment market. With
cardiovascular disease and death rates expected to increase in China by as much as 73% by 2030 and the Chinese
government’s recent announcement of the infusion of $124 billion into the country's health care system in 2011,
Bionsensors is well ahead of its global competitors in the China Market with its leading product, BioMatrix™, awaiting
approval from the China’s State Food and Drug Administration (SFDA) to be marketed in China.
The Japan Market
In Japan, Bionsensors partnered with Terumo Corporation, Japan’s leading medical device company that
manufactures and sells its own brand Nobori DES exclusively in the home market. By licensing the BioMatrix™
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technology to Terumo, the Japanese firm is allowed to market Nobori stents outside of the US and Japan on a non-
exclusive basis. A license fee is then paid to Biosensors on a fixed percentage of the amount of sale of the Nobori
stents. Nobori home market in Japan has an estimated potential of US$600 – US$800 million per year. Upon receiving
approval for its sale in May 2011, the document released by Japan’s Ministry of Health, Labour and Welfare shows
that the company has captured 30% of the market share. Terumo targets to achieve ¥20 billion in Nobori sales for FY
March 2012, of which Biosensor would receive a share of the sale estimated at $US 66 million. This partnership also
increases the visibility of Biosensors as Terumo endorses and recognizes the superiority of the BioMatrix™
technology.
The US Market
The Group is considering entering the US DES market – the largest in the world with 56% of global DES market
share. With Biosensors strategic acquisition of technologies from US companies CardioMind Inc. (US$1.0 million) and
Devax Inc.’s Axxess DES system (US%5.7 million), Biosensors is in a favourable position to develop superior
products to compete with big player in the US market.
Healthy Financial Position
Despite the intensive competition within the industry, there have been positive changes in Biosensors’ ROE, mainly
affected by increasing profit margin throughout the years. The Group finances its growth mainly through equity – its
earnings are relatively more stable. In 2011, the earnings per share grew by 45.47% as compared to the previous year
– it is expected to rise steadily over the years. In addition, the Group has enhanced their shareholder profile with the
entrance of Hony Capital, a leading global investment firm and added Atlantis Investment Management (Hong Kong)
and Ever Union Capital to their investor group. The addition of these investors has strengthened their balance sheet to
support further expansion plans. With its potential growth, Biosensors should provide good capital appreciation to their
investors.
BUSINESS MODEL
Revenue Drivers and Competitive Strategy
There are three principal components of their revenue:
Interventional cardiology products (81% of total revenue for FY2011)
Critical care products (8% of total revenue for FY2011)
Licensing revenue. (11% of total revenue for FY2011)
The main source of revenue comes from interventional cardiology, especially the BioMatrix™ family of DES, which
made significant contributions to its total revenue and net profit growth of 35% in FY 2011. With the growth of the DES
market, which is capturing market share from traditional cardiovascular therapies, and their commitment to it, they
continue to meet and exceed revenue targets year on year.
Another key source of revenue comes from their joint venture company with Shandong Weigao, JW Medical Systems
Ltd (JWMS). Profit after taxes increased from US$14.8 million in FY2010 to US$19.2 million in FY2011.
Costs
Biosensors’ cost structure consists of sales and marketing expenses, general and administrative expenses, R&D, and
other operating expenses. The biggest cost item is sales and marketing (50.7% of total operating expenses in
FY2011), helping to reinforce their brand and global presence through trade shows and other marketing activities.
R&D also accounts for a significant proportion of its costs due to the intense competitive environment and rapid
changes in technology where products can be displaced overnight (19.2% of total expenses in FY2011). High R&D
cost is also reflected in the costs for conducting clinical trials.
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Products
Within the interventional care cardiology product line, Biosensors offers drug-eluting stents, bare metal stents, and
angio-plasty catheters; for the critical care product line, they offer pressure monitoring kits, vascular catheters, arterial
blood sampling kits, and blood pressure transducers, used in open-heart surgeries.
Drug Eluting Stents (DES)
The BioMatrix™ Flex TM
and AXXESS TM
are Biosensors’ main DES products, which account for a significant
proportion of its product revenue. They have three major components: the stent/delivery catheter, the polymer, and
the drug. The unique S-Stent TM
design allows for greater flexibility and efficient drug release, while the Biolimus A9TM
or BA9 TM
is 10 times more dissolvable than sirolimus, another brand of immunosuppressant drug. Biosensors
licenses the stent designs and drug to other companies as a source of revenue too.
Business Process
Biosensors has a growing global presence, especially in Asia and Europe. They are involved in developing,
manufacturing, and marketing its products. Having control over these processes means that they are able to control
pricing and licensing of products.
The development process – How Biosensors creates value
The first step in the value creation process is in-house R&D. The second step is to conduct pre-clinical trials on
animals, to test the safety. The third stage involves human clinical trials. These are conducted in small and large
scales in different countries and clinical centres. Upon successful clinical trial results, they submit the technologies or
products for regulatory approvals. For example, Devax Inc., whose DES wing was acquired by Biosensors in 2010,
conducted AXXESS TM
System trials in clinical centres in 16 clinical centres in three countries before it obtained the
Conformité Européenne (CE) mark of approval.
The Limus Eluted from A Durable versus ERodable Stent coating (LEADERS) trial is one example of Biosensors’
research excellence. The clinical trial featured a direct comparison between Biosensors’ BioMatrix™ FlexTM
, an A9-
eluting stent with a biodegradable polymer and a sirolimus-eluting stent with a durable polymer. Results showed
significantly better safety and efficacy of the BioMatrix™ FlexTM
. The R&D function is concentrated in the US, Holland,
Singapore, and India, countries which are prominent in R&D.
The manufacturing process – How Biosensors delivers value
Once regulatory approval such as the CE mark, which allows selling in the European Union, is obtained, the
commercial manufacturing process begins. Biosensors manufactures and also licenses its technologies to companies
that have expertise in manufacturing specialty stents. Manufacturing is mainly carried out in Singapore, Holland, India
and China.
The marketing process – How Biosensors captures value
Biosensors handles marketing activities in-house for greater efficiency and impact. To gain greater mindshare among
potential customers, and thus market share, they actively build and promote their brand through a variety of marketing
activities and participate in trade shows. Marketing activities are mostly carried out from Japan, Switzerland, and
France, where the targeted consumers are concentrated.
INDUSTRY ANALYSIS AND RISK ASSESSMENT
Industry Analysis
Competitive Rivalry (High)
The DES market is highly consolidated with three key players – Boston Scientific, Medtronic and Abbott capturing
92% of the market. The top two players are Boston Scientific and Abbot, both having similar market share in the US.
Biosensors is considered an emerging market player with a growing presence in Asia with innovative DES
technologies but overall fewer product offerings compared to its counterparts.
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Suppliers (Low)
There are no substantial threats from suppliers as the numbers of suppliers in the DES market for manufacturing
materials are many.
Customers (Medium)
There is a trend in the rise of preferred-supplier agreements between large hospitals (or groups of hospitals) and
device manufacturers. Preferred-supplier agreements allow hospitals to exploit volume-based discounts by bulk
purchasing, as seen by the decrease in monthly median prices paid by hospitals over the years.
Threat of New Entrants (Low)
Large device manufacturers have in-house R&D and resources to build a large product portfolio in order to act as
hospital suppliers across multiple categories and exploit the preferred-supplier position with large hospital groups. In
addition, stringent clinical trial testing procedures are in place to validate the benefits of a product making it more
difficult and longer for products and technologies to be approved. These factors create high barriers for new entrants.
Substitutes
Bare metal stents (BMS) are the closest substitutes to DES. The main difference between BMS and DES is the
absence of coating on the BMS. The much lower cost of BMS is one of the major resistors of growth for the DES
market. Also, according to Lemos et al. (2003), BMS is more cost effective than DES. The development of bio-
engineered stents and nanoparticles are currently in the pipeline and has also been speculated as real alternatives to
DES.
Internal Analysis
Strengths Weaknesses
First Biodegradable DES
Acquisition of JWMS
Strong clinical trial results
Small product portfolio
Shorter clinical trial history
Opportunities Threats
Emerging markets especially China
J&J exits the US market
Possible target for acquisition by leading players
Intense Competition
Strengths – Biosensors’ DES products are comparably more innovative than competitors as it uses a biodegradable
polymer type. BioMatrix™ being the world’s first commercially available DES gives the Group a first mover advantage.
Biosensors’ acquisition of JWMS is very significant as it holds about 10% of the Chinese DES market giving the Group
leverage in the competition for market share in China. Biosensors’ BioMatrix™ is supported by strong clinical results
collect over three years and the Group is participating in the Global LEADERS II trial which would involve a head to
head comparison of BioMatrix™ Flex against a market leading DES with a durable polymer. Positive results of clinical
trials will add credibility and strengthen Biosensors position in the DES market.
Weaknesses – Biosensors, only listed in 2005, has a much smaller product portfolio compared to big international
players such as Boston Scientific and Abbott. In addition, as Biosensors is considered new compared to the big
players, a shorter clinical trial history will lose out as interventional cardiologist and patients would naturally prefer a
stent that has a longer time tested history of safety and efficacy.
Opportunities – China is one of the emerging markets for DES. With the strategic partnership with JWMS, Biosensors
is well positioned against the big players. In addition, with J&J, a strong competitor, announcing in June 2011 its
departure from the DES market, it leaves room for Biosensors to enter the US and fight for market share.
Threats – Due to Biosensors’ innovative technology and market penetration in Europe and APAC, it is an attractive
target for acquisition. Because of its small size, it may face hostile takeovers by leading players. Moreover, the
medical device industry is inherently competitive; R&D processes in the healthcare industry are generally costly and
over a long duration, resulting in a relatively long lead time from R&D to commercial production and sales.
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Risk Assessments
Risk Factors Risk Management
Preferred-supplier agreements from large hospitals
leave smaller companies like Biosensors out
Biosensors’ strategic partnership with JWMS helps
overcome the current lack of product portfolio diversity.
Declining prices of DES since 2007 might erode profits There is a strategic move towards being a company
with multiple interventional products, not just relying on
DES.
Competition from local device manufacturers Biosensors’ production capacity at Singapore and
Weihai (China) is estimated to be sufficient for another
2 years and has additional capacity for new products.
Regulatory requirements to submit complete clinical trial
and efficacy data, thus leading to longer time before
new products hit the market
The paradigm-shifting LEADERS trial was the first
randomized, multicenter, all-comers trial to compare
Biosensors’ biolimus-eluting stent with a market-leading
sirolimus-eluting stent. The results were universally
successful, documenting the equivalence and/or
superiority of our stent design in both safety and
efficacy variables.
QUANTITATIVE ANALYSIS: FINANCIALS AND INVESTMENT METRICS
Various ratios are used to help interpret and understand financial statements.
Balance Sheet Analysis and Earnings per share projection
Peer Comparison
ROE Comparison
DUPONT DECOMPOSITION FOR ROE
2009 2010 2011
BIOSENSORS
Net Profit
Margin (%)
-0.94% 27.59% 27.73%
Total Asset
Turnover
0.5993 0.5101 0.3276
Total liabilities /
Total Equity
1.9096 1.5745 1.2628
RETURN ON
EQUITY (ROE)
-1.08% 22.16% 11.43%
-0.14
3.78 5.01
7.23
8.92
10.78
-5
0
5
10
15
Earnings per share (in SGD)
Earnings per share
0%
20%
40%
60%
80%
100%
Balance Sheet Composition
EQUITY
LIABILITIES
ASSETS
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BOSTON SCIENTIFIC
Net Profit
Margin (%)
-13.01% -13.13% 5.79%
Total Asset
Turnover
0.3252 0.3528 0.3580
Total liabilities /
Total Equity
2.0467 1.9589 1.8753
RETURN ON
EQUITY (ROE)
-8.66% -9.07% 3.88%
MEDTRONIC
Net Profit
Margin (%)
14.18% 19.59% 19.43%
Total Asset
Turnover
0.6189 0.5631 0.5237
Total liabilities /
Total Equity
1.7895 1.9201 1.9055
RETURN ON
EQUITY (ROE)
15.70% 21.18% 19.39%
Biosensors has a relatively low ROE
as compared to Boston Scientific. The
low ROE, when decomposed using a
DuPont analysis, can be attributed to
the lower leverage of Biosensors, and
also the lower asset turnover.
Biosensors’ changes in ROE were
mainly affected by its increasing profit
margin. This suggests that Biosensors
has been able to seize significant
market share despite the fierce
competition within the industry. ROE is
also generally more stable than
Medtronic, whose ROE varied greatly from year to year. Overall, judging from the growth in ROE, Biosensors is able
to generate relatively high profitability with the equities invested.
Asset Turnover Comparison
The turnovers for the companies are
relatively moderate and have increased over
the years with Biosensors as an exception.
This, however, does not mean that Boston
Scientific and Medtronic are more efficient in
utilizing its assets in generating sales. Asset
turnover ratio could also indicate pricing
strategy: companies with high profit margins
have low asset turnover and vice versa.
Keeping this in mind, we can see that the
profitability of Biosensors is more lucrative
as compared to other competitors.
-1.08%
2.16%
11.43%
-8.66% -9.07%
3.88%
15.70%
21.11% 19.39%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2009 2010 2011
ROE COMPARISON
BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC
0.5993
0.5101
0.3276 0.3252 0.3528 0.3580
0.6189 0.5631
0.5237
0.0000
0.1000
0.2000
0.3000
0.4000
0.5000
0.6000
0.7000
2009 2010 2011
ASSET TURNOVER RATIO COMPARISON
BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC
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Enterprise Value to EBITDA Comparison
Biosensors is valued significantly higher than its
competitor throughout the years – it also
experienced the highest growth in EV/EBITDA.
Medtronic’s EV/EBITDA is the most consistent
throughout the three years. High enterprise value
also means that a company is less attractive to
be a take-over candidate – thus, Biosensors is
relatively unattractive for any take-over
discussions in near future. This represents the
strength of the company’s establishment in the
market as one of the key players.
Gearing Ratio
Throughout the years, Biosensors has a
decreasing debt-to-equity ratio and is always the
lowest as compared to Boston Scientific and
Medtronic. This indicates that Biosensors has not
been aggressive in financing its growth with debt.
As a result, Biosensors’ earnings are relatively
more stable due to less interest expenses paid.
With this in mind, Biosensors has the lowest risk
of bankruptcy as compared to its peers.
Current Ratio
Biosensors’ current ratio rose significantly over
time as compared to Boston Scientific and
Medtronic, who have relatively stable current
ratios. This means that among the three
companies, Biosensors has the best ability to
pay back its short-term liabilities. In addition, the
firm is more efficient in terms of its operating
cycle and its ability to turn its product into cash.
Thus, the risk for Biosensors to default on its
payment is relatively lower as compared to these
two counterparts, making it the better choice to
invest in.
11.45
21.29
26.88
9.06 9.27 6.88 7.25
9.1 9.01
0
5
10
15
20
25
30
2009 2010 2011
EV TO EBITDA COMPARISON
BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC
45.19
20.18
9.08
48.11 48.14
37.53
48.11 48.14
37.53
0
10
20
30
40
50
60
2009 2010 2011
GEARING RATIO COMPARISON
BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC
1.06
2.17
5.35
1.52 1.39 1.72
2.07 2.37
1.92
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2009 2010 2011
CURRENT RATIO COMPARISON
BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC
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QUALITATIVE ANALYSIS: CORPORATE GOVERNANCE AND MANAGEMENT TEAM
Good Corporate Governance
For effective and independent oversight of the management, the Board Committees, mainly the Audit Committee,
Nominations Committee and Compensation Committee, are chaired by independent non-executive directors where
members are predominantly independent non-executive directors. The Group’s board of directors currently consists of
two executive directors and five non-executive directors of whom four are independent directors. The presence of the
independent element on the Board facilitates the exercise of objective judgement on corporate affairs independently
from the management, ensuring the best interest of the Group. The Nominations Committee reviews the
independence of each director annually.
The performance of individual directors is assessed on the basis of each director’s contribution to the Company and
the levels of participation in various Board Committees and attendance at Board meetings. In addition, the Company
has in place a Whistle-Blowing Policy and Procedures giving employees and others an official channel to request for
independent investigation with appropriate follow up action.
Key Management
The management team is led by Founder and Executive Chairman Yoh-Chie Lu, who is chairman since 1990 and
CEO of the company till 2008. Alongside with internally promoted Co-CEOs Dr. Jack Wang Chicheng and Mr. Jeffrey
B. Jump, Chief Technology Officer, primary architect of both the BioMatrix™ and BioFreedom™ DES systems Mr.
John E. Shulze and newly appointed CFO Mr. Ronald H. Ede, majority of the management team have over thirty
years of experience in the medical field and have been working in Biosensors for more than ten years. The recent
restructure of the executive management team in 2011 has shown positive results with the Group attracting big
institutional investors and acquiring strategic technologies to achieve its long-term objective of being Asia’s leading
DES company.
SUSTAINING GROWTH
Future Plans
Expanding the product portfolio
Biosensors has developed a new strategy to move forward, from focusing primarily on DES technology and products,
to increasing its product portfolio diversity, eventually becoming a first-class global medical device platform company.
With the acquisition of Cardiomind in June 2010, they gained technological expertise in the treatment of smaller
vessels, outside the treatment zone for its current DES products. Similarly, in October 2010 acquiring AXXESS DES
systems from Devax Inc. has enhanced the Group’s portfolio to include the specific treatment of bifurcation lesions.
Pioneering next generation medical devices
It is also in the process of developing next generation interventional care cardiology products, such as BioFreedom™
(its latest in stent technology), and continuing to provide complementary technology for specialty stents.
Expanding in the China DES market
As mentioned earlier, Biosensors has the critical advantage of being one of the new entrants in the DES market in
China through its recent acquisition of JWMS. BioMatrix™ is currently awaiting approval from the China’s State Food
and Drug Administration (SFDA) to be marketed in China and is well positioned to take the lead in China and ensure
sustainable growth.
Penetrating the US DES market
There are also plans to penetrate the US market, which is currently the largest DES market globally. With its
acquisition of Devax Inc. AXXESS technology, Biosensors seeks to gain a foothold in the profitable US market. In
2010, Devax received the CE mark, for the AXXESS System, allowing Devax to sell this product in the European
Union and other countries that recognise the CE mark.
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CONCLUDING WORDS
Investing in Biosensors International is recommended because of its strong balance sheet and its continued strong
performance in achieving revenue and profit goals. Investors can expect a stable return on their investment in the long
term, as well as see the company expand into new markets and reap returns on Biosensors’ growth.
With a sizeable portion of the DES and other specialty stent markets that are relatively untapped, there is significant
industry growth potential, and Biosensors is in a strategically sound position to achieve success. It has expertise in the
entire chain of process, from R&D to sales and marketing. This is a crucial factor in its success, as control over
licensing and pricing contribute to overall sales and profits. Besides a good grasp of the entire chain of processes,
Biosensors has in-depth knowledge of Asia’s and Europe’s regulatory and licensing processes, allowing it to obtain
several key patents and approvals.
The good track record of the company, coupled with management that are capable and driven to achieve results for
Biosensors and investors, prove that Biosensors has the ability to carry out future growth plans. As of March 12, 2012,
analysts have put a valuation of SGD1.90 on Biosensors, with the current trading price of SGD 1.40. This
demonstrates analyst confidence in Biosensors to perform up to and beyond expectations, and deliver on its promised
goals.
In summary, investors looking to invest in the long term in a growing industry should have Biosensors on their radar
and consider including Biosensors in their portfolio.
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References
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http://www.biosensors.com/intl/about-biosensors-milestones-highlights
Lim, J.S. (2012, January 6). Nomura Equity Research: Analyst Report on Biosensors International.
Wong, T. C. (2011, October 11). OCBC Investment Research: Analyst Report on Biosensors International Group.
Retrieved March 10, 2012, from http://www.ocbcresearch.com/pdf_reports/company/Biosensors-111017-OIR.pdf
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