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Monday, 27 June 2011

Biosensors eyes stent markets in China, Japan

SINGAPORE - The Chinese market for drug-eluting stents, used to treat blocked arteries, is estimated to be worth more than US$1 billion by 2014, and Singapore's Biosensors International aims to increase its current 27-30 per cent share as a rival firm exits the sector, its chairman said.

Biosensors is also eyeing a 20 per cent market share in Japan by May 2012 through its licensee Terumo Corp, which makes the Nobori stent using the Singapore company's technology in exchange for royalty payments.

US$500-600 million is more or less what I see is the market that is being served in China (currently),' Biosensors chairman Yoh-Chie Lu told Reuters. 'In terms of number of cases or procedures, according to the estimates, by 2014 it would be double.'

Drug-eluting stents (DES) have a medicated coating to help prevent the reclogging of arteries after the stents are inserted in angioplasty procedures.

According to the World Health Organisation, an estimated 17 million people die of cardiovascular diseases, particularly heart attacks and strokes, every year.

Mr Lu said that the Chinese DES market will grow in coming years because of the government's healthcare initiative, which reimburses stent treatments, as well as by the ageing population.

Biosensors announced earlier this month it plans to buy the remaining 50 per cent stake in Chinese stent maker JW Medical Systems (JWMS) from Hong Kong-listed Shandong Weigao Group Medical Polymer for S$625.4 million (US$506.8 million).

Biosensors is estimated to have a 27-30 per cent share of the overall DES market in China through JWMS and this could increase following the withdrawal of competitor Johnson & Johnson from the DES business, Mr Lu said.

'With Johnson & Johnson pulling out, it's for us to grab.

Just like everybody in the market, we have the ability to replace their business with ours,' he said. However, he declined to disclose Biosensors' market share target in China.

J&J announced earlier this month it will stop selling drug-eluting stents, a former profit driver for the diversified healthcare company that has stumbled due to safety concerns and fierce competition from rival products.

Nomura wrote in a report that Biosensors could gain market share from J&J's pullout and it could also benefit from hiring the sales and technical staff affected. The brokerage has a buy call and S$1.50 target price on Biosensors.

In China, Biosensors competes through JWMS with local players such as MicroPort Scientific and Lepu Medical, as well as foreign companies like Boston Scientific and Medtronic.

In Japan, analysts noted that the market share of Nobori - the first locally-made DES by a Japanese medical technology firm following the approval by authorities - could be significant given Japanese physicians' loyalty to local companies.

'Our licensee Terumo has never sold DES into the Japanese market until now, after the approval. In the first 12 months from May this year, they expect to get around 20 per cent share of the DES market by volumes in Japan,' Mr Lu said.

He added that Biosensors is open in the next 3-5 years to acquiring companies with technologies that are complementary to the DES business, as well as a strong distribution network in global markets, particularly Asia and Latin America. -- REUTERS

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