Liver cancer treatment developer Sirtex Medical has cut the value of its clinical and research and development assets by $90 million and will axe 15 per cent of its workforce as the company moves to improve its performance.
Sirtex chief executive Andrew McLean on Wednesday said the $90 million asset impairment and the job cuts, which will cost $5.3 million, are intended to reset Sirtex's profitable core business for future expansion.
The move sent Sirtex shares up $2.31, or 17.1 per cent, to $15.80, the highest level since mid-May and making the company the best performer among the large-cap stocks for the session.
"Our goal is to achieve expanded use within our existing markets which covers over 40 countries globally and gaining utilisation in new geographies," Mr McLean said.
Sirtex's core technology is a selective internal radiation therapy called SIR-Spheres Y-90 resin microspheres, which is used in the treatment of liver cancer at 1,060 medical centres around the world.
In May, shares in Sirtex plunged almost 30 per cent after a global study of the company's radiation therapy for colon and liver cancer found it delivered no survival benefit when used in conjunction with chemotherapy, compared to treatment with only chemotherapy.
But Sirtex at the time said the disappointing trial results would not affect the company commercially because most of the patients receiving the SIR-Spheres treatment had failed all of the standard chemotherapy treatments.
Sirtex also said on Wednesday its business had been performing within guidance, with dose sales growing by about 5.5 per cent to about 12,590 in fiscal 2017 compared with the previous year.
The company expects its 2017 underlying earnings, on a constant currency basis, to come in at around $72 million which, it says, is also within guidance.
But Sirtex said that in the Americas market, which represents 70 per cent of dose sales, sales had not grown as fast as expected.
Sirtex has suffered from a string of bad news over the past seven months.
In January, then chief executive Gilman Wong was fired for alleged insider trading, and in December 2016 the company's share price plummeted 37 per cent following a poor trading update.
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