Cancer treatment developer Sirtex Medical's half year profit has fallen 20 per cent as its sales growth slowed and a rising Australian dollar dented revenue.
The company manufacturers and distributes a radiation therapy for liver cancer called SIR-Spheres Y-90 resin microspheres, for which sales rose 5.6 per cent in the six months to December 31, down from a growth rate of almost 16 per cent a year earlier.
Sirtex had warned of the weaker sales growth in December, due to increased competition for patients, a rival drug approval and restrictions in reimbursements.
The majority of Sirtex's revenue is generated in the Americas, Europe, the Middle East and Africa, and the Aussie dollar's improvement against the US dollar and euro meant revenue in the half year rose just 0.2 per cent.
The cost of a new production facility in Germany and increased marketing also weighed on net profit, which fell to $20.8 million.
Sirtex said it will wind down research and development activities not associated with its liver cancer treatment to deliver $7 million in annual cost savings from the 2017/18 financial year.
The company still expects its sales to grow by between five and 11 per cent over the full 2016/17 year, and has forecast pre-tax earnings of between $65 million and $74 million, on a constant currency basis.
Earnings were $74.3 million in 2015/16.
Sirtex also announced it will buy back up to $30 million of its shares in the next six months.
Its shares were up 27 cents at $15.66 at 1515 AEDT.
SIRTEX HIT BY SLOWING SALES AND HIGHER AUSSIE DOLLAR
* Half year net profit down 19.8 pct to $20.8m
* Revenue up 0.2 per cent to $112.8m
* No interim dividend, unchanged
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