Biosensors

Biosensors: Co and Terumo will extend their existing licensing arrangements. Terumo will be able to continue to incorporate co's BioMatrix tech in Terumo's drug-eluting stent. Biosensors and Terumo have agreed to extend the original licensing agreement for territories outside of Japan until Dec 2014. Terumo uses both the drug and stent developed by Biosensors under its Nobori DES system which is sold in over 20 countries across the world. CIMB maintains Outperform with TP$1.82. Co’s royalty income from Terumo is btwn US$4m to 5m a quarter and with co operating more successfully in key mkts worldwide, it is in Terumo’s interest to clinch a more lucrative deal for Biosensors. While revenue contribution may not be substantial, royalties will add to gross margins due to zero additional costs. House highlights that Biosensors has been taking mkt share from peers and seems inconceivable that no players will offer to collaborate or even acquire it with or tgt with major sh/h Shandong Weigao. ASP declines in Gansu and Zhejiang have been observed but should be mitigated by ASP decline.