Biosensors

Biosensors: commences share buybacks, with 1.5m shares bought at an avg of $1.1127 yday. The co has a mandate to buy back up to 172.4m shares (10% of shares out). Following the 2QFYMar13 results which disappointed some analysts, Deutsche downgrades to Hold from buy, and lowers TP to $1.40 from $1.30, on the back of reduced earnings forecast, citing decelerating growth on interventional cardiology (ICP) and continued weakness on royalty income. Highlights, i) the 5.8% qoq decline on ICP revenue is the first sequential decline ever in the co’s history, and ii) the 29% yoy and 17% qoq decline in royalty. The house believes increasing competition and a challenging drug eluting stent (DES ) mkt environment would see Nobori continuing to lose mkt share in Japan, leading to lower licensing fees for Biosensors. Also notes that while gross margins increased to 83.7% from 80.7% qoq, margins are unlikely to improve further due to an anticipated price cut in China and initiation of Biofreedom studies. Biosensors continues to slide, -1.3% at $1.105.