Biosensors International Group (BIG) announced last evening that it had struck a deal with Terumo Corporation to extend its licensing agreement, such that the latter may continue to incorporate BIG’s BioMatrix™ drug-eluting stent (DES) technology in the production, marketing and sales of the Nobori DES in territories outside the U.S. and Japan until Dec 2016. The previous licensing agreement was supposed to expire in Dec 2014. This is the second time in which this licensing agreement has been extended. Terumo’s Nobori DES is currently sold in over 20 countries across Europe, Asia and Latin America. But given that Terumo is planning to launch its next-generation “Ultimaster™“ in Jun 2014, we believe it is highly probable that this could be the last licensing extension with BIG for this current agreement. Meanwhile, BIG also said that it is expanding its existing sales collaboration with Terumo in Japan in a bid to increase its market share amid strong competitive pressures. We maintain our SELL rating on BIG with a fair value estimate of S$0.77.

Source: OCBC Research - 3 Apr 2014