The latest financial reports by TASE-listed biomedical companies that already have sales indicate that they had a tough summer. Half of these companies reported lower sales in both the first half and second quarter of 2008 compared with the corresponding periods of 2007, alongside higher input costs because of the shekel's appreciation against the dollar, and a credit crunch caused by the global financial crisis.
The variable that affected the companies' sales was financial. The credit crunch at biomedical companies forced them to economize and refrain from intensive marketing efforts. Companies whose primary market is the US also suffered from the slump in the shekel-dollar exchange rate.
In addition to the general factors mentioned above, all biomedical companies had their particular reasons for their unhappiness in the first half. Intercure Ltd. (TASE:INCR) reported a drop in revenue to NIS 3.9 million in the first half from NIS 4.4 million in the corresponding half. The company sells directly to end-users in the US and UK and is consequently highly exposed to exchange rate fluctuations.
BioView Ltd. (TASE:BIOV) posted NIS 8 million revenue in the first half compared with NIS 9.3 million in the corresponding half, although second quarter sales were higher than for the corresponding quarter. The company attributes the decline to the low shekel-dollar exchange rate.
Itamar Medical Ltd. (TASE:ITMR) saw its sales fall to NIS 3.1 million in the first half from NIS 5.1 million in the corresponding half. The company attributes the drop to changes in US Center for Medicare and Medicaid Services (CMS) regulations. Although the company says that it will benefit ultimately from the changes, it has suffered lower sales in the meantime. The low shekel-dollar exchange rate was no help either.
LifeWave Hi-Tech Medical Devices Ltd. (TASE:LIFE), which operates in Europe, saw its sales rise to NIS 1.4 million in the first half from NIS 650,000 in the corresponding half, but its second quarter sales fell to NIS 500,000 from NIS 600,000 in the corresponding quarter of last year. The company attributes the drop to the switch to a single exclusive distributor which replaced a group of distributors.
Sialo Technology Israel Ltd. (TASE: SALO) saw its sales fall to NIS 120,000 in the first half from NIS 300,000 in the corresponding half. The company said that it sold three salivary gland stone treatment devices, its most expensive product, in 2007, but had no sales of this item in the first half of 2008.
ProCognia (Israel) Ltd. (TASE:PRCG) saw its sales fall to NIS 2 million in the first half from NIS 3.9 million in the corresponding half. The reasons are the low shekel-dollar exchange rate, the termination of recognition of revenue from the company's distribution contract with Qiagen NV (Nasdaq: QGEN; XETRA:QIA), and fewer orders for the companies diagnostic kits from Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA).
MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL) saw its sales fall to NIS 1.6 million in the first half from NIS 2.2 million in the corresponding half. The company attributed the decline to uncertainty about the contract with its US distributor Hill-Rom Company during the first quarter, and it ultimately reduced its orders.
Some biomedical companies nevertheless bucked the trend and boosted their first half sales compared with the corresponding half: BSP - Biological Signal Processing Ltd. (TASE:BSP), Exalenz Bioscience Ltd. (TASE:EXEN), Kamada Ltd. (TASE: KMDA), Mazor Surgical Technologies Ltd. (TASE:MZOR), Medigus Ltd. (TASE:MDGS), and TRD Instrum Ltd. (TASE:TRD).
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2008
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