Contrary view

I hold a significant number of shares in SRX, did not sell during the recent plunge, and have believed in the story since buying them at $11, but am also interested in opposing opinions which I can use to test my thinking. I have attached a report on SRX from the most recent "Under the Radar" report. I must admit I did not enjoy reading it and would be interested to read what members here identify as flaws in his analysis.

SIRTEX MEDICAL
Biotech RADAR RATING TAKE $$$
This company is benefiting from fast growing demand for its SIR-Spheres liver cancer ASX CODE SIRX treatment, a weaker Australian dollar, and an inordinate amount of hype.
The biotech's shares climbed about 14% in the past week on afullyear profit result
showcasing 20% increase in volumes; 14% increase in prices; which led to sales growth of 36% and NPAT growth of 69% to $40.3m, which was above analysts expectations.
Total dose sales were 10,252, producing $176.1m revenues. The main growth came from NEI CASH S1 07M the Americas where dose sales climbed 21% and revenue climbed 42.5% to $136.7m. The fall in the Australian dollar contributed $12.1m or 7% of total revenues.
Another impressive feature was operating cashflow, which at $52m represented 93% conversion of EBITDA, which augers well for the company increasing its dividends from its current level of 20 cents (last year 14 cents).
The boost in the company's shares indicate that investors are anticipating further strong volume growth which will require stronger clinical data than it has provided.
The problem as we see it is that Sirtex's SIR-Spheres product has not proven that it increases a cancer sufferer's life expectancy. It has proven that it can halt the increase in the size of the livertumour, but this will not be sufficient for it to gain government reimbursement. As one professor in the field told Under the Radar Report:
"it has been approved to be used, but it hasn't shown to be of benefit (to overall survival) and I don't see the mass appeal. Stopping tumours getting bigger is meat, but what's the point if these tumours keep on growing in other areas of the body."
The professor is referring to the fact that Sirtex's “SIR-Spheres" is highly specialised in itstreatment, which is only really effective on the liver and not elsewhere. The technology consists of tiny resin balls, which emit radioactive isotrons. Each is about a third of the size of a human hair in diameter. They are inserted into the body via a catheter close to the liver tumour. The spheres block the blood supply to the tumour where they deliver high radiation doses.
It's currently being used as a salvage therapy, which has a market of about 5000 patients, who get treated with SR-Spheres in a form of selective radiation therapy (SIRT) before they die. If it gets first line of defence treatment status, the market is 60,000, and if it goes along side chemo treatment for those with metastatic colorectal cancer (mCRC) it is multiples from there.
RADAR RATING: A base valuation for this stock is anywhere between $14 and $18 a share. There are big exchange rate tailwinds which aren't going to be around for too long and we think that there is too much expectation that it will be used as a “first line of treatment” for mGRC. The probability of this happening is very, very low. TAKE PROFITS.