1

Prepared by:

Anna HAN Huixin

Executive Summary; Industry Analysis and Risk Assessment; Proofread Report.

Angeline HO Hwee Min

Investment thesis, Internal Analysis Qualitative Analysis; Proofread report; Compiled Presentation.

Janna KEE Jun Ling

Executive Summary; Business Model; Sustaining Growth; Concluding Words; Proofread Report.

Zita SETIAWAN

Executive Summary; Quantitative Analysis: Financial and Investment Metrics; Proofread Report

2

TABLE OF CONTENTS

Executive Summary ........................................................................................................................................................ 3

Introduction ..................................................................................................................................................................... 4

Investment Thesis ........................................................................................................................................................... 4

High Growth Potential ................................................................................................................................................... 4

The First Biodegradable DES and Strong Clinical Trial Results ................................................................................... 4

Access to Strategic Markets .......................................................................................................................................... 4

Healthy Financial Position ............................................................................................................................................. 5

Business Model ............................................................................................................................................................... 5

Revenue Drivers and Competitive Strategy .................................................................................................................. 5

Costs ............................................................................................................................................................................. 5

Products ........................................................................................................................................................................ 6

Business Process .......................................................................................................................................................... 6

Industry Analysis and Risk Assessments .................................................................................................................... 6

Industry Analysis ........................................................................................................................................................... 6

Internal Analysis ............................................................................................................................................................ 7

Risk Assessments ......................................................................................................................................................... 8

Quantitative Analysis: Financials and Investment Metrics ....................................................................................... 8

Balance Sheet Analysis and Earnings per Share Projections ...................................................................................... 8

Peer Comparison .......................................................................................................................................................... 8

ROE ...................................................................................................................................................................... 8

Asset Turnover ..................................................................................................................................................... 9

Enterprise Value to EBITDA................................................................................................................................. 9

Gearing Ratio ..................................................................................................................................................... 10

Current Ratio ...................................................................................................................................................... 10

Qualitative Analysis: Corporate Governance and Management Team.................................................................... 11

Good Corporate Governance ...................................................................................................................................... 11

Key Management Team .............................................................................................................................................. 11

Sustaining Growth ........................................................................................................................................................ 11

Concluding Words ........................................................................................................................................................ 12

References ..................................................................................................................................................................... 13

3

EXECUTIVE SUMMARY

This report is intended to portray a clear investment thesis for existing and potential investors.

Biosensors International (“Biosensors” or “The Group”) is an emerging player in the interventional cardiology and

critical care medical devices industry, striving to develop innovative products that positively impact human lives. The

company was established in 1990 by Singaporean Yoh-Chie Lu, starting as a contract manufacturing company for

critical care products. It has since grown into a global company with its own in-house research and development and

products specializing in drug-eluting stents (DES). In 2005, Biosensors was listed on the Singapore Exchange.

Four reasons why investors should invest in the Group have been identified in this report. Firstly, there is high growth

potential in the DES market. Coronary artery disease (CAD) is a leading cause of death worldwide, spurring the

demand for stents. The global stents market is expected to grow at a CAGR of 9.5% to reach $25.2 billion by 2016.

Secondly, BioMatrix™, the Group’s star product, is the first DES that uses biodegradable polymer, hence having a

first-mover advantage over its competitors. Thirdly, Biosensors is well positioned to access the China DES market due

to its 100% stake in JWMS as of January 2012. Biosensors has also licensed its BioMatrix™ to Terumo Corporation,

allowing the company to access the Japan market. The US is the next target market for Biosensors to enter as it

represents 56% of the global DES market. Lastly, the Group has a healthy financial position as shown by its improving

ROE. In 2011, the earnings per share grew by 45.47% as compared to the previous year – it is expected to rise

steadily over the years.

This report also identifies risk factors in the industry relevant to Biosensors. As a small company in the medical device

industry, Biosensors is disadvantaged when forming preferred-supplier agreements with large hospitals that prefer to

buy all their products from one company. In the healthcare industry where there are regulations requiring complete

submissions of clinical trial and efficacy data, Biosensors has to undergo a longer time before new products can be

commercialized. In addition, the declining prices of DES and competition from local manufacturers are also a risk for

the Group.

In conclusion, Biosensors is highly specialized with a firm understanding of the healthcare regulatory and approval

processes. To shape its competitive edge, the Group has extensive research and development measures in order to

stimulate innovation and ensure the quality of its products, of which DES is its current focus. In addition to its expertise

and experience, Biosensors’ addressable markets are substantial with significant growth potential. All these contribute

to Biosensors’ historical and future growth, making the company an attractive investment.

BIO

SE

NS

OR

S

INV

ES

TO

R R

EL

AT

ION

S

4

INTRODUCTION

The Biosensors International group of companies develops, manufactures and markets innovative medical devices for

interventional cardiology and critical care procedures. The Group aims to improve patients' lives through pioneering

medical technology that pushes forward the boundaries of innovation. Singaporean Yoh-Chie Lu, who first founded

the company as a contract manufacturing company for critical care products, established the company in 1990.

INVESTMENT THESIS

High Growth Potential

Coronary artery disease (CAD) is a leading cause of death worldwide with annual medical costs amounting to US$150

billion, spurring the demand for stents. The global stents market for coronary and peripheral procedures was valued at

$16 billion in 2011, and is expected to grow at a CAGR of 9.5% to reach $25.2 billion by 2016. The major driving

factor for these markets would be the increasing demand for minimally invasive endovascular treatment. As the

incidence cases of coronary and peripheral artery diseases continue to rise along with increasing trends in co-morbid

conditions such as obesity and diabetes, the vascular interventional devices market for treating these diseases is

showing significant growth. In particular, Asia Pacific countries are experiencing rapid economic growth, greater

access to affordable health care and an expanding elderly and obese population. The stents used in interventional

procedures represent the largest segment of the market. In the global stents market, DES contributed the largest

share with 76% of the total market, generating revenues of $8.9 billion in 2011, and is expected to reach $13.7 billion

by 2016. The key driving factors for the growth of the DES market are expected to be

1. World-wide increase in patient population that require stenting

2. Acceptance of DES as a preferred and more effective means of treatment

3. Reimbursement of stents by government health care plans

With global trends heading towards the DES market, it indicates large market potential for Biosensors and high growth

of the industry, which the Group can leverage on for the next three years.

The First Biodegradable DES and Strong Clinical Trial Results

BioMatrix™ is the world’s first commercially available DES that addresses the issue of late stent thrombosis giving the

Group a first-mover advantage. Unlike earlier generations of DES, BioMatrix™ employs a biodegradable polylatic acid

polymer, which breaks down into water and carbon dioxide after serving its purpose. Subsequently, BioMatrix™ was

combined with Biosensors’ own anti-restenotic drug – Biolimus A9 – to form BioMatrix™ flex, an improved version that

was shown to lead to significantly lower cardiac death in the high risk group among competitors during clinical trial.

Biosensors has been supported by strong clinical trial results collected over three years. The data from its LEADERS

clinical trials has also proven that BioMatrix™ is not inferior to leading competitor products such as Johnson &

Johnson’s Cypher Select DES.

Access to Strategic Markets

The China Market

According to industry estimates, the China stent market is worth approximately US$500 million. Biosensors has the

critical advantage of being one of the new entrants in the DES market in China through its recent acquisition of

Shandong Weigao’s JW Medical Systems (JWMS). JWMS is one of the top three DES players in China with a strong

distribution network nationwide with around 25% share in the domestic medical equipment market. With

cardiovascular disease and death rates expected to increase in China by as much as 73% by 2030 and the Chinese

government’s recent announcement of the infusion of $124 billion into the country's health care system in 2011,

Bionsensors is well ahead of its global competitors in the China Market with its leading product, BioMatrix™, awaiting

approval from the China’s State Food and Drug Administration (SFDA) to be marketed in China.

The Japan Market

In Japan, Bionsensors partnered with Terumo Corporation, Japan’s leading medical device company that

manufactures and sells its own brand Nobori DES exclusively in the home market. By licensing the BioMatrix™

5

technology to Terumo, the Japanese firm is allowed to market Nobori stents outside of the US and Japan on a non-

exclusive basis. A license fee is then paid to Biosensors on a fixed percentage of the amount of sale of the Nobori

stents. Nobori home market in Japan has an estimated potential of US$600 – US$800 million per year. Upon receiving

approval for its sale in May 2011, the document released by Japan’s Ministry of Health, Labour and Welfare shows

that the company has captured 30% of the market share. Terumo targets to achieve ¥20 billion in Nobori sales for FY

March 2012, of which Biosensor would receive a share of the sale estimated at $US 66 million. This partnership also

increases the visibility of Biosensors as Terumo endorses and recognizes the superiority of the BioMatrix™

technology.

The US Market

The Group is considering entering the US DES market – the largest in the world with 56% of global DES market

share. With Biosensors strategic acquisition of technologies from US companies CardioMind Inc. (US$1.0 million) and

Devax Inc.’s Axxess DES system (US%5.7 million), Biosensors is in a favourable position to develop superior

products to compete with big player in the US market.

Healthy Financial Position

Despite the intensive competition within the industry, there have been positive changes in Biosensors’ ROE, mainly

affected by increasing profit margin throughout the years. The Group finances its growth mainly through equity – its

earnings are relatively more stable. In 2011, the earnings per share grew by 45.47% as compared to the previous year

– it is expected to rise steadily over the years. In addition, the Group has enhanced their shareholder profile with the

entrance of Hony Capital, a leading global investment firm and added Atlantis Investment Management (Hong Kong)

and Ever Union Capital to their investor group. The addition of these investors has strengthened their balance sheet to

support further expansion plans. With its potential growth, Biosensors should provide good capital appreciation to their

investors.

BUSINESS MODEL

Revenue Drivers and Competitive Strategy

There are three principal components of their revenue:

Interventional cardiology products (81% of total revenue for FY2011)

Critical care products (8% of total revenue for FY2011)

Licensing revenue. (11% of total revenue for FY2011)

The main source of revenue comes from interventional cardiology, especially the BioMatrix™ family of DES, which

made significant contributions to its total revenue and net profit growth of 35% in FY 2011. With the growth of the DES

market, which is capturing market share from traditional cardiovascular therapies, and their commitment to it, they

continue to meet and exceed revenue targets year on year.

Another key source of revenue comes from their joint venture company with Shandong Weigao, JW Medical Systems

Ltd (JWMS). Profit after taxes increased from US$14.8 million in FY2010 to US$19.2 million in FY2011.

Costs

Biosensors’ cost structure consists of sales and marketing expenses, general and administrative expenses, R&D, and

other operating expenses. The biggest cost item is sales and marketing (50.7% of total operating expenses in

FY2011), helping to reinforce their brand and global presence through trade shows and other marketing activities.

R&D also accounts for a significant proportion of its costs due to the intense competitive environment and rapid

changes in technology where products can be displaced overnight (19.2% of total expenses in FY2011). High R&D

cost is also reflected in the costs for conducting clinical trials.

6

Products

Within the interventional care cardiology product line, Biosensors offers drug-eluting stents, bare metal stents, and

angio-plasty catheters; for the critical care product line, they offer pressure monitoring kits, vascular catheters, arterial

blood sampling kits, and blood pressure transducers, used in open-heart surgeries.

Drug Eluting Stents (DES)

The BioMatrix™ Flex TM

and AXXESS TM

are Biosensors’ main DES products, which account for a significant

proportion of its product revenue. They have three major components: the stent/delivery catheter, the polymer, and

the drug. The unique S-Stent TM

design allows for greater flexibility and efficient drug release, while the Biolimus A9TM

or BA9 TM

is 10 times more dissolvable than sirolimus, another brand of immunosuppressant drug. Biosensors

licenses the stent designs and drug to other companies as a source of revenue too.

Business Process

Biosensors has a growing global presence, especially in Asia and Europe. They are involved in developing,

manufacturing, and marketing its products. Having control over these processes means that they are able to control

pricing and licensing of products.

The development process – How Biosensors creates value

The first step in the value creation process is in-house R&D. The second step is to conduct pre-clinical trials on

animals, to test the safety. The third stage involves human clinical trials. These are conducted in small and large

scales in different countries and clinical centres. Upon successful clinical trial results, they submit the technologies or

products for regulatory approvals. For example, Devax Inc., whose DES wing was acquired by Biosensors in 2010,

conducted AXXESS TM

System trials in clinical centres in 16 clinical centres in three countries before it obtained the

Conformité Européenne (CE) mark of approval.

The Limus Eluted from A Durable versus ERodable Stent coating (LEADERS) trial is one example of Biosensors’

research excellence. The clinical trial featured a direct comparison between Biosensors’ BioMatrix™ FlexTM

, an A9-

eluting stent with a biodegradable polymer and a sirolimus-eluting stent with a durable polymer. Results showed

significantly better safety and efficacy of the BioMatrix™ FlexTM

. The R&D function is concentrated in the US, Holland,

Singapore, and India, countries which are prominent in R&D.

The manufacturing process – How Biosensors delivers value

Once regulatory approval such as the CE mark, which allows selling in the European Union, is obtained, the

commercial manufacturing process begins. Biosensors manufactures and also licenses its technologies to companies

that have expertise in manufacturing specialty stents. Manufacturing is mainly carried out in Singapore, Holland, India

and China.

The marketing process – How Biosensors captures value

Biosensors handles marketing activities in-house for greater efficiency and impact. To gain greater mindshare among

potential customers, and thus market share, they actively build and promote their brand through a variety of marketing

activities and participate in trade shows. Marketing activities are mostly carried out from Japan, Switzerland, and

France, where the targeted consumers are concentrated.

INDUSTRY ANALYSIS AND RISK ASSESSMENT

Industry Analysis

Competitive Rivalry (High)

The DES market is highly consolidated with three key players – Boston Scientific, Medtronic and Abbott capturing

92% of the market. The top two players are Boston Scientific and Abbot, both having similar market share in the US.

Biosensors is considered an emerging market player with a growing presence in Asia with innovative DES

technologies but overall fewer product offerings compared to its counterparts.

7

Suppliers (Low)

There are no substantial threats from suppliers as the numbers of suppliers in the DES market for manufacturing

materials are many.

Customers (Medium)

There is a trend in the rise of preferred-supplier agreements between large hospitals (or groups of hospitals) and

device manufacturers. Preferred-supplier agreements allow hospitals to exploit volume-based discounts by bulk

purchasing, as seen by the decrease in monthly median prices paid by hospitals over the years.

Threat of New Entrants (Low)

Large device manufacturers have in-house R&D and resources to build a large product portfolio in order to act as

hospital suppliers across multiple categories and exploit the preferred-supplier position with large hospital groups. In

addition, stringent clinical trial testing procedures are in place to validate the benefits of a product making it more

difficult and longer for products and technologies to be approved. These factors create high barriers for new entrants.

Substitutes

Bare metal stents (BMS) are the closest substitutes to DES. The main difference between BMS and DES is the

absence of coating on the BMS. The much lower cost of BMS is one of the major resistors of growth for the DES

market. Also, according to Lemos et al. (2003), BMS is more cost effective than DES. The development of bio-

engineered stents and nanoparticles are currently in the pipeline and has also been speculated as real alternatives to

DES.

Internal Analysis

Strengths Weaknesses

First Biodegradable DES

Acquisition of JWMS

Strong clinical trial results

Small product portfolio

Shorter clinical trial history

Opportunities Threats

Emerging markets especially China

J&J exits the US market

Possible target for acquisition by leading players

Intense Competition

Strengths – Biosensors’ DES products are comparably more innovative than competitors as it uses a biodegradable

polymer type. BioMatrix™ being the world’s first commercially available DES gives the Group a first mover advantage.

Biosensors’ acquisition of JWMS is very significant as it holds about 10% of the Chinese DES market giving the Group

leverage in the competition for market share in China. Biosensors’ BioMatrix™ is supported by strong clinical results

collect over three years and the Group is participating in the Global LEADERS II trial which would involve a head to

head comparison of BioMatrix™ Flex against a market leading DES with a durable polymer. Positive results of clinical

trials will add credibility and strengthen Biosensors position in the DES market.

Weaknesses – Biosensors, only listed in 2005, has a much smaller product portfolio compared to big international

players such as Boston Scientific and Abbott. In addition, as Biosensors is considered new compared to the big

players, a shorter clinical trial history will lose out as interventional cardiologist and patients would naturally prefer a

stent that has a longer time tested history of safety and efficacy.

Opportunities – China is one of the emerging markets for DES. With the strategic partnership with JWMS, Biosensors

is well positioned against the big players. In addition, with J&J, a strong competitor, announcing in June 2011 its

departure from the DES market, it leaves room for Biosensors to enter the US and fight for market share.

Threats – Due to Biosensors’ innovative technology and market penetration in Europe and APAC, it is an attractive

target for acquisition. Because of its small size, it may face hostile takeovers by leading players. Moreover, the

medical device industry is inherently competitive; R&D processes in the healthcare industry are generally costly and

over a long duration, resulting in a relatively long lead time from R&D to commercial production and sales.

8

Risk Assessments

Risk Factors Risk Management

Preferred-supplier agreements from large hospitals

leave smaller companies like Biosensors out

Biosensors’ strategic partnership with JWMS helps

overcome the current lack of product portfolio diversity.

Declining prices of DES since 2007 might erode profits There is a strategic move towards being a company

with multiple interventional products, not just relying on

DES.

Competition from local device manufacturers Biosensors’ production capacity at Singapore and

Weihai (China) is estimated to be sufficient for another

2 years and has additional capacity for new products.

Regulatory requirements to submit complete clinical trial

and efficacy data, thus leading to longer time before

new products hit the market

The paradigm-shifting LEADERS trial was the first

randomized, multicenter, all-comers trial to compare

Biosensors’ biolimus-eluting stent with a market-leading

sirolimus-eluting stent. The results were universally

successful, documenting the equivalence and/or

superiority of our stent design in both safety and

efficacy variables.

QUANTITATIVE ANALYSIS: FINANCIALS AND INVESTMENT METRICS

Various ratios are used to help interpret and understand financial statements.

Balance Sheet Analysis and Earnings per share projection

Peer Comparison

ROE Comparison

DUPONT DECOMPOSITION FOR ROE

2009 2010 2011

BIOSENSORS

Net Profit

Margin (%)

-0.94% 27.59% 27.73%

Total Asset

Turnover

0.5993 0.5101 0.3276

Total liabilities /

Total Equity

1.9096 1.5745 1.2628

RETURN ON

EQUITY (ROE)

-1.08% 22.16% 11.43%

-0.14

3.78 5.01

7.23

8.92

10.78

-5

0

5

10

15

Earnings per share (in SGD)

Earnings per share

0%

20%

40%

60%

80%

100%

Balance Sheet Composition

EQUITY

LIABILITIES

ASSETS

9

BOSTON SCIENTIFIC

Net Profit

Margin (%)

-13.01% -13.13% 5.79%

Total Asset

Turnover

0.3252 0.3528 0.3580

Total liabilities /

Total Equity

2.0467 1.9589 1.8753

RETURN ON

EQUITY (ROE)

-8.66% -9.07% 3.88%

MEDTRONIC

Net Profit

Margin (%)

14.18% 19.59% 19.43%

Total Asset

Turnover

0.6189 0.5631 0.5237

Total liabilities /

Total Equity

1.7895 1.9201 1.9055

RETURN ON

EQUITY (ROE)

15.70% 21.18% 19.39%

Biosensors has a relatively low ROE

as compared to Boston Scientific. The

low ROE, when decomposed using a

DuPont analysis, can be attributed to

the lower leverage of Biosensors, and

also the lower asset turnover.

Biosensors’ changes in ROE were

mainly affected by its increasing profit

margin. This suggests that Biosensors

has been able to seize significant

market share despite the fierce

competition within the industry. ROE is

also generally more stable than

Medtronic, whose ROE varied greatly from year to year. Overall, judging from the growth in ROE, Biosensors is able

to generate relatively high profitability with the equities invested.

Asset Turnover Comparison

The turnovers for the companies are

relatively moderate and have increased over

the years with Biosensors as an exception.

This, however, does not mean that Boston

Scientific and Medtronic are more efficient in

utilizing its assets in generating sales. Asset

turnover ratio could also indicate pricing

strategy: companies with high profit margins

have low asset turnover and vice versa.

Keeping this in mind, we can see that the

profitability of Biosensors is more lucrative

as compared to other competitors.

-1.08%

2.16%

11.43%

-8.66% -9.07%

3.88%

15.70%

21.11% 19.39%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

2009 2010 2011

ROE COMPARISON

BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC

0.5993

0.5101

0.3276 0.3252 0.3528 0.3580

0.6189 0.5631

0.5237

0.0000

0.1000

0.2000

0.3000

0.4000

0.5000

0.6000

0.7000

2009 2010 2011

ASSET TURNOVER RATIO COMPARISON

BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC

10

Enterprise Value to EBITDA Comparison

Biosensors is valued significantly higher than its

competitor throughout the years – it also

experienced the highest growth in EV/EBITDA.

Medtronic’s EV/EBITDA is the most consistent

throughout the three years. High enterprise value

also means that a company is less attractive to

be a take-over candidate – thus, Biosensors is

relatively unattractive for any take-over

discussions in near future. This represents the

strength of the company’s establishment in the

market as one of the key players.

Gearing Ratio

Throughout the years, Biosensors has a

decreasing debt-to-equity ratio and is always the

lowest as compared to Boston Scientific and

Medtronic. This indicates that Biosensors has not

been aggressive in financing its growth with debt.

As a result, Biosensors’ earnings are relatively

more stable due to less interest expenses paid.

With this in mind, Biosensors has the lowest risk

of bankruptcy as compared to its peers.

Current Ratio

Biosensors’ current ratio rose significantly over

time as compared to Boston Scientific and

Medtronic, who have relatively stable current

ratios. This means that among the three

companies, Biosensors has the best ability to

pay back its short-term liabilities. In addition, the

firm is more efficient in terms of its operating

cycle and its ability to turn its product into cash.

Thus, the risk for Biosensors to default on its

payment is relatively lower as compared to these

two counterparts, making it the better choice to

invest in.

11.45

21.29

26.88

9.06 9.27 6.88 7.25

9.1 9.01

0

5

10

15

20

25

30

2009 2010 2011

EV TO EBITDA COMPARISON

BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC

45.19

20.18

9.08

48.11 48.14

37.53

48.11 48.14

37.53

0

10

20

30

40

50

60

2009 2010 2011

GEARING RATIO COMPARISON

BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC

1.06

2.17

5.35

1.52 1.39 1.72

2.07 2.37

1.92

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2009 2010 2011

CURRENT RATIO COMPARISON

BIOSENSORS BOSTON SCIENTIFIC MEDTRONIC

11

QUALITATIVE ANALYSIS: CORPORATE GOVERNANCE AND MANAGEMENT TEAM

Good Corporate Governance

For effective and independent oversight of the management, the Board Committees, mainly the Audit Committee,

Nominations Committee and Compensation Committee, are chaired by independent non-executive directors where

members are predominantly independent non-executive directors. The Group’s board of directors currently consists of

two executive directors and five non-executive directors of whom four are independent directors. The presence of the

independent element on the Board facilitates the exercise of objective judgement on corporate affairs independently

from the management, ensuring the best interest of the Group. The Nominations Committee reviews the

independence of each director annually.

The performance of individual directors is assessed on the basis of each director’s contribution to the Company and

the levels of participation in various Board Committees and attendance at Board meetings. In addition, the Company

has in place a Whistle-Blowing Policy and Procedures giving employees and others an official channel to request for

independent investigation with appropriate follow up action.

Key Management

The management team is led by Founder and Executive Chairman Yoh-Chie Lu, who is chairman since 1990 and

CEO of the company till 2008. Alongside with internally promoted Co-CEOs Dr. Jack Wang Chicheng and Mr. Jeffrey

B. Jump, Chief Technology Officer, primary architect of both the BioMatrix™ and BioFreedom™ DES systems Mr.

John E. Shulze and newly appointed CFO Mr. Ronald H. Ede, majority of the management team have over thirty

years of experience in the medical field and have been working in Biosensors for more than ten years. The recent

restructure of the executive management team in 2011 has shown positive results with the Group attracting big

institutional investors and acquiring strategic technologies to achieve its long-term objective of being Asia’s leading

DES company.

SUSTAINING GROWTH

Future Plans

Expanding the product portfolio

Biosensors has developed a new strategy to move forward, from focusing primarily on DES technology and products,

to increasing its product portfolio diversity, eventually becoming a first-class global medical device platform company.

With the acquisition of Cardiomind in June 2010, they gained technological expertise in the treatment of smaller

vessels, outside the treatment zone for its current DES products. Similarly, in October 2010 acquiring AXXESS DES

systems from Devax Inc. has enhanced the Group’s portfolio to include the specific treatment of bifurcation lesions.

Pioneering next generation medical devices

It is also in the process of developing next generation interventional care cardiology products, such as BioFreedom™

(its latest in stent technology), and continuing to provide complementary technology for specialty stents.

Expanding in the China DES market

As mentioned earlier, Biosensors has the critical advantage of being one of the new entrants in the DES market in

China through its recent acquisition of JWMS. BioMatrix™ is currently awaiting approval from the China’s State Food

and Drug Administration (SFDA) to be marketed in China and is well positioned to take the lead in China and ensure

sustainable growth.

Penetrating the US DES market

There are also plans to penetrate the US market, which is currently the largest DES market globally. With its

acquisition of Devax Inc. AXXESS technology, Biosensors seeks to gain a foothold in the profitable US market. In

2010, Devax received the CE mark, for the AXXESS System, allowing Devax to sell this product in the European

Union and other countries that recognise the CE mark.

12

CONCLUDING WORDS

Investing in Biosensors International is recommended because of its strong balance sheet and its continued strong

performance in achieving revenue and profit goals. Investors can expect a stable return on their investment in the long

term, as well as see the company expand into new markets and reap returns on Biosensors’ growth.

With a sizeable portion of the DES and other specialty stent markets that are relatively untapped, there is significant

industry growth potential, and Biosensors is in a strategically sound position to achieve success. It has expertise in the

entire chain of process, from R&D to sales and marketing. This is a crucial factor in its success, as control over

licensing and pricing contribute to overall sales and profits. Besides a good grasp of the entire chain of processes,

Biosensors has in-depth knowledge of Asia’s and Europe’s regulatory and licensing processes, allowing it to obtain

several key patents and approvals.

The good track record of the company, coupled with management that are capable and driven to achieve results for

Biosensors and investors, prove that Biosensors has the ability to carry out future growth plans. As of March 12, 2012,

analysts have put a valuation of SGD1.90 on Biosensors, with the current trading price of SGD 1.40. This

demonstrates analyst confidence in Biosensors to perform up to and beyond expectations, and deliver on its promised

goals.

In summary, investors looking to invest in the long term in a growing industry should have Biosensors on their radar

and consider including Biosensors in their portfolio.

13

References

Biosensors International. (2011). Nurturing Dynamic Growth: Annual Report 2010/11. Retrieved March 10, 2012, from

http://biosensors.listedcompany.com/misc/ar2010_11/ar2010_11.pdf

Biosensors International. (2012). Milestones & Highlights. Retrieved March 10, 2012, from

http://www.biosensors.com/intl/about-biosensors-milestones-highlights

Lim, J.S. (2012, January 6). Nomura Equity Research: Analyst Report on Biosensors International.

Wong, T. C. (2011, October 11). OCBC Investment Research: Analyst Report on Biosensors International Group.

Retrieved March 10, 2012, from http://www.ocbcresearch.com/pdf_reports/company/Biosensors-111017-OIR.pdf

Biosensors International. (2010, October 21). Biosensors Acquires Bifurcation-stent Specialist Devax. Retrieved

March 10, 2012, from

http://biosensors.listedcompany.com/newsroom/20101021_080324_B20_A9BD3524B15773F9482577C200818DF0.1

.pdf

News Medical.Net. (2010). Devax’s AXXESS Biolimus A9Eluting Coronory Bifurcation Stent System Receives CE

Mark Approval. Retrieved March 10, 2012, from http://www.news-medical.net/news/20100729/Devaxs-AXXESS-

Biolimus-A9-Eluting-Coronary-Bifurcation-Stent-System-receives-CE-Mark-approval.aspx

Business Insights (2011, March). The Drug-eluting Stent Outlook to 2016.

Lemos PA, Serruys PW, Sousa JE. Drug-eluting stents: cost versus clinical benefit. Circulation 2003; 107:3003-07