Milestone for Accuray's TomoTherapy

Leading radiosurgery systems maker Accuray Incorporated (ARAY - Analyst Report) recently reported that medical practitioners at the University of California, San Francisco (“UCSF”) Helen Diller Family Comprehensive Cancer Center have started to treat patients with its popular TomoTherapy Systems. The latest addition has enabled the center to offer more dynamic and effective cancer treatment, enhancing patient outcomes.

The UCSF installed its first 3D image-guided, intensity modulated radiation therapy (“IG-IMRT”), TomoTherapy System last month. The center also uses Accuray’s CyberKnife Robotic Radiosurgery System along with other equipments to provide a complete range of cancer care technologies.

The TomoTherapy Systems are unique fully integrated and advanced radiation therapy systems used for treating all types of cancers. It provides precise and safe radiation therapy by combining computed tomography (“CT”) imaging and radiation treatment delivery in a single device, thereby lowering side effects.

Accuray is a global leader in the field of radiosurgery and provides a non-surgical treatment option for patients diagnosed with cancer. Most of the company’s growth comes from acquiring market share from its rivals for two of its flagship products, the Cyberknife and the TomoTherapy Systems.

The company acquired Wisconsin-based radiation system maker TomoTherapy in June 2011. The acquisition has bolstered Accuray’s foothold in the radiation oncology space. The merger marked the union of TomoTherapy’s unique radiation therapies and Accuray’s popular radiosurgery systems to create a leading player in this market. The combined entity is now offering state-of-the-art therapies, ranging from high-precision radiosurgery to image-guided intensity-modulated radiation therapy for treating cancer and other diseases.

Accuray installed 22 new CyberKnife and TomoTherapy systems during the most recent quarter, taking the aggregate global installed base to 635 units. The company added $64.2 million of new system orders in the quarter, leading to a total system backlog of $279.6 million.

However, Accuray remains susceptible to reimbursement uncertainties and faces stiff challenges from competitive product offerings of Varian Medical (VAR - Analyst Report). We currently have a Neutral recommendation on the stock, which is backed by a short-term Zacks #3 Rank (Hold).