Accuray Radixact Picked by India's Apollo for Cancer Treatment

Zacks Equity Research Published on March 29, 2018

Accuray Incorporated (ARAY - Free Report) recently announced that it has signed an agreement with the Apollo Hospitals Group in Chennai and New Delhi, India, for the acquisition of two Radixact Systems — the company’s flagship radiotherapy device. This development is part of the company’s effort to fortify its position in the emerging market.

The systems will be replacing a traditional linear accelerator in a bid to deliver highly accurate treatments for a broad range of malignant tumors of patients in India. Per management, the Radixact System can be used to treat virtually any tumor type including breast, head and neck, lung and prostate cancer, during any stage of the treatment.

Apollo Hospitals Group has emerged as Asia’s premier healthcare services provider, serving patients from over 140 countries for more than 25 years. It can therefore be deduced that this latest development will strengthen Accuray’s position in Asia.

Radixact in Focus

The Radixact System comes with additional benefits. Its powerful linear accelerator enables physicians to deliver accurate, individualized dose distributions that conform to the shape of the patient's tumor. Moreover, it provides 3D image guidance on a daily basis, facilitating proper dosages that cater to patients’ anatomical changes. Furthermore, the adaptive therapy, using PreciseART Adaptive Radiation Therapy software, is highly automated and efficient, enabling the clinical team to routinely incorporate adjustments to the treatment planning.

In this regard, it can be noted that the orders will be incorporated during Accuray’s fiscal third quarter, that ends in March. In the second quarter as well, the Radixact system represented nearly 70% of all TomoTherapy products. Per management, 25 Radixact units were recognized up to the second quarter.

Cancer Trends in India

Per a study by Times of India, 14.5 lakh people are estimated to be living with the disease in India, with over 7 lakhs new cases being registered every year.

Increasing prevalence of tobacco consumption is a major cause of the disease.

Price Performance

In the past six months, Accuray’s shares have rallied 26.6%, compared with the industry’s gain of 8.1%.

Zacks Ranks & Key Picks

Accuray carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space are athenahealth, Inc. , Bio-Rad Laboratories, Inc. (BIO - Free Report) and Centene Corporation (CNC - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

athenahealth has expected long-term growth rate of 17.7% and earnings per share growth rate of 21.5%.

Bio-Rad has expected long-term growth rate of 20% and earnings per share growth rate of 20%.

Centene has expected long-term growth rate of 14.4% and earnings per share growth rate of 14.4%.

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