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Accuray's (ARAY) New Tie-Up to Augment Treatment Planning

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Accuray Incorporated (ARAY - Free Report) recently announced that it is collaborating with Limbus AI Inc. to enhance Accuray’s adaptive radiotherapy capabilities. This is expected to be done by leveraging Limbus' artificial intelligence (“AI”)-driven autocontouring algorithms, thereby enabling automated contouring to further streamline the treatment planning process (which is currently under progress).

Accuray, along with Limbus AI, expects to make the integrated offering available in the beginning of 2023.

The latest partnership is expected to be a step forward for Accuray to strengthen its radiation therapy business on a global scale.

Rationale Behind the Tie Up

During the course of radiation therapy, instances like changes in tumor size, shape and location, or in the position of organs and other healthy tissues due to weight gain or loss, might occur. This may necessitate adaptation of the treatment plan to ensure that the radiation dose remains targeted on the tumor while avoiding nearby sensitive organs. However, modifications to plans as part of the adaptive workflow can be excessively time consuming and labor intensive.

Contouring (defining the border of the tumor and organs at risk) is one of the most critical steps in the planning process. However, automating the contouring portion of the overall planning process paves the way for practical adaptive plan modification as per requirement, without disrupting any workflow. Further, automation tools make it easier for medical care teams to ensure consistency in the plans created.

Per Accuray’s management, offering practical adaptive solutions for clinics is one approach and the software provided by Limbus AI is likely to be a significant contributor in achieving this goal. Management also believes the latest partnership with Limbus AI will aid it in developing innovative AI-driven solutions that cater to the requirements of providers and enable them to deliver personalized patient care.

Limbus AI’s management believes that the technology will boost efficiency for clinicians, thereby enabling optimal treatment planning in lesser time. Also, these advances will likely expand the utilization of treatment machines so that more patients can receive improved care.

Industry Prospects

Per a report by MarketsandMarkets, the global radiotherapy market is valued at $5.9 billion in 2021 and is expected to reach $7.3 billion by 2026 at a CAGR of 4.2%. Factors like technological advancements in radiotherapy and the rising incidence of cancer are likely to drive the market.

Given the market potential, the latest collaboration is expected to provide a significant boost to Accuray’s business globally.

Notable Developments

Last month, Accuray announced that clinical studies continue to validate the versatility of its CyberKnife and TomoTherapy platforms, including the next-generation Radixact System, to accurately and efficiently treat a wide variety of indications of all complexities.

In March, Accuray announced favorable long-term follow-up data from a study of patients with trigeminal neuralgia. The data indicates that majority of the patients continued to experience pain relief 10 years after receiving image-guided robotic radiosurgery treatments delivered with Accuray’s CyberKnife System.

Price Performance

Shares of the company have lost 49.5% in the past year compared with the industry’s 13.9% fall and the S&P 500's 1.9% decline.

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Zacks Rank & Key Picks

Currently, Accuray carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Patterson Companies, Inc. (PDCO - Free Report) and Masimo Corporation (MASI - Free Report) .

AMN Healthcare, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has gained 6.1% against the industry’s 63% fall in the past year.

Patterson Companies, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. PDCO’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 2.7%.

Patterson Companies has lost 8.3% compared with the industry’s 4.1% fall over the past year.

Masimo, carrying a Zacks Rank #2 at present, has an earnings yield of 3.2% against the industry’s negative yield. MASI’s earnings surpassed estimates in the trailing four quarters, the average beat being 4.4%.

Masimo has lost 32.4% compared with the industry’s 13.9% fall over the past year.

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