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Accuray's (ARAY) Tomo C Radiation System Gets Approval in China

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Accuray Incorporated (ARAY - Free Report) announced that the CNNC-Accuray joint venture Tomo C radiation therapy system got approval from the Chinese National Medical Products Administration (NMPA).

The radiation treatment delivery system will be available in China for Type B market. It is completely made in China, developed under a joint venture between Accuray and CNNC. The system will be used to treat cancer patients who require radiotherapy at least once to cure their disease, increase the chances of cure or relieve symptoms caused by the same.

Price Performance

Shares of Accuray have risen 38.3% year to date against the industry’s 10.4% decline. The S&P 500 Index has increased 11.4% in the same time frame.

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Significance of the Approval

The recent approval to Tomo C radiation therapy system will help Accuray cater to a large market. Per the company, there is a significant opportunity in China for radiation therapy systems as number of patients requiring radiation far outweighs the current capacity in the country. The current capacity is also below the level recommended by the World Health Organization.

The Tomo C radiation therapy system includes fully-integrated treatment planning and centralized data management. Moreover, the new system uses patented beam-shaping technology for ultra-precise treatment delivery that will give greater control over the radiation dose so it conforms closely to the tumor and helps minimize the effect on healthy tissues.

The system's unique design and high-speed multi-leaf collimator support a range of delivery modalities, from conventionally fractionated to ultra-hypofractionated treatments. The multi-modality delivery will optimize outcomes for standard radiation therapy indications including breast, prostate, lung, and head and neck cancers, in addition to complex treatments such as total marrow irradiation.

The advanced features of the radiation therapy system will likely lead to its faster adoption in the largest segment of the China market, as it will enable medical care teams to provide personalized and highly precise treatments to more people every day.

Industry Prospects

Per a report by Market Data Forecast, the radiation therapy market in the Asia Pacific region was estimated at $1.37 billion in 2023 and is anticipated to reach $1.90 billion by 2028 at a CAGR of 6.8%. Within this region, China is likely to dominate with higher demand for radiation therapies driven by factors like large and increasing elderly population, better healthcare infrastructure, increasing per capita income and rising cancer cases.

Given the market potential, the latest product offering is expected to provide a significant boost to Accuray’s business in the country.

Recent Developments

Earlier this month, Accuray announced that an online adaptive therapy option, Cenos, is under review with the FDA for a 501(k) clearance. Cenos will be used with ARAY’s Radixact system, enabling medical care teams to quickly and efficiently make the necessary adjustments to a treatment plan while operating. The therapy option leverages real-time adaptive therapy through the company's proprietary Synchrony technology and offline adaptive with PreciseART radiotherapy to check for any anatomical changes during radiation delivery. The solution was developed in partnership with Limbus AI. The latest offering is expected to significantly strengthen Accuray’s TomoTherapy radiation therapy platform on a global scale.

This month, Accuray opened its new global training facility, the Accuray Center for Education, located at its corporate headquarters in Madison, WI.

Last month, the company received the FDA’s approval for its VitalHold breast package on the Radixact System. The technology is expected to be available to customers in the United States, European Union and other regions, subject to regulatory approvals.

Zacks Rank & Stocks to Consider

Accuray currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader medical space are Align Technology (ALGN - Free Report) , McKesson Corporation (MCK - Free Report) and Medpace (MEDP - Free Report) .

Align Technology, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 17.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ALGN’s earnings surpassed estimates in two of the trailing four quarters and missed twice, delivering an average negative surprise of 1.76%. The company’s shares have risen 42.1% year to date compared with the industry’s 9.3% growth.

McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.7%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 8.1%.

The stock has gained 16.6% year to date compared with the industry’s 9.3% growth.

Medpace, carrying a Zacks Rank #2 at present, has an estimated growth rate of 16.2% for 2024. MEDP’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 22.28%.

The company’s shares have rallied 14.2% year to date against the industry’s 13% decline.

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