Accuray's (ARAY) TomoTherapy System Uptake On The Rise

Accuray Inc.’s (NASDAQ:ARAY) TomoTherapy System continues to gain traction in international markets. The company recently announced that Mexico City-based Fundación de Cancer de Mama (FUCAM) has treated 1,000 breast cancer patients in less than 18 months after the system was installed at the center.

Globally, breast cancer is the second leading cause of death, exceeded only by lung cancer. Per the reports by the Karolinska Institute, OptumInsight and Stockholm School of Economics, ageing is the principal risk factor for breast cancer. This along with changes in the demographical structure is expected to cause epidemiological shifts and by 2020, breast cancer will reach epidemic proportions in the Latin American region.

Per a report published by Latin American and Caribbean Demographic Centre (CELADE), people aged 65 and above will represent 19% of the population in Argentina, 21% in Uruguay, 21.4% in Mexico and 22.6% in Brazil by 2050. With only a small part of this patient population being able to access proper breast cancer treatments, the scope for market penetration and expansion is significantly high for Accuray.

TomoTherapy System is the only radiation system designed for image-guided intensity-modulated radiation therapy (IG-IMRT). Radiation therapy is often recommended to women, who have breast-conserving surgery, since it may reduce risk of recurrence by up to 70%.

The TomoHelical mode is designed to deliver radiation treatments with speed and precision from all angles around the patient. By using the TomoDirect mode, a clinician can choose to deliver treatment from specific fixed angles. Both the modes ensure the highest level of precision, which reduces radiation exposure to the surrounding healthy tissues.

The milestone achievement at FUCAM demonstrates TomoTherapy’s growing adoption rate among radiation therapy providers. Most recently, U.K.-based NHS supply chain ordered seven TomoTherapy Systems, which demonstrates the continuing strong demand for the system.

The deal will now help Accuray exceed its full-year 2016 gross order target of $280 million to $290 million. We believe that continued penetration and market share gains by the TomoTherapy system in single and dual vault accounts will drive gross order growth in fiscal 2017. Additionally, continued momentum in replacement sales and higher CyberKnife system sales are expected to drive growth in the near term.

Zacks Rank & Key Picks

Accuray carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical space are CryoLife (NYSE:CRY) , IRadimed (NASDAQ:IRMD) and Masimo Corp (NASDAQ:MASI) . All the three stocks sport a Zacks Rank #1 (Strong Buy).