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Accuray Extends Ties with RaySearch Laboratories, Stock Up

Shares of Accuray IncorporatedARAY rallied 3.2% (or 17 cents) yesterday, following the news of its second long-term agreement with RaySearch Laboratories. The first agreement was inked in July, this year.

The second agreement will include treatment planning support for the TomoTherapy and CyberKnife systems in RayStation - a treatment planning system for external beam therapy using photons, electrons and/or protons.

Under the terms of the newly-inked agreement, Accuray can offer RayStation to physicians who use the TomoTherapy and CyberKnife systems. RayStation will complement Accuray's treatment delivery systems, offering customers the freedom to choose the technology appropriate for them. Treatment planning support for TomoTherapy systems in RayStation is expected to be launched in 2016, while support for CyberKnife Systems will likely be made accessible in 2017.

In July this year, Accuray and RaySearch entered into a strategic collaboration under which the former will offer the latter's upcoming oncology information system (OIS) RayCare. The collaboration will allow Accuray to offer an integrated solution by combining RayCare - scheduled for launch in 2017 - with the TomoTherapy and CyberKnife solutions. RayCare is being developed using RayStation algorithms for higher performance radiotherapy. The OIS will also feature advanced clinical resource optimization, superior workflow automation and adaptive radiation therapy.

Demand for radiotherapy services in the global market is on the rise owing to increasing occurrence of cancer, replacement of older radiotherapy systems and higher reimbursement levels for radiation therapy. In such a scenario, we feel that the partnership will help Accuray gain market traction which will eventually drive top-line growth.

However, it is to be noted that Accuray's CyberKnife system involves significant capital spending, with many healthcare providers reluctant to spend, primarily owing to the prevailing sluggish macro-economic conditions.

Zacks Rank and Key Picks

Currently, Accuray carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical sector are Masimo MASI , Thoratec THOR and NuVasive NUVA , all the stocks sporting a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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