MADISON, Wis. – Accuray (NASDAQ:ARAY) Incorporated (NASDAQ: ARAY) has received approval from the Chinese National Medical Products Administration (NMPA) for its Accuray Precision® Treatment Planning System (TPS), the company announced today. This system is designed to work with the Tomo® C radiation therapy system, developed through a joint venture with CNNC, to deliver precise radiotherapy for cancer patients in China.
The Accuray Precision TPS enables medical teams to create and adjust treatment plans quickly, taking into account changes in tumor size, shape, and position, as well as shifts in nearby healthy tissue. This approval allows the joint venture to begin distributing the Tomo C System in China, where approximately 25% of the world's new cancer cases were diagnosed in 2020.
Suzanne Winter, president and CEO of Accuray, expressed satisfaction with the approval, highlighting the potential benefits for patients in China. She noted that the Accuray Precision TPS is already known to Chinese customers through the company’s other systems like CyberKnife®, Radixact®, and TomoTherapy®. The addition of the Tomo C System to Accuray's offerings is expected to enhance the company's presence in China's regional Type B market.
The Tomo C System, which is manufactured domestically in China, features helical imaging and radiation delivery, integrated treatment planning, and centralized data management. Its beam-shaping technology is patented, and it aims to precisely target tumors while minimizing exposure to healthy tissue. The system is suitable for treating a range of cancers, including breast, prostate, lung, and head and neck, as well as more complex conditions like total marrow irradiation.
Accuray is headquartered in Madison, Wisconsin, and operates globally, focusing on continuous innovation in radiation therapy. The company's mission is to expand the potential of radiation therapy to improve as many lives as possible.
In other recent news, Accuray Incorporated, a radiotherapy equipment specialist, faced notable challenges in Q3 due to decreased capital spending on radiotherapy equipment in U.S. hospitals and approval delays for the Tomo C precision treatment planning system in China. Lake Street Capital Markets adjusted its price target for Accuray, reducing it to $6.00 from the previous $13.00, while maintaining a Buy rating. Despite the cut, the firm projects Accuray's fiscal year 2025 revenue to be $450.2 million, a 4% year-over-year increase.
Accuray's Q3 financial results were below expectations due to these setbacks, but the company remains optimistic about its long-term strategy, anticipating a return to growth in fiscal year 2025. Global order growth and strategic initiatives aimed at enhancing patient access and reducing operating costs through AI-driven solutions were highlighted as positive developments.
The company's outlook includes recovery in revenues and adjusted EBITDA in the upcoming quarters. Accuray plans to leverage its service contract revenue, commercial partnerships, and innovation pipeline to drive growth. Regulatory approval for precision treatment planning in China and the introduction of the product Helix in India are among the long-term opportunities being pursued.
InvestingPro Insights
As Accuray Incorporated (NASDAQ: ARAY) secures a foothold in the Chinese medical market with the approval of its Accuray Precision® Treatment Planning System, it's important for investors to consider the financial health and market performance of the company. According to InvestingPro data, Accuray holds a market capitalization of 173.18 million USD, indicating its size in the competitive landscape. Despite the potential for growth in new markets, the company has been dealing with some financial challenges. It operates with a significant debt burden, and analysts have predicted a decline in net income this year. Furthermore, Accuray has not been profitable over the last twelve months, and it is trading at a high EBITDA valuation multiple of -8.95 as of Q3 2024.
InvestingPro Tips suggest that the company is not expected to be profitable this year, which is a crucial consideration for potential investors. Additionally, the company's revenue has seen a decline of 2.0% in the last twelve months as of Q3 2024. These factors underscore the importance of a cautious investment approach, taking into account not only the company's strategic moves but also its financial stability and growth prospects.
To gain a deeper understanding of Accuray's financial position and to access more detailed analysis, investors can explore additional InvestingPro Tips. There are currently 5 more tips available on the platform, which can help investors make more informed decisions. For those looking to subscribe to InvestingPro for further insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With these tools at hand, investors can better navigate the complexities of the market and the intricacies of Accuray's business model.
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