Accuray's Success Still on the Rise

Feb. 3.09 | About: Accuray Incorporated (ARAY)

by Katharine Schildt

The health care sector is about as recession-proof as you can get – quite an attractive quality in these trying times. According to some analysts, health care could average a 25% gain this year. These gains are possible because our population is living longer as it grows older.

That means more people suffering longer from harder-to-treat diseases. And disease’s poster-child is cancer. It claimed over 500,000 people in the United States alone last year.

Cancer is one of the leading killers around the world as well. And even with recent gains in cancer treatment, the number of people suffering from this debilitating disease is expected to increase in coming years.

Accuray – A Global Leader in Radiosurgery

It’s what makes Accuray (Nasdaq: ARAY) so special. As a global leader in the field of radiosurgey, it’s the only biotech company boasting a product with the ability to treat cancer patients’ tumors with precision.

Based in Sunnyvale, California, Accuray has created technology that can make the healing process easier and less invasive for cancer patients. Their products allow certain patients to be treated, who might have otherwise gone uncared for due to the scope of their tumors.

Accuray’s most promising product is their CyberKnife, which is designed to treat tumors in any part of the body – of any size – without actual surgery.

The high-tech, computer directed CyberKnife allows for treatment of the tumor with minimal damage to surrounding tissue, giving cancer patients an alternative to other radiation therapies. The ability to treat these tumors with more precision is especially useful in areas of the body that contain critical nerves and/or organs.

Worldwide Usage of Accuray’s CyberKnife

So far Accuray’s CyberKnife has been used on more than 50,000 patients all over the world. One hundred and fifty-five systems are located in various treatment centers throughout North and South America, Europe and Asia.

With a cost of over $3 million each, Accuray doesn’t need to sell too many of these to have a good quarter. As a leading cancer treatment, it’s no surprise that more machines are planned on being installed.

Euan S. Thomson, Accuray’s President and CEO, is excited for what’s still to come. “We are encouraged by the year-over-year revenue growth plus strong installation and shipment numbers for the quarter, reflecting an expanding demand for our CyberKnife Robotic Radiosurgery System.”

Accuray announced a 10% increase over second quarter of fiscal 2008 revenue of $52 million and a 3.2% sequential increase over the first quarter of fiscal 2009.

Last week, Accuray rocketed 26% after meeting second quarter earnings expectations, making it one of the lead small-cap gainers. But that shouldn’t suggest that it’s done marching upwards.

With CyberKnife on their side, and other developments in the works, Accuray is sure to have continued to success in the months – and years – to come.