Health & Fitness
Health and Fitness
Health and Fitness
Thu, December 2, 2010
Wed, December 1, 2010
Accuray Incorporated, Varian Medical, TomoTherapy, GlaxoSmithKline Plc and Theravance
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Accuray Incorporated (Nasdaq: [ ARAY ]), Varian Medical (NYSE: [ VAR ]), TomoTherapy (Nasdaq: [ TOMO ]), GlaxoSmithKline Plc (NYSE: [ GSK ]) and Theravance Inc. (Nasdaq: [ THRX ]).
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Here are highlights from Tuesdaya™s Analyst Blog:
Accuray Lowered to Underperform
We downgrade our recommendation for leading radiosurgery systems maker Accuray Incorporated (Nasdaq: [ ARAY ]) to Underperform following the companya™s lackluster first-quarter fiscal 2011 results and a tepid outlook. The first quarter loss per share of 8 cents was higher than the Zacks Consensus Estimate of a loss of 7 cents and the year-ago loss of 6 cents.
Net loss swelled 39% year over year on account of lower revenues. Sales dipped roughly 25% year over year, largely missing the Zacks Consensus Estimate, hit by lower products and services revenues. The company has backed its outlook for fiscal 2011.
California-based Accuray is a global leader in the field of radiosurgery and provides a non-surgical treatment option for patients diagnosed with cancer. In the radiation oncology market, the company competes head-to-head with Varian Medical (NYSE: [ VAR ]) and TomoTherapy (Nasdaq: [ TOMO ]).
Accuraya™s CyberKnife system boasts of a technology that differentiates it from traditional treatments. The company continues to enjoy healthy demand for the product as evidenced by sustained growth in the number of patients receiving treatment with the device.
However, Accuray remains susceptible to reimbursement uncertainties surrounding its products. Moreover, its CyberKnife system faces stiff challenge from competitive product offerings, especially from Varian.
Accuray has provided a conservative guidance for fiscal 2011 with a sizable sales deficit, expected to be a drag on the top and bottom lines for the year. The companya™s weak revenue guidance for fiscal 2011 reflects lower deferred revenues from the CyberKnife systems sold under the legacy Platinum multi-year service plan (discontinued in October 2005) compared to fiscal 2010.
Accuray expects to book revenues of $5 million in fiscal 2011 under the Platinum plan versus $29 million a year-ago, which will conclude all deferred revenues recognized under this contract.
Glaxo Hikes Stake in Theravance
British pharma giant GlaxoSmithKline Plc (NYSE: [ GSK ]) upped its holding in biotech company Theravance Inc. (Nasdaq: [ THRX ]) following the completion of the sale of 5,750,000 shares at $22.50 per share. The transaction, worth approximately $129.4 million, allows Glaxo to hold approximately 19% of Theravance shares going forward.
The increased holding by the pharma major reflects the confidence in the Relovair program, under which the companies are looking to replace one of Glaxoa™s best selling drugs Advair by evaluating treatment options for asthma and chronic obstructive pulmonary disease (COPD).
In November 2002, Theravance entered into a collaboration agreement with GlaxoSmithKline. Under the deal, the companies are looking to develop and commercialize a once-daily long-acting-beta 2 agonist (LABA) product candidate both as a single agent (for treating COPD patients) and also in combination with an inhaled corticosteroid (ICS) for the treatment of asthma and/or a long-acting muscarinic antagonist (LAMA) for COPD. These programs are collectively known as the Relovair program.
In September 2010, the companies presented encouraging data from a mid-stage study (n=60) on their combination therapy Relovair for treating COPD patients. The data from the double-blind, parallel-group, placebo-controlled study was presented at the European Respiratory Society congress in Spain.
The late-stage studies for Relovair in COPD and asthma began in October 2009 and March 2010, respectively. Even though Theravancea™s pipeline is quite impressive, we believe the main potential lies with the Relovair program.
Currently, we are Neutral on both Glaxo and Theravance. Our long-term stance is supported by the Zacks #3 Rank (short-term Hold rating) carried by both the companies.
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