Seeking Alpha: Accuray Has to Turn Short-Term Pain Into Long-Term Gain

If the first six months are any indication, Accuray's (ARAY) acquisition of TomoTherapy hasn't really pleased anybody. Investors have seen steady erosion in their position value, while clinicians seem unimpressed or even confused about the purported benefits of this tie-up. All of that said, these are early days. Accuray already seems to be effecting a turnaround in the Tomo service operations and given the overall med-tech weakness in 2011, it may well be too soon to declare this merger and this company a failure.

Bad News First – A Tough Market Getting Tougher
Accuray is a small fish in a tough pond. Radiation therapy systems are large, expensive commitments for hospitals to make and that makes it all the more difficult for a small would-be player like Accuray to unseat established giants like Varian (VAR). Moreover, difficult financial markets have not helped hospital capital budgets and reimbursement pressures continue to constrain the radiation market.

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Accuray Has To Turn Short-Term Pain Into Long-Term Gain