ViewRay Initiated Buy At BTIG Research, Expects Hospital Arms Race For Live Imaging

BTIG Equity Research initiated

Viewray IncVRAY

shares with a Buy rating and a 12-month price objective of $6 based on the expectations of hospital arms race in live imaging. The comments come on the heels of the company receiving Chinese regulatory approval for its MRIdian system, as China is considered as one of the biggest markets for medical devices.

BTIG analysts, led by Sean Lavin, believe ViewRay is the only company providing a radiation option that images while treating. The lead analyst thinks that MRIdian system could provide better outcomes with fewer side effects.

"While we admit the higher price per system may impact how many hospitals will ultimately adopt, we feel the early adopters who are less price sensitive will drive strong initial orders and the stock over the next few years.

"If properly marketed, patients will learn about live imaging and, we believe, seek out centers with its availability. We are not calling for ISRG like success this early but could envision a similar hospital arms race," the analysts told clients in a research note.

The brokerage pointed out that not only images are clearer, but studies indicated enhanced accuracy in treatment using ViewRay's device. The medical device maker's product demonstrated a difference of 1.0 cm–1.5 cm healthy tissues, which would have been radiated on traditional linear accelerator systems in a normal case.

BTIG believes patients would be open to VRAY's MRIdian system once they learn about the live imaging.

At time of writing, ViewRay was up 5.31 percent on the day at $3.77.

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