Piper Jaffray: Hospital And Freestanding Center Capital Spending Continues To Show Improvement

Piper Jaffray mentions, “Wednesday marked the conclusion of our 4th Annual Cancer Summit held in Minneapolis, Minnesota. This year's participant list included seven cutting edge technology companies, seven leading radiation therapy providers and more than 10 highly respected physician experts. In aggregate, we walked away from the event with a largely bullish outlook as the general consensus was that the reimbursement horizon is stable, M&A activity has returned from its 2 year hiatus, and hospital and freestanding center capital spending continues to show improvement.” “Our provider panelists appeared more willing to commit capital to projects that drive revenues through increased patient volumes (i.e., throughput) and/or products that address new revenue streams than we have seen in recent years. Fortunately, LINAC manufacturers have stepped up R&D efforts in spite of weak capex trends and have released a number of products recently that meet these criteria, including TrueBeam (VAR), TomoHD (TOMO) and CyberKnife VSI (ARAY). We believe recent product innovations, reimbursement clarity, the elimination of most health care reform concerns and an overall healthier economic backdrop (relative to a year ago) support a more optimistic outlook for large-dollar capital equipment purchases for the foreseeable future,” the analysts say. Piper Jaffray adds, “Our panelists believe further accretive transactions will materialize this year ahead of the capital gains tax hikes scheduled to go into effect on Jan. 1.” More Analyst Ratings here