PETALING JAYA: IHH Healthcare Bhd
’s investment in US-based TibaRay for advanced flash radiotherapy technology will improve its offerings to patients in the area of oncology, says MBSB Research.
The tech-driven investment will potentially shorten delivery times, improve dose control leading to a reduction of 20% to 30% dose and deliver safer radiation exposure, subsequently boosting IHH’s oncology services.
While the cost of investment, as well as the type of product and product pricing, had not been disclosed, the research house noted the target price range for TibaRay’s technology is expected to be in line with or slightly above conventional X-ray linear accelerator machines, which cost about US$5mil each.
Another product of TibaRay is the proton therapy machine called Phaser, which could cost up to US$100mil, it said.
The research house said TibaRay had received significant funding from sources like the National Cancer Institute to support the research and developement as well as consequent commercialisation of its product.
“We believe with the additional funds from IHH, the development of the technologies can be further improved. Despite the high initial cost, Phaser has the potential to treat patients up to 400 times faster than conventional radiotherapy, which could significantly increase revenue intensity for IHH’s oncology centres,” it said.
“We opine that this investment positions IHH as a premium, competitive provider of such technologies,” MBSB Research added.
It noted the deployment of more affordable, high-speed machines would allow IHH to support government-linked initiatives, including its ongoing memorandum of understanding with the Health Ministry to provide free public cancer treatments.
“We believe that IHH’s move to upgrade its facilities with TibaRay technologies is in tandem with the group’s strategy to increase revenue intensity by attracting high-acuity oncology cases as well,” it said.
MBSB Research maintained a “neutral” call on IHH, with an unchanged target price of RM8.25 with no changes to the group’s earnings estimates.
