IBA - KBC Securities Company Note 23.10.2018 - Ready to rumble

Yesterday we attended IBA’s CMD at the ASTRO conference in San Antonio (USA). We had the opportunity to discuss industry prospects with several participants. A lot of attention went to Varian’s announcement regarding a new PT system. Varian’s improved single room system is expected to intensify competition in PT going forward. Nonetheless, IBA remains a leader in the PT field, with its competitors following strategic decision. Accumulate and € 23.5 TP reiterated.
• Varian announced its new and improved single room PT system, the ProBeam 360°: using the same accelerator but with a smaller gantry, reducing the footprint to 384.4m2 (30% smaller but still above IBA’s 350.7m2 Proteus One) and focused on Flash Therapy.
• Although Varian loudly re-emerged with an improved single room offering, we believe that at this point Varian does not have a technological edge over IBA. However, Varian’s offering has become more competitive and its integrated radiation therapy offering might provide them a foot in the door with potential PT customers. IBA remains to have the advantage of fast installation time versus its competitors, which take 2-3 years vs 12 months with IBA.
• In the meantime, the 2018 PT market to date consists of 10 rooms, with Hitachi and Mevion each adding a contract in 3Q18. From conversations with the various players in the field of PT, we take away that the industry is quickly moving towards single room systems, validating IBA’s approach to the sector. Each of the PT companies feel that traction in the US is picking up.