A radiation therapy facility (RTF) uses targeted energy to kill cancer cells, shrink tumors, and provide relief of certain cancer-related symptoms. Generally speaking, there are three types of treatment modalities utilized by RTFs: Photon Therapy (EBRT, IMRT, SRS/SBRT), Proton Therapy and Brachytherapy.
Services are typically provided in a freestanding center or a hospital outpatient department. In 2013 there were approximately 2,340 photon/brachy based radiation therapy locations.
In 2017, there were 27 proton therapy centers in operation in the United States with 11 under development or construction. With only nine proton centers in 2010, the industry has seen tremendous growth which is expected to continue. The costs to construct a proton beam therapy center can range from $30.0 to $350.0 million, depending on the size of the center (number of treatment rooms), the equipment being utilized (pencil beam scanning/IMPT, volumetric imaging, etc.) and the type of treatment rooms utilized (gantry, fixed beam). Traditional photon centers are much less expensive with the cost of a new linear accelerator ranging from $2.0 to $5.0 million.
RTFs are typically valued as a contribution to a joint venture, buyout by an operator/private equity firm or for sale to physician investors. In addition, proton centers that issue tax exempt debt may need a valuation to support the bond issue as part of a refinancing process. VMG Health has extensive valuation experience within the RTF space, valuing dozens of freestanding photon centers and hospital departments per year. In addition, VMG has performed numerous proton therapy valuations, market studies and feasibility engagements.
Determining the value of an RTF poses unique challenges as the appraiser must understand all of the specific facts and circumstances surrounding the industry.
Key value drivers for photon based RTFs include, but are not limited to:
In addition to the above, other value drivers for proton based RTFs include, but are not limited to the following: