Accuray Incorporated (ARAY) Earnings Call Transcript & Summary

Welcome to Accuray's Annual Investor Day meeting to review our new vision, strategy and product road map. My name is Ken Mobeck, and I'm the Vice President of Finance and Investor Relations here at Accuray. Joining us today are Josh Levine, President and Chief Executive Officer; Suzanne Winter, Chief Commercial Officer and Senior Vice President of R&D; Corey Lawson, Vice President, Product Strategy; Shawn Prince, Senior Director, Patient Access, and Shig Hamamatsu, Chief Financial Officer. Before we begin, I would like to remind you that our presentation today includes forward-looking statements, including statements related to our product road map, growth and growth catalysts. Actual results may differ materially from those contemplated or implied by these forward-looking statements. Factors that could cause these results to differ materially are set forth in the slides accompanying today's presentation, which we filed on Form 8-K today prior to market open, as well as in our other filings with the Securities and Exchange Commission. The forward-looking statements contained in today's presentation are based on information available to us and management expectations as of today's date. And we assume no obligation to update any forward-looking statements as a result of new information or further events, except to the extent required by applicable securities laws. Accordingly, you should not put undue reliance on any forward-looking statements. One housekeeping item for today's call. We will hold a Q&A session immediately following the presentation. You may submit your questions during the presentations, via the questions and answers box located on the webcast page. We will host a separate earnings call to report the results of our fiscal first quarter this Thursday, October 29, after the close of the market. With that, let me turn the meeting over to Accuray's President and Chief Executive Officer, Josh Levine. Josh?

Good morning. I'd like to welcome all of you who are currently online with us. Whether you are a current investor or familiar with Accuray or new to the company's story, I'd like to thank you for connecting to the Accuray Investor Day presentation webcast. I'm Josh Levine, President and Chief Executive Officer of Accuray. I'd like to provide a quick run-through of our agenda for today's session. I'll take roughly the first 10 minutes of the session with some comments regarding our vision for the company, and then focus on the strategic growth agenda and strategy that we have for Accuray going forward. I'll then turn the program over to Suzanne Winter, our Chief Commercial Officer and R&D leader, who will spend some time on market dynamics and the key areas that we see as growth catalysts for the business. When Suzanne is done, we'll transition to Corey Lawson, our Vice President of Product Strategy, who will discuss in detail our current product innovation pipeline, and how it aligns with critical market trends and growth opportunities that we see in front of us. After Corey, you'll be hearing from a number of our key opinion leader physicians and their experience with Accuray's newest technologies, those that we have most recently launched as well as those that are soon to be introduced. After that, we will be opening this session up for Q&A. We have a very powerful view of where our industry is at present and how Accuray will participate in it going forward. Philosophically, we see the next several years as the golden age of radiation therapy. It's a powerful treatment modality that is truly noninvasive and patient-friendly, delivered in 15-minute treatment time slots with very little recovery period required post treatment. As more long-term clinical data follow-up is confirming, radiotherapy has the potential for improved clinical outcomes and quality of life, in contrast, as an example, to surgical approaches for similar disease sites. Taken to its most aggressive vision, radiotherapy has the potential to become a nonsurgical therapeutic solution in a number of chronic diseases. Both oncology related and beyond, creating a real treatment hope for many suffering patients. So with this previous description of the power of radiotherapy as a treatment modality, we see the following vision for Accuray: to expand the curative power of radiation therapy to improve as many lives as possible. Breaking down these highlighted words. Expand. Treating more patients and more diseases, both in and beyond oncology and at the greatest geographic reach to ensure broad patient access. Curative. Our company's legacy has been built around pushing the innovation envelope with advanced treatment capabilities to allow radiation oncologists to be able to treat patients with clinically challenging situations that previously have been thought to be untreatable with more conventional technologies. Power. We have staked our company reputation from the earliest days on precision and accuracy based on our unique capabilities. We have a strong sense of responsibility to being customer-centric and responsive, but also have a greater appreciation for what we can and can't do on our own as a small market cap company. We are driven to work with other innovative organizations to leverage and deploy more powerful go-to-market approaches that support our business mission. Radiation therapy. We are a pure-play focused organization dedicated to providing the best radiotherapy products to support patients and the customers that treat them. Our growth strategy will be supported by these 3 areas of concentration, capabilities and market trends, a very strong and getting stronger by the day, executive team, great functional leadership and domain expertise, a unique go-to-market strategy in the fast-growing China market and improving operating leverage in our overall business model, uniquely differentiated product architecture that drives a different treatment capability, ultra-precise, highly accurate and confidence inspiring to be able to increase dosing and treat through hypofractionated delivery; cross-platform, best-in-class, unique technologies like Synchrony, automated real-time motion management capability, VOLO, enhanced treatment planning and ClearRT, Helical kVCT imaging innovation for the Radixact platform that we are introducing here at the ASTRO conference. Strong macro market drivers. Underpenetrated global market, changes in U.S. reimbursement, favoring use of SBRT and hypofractionated treatment delivery, and an aging installed base in the U.S. and Western Europe, latest technology upgrades driving trade in trade up opportunities to the latest generation products. I have the distinct pleasure and honor to lead one of the strongest executive teams in my career, and by far, the strongest group in my time at Accuray. This is a team of best-in-class functional executives that have significant domain experience with larger market cap companies. They are here because they see the potential for Accuray's growth trajectory through focused execution and are interested in shaping and leading in a smaller organization where their impacts are more immediately visible on the company's performance. The drivers of why customers choose Accuray products varies from location to location. But in general, customers choose Accuray because they believe the technology is superior in delivering patient outcomes from the simple to the complex. Accuray devices have become more mainstream and workhorse in nature through improved speed, throughput and overall operating efficiency as well as improved product reliability with our newer generation devices across both the CyberKnife and TomoTherapy platforms. Key innovations have expanded the range and clinical diversity of the case mix that can now be effectively treated across both platforms. CyberKnife has been a gold standard SRS/SBRT platform, especially in intracranial cases. But over time has become a full-body radio surgery device with significant clinical capability and usage in lung, liver and prostate cases. TomoTherapy has very broad case capability and diversity. The largest field size of any device in the RT space making it very capable in procedures such as total body irradiation that supports stem cell or bone marrow transplantation. Accuray's platforms deliver strong clinical outcomes and enhanced quality of life and treatment experience for patients through the use of hypo and ultra-hypofractionated treatment delivery, significantly reducing the overall time lines to complete a full treatment regimen. Accuray's unique robotic and helical product architecture, also represent a differentiator for customers in their local markets from a clinical and competitive positioning standpoint. We have worked hard over the past several years to drive improved operating leverage into our business model and the financial impact of those efforts are starting to become more visible. We've become more efficient with resource deployment and headcount management and are continuing to focus on critical areas such as COGS reductions and activities related to service margin improvement. Additionally, the growth in our global installed base has supported a recurring service revenue stream that has grown to over $200 million annually. Technology innovation has been an intrinsic element of Accuray's historical culture and we believe will be a key success factor to the execution of our vision. As of the end of our prior fiscal year ended June 30, 2020, the company's [ IP estate ] had 472 issued patents and another 129 patents that were pending. Over the next 3 years, we are committed to a continued cadence of innovation that will support greater market penetration and market share gains for our business. Recent launches of our Synchrony motion management capability on the Radixact platform and our VOLO treatment planning optimization engine are representative of the high-impact projects in our R&D pipeline. Another example of a high-impact project is our Radixact platform imaging upgrade called ClearRT, which offers soft tissue visualization capabilities with near diagnostic quality CT levels of resolution. While impacts related to the COVID environment creates some headwinds in the near term, we believe our continued focus on driving a cadence of innovation that's aligned with clinical market needs, will create a catalyst for growth in Fiscal year '22 and beyond. The milestones and activities captured in the center and right-hand boxes in this slide represent the areas of focus associated with Accuray's current strategic business planning horizon. Several of these milestones have already been delivered or launched, others are in progress. In the aggregate, they represent the critical areas of strategic focus, resource deployment and executive accountability that we believe will accelerate Accuray's growth through Fiscal year '22 and beyond.

Thank you, Josh. I'd like to cover discussion of favorable market dynamics and what we see as long-term growth catalysts for Accuray. I'll be discussing a little bit more about the overall global radiotherapy market, the opportunity in China and how our joint venture strategy positions us to win in China. And then trends in treatment modality that we see as opportunities for Accuray technology. Then I'll be handing it over to Shawn Prince, our Senior Director of Patient access to discuss the latest update on the radiation oncology alternate payment model and its implications for Accuray. As Josh discussed, our vision to expand the curative power of radiation therapy to improve as many lives as possible, we see significant opportunities to expand penetration of radiation therapy in the global market. Just a few facts, as we know, cancer continues to be the #2 killer and new cases of cancer continue to grow due to a number of factors, including better detection methods and the aging population. Radiation therapy remains a critical modality in the treatment of cancer with an estimated 50% to 60% of patients that could benefit. However, gap in care still remains. According to the Lancet Oncology Commission and expected acceleration in the number of patients that will be receiving radiation therapy by 2035, will drive an increase in the number of new linacs needed through either replacement due to age or incremental new systems, providing a healthy look for the radiation therapy modality in cancer treatment alone. Additionally, the use of radiotherapy in neurosurgery is also promising with a growing interest in the use of stereotactic neurosurgery due in part to its noninvasive nature and is growing clinical validation, proves it to be an alternative to surgery, providing therapeutic options to patients that may not be candidates for surgery or other techniques. There's both a replacement opportunity with an aging Gamma Knife installed base and for addition of new systems. There's growing interest in the use of radiosurgery therapy in non-oncology applications like benign tumors, vascular malformations, trigeminal neuralgia and for use in movement disorders like essential tremor and beyond. You will hear more from Dr. Chris Loiselle from Swedish Hospital later today about his experience using radiation therapy and applications beyond oncology and learn more about our product road map and how we're further developing the CyberKnife system to support stereotactic radio neurosurgery applications. Finally, with capital equipment funds being constrained, we believe there will be more demand for shared system and a multidisciplinary approach between the neurosurgeon and the radiation oncology department. The CyberKnife with its neurosurgery roots is exceptionally well positioned to capitalize on the growing interest in neuro radiosurgery applications. In the developed markets, the market opportunity is heavily reliant on upgrading an aging installed base. For example, the median age of the total U.S. installed base of radiation therapy is greater than 8 years. While health systems are maximizing the use of their system as long as possible, our data from IMV suggests that 82% of purchases will be replacements and that the driving motivation will be new technology that provides new capabilities and allow the providers to provide the most advanced patient care like ultra-hypofractionated treatments. You can see that we see a significant opportunity and growth catalysts within our own installed base to upgrade our customers to our latest performance capabilities. Having an installed base is a significant advantage and allows our customers to upgrade to new technology like the CyberKnife S7 with VOLO and our latest generation TomoTherapy platform, Radixact, now with Synchrony and ClearRT, Helical kVCT imaging upon market clearance. The advantage for customers to upgrade is that they are already familiar with how the system operates. There is minimal, if any, investment needed to modify the existing bunker. And there is already a trusted relationship established with a local service and support teams. All of these factors help to ensure retention of our IB customers within the Accuray family. China. China represents a tremendous long-term catalyst for Accuray. In terms of market penetration, China still has a significant lack of patient access to radiotherapy treatments, despite growing newly diagnosed cancer statistics and also below the recommendations of the World Health Organization in terms of linacs per million persons. As a strategic initiative, Accuray established a joint venture in July of 2019 with China Isotope and Radiation Corporation, CIRC, as a partner. The JV partnership is 49%-51% between Accuray and CIRC and represents a powerful differentiated strategy where together, we will provide locally branded and manufactured product in Tianjin. The partnership also involves distribution, customer support, infrastructure and broad access to hospitals. The JV is led by Roger Cao, our former General Manager for Accuray's APAC region. We believe the JV provides a competitive advantage for Accuray as we will be the only radiation therapy company with a local partner, which will allow us to strongly compete in both Type A and the larger Type B opportunities, with continued development of our product portfolio. The progress of the JV has been excellent with completion and ribbon-cutting of the manufacturing facility and customer training center. We have successfully transitioned from our former TomoKnife distributor and established a full direct commercial and support team, along with the 20-plus subdealer network covering across the provinces. Additionally, 40-plus service engineers have also transferred over from TomoKnife, ensuring a smooth transition for our customers. In terms of future milestones, we expect to begin manufacturing of a locally branded product in approximately 15 months. The JV continues to add resources expanding from today at 100 employees to expected over 200 in 2023. Additionally, our engineering teams are working closely to further develop the Type B product portfolio to meet China market needs and drive market share. The foundation for our success in China is strong, with our 86% win rate in the first round of Type A licenses. To date, 58 licenses, the 188 Type A have been awarded with Accuray winning 50 split across CyberKnife and Radixact platforms. Within the larger type B core market, over 1,451 licenses are expected. This number has increased from 1,208, the original amount, making this a large and growing segment of the market where our new JV Type B product will compete. You'll be hearing more about that later in our presentation during the product road map presentation. Finally, we believe that another strong growth catalyst is the emerging clinical trends toward ultra-hypofractionated treatments that provide patients with shorter but more powerful courses of radiation treatments. Some of the factors that are driving the acceleration of shorter treatments our overall consolidation of radiation therapy systems in developed markets like the U.S. over the past 5 years. Treatment demand has increased 13% as patients and providers seek shorter duration of treatments as a result of growing clinical evidence of efficacy that have influenced guidelines for specific patient cohorts, changes in reimbursement from CMS driving toward episodic payments versus fee-for-service. Finally, COVID has placed a priority on minimizing patient and provider exposure, which we think will have a sustained impact driving treatment demand. As a result of these trends, purchase decisions for replacement or new systems have prioritized advanced technologies that will allow them to provide advanced therapies like ultra-hypofractionation for patient care. From the 2019 IMV report, you can see the growth in baseline in the gray to expected adoption of capabilities within the next 3 years. Stereotactic body radiation therapy, neuro or stereotactic radiosurgery and adaptive therapy are all expected to grow in driving purchase decision criteria. Also interesting to note is the growing importance of being able to manage respiratory motion, with expectations that 67% of purchase decisions will be influenced by this capability. This is an area we believe that Synchrony technology will be a strong differentiator for Accuray to enable the highest level of precision and accuracy to the radiation beam during ultra-hypofractionated delivery. Finally, changes in reimbursement in the U.S. are underway, and I'd like to introduce Shawn Prince our Senior Director of Patient Access for Accuray to speak about the latest status of the RO-APM and the expected impact for Accuray.

Thanks for that introduction. I'm going to discuss today some reimbursement changes that we are seeing in the marketplace, specifically focusing on the radiation oncology alternative payment model. This RO-APM, we believe, will be a market catalyst. This program has been in the works for 3 to 5 years, initiated by both CMS and Congress. There was a slight delay due to the COVID-19 public health emergency. However, CMS did finalize and release this rule mid-September of this year. This model as slated, will begin January 1, 2021, and it will run for a period of 5 years. It will conclude December 31, 2025. CMS projects that it will save approximately $230 million over the 5-year period of time. These savings are due to a payment switch away from fee-for-service reimbursement to one that is based upon the patient's diagnosis. Providers will be required to participate in this model if they have been randomly selected by the Zip code of where their practice is located. CMS structured this model so that 30% of all of the radiation therapy episodes will be included in this model. The remaining 70% will be paid for under a fee-for-service program. We believe that our technology is well positioned to thrive in this new environment. Our technology has been specifically designed from the ground up to deliver safely ultra-hypofractionated treatments. These treatments enable providers to treat patients in the most cost-efficient manner possible. We believe that our technology provides an opportunity for our customers to reduce their CapEx and their OpEx. Simply put, we believe you can treat more patients on a single machine using our technology. Finally, we believe our technology will improve the patient's clinical and financial experience. The radiation therapy services that will be included in this radiation oncology alternative payment model can be categorized in 4 broad categories: treatment planning, technical preparation and special services, radiation delivery and treatment management. When you think about the Accuray innovation that maps to each one of those categories, from a treatment planning perspective, we have our Accuray precision treatment planning system. When you look at the technical preparation and special services, we have our InCise Multileaf Collimator, our total quality assurance, TQA software, along with our Synchrony platform. In terms of radiation delivery, we have our CyberKnife system and our Radixact platform. In terms of treatment management, we have our preciseART, which is our Adaptive Radiation Therapy solution. We believe that Accuray capabilities align very nicely with the key diagnoses in the radiation oncology alternative payment model. When CMS constructed the payment amounts for each diagnoses, they extracted claims data from 3 calendar years. Based upon this claims data, they concluded that there were 6 diagnoses that were resulting in 80% of the claims being filed for radiation therapy. These diagnoses included head and neck cancer, brain metastases, bone metastases, prostate cancer, lung cancer and breast cancer. What I believe is important about this is the fact that there are clinical guidelines in place by either ASTRO or NCCN, recommending the use of moderate and/or ultra-hypofractionated techniques. In addition to the pressures that providers are facing from Medicare, they are also experiencing pressures from the commercial insurance side as well. Recently, there have been a number of private insurance plans that have posted medical coverage policies that will only allow moderate and ultra-hypofractionated treatments for prostate cancer. So not only do you see Medicare putting different payment methodologies in place, you also see that on the commercial side as well. We believe that ultra-hypofractionation has the potential to dramatically increase the number of patients treated on a single machine. The time it takes to complete an entire course of treatment is significantly less when you use ultra-hypofractionated techniques versus conventional treatment schedules. Less time to complete the entire course of treatment freeze up time or makes time available on a machine that can treat patients. Under an alternative payment model, the number of patients treated not the number of fractions or treatments that are delivered will shape the provider's financial experience. Ultra-hypofractionation allows providers to maximize the number of patients that they can treat on a single machine thus, maximizing the revenue that can be generated. We believe that ultra-hypofractionation supports the shift from volume to value. We also believe Accuray's innovative technologies have the potential to deliver more value, more value to our customers and more value to our patients. When we deliver more value to our customers, we increase the annual number of patients that they can treat on a single machine. We accomplished this by allowing for shorter total treatment times. We also provide decreased treatment-related costs. There's a number of studies out there that clearly show it costs providers less money to deliver ultra-hypofractionated treatments. This improves the total cost of ownership experience. And then most importantly, to the patient, we provide the patient with high-quality patient outcomes and experiences. And this is based upon the fact that we can reduce toxicities due to the small margins that we are able to accomplish or achieve around the tumor. I thank you for your time. I would now like to turn this over to our Vice President of Product Strategy, Corey Lawson, who will walk you through in more detail our technology as well as to provide you with a road map to our innovation.

Hi. My name is Corey Lawson. I'm the Vice President of Product Strategy here at Accuray. At Accuray, we are constantly aligning innovation to growth opportunities. This is especially important to note as radiation oncology continues to evolve in the following ways. Access to care is expanding into previously underserved regions. Clinical practice continues to shift towards treating patients in fewer fractions, but with higher doses, while also beginning to make small treatment adjustments to account for day-to-day patient variation. And with all of this change, technology continues to advance, enabling greater personalization versus standardization of treatments. So now let's talk about Radixact. Radixact is our unique helical imaging and delivery system that is able to treat a full range of patient cases from the very simple cases to the most complex. It is the latest generation TomoTherapy platform that is quite different than its predecessors in the following ways: speed. It has quick installation. It comes precalibrated from the factory. It has a fast warm up time of 5 minutes or less. Imaging speed and treatment delivery speed is far more efficient. It is able to accommodate the demands of the busiest clinics. It's built for innovation. Much greater computational power is on this platform. And there's actually room on the slip ring to add components necessary to support ongoing innovations. Now let's talk about the first major innovation that was brought to this platform, Synchrony. With Synchrony, the beam is able to follow a tumor's full range of motion, which is more comfortable for the patient and easy for the clinical team. It enables tighter margins around the target, less dose to healthy tissue, which can translate to lower risk of side effects and potentially better outcomes, in essence, allowing clinicians to treat challenging lung cases using ultra-hypofractionation. The ability for the beam to follow the moving tumor also enables greater delivery efficiency. By never needing to gate the beam off, each patient is treated efficiently, more cost effectively and increases the potential for improved profitability for the provider. Finally, Synchrony allows the patient to breathe as they always have, without cumbersome restraining devices or the need for the patient to train themselves to alter their natural breathing characteristics. This last point is an important one because patients who already have compromised respiratory function often have difficulty tolerating compression devices, like I'm showing on the left side of this slide. And they are not always able to alter their breathing characteristics to comply with trained breathing regimens as I'm showing on the right. So by having the ability to free breathe, patients have increased comfort during treatment. And therefore, a broader array of patients are able to easily tolerate being treated using Synchrony. So how does Synchrony work? It begins with building an AI-driven predictive model, specific to each patient on each treatment day. Building the model only takes about a minute. A series of snapshot images is taken, correlating the position of the tumor to the phase of the patient's breathing cycle. The breathing cycle is monitored in real-time using the external camera shown in this image. So with this AI-driven predictive model, the system knows where the tumor will be during the treatment, then the treatment can begin. But before we go there, I should explain how the Radixact system continuously adjust the beam to follow the moving target. It actually uses the 2-part collimation system already on the Radixact platform. The primary Collimator, also known as the jaws, as shown in the picture on the right, moves the beam in a head to toe orientation. And for any tumor motion that happens side to side or front to back, the ultrafast MLC, which is also shown, is able to open and close leaves to adjust. And for the sake of illustration, those MLC leaves move at roughly the same speed as the blink of an eye. So Radixact, leveraging its unique collimation system is able to follow complex elliptical or other motion patterns that a tumor may exhibit. Now it's important to note that even during delivery, the system continues to update the model with new snapshot images. And for those patients that may relax during treatment, it may change their breathing pattern. Well, Synchrony is able to adjust. Now here is a great application of Synchrony to treat a 45-year-old patient with lung metastases. He was treated in only 3 fractions, which would be considered ultra-hypofractionation. 18 gray was delivered with each fraction to a total of 54 gray. The treatment volume was a little bit more than 18 CCs, with a margin of only 5 millimeters. Motion was approximately 7 millimeters, primarily in a head to toe orientation. Overall, by comparison to a conventional ITV technique, 30% less volume was irradiated, which means more sparing of normal healthy lung tissue. When compared to a conventional gating technique, it cut treatment time in half to upwards of 2/3 because the beam could remain on throughout the treatment. And this was all achieved with our trade-offs. Tumor dose was elevated by almost 5%, while mean lung dose was decreased by about 12%, all with greater efficiency than conventional systems. So to summarize Synchrony, it's fast. Beam can remain on versus gating where the beam is off throughout much of the motion cycle. It's precise. Because the beam can follow the moving tumor, margins can be tightened versus an ITV approach, whereby the entire motion envelope is treated, inclusive of normal healthy tissue. And because more dose is delivered to a tumor in less time and with greater precision, Synchrony promises to enable ultra-hypofractionation treating patients very effectively in less time. So I would now like to introduce you to Professor Umberto Ricardi. Professor Ricardi, is the Chairman of Radiation Oncology and Dean of the School of Medicine at the University of Turin in Turin, Italy, as well as Director of the Department of Oncology at Health and Science Academic Hospital in Turin. Today, he is using Radixact with Synchrony to deliver extremely precise lung SBRT treatments to the most fragile lung cancer patients using tight margins to preserve healthy lung tissue in most cases without needing to implant fiducials.

So we installed the Radixact system here in this hospital in this treatment room roughly 1 year ago. So we started our clinical activity at the end of August 2019. So it was roughly 13 months ago. And at the moment, I can say that we treated more than 3 other patient with this system after the first year. We decided to offer Synchrony treatment to -- I mean, some patients because, of course, when you can reduce the margin of normal lung, including the treatment volume, you can certainly do an important, let's say, benefit to these patient because always 1, 2 millimeters less in terms of PTV, meaning a larger amount in terms of cubic centimeters, of course, can offer you the possibility to further spare these pulmonary function in those fragile patients. That's a very important question. I mean, allowing me to comment on how probably also in the future, radiotherapy can become even more effective when we have the possibility to treat small tumors in a very radical way with a very radical curative, let's say, aim. And for example, the early lung cancer we were talking about before are a classical example of such a consideration. Another important consideration evolving during the years. And with the contribution of scientific research showing important contribution in terms of clinical end point benefit comes from the oligometastatic disease. So oligometastatic disease is indeed a very important rapidly evolving scenario where we can confirm the clinical benefit of ablative treatment even in the context of the metastatic disease. I mean, 2 decades ago, it could be really -- I mean, something completely uncorrect to think to a role of radical treatment, local radical treatment in the context of a metastatic disease. Right now, we know that both in terms of progression of the survival and overall survival benefit, we are accumulating evidence that ablative treatments really contribute to more important therapeutic chances to such a scenario, to such an oncological scenario. So as we are [indiscernible] means a lot. And also, I mean, with the possibility to offer our patients safer treatments in fewer fractions, of course, makes a lot in terms of, let's say, workload consideration, reduction of waiting list and improvement of patient compliance. If we think for a way to prostatic cancer, in the past, I started my activity, delivering 80 gray in 40 fraction to prostatic cancer patient. Right now, we can offer similar results in a very safe way. I mean with just a few fraction. For example, 5 fraction in 1 week. It's very difficult to say in a very few words, but probably I can use words like, let's say, productivity. That, of course, is an important issue for people responsible of the department in terms of optimization of patient throughput, patients who are [ broader ] in terms also of administrative data. And of course, for patients in terms of avoiding waiting lease, for example. So productivity certainly is an important word. The second one could be versatility because I guess that from the clinical point of view, this system is certainly very useful in treating from the most complex treatment -- for the most complex tumor, I would say, to the simplest tumor. And then I also would add a third word reliability because, of course, the reliability of a treatment system is an important component in our routine clinical. So the 3 magic words are productivity, reliability, versatility.

Thank you, Professor Ricardi. I would now like to introduce you to Dr. Sugie. Dr. Sugie completed clinical training in the Department of Radiology at the Graduate School of Medical Sciences and Medical School, Nagoya City University. He then went on to become Associate Professor of the Department of Radiology at Nagoya City University. He pursued research on radiation, biology and lung cancer radiation as subspecialties. He is currently the Vice Director of the Department of Radiology at the Japanese Red Cross Nagoya Daini Hospital, a leading center providing advanced radiation treatments in Japan.

[Foreign Language]

Thank you, Dr. Sugie. Let's now move on to ClearRT, helical imaging for the Radixact system. We have opened an imaging center of excellence in Cleveland, Ohio. This represents a significant investment for the company. Why Cleveland you might ask. There's a strong base of imaging knowledge within the local region. The team we pulled together had made a quick and positive impact on our iterative reconstruction and Synchrony programs, both of which required strong imaging knowledge. And now their impact is being further felt with the introduction of the very important ClearRT helical kVCT imaging feature on the Radixact system. The importance of imaging in radiation oncology's workflow cannot be overstated. Prior to treatment, high-quality imaging ensures efficient and proper patient positioning. During treatment, high-quality imaging ensures alignment of the beam to the moving tumor as we had discussed with Synchrony. After treatment, high-quality imaging is the basis for understanding dose delivered to both the tumor and surrounding tissue. And if the plan needs to be adapted, should the patient change? High-quality imaging can be used as a simulation image upon which to replan. In fact, high-quality imaging is critical to enabling high-quality patient treatments. Now let's talk about how Accuray is advancing technology to improve clinical practice and grow. It is my pleasure to announce the launch of ClearRT, Helical kVCT imaging on the Radixact platform at this ASTRO. ClearRT Helical kVCT means image quality that is diagnostic-like, fast acquisition speed, upwards of a 1-meter scan length in only 1 minute. The largest transverse field of view at 50 centimeters, it takes full advantage of the big bore of this system. It is familiar. With the majority of workflow remaining unchanged, it is unique. The Radixact platform at its core is a CT slippering, and we are now taking advantage with all of the attributes I mentioned, and protecting our position with various patent disclosures submitted or in process. It is flexible, allowing clinicians to choose the best imaging mode for the clinical case being treated. In terms of flexibility, the user can choose to use a broad kVCT imaging beam or a narrow kVCT imaging beam. A broad beam for clinical cases that would require long scan lengths to be quickly acquired. Examples of such cases that would benefit from this mode include craniospinal cases or total marrow irradiation cases. Conversely, the narrow kVCT imaging beam would be used for clinical cases that would benefit from diagnostic-like quality. These would include cases where soft tissue visualization is key. And likewise, cases where, well, the plan may need to be adapted at some point during treatment. A great example would be a head and neck case. So now let's take a look at some sample images. These are images of a living pig. Trust me, no pigs were harmed as the imaging took place. I'd like to draw your attention to the image on the left. You can see there's excellent uniformity and low noise across the entire image. This is unlike competitive cone beam offerings that are prone to scatter artifacts. The image has exceptional spatial resolution. This is unlike MR, which utilizes a large and powerful magnet to acquire images. This same magnet can actually change the shape of anatomy because tissue is largely comprised of water, a polarized molecule, and a magnet can actually cause distortion of the tissue. And you can see low contrast anatomy, such as skin, fat and soft tissue are easily visualized. Now I would like to draw your attention to the ClearRT Helical kVCT image on the right. Here, you can see the long field length of over 1-meter that was acquired in a little more than a minute. And here are some additional porcine images that I would like to share. The image on the left was acquired using a megavoltage CT, also known as an MVCT. The image on the far right is a diagnostic kVCT. One would typically find such a system in a hospital's radiology department. The center image was acquired using ClearRT in high-speed mode, which again illustrates excellent spatial resolution, uniformity and easy visualization of low contrast anatomy. Now I want to tie back to the concept of imaging as a strategic investment for Accuray. In essence, the road map continues forward, even after this launch of ClearRT Helical kVCT imaging. So as we continue forward, we will continue to benefit from technology innovations now happening in the diagnostic CT market. Remember, this platform at its core is a CT slippering platform. There is the opportunity to further improve soft tissue contrast, competing even more effectively against MR linacs, but at a fraction of the total cost of ownership. We also envision continuing to monitor dose in tissue using the native image. We don't believe fusion or interpolation is required. We also believe we can do this while still maintaining the current simple workflow. And we expect the Radixact platform to be upgradable to this new imaging. As you can see, ClearRT Helical kVCT imaging is a big step forward. What is only the first step. With the technology innovation I just shared, we will continue to drive improved imaging performance moving well beyond conventional cone beam capabilities and effectively competing against MR linacs, but at a fraction of the total cost of ownership. Now I want to reiterate that ClearRT Helical kVCT imaging is a big step forward, but it is only the first step. Now let's talk about a couple of additional programs related to this platform. The latest VOLO technology will be ported on to the Radixact platform. While VOLO at its core is a blazing fast plan optimizer, it also brings with it other notable improvements that clinicians will value, such as automatic selection of key planning parameters to simplify the planning process, while also driving planned quality with delivery efficiency. Real-time trade-off exploration where the planner can modify inputs and quickly see how the plan is affected. And finally, the ability to save various plan options that have been created, one of which gets chosen for delivery. Customers who have had a chance to peek into this development have been very impressed. We also have a program underway, working closely with our JV partner in China to develop a product targeted to the Type B segment. The goal is to support even higher throughput, reduced cost of ownership. And as the base system has the right balance of features, it can also be upgraded over time. Our goal is to have this offering available to the target market sometime during calendar 2022. So in summarizing Radixact innovation, there are a few things to keep in mind, motion management with Synchrony strongly positions Radixact for SBRT, a growing clinical treatment trend seen globally today. ClearRT Helical kVCT will enable diagnostic-like quality CT imaging, with the largest and longest field of view that can be scanned very rapidly, with images that can be directly used for adaptive therapy. And finally, VOLO on the Radixact, enables fast planning of high-quality, efficiently delivered treatments. So now let's move forward to the CyberKnife S7. CyberKnife S7 is our unique robotic radiosurgical system. It is the latest generation CyberKnife platform that was introduced in June of this year. It was designed for, first and foremost, speed, quick plan development and highly efficient delivery. This platform is now able to fit some radiosurgical cases into conventional time slots. It was designed for precision, enabling submillimeter treatments anywhere in the body, helping to sculpt dose to the intended target while minimizing dose to organs at risk. It was designed for motion synchronization, personalized delivery in sync with stationary targets or those that dynamically move. The CyberKnife S7 has deep roots in neurosurgery. And as many know, Dr. John Adler, a neurosurgeon from Stanford, originally designed and brought the first CyberKnife to market years ago. That legacy remains embraced by clinicians around the world today. In fact, it should be known that a new publication specific to CyberKnife neuro radiosurgery has recently been completed through a collaboration of 38 different authors spanning 14 countries. It covers all intracranial and spinal indications. Our intention is to continue further strengthening that legacy with additional innovations for neurosurgery on this platform. First, we plan to add the ability to do frame-based radiosurgery for those clinical cases that would benefit from use of such a device. Namely, those cases where the patient cannot control movement, such as one would see with a patient that presents with essential tremors. Additionally, we envision tailoring planning to better incorporate workflows familiar to the neurosurgeon, while also enabling the treatment of multiple targets with greater efficiency, using the best possible collimator for the given case. And like Radixact, we intend to incorporate volumetric imaging with the CyberKnife S7 system, which may be used for efficient patient setup for any clinical case. It can be used for planning in support of same-day scan, plan and treat workflows. And likewise, high-quality imaging opens the door to advanced adaptive features, which help clinicians account for patient changes throughout the course of therapy. Our goal is to have this offering available sometime during calendar 2023. So in summarizing, innovation on the CyberKnife S7 system. There are some key points to keep in mind. Synchrony with VOLO lays the foundation for this unique robotic platform to deliver highly efficient sub millimeter SRS and SBRT treatments. Secondly, neuro upgrades are expected to expand robotic radiosurgery to treat functional disease, such as essential tremors, while also enabling familiar planning workflows for the neurosurgeon. And finally, extending ClearRT imaging to the CyberKnife S7 system will bring efficient, high-quality volumetric imaging that can be used throughout the planning and treatment process. I would now like to introduce to you, Dr. Chris Loiselle. Dr. Loiselle is a Board-certified Radiation Oncologist who practices at the Swedish Medical Center in Seattle, Washington. Dr. Loiselle received his medical degree from Johns Hopkins University and completed his residency in radiation oncology from the University of Washington Medical School. Dr. Loiselle currently serves as a Director of Radiosurgery at the Swedish Medical Center.

I'm Dr. Chris Loiselle. I'm a radiation oncologist and Director of Operations at the Swedish Radio Surgery Center in Seattle, Washington. I'm part of a group of 14 radiation oncologists practicing at 5 hospitals. We have 9 linear accelerators, a brachytherapy seed program, 2 HDR units and unsealed source program, a Gamma Knife and a CyberKnife. Today, I'm going to talk to you about cranial indications for CyberKnife, Accuray's mission statement to expand the curative powers of radiation therapy to improve as many lives as possible. My take on CyberKnife is that the CyberKnife is a powerful and unique tool in radiation medicine with greater scope and deeper capability than any other radiation modality or platform. And I'd like to talk to you about expanded scope of cranial and CNS indications by looking at complex malignant conditions of the skull base, vascular conditions, pain conditions and functional neurologic conditions like essential tremor. First, looking at a case of a complex malignant condition of the skull base. This MRI image depicts a tumor of the right cavernous sinus extending through the skull base into the facial structures. This was biopsy-proven metastatic melanoma. And as you can see, fairly aggressive, given the growth of this metastatic tumor into the medial temporal lobe during this short time span of a few months. This patient was elsewhere disease-free, and we thought about definitive therapy with CyberKnife and went forward with this isodose plan that you can see here. And what's truly remarkable about this CyberKnife delivery plan is that the capability of CyberKnife to deliver radiation to this area of tumor under the eye, in front of the brain stem, straight out through the face coming down underneath the optic structures inside the medial temporal lobe is truly unparalleled. There's no other platform that can deliver this kind of radiation dose to this area and, at the same time, deliver this amount of tissue sparing. The way CyberKnife does this is with a noncoplanar array of highly collimated image-guided beams, as depicted in the upper right, where you can see each of these blue rays indicating a CyberKnife attack angle. And I placed the dose volume histogram data here because just looking at these analytics objectively really shows the great success of CyberKnife and again, delivering extremely high dose to the tumor and absolutely minimizing the dose outside of the target. And here's the result a few months later. So August, in comparison to June, we can see dramatic regression of this projection of tumor into the medial temporal lobe. We can see normalization of the contours of the cavernous sinus. And similarly, the patient's clinical outcome dramatically improving. She presented with eye movement difficulty and facial pain due to involvement of multiple cranial nerves. And all of that dramatically ameliorated over a 5-fraction course, completely noninvasive. CyberKnife is a shared radiation and neurosurgical platform. Cases such as this are managed with prospective input from our multidisciplinary team, neurosurgery, radiation oncology, neuro oncology, neuro otology, head and neck surgery. And we are constantly determining optimal sequencing of various treatment modalities like treatment with radiation using the CyberKnife platform versus open surgery versus incorporation of various systemic therapies and determining the scope of each. Recently, we've been very interested in a new paradigm where we are essentially putting the cart before the horse by thinking about stereotactic radiation preoperatively for brain tumors. This is a case where input prospectively from our multidisciplinary team is paramount. This is another patient with metastatic melanoma, a large right parietal tumor. This patient underwent preoperative single fraction stereotactic radiation, followed by surgery, and a year later, has absolute complete control with no toxicity related to treatment. You can see the image on the right, April of 2020 versus the image on the left, March of 2019. And all that's left is a little bit of dural-based enhancement in that right parietal region. Indications where we use CyberKnife only begins with complex tumors. As I've shown you thus far, we treat a number of vascular conditions, including arteriovenous malformation and AV fistulas using CyberKnife. Here's an example of a patient without surgical or embolization options, again, managed by a multidisciplinary team, including neurosurgery and radiation oncology. This was a symptomatic dural AVF treated, again, single fraction stereotactic radiation using the CyberKnife platform. Completely noninvasive. Patient can expect relief of symptoms and absolute minimal toxicity from this noninvasive approach. I'd like to share with you a unique case where we used CyberKnife for the treatment of back pain. This is a patient who had metastatic esophageal cancer and had metastatic disease to the paraspinous region. This metastatic disease was controlled with multiple radiation treatments via various techniques, but the patient was left with severe, chronic, debilitating pain. Patient was bedridden. And the patient's medical oncologist called us, and knowing of our experience with treating pain syndromes like trigeminal neuralgia, said, is there anything that you can do for this patient? Looking through the literature, we applied the technique that has been published for CyberKnife in the treatment of facetogenic back pain. We treated this lumbar nerve route to [ 40 gray ] to the 75% isodose line. First, we actually evaluated the patient with some help from the interventional pain service. We had them inject various spinal nerve roots. And we found an injection at L3, though pain relief was brief, that it was very helpful. We then came and targeted L3 using the CyberKnife platform. And there is no other radiation platform that allows you to put super high dose radiation in a very small area anywhere in the body with image guidance like the CyberKnife platform affords. This patient had transient motor weakness, but durable pain relief, such that the patient was up and out of bed and resuming normal life activity. Lastly, I'd like to talk to you about functional neurologic conditions like essential tremor. Essential tremor is a condition of uncontrolled movement and shaking, mostly of the hands and arms, but sometimes the head, neck, voice or legs. You have to understand that this is a severe and debilitating condition. These patients cannot carry out normal activities of daily living that we all take for granted, like buttoning a shirt, writing a check, putting on makeup or handling a cup of glass or utensils. It's the most common movement disorder affecting 5% of the population, 65 and over. Accuray is developing a fixed head frame system for treatment of this and other indications that could benefit from fixed head frame fixation using the CyberKnife platform. And I'm sure that the CyberKnife platform will be a very good option for patients with this condition considering similar treatment in the future. This is an example of a patient treated with a Gamma Knife thalamotomy. On the left image, you can see patient has such impairment from tremor that they're unable to keep the pen to the paper when trying to construct a spiral diagram. And a few months after treatment, you can see the right sided image where the patient is now able to construct a spiral diagram normally such that you'd never even know that they had tremor. There's no doubt that this treatment has been a remarkable improvement in this patient's quality of life. Overall, CyberKnife is a unique radiation delivery tool. Intracranial and extracranial indications are broad and intracranial scope and precision is unmatched and expanding.

Thank you, Dr. Loiselle. We shared a great deal with everyone today. The question is, where is all of this innovation going? The answer is innovation efforts converge on adaptive therapy. At Accuray, we view adaptive therapy as more of a toolkit than a singular application. The workflow, the toolkit supports begins with enrolling the patient for fraction by fraction dose monitoring. A high-quality image is obtained each day just prior to treatment, and a benefit of such an image is that it provides insight into the patient changes, changes that can affect which parts of the patient anatomy receive dose and which do not. The accumulated dose for each structure is then tracked and compared against original planning objectives. And then it's decision time. Does the clinician treat, shift dose within the patient and then treat; change the plan with the patient off the table or on the table; or during treatment, adapt the delivery beam to a dynamically moving target. These are choices, by and large, supported by Accuray's adaptive toolbox. So as we look at how technologies discuss, build upon and enhance our adaptive offering, we see it all begins with high-quality imaging. Imaging capable of natively measuring dose within the patient each day with each fraction. Computational speed that touches every part of the process, from planning with VOLO to final treatment delivery. Reliable, automated tools to help monitor and replan when warranted. Efficient, reliable quality assurance tools supported by the workflow. And finally, highly accurate and precise delivery to tumors that are stationary as well as those that dynamically move during treatment. We have the fundamental building blocks completed or in play to only enhance Accuray's current adaptive toolkit. As I bring this innovation discussion to conclusion, it's worth mentioning that we are continuing to also ensure ongoing connectivity of our systems within the clinical department. We achieve this through collaboration with other technology providers. With oncology information systems, we work closely with established vendors to ensure connectivity remains up-to-date as we continue to innovate. For those departments that desire treatment planning standardization, we interface to RaySearch's RayStation treatment planning system. And we continue to seek opportunities with hospital information system providers for broadened connectivity within the department and potentially beyond. My sincere thanks for your time and attention today.

We are now ready to begin our Q&A session. In addition to the Accuray management team, Dr. Chris Loiselle, from the Swedish Medical Center in Seattle, Washington, is available to answer your questions.

As a point of clarification, because we have prerecorded certain sections of today's presentation, and given the relatively late decision by CMS to push the implementation date for the RO-APM launch back to July 1, 2021, during the recorded segments of today's presentation, we were still referencing the original date of implementation, which was January 1, so we wanted to point this out to avoid any confusion in any fashion at all. Again, the new date for implementation of the alternative payment model is July 1, 2021. And with that, we're ready for our first question.

Our first question. With China representing a large market opportunity, can you offer insight into how the hospital access and ordering environment is recovering in the country?

I'll take this one. Marie, thank you for the question. While there's no question that the COVID environment has had a negative impact in a number of ways, obviously, in all markets, in China, I'd say the -- one of the bigger areas of delay had, quite frankly, been in the regulatory pathway kinds of activities. The Chinese government most recently has had a strong push to encourage providers to return to -- make the attempt to return to normal clinical practice routines and patient access. And I would say, today, compared to the other major markets of the world, China is probably, while not back at pre-COVID levels, probably closer to that than any other market, major market or a mature market in the world. So that's the answer to that.

Our next question. What is kVCT? And how is this superior to what is offered by Vera and Varian?

Corey, I'm going to let you take that one.

You bet. So there's actually a couple of questions that I'm seeing along the same lines, talking about contrasting our kVCT solution to other technologies out there in the marketplace. And let's start it out with an answer that starts with scan length, actually. A typical scan length out there in the marketplace is only about 20 centimeters long. And it is about a 30-centimeter diameter scan that takes place within the patient. Now this typically takes roughly about a minute to acquire this image. If you take that same scan length of about 20 centimeters and compare it with the ClearRT Helical kVCT, what you see is instead of only a 30-centimeter transverse field of view, you get a full 50-centimeter transverse field of view, which means you can see the full extent of the patient in most cases. And instead of it taking about 60 seconds to acquire that image, it only takes about 15 seconds to acquire that image. So that's in comparison to a typical cone beam CT. Now if you go to the next step and talk about the quality aspect of it, it's not just about field size or scan speed. It's also about the quality of the image itself. So if you look at a ClearRT Helical kVCT, it is diagnostic-like in quality, which means contrast resolution and uniformity of this image is superior to that of a cone beam. In fact, you're not going to see the bright spots or the dark spots where there should be none on a typical image. And unlike MR, you're also going to have a spatial resolution or representation of the anatomy that is very accurate because as I had mentioned during the presentation, you can get in using an MR and find yourself in a situation where the MR itself is actually distorting some of the anatomy. So this is really important, having high-quality imaging, especially when you start to go into adaptive. Adaptive relies upon high-quality imaging, diagnostic-like imaging, in order to monitor dose within the tumor every day as well as the surrounding normal healthy structures. And you can't do this with just a cone beam, unless, of course, you would try and anchor it to an image that may have been obtained weeks previously. And this is totally contrary to anything you're trying to do with adaptive because with adaptive, you're trying to adjust for the changes as they happen during treatments. And that's why the high-quality imaging is so important. Now the one thing I didn't mention upfront is we talked about a typical 20-centimeter scan length. Something you just can't get with the other systems is a full scan length that goes well beyond that. With ClearRT Helical kVCT, you can go up to 1.35 meters in scan length, so pretty much the top of the head to the kneecaps of the average person. So really, with ClearRT Helical kVCT, you can see more and you can know more of what's going on within that patient. And then with that information, you're able to do more, like in some cases, needing to adapt. I hope that answers the series of questions that I saw come across today.

The next question. What factor or factors lead customers to pick a new or upgraded Accuray system over other competitive systems.

Marie, thanks again for that one as well. I'm going to ask Suzanne Winter to take this answer.

Yes, thanks for the question, Marie. Again, for every institution, it's usually a complex decision to what their system is going to be, whether they upgrade, whether they go to a new vendor, there's many people involved. But in general, from our existing customers, I think that they are already sold on the benefits of the platform, whether it's the CyberKnife or the TomoTherapy Radixact platform. And so as we start to add new capabilities that allow them to advance their clinical capabilities to what they deliver to patients is well received. They're already familiar with the system. And again, very little investment needed in making any alteration to the bunker. Again, they know their local teams already. But usually, it's when they need to get advanced capabilities like the ability to do ultra hypofractionation. For new customers, again, I think that, again, as they evaluate the equipment, I think they believe that this technology will allow them to deliver superior outcomes to their patients. It's certainly a better patient experience. The introduction of differentiated technologies like Synchrony, like our Helical kVCT, are major differentiators compared to competitive equipment out there. And so they see this as an opportunity to differentiate themselves within their local markets and the types of capabilities that they can deliver to their patients. So again, while we need to continue to -- whether they're an existing customer or a new customer, we still need to show the value of what we're bringing through our innovation. But in most cases, it really boils down to the ability to provide the most advanced technology.

Our next question, it was mentioned that ClearRT on Radixact could acquire 1-meter imaging length in 1 minute. What is the length of a typical imaging field in radiation oncology? And how quickly is it commonly acquired?

Corey, we'll send that your way.

Actually, I think I just answered a lot of that question with my previous answer. It goes back to the typical image is about 20 cm in length. So if you look at what we offer, that same time that's required to acquire that 20 centimeters in a typical cone beam is the same time span, which is about a minute, that it takes us to acquire a full meter, 1.35 meters. So it's either 20 centimeters with a cone beam, or for us, the same time span upwards of 1.35 meters, a lot more scan in a lot less time. Thank you.

Thanks, Corey. Our next question, who are the winners and losers of the RO-APM final rule?

I think, Shawn Prince, we'll send this one to you.

Okay. Thank you, Josh. When I look at the radiation oncology alternative payment model, although it's been delayed until July, I think, when you think about who is going to win and who is going to lose under this model from the hospital and the physician side, I think the ones that will win under this model will be those that have the ability to transition to providing hypofractionated and ultra hypofractionated treatment. And that requires not only a technical -- an ability to do so, but also you have to have the human resource ability to do that as well. During my part of the presentation, I indicated that as providers adopt hypofractionation, it significantly increases the number of complete courses of treatment that can be provided to a patient. Under a model that compensates providers based upon the diagnosis of the patient, it obviously behooves them to treat more patients on a single machine. So again, the adoption of hypofractionation will be key in terms of who wins and who loses. I also think there's really no way to kind of build your way out of this scenario. So providers are going to have to not only focus on the types of techniques that they can provide patients to increase the throughput or the number of patients that can treat, but they also need to focus on the cost of delivering that care. There is a number of different studies out there that clearly show that ultra hypofractionated treatments are less costly to the providers. So again, that should minimize the cost of delivering that type of care. But even more so, it's one thing to be able to deliver ultra and moderate hypofractionation, but you have to do that in a safe manner that provides the patient with optimal quality. We believe that not all SBRT is the same. Given the technology that Accuray has to manage that motion, the Synchrony adaptive capabilities, the tighter margins, we believe we provide physicians with the confidence to deliver high doses of radiation, but also we're providing patients with a better clinical outcome. The other group of entities out there, I think, that will be winners in this model are patients. When you treat patients in shorter courses of treatment, they can get back to their lives or get back as fast as possible to their normal routines. Also, I believe that this may result in a better financial experience for the patient, not only in terms of coinsurance amounts and things like that, but also just travel expenses, to and from a treatment facility. If you only have to go 5 time versus 40, you get the same clinical outcome, the same clinical benefit, that's clearly a value to the patient. In terms of the losers of the model, I think it's pretty obvious, those providers that cannot sort of turn or, I guess, move towards quickly hypofractionated and ultra-hypofractionated techniques, I think they'll struggle. I think manufacturers of high-priced systems that perhaps don't have compelling data -- clinical data that would support that could struggle. I also think systems that have difficult or expensive workflows may struggle under this particular model. Hopefully, that addresses that question.

Thank you, Shawn. Our next question, with budgets being tightened, do you see a trend toward more shared service lines with pooled assets or stand-alone neurosurgical practices with dedicated neurosurgery systems? Please explain.

Dr. Loiselle, we'll send this one to you, I think.

Can you hear me okay?

Yes.

I think that the trends in the shared service lines follow the trends in clinical care. I think that multidisciplinary care is more of a standard now. I work in a team with neurosurgery, neuro oncology. And myself being from radiation oncology, I think that multidisciplinary care, both on the clinical side, is more prominent, and I think on the service line side, that there's more of a blurring of the service line aspect of things. I think that there's more cost sharing. In terms of stand-alone neurosurgical practices with dedicated systems, I think that what you might see is more in-hospital practices that have funding structures that are unique in their character. I think that there's more interest in high-technology endeavors like this from some sources of outside funding. And I think that -- so I think that on both of those fronts, that there's an upward trend in -- yes, I think there's an upward trend in both seeing shared services coming together and following multidisciplinary clinical care. And I think that on the back end, on the hospital side, that there's more interest in having some stand-alone programs within the hospital setting.

Thank you, doctor. The next question, Synchrony's dose delivery speed when treating lung tumors seems to provide real clinical advantage over conventional technologies. Outside of the lung cases, are there other clinical case types that also benefit from Synchrony?

Corey, I think we'll send this one to you.

Okay. That's a great question. So with lung, that's the one that we talked mostly about during today's presentation. It's one of the primary deliveries for Synchrony because of a few things. You can follow that target throughout its full range of motion and keep very, very tight margins around it, giving you the ability to ultra-hypofractionate. And one of the big reasons that we talk about lung is you don't have to implant fiducials. So you really reduce risk to the patient, and that risk being risk of a collapsed lung because that implantation of fiducials can actually introduce air into the person's thorax and put pressure down on the lungs. But outside of the lung, we also have the ability to treat other types of targets. A notable one is actually liver. With liver, we would actually end up -- the clinician would implant fiducials for a liver case. And the reason for that is oftentimes, that liver tumor is about the same density as the liver itself. So by implanting the fiducials, you're able to see the motion of the target that you want to hit. And in doing so, you're able to use Synchrony, and still, using the very same camera system to associate where that target position is relative to the phase of the breathing cycle, you're able to hit that target. And the reason that a liver moves with respiration is it lies just below the lungs, just below the diaphragm. So every time those lungs fill and expand and then compress, the liver moves with it. Now there is one other type of case that is really well entered -- is really well illustrated, and it is a case that does not move with respiration. It's prostate cancer. So with prostate cancer, the prostate can move because of digestive processes going on within the patient. So you start out a delivery on a prostate, you see exactly where it's located. The delivery starts, goes, goes, goes, and then a digestive movement causes that prostate to move. What happens using Synchrony is you pause temporarily. The collimation system reorients the beam and then you go right back into treating. So you never lose sight of the prostate, and you keep beam on that prostate from the beginning of the treatment to the end of the treatment. And that is another great example. All of these types of cases, we've seen already in our installed base of Radixact with Synchrony. Thank you for that question.

Thanks, Corey. It was mentioned that 5% of people over 65 have some form of essential tremors. Are there other ways of treating this condition today? And do you see the potential for radiation to play a bigger role in the future? There's a follow-up. Do you think there is opportunity in other movement disorders beyond essential tremor?

Dr. Loiselle, these are both for you.

Yes. So in terms of treatment of essential tremor, the first-line treatment is medical therapy, conservative treatment. Next-line therapy moving towards more of an intervention is, interestingly, classically, to do deep brain stimulation. So essentially, setting up a pacemaker type of device with a lead coming into the brain, coming down under the skin with a battery pack in the low neck, upper chest area. And deep brain stimulation isn't for everybody. There are certain restrictions on patients who have a deep brain stimulator in place. For example, 2 restrictions are that you cannot shoot firearms. Another restriction is that you can't have an MRI of anything except for the head. So you -- anything that requires a body coil, you can't do an MRI. And the firearm restriction, interestingly, we have had many law enforcement individuals come to us with essential tremor who are years before retirement, but can't qualify on the range or have concerns about qualifying on the range. We treated members of the Secret Service, the FBI, local police, sheriff's departments, and all because of this firearm concern with DBS. So deep brain stimulation isn't for everybody. You also have to live, more or less for the rest of your life, near a center that maintains DBS. So you have to be near a neurology team that can maintain the programming of the device, do battery changes and these sorts of things. And from any patients living, for example, in countries outside of the U.S., those maintenance services aren't really available. And we've treated many patients doing a stereotactic radiation thalamotomy who live outside the U.S. because follow-up for them otherwise would be a challenge. In addition to deep brain stimulation and doing a stereotactic radiation thalamotomy, there's another new treatment called focused ultrasound. And not nearly as many patients have been treated with an ultrasound approach as have been treated with a stereotactic radiation thalamotomy. And ultrasound has a number of challenges. There are some skull thickness constraints. And I think that not everything is known about ideal treatment parameters for focused ultrasound, for example, exactly what temperature to heat the target to and for what amount of time in order to have a durable effect that is acceptably low risk. Interestingly, though, too, because focused ultrasound is making a hopefully permanent lesion, we've seen somewhat of a renewed interest in doing the stereotactic radiation thalamotomy that -- for which we have many years of experience as an alternative to DBS because of the fact that you don't have the long-term lifestyle impact of having the stimulator and battery pack in place. So I think that the answer to the first question is, what are the other treatments, that would be medical therapy, deep brain stimulation or focused ultrasound. And interestingly, I think that some of the interest in focused ultrasound has brought a lot more interest towards stereotactic radiation thalamotomy. And I don't have this question in front of me. What was part 2 of the question, perhaps it was, what other movement disorders could this technology or for which this technology could be applicable. Well, in terms of tremor, I think that essential tremor is the most straightforward and probably interestingly, too, undertreated movement disorder in the United States. We see patients all of the time who have been under medical therapy for many years and still don't really know about the options of deep brain stimulation or a stereotactic radiation thalamotomy. We do treat a number of patients who have tremor-dominant Parkinson's disease. Outside of tremor-related functional conditions, though, I think that applications really are more in the domain of pain and pain syndromes than they are specifically in terms of movement disorders.

Thank you, doctor. That concludes our question-and-answer session. I would now like to turn the meeting over to Josh for his closing remarks. Josh?

The Accuray team is mission driven. We are focused on delivering the safest, most effective radiation therapy solutions and helping patients return to health and get back to living their lives as quickly as possible. For patients, Accuray technologies can drive shorter, more convenient treatment regimens. For our provider partners, Accuray technologies have the potential to enable an expanded patient universe that can be treated safely and effectively utilizing advanced therapies. Our technologies can also enable our providers the potential to differentiate their practices in their local markets. We believe our ability to effectively execute across this range of provider and patient requirements will create value for shareholders going forward. I want to thank everyone for joining our webcast today and today's presentation, and encourage you and remind folks that we will be releasing our fiscal Q1 earnings this Thursday after the close of the market. Thank you again for your participation today.