Accuray Incorporated (ARAY) Earnings Call Transcript & Summary

My name is Ken Mobeck, and I'm the Vice President of Finance and Investor Relations here at Accuray. Joining me today from our management team is Josh Levine, Chief Executive Officer; Suzanne Winter, President; Professor J.P. Pignol, Chief Medical and Technology Officer; Corey Lawson, Vice President of Product Strategy; and Brandy Green, our Interim Chief Financial Officer. Over the next few hours, we will be discussing our vision, strategy and product road map to illustrate how we are executing against our long-term plan. After we finished our prepared remarks, we'll have a Q&A session. For those of you logging on virtually, throughout the next 90 minutes, you'll be able to type your question online, so we'll be ready when we're done. For those of you in the room, we will have live Q&A like we usually do, okay? I would encourage the questions today to be on our product strategy. We have a lot of our experts here because I'll remind you that it is our quiet period right now, and we'll be having our earnings call next Wednesday, November 3. Before we begin, I would like to remind you that our presentation today includes forward-looking statements. Actual results may differ from those forward-looking statements. Factors that could affect these results are documented in our SEC filings. And with that, let me turn the meeting over to Accuray's Chief Executive Officer, Josh Levine. Josh?

Thank you, Ken. I'd like to welcome everybody here in the room participating in person as well as those online that are participating virtually. We have a very, very content-rich next 90 minutes to share with you. I think, hopefully, you're going to leave with the sense of excitement and forward-looking promise that we feel right now from a management and executive team standpoint. We are in the very midst of redefining and have been over the course of some time, redefining the vision for our business. And it's big and it's bold. It's talking about expanding the curative power of radiation therapy to improve as many lives as possible. We -- you're going to hear us talk a lot today over the course of presentations about our core competencies and our historical, quite frankly, pioneering role in things that have come full circle today to become kind of mainstream in how the market is operating with regards to SBRT treatments, hypo and ultra-hypofractionated treatments, et cetera. But our -- it's in our DNA, and it's the kind of the foundational roots of our business over a long period of time. We knew that way back when 15 years -- plus years ago, that you couldn't increase dosing unless you could deliver it safely and with great precision. And so as we've continued to develop that capability, we actually broadened the number of patients that can be treated with our products because clinicians have peace of mind, precision, accuracy, being able to do these things and do them routinely and do them safely at the doses that -- levels that we deliver are critically important. We believe that noninvasive radiation has a place beyond oncology as well. And you're going to hear some aspects later in today's session about that as well in the area of neurosurgery and specifically in the functional neuro area, and we're excited about those opportunities as well. We believed from the beginning and still do that patient experience counts as well. The idea that you could treat a patient in a week versus something much longer than that, but not really necessary to be longer than that is a major part of, again, where we are today and how I think our business is uniquely positioned to take advantage of things like the alternative payment model and implications from that going forward. There's data now that's been a long time admittedly incoming, but there's data now that says what we've been doing for the last 1.5 decades is very, very effective clinically. Precision, the ability to deliver a high dose and do it safely is making a difference in clinical outcomes. It's making a difference in survival rates. And again, it expands and enables more advanced treatments to be possible to deliver. We think we're in the -- entering what we would describe as the golden age of radiotherapy. You might also think of it at another level down as the golden age of SBRT, but we are playing a critical role in leading that transformation. Again, before anybody really believed that it could be delivered safely, the idea that you could take dose up to where we took it 1.5 decades ago and deliver it safely was really -- these were brand-new concepts. And things do come full circle in life. We are now at a place where as fee-for-service reimbursement is going away and the alternative payment model is coming into its launch in January of 2022, there are implications that will come from that, that we are uniquely qualified and positioned quite frankly, right now to take advantage of. Back to how you deliver dose safely. The technologies that we've had in the market for some time that really now are proving to be, again, with the availability and the visibility of data, technologies like Synchrony, motion management capability that takes respiratory motion and movement of internal organs and structures into account are playing a big role in how clinical confidence to deliver dose safely is kind of at the forefront of this powering up, if you will, of SBRT treatments. The other aspect of this is in order to deliver dose safely, you have to basically be able to visualize what your target -- where your target is and what you're delivering the beam to, and we are making major strides in the improvement and the advancement of really important innovation on the imaging side. You're going to hear a lot today over the course of a number of physician presentations and videos that will talk about the impact of ClearRT on our technologies and again, in how we're uniquely positioned. The truth is after now 1.5 decades and a lot of noise in the last 5 or 6 years from the MR side of the world, the world is waking up to the fact that CT is actually the better way. If you're going to improve visualization capabilities in treating -- in conjunction with treating from a radiotherapy standpoint, CT is the better way to go about it. And we're going to talk more about that as well as we get into conversations about how ClearRT is supporting and enabling programs and technologies that we're in the process of developing both on our own and with partners in the adaptive therapy area. A company of our size can't do it all. And we're working with some of the best people in our space and companies in our space to leverage our strategic positioning and strategic market access, relationships like RaySearch Laboratories has been a terrific joint effort. We have benefited greatly from what they've done and the access they provide us to in multi-vendor environments. And we're working closely with them again on next wave, next-generation capabilities, especially in the adaptive therapy area. The other partnership that I would reference is Brainlab, and we'll be working with them fairly deeply in the areas of surgical navigation in the neuro space. So we are continuing to look for opportunities to leverage our position, take what we do well and also have that expandable, if you will, or scalable through other relationships from an industrial standpoint. If you go back to the very genesis of the company, we were about differentiated product. It started with product architecture. When you looked at CyberKnife almost 2 decades ago, when you looked at TomoTherapy almost 2 decades ago, these were products that were based on dramatically different architecture, and that different architecture to this day is critically important in how we deliver treatment more effectively and in a different form, a very effective form, quite frankly, when compared to basically C-arm gantry architecture, which has been the kind of the dominant product design characteristic in this space forever. I think you know for the most part that we have 2 really, really important technology platforms and treatment delivery platforms. The first is the TomoTherapy System, the most recent generation of that is called Radixact. This has become a truly workhorse product, everyday product in the clinic all over the world. This product, basically, from an architecture standpoint, is on a big board CT -- not a big board, but a CT scanner. And again, it's at the core of how the imaging capability is critically important in treatment delivery. Product is fast, it's efficient. It's got very, very user-friendly workflow and it has become a remarkably diverse product, maybe one of the most versatile products in the market with regards to treatment range, case mix range, everything from very routine cases to the most complex cases that one could imagine. And what's happened with it over time is being borne out in terms of the diversity, its case capability and its workhorse nature. CyberKnife continues to be the gold standard product in the market for full body radiosurgery. It's still unique in many, many ways and is still a very big part of our future, especially in light of the impacts that the APM changes in reimbursement will create in the marketplace. Last but not least, our ability to connect in the clinic to other OIS systems, all OIS systems, quite frankly, as well as the latest OIS systems from partners like RaySearch Labs with RayCare. Our connectivity and interoperability has taken a quantum leap forward in the last several years. And this is a really, really important aspect of how we're able to improve our positioning and expand the number of customers and the degree of customers that we can engage with. You've probably seen that we've been making some reasonably visible progress in how the company is moving forward from an operational and a financial standpoint. We have -- over the last several years, we have made pretty dramatic improvements to executive leadership and talent. We've unleashed the power now of a strategy in China, which you'll hear more about when Suzanne speaks that really is one of the most important growth catalysts we have. We have moved technology from the CyberKnife to the Radixact platform in the form of Synchrony. And along the way, we've continued to try and manage our cost structure and operational efficiencies to a better place. We really have used innovation as a primary driver of this thought process about how the company needs to be positioned. And the vision of our road map, taking advantage and complementing the things that we do well and finding ways to bring more of that to bear from an innovation and a road map standpoint is, again, at the heart of the focus from an R&D standpoint. We came through the end of the last fiscal year, restructuring and reworking the structure of our debt situation, reduced cash burn and hard interest expense pretty significantly and have put the company -- and probably from a balance sheet standpoint, while we still carry debt, it's in a form that is not creating a significant overhang at this point and not in our way relative to being able to make investments in the business. Last but not least, this is about doing what we need to do to accelerate revenue growth. This is about a business today that has scalability in terms of the P&L and the financial model. And we believe what we're doing and what we're introducing and taking advantage of relative to the future impact in the market from changes in reimbursement, this wave of SBRT and more efficient treatment delivery, we believe that we are uniquely positioned to grow faster than our market to a fairly reasonable degree for the foreseeable future. You'll hear more again about the things that are catalysts for growth from Suzanne. But you know China is a big part of the strategy going forward. We believe that this business is on the cusp of crossing over to GAAP net income profitability. And we're in a place, quite frankly, where we should be starting to see changes in how the company is being valued that mirror the operational and financial impacts that we've been driving. So with that, I'm going to take a pause. I'm going to very excitedly introduce Suzanne Winter, the President of Accuray to talk more about the company's growth catalysts.

Thank you, Josh. So we have multiple growth catalysts that's driving our commercial momentum. If we look at how we're organized globally, we have 4 major business regions and within each of them, we have made a significant investment in the commercial infrastructure, and we continue to look at that to make sure that we are executing high-impact commercial strategies within each of the regions. From an overall market standpoint, if we look at the market research for the markets that we participate in, that CAGR is about 4.2% growth over 2021 to 2026. You can see in our last couple of quarters, we have significantly overachieved the market growth, and we believe we're going to be continuing that momentum. And I'm going to talk about some of the growth catalysts, but we believe that this is going to drive market share gain. Our long-term growth catalysts, the really for our first is our technology innovation pipeline, and I believe it's the strongest it's ever been in the company's history. China is a significant growth catalyst for us, and we have a unique business model that we think is going to favor our growth. New market opportunities, markets that we didn't participate in before that are incremental to our commercial focus. And then finally, really the acceleration of many favorable market trends, which I'm going to talk about, where Accuray is positioned very strongly to capitalize. We have a robust technology pipeline, and this is something that is very purposeful on our part. As Josh pointed out, our vision is to expand the curative power of radiation therapy. That is our core competency, and we're going to continue to focus on making sure that we are pushing the boundaries of technology for both treatment planning and delivery, while others are looking more at an oncology ecosystem, replacing the bet that actually the radiation oncologists are going to care more about the most sophisticated, the most precise equipment in their decision-making process. This is an aggressive pipeline. We are investing 15% of our revenue back into R&D. We think this is highest in the industry. And we are committing to a robust cadence of consistent innovation so that we are telling the marketplace that we have innovation that is today and into the future, and it's going to continue to improve patient care. And we're also -- we know that, as Josh pointed out, that maybe 10 years ago, the perception of some of our systems may have been that they were niche products or that they were on an island. We are closing those gaps as well as producing meaningful innovation that is taking radiation therapy further. You can see in the green, what we have introduced already, Synchrony on Radixact, ClearRT on Radixact. And here at this show, we are introducing for the first time, VOLO Ultra, which increases treatment speed and quality on the Radixact, and what we have shown also in the booth is our neural package for CyberKnife, which is our partnership with Brainlab. As Josh pointed out, we know we can't do everything. And so we are partnering with companies that have best-in-class technology that can marry our technologies and offer an enhanced solution. We just signed an agreement. You may have seen the press release with C-RAD, which is also going to allow us to have a breast package for those sites that have Radixact and are doing breast imaging as well as the use of deep inspiration breath hold. We did show in a suite, our partnership with RaySearch where we're showing ClearRT as an input to online adaptive. We believe that this will be differentiated from what others are showing from their online adaptive in terms of workflow speed but also in fidelity of information being fed into the adaptive workflow, and we're going to talk about that a little bit more. And then longer term, we talked about also marrying ClearRT on to our CyberKnife platform so that the CyberKnife platform can also enjoy the volumetric imaging from the ClearRT technology. China. China is a major growth catalyst for us, and we do believe we have a unique business model. I wanted to give a little progress on what we've done in China. Right now, we're up to 175 employees and growing. The commercial execution has been outstanding in our China group. We dominate right now in the Type A market share. We've gotten 100 out of 118 licenses in the Type A. And again, the Type A market segment are the premier hospitals that are the highest visibility hospitals. These are the hospitals that take care of the party leaders, and to have that kind of a share in that high visibility of a segment, we believe will have a halo effect when we come to the market with our jointly produced Type B product. Right now, we have the commercial coverage. We are selling into the Type B product. That product is on track, and we are excited about the opportunity to bring that to market. We have a customer support team that is in place. We installed 30 systems this year. They are working hand in glove with the Accuray service team based out of Madison so that they are able to give the same level of service as if it was an Accuray employee. And also, they have built a fantastic world-class training center, which we probably will use globally in the future. But for now, they have already trained 175 physicians in 24 institutions. From a manufacturing standpoint, the facility is ready. They're ISO certified and ready to go. They've just -- they're just completing the BIMT testing, which is necessary before we put it through NMPA regulatory approval, but we are on track. The planned market introduction is still the summer of '22 with anticipating shipments following an NMPA approval, we think by the end of calendar year '22, also working very hand in hand with our manufacturing in Madison to make sure that they are like a sister manufacturing site from us from a quality standpoint, from an operating procedure standpoint. New market opportunities for us that we're looking forward to. We believe we can take the concept of the Type B product that we're going to be developing for China. And that there's opportunity from a global value segment product. There are emerging markets where radiation therapy is underpenetrated where the most important thing for them is not only quality of care but also workflow efficiency and a limited advanced capabilities in terms of extra features. And so that type of a feature set with high throughput, high quality, we think will be very attractive in other markets. And we believe this is a $300 million annual opportunity in really just India and Latin America alone. So we look forward to that. Neuro radiosurgery. We also believe this is an incremental market for Accuray that we are going to place greater focus. Not only will it help us in our win rate with radiation oncology systems that are shared with neurosurgery, but we also think there's significant replacement market opportunity because of aged Gamma Knife systems that are out there. So through 2026, we believe $600 million worth of business opportunity is available. And we think the CyberKnife has a unique advantage, especially now with our partnership with Brainlab, which has an outstanding reputation within the neurosurgical community. We'll be targeting neurosurgeons. But unlike the Gamma Knife that only treats the brain, the CyberKnife treats both brain and spine and rest of body. But from a neurosurgeon standpoint, the ability to do both brain and spine and treat tumors that are very close to the spinal column and need extreme precision and accuracy, we think the CyberKnife will do very well. Certainly, an improved patient experience, the Gamma Knife requires a head frame and they're now offering with and without the head frame, but many centers are still using a frame that they attach to the patient's skull. We have a frameless way to approach. We will offer the option for neurosurgeons that are familiar with the frame, but we think this will be a significant improvement in patient experience. The CyberKnife unlike the Gamma Knife, has Synchrony, our 4D tumor tracking and dynamic delivery and unlike the Gamma Knife, there's no cobalt source associated with the Gamma Knife, which is having increasing regulatory challenges to implement. We'll hear a little bit from Dr. David Roberge, who's from McGill University. He's going to talk a little bit about his experience and what he's seeing in growing patients for radiosurgery as well as the collaboration between radiation oncology and surgeons and why he likes the CyberKnife. So if you would play the video.

I'm a radiation oncologist in Montreal at CHUM. So we're sitting here at CHUM, which is the Hospital Center of the University of Montreal. So it's a large academic hospital that treats cancer. In our radiation oncology department, we have 10 linear accelerators from multiple vendors, but it includes 3 devices from Accuray. So 2 TomoTherapy devices and Canada's first CyberKnife. The CyberKnife lives in radiation oncology. It's a device of the radiation oncology department. But many of our treatments are delivered in collaboration with surgeons. So all of our intracranial treatments are done collaboratively with surgeons that come and review and approve the treatment plans and refer us a large number of our patients. We have ocular tumors who are delivered with the ophthalmologist that comes in, also reviews plans and helps us with treatment delivery. Radiosurgery basically is the delivery of a high dose of radiation to a small, well-defined area in 1 or a small number of fractions. It's the sharpest sample in our tool set. So we use it for the most precise cases. So most of the spine cases that we do with the primary spine tumors. When we started with our first CyberKnife more than 10 years ago, it might have been 5% of radiotherapy patients that were treated with radiosurgery. Now it might be almost 1/3 of patients that can be treated with radiosurgery. And that percentage seems to be increasing. Large proportion of the growth in radiosurgery is patients with multiple malignant brain tumors, multiple brain metastases that are being treated with radiosurgery, sometimes more than once, over the course of their disease. For some patients, they would have a choice between different kinds of treatment. Prostate cancer could be treated with radiosurgery, but it might be treated with conventional radiotherapy. For other problems, really radiosurgery is the only solution. So for neuralgias or facial pain, there is no conventional radiotherapy solution. And for some patients with malignant brain tumors, although there might be an alternative to radiosurgery, there isn't an alternative that's as good or -- as good in controlling the tumor or as -- that offers so little toxicity to the patient. So there isn't a good alternative. What I like about the CyberKnife is the workflow, the flexibility that the device has, the accuracy, the appeal of the device, and flexibility of the CyberKnife allows it to treat a large variety of patients and that kind of patient, the number seems to be increasing. And also, I won't name the brand of my car, but the CyberKnife is a little bit like my car since we've gotten it just through software upgrades. The CyberKnife is faster than when we first purchased it, it gives better plans. And we've seen improvements over the years to the device that we purchased all that time ago. It's been now more than 10 years that we've had the CyberKnife. So I don't have as many patients now that have had treatments on another device under my care and then subsequently, the CyberKnife. So a lot of my patients haven't lived through having things screwed that are outside of their skull. I can testify that patients that have had with and without wouldn't go back to having things screwed to their skull. I think for most patients, it's a very easy experience, fall asleep during treatment and wake up and then they've had a brain tumor treated, which is quite impressive. The things we like about the CyberKnife, it's a sexy device. So patients look at the device and they understand. It doesn't need to be explained to them. They see the robot breathe as they're breathing and they understand the technology. So it's easy to communicate the value of the technology to patients' referring physicians. The CyberKnife is an easy-to-use technology. The ease of use of it and the confidence that it inspires we like. And of course, what's important in radiosurgery device is precision, accuracy, knowing that you're hitting the right area and that you're hitting it with a high degree of accuracy, it makes us all sleep much easier at night.

And finally, market trends, favorable market trends and also the technology implications of those market trends. Josh talked a little bit about the growing use of ultra-hypofractionated treatment. This truly is a growth catalyst. It's really a change in the clinical paradigm in radiation oncology, just from 2015 to 2019 in terms of Medicare claims alone, the number of patients that were treated with ultra-hypofractionation has grown 52%, and that continues to increase. Part of that is because of increasing clinical evidence that shows the safety and efficacy of shorter-duration treatments, but also COVID. COVID has dramatically accelerated the adoption of SBRT. So as we talk on the show floor here at ASTRO, all of our clinicians across the board are talking about the significant rise in the number of patients that they are treating with SBRT and partly due to the wider exposure during the pandemic, and also all of the major radiation oncology organizations have adopted these guidelines. But much of it also has to do, obviously, with the RO-APM that is coming, the change in reimbursement. But what is -- what we see in the marketplace is there's old equipment, the installed base across the board, all manufacturers is old, it's aged. And if you look at the U.S. alone, 40% the U.S. installed base is greater than 9 years. That means that they need technology enhancements in order to be able to deliver ultra-hypofractionated treatments. We know on the right-hand side that if you look at conventional fractionation versus those sites that use ultra-hypofractionation that the total capacity of what you can treat within a year goes up significantly, and that is more favorable under a new reimbursement model like the RO-APM. So the ability to do ultra-hypofractionation treatments, good for patients certainly allows them to treat more patients, which is good for them from the bottom line. They can compete more effectively in the RO-APM reimbursement and obviously, potential for improved outcomes and quality of life. But that really now is incumbent upon all the providers to make sure that they're making the investment going to their administrator and getting the capital equipment funds. We're going to hear from Professor Raphael Moeckli from CHUV, who's going to talk a little bit about the upgrade that he just had for ClearRT and Synchrony and how that positions him to do ultra-hypofractionated treatments as well as position him for the future, which is online adaptive.

We treated all our patients on Radixact with that modality, which means about 60 patients up to now. The takeaway up to now for our experience is that the image quality is extremely good and also that we gain a lot of time when doing the imaging. So this is faster and better, which is what we would like to have each time we do an upgrade. Doing imaging in radiation therapy is very important because, obviously, it allows us to position the patient correctly. So it has been a major improvement in the treatment quality when we implemented imaging in radiation therapy. For me, ClearRT is image quality, speed and perspectives for the future. Adaptive radiotherapy and particularly, online adaptive radiotherapy is probably the future of radiotherapy. And in that context, ClearRT could be of interest in conjunction with motion synchronization that we can do with Radixact and is potentially an alternative to [indiscernible].

Great. So in summary, we believe now is our time. We are positioned very well to do -- to take advantage of these growth catalysts, the market trends, really leverage the technology pipeline that we have put in place, participate in new markets with both the CyberKnife and Radixact and really differentiate Accuray technology from the rest of the marketplace with our latest introductions of ClearRT, of Synchrony, of VOLO and also a superior patient experience while they are getting the most precise technology. With that, I'm going to introduce Dr. Jean-Philippe Pignol, who is our Chief Medical Officer, Chief Technology Officer. And he's going to talk specifically about now clinical evidence that shows why Accuray technology is not the same as other technologies out there. So Jean-Philippe?

Thank you very much, Suzanne. My name is Jean-Philippe Pignol. I am a radiation oncologist. I'm also a nuclear physicist. So my research was mainly clinical trial and research in physics. I was for many years a Chair in Rotterdam, the largest radiation oncology department in the Netherlands. And in this position, I had the blessing to access all technology and work with all the vendors. I had photon. I was part of the MR-Linac consortium and had the chance to have 2 CyberKnife. So I came to a point of my career where I would really like to make, if possible, a bit more impact on patient care. And so I say, well, in talking to Josh, my very old friend, Josh, I say, well, I would love to contribute to the development of machine, and I decided to go for the machine I preferred that I think is a better architecture that delivered the best thing, but also the one exactly what, Suzanne, you just said, has some clinical evidence. When I was part of all those teams, we were always talking about what we would like to do, plan for clinical trials. And the main difference, I would say, with Accuray is that we have the evidence. We have developed the evidence. So one of the evidence would be just what was released this year in end of August, at the ESTRO, we had the result of the PACE-B trial. This is a major clinical trial. So one may not have -- a, develop a prostate cancer, it's very, very frequent. And the idea was to say those men, when you decide to treat with radiation, have to go for 20 fraction over 4 weeks, that's the best evidence today, but you have to be very careful. And the question was, can we do that in just 5 fractions to make the life of the patient way better. And you can do that only if you have a good technology, and you need to do SBRT. So it was a very large, randomized trial done in Canada, in the U.K., but mainly in the U.K. 37 centers, and about 40% of the centers are with CyberKnife. And what we found is that you can do it safely. The result of acute toxicity were published last year, the [ probability ] of long-term toxicity were presented this year because when you give high dose per fraction, that's when you have toxicity. In fact, the toxicity was sort of equal, but what they found is that you have half toxicity if you use a CyberKnife compared to a C-arm. And I think that's major because that show that the technology is not only better, but it translates also in better outcome. There's a -- here, for example, Dr. Alison Tree, who is the PI of the study, who's going to explain that to you.

So I'm here at ESTRO 2021, and have just presented the results of the PACE-B trial. This is a large research study where we wanted to test whether we can shorten the radiotherapy from the standard length of treatment, which is 4 to 8 weeks, down to just 5 days. And the reason we wanted to test this was because we believe this will make treatment more tolerable and more convenient for patients so they can get back to their normal lives sooner. What we found is that men who have the 5 treatments can be safely treated with low levels of toxicity, both bowel and bladder toxicity. And that there were slight differences between the 2 groups with slightly higher bladder toxicity in the 5 fraction, the shorter regime. There were also some differences seen in the way we deliver the treatment with lower toxicity in centers where they had a special machine called a CyberKnife. And we're doing some further analysis to find out why this is the case. In terms of how the patients feel, we found the same picture, slightly more bladder side effects, slightly less bowel side effects. But overall, very well tolerated. So a good result.

Prostate. The most frequent cancer in women is breast cancer. One woman [indiscernible] breast cancer. 80% of women at an early stage, which is good because the likelihood to die with your cancer at 10 years is 1.5%. Meaning the patient will live very longer. And the very latest work I've done just before joining the company with my friend, Frank Vicini, who's one of the most famous radiation oncologist for breast, the lead of the NSABP 39 trial, meaning that we want to treat the breast -- early-stage breast cancer in just 5 fraction was an evaluation of when you give radiation to a woman, sometime young, what happened 30 years down the road. And we found surprisingly that in the U.S., close to 3,000 patients may develop the lung cancer because they have been exposed to radiation. But not every technology is equal. If you do brachytherapy, it's a little bit better. But the best technique from all was using a CyberKnife. You could reduce by 85% those unnecessary death in women. And I think that may change the way we consider technology for early-stage breast cancer. There's another paper, I think that was also very interesting. I have an accent, you guess from which country. And in this country, at some point, they have decided when they move to IMRT for head and neck, and it's a very dramatic cancer with a very poor outcome, to compare VMAT, so the good old C-arm, the best they can do with the old C-arm, with the TomoTherapy. And so about -- I don't know, it was like 37 centers -- 40 centers, 166 patients, they collected all the patients. And they have done what we call a propensity score analysis. It's a pseudo randomization, if you want. And they compare when you treat a patient with TomoTherapy versus VMAT. And what they found is that after 18 months, local recurrence was only 97% with a TomoTherapy versus 85% with VMAT, meaning that you have a way better results in terms of local control when you use TomoTherapy. But what was the cost of that? Well, the cost was a bonus. You have less toxicity. There was a better protection of salivary gland. So it's very rare that we expand so much the therapeutic window in radiation oncology, and that has to do with the technology. And the latest advance, I would say, in radiation oncology, I think that's very exciting. We know that SBRT could be potentially put on sheet using checkpoint inhibitor. And that's really a very hot topic, including this year at ASTRO. And this year, we had a publication from China for pancreatic cancer, the patients that receive SBRT plus [indiscernible] chemotherapy do worse than patients receiving SBRT with CyberKnife plus checkpoint inhibitors. And there was an expansion of the survival here. And that's important because pancreatic cancer are very hard to treat with SBRT because they tend to be placed in a very bad zone. And that treatment was extremely well tolerated. So I think that what I'm seeing here is really indeed what Suzanne, you were saying, we could potentially with good technology, expand the curative power of radiation oncology. And that has to do with a better surgical precision, noninvasive, I'm not going to enter into a patient. It's way more comfortable. The Synchrony is way more comfortable. It's fast. And fast, we're going to talk, I think -- I'm going to give to -- now the word to Corey, our VP [indiscernible] Marketing.

Thank you, Professor Pignol. It's my pleasure today to speak with you about the product, Accuray product difference. So let's begin with the Radixact System. The Radixact System is really the ultimate full-body workhorse radiation therapy system. This system is actually premised on the same type of platform used in diagnostic imaging, a slip-ring platform, and that brings certain advantages. Here, you can see helical delivery taking full advantage of that slip ring, doses delivered from 360 degrees around the patient very specifically to the targeted region. We also have a delivery mode called TomoDirect, whereby you park the gantry at a fixed angle and deliver dose from that angle. You can go ahead to the next angle and deliver accordingly. This is the big advantage of having a slip-ring platform because it really gives you the best of both worlds. Both being able to deliver from a continuous arc standpoint as well as fixed angle delivery. The Radixact System also provides for a simple planning system, now introduced at this year's ASTRO Congress called VOLO Ultra. VOLO Ultra really brings 3 things. First and foremost, for the novice planner, it automatically selects many of the planning parameters that are required to get an expert plan. So you turn the novice into expert through intelligence of the planning system itself. The other thing it brings is speed. And speed in both optimization time or the time required to calculate that treatment plan as well as speed of delivery. Speed of delivery improves by about 60%. We reduce delivery time by about 60%. In addition, we also reduce that optimization time by as much as 90%. We also have Synchrony 4D tumor tracking with dynamic delivery. This is a unique capability of the Accuray system, and we're going to talk more about it in just a moment. Vendor-neutral connectivity, and this connectivity is to oncology information systems that include Varian's ARIA, Elekta's MOSAIQ as well as RaySearch's RayCare oncology information system. Quick installation. The system comes precommissioned from the factory, so much of that work is done before it ever arrives at the site. And this enables us to install a system in as little as 2 weeks. And then we have just introduced our diagnostic like ClearRT helical imaging. So let's talk a little bit more about ClearRT. ClearRT has many advantages. Well, first and foremost, it can be installed on any Radixact system within our installed base. Secondly, it's very fast. We can acquire a 1-meter long image in only 1 minute. Thirdly, it has the largest field of view available in the market today. If you think about it this way, it's a large cylinder that is 50 centimeters in diameter, by upwards of 1.35 meters in length, by far, the largest in the industry. And it's fast. We can acquire a 1-meter image in only 1 minute. Finally, probably the most important aspect of this is it provides for diagnostic-like image quality. And as you can see from the images shown on this particular slide, on the far right is the diagnostic planning image. On the left, what you see is that same patient imaged with ClearRT. And I dare say it's very difficult to tell the difference between the 2. So if we contrast this to the typical cone beam image that many of our competitors use, that cone beam image is typically acquired at a much slower rate. In fact, the typical cone beam takes about 60 seconds or 1 minute to acquire only a 20-centimeter axial length. It is also brought with artifacts. Those artifacts can include nonuniformities. And I tried to highlight here, with a couple of red arrows, areas that are dark that shouldn't be dark and areas that are light that actually shouldn't be light. They also, because of these artifacts, you can see some geometric distortions. And what this really means is the representation of the image of the anatomy is a little bit off. And limited field of view. The maximum scan length on a cone beam CT is typically about 20 centimeters. And just referencing back to ClearRT, we have 7x that axial scan length. If we further expand the comparison beyond cone beam CT, we can also look at MR. And actually, MR has some of the same limitations. It is a much slower scan speed than ClearRT. Likewise, the field of view is also limited. And additionally, you also have image quality issues in terms of uniformity and actually spatial integrity. Where MR is actually very good is in contrast resolution. But what I will say is in terms of contrast resolution, we are continuing to invest in the technology to narrow that gap. And I'd like you to think about it this way. If you look at the diagnostic imaging world, every day, CT is competing against MR, and they're always making inroads in narrowing that gap in contrast resolution. We have a platform that is based on a diagnostic imaging platform. So we can ride that same road map curve. So with that, it is my great pleasure to introduce Dr. Lane Rosen, Director of Radiation Oncology at the Willis-Knighton Cancer Center. Dr. Rosen?

Good afternoon. I'm Dr. Lane Rosen. I'm the Director of Radiation Oncology at the Willis-Knighton Cancer Center in Shreveport, Louisiana. We're a large tertiary center, and we've been a long-term user of the TomoTherapy product and Radixact. And what I would like to talk to you about today is just a little bit about our experience with the product. Willis-Knighton initiated a rotational form of IMRT as early as 1997. But at that time, because you had to attach an MLC cage to your linear accelerator, we had a very limited visualization of the patient despite a rotational IMRT delivery. In 1999, we installed the first 2 linear accelerators of their type that had online imaging, and we used a step-and-shoot IMRT technique. And because these were traditional linear accelerators, we had a much larger portal image, but we missed that rotational dose-symmetric advantage. The TomoTherapy System provided a unique solution to us. So in November of 2003, we began offering helical IMRT, and we -- now, we had the first of its type ability to do a 3-dimensional megavoltage CT image. At that time, I can tell you, I came to ASTRO and I remember it being described as a boutique therapy or niche therapy. And pretty much, I was told that helical IMRT was doomed to fail. So the first patient we treated in our department back in 2003, it was actually our very first patient traveled to Shreveport from New Orleans. He was a colonel who had landed at Normandy and he had a metastatic pancreatic cancer to his liver. He had already failed treatment at numerous facilities with chemotherapy. And despite the fact that there was no experience using these type of large fractions, we treated the patient with radiosurgery, now called SBRT, to both the liver and the pancreas. And that patient did very well and survived for 2 years really sort of opening up a world to us that we had not previously had. That led to doing things like retreating head and necks, treating the entire lung for mesotheliomas, whole abdominal radiation therapy sparing the organs at risk, which was called conformal avoidance. Really some amazing treatments. Perhaps my most exciting case was a gentleman that had a pineoblastoma that had been treated by a Gamma Knife procedure near the brainstem. And after recurring had been treated with bone marrow transplant and chemotherapy at both Duke University and MD Anderson and essentially been told that he needed hospice. We were able to reirradiate the patient with craniospinal technique in the supine position while sparing the brainstem, and that patient dropped into my office 12 years later to let us know he was alive and well. So really, the whole TomoTherapy system opened up so many opportunities for us. We began very early treating early-stage lung cancers with again, at that time, what we call image-guided radiosurgery, which was the treatment of lung lesions using only 4 or 5 fractions of radiation. This, of course, is done all over the world routinely now and was very successful and really made easier by the TomoTherapy program. So we were very proud in 2005 to host the world's first image-guided IMRT conference here in Shreveport. We had some wonderful speakers from all of the early TomoTherapy sites. And at that time, we recognized that TomoTherapy could just do things that other machines could not. You've heard already and you're familiar with the concept of image-guided radiation therapy. The whole point of radiation, of course, is to deliver a good dose to a tumor while sparing surrounding tissues, and using imaging during that treatment is the foundation of accurate delivery. All of the various advances in our field have involved things like image guidance with or with x-rays, with CAT scans or with MRIs, even PET scans. And there are some advantages and disadvantages of each of these modalities. So just to briefly touch on x-rays, of course, this is how we started radiation oncology. Traditional port films that only allowed bony landmarks or fiducial markers, and it was very dependent on the planning of a static CT, skin marks and patient immobilization. Obviously, the field has moved beyond that. In-room CAT scans, CAT scans on rails were also solutions but didn't share an isocenter with the machine. And even cone-beam CTs, which since 2005, they offer a diminished quality CAT scan, but it could be integrated with your treatment that didn't require a patient or table motion between imaging and therapy. But cone-beam CTs are quite limited in the improvement by reconstructive algorithms and software. Of course, you already know about TomoTherapy, that was a linear accelerator mounted on a CAT scan gantry, and it really used the same source for both treatment and imaging and totally revolutionized image guidance in radiation oncology. MRIs have been around for some time in radiation, using low energy or low strength -- field strength MRI since 2012, did allow image anatomy to be adapted. But the weak magnet, the high cost, the problem with patients' claustrophobic issues with MRIs and the slow throughput really limited widespread use. Higher field MRIs are newer. They do offer diagnostic quality MRI images, but they have also limited fields of view to maintain their quality. There is still an issue with throughput, claustrophobia and the acquisition and vault costs have really limited widespread applicability. As a department that not only has technologies such as proton therapy, but also in-house, in-department MRI simulator, I can tell you that physician experience with MRIs is also quite limited. PET scans incorporated into linear accelerators offers the opportunity to bring biology into treatment planning, but we're still not really sure of the timing of isotopes and how you differentiate healthy and unhealthy tissue and what SUV is necessary to guide therapy. And although this hybrid technology has promise, its outcomes can potentially be reproduced using the stage existing PET CT scan we have in our department and SBRT and radiosurgery techniques that already exist. So even early on with the original TomoTherapy, high-arc name, the goal was to get to adaptive radiotherapy. But to do adaptive radiotherapy, first, you need to be able to do good-quality, image-guided radiation therapy. So the whole idea is that with image-guided radiation, you align a patient to match their anatomy and their contours from your CT simulation. And then if a tumor shrinks or patient loses weight, you can't simply adjust patient position to accommodate that. You essentially have to change your initial treatment plan because if you don't, these changes can result in overdose or underdose to healthy tissues or targets. So with adaptive radiotherapy, you'll modify your original treatment plan. But there are a number of barriers that have existed to adaptive radiotherapy, manpower issues, contouring, registration. But image interpretation and a quality imaging source that can allow visualization of your tumor, your patient and your organ changes is our biggest obstacle. So welcome to Radixact ClearRT. So we think this is an opportunity to finally bring adaptive radiotherapy more practically into the clinic. It's a comparatively low entry or unit update cost compared to other products. It's still incorporated with the helical delivery approach. The CAT scan form of imaging is very familiar to my physicians, my partners, my staff, my businesses. It has excellent throughput and efficiency. But perhaps most importantly is that it is a rapidly obtained near-diagnostic quality image. So I'm going to show you some of those in a moment. But before I do that, I don't want to forget megavoltage CT, which is also, of course, available on the Radixact system, still has its use. You can see in the center of the picture, megavoltage CT for Patient B versus a CT simulation using an O-MAR reconstruction protocol on the bottom right. And I would argue that the megavoltage CT for this patient is superior to the other options available. So there is still a case where you may want a megavoltage CT. This is a patient that we treated in our department. And these are identical slices at 2 different parts of the patient using the new ClearRT images, our CT simulation, which I might add is a first of its type dual image CT scanner, brand new, and cone-beam image is obtained on our linear accelerator, which is relatively new 4, 5 years old. And I think you can easily see that the ClearRT images here with the exception of the contrast in the CT scan are really identical. Here is a good example of the same patient, back-to-back days on our cone beam done on our linear accelerator versus the same patient treated on our Radixact. And you can see the ventricles and [ jari ]. It's just a much superior image. Another example, this patient had a lot of artifact from some metal and other issues in the body. And if you look at the image on the left, the ClearRT image, and look interiorly, in some ways, I think you're getting a more clear image than we even were on our CT simulator. This image is self-explanatory. These are 3 different slices of a patient using a cone-beam CT for a lung tumor. And clearly, we were able to eliminate a good portion of that artifact. And in fact, you could even see mediastinal lymph nodes on this patient on the right. And so really a tremendous advantage in our clinic. This is a video that should be playing now. This video is a side-by-side image. I just wanted you to be able to see as we string through a CAT scan simulation image and a ClearRT image. Now as you start to work your way through and if you focus on the sort of mid-posterior pelvis, I think in many ways, you can see every bit as well on the ClearRT image, recognizing we don't have contrast on this image in comparison to the contrast study. And that changed the window level a little bit on these 2 so that you could see a difference, but tremendous image quality all the way through treatment. So as this video stops, I'll move into one of the real strengths of the Radixact and ClearRT system, which is our image acquisition time. Compared, of course, to our TomoTherapy Radixact megavoltage CT, it's dramatically faster. But what is a very pleasant surprise to us was that it was almost 50% faster than typical images obtained on our linear accelerator using cone beams. Now all these kind of images are dependent on your length and technique when you're using the TomoTherapy Radixact and the gantry rotations speed on the linear accelerator. So in order to compare an apples-to-apples evaluation, what we did was we looked at the fine mode. Now if you're doing image guidance, there's almost no time where you're not going to want your best-quality images. So using the fine mode, we compared a 25.5-centimeter length image on our linear accelerator with cone beam and on our Radixact with ClearRT. And we also selected a 44-centimeter width, and we have the field of view that can get up to 50 centimeters, which is larger than any system that I'm aware of in our field. But we tried to use apples-to-apples to compare. And what you can see was including ramp-up, our ClearRT images were still 31 seconds faster than that of our cone-beam CT images. So when you add this up throughout a 25 or 30 patients a day, this means another full patient slow or 2 depending on what you're treating. And that speed returns value to the department. So our upgrade experience, we were the first site to upgrade from Radixact to the ClearRT-type system. It was a very smooth upgrade for us. We received feedback from Accuray throughout the installation. The process was very deliberate and unrushed because we were the first site. They wanted to prepare for first site issues. We blocked the work fleet. It ended up and required 9 days in total, the weekends before and the weekend after our block work week. A subsequent site was able to complete over 2 long weekends, I think 4 days and 4 days. So our experience with ClearRT has been really remarkable and continues to show why this system has the potential to change the way we treat things. I thank you for your attention.

Thank you so much, Dr. Rosen, for sharing your experience with ClearRT Helical KVCT. Now let's move on to another challenge that confronts radiation oncology. And that is motion. Life is always in motion. And that motion can come by way of the patient breathing, comes by way of circulation. It also comes by way of digestion. And there's really 3 fundamental ways of managing that motion. The first way is to use something called an internal target volume technique, an ITV technique. And what that essentially means is you encapsulate the moving target within the entire margin. The other way is to use what's called a gating technique. A gating technique allows for a very confined window. And as that target moves into the window, that is only when the beam turns on. All the time, while that target is outside the gating window, the beam is off. The third way is with Synchrony. And Synchrony is actually the best of all. And the reason is because with Synchrony, you're actually able to follow the moving target throughout its full range of motion. And what does that mean? Well, unlike gating, when you can follow that target throughout its full range of motion, you're never turning the beam off. If you never turn the beam off, you're able to deliver the dose much more efficiently. And unlike the ITV technique, where you're encapsulating a very large area within the dose cloud, making sure to keep your moving target within that dose cloud, you're also irradiating a lot of normal healthy tissue. So here is just for illustrative purposes the difference between the ITV technique and Synchrony. In essence, here, you see using the ITV technique, the dose is denoted by the red square. And within that square, you see the target moving. The target is only that small red volume. But the dose is being delivered to the entire area that's shown in the yellow box. Contrast that with Synchrony. With Synchrony, you're seeing a very specific conformal targeting of only the moving target. You're not getting a lot of normal healthy tissue within that dose cloud. So if you compare and contrast, and this happens to be a pancreas case, if you use the ITV technique, over 90% of your dose volume is actually hitting normal healthy tissue. Less than 10% is actually hitting the target. If you look at Synchrony, a vast majority of the dose is actually hitting the target, and a minority of the dose is hitting normal healthy tissue. So what does that really mean? What that really means is that you're able to escalate dose to the target. Also what that means is the patient is able to better tolerate the dose delivery because the more healthy tissue you irradiate, you increase the chances for short-term side effects. And when you increase chances of short-term side effects, that patient is not able to tolerate the delivery. So with Synchrony, you minimize that dose to healthy tissue. And from a long-term perspective, you lay the groundwork for potentially having better outcomes. So there are ways of controlling motion. And those who use an ITV technique or a gating technique often deploy these ways of trying to limit motion. They use 2 different devices. One device is actually a compression device. In this case, we're showing an abdominal compression device that limits the amount the patient can actually breathe. The other method is to use a device that the patient is trained to breathe only with a certain depth of respiration. In both cases, you're trying to limit the amount of respiration that patient can do. The problem is many of these patients already have compromised respiratory function. And if you have a patient that already has compromised respiratory function, further limiting their ability to inhale and exhale is not well tolerated. In fact, about 1 out of 3 patients are unable to tolerate these devices and, as a result, are not able to be treated with those technologies. With Radixact and CyberKnife and Synchrony, you're able to treat that moving target and you open up the possibility to treat more patients. So just in summary, Synchrony allows patients to breathe naturally, it allows for more efficient delivery and you're able to minimize margins and, therefore, provide a better patient care. Now Suzanne had mentioned previously that we will also be partnering with C-RAD, an announcement that just happened over the last few weeks. And with C-RAD, we are interfacing their C-RAD Catalyst HD system. What this system will do is monitor that patient. When that patient takes a big breath and holds it, what they're doing is effectively pulling the chest wall away from the heart. And when you do that, as that patient holds their breath, you turn the radiation beam on, so you provide distance between the target and the heart, again, reducing the potential for long-term side effects. The C-RAD system will tell our system when to turn the beam on because they have a camera system that monitors where that patient -- what that patient state is at any time. When the patient exhales, they will tell our system to turn the beam off, so opening up the possibility for additional breast treatments. And with that, I'd like to introduce Dr. Anand Mahadevan, Professor and Chairman of Radiation Oncology at the Geisinger Health Care System.

Hi. My name is Anand Mahadevan. I am the Professor and Chairman of Radiation Oncology in the Geisinger Health System. Before coming here, I was in Boston for 15 years in the Harvard Radiation Oncology program. And we started a successful CyberKnife program with SRS and SBRT. And my goal to come to Central Pennsylvania is to bring these treatments and these best technologies to rest of the country here in the U.S. and to do SRS and SBRT. Geisinger Health Care System is a 100-year-old health care system in Central Pennsylvania. It's a large system which treats a wide variety of patients in an area between Pittsburgh and Philadelphia. The Geisinger Health Care System had a radiation oncology department, which are traditional machines. And in 2018 and 2019, we embarked on a venture to bring the most up-to-date SBRT systems here. So we bought the CyberKnife machine in our Northeast main campus, and they're adding exact machine in the other campus. With this, we were able to give the best treatment options with SBRT in patients in Central Pennsylvania. Since started doing SBRT about 15, 20 years ago, I was always attached to the CyberKnife machine. The reason was when we do SBRT, we want to deliver the best possible treatment but also in the best comfort for the patient as well. What was attractive about the CyberKnife was its ability to track the tumors and follow it and treat it accurately even if the patient is bleeding. That was a unique capability. And once you start doing that, it's very difficult to embrace lesser technologies where the breathing and everything is not tackled. That's why I've passionately pursued the CyberKnife and now that are exact with what's called the Synchrony System. In my mind, it is almost difficult for me to recommend SBRT in other systems given the technological advantage of the Synchrony. Sometimes, we have had patients who had treatment with SBRT for tumors with -- move with respiration and other systems, for example, with abdominal compression or gating or respiratory breath holding. It's happened that some of these patients were not able to tolerate the gating or the breath hold. And when they were treated with the Synchrony System with free breathing, the patient comfort and their ability to breathe normally and their ability to tolerate the treatment successfully was a tremendous relief for them that they were able to get their treatment down. This speaks for itself for Synchrony that the patients benefit from the comfort of the treatment but yet achieve the same level of tumor control. With the expanding role of SBRT in the treatment of primary tumors and in the metastatic disease, the accuracy, the precision, the speed, the patient comfort and overall improved outcomes makes SBRT technologies with good respiratory motion management like the Synchrony going to be uniquely positioned in the future.

Thank you, Dr. Mahadevan. So the Geisinger Health System has both Radixact and the CyberKnife System. The CyberKnife System, let's turn our attention to this delivery device. It is our dedicated whole body SRS and SBRT system built on a robotic platform. This robotic platform is capable of delivering treatments with sub-millimetric accuracy to both stationary and moving targets, as you see in this video. In addition, the CyberKnife System is capable of very fast delivery for SRS and SBRT. In fact, the CyberKnife System is able to deliver stereotactically in approximately the same time frame as would be for a conventionally fractionated delivery. In addition, it is offering flexible collimation choices. And those collimation choices or beam-shaping choices are effectively chosen to suit the particular clinical case. And finally, very powerful planning choices. Of course, the CyberKnife System has always been married to the precision treatment planning system. But now, in addition, we also offer the CyberKnife System with RaySearch's RayStation treatment planning. And what RayStation treatment planning enables is, first and foremost, the latest generation of RaySearch plan optimizer. In addition, automation tools such as protocols and scripting that enable an easier user experience. It also comes with machine commissioning through the RayPhysics machine commissioning application. And finally, it is -- it utilizes the highly intuitive workflows for which RayStation has always been known. We're also partnering with Brainlab, as was mentioned earlier. In doing so, Brainlab elements or preplanning software will be interfaced to our system. And Brainlab elements is very well known to the neuro-radio surgeon. So this is a paradigm that would be easy to enable some of those neuro-radio surgeons to start using the CyberKnife System. And in addition, we're also going to be coupling this system with Brainlab's Quentry registry software. And what that registry software allows for is collaboration globally across neurosurgeons, research and so forth. We're also going to be offering a frame with the CyberKnife System. Now we just got done talking about how you don't need a frame with CyberKnife, and that is absolutely true. There are certain indications, though, that you may want to use a frame. And that is where the patient does not have good motor control. Essential tremors is such a state. And for those patients, you would want to lock those patients down during treatment. In addition, that head frame will also be a point of comfort for a segment of the market that may be used to using a head frame, and again, helping to bring them into the CyberKnife space. CyberKnife will always be able to do brain and spinal treatments, which is obviously the area that radio neurosurgeons are focused on. Again, a choice of collimation devices, and with this neurosurgeon package, we will also be offering a much more efficient treatment of oligometastatic situations, in essence, patients that have multiple mets. So with that, I would like to introduce Dr. Aditya Gupta, Chief Neurosurgeon at the Artemis Hospital.

I chose to have the CyberKnife for a variety of, I think, very, very important reasons. So first of all, CyberKnife offers a huge degree of comfort to the patient when they really don't have to have a frame on their head. It really makes the whole treatment much more friendly and also bearable for the patient who is already struggling with the anxieties of their disease. Also additionally and very importantly, for tumors or other lesions that are close to critical parts of the brain, like close to the optic nerves or the visual pathway, and also tumors that are stuck to critical structures like the brain stem, I think the ability to fractionate on the go is something which I find very, very valuable in my clinical practice. At the very last, I would say that CyberKnife helps me to expand the location of the treatment beyond the head to cervical spine and other areas of the spine where I work closely as a neurosurgeon. So for example, when I'm removing schwannoma from the lumbar spine or the dorsal spine, the extra foraminal part of the schwannoma can later on be targeted very easily using the CyberKnife. My colleagues from radiation oncology and, in fact, from the ENT specialty and really other specialties can work closely to use CyberKnife on the liver, on the lung, on the prostate, on the spine as well along with me. So I think it creates ecosystem wherein the CyberKnife is not just seen as a neurosciences tool but is really seen as the versatile tool that it is, which can be used in many parts and many organs of the body. I have seen a very interesting shift in the indications that we are now treating after 4 years. So after 4 years, what I'm noticing is that I'm treating a larger number of complex ABMs, including many that I'm treating now after embolization. I'm noticing that in India, traditionally, the metastasis work has really not been too much if you compare it with the rest of the world. So I am noticing a very clear shift in the increase in the number of metastases that I'm treating, both in the brain and the spine. And the other segment of work which I am seeing an increase in the future is functional indications like trigeminal neuralgia. Now I am fully trained to even do a functional radiosurgery for epilepsy. So that's one segment of the work which I'm hoping I will see more and more of it, alongside doing lesioning for things like essential tremor and Parkinsonian tremor. So the other interesting and challenging indications which I think will expand in the future include treating essential tremor with the CyberKnife and really other kinds of unilateral tremors, which, traditionally, I treat today by doing a surgical lesioning. Apart from that, I think the epilepsy treatment with the CyberKnife is a very promising area which will expand because as the epilepsy surgery program here is picking up, I am seeing now more and more patients that could be good candidates for doing radiosurgical epilepsy surgery, especially the mesial temporal sclerosis. I would say that my CyberKnife experience and really the patients experience with this CyberKnife has been very comfortable efficacious and accurate.

RayCare. This ensures that through the interface between the oncology information system and the electronic medical record that every patient has a contiguous patient record. And we've done this in collaboration with others on the integration of Health Care Enterprise Radiation Oncology segment. This, what is known as IHE-RO, is an industry consortium where all industry participants are contributing to interfaces that further build out the integration of data for every patient. In effect, everybody wins. The patient wins, the provider wins and the industry partners also win. So with that, I would like to hand it back to Professor Pignol.

Thank you very much, Corey. It's very impressive, and yes, such a great way to think. I feel I maybe need some subtitle because with the accent, I don't know -- I love the subtitle. No, I think that everything that Corey presents you is what's on the pipe, what we're going to deliver. And you can see it's already a big leapfrog. And that's why when I was in [indiscernible], I wanted those machines. But in any company, what you need is also to create a bubble way of innovation. You need to shake the tree. You need to go way further. We need to dream. We need to create something. And since I joined the company, and thanks to the trust of the leaders, we are really pushing very far. So there's one thing that we want to push, yes. One thing that Corey mentioned is a connection with the industry. And I think that over the last 3 months, the first ClearRT image was obtained in February 2021. And the last 3, 4 months, we have tried to say, okay, can we really push with our partner in research, for example, about adaptive radiotherapy. So you heard a lot about adaptive radiotherapy. What is it? I have my patient come to daily treatment. For many years, I align on the laser, and I hope inside nothing was moving. I create an ITV at [ real ] very large. Now I got [indiscernible] images and better and better and better image. And what I figure out is, oh my god, the target is way off. So today, what we do, we take the patient, they stop the treatment, go back to the CTC. And it's a real turn on the radio oncology department because we have to recontour and to redo everything. How a dream it would be if you could do -- okay, things have moved. We have a ClearRT image here, we have a CT image. Could we just plan and do everything now and treat the patient right now? So basically, the adaptive workflow, meaning that you have the patient, you acquire the daily image, and on the daily image, you could immediately deform contour using AI, recreate all your volume, accumulate the dose and plan and treat, decide if you want the old treatment or the new treatment. So there are some competing technology. And when I was in Halifax, I was entrusted by the competition. We look what they do, and we say, "No, thank you." And so what we are working with in 3 months is a reimage because to do an adaptive radiotherapy, you need a real CT image quality and you need to replan. Well, if you do the competition, they use the cone-beam CT and you have seen the quality of the cone-beam CT and they do those tweaking. And we don't really believe in those tweaking because we can make major error. So that really is something that we have done. And Suzanne, you mentioned that we had something and a demonstration to get the feeling from the image what you think. And if some of the competition aim, like they were saying at ESTRO, to probably do an adaptive treatment in 20 minutes, which is quite disruptive, what I found is the engineer at Accuray working with research did an adaptive treatment in 5 minutes. If it's 5 minutes, me as a head of radiation oncology, I say, that should be all my patient. This is a new norm. And I think that's what we are dreaming and willing to do. But that's not all. Because I have a lot of friends, and they all contacted me, I have a lot of key opinion leader, would be in Heidelberg, would be in Dana Farber, which would be in MD Anderson, which would be in Toronto under Princess Margaret Hospital, the Royal Marsden. And they all think now that you're on the other side, can we meet? Can we see it? Can we brainstorm? Can we try to imagine what kind of machine we want in the future? So we are already starting to have some meeting, regular meeting to try to use the technology with there. With a ClearRT, we have a CT image, we can use radio mix. Radio mix is hidden information in the CT. There has been some evidence that when you give checkpoint inhibitor, well, there are some radio mix that tell you, yes, this cancer will respond, this cancer will not respond. So maybe this one, I need this much of dose of radiation to make sure and cure the patient, and this was this much of dose. So we are already starting to work with people from [indiscernible] from Germany, from the U.S. to collect and to see what we can develop together. There is another theme which is coming. Let's dream about the future. Corey, you deliver to us the ClearRT, and now we can replan every day. Well, if I replan every day, and if I find out to adjust my treatment every day, do I really need the 4 to 6 weeks doing a CT scan, replanning and all the [ key way ], the patient is waiting 6 weeks. I had any patient waiting a week lose 5% chance of survival. So maybe we could just one-stop-shop that treatment machine. And then there's a lot of things you talk about a ring to have a CT image on the CyberKnife. Well, MR is the best modality to see some brain lesion. If I confuse my MR image on my CK, that's better than any neurosurgeon can dream. So on that, I would like to give it in to Brandy Green to completely change subject and talk about finance.

Thank you, JP. That's hard to follow-up because there's so much excitement. All right. Let's spend a little bit of time on our financials. First, I want to anchor you to our Q4 results that we reported about 6 weeks ago. We have gross orders of $113 million. Our revenues came in at $111 million. Our operating expenses of $39.6 million, and adjusted EBITDA of $6.7 million. We finished the full year of FY '21, that's year-over-year results are metrics on the side there, but full year FY '21 of $396 million in revenue. Operating expenses of $137.2 million and adjusted EBITDA of $38 million. These are solid near-term results emerging out of COVID, where we now believe we're positioned for growth. If we now look over here at Q1 FY '22 highlights, our new product integration that we've just been talking about over the last 1.5 hours here is driving our order momentum. Hopefully, you saw our pre-announcement last Thursday, in which we noted, $70 million in gross orders, that's 39% year-over-year. $107 million in revenue, 26% year-over-year and adjusted EBITDA in a range of $4.50 million to $5.5 million. We have also raised our full year guidance, our revenue guidance, to $420 million to $427 million. We've tightened our full year adjusted EBITDA range of $33 million to $35 million. We're pretty excited about these results. Our balance sheet. Looking back at Q4, we improved our balance sheet. First, starting with improvement in our working capital. We decreased our inventory to $126 million at the end of the year. We've decreased our receivables down to $85 million. We also, in Q4, restructured our debt, as Josh had mentioned earlier, that's lowering our interest expense by $2.5 million a year. It's gaining us greater flexibility with our new term loan and revolver, and it's increased our capacity for growth. Plus, we extended our maturity date out to 2026. What does that mean that has brought us all back to stronger cash position at the end of the year. We ended at $117 million, and we were also able to pay down $5 million on our revolver. This is tremendous progress on organic fundamentals within the organization. Josh talked about this slide in the very beginning of the presentation, but I really want to highlight some of the financial aspects at the bottom here. In FY '18, we repositioned ourselves for success by resetting our cost structure to increase our operating leverage. Coming into FY '20, we continue to build out our global infrastructure and operations. In FY '21, we restructured our debt. And looking forward to FY '22, we now can capitalize on that operating leverage to drive greater profits and cash flows. This is really positioning us for growth. And with that, I will hand it back over to Josh. Thank you.

Thank you, Brandy. I hope you all get a sense about the level of excitement, the level of activity and energy around today's topics. This is not the Accuray that people remember from years past. I can say that with great confidence and great affinity in terms of difference in many, many areas. We've talked about -- obviously, the innovation part of this is significant and is a significant -- the most significant driver. But we've got better processes in place. We've got better leadership in functional areas of critical importance to the company, operationally, financially, et cetera, in place and commercially as well. It's a different time for us. And it's -- again, the external environment is lining up given the move away from fee-for-service, the implications of APM in the U.S., and quite frankly, what will become the -- in the developed markets around the world, the dominant reimbursement methodology. And the thing that is going to continue to fuel shorter fractionation, more dose, better comfort for patients, better outcomes probably financially for payers as well because they're going to have fewer side effects and they're going to have patients that aren't as at risk of side effects causing rehospitalization or some other unplanned cost implications. And we absolutely are in the heart in all of those areas of what we are really good at and what we're adding to those capabilities by the day it feels like. So with that, I will turn it open -- we're going to transition to Q&A. I'll ask the presenters to come back up, and we will start to take some questions.

Marie Thibault from BTIG. Thanks for hosting the day. I wanted to start here with maybe a quick 2-part question on the China opportunity. Certainly very impressive market share in the Type A opportunity. Would love to hear your thoughts on what you think the Type B opportunity could bring in terms of market share perhaps? And then on Type A, 30 systems sold in calendar year '21 in a COVID environment, what do you think is a normal pace?

You start off. Yes.

Well for sure, the Type B opportunity is -- just in terms of the total size in the market segment, Type B is growing and it's also the larger part of -- well, we don't think we'll get 85% market share in the Type B segment, we do think we'll get our fair share. And so even modeling in 10% to 15% of that total market segment will be a significant growth catalyst for us. We've worked very closely with our China team to make sure that we have a feature set that is going to be competitive to those that are participating in the Type B segment now. We also think that we will have a significant advantage in the China -- manufactured in China segment -- program with our joint venture business model. So we have an opportunity to have a leg up there as a result of our jointly developed business model.

Really, I'll take the second piece. The -- there's no doubt that the COVID environment, you've seen it, we've seen it. The COVID environment has, from a timing standpoint, disrupted the tendering and bidding process. We still have Type A licenses out there that we are reasonably certain we've been -- customers that have applied for them will be awarded, but there really hasn't been a resitting, if you will, of the KOL approval committee to go through those -- the final stages of tendering, bidding and getting licenses awarded. So it's difficult to predict from a timing standpoint when normal returns. I think we can all say, based on what we see and read that China is working very diligently and strictly to try and create a 0 risk environment from a COVID standpoint as possible. But if we've learned anything over time, it's that it's a very difficult thing to predict the timing of these things. So I would rather not get overly aggressive about saying what new normal is. I think what we take great comfort in is we did 30 system installations last year under extraordinarily challenging circumstances. And I say we -- Roger Cao's team at CAMT. And I've got great confidence in them and what they're capable of. And so whenever that new normal returns, I think we can expect it will be every bit as good as what we've seen under the worst of conditions, if not significantly better. But I -- again, difficult to look today and say, I can predict timing and what that would translate into in terms of a specific number of devices. Brooks?

Yes. So first, tremendous presentation. I thought it was very helpful and very complete, and we really appreciate that. Could you -- I know the focus here is that your capabilities and the innovations you're driving. But one of the key items for us on the outside is we try to assess where you stand relative to the competition. And in particular, I mean, obviously, treatment plan is one piece, imaging is a piece. But I've always felt that your machines have the architectural capability to deliver a different theme in relation to the information you're getting from the imaging and the patient's physician. Can you just talk to that a little bit in terms of where you stand relative to the other guys and how this might play out to your advantage down the road?

So it's really interesting when you think about where we were timing-wise, how long ago we brought innovations like Synchrony to the market? And how long it stays -- in a fee-for-service environment, the things that we did -- well, things that we were uniquely -- I mean we were in a missionary situation. We were talking about dosing levels that people would look at us like we were crazy. But we knew we had the capability to deliver them safely, efficiently and very precisely, which is ultimately what gives clinicians a peace of mind. I don't know anyone that could have predicted it. It would have taken a 1.5 decades to have the rest of the world catch up with us, but not in technology necessarily, but in reimbursement methodology. Because, quite frankly, it is very clearly the shift from fee-for-service to a more capitated episodic payment model that is going to drive and is driving the numbers that you see on the slides.

I'll just add and then have Corey speak to it from a product standpoint. It's all about the platform, okay? Our platform is unique in that it's helical. There are others, market leaders, that are not on a platform that is able to do a full helical kVCT. They can enhance their cone beam CT, which I think that was one of the introductions here at the ASTRO show, but we're talking about tweaking a cone beam image. So for them to be able to get to this next generation of imaging and input to online adaptive, they're going to have to redesign their platform. So that's one. The other side is the MR platform, okay? So MR is another way of adding imaging but they are having significant issues with workflow and just -- it's a complicated workflow, and they've got a long way to go, and it's still an expensive technology. We're in a sweet spot with our platform that still has tremendous runway, is going to get outstanding imaging. And as Corey pointed out, there's so much work being done on the diagnostic imaging industry on making CT even better and improving contrast imaging. We are piggybacking on that kind of technology development onto our platform as it relates to radiation therapy. And I don't know if there's anything else to add, but...

I would just add that on top of what you said already, Suzanne, it does actually begin with the platforms. The platforms were developed actually to overcome some of the deficiencies of platforms that existed in the market already. So if you look at the Radixact System, for example, you have an ultrafast MLC on that. And what does that really mean? It means the ability to intensity modulate like no other system out there. In addition, because it is a helical delivery, you can treat really long fields really effectively. And a great example of that is the treatment of a total marrow irradiation. Still to this day, there is no other treatment system that is capable of delivering a total marrow irradiation where you're just carving out the bones. And when you look at the CyberKnife System, we utilized a robotic platform because of some of the limitations of noncoplanar delivery with CRM gantries. This overcame it. The robot can move 360 degrees in a sphere around that patient. So this is why you get better dose delivery with these 2 platforms. They inherently overcome the limitations of what, in fact, is a platform that has been available since the 1950s.

I just would like to add a word because I saw some reaction when we're talking about MR because MR has been a big thing. I was on the other side. I was part of the MR-Linac consortium during the inception, and I truly believe it was a phenomenal technology. But the more we met -- the more I met with my colleagues, like I said, from all around the world, from New York, from Texas and everywhere, we realized that every time we want to define a benefit, it has to do with MR seen in the image that you use for planning. And at the end we're saying, we need to use this machine that costs a lot to maintain. I need to train my practice. There's a lot of issue. And why? And my colleagues from Michigan say, "oh, but you don't -- we can track and trail. We can follow the motion of the tumor." No, not really. And just remember that in 2012, we're saying, "Oh, track and trail can mean 5 years." 2021, we're still waiting for it, 9 years later. I think there's a -- it's a great idea, but sometimes great ideas are very hard to deliver. And with all our -- my head of physics, we decided that way better to have an MRC, to get the image, to fuse the image. And if I really want to take care about motion, the only proven technology that is -- and I use it for my own patient is a Synchrony actually. So I think that's something that the market is working. And also my friend who decided to get those machines confirmed to me that they treat 10 to 12 patients a day. And when you want to be comfortable and balance your sheet as a ratio per head, you have to treat close to 30 patients a day.

Let me just add one last point. In deference to MR for a second, the truth is the introduction of MR-Linac, actually, in some unexpected ways has been very, very helpful for us, I think. We -- they raised the bar and raised the intensity of the awareness of better visualization, better soft tissue resolution. These were things that -- no one was debating this in radiation oncology on the treatment end of the world, not the imaging side of the world. The only thing that was up for debate was how much better imaging? And what was -- what made sense from an economic standpoint in order to get it? We've had these products in the market now for how long? Commercially for 5 years?

2012.

2012. I don't know what the expected discussion was back then. I know it was some crazy number. But the truth is the adoption curve of these devices has not tracked anywhere near what the market has expected on the front end or has even been continuing to trump in current time frame. There are a lot of these devices that are not actually even clinically used, they're basic research machines. They tend to be in the largest academic -- the bluest of the blue chip academic medical centers around the world. And so -- but what they've done is they've set the stake in the ground on one end of the spectrum relative to value proposition. And we have, on the other end of the spectrum, the -- when I say we -- the market, the traditional technology has been cone-beam kV. The window there is huge. That's where ClearRT sits, and it sits there with some very, very unique capabilities that neither end, where the other stakes in the ground, neither one of them can solve for. CT has a treatment -- has a visualization mechanism for treatment purposes, not as a simulation image. But for treatment purposes, CT is going to win the day here. It's more accurate. And we happen to have a device in Radixact that you can image and treat off the same image, the same platform. It's a unique situation. The architecture that Rock Mackie came up with and that John Adler came up with in both of our platforms decades ago, are -- I'm not sure I can remember anything like it in my 35 years of med tech, med device where you've seen things that were so far ahead of their time that are actually still -- and as the world is kind of coming back around full circle now, where the stars are lining up where we are based on that original technology. We've continued to obviously improve on it. But...[ Jason ].

Maybe a follow-up. I appreciate that you've put out the -- Thank you. So I appreciate the time line you put out for the Class B, which, obviously, we're all very interested in. I guess I'm curious in terms of how we should be thinking about the launch. Is this sort of a typical kind of 2 years to really start to penetrate the market? Or is this thing going to be ready to go, and we'll start to see orders very quickly? I mean, how should we think about that evolution?

I think that because it's such a long process to get registration, and our CAMT partners have set up their distribution channels already, so they've got direct -- a direct and sub-distributor model that are already developing relationships in the Type B market segment, we are selling into the Type B market segment right now with our existing products. So we do believe that once we do a market introduction, and the market introduction being in the summer with clinical sites, developing the strong reference sites that when we get the NMPA approval, we feel like we'll be in a good shape to get a good commercial traction.

Just one quick follow-up. Also appreciate that, obviously, you had a very solid quarter and you raised guidance. I guess you kind of alluded to it, but is that an assumption that you can get more in the ground and COVID is less of an issue in the next 12 months? Or what is built into that guidance is basically what I'm asking.

Yes. I think we're seeing good progress with our customers. And of course, we can't predict the future. But I would say we're hopefully on the backside of this pandemic. And if anything, I think there's some pent-up demand of wanting to get things going, and we certainly are seeing that from an installation standpoint. We're very busy. We are prioritizing projects, and we are trying to prioritize projects of customers that are ready to go.

Marie Thibault from BTIG. I wanted to follow up on Brooks' discussion here and ask you have ClearRT, you have Synchrony. Maybe a couple of questions off of that. How far away are we from online adaptive where we're doing real-time replanning while the patient is on the couch? And secondly, what are you doing to make sure that customers are understanding Accuray is not the Accuray of a decade ago?

Yes. So to the first half of your question, where are we on online adaptive. First thing I'll say is we've already got an adaptive solution with some very good tools in place. Those tools being the ability to monitor dose within patient day by day, making sure that the clinicians are seeing that they're remaining true to their original planning objectives that they tried to set out to do, right? And that is through our PRECISEART Adaptive Application. That's alive and well and in a lot of customer hands today. And what we're going to be doing is over the next 12 to 18 months, what we're going to see is more of the tools that are already in that PRECISEART toolkit migrate to the operator station or the place where the clinicians are actually delivering, not the treatment planning system. So with this migration, we're also going to be working with our partners at RaySearch, and we had an event on Saturday evening where we were showing our works in progress right now of online adaptive. So we're actually looking at this from 2 different perspectives, the Accuray Precision Treatment Planning perspective as well as the RaySearch RayStation perspective.

I'll take the second part of your question because that was a very smart question. when you bring some high technologies, sometimes, the customer has a hard time. And I recall always that the problem that when you're an academic and you talk to an engineer, we don't speak the same language, but no, socially. But that's why we did this event. And that's why my friend, for example, from Dana Farber, they came. And honestly, they were salivating. As I said, and we start to say, "Hey, with Synchrony where I can retract the motion of a real-time adaptive, I can adjust, maybe you can start to treat my prostate with a millimeter margin around. We normally use 7-millimeter or 5-millimeter when you have fiducials, meaning you double the volume that you want to treat. With a millimeter, I mean, you can dream of treatment without side effect. If you can -- if you can really associate those. So what we have to do to make sure the markets understand. And I think that's my role. Thank you very much for accepting me in the company, is to have all my friends meeting with them, showing them the thing, testing with them, creating some registry, dropping from PhD seat on there to do the research, adding some meetings -- some international meeting where we can present that. And that's what we're going to do. Because like you were saying, there's really a brand new team at Accuray.

And I'll just follow up with a very tactical focus, but that this is really up to our commercial teams, get out there and get the excitement. And we're very focused, first and foremost, on our installed base and making sure that our HIBs are the first ones in line to get the latest performance upgrades and making sure that they're very, very happy. And then, of course, getting new customers. But our idea is #1, focus.

Marie, one last thought. For those of us that have come and had long careers in other segments of med tech, med device, one of the things that -- elements that characterize this industry, this specialty forever was that it was really unthinkable that such expensive, really high-tech, high science devices, there was really not a lot of valid strict formal clinical data supporting differentials and performance characteristics between any of them. I was -- I came from a Class 3 medical implantable device background, really big regulatory hurdles in some of those experiences. And it was incredible to me that we had -- there was no data. And we -- I know that we have been -- it's been slow in coming. But the data that's starting to emerge is, again, PACE-B is a good example of it with SBRT prostate. This is going to be a situation where we are -- we're going to continue to make sure that there is some valid benchmarking that everyone has to kind of compete to and rise to the level of. Otherwise, it's great to pound our chest about it. But if you can't -- I mean, in God we trust, all of this bring data. If it's not there, it's not there. And I think that our competitors are going to have some difficulties with that. Are there other questions? Ken, anything out in the...

When I look on the web questions, we pretty much addressed everything.

I think you spent a lot of time on the real-time online capabilities on some of these newer platforms. It was interesting to hear how they compare with some of the competition right now out there.

Well, that's a very good question. Well, like I was saying, at some point, we're interested to buy something for the competition. And what we understood is that with AI, you could have a good quality image because to calculate the dose, you really need to have something which is close to the CT. Otherwise, your dose is way off. And that you would have a dose calculation. And to be fast, I mean, RaySearch do well, I think that our perfection is doing better. So you really want something that will be like within a reasonable amount of time, like 5 minutes. And we realized that, that was not true. There was a dream. They were hoping to do that. But the image quality has nothing to do, and you saw some of them which is a CT, and the dose calculation was not even a dose calculation, it's dose tweaking. Honestly, what we found here is you set up the patient, you acquire the image, like Corey told you, in a minute you get an image of CT quality. The time that you transfer the image with the AI capability that RaySearch has, all the -- in a minute, that all the segments are contoured and the time that you checked that the registration is good and everything, in 90 seconds, the dose is calculated. And the new plan is deliver it in 2 minutes. And the whole process was 5 minutes. Okay, it was a prostate case, but that's the #1 in man, and those people don't want to have side effect. So it was like sort of impressive. This is work in progress. We want now to start to have some connection with our colleagues to say, how can we implement that? What do you want to do? You're middle of a clinic, you have to approve something, how you do. We're going to make probably the most innovative platform from real-time adaptive.

Other questions? If there are none, I want to personally thank the in-room, the people that are here in person. I know for a variety of reasons, all valid starting with COVID and starting with travel, and secondarily, the Chicago weather in the last 36 hours or whatever it is, I am really, really appreciative that you guys are here in person. And this wouldn't have felt, quite frankly, like it feels without people in the room. And so I think we're all probably -- there's a fatigue factor on masks and Zoom and et al., but I just -- it's a big deal for us to have you here in person. Thank you.

Thanks very much.

Thank you.