Accuracy, Inc. (ARAY) is a developmental company that markets the CyberKnife® Robotic Radiosurgery System, which extends the benefits of radiosurgery to include extra-cranial tumors, including those found in the spine, lung, prostate, liver and pancreas. Euan S. Thomson, president and CEO of Accuracy, presented Thursday at the Jefferies 2nd Annual Healthcare Conference in New York, NY. Of the many things he spoke about was the company’s worldwide presence within the healthcare system, recent orders they received for the CyberKnife, and the company’s revenue.
The CyberKnife is the world’s first and only robotic radiosurgery system specifically designed to treat tumors anywhere in the body non-invasively. The CyberKnife System utilizes continual image guidance technology and computer-controlled robotic mobility in order to automatically track, detect, and correct for tumor and patient movement in real-time during the treatment. This allows the CyberKnife System to deliver high-dose radiation with precise accuracy, minimizing possible damage to the surrounding healthy tissue and eliminating the need for invasive head or body stabilization frames.
The company has been extremely active during the first half of the year and Dr. Thomson hopes this will continue, “We have sales coverage in more than 45 countries worldwide. Our installed base continues to rise in very healthy way. We have now reached 134 systems installed at the end of the last quarter, with two-thirds of those in the U.S.,” he continues. “We have seen rapid growth and accelerated acceptance in the U.S. We recently received an order for the first CyberKnife in Canada. Japan has been a very good market for us with 19 systems, and we announced last week that regulators in Japan have approved the use of CyberKnife for use in the whole body. This should significantly increase our market there.”
Dr. Thomson spoke on what kind of financial figures are expected for specific performances, “This is a very profitable system for our customers. The average reimbursement in the U.S. is $20,000 per patient. That would be a break-even for the customer at 50 patients in the first year. At average performance of 200 patients, net revenue approaches $4 million. At peak performance of 300 patients, net revenue approaches $6 million. Also in 2008, Medicare rates have increased by 4-5%,” he explained.
“We have also been able to achieve a strong recurring revenue stream from multi-years service contracts that include equipment upgrades. Over 90% of our U.S. customers have chosen these contracts at $460,000 per contract-per year,” Dr. Thomson added. “We are in a fast revenue growth mode and have significant backlog. Our revenue from the first three quarters of this year has already exceeded all of last year’s revenue. We have proprietary technology and a large and expanding clinical market with an established and growing installed base. This company is a very good value proposition.”
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