That this call is going to be recorded, so all participants are in a listen-only mode. There will be a Q&A session at the end following the presentation. If you would like to ask a question at that time, please type it into the Zoom Q&A section, which is at the bottom of your screen, and note that the raise hand function is not going to be enabled. I would like to now hand over the call to John Konstantopoulos to start us off today.
Thanks, David, and thank you everybody for joining us today. I am really pleased to be speaking to you about this really important commercial milestone for us as a company, which is the signing of this five-year commercial agreement with the Huntsville Hospital Health System. There are really four messages I want investors to take away from today's call. The first one, and probably the most important one, is that Huntsville is the first SAPPHIRE participant that we have now converted into a commercial customer.
This is really important early validation on our go-to-market strategy that we have been not only communicating to the market, but been pushing and pursuing in the background quite heavily over the last few months by using some of the clinical work that we have been doing with a lot of the SAPPHIRE partners, getting them engaged on the product, and then moving them to this pathway of commercial adoption, which we have now just shown with Huntsville. The second part is that Huntsville now becomes our fourth U.S. commercial customer and is our largest U.S. deployment to date. This is really a significant health system for us, and they represent roughly about 15 hospitals and 19 heart centers and quite a substantial cardiology footprint. The third point is the AUD 500,000 contract value that we announced is really the minimum contracted value for Salix Coronary Anatomy only.
It does not include the contracted fee per scan opportunity that we have with Huntsville for plaque and flow once that is cleared. The fourth and final point is we now really have a clear pathway from contract signing through to deployment, utilization, and revenue expansion within a large U.S. health system, which Huntsville represents for us. If we take all of those together, we really believe Huntsville is more than just a new customer win. It is really a major proof point for us that our SAPPHIRE go-to-market strategy is working, and that we are able to shift from clinical awareness to getting hospital systems excited about the product to commercial adoption, and then ultimately through enterprise-scale deployment.
It also demonstrates that the platform model that we have through Salix Coronary Anatomy, is a major entry point into hospital systems within the clinical workflow, with the opportunity to expand into plaque and flow as the base platform gets rolled out. Moving on, I just want to start a little bit about what this strategically means for us from agreement perspective. As I mentioned, Huntsville is the first SAPPHIRE participant to convert into a commercial agreement. It matters because it is a major tangible proof that a clinical collaboration can move into a long commercial partnership, and also becomes this fourth U.S. customer for us through the 15 hospitals and the 19 heart centers.
The five-year agreement establishes that recurring software-as-a-service revenue for us for Salix Coronary Anatomy, as we bring in plaque from on a fee per scan perspective, and then flow on a fee per scan perspective once that gets cleared by the FDA. One way to think about this commercial model is the contracted recurring revenue base for anatomy is the opportunity for us to embed ourselves within the hospital system through this platform, where it allows them to become a lot more efficient in their workflow, allows them to process more scans within hospital systems that are very much capacity constrained. Then we overlay these new modules of ours from plaque in the same platform and flow in the same platform for them to clinically assess patients going forward.
The other point for us from an analytic perspective is that not only does it help from a workflow perspective, but it also brings a number of single point solutions into one single solution and allows them to focus in that one single solution and report a lot faster as well. Now that we have this commercial agreement with Huntsville as our fourth customer, we are now also focusing on other SAPPHIRE partners within the SAPPHIRE group from a commercial perspective, and we are in varying stages with those different SAPPHIRE partners from a commercial perspective in bringing them on to commercial maturity. I do want to put a little bit of context around Huntsville for the listeners. Across the system, as I mentioned, there are 15 hospitals with 19 heart centers. Their cardiology operation includes about 1,000 cardiac staff and 58 cardiologists.
They've got six cath labs, four electrophysiology labs, and three cardiac ICUs. The system also reports around about 60,000 non-invasive tests annually and about 12,500 catheterizations annually as well. One thing which is important for listeners to understand is the size of Huntsville. Even though it's the smallest of the hospital systems, but on a per bed basis, they're the 47th largest hospital system in the U.S. out of about 600 hospital systems in the U.S. So they're within the top 10% from a volume perspective and a bed perspective, the size of them that we have and that we've got access to now.
It just puts in perspective the quality and the size of groups that we're targeting. As we go into our commercial pathway, this is a really important part for us because we are very much focused on the SAPPHIRE partners being the first pathway for us to generate revenue. We've always described SAPPHIRE as both not only a clinical evidence program, but also important part of our U.S. go-to-market strategy. Our objective is really to build deep relationships with these high-volume cardiovascular centers, giving them access to the product so they can experience the product in a pilot setting, build the clinical confidence with the platform, and then really create a pathway and a fairly easy pathway for them to go towards commercial and clinical adoption.
Huntsville is that very much first tangible evidence that that pathway is working for us, where we provided them with Salix in a pilot setting. They were able to pilot the software. They saw the benefit that it brought them from a workflow perspective, being able to get access to plaque in real time, the CCTA report in real time, but also, excuse me, edit any of the results in real time as well, all in that single solution. We're also seeing quite a few additional inbound interests from health systems outside of the SAPPHIRE program, which is also adding a broader U.S. commercial pipeline for us. We think that reflects the growing awareness of Salix and the value proposition that it brings to hospital systems within the U.S. We'll start moving those forward as we go forward as well.
I do want to reiterate that each system will move at its own pace and move through the whole procurement process at its own pace. We're not going to predict any timing to any of the other SAPPHIRE partners moving into the next conversion as a commercial partner. But it is important that the commercial activity is ongoing with many of them, and there is broader movement beyond just Huntsville within the SAPPHIRE group, as well as inbound customers as well. What that really means going forward is the focus now moves for us from contracting into execution. Our rollout has four clear stages. The first part of the integration, which was through the piloting stage from that initial integration to PACS, and now going into the other hospital IT systems like the electronic medical record system.
We'll look at training and onboarding the broader cardiology group within Huntsville, help them understand the workflow throughout the whole hospital system, and then make sure that we're also implementing the pre-authorization reimbursement pathway that we've been speaking about within Huntsville as well. That is something that we are able to replicate from the work we've done with Tanner Health, and then really go live at the first site and then scale across all the different hospital systems within the hospitals within the Huntsville network. The Salix Coronary Plaque is also intended to be part of this commercial deployment. As soon as we go live, they'll have access to plaque, and that whole pre-auth workflow process that I just mentioned will kick into gear, and they can start using the plaque product and the plaque module in normal clinical practice.
We're not going to be providing any revenue guidance for Huntsville today at all, but as I have mentioned in the past, they perform roughly between 9,000 - 10,000 scans per year. It is our largest hospital system to date, and we'll be working closely with them to make sure that that run rate for CCTA is going through the base platform, and we'll be working with them around the plaque utilization once we go live. What does that mean for us as a company? As you can see on the screen, this is really more than just a new customer win.
This is the continued commercial validation that our SAPPHIRE go-to-market strategy is working, and that we now have our fourth and largest hospital system to date joining us as a partner and willing to use Salix without Salix Coronary Flow because they see the value of Salix Coronary Anatomy and Salix Coronary Plaque, and will wait for flow to be cleared once that is cleared by the FDA. But also demonstrates that our platform model with Salix Coronary Anatomy providing this recurring subscription revenue and this opportunity for them to deliver workflow efficiency and establish Salix within the hospital system is a clear opportunity for us to embed ourselves and make sure that we are sticky within the hospital system, and that becomes the reporting platform of source for them within their hospital system.
The final one is that it really supports our scalability model, where we now have our first SAPPHIRE conversion and five additional SAPPHIRE health systems that we're working with and building beyond those deep clinical relationships that we already have, working along the commercial pathway and maturing those as we go forward. The key thing for investors to take away from this is that we're really starting to see the pieces of our U.S. strategy connect. The clinical engagement that we've been working on heavily over the last year is now starting to work well. The enterprise contracting, as demonstrated by Huntsville, is really now starting to take shape as well. Our deployment process and the utilization process so that we can move towards recurring revenue and substantial revenue. Recurring revenue will start taking shape as we go forward. Our main focus now as a company is execution.
We want to get Huntsville live, we want to drive utilization, and we want to expand adoption and continue progressing our commercial pipeline beyond just Huntsville into the other SAPPHIRE partners, and some of the inbounds that we're getting as well. I do want to reiterate that this is a major opportunity for us and a major stepping stone for us as a company, that we've brought in a system the size of Huntsville that are willing to come and partner with us, use SAPPHIRE, sorry, use Salix as part of their clinical day-to-day workflow, and then work with us over a five-year period to build our revenue and build their opportunity within the hospital system that they see. Clayton and I are happy to take any questions now, David, and we'll pass it on to you for any other thoughts.
Great. Thanks, John. We have an awful lot of participants today, so we'll do our best to get through all of the questions. We've got multiple questions on the same topic. We'll look to combine those. As I said, the focus is very much around Huntsville, so that'll be the key topic. Again, remember, if you'd like to ask questions, the Q&A button at the bottom of your screen. The first question comes from Melissa Benson, analyst at Barrenjoey. This is probably one for Clayton. What sort of investment in terms of support, customer integration do you expect to need for Huntsville, and are you appropriately capitalized to follow through with this opportunity?
Yeah. Thanks, David, and thanks for the question, Melissa. In terms of resourcing, we are already well-resourced, obviously in the U.S., and have the team in place to be able to handle the implementation, both from the Australian side but also in the U.S. with our resources on the ground there. If we do need additional staff, that'll be in conjunction with other opportunities that we have along the way, so not just specific for Huntsville, but for all opportunities coming forward. In terms of where we sit, we're obviously well-funded. We have AUD 74 million in the bank at the end of last quarter. We do have some additional cash receipts that we'll be receiving either through R&D, our R&D submission, but also from some options that are looking to be vested, and therefore we'll have another odd AUD 20-odd million out of those sort of functions.
I think we're well-funded and we have a very strong balance sheet to be able to run through with any of the resourcing needs for Huntsville.
I have another question for you, Clayton. The question is, I believe you were possibly involved in the contracting towards the end of the process. Did you get a chance to meet with the customer and any other customers, and any sort of thoughts and observations you'd like to share on that please?
Yeah. First of all, I did get to meet with Huntsville, and I did assist John in the final stages of the contracting. One thing's for sure, and that is very similar to what I'd seen previously in my previous role, was healthcare institutions all work at a different rate. Contracting can take time. It is part of the process. This is nothing unusual in terms of healthcare institutions, and that's the same with implementations and go forward into getting these people live. But once they do and they become part of your customer base, install base, they obviously stick around for long periods of time. But in terms of the trip away, yes, it was my second week in employment at Artrya, and it was a great timing for me to go across to the U.S. with John, and some other groups and funds along the way.
As part of that, we obviously saw some existing customers, through Tanner Health, Northeast Georgia, and Cone Health. Potential customers, obviously Huntsville, which has now converted into a new customer, which was great to obviously meet with the doctors, meet with their I.T. departments, understand their timing of when they think they can implement and get this going, which they obviously want soon. Some other SAPPHIRE partners in Extension, and some others. Then other inbound opportunities. So it's not just in the SAPPHIRE group that we're seeing inbound, so that's also important that we think there's great opportunity. I guess the key takeaways from my trip away was, and this is something we've seen, cardiac CTs are growing at a rapid rate.
I think the industry standard's around 8%, but we're regularly seeing double-digit growth within our other existing customers or now with Huntsville, around that sort of 20%, 25%. Again, every hospital will be slightly different, but we are seeing that real growth in the CCTA numbers. Which leads to the next problem within healthcare organizations, is they don't have enough staff or clinicians to be able to deal with that. So workflow efficiency is huge, and providing a platform like we do with the SCA, is a major benefit towards these health institutions. I think this is the biggest thing from a fresh set of eyes coming in, is what's been misunderstood in the market is how important that platform is, and SCA numbers going through the platform.
That is the key differentiator compared to point solutions, and I think that's where groups like Huntsville I've mentioned, and even other existing customers, that is the key to our organization. If you have the platform and clinicians are able to read through that platform, adding in things like plaque and flow once it's cleared, it's hugely beneficial to have that individual platform. Clearly, we're well-positioned for that because of our real-time solution compared to some of the competitors that are days, human in the loop, sort of getting information back. I think a lot of the clinicians find that very difficult, that they might be working on a certain report for a patient, and then they've got to recall it 24, 48 hours later while they're stuck on another support.
It does take away the efficiencies with some of the other competitors. I think it's a huge benefit to what we're doing. I think the major thing is clearly customers are moving forward without our flow submission being done, Huntsville being a prime example of that. I've seen other opportunities that are looking to moving forward to commercial terms. All in all, it was a great trip, a really good time, a couple of weeks at multiple customers and potentials and plenty to go on with from there.
Thank you. Just to follow up from Melissa Benson, just picking up a couple of things you mentioned here, Clayton or John. What are the terms in the Huntsville agreement in relation to coronary flow and the approval is one element, and then the second is, can you give us a sense of the integration timeline? Is there a density of sites such that maybe there's a majority of volumes in an 80/20 rule? Any sort of guidance or color would be great.
Yeah, look, I think I'll grab that, Clayton.
Sure.
The flow pricing has been priced into the commercial agreement, so it is in there. It's obviously pending clearance. As soon as it does get cleared, it will be immediately available on the platform, which is why the platform, as Clayton just mentioned, is so important. It's not another solution that they have to get separate from what they currently report on. It just appears as a button on the Salix Coronary Anatomy platform. That is priced in there. It is pending clearance, though. Obviously, they can't use it clinically. We will give the flow product, as soon as we get a little further along around at getting into the submission piece, we'll give a few select customers access to it so they can start getting used to it in a non-clinical setting, so that they get used to that as well.
The other question was around what we can take on from a pipeline perspective.
We do have the opportunity to take on multiple customers. Obviously, we want to make sure that our customer experience with our existing customers is really, really good. That embeds us further beyond just a great product, but it also embeds us with our customers more, as we provide that great experience, from onboarding to general support, as they're live and using it clinically. We are able to take on more customers. We are making sure, however, that we are providing that great customer experience as we bring more customers on, and we will resource accordingly as we bring more customers as well.
Thank you. Question from Martyn Jacobs at Bell Potter. Can you give us a sense of the time that the process took, and was there any competition for the business? Do they use existing products and have you replaced other products, or could you comment on that, please?
Yeah, look, they have used HeartFlow in the past, and we've replaced HeartFlow, so that was another major win for us, that it wasn't a competitive. When I say it wasn't competitive, there wasn't an RFP as such. They, like many other hospital systems that Clayton mentioned, are under severe pressure from a capacity perspective. They've got a set level of cardiologists that read CCTAs, but the volumes are growing in double digit in Huntsville. I won't give the exact number, but they're growing greater than 20% year on year, their CCTA volumes. They just cannot keep up with that. So, they are really desperately looking for something to help them read more with the same capacity of doctors that they have and get more patients treated more effectively.
The competitive pathway was fairly simple because they already saw that value with the base platform, and then having the plaque and then ultimately the flow when that gets cleared in the same platform. We didn't really see that as much from a competition perspective. We did see the real desperate need that hospital systems have in the U.S. for further workflow efficiency.
Thank you. A follow-up here from Tanu Jain at Petra. You've just said that they've replaced another product, which is the HeartFlow. Does Salix, have they adopted a CCTA first pathway? In other words, do they see their CCTA volumes growing because they're already using a product and then they're using Salix?
They've been very much focused on CCTA for quite some time now. When we first met Huntsville a couple of years back, their volumes were probably half of what they are now. It's almost doubled in that period because of all the reasons we've said in the past, the ability to see the coronary arteries better with CCTA, the ability to assess plaque more effectively, the ability to treat the patients more effectively because what you see, you can treat. They have taken on that CT first approach, and since they've done that, they are seeing that greater than 20% growth rate. We are seeing that with other customers as well. As soon as they do take a CT first approach, the numbers grow significantly quickly and at high volume.
Andrew Wilkinson from Venn Brown, asking around the sort of the pricing that you adopted in the contract. Is it right to look at it as a subscription base, and then you're looking at guiding circa AUD 750 for a plaque analysis and around about AUD 800 for a flow analysis? Is that still the right way to look at the pricing model?
It is, but I'll let Clayton answer that in more specific terms based on where we think we can go forward from a pricing perspective.
Yeah, absolutely. Each contract, I am not going to go into individual contracts, but that is the pricing that we have been looking at in the past. That is what we are looking at for the future. Although, as John mentioned, we could be looking at more of a blended rate. I think it is still early at this stage, and clearly having flow cleared and being able to be commercialized will help assist with some of those discussions. Each one is in a it is done in good faith, obviously, with the customer, and it is around those marks.
Thank you. A question asking, what is the target go live date with Huntsville, if you are able to comment on that? There is a related question about do all the SAPPHIRE participants now have Salix loaded, and therefore becoming aware of the product and its benefits?
Yeah, look, we only signed the contract on Friday, so we are working closely with the IT team now on what a go live date looks like, so we cannot comment on that yet. We do know that they are really desperate to get moving quickly. As soon as that gets moving with regards to their IT team being set up for this, we think it will move quickly. We will know as that team gets structured and set up what that timing looks like. Yeah. David, what was the second question?
It was around are all the SAPPHIRE participants now using Salix, and is that assisting their awareness and understanding of the benefits of the product?
Yeah. We are, as I mentioned earlier, in varying stages of commercial maturity from the remaining SAPPHIRE partners. Some just starting to pilot, others that are broader than that. But yes, they are all aware of it, and they are all using it in varying levels of maturity at the moment. I think that is a key thing for the market and our shareholders to understand, is that we have not been waiting for SAPPHIRE, the study, to run for them to start using the product and start using it clinically and validating that clinically.
We have been doing that in the background, and Huntsville is a really good proof point for that. I hope that does at least give some comfort to the market that there is a lot of things happening in the background with regards to our SAPPHIRE partners and inbounds commercially beyond just the SAPPHIRE study from a clinical perspective.
Thank you. A question around plaque. Obviously, you have mentioned that it is going to be live as soon as they go live with the system. But can you give any sort of comments around what you expect the take-up rate or the attach rate will be for plaque within the Huntsville patient population?
Look, we cannot comment on that yet. We are working with them at the moment, but because of the first part of the reimbursement pre-authorization process that is now being established, we do think that will start going a little faster. But as we get into working with them clinically over the next few weeks, we will get a better perspective on what that adoption looks like. But our goal obviously has always been try get the utilization up to 65%-70% as quickly as we can.
Question here relating to implementation. Is it different implementing a SAPPHIRE partner to, say, a non-SAPPHIRE partner? Is that going to impact the time frames and the resourcing that you need to support the customer?
I will answer part of that, and I would not mind Clayton's perspective because he has seen that when he was a PME as well. Look, no, because they all go through the same pilot process. The only difference with SAPPHIRE is that many of them are integrating basically into the basic integration into PACS just so they can start clinically testing it for SAPPHIRE. That does help, but they still have to go through the normal IT review process from a cybersecurity, patient privacy, assessing how we integrate, et cetera. That is independent of SAPPHIRE as such. We will all be going through that same process, and they will all have their own timings depending on what their processes are. Now Clayton, I do not know what your. If you want to give more color on that.
Yeah, absolutely. I mean, Cone, we know there has been delays for certain reasons on the IT side, and we can talk about that at another stage. But that does not hold that every implementation is going to be exactly the same. In a previous role, our longest Pro Medicus implementation was about 3. 5 years. Our shortest one was five weeks. There is a lot of range between where they will be. I do not think it matters if they are SAPPHIRE or non-SAPPHIRE. It is more what is their need, how conducive are their IT department around getting this for the clinicians, how influential are the clinicians to make sure that that happens? From all accounts from Huntsville, that is very soon. They want it ASAP.
Whilst there have been some implementations in the past with our existing customers, that does not ring true that it just is the same timeline for someone like Huntsville, which I believe will be quicker than others.
A follow-up here from Martyn Jacobs at Bell Potter. How are you planning to manage the SAPPHIRE actual study within the commercial world with Huntsville? For instance, will you be charging commercial rates for SAPPHIRE scans?
They are two independent bodies of work. With some of the doctors that are part of the commercial piece or part of the SAPPHIRE study, using it both clinically and also from a SAPPHIRE perspective, but it is very independent. We are not charging for the study as such. It is a study that we are working closely with these hospital systems to get scans in with follow-up from heart attacks and patients that have had strokes, et cetera, so that we can start showing that we can predict future events before they actually happen. But they are independent, and no, it is not charged from a SAPPHIRE perspective, but we are obviously charging from a commercial perspective, which is really where the value lies. If you think of it simplistically, that SAPPHIRE is our business development manager.
That charge that we are covering from a SAPPHIRE perspective effectively gets covered by us not having to put a huge sales team on the ground, and we can get those customers through from a clinical perspective to piloting the product and then using it commercially once they have signed the contract in a very simple, fairly cost-effective way.
Another question around the integration. Can you talk about the speed at which you might go from one hospital within the group to being rolled out across the hospital network? This question relates to Northeast Georgia, but you could apply the same question to what you are planning and expecting for the Huntsville Group.
Yeah, it's a good question that. So of the 15 hospitals, the majority of the scans in Huntsville really get done in Huntsville, the main center, the heart center in Huntsville, Alabama. I would say about 80% of the scans go through there, with probably about 20% are spread out through some of the others. Majority of the times, the rollout gets done into the singular PACS system, so we get all the CCTA scans coming through, but the utilization starts off with the clinical champion in that major center, like Huntsville in Alabama, like in Gainesville, Northeast Georgia, the major center over there, in Carrollton, Tanner Health, in Greensboro, North Carolina. It really starts at the major centers and then rolls out from there.
We really try to focus on the high volume hospital first, where the majority of the scans get done, and so that we can have a clinical champion over there that we can use to help onboard the other doctors as we roll out to the other sites.
A follow-up question here. What influence does the whole hospital group have over the individual cardiologist? So for instance, can it force them to use Salix, or could an individual cardiologist choose to do a manual read because that's the way they've always done it? In other words, is this a hospital-wide process, or is it sort of more of a recommended?
No, it's enterprise-wide rollout, so they have to use it. It's slightly different than physician-based groups where doctors within hospital systems are salaried, so they're effectively the employees of the hospital. Once the decision gets made and the doctor says, "We're using it," and the service line director for the cardiovascular service line sees both the clinical and the financial benefit from that gets rolled out across the whole hospital system, and all the doctors have to use it.
We've got a number of questions around the pre-authorization. I know you touched on it in your address, but could you just maybe confirm or clarify that the prior pre-authorization issue has now been addressed, including for Huntsville and future customers?
Yeah, look, that's one of the really major benefits we had in this previous quarter when we were working on the pre-authorization process. That was rolled out at Tanner late in the last quarter, so we're really starting to see some uptick in the plaque clicks now from Tanner. We're starting to work with Northeast Georgia to roll that out there, and it'll be the exact same thing that gets rolled out with Huntsville and Cone when they go live and anyone else that, any other customer that we bring on board. We've been very much focused on not having a customizable solution, but something that is unified across all hospital systems that we can just rubber stamp as we bring on more customers.
Thank you. A follow-up from Martyn Jacobs at Bell Potter. How long was Huntsville testing Salix before they actually signed the contract?
Look, probably about three months they were busy working with it. That was on a number of things. They were also involved on our Salix Coronary Plaque submission late last, so the middle of last year, so they got access to it then. In the grand scheme of things, it was probably about three months where they were busy working with Salix, just getting used to it, understanding it, and we were working with them to get fully experienced with it as well.
And following on from that, could you comment, has Huntsville now discontinued HeartFlow? In other words, they've chosen Salix as their preferred vendor or preferred product?
Yes. They will use Salix from a reporting perspective. In the past, they used TeraRecon. They're looking to shift over to Salix for just general CCTA reporting for all the efficiency reasons we gave earlier. They'll use Salix Plaque from a plaque perspective and won't use HeartFlow, and then when the flow gets cleared, they'll remove HeartFlow from a flow perspective as well.
Thank you. Another one here from Melissa Benson at Barrenjoey. Should we anticipate that the pricing that you're negotiating with SAPPHIRE partners such as Huntsville might be lower than other commercial contracts, given they're a research partner? Is that what you would expect, or are you able to comment on that?
Clayton, I'll hand that over to you. I know you've got a view on that, but yeah, please go ahead and answer that.
Yeah. That's not unusual. Not unusual also from the timing, the timing of the market of when we're starting with existing customers. As time gets further down the track and there's more referenceability of our product and we can show the efficiency gains of using even just the platform, let alone the other additional products, that pricing should increase across time. That's not unusual whether they're SAPPHIRE or not. But yes, that would be the case at this stage.
Yeah.
There's a slightly broader question here for you, Clayton. It references your prior role at Pro Medicus, where you've seen the business cycle evolve. Are you able to see any parallels between where AYA is today and maybe where you were during that prior cycle?
Tough question.
Yes. Tough question, but yes and no. There are a lot of similarities and there are a lot of differences. Part of it's around commercialization in the U.S. I think everyone remembers or looks at the company now and thinks it's been around forever. But 2009, Pro Medicus made the acquisition of Visage, and it took until around 2011, 2012, to really get our first, Pro Medicus to get their first sort of sales into the U.S. Then there was steady sales sort of flow from there. But the real reset was in 2014 when Sutter Health took up the product. So there are some similarities, but it does take time, and this is, as I mentioned before, this is pretty usual for healthcare institutions. They don't move quick. They think they are.
They mentioned to us someone like Huntsville, it's been light speed in terms of how the contract worked, where in other areas you sort of go, "Well, that was slow moving." But no, there's a lot of similarities in product development and how early it is in the piece, but also one that it's best in class and therefore clinicians and IT departments are happy to move forward with it. I think that's the key, that you've got a differentiated mousetrap in your industry. I think having a platform, I keep mentioning that, as a platform is the key. As opposed to a point solution, that is a key where groups will go, "Yes, we want less applications, not more." And so having everything sort of filled in one product, is key to what you can do for a healthcare institution.
Yeah, I do want to answer that, Clayton. I think it's an important point. We went to dinner with Huntsville after we met with them, and one of the key things their IT director said is that they're under severe pressure to consolidate single-point solutions and not have that many because they are inundated with point solutions. They are inundated with companies that are coming to them and saying, "We can make you 10% more efficient." And they're just not even looking at those anymore because there are so many of them that they just want to focus, find something that can be brought into one single platform, allows the doctors to have a single platform to report on, and then add those single solutions into that single platform, as opposed to having three or four or five solutions that they've got to evaluate every time someone comes on.
I think it's a clear, and it's an opportunity for us that we have that platform, but it's also clear for us to see that the hospitals are under pressure to also scale back the solutions they have. And having that single solution is a major opportunity for us as well.
And thank you. Another one here from Tanu Jain at Petra. Plaque's been a Category I reimbursement since January this year. Post your trip to the U.S., what's your view on coverage now, and how is that changing now the pre-authorization process has been rolled out at Tanner?
Yeah. Look, coverage, as I mentioned before, from when it goes from Category III to Category I, does take a bit of time, probably about 12 - 16 months before all the, mainly the commercial payers come on board. I think we're at about 75% lives covered at the moment from a commercial perspective. That will keep moving as we go forward, which is why the pre-authorization or the streamlined reimbursement is so important. But as those payers come on board, that will just help the hospital systems improve their revenue cycle even more. We see that changing. We do see our approach to real-time pre-authorization also assisting in that, but also assisting them to get revenue a lot faster as well. That's generally the feedback we're getting, is that they're excited about something in real time.
They're excited about getting pre-auth faster, but they're also excited in making sure that their revenue cycle is a lot faster as well.
Related to that, the question asked, is there a phase II process for fully automating your pre-authorization? If so, is that still on track to be rolled out this quarter?
Yeah, so we are working on that at the moment. That's our traffic lighting system. That is being worked on at the moment, and that'll be the next release that we have to the hospital systems to fully automate that whole process for them. Yes. Yeah.
Thanks, John and Clayton. That's all the questions we've got related to Huntsville. As I said, there will be an investor call later this month, which will deal with all of the other operations of the business. I might just hand it back for any closing remarks.
Yeah. Thanks, David, I appreciate it. And thank you, everybody, for joining today. Huntsville is a really important milestone for us as a company. One, because it validates that our go-to-market strategy for SAPPHIRE is working, and they are our largest customer to date, coming on and wanting to work with us and using Salix for all the reasons we've mentioned from a workflow efficiency perspective, the ability for them to improve their margins, the ability for them to see more patients, and clinically treat those patients better as well. But also importantly, it's our fourth U.S. reference site now, which is also getting a lot more awareness within the U.S. from other hospital systems because of how well-recognized Huntsville is from a cardiovascular, both from an imaging perspective but also from a treatment perspective.
I do also want to reiterate that the AUD 500,000 contract value is only for the anatomy platform. There is incremental upside priced into the agreement for plaque at the rates we've always mentioned, and for flow once that's cleared. So we do see substantial upside beyond just the AUD 500,000. Now our real focus is on execution. We need to deploy Salix well and successfully within the hospital system, train the doctors, make sure that we're driving utilization, and then progressing all the other SAPPHIRE relationships and commercial pathways that we have with our SAPPHIRE partners and inbound customers, as we go forward through the remainder of this year and into the remainder of this financial year. So we look forward to providing a broader business update at our September quarterly.
This is a great news for us as a company, and thank you very much for all the support from a shareholder perspective, and we look forward to talking to you soon.
Thanks, everybody. That does conclude the call for today. We appreciate your participation. You may now disconnect.