Morning, everybody. On behalf of our team and our board of directors, I want to welcome you here to our September Investor Day. I would ask before we begin that you please forward and let me walk through the agenda that we have for all of you today. I think we have on that. I'm gonna begin by talking about. We're gonna talk about how we not only fit into, but drive the trends in cancer care. I wanna go through and help build on one another to drive growth, to drive P&L leverage, to drive shareholder value creation over time. I'm gonna then turn it over to Paul Ziegler. Paul is gonna talk about how into commercial action, and he's gonna give you a point of view about this incredible market that we compete in and serve.
Paul will turn it over to Dr. Martin Fuss. Dr. Fuss is a world-renowned radiation oncologist and our Chief Medical Officer, and he's gonna share with us what our goals are in the toughest to treat cancers and more common cancers alike. Very excited to give you visibility into the incredible patient care and data that our customers are generating for us. We think that is the right backdrop for the key opinion leader panel that we have. We have three truly remarkable physicians with us today. Dr. Sarah Hoffe from Moffitt, Dr. James Good from GenesisCare, and right here in New York, Dr. Himanshu Nagar. They're gonna be able to talk to us about the full landscape of cancer care.
Tough to treat patients, more common cancers as well, and we're complementing that incredible list of physicians with a business executive from GenesisCare, Mr. Paul Gearing, that is in perhaps the best position of anybody in the world to talk about how that clinical value translates into strategic and economic value for our customers. Zach will then take us through more depth on our forward-looking financials and the goals that we have over the next three years. We look forward to opening it up to Q&A. For those of you who are here live, we got some teammates that are ready to do hands-on demonstrations should you be interested after the program. With that, let me give you a sense of kind of who we are and how we operate.
What's a little bit different about ViewRay is a lot of companies have vision statements and mission statements and shared values. What might be a little bit different about us is every single teammate in the company around the world could tell you virtually verbatim the words I'm gonna share on these two slides. At the highest level, we think about our what and our how. Our what is our vision to re-envision radiation therapy to conquer cancer. Our mission is to treat and prove what others can't. These are our guiding lights, how we allocate capital. Teammates use these words in meetings every single day. Our shared values, what we call our radical habits, are easy way to recall our six shared values. That's a pact that we agree to in terms of how we will engage with one another as teammates. That's our what. Our how.
How do we make sure that we in fact re-envision radiation therapy to conquer cancer? How do we treat and prove what others can't? There's four things that we have to do better than anybody that we compete with to win in the marketplace. One of those rises above the other three because it is foundational to and it's indigenous to the other three. Most important thing we do as a company, attract, retain, and develop the top talent on the planet. Nice words. We are maniacal about this, and I would contend if we do this one thing better than everybody we compete with, we will win in the market. With the right team, we operate with what I call wicked strategic clarity. Now, I say wicked because I'm from Boston. I root for all of the correct sports teams.
Wicked is a word that's memorable, and it reminds us to not make the same mistake that we see so many companies making. What is that mistake? We see it time and again. Companies have all of these great ideas, and they peanut butter resources across too many good ideas. What happens as a consequence of that? They don't fully resource those vital few and key drivers, what we call them. They slip gears. They miss dates. They fail. They justify failure. They attempt to do smaller things over time. We operate in completely stark contrast to that. We have three constituencies that we serve that rise above all others, our team, our customers, and our shareholders. We have very robust processes to ever more deeply, ever more clearly understand what is gonna move the needle for those three constituencies.
We prioritize those items and when we can no longer fully resource those vital few and key drivers, we draw a hard line and we do nothing else. We execute as if lives depend on it because indeed in our case they do. Number four, the bookend to number one, attract, retain and develop, is to be incredibly thoughtful and intentional about building the culture and the environment that great people wanna be a part of. You've heard all of the cliches, right? Eagles soar with eagles, sparrows hire pigeons. It's true. Great people wanna work with great people. They wanna work on big things that matter. They want latitude to do their job. We are incredibly thoughtful about creating that kind of environment that great people want to be a part of.
Let me talk just a little bit about how we not only fit into, but we drive the prevailing trend in cancer care that's been unfolding not only for years, but for decades. That prevailing trend is toward more personalized, more precise medicine that has less negative side effects for the patient. I spent several years of my career in surgery. We went from open to laparoscopic, now on to robotic surgery. Smaller incisions, less anesthesia, faster recovery times for patient, less negative effects for the patient. In chemotherapy, same thing. We went from broad-spectrum chemotherapy to now more targeted immunotherapies. This is exactly the trend that we are leading and driving as ViewRay in radiation oncology. For those of you that might be a little newer to our story, let me share with you just how starkly different we are from conventional therapy.
Conventional therapy is CT or X-ray guided, and as you probably know, X-ray sees bone clearly but does not see soft tissue clearly. And as a consequence of that relative blindness, a treatment plan is developed for a patient days, often weeks, before their first day of treatment. That treatment plan does not take into account the very natural motion that takes place inside of our bodies from one day to the next, and that treatment plan does not take into account the very natural motion that takes place inside of our bodies even during the delivery of radiation therapy. So treatment plan created for the patient. Everybody closes their eyes, and you deliver this low-dose radiation over many, many treatments called fractions. And the goal is to deliver enough radiation to hopefully kill the cancer, but at the same time not do too much damage to healthy tissue.
This has been the paradigm of the space until ViewRay came along. Our customers want to deliver an ablative dose of radiation therapy to drive the survival benefit to mitigate the chances of a recurrence of cancer, but they're concerned about healthy tissue toxicity. We completely break this paradigm. In our case, same treatment plan is delivered, but you could argue a little less important because when that patient lies down on the table for their first day of treatment, our customers have the opportunity to do an on-table adaptive plan very quickly. Probably no surprise, and with very good data, our customers choose the superior plan. Oftentimes, it is the plan. While the treatment is being delivered, we watch everything with MRI diagnostic quality imaging. We track tumors in real time at eight frames a second.
We track soft tissues, organs at risk in real-time at eight frames a second. Now with A3i, we track all of that in three planes, left to right, up, down, front, back, making it virtually impossible for the radiation beam to miss. Instead of low-dose radiation over a long period of time, we allow our customers to deliver that ablative dose that they want to deliver in five or fewer fractions, even single-fraction therapy, which is akin to completely non-invasive surgery. Starkly different from what is out there in the field today. It's really important, we believe, to be completely rooted and grounded in our customers' definition of clinical success. We did very deep research three to four years ago to make sure truth on what it is that our customers want to deliver in radiation therapy. The definition of success is uniform across the world.
Five things define that. Number one, our customers want to deliver that ablative dose. They want to do it safely. They want to deliver that ablative dose, number two, with very tight margins or implanted markers. Our customers want to deliver completely non-invasive therapy. They want to do it in five or fewer fractions, and they want to deliver that ablative dose with low or no grade three or higher toxicity. We scour the landscape for any clinical data that meets these criteria. We invite you to do likewise. The only data that we're able to find out there, meaningful body of work is our own, phase II, phase III randomized controlled data. What our customers are delivering with MRIdian is nothing short of remarkable. From a strategy standpoint, we have four strategic pillars that kind of build on one another.
It all begins with the remarkable technology that Dr. Dempsey, our Founder and Chief Scientific Officer, thought through 20 years ago. It is the enabling technology that allows us to pursue our second strategic pillar, which is clinical data. Martin's gonna go into some depth here for you, but I'm gonna touch on it at a high level. That innovation pipeline and clinical pipeline open up the opportunity to drive market awareness. Finally, all of that leads to therapy adoption, which is the precursor to the revenue growth that we're gonna talk about here today. Let's talk about our technology just for a moment. We don't sell futures. We don't have to. We have been delivering this technology and this therapy, as I've described it now, for over 10 years.
We're about 27,000 patients into this journey, and we have taken this technology to a completely new level with A3i. A3i is the top seven or so things that our customers want out of MRIdian. Increased clinical utility with the brain treatment package, that tracking in three planes, as I mentioned, the ability to work in parallel for radiation oncologists, physicists, dosimetrists, therapists to do that adaptive treatment plan, to be able to work remotely on the system to enable a hub and spoke kind of model that our customers seek. Just extraordinary technology. I track very closely the rate of change of our innovation pipeline and do my best to compare it to others and how quickly or slowly their innovation pipelines move. I feel very good about the position that we are in.
The final thing that I'll say about our technology, and this is quite a mouthful I realize, but it happens to be exactly what we are working on. We are driving MRIdian technology to the complete personalization of radiation therapy delivery. Just extraordinary. Let me talk about our clinical pipeline at a high level. I won't steal any of Martin's thunder, but I think it's important for investors to understand what it is that we're trying to accomplish in all of these different tumor types that our customers treat. We kind of break it down at the highest level between the tough-to-treat cancers and more common cancers. On the tough-to-treat side, things like pancreas, central lung, ultracentral lung, these are areas where conventional therapy has objectively failed to prove a survival benefit.
If you look at the clinical pipeline that we have, our goal is to prove a survival benefit in the toughest to treat cancers. More common cancers, and you'll hear this from our panel, we are looking to deliver not necessarily increased survival. Breast cancer patients, prostate patients often have very good prospects for survival, but we are looking to deliver critical quality-of-life value for these patients. Couple of examples. In breast cancer, my mom is a survivor, thank goodness. I went with her to every single one of her 40+ treatments for breast cancer. That poor dear woman was absolutely fried. The redness, swelling, pain, couldn't sleep, hated the way it made her look. 40+ trips to the hospital. She's one of the lucky ones. She had the family, the friend network, and the wherewithal to make all of those trips for her treatment.
We hear horror stories all the time from our customers about patients that come for their first week of treatment and then don't show up anymore. Why is that? They don't have the job that offers that level of flexibility. They live far away from a cancer center. They have kids or sick parents to take care of, and they can't afford, in every way, to go to 40+ treatments. Our customers are delivering on a daily basis single fraction post-op breast cancer therapy. Single fraction. One trip to the hospital versus 40+. In prostate, our friends at UCLA just did an amazing job. They ran a phase III head-to-head randomized controlled trial comparing conventional therapy to MRIdian. What did they prove in the MRIdian arm? They cut margins in half. They cut treatment volumes by about 30%. This is precious real estate.
Treatment volume reduction by about 30% and healthy tissue toxicity reduction of about 60%. That healthy tissue toxicity takes the form of sexual dysfunction and the life-altering debilitating effects of incontinence. Value, critical quality-of-life value for these patients. Market awareness is something that we've really more recently begun to lean into. Our customers, some of them here today, were imploring us, begging us, cajoling us to drive market awareness. They told me three to four years ago that patients will write the ViewRay story. When patients are aware that short course, highly effective, virtually side effect-free therapy, when they're aware of that therapy and it's available, they will demand it, and they will travel for it. Well, our customers were right. That is happening today.
We thought we had to have a few things in place before it would be right for us to invest in this kind of effort. Back three to four years ago, we had very few systems in the ground. No matter how great MRIdian therapy was, we didn't want it to just be a tease for the patient to be aware of therapy they really couldn't access. Now we have enough systems, enough of a footprint, we believe, to merit this investment that we're making. The other thing that we thought we needed to have was meaningful data, which we certainly have on hand today. We provide that to patient advocacy groups that are educating patients with their call centers, PanCAN in pancreas, ZERO in prostate. This is now taking place on a daily basis.
We wanted to find a trusted partner that had a big enough megaphone to really make a difference out there in the marketplace. We have found that partner in Katie Couric. Katie is a patient advocate unlike anybody that I've ever met. She's a patient herself. She's a trusted source of information, and we're just thrilled to have a partner with that quality of character and integrity that we are indeed very proud to partner with. These things all lead to therapy adoption. Let me give you a sense here for just how different we are from other systems and the progress that we have made on our own over the past few years. The number one complaint that customers had about MRIdian three or four years ago was throughput on the machine.
We were treating, give or take, rough math, about 100 patients per year on average on MRIdian, and our customers wanted us to focus on that. Today, our top quartile of customers are treating over 300 patients a year. We have customers in the room that are on pace to exceed 400 patients per year, and all of this is before the throughput benefits of A3i. Just extraordinary progress for us. The other thing that's important to understand, remember our customer's definition of clinical success, ablative dose, tight margins, no fiducials, five or fewer fractions, low to no grade three or higher toxicity. We are delivering that 86% of the time with our customers. We have customers that are delivering that 100% of the time. Compare that to the overall market, 13% of the time.
This clinical value that translates into strategic and economic value is why about 1/3 of our customers have invested in their second, third, fourth, sixth MRIdian system. We anticipate we're gonna see more and more of this over time. Let me just highlight really quickly, if I can, the impact that we have on patients as individuals, the burden that we lift. All of the clinical data is very compelling. Think of the quality of life for our patients and think of health disparities that we can address as a company. The average patient out there, like my mom, is going for treatment seven to nine weeks, 40+ trips to the hospital. Contrast that to what we offer, five or fewer fractions. Patients get back to health, get back to life, get back to their family very quickly.
Again, in the spirit of not selling futures, we currently have customers today, multiple customers today, that bring patients in for planning and complete treatment inside of seven hours. Seven hours versus seven to nine weeks. The burden that we lift for cancer patients is truly remarkable. A final thought on our therapy adoption pathway that I think is pretty remarkable. Back when the first patient was treated on MRIdian in 2014 to today, a 93% CAGR of patients treated over that period of time. Think about now we're at about 58 MRIdian systems clinically treating patients. We have the benefits of A3i coming. We have another 80 or so systems in our backlog. The impact that we're gonna have on cancer patients and on society, I think, is gonna continue in a really attractive way.
That's the precursor to the growth that we anticipate going forward. I learned a lesson when I was first a general manager, this is about 25 years ago, and teams would come in and present their strategic plan to business leaders. I never had anybody come in and say, "Hey, you know what? The next three years is really gonna suck." Never happened. The next three years, the next five years was always gonna be fantastic. Very quickly, I learned that whatever our planning period is, three years or five years, I wanna look back that same amount of time and understand the set of assumptions that we had three years ago. What did we think was gonna be true, and what ultimately did we do? From that basis, let's then have a forward-looking conversation.
So let me treat you the same way. The CAGR of growth that we've experienced over the past three years, uh, depending upon where we end, uh, twenty twenty-two, is gonna be a little bit north of thirty percent. And I anticipate that we will continue to drive 30%+ revenue growth over the next three years. Pretty elite levels of growth. Not too many companies doing it. Fewer are doing it in a really durable way. The other thing I want to be really clear about are the headwinds and tailwinds in our business. The tailwinds, we can make this list as long as you like, and it's always headlined, for me anyway, by the patient impact that our customers are having on MRIdian.
If you look at our innovation pipeline, our clinical pipeline, the revenue growth, the P&L leverage that we will drive, we feel incredibly excited to be in this place that we are in. We have been battling two things over the past two-plus years that I anticipate we will continue to battle. Number one, the biggest risk in this business has been and continues to be supply chain risk. We have largely avoided the negative impacts of supply chain, but the bigger companies in our space we are hearing from our customers are being quoted 12-18-month delays on installations for systems. I personally believe that our supply chain is improving and things are getting better. I want to be very clear that this risk is still present as a company.
The other thing that we're going to continue to battle, that we've been battling really since the inception of the company, is the chunkiness and occasionally the delay of these big receivables that we have, these multimillion-dollar receivables. Now, we see a very clear path to get to cash flow breakeven and adjusted EBITDA breakeven in the 2025-2026 time frame. We feel great about that path, but we still have all of 2023 and 2024 to battle these working capital changes as a company, and we want to be very overt and clear about that with our investors. Finally, for me, three things I think characterize where we're taking this business out into the future from a purely financial standpoint. 30%+ revenue growth, 30%+ gross margin, and very tight discipline on operating expenses. Mid-single-digit increase over that three-year period of time.
That's our pathway, that's our recipe to get to cash flow breakeven and adjusted EBITDA breakeven without having to tap equity markets. We love this pathway that we are on, and we thank you for your interest in our company. Before we turn it over to Zieg , we have a special friend that wanted to share a few words with you.
Thanks, Scott, and hi, everyone. It was so great to be with you and the ViewRay team last month at ASTRO in San Antonio, Texas. We had such a great conversation with two radiation oncologists about the ways MRIdian is changing their patients' lives and some of the exciting findings you've recently announced. As many of you may know, I lost my husband, Jay, after his nine-month battle with colon cancer in 1998 at just 42. Our daughters were six and two. Three years later, I lost my sister Emily to pancreatic cancer when she was just 54. In the almost 25 years since losing them both, I've dedicated my life and career to educating people about their screening and treatment options. When I was on the Today show, I even broadcasted my colonoscopy to demystify the procedure.
Following that segment, the University of Michigan found there was a 20% increase in colonoscopies. I've always felt journalism is a calling, and being able to share potentially life-saving information with my audience is a huge responsibility, but one I consider to be the most rewarding part of my career. Four years ago, my husband John and I founded our own media company, Katie Couric Media. How original, right? To create content with mission-driven brands. We've continued to make health and wellness information accessible and understandable. With Hologic, we covered a wide range of women's health issues, including information about 3D mammography and dense breasts, a lesson I learned firsthand earlier this year when I was diagnosed with stage 1A breast cancer.
We've worked with Exact Sciences on articles and videos not only about colon cancer screening, but also about the tough conversations that often accompany a diagnosis. Excited to dive into new topics with all of you. We've already collaborated on pieces about MRIdian technology, prostate cancer recurrence, and how to find a trustworthy doctor. Later this week, I'm publishing an essay about my sister Emily, what she was like, and what I wish she had had more time to accomplish. In fact, many people thought she would have been the first female governor of Virginia. Last weekend, I was down in Charlottesville visiting my alma mater, UVA. Wahoo, wah. I was able to visit the Emily Couric Clinical Cancer Center, which just last month installed ViewRay's MRIdian radiotherapy system. Small world, right?
I wish she had that kind of technology available to her back then, but it is so heartening and encouraging to hear that twenty-seven thousand patients have access to it today. So in closing, I'm endlessly curious and ready to brainstorm more stories that empower cancer patients and their loved ones and help them find access to the best available care. I really wish I could have been with you all in person. Maybe next year. But right now, I'll turn it over to Zieg.
That's quite an introduction from Katie Couric. Thank you. Good morning. Scott walked through our strategic pillars, and I'd like to share with you how we're executing on the commercial front. The real goal is to develop an order cadence through consistent education, advocacy, and real market expansion. When we drive therapy adoption, we create market pressure, we create competition, and this really accelerates demand. Starts with differentiation. Discussions initially take place all around the technology, right? Our soft tissue and diagnostic quality, high value MR, shape the dose to personalize the medicine each and every day, and strike only the tumor to protect healthy tissue. The MRI controls the beam. Very important for us as we talk about the technology.
The other piece is that the voice of our customer really guides our product roadmap, ensures that we're delivering innovation really in a timely fashion. Second, we really like to establish the value of MRIdian. You heard Scott touch on this. We start with the clinical value that translates into strategic value and ultimately into economic value. Martin's gonna go deeper into the clinical value, really the MRIdian five that Scott talked about. The strategic value here is really important. As net new patients are brought into the fold, catchment areas change, service lines grow. That translates into that economic value that we talk about, where it's top-line and bottom-line growth. Finally, advocacy. Advocacy is critical for us.
As we create clinical champions, as we create advocates within the C-suite, we really drive competition in the markets, and other institutions start to take note of what's happening. Patients, patient advocacy groups, patients deserve to know what their options are. Patients will seek out those options, and they'll travel. They'll travel across state lines, they'll travel to other countries, and we're seeing that each and every day. Finally, we take a programmatic approach to establishing new service lines. This is in order that our customers really realize the entirety of the value chain. With each program success, and we measure that success by clinical outcomes and utilization, this drives therapy adoption. As customers then realize the strategic gains and the positive economic returns, we're seeing reinvestment and expansion of programs. Driving differentiation through innovation is really delivering meaningful value.
It's creating an echo chamber, an echo chamber with our advocates, an echo chamber with patients, and all of this is fueling future program development. It's a critical cycle, and we address this each and every day as we look at the significant patient opportunity. Let's turn to that. This is a high-level look at the patient market. Roughly each year, 19 million patients are diagnosed with cancer, and at some point during their journey, roughly 50% of those patients will undergo some form of radiation therapy. Approximately each year, two million patients are treated, one million here in the U.S. and one million outside the U.S. If we turn to the global market opportunity, this is how we look at the total addressable market, breaking it down to what we can service and what we should be targeting.
It's estimated that the LINAC market is growing at about 2% each year, driven primarily outside of the U.S., where LINAC capacity is really an issue. Ultimately, I believe MRIdian can compete for 95% of these centers in LINACs, with 5% perhaps limited by space or some system functionality where electrons may be required by a customer. Given the current state of adoption, we view our serviceable addressable market as those customers with two or more vaults. We're not currently focused on single vault centers, primarily because they're more challenged by budget limitations or operational disruptions. Based on our scale and our current commercial priorities, our target market is focused in three key areas, North America, EU's Big Five, U.K., France, Italy, Germany, and Spain, and then the APAC countries.
It's safe to say there's plenty of opportunity for MRIdian to take market share as our customer base really becomes better educated on the clinical benefits being afforded by MRIdian. I wanna touch on the innovation impact we're having in the market. While others really do try to mimic what we're doing, we are changing the radiation oncology landscape, and they are generations behind. Three core things to remember, and Scott touched on these, but I wanna make them clear. Number one, we do not sell futures but have continuously delivered product innovations that facilitate meaningful clinical results. Number two, this pace of innovation is leading the field. Having celebrated 10 years of innovation, we're far ahead. Anyone else, all of those others saying, "Us too," far ahead, we're setting the pace.
Finally, the third, we won't stop what some people believe are impossible problems, something our founder likes to say. We're really focused, and we believe that we can work towards the complete personalization of radiation therapy. Let's look at those innovations. MRIdian is the first radiation therapy system to integrate diagnostic-quality imaging, high-value MRI in an advanced linear accelerator. The most remarkable features of the MRIdian are the capabilities or mechanisms that increase the accuracy and precision of radiation therapy treatments, leading to these improved outcomes. These core MRIdian mechanisms we have termed as see, shape, and strike. Analogous to surgical intervention, the physician sees the surgical, or in this case, the treatment field in real time. They then shape their therapy based on the anatomy and tumor needs in real time to avoid harming healthy tissue.
Finally, they strike only the target with the accuracy and the precision greater than that of the human hand. MRIdian's smart therapy is really driven by the balance of these see, shape, and strike technologies. It's the confluence of these three where the magic really happens. MRIdian's newest generation of technologies, the newest generations of innovations, has been termed A3i. It's the latest suite of technological advancements that streamlines this real-time on-table adaptive workflow and has expanded MRIdian's clinical capabilities. Simply put, it's allowing clinicians to auto-contour, auto-adapt, and auto-gate the beam intelligently, thus facilitating improved treatment times as well as increased patient throughput. Let's take a deeper look at some of MRIdian A3i's specific feature sets.
A3i's parallel adaptive workflow means the team is able to work collaboratively and simultaneously on the patient. Throughout the localization, contouring, and plan review, there's no longer a need for the staff to be tethered to the confines of the treatment room. Therapy portals allow access to the patient's replanning efforts for all of the clinicians involved, each one of them being able to auto-contour or access to the auto-contouring tools regardless of where they might be within the facility. In addition, there are new imaging and planning scans, and integrated real-time patient display, and advanced 3D multiplanar tracking and enhanced automatic beam gating. The combination of these innovations facilitates faster treatment times as well as increased patient throughput, something our customers are incredibly excited about. Henry Ford and Miami Cancer Institute received their upgrades late this summer.
They've treated well over 100 patients, and they've seen a 30% reduction in their adaptive treatment times, taking their most complex cases, the most complex cases that they're treating today, down to 40-minute treatment time slots. That's really incredible. We've also expanded MRIdian's clinical utility with BrainTx, our brain treatment package. This will facilitate SRS with a new head coil and integrated immobilization device. Again, the initial feedback on this product so far has been remarkable. The natural question then is, how will these innovations continue to drive commercial adoption? I think you've heard this, but any measure of success starts with the patient in mind. Consequently, our story is all about therapy adoption, highlighted by that 93% CAGR in utilization. MRIdian is the treatment leader in MR-guided radiation therapy and a long history of innovation since 2012.
We've surpassed that 27,000 patient treatments globally, and we're proud of the milestones that our customers are setting. We currently have seven MRIdian programs today that have exceeded that 1,000 patient treatment mark since launching their program, and that's continuing to grow. Our focus really on the customers is paying dividends. As we drive MRIdian therapy, customers are fully realizing the clinical, strategic, and economic value of the program. The fact that a third of our customers have already reinvested or are looking to reinvest and are planning to expand their programs is a real testament to the value. Let's see how that impacts our revenue line. Our impressive clinical partners are driving markets across the globe. With roughly $370 million in our backlog, we've got approximately 80 other MRIdian systems in some stage of program planning or in installation.
Let's follow this. With each new installation, and more importantly, each successful MRIdian program, customers start to fully appreciate the clinical utility of their investment. With each new installation, we start to drive annual revenue through our service offerings. The clinical value realized by both the physicians and, more importantly, patients, drives the strategic and economic returns that administrators want. These results drive competition. Interest is driven both to patients and to other institutions. The changes to the catchment areas creates market agitation and competitive dynamics, which drives new customers to invest. This right here is why market awareness is so important. This validation of MRIdian SMART is the catalyst for therapy adoption as customers look strategically across their health networks, and they also want to see where else they can do first-to-market opportunities. This drives broader investments by customers within those large networks.
With increasing volumes and patient demands, customers reinvest in a second system within their immediate network to address clinical demand and pressing backlog of patients. We move from greenfields, which drive other greenfields, to drive market expansion across networks to second systems, all with a natural need for eventually a replacement cycle. This will continue to replicate over time, and with the cadence of orders and new programs, we can see really impressive revenue story unfold. At this point, I would like to pass it to Dr. Martin Fuss, our Chief Medical Officer, who's gonna take a deeper dive into the clinical work we're doing. Thank you.
Good morning. ViewRay's focused clinical strategy with investment into clinical trials in both common and tough-to-treat cancers was previously highlighted by Scott. Before I dive into clinical data, I wanna take you one step back and give you some insight into thought processes by radiation oncologists of how the MRIdian technology advantage allows us to break old paradigms of how radiation therapy is planned and delivered. I wanna take the opportunity to discuss some recent clinical trial data that were presented at the ASTRO 2022 meeting in San Antonio, Texas. Here's the fundamental paradigm in radiation oncology, do no harm, and you've certainly heard this in other meetings before. For a radiation oncologist, this is really the principle that drives each and every decision made.
Any consideration for an indication for and then the subsequent prescription of radiation therapy will consider healthy tissue radiation dose tolerances and will, at times, result in the delivery of radiation doses to a cancer that we know and understand to be too low to expect a durable long-term benefit for the patient treated. Again, all of this is done to avoid or minimize risk for harm experienced by our patients. In the clinic, you often find tables like this on the walls in the area where treatment plans are being discussed, and we consult these tables because they advise us about dose and volume effects and how normal tissues might respond in unfavorable ways to radiation. It's the accounting for expected and unforeseen changes inside a patient's body that complicate the development of a radiation therapy plan and its subsequent delivery. Predominant concerns relate to motion management.
Motion that occurs to the target and organs at risk, both in position and shape over the course of a treatment. That motion still may occur while the actual radiation dose is delivered on a day's treatment. How do we account for those changes? We design something that we call planning target volume safety margins, and it's the safety in this word that we will get back to. Bear with me for a moment to better understand that concept of and the need for those planning target volume safety margins. Here you see a graphic simplification of a target, in this case, a prostate cancer in the pelvis, and the relationship of this prostate cancer, which is called target, to organs at risk. Superior to the prostate, we find the bladder, and right behind it, the rectum.
Now the challenge is we need to assure that this target volume is exposed to the proper radiation dose every day of treatment. Now it doesn't work. We need to add a margin, a volume extension to the prostate gland to assure that this happens. You realize this margin extension now occupies space that consists of normal tissues, and some of those normal tissues are actually named organs at risk. You see an overlap with the bladder on top and the rectum in the back, and it is this overlap area that now yields the risk for radiation-related side effects or toxicities. What toxicities are those? Scott mentioned sexual dysfunction after the completion of a course of radiation therapy. In the short term, it is things that really make life miserable. Urgency. Never walk or stray far from a restroom.
Many patients don't leave the house. They carefully plan the way to their radiation oncology treatment so that they don't run out of an option of a restroom should the urge occur, because incontinence, yeah, is something that every man fears. It's not just urinary incontinence that we are talking about at times. Dr. Amar Kishan at UCLA calls it misery-inducing toxicities. In order to target the prostate gland reliably on a daily basis, we have to add some narrow margin. Let's look at another target setup here in the upper abdomen. I'm sketching out a pancreatic head cancer here, and its close proximity to organs at risk, such as the stomach, the duodenum, that's the part that literally wraps around the pancreatic head, and then the small bowel. Not enough that we have this proximity to organs at risk again.
In the upper abdomen, we're dealing with motion, breathing motion. These lesions move with every breath a patient takes. As sketched here, the motion is predominantly in the head-to-toe or craniocaudal direction. Now, this motion differs from patient to patient, but its anatomy almost never is static over the course of a breathing cycle. Now we account for this motion by designing a motion envelope. We call it at times an ITV, an internal target volume. This extended area now becomes the targeted area for radiation dose delivery. However, not enough with this extension, we again need a planning target volume to assure that this area is actually properly exposed to radiation on a daily basis and throughout fraction dose delivery. Margins in the upper abdomen need to be much larger than PTV margins in the pelvis, for example.
You certainly note the significant overlap of all these targeted areas now with the bowel structures. In prescribing a radiation dose, the physician will have to consider just how much radiation dose those bowel structures can tolerate. This normal tissue tolerance, as we call it, will then dictate the assumed safe total radiation dose that can be prescribed and delivered. It becomes intuitively clear that if you could know where a target is at all times, prior and during radiation therapy, and you could avoid or reduce the need for those margins, new freedoms in treating patients by radiation therapy for a physician would be enabled. What if we had a technology that allowed for optimal assessment of the position of a target and nearby organs at risk immediately prior to radiation dose delivery?
Had the ability to change a plan if some changes from the original anatomic setup were observed, shrinkage of a target, for example. Have the ability to continuously track the target and those organs at risk, not just track them, but control the radiation beam. Now obviously, this sounds a lot like capabilities that are available on a ViewRay MRIdian platform. It is not that we hadn't had the ability to glimpse into a human body right before radiation therapy was delivered. We established the concept of image-guided radiation therapy or IGRT about 15 years ago. On the left, you see a typical cone beam CT. This is what is acquired on 99.9% of LINACs installed around the world. You immediately note that the image lacks detail. It actually lacks contrast.
The ability to discriminate between a prostate, which is again the target in this part of the anatomy, and the bladder and rectum that are close by. On the right side, you see an MRI acquired on the MRIdian platform. Immediately, it becomes clear that this type of image yields much better soft tissue contrast. The physician has a much higher confidence to establish the position of a target and its relationship to organs at risk. Even more drastic is the difference in image quality in the upper abdomen, where a cone beam CT routinely fails to depict the target in the first place and the nearby bowel loops. On the right side again, you see an image acquired on MRIdian.
Great detail, allowing us to identify here a locally advanced pancreatic cancer, the surrounding bowel loops, the kidney, the liver, the spinal cord, or the nerves that run in the spinal canal. All the critical anatomy depicted in great anatomic detail right before we step into delivering radiation dose. With all this detail comes more clinical capability. It allows us to assess changes that might occur in between treatment days or in between the time that we planned the treatment and developed an original treatment plan, and the first time that patient lays down on the table. Here you see what's called an adrenal gland oligometastasis and a nearby stomach.
The beauty at the time of treatment planning is that there is a distance between those two structures, which allows to treat the lesion, the tumor that needs to be treated effectively and yet safe or spare the stomach from potential harm. In the middle, on day one, that patient lays down on the table, and we get a new glimpse, an MRI of the patient's anatomy of the day. We immediately recognize that something has changed. The stomach has probably changed its filling status before or after breakfast or lunch, and comes closer, in fact, precariously close, to the area that we are targeting. If you don't know that this is happening because you don't see it, risk for the patient is imminent.
The risk could just be a small area of gastritis and maybe some pain, but it could be much more serious, and there could be a perforation or literally a hole in the wall of the stomach that can lead to a life-threatening situation. Historically, unfortunately, patients have died in this scenario. With the knowledge of this changed anatomy, you can adapt the plan, change the original treatment plan to account for this different setup and create again a safe dose delivery scenario. That leaves us with the challenge that motion still occurs during radiation dose delivery. Again, knowledge of this motion in real-time is critical, but at least as critical is the ability to take this knowledge and act upon it. On the MRIdian system, the MRI uniquely controls the radiation beam and has done so for over eight years in clinical use.
You see, typically, a patient would hold their breath. The target would move into what we call a gating boundary, shown in red here, and then an algorithm determines that all the stars line up. The target is in a safe location. Organs at risk are away from the targeted area, and the beam would engage. If that patient breaks their breath hold, automatically the beam disengages. No one needs to manually interact with the system. With those features of see, shape, and strike, MRIdian overcomes many of the limitations of conventional radiation therapy and allows physicians to fundamentally rethink the way radiation therapy is administered. It provides an opportunity for radiation dose escalation without the associated risk of increasing normal tissue toxicities. In doing so, enables ablative shortened treatment courses, five or fewer fractions.
We call it SBRT, stereotactic body radiation therapy, delivered to those critical dose levels of what we call a BED10 of 100 Gray or higher. At that level, cancers really get locally controlled. With that background, let's turn to two clinical trial results that were reported out at the ASTRO 2022 meeting in San Antonio, Texas, just a few weeks ago. First, let's have a look at a phase II clinical trial, SMART Pancreas, a clinical trial that was sponsored by ViewRay. It was a single-arm, phase II, multicenter, international-conducted clinical trial that enrolled 136 patients. What was studied here was the addition of ablative SMART. SMART stands for stereotactic magnetically guided ablative radiation therapy to standard of care chemotherapy for locally advanced and borderline resectable pancreatic cancer. The dose prescribed was 50 Gray in five fraction.
It gets us to this magical threshold of a BED10 of 100, a truly ablative dose, and the first trial of such kind in the world. The primary endpoint of the trial was safety, Grade three or higher toxicities observed within 90 days of the completion of SMART radiation therapy. The hypothesis leading into the clinical trial was that less than 16% of patients would in fact experience Grade three or higher toxicities. Down the line, we will report out two-year survival data, six months distant recurrence-free survival data, as well as quality of life data. Let's look at primary endpoint results. 0%, no single Grade three or higher toxicity event was found to be definitively related to SMART radiation therapy administration on the MRIdian platform. A low 8.8% of events was possibly related to the administration of SMART.
The challenge in these difficult-to-treat cancers here is the fact that the patient undergoes chemotherapy, which in itself comes with side effects, and then you add radiation therapy, and then on the back end, possibly surgery. It becomes somewhat difficult, yeah, to clearly assign a toxicity to one or the other treatment modality used. The analysis gave us, however, an early glimpse at survival data. We have to call it survival estimates. Very few patients have now lived two years beyond the completion of their therapy, so there's a mathematical calculation that you employ. It is an astonishing 93% of patients that are being expected to be alive at one year after their diagnosis in this clinical trial. Put that into perspective. Most patients die in the calendar year that they're diagnosed with pancreatic cancer.
If you can offer over 90% of patients to at least live a full year and then hopefully significantly longer, this will have an impact in this patient population. Where do we take this data? In moving forward, sometimes it's good to take a look back. Scott did it on financial data. I do it on clinical data. Radiation therapy has not fared well in the multimodality treatment concept of pancreatic cancer. In fact, I can recall at least five clinical trials that have recently shown that the addition of radiation therapy did not improve survival in patients, and often only added toxicities. Common to all of those clinical trials, however, is the fact that what we call conventional, relatively low radiation doses were prescribed.
Once we move into the area of ablative radiation dose, where we can reasonably expect local control of a cancer and thus hopefully improve survival, we are getting early signals of improved survival. 93% one-year survival in SMART Pancreas, but other data points are being brought to us that give us confidence that the median survival in this patient population may be pushed beyond two years. Now, you have to take this information. It's safe to deliver SMART. Hope is for survival into a prospective randomized clinical trial, which we have committed to LAP-ABLATE. This clinical trial will randomize patients with locally advanced pancreatic cancer to standard of care multi-agent chemotherapy versus the same multi-agent chemotherapy plus SMART. The primary endpoint of that trial obviously has to be survival, so it will be two-year survival.
We are looking forward to conduct of that clinical trial, and we are very hopeful that it will demonstrate the value of ablative MRIdian radiation therapy in this patient population. Obviously, there are other disease sites in the human body, centrally located lung tumors, where you have the proximity to major airways, the heart, the esophagus, head and neck cancers of the brain, where we are looking at how can MRIdian add in the multidisciplinary treatment concept for those cancers. Another clinical trial reported out. This is a prospective phase III randomized clinical trial. This is a trial that was not supported by ViewRay, but conducted at a single institution at UCLA in Los Angeles, California. It randomized patients with an intact prostate cancer to treatment on either a cone beam CT-guided platform, a regular LINAC, versus the same treatment administered on MRIdian technology.
The only difference between the two arms was a reduction in the PTV margin on the MRIdian platform. In fact, the margin was cut by half, which resulted in about a 30% volume reduction exposed to radiation. The primary endpoint here, again, toxicity and then secondary endpoints are long-term biochemical or PSA control, overall survival, and quality of life. The comparison between the arms showed an astonishing 60% risk in the odds of experiencing genitourinary toxicities, so toxicities related to bowel function, urgency, frequency, that you have to get up multiple times at night. Yeah. Pain at urination, loss of sexual function down the road. A complete elimination of Grade two and higher GI toxicities. Spasms, pain with a bowel movement, blood in your stools. All of these early occurring side effects resolve most of the time.
But even if they resolve, the patient is left with a memory of weeks or month of misery. Certainly, something that would be desirable to resolve. Where do we take this data? Typically, a phase three randomized clinical trial is the end of all discussion. The limitation here is this was a single institution. We would like to see this conducted in a multi-institutional setting, international setting on top of that, yeah? US data is accepted around the world, but sometimes comes the question, "What, what about in an Asian population? Is this a... Uh, do we see a different toxicity profile? In, in, uh, patients of colors, do we see there a different toxicity profile?" And sometimes, and in this case, certainly, we have to study that. But here, really, one aspect needs to be pointed out.
MIRAGE is more than just a comparison of treatment on a LINAC platform versus MRIdian. The team around Amar Kishan at UCLA also increased the radiation dose. Why did they do so over what I would call conventional SBRT for prostate cancer? Because it was a higher risk population treated here, and it was felt that more radiation dose, in fact, about 10% more radiation dose would benefit those patients. Historically, however, when we increase radiation dose by about 10%, we expect a significant increase in toxicities, not by 10%, maybe by 20% or 30%, 50%, sometimes doubling. That was not observed in this clinical trial, highlighting the potential to really deliver effective radiation doses without that risk for toxicities. Now, all of those treatments were delivered in five fractions. Our partners, Dr. Nagar sits here, for example, representative.
Good sits here as representative of groups that are studying even shortening those treatment courses further. Not five fractions, but maybe only two. Further facilitating access to care. Taking this concept of shortened radiation treatment courses into the setting of those patients who recur after a prior surgery or robotic intervention. Today, those patients undergo six-seven weeks of radiation therapy treatment. Does it become feasible to also treat that population in just five days? I think those are very interesting questions for which we will see answers because those clinical trials are being conducted today. In other common cancers like breast, we are also looking into prospectively assessing how shortened treatment courses can improve access to care and quality of life after treatment.
With that, I wanna turn over to our esteemed clinical panel, three doctors, NYP here in New York, at Moffitt in Tampa, Florida, and then Dr. Good from Oxford in the U.K. I think you will find the discussion very interesting. Thank you very much. That was too long.
All right. Thank you all for joining us today. My name is Hailey Austin. I am the Director of Clinical Operations at ViewRay, and I am happy to have our esteemed panel with us. We will go down the line for introductions, and I'd appreciate if each of you could provide details on your institution, your role, and which systems you currently have for cancer treatment. I'll start with you, Mr. Gearing.
Thanks very much. Good morning, everyone. I'm Paul Gearing. I'm the Senior Vice President of Physician Services and Development at GenesisCare. I'm responsible for creating and executing all of our clinical strategies and how we engage and educate our referring clinicians. GenesisCare was founded in 2004 by our CEO, Dan Collins. We operate across four countries, Australia, Spain, United Kingdom and USA. We have over 200 cancer centers worldwide, over 300 radiotherapy machines, treat about 100,000 patients a year. Absolute pleasure to be with you.
Good morning, everyone. My name is Himanshu Nagar. I'm a Radiation Oncologist treating patients here in New York at NewYork-Presbyterian/Weill Cornell Medical Center. My focus is genitourinary malignancies with a 99% focus on prostate cancer. We operate in Queens, Brooklyn, and Manhattan. We have one ViewRay system, 10 other LINACs and a Gamma Knife. We definitely need more ViewRays.
Good morning, everyone. I'm Sarah Hoffe. I'm a radiation oncologist based in Tampa, Florida at Moffitt Cancer Center, which is an NCI designated comprehensive cancer center. We got our system, our ViewRay system in 2019. As you can imagine, given the aging demographics of our Floridian population, we have an extremely high-volume practice. I, in particular, have been doing pancreas cancer work on the ViewRay system since 2019. We have an extremely busy practice, and that's related to our demographics. We're actually the third busiest by volume in the U.S. The ViewRay system has been really a game-changer for us. Dr. Good?
Thank you, Sarah. Good morning, everybody. I'm James Good. I'm a Clinical Oncologist in the U.K., which means I specialize in the delivery of both drug and radiation treatment. I focus on patients with head and neck and gastrointestinal. I divide my time between our National Health Service and the care of patients in that setting, but also I work with GenesisCare as their Clinical Director of SBRT and help to lead the MRIdian program. We have two MRIdians, Oxford and London, with two more on the way. The rest of our network, to your question, Hailey, about other platforms, is generally based on the Elekta Versa HD platform.
A key interest of mine is working with our academic partners at the University of Oxford on conceiving of and delivering novel clinical trials in the MRIdian space.
Wonderful. Thank you each for sharing about your practices. First, I'll start off with you, Mr. Gearing. Can you share a little more detail about the GenesisCare health hospital system as a whole, and then what has been your experience bringing MRIdian into that hospital system?
Yeah, certainly. I'll start at the beginning and give you a bit of context. Our U.K. business is we provide access to patients with private medical insurance who wish to self-fund their treatment. That equates to about only 12% or 13% of the population. We've made our decision to invest in MRIdian as part of our clinical strategy to expand access to stereotactic radiotherapy across the U.K. as a whole in our 14 centers. I'm sure Dr. Good might mention it, but we felt that the MRIdian platform was going to be dedicated to delivering complex stereotactic radiotherapy only. We launched our first system in Oxford in December 2019. We made the decision to adapt every single fraction. We treated some 700 patients so far.
Of course, December 2019, only a few weeks later, COVID kicked off in the U.K. The government imposed national lockdown, so overnight we had schools and workplaces closed, cancer centers and services stuttered or stopped altogether, and patients stayed away. Throughout all of that sort of chaos, quite a few opportunities did present themselves. If we think about the 12 months prior to going live, we spent a huge amount of time, effort, and resources in raising public awareness and the education of potential referrers. Interestingly, because we treat patients in the U.K. with private medical insurance, actually the first education is often, "Well, who is GenesisCare?" Before we get to, "Well, what is stereotactic radiotherapy?
Why the MRIdian is the optimal tool to deliver it on? Just because of the timing, also how MRIdian could be used to replace other treatment options that have been disrupted due to COVID. In the 12 months after going live, I think really interestingly, hopefully you agree, we saw an unexpected surge of about 29% of referrals on our conventional LINAC that sits next to the MRIdian system. I actually believe that that's driven largely by increased referrer confidence, but also patients wishing or activating their insurance when maybe they wouldn't have done historically. Diving into that a little bit more, you know, as the non-clinician on the panel, it doesn't matter what cancer you have, patients naturally and understandably think that their cancer is complex.
What they really want to do is to find the best institution with the best equipment to get the best outcome. They want to feel reassured and safe. I think because we very quickly developed a reputation for delivering complexity well, patients chose to travel to GenesisCare. In fact, our data supports that. We were treating patients from every corner of the United Kingdom, from Scotland, Wales, and Ireland. In fact, we'd never seen so many patients actually self-fund their treatment as they did on the MRIdian platform, in particular for prostate cancer, where the value proposition is significantly differentiated versus other standards of care. Thank you.
Yeah.
Yeah.
Thank you. Many of you started using MRIdian for a specific disease site and then expanded to additional tumors. Dr. Good, how did MRIdian allow you to expand to other disease sites, and what gives you the confidence to treat on MRIdian?
When we were thinking about starting a MRIdian program, we visited a number of established centers. I have to say that ViewRay have been a very good and an excellent. That's English understatement there. They've been an excellent partner in that regard in terms of facilitating those initial conversations but also sustaining that dialogue with colleagues on the dais here but from across the whole network to support the growth of the MRIdian program. We went to visit people, basically. It's hard to overstate the eureka moment that you get when you first see a patient being treated live on the machine, when you see the images that Martin has shown you, even before the A3i upgrade.
You know, I've literally had people visit our center and stand slack-jawed, you know, as they see it. It's a cliché and like almost like a cartoonish version of it, but their mouths fall open when they first see this, and in their minds, you can see them comparing it to the platform that they have at home. We went through that same process. As board says, we quickly realized that this was going to be our platform of choice for delivering SBRT in general and complex SBRT in particular.
Every patient that is referred to us from within or outside our network for SBRT goes through a tumor board process where the patient is considered for a possible clinical benefit from being treated on this platform. This is a long-winded answer, Hailey, I'm sorry about that. Once I get going, it tends to go like this. The way that that's fallen out over time is that of that 720 patients that we've treated in three years, 40% of them have had early-stage prostate cancer, and there the value proposition is as demonstrated in MIRAGE, a reduction in acute and late toxicity. The other 60% have all had complex targets. By complex, I mean the tumor is next to a critical piece of normal tissue.
What the See, Shape, Strike functionality allows you to do is see, you can see both the tumor and the normal tissue, shape, you can adapt to the changes that are seen day by day and strike them. The beam only switches on when the tumor is in the right position, means that essentially you can deliver that ablative dose to a much wider variety of targets than you would be able to do on a conventional linear accelerator or SBRT platform.
That's things like pancreas, which I think we might cover later, complex liver tumors, any re-irradiation, which is increasingly becoming something we're asked to do as systemic therapies improve, both of the prostate gland itself, for example, but also of the pelvis, the center of the lung, and increasingly also the brain that I won't go into now. That's how our program has grown. You know, we started off in December 2019, we thought, well, let's play, let's just start slowly, we'll do prostates. Come January 2020, we have the bit between our teeth very quickly. We were very well supported to start to treat those complex targets and really it's really grown from there.
Thank you, Dr. Good. Dr. Hoffe, a follow-on question to clinical treatment for you. How has your practice changed from when you first installed MRIdian?
It's changed in a number of ways, but I'll keep it simple today to give you an example. There's one segment of our pancreatic cancer population that's called locally advanced. Dr. Fuss alluded to it with the SMART trial. These patients have a very difficult prognosis. What we've immediately seen in our practice is we've had a doubling in the number of referrals to our center for patients with locally advanced disease. Interestingly enough, it's mainly from folks around the state. Other medical oncologists who heretofore would just give these patients chemotherapy, sort of on a non-ending cycle. Now, all of a sudden, given that we have this technology, we're seeing referrals from physicians outside of our center. To put it in perspective, I'll give you an example. We recently had a 42-year-old nurse who was not within our system.
She was treated in a different hospital system in town, and she had what's called a locally advanced tumor. Imagine a tumor in the center of the abdomen encasing the most central blood vessels that supply blood flow. This particular patient, being a nurse, knew how significant this was. She got her outside physician to refer herself to our center, and she came in saying, "You know, I know this is my best chance for treatment." Those kind of stories are the kind of stories that we see, Hailey, every day. It's changed the nature of the practice, particularly with some of, unfortunately, the worst diseases. It also, just to emphasize what Dr. Good has said, it also opens up treatments for patients who might not have had these treatments before. There's a number of sites, he mentioned pelvis.
We also see patients who'd had previous pelvic radiation who maybe in years past we would not have even offered treatment, but now they come in with a focal target, and with this technology, we can offer them that. It really is a game changer in terms of expanding patient populations.
Now that you're seeing more referrals, what are the referring docs saying the benefits are of MRIdian?
The biggest kick I always get is from the surgeons. You know, we all of us here, we work very closely with surgeons. You know, surgeons and radiation oncologists, a lot of times we're competing for the same population of patients. It's interesting to me, my surgical colleagues are the first ones to tell patients about, "You know, you might be a candidate for MRIdian." The joke with my Chair of Surgery at my institution is, you know what? I don't even know if we're gonna be operating, if we're gonna be doing Whipple operations in 10 years, given the fact that you guys have this technology. That's a whole 'nother topic is can we select patients for organ preservation? We talked a lot this morning about function.
Can we actually find patients who keep their organ, don't have those toxicities with this technology? It's very exciting, so I think that's the path forward.
Thank you, Dr. Hoffe. Dr. Nagar, your focus has been in prostate cancer, but have you seen this similar halo effect in your practice? Can you expand on the increase in prostate cancer patients that you've seen from when you first started treating with MRIdian?
Of course. Thank you, that's an excellent question. For the audience, you know, truth be told, we didn't buy the machine for prostate cancer. We didn't actually know we were early adopters of it and actually weren't sure how we were going to use it, and the thought was, okay, this is gonna be a great machine for abdominal tumors. We're gonna be able to, you know, deliver high-level, high-quality SBRT doses, and we use it for that purpose. You know, we saw our prostate volume was saying, "All right, well, maybe we can do better for prostate cancer patients." We were doing SBRT, we were doing fiducial markers, and then we put a prostate cancer patient on the machine. We're like, "Things are moving.
We probably can be better at delivering dose to these patients. All of a sudden, week one, week two, a full switch from CT to MR, where we basically loaded up the machine with patients with prostate cancer. We're saying, okay, this is good. This is our internal referral system. People aren't crossing the street or going to the other four families in New York City. Slowly, and by slowly, over three years, our volume has gone up six times.
That's why I alluded a little bit earlier that we just need more machines at this point, because the volume is there and growing, and now we have a waitlist for even five-fraction treatment. Part of the FORT trial that we'll get into is can we make this even more convenient and just as safe for patients with dose escalation and get patients done in two fractions versus just five. Needing more machines is a palpable issue right now.
That leads into my next question for you on clinical data. You are leading multiple prostate studies out of Cornell. Can you take us through the evolution of prostate cancer treatment from 25 fractions down to five fractions and now down to two fractions with your most recent FORT study?
All right. We've been hypofractionating the 20-25 with conventional CT-based. There's trials in the U.K. and abroad looking at 20 fractions versus five fractions with CT-based and CyberKnife-based treatment. UCLA, when Amar Kishan was running MIRAGE, the thought was, would we participate in that? There was a calculus, okay, maybe we join this trial, but then we sort of saw clinically day to day because, you know, we have memories of how patients are doing, and we've already adopted five-fraction on the MRIdian. The nurses, the physicists, the therapists, the patients were like, this is going to be better. We're gonna let Amar prove it, but we already knew that this was gonna win because we saw it clinically, like you just weren't seeing the side effects, and that you can't make up.
From that, we're saying, "All right, we'll let them publish the data, but we know what the data is likely gonna look like." Let's start developing a five versus two trial because we know from brachytherapy and implanted, you can go down to two fractions. Everyone on the stage, others included, said, "Okay, we're gonna run an international trial with ViewRay, five versus two." It's gonna be all the players in prostate cancer across the pond and here at home in the U.S. That was just the intact setting. Because you can do it in the intact setting, the thought is, well, you're still trying to avoid those same organs in the postoperative setting, right? It's not like the bladder or the rectum are just magically gone in the postoperative setting.
If anything, you have higher volumes to treat in, and you're really trying to minimize what already might be incontinence issues from surgery itself. We started treating post-op patients on the machine, and we're like, "Oh, this stuff also moves." We're like, "Okay, now we got to flip this to treating post-op patients." We created another trial, 20 treatments versus five treatments, because the biology hasn't changed. It's still cancer. It's still prostate cancer. Now that we have real-time image guidance with soft tissue delineation, and if the patient anatomy moves, the beam stops. It's not a human stopping it. The machine knows is what I tell the patients, right? You know, they're thrilled and, you know, love that kind of input within their treatment.
That's why we have the shorter trial, which we will hopefully have data on soon comparing 20 treatments to five treatments, because that potentially is paradigm changing if you can shrink the post-op volume down to the intact volume for patients after surgery that have recurrence. That volume is also increasing. As my colleagues know, surgeons are just operating on higher-risk patients. We're going to see more of these patients earlier on in the time course.
Thank you, Dr. Nagar. You touched on this a little bit, but what do you need for wider adoption?
I think everyone's sort of, you know, it's patient and awareness and education, right? Our referring physicians know about it. You know, we work very closely with our colleagues. In fact, you know, there's three trials I didn't even mention that are going on with our urologic colleagues. It's patient awareness is the biggest because patients will travel for this, as everyone has. As patients become more aware and, you know, they're going to, you know, let their circles know, and then there'll just be rapid market adoption because people are traveling, as you know, previous speakers have said, from countries to get to these centers, let alone across state lines. You know, that's telling when patients are doing that. It's not just, you know, you're advertising it.
Patients are seeking it out themselves based on clinical data and, you know, the side effects that they hear about.
Thank you, Dr. Nagar. Dr. Hoffe, you're also very active clinically. You've been doing SBRT for over 15 years. Now that we have the SMART Pancreas dataset showing 50 Gray in five fractions is safe on MRIdian, how do you see that this impacts the treatment paradigm for others who haven't treated high dose on MRIdian, and what gave you the confidence to treat high dose on MRIdian?
Yeah, Hailey, it's really compelling, the data that was presented this morning that was just recently presented at our national meeting that Dr. Fuss alluded to. When we talk about 50 Gray and five fractions, it's important that everybody in the room understand the stakes. The stakes are very high when you're giving such a high ablative dose to the middle of the abdomen, as you heard from Dr. Fuss this morning, where the stomach is and the intestine is, because if that dose does not go into the pancreas target, that dose can go to the GI mucosa and cause a complication. As Dr. Fuss alluded to this morning, it can cause a perforation. Imagine how significant that is.
For many centers, there's been this reluctance to give such a high dose without the clarity of knowing where the dose is going. I always think of it a little bit like Florida. You have the East Coast of Florida and the West Coast of Florida. Those of you who've ventured in the waters in the East Coast of Florida know you can't see the bottom. You're walking in, you're wading in, you don't know if there's a shark there, you don't know what's there. You go to the West Coast of Florida, crystal clear water, you can see everything. That is the night and day for us, even contemplating 50 Gray and five fractions with and without a MRIdian.
I will tell you in my own practice, if I wasn't using MRIdian, I would de-escalate the dose because I don't think I have the confidence without knowing where the organs are to deliver such a high dose. I think mainly, Hailey, it goes to confidence. The last thing I'll say is, a lot of us have been reluctant to treat certain patients. I'll give you an example. I thought recently of this 86-year-old who came in who had a metastatic kidney cancer to his pancreas. Those of us on the panel would tell you a kidney cancer in the past has been what we call a radioresistant tumor, a tumor I wouldn't even contemplate on treating.
Now with MRIdian and being able to go to such a high dose, not only did we treat that particular gentleman, but he's 86, he has a podcast, he comes in every six months and sees me. It's opened up our waters, and the clarity is what I would say.
Good. Thank you, Dr. Hoffe. Dr. Good, you're also very active clinically. You're one of the national principal investigators on the upcoming LAP-ABLATE randomized pancreas study. Can you take us through the importance of the study and more specifically, the importance within the European market?
Sure. I want to echo what Sarah has said about pancreas. I mean, for me, as a GI oncologist, it's the premier indication for this technique. To give you, before I answer the question, just to give you a kind of idea of the scale of the challenge that we faced in the U.K., you know, it's a country of 60 million souls, 10,000 of them get pancreatic cancer every year. A third of them have this locally advanced inoperable phenotype, so it's just in the pancreas. It hasn't metastasized, but the surgeon can't get it out, and they're never going to be able to get it out.
The standard of care treatment there is lifelong chemotherapy because, as Martin showed you, chemoradiation, a six-week course of radiotherapy doesn't improve overall survival. Why ask a patient to go through that if it doesn't improve overall survival? This the data that came out before the SMART trial, that's now been confirmed in the SMART trial, is hugely motivating when you see those two-year overall survival signals. Our state-funded patients in the U.K. cannot access any form of SBRT for pancreatic cancer. It's not funded. Shortly after we started our program, the pandemic started, and those patients could also then very often not get either chemotherapy or surgery either, so they had no option for treatment.
We set up what we called a compassionate access program to fund a cohort of those patients using charitable money to treat them. We've seen similar outcomes to those which were seen in the SMART study. We've also validated in our own patient cohort the dosimetric benefits that Martin showed you, namely that our analysis shows that if we had taken the baseline plan and applied it to the anatomy of the day, the anatomy changing every day, then very often delivering high ablative doses, we would have made, I'm not gonna go so far as to say a hole in the duodenum. We would have caused some collateral damage that would have been unacceptable. We've been able to validate in our own hands the dosimetric and the clinical benefits of this platform.
Going forward, in order to change that standard of care of continuous chemotherapy, particularly in the minds of medical oncologists, randomized data is going to be required. That's why it's very gratifying that the ViewRay leadership team are really, to put it bluntly, putting their money where their mouth is on this and funding a trial that we think will demonstrate not only an overall survival advantage for these patients receiving SMART, but also quality-of-life advantage. Many of these patients are not going to be cured. This is a question of prolonging overall survival at meaningful time points, like two years. The potential improvement is from 14% with chemotherapy to around 50%, as demonstrated in SMART.
If we can give those patients time off chemotherapy after their SMART, then that will preserve their quality of life for longer. When it comes to other clinical trial activity in the pancreas space, in the U.K., GenesisCare is funding a trial at the University of Oxford following Himanshu's lead really with prostate, going from five and looking at the feasibility and safety of treating the pancreas in three fractions and then in 1 fraction. That's because, well, first of all, the health economics of it. Second of all, freeing up space on the machine so that more patients can benefit in a timely way. Thirdly, because the shorter the course of radiation is, the better the integration with systemic therapy.
We think that there may be a role for this technique in treating that 60% of the population of pancreatic cancer patients that actually present with advanced metastatic disease, so both the primary tumor and also widespread disease. That's because very often those patients suffer horribly from the consequences of growth of the tumor in the pancreas. It blocks the stomach, so they stop eating. It blocks the bile ducts, and so they have to spend often a week or two in hospital having that battle sorted out. They get recurrent infections. By treating the primary tumor in patients with metastatic disease, it's very possible that even if you don't improve overall survival, you again improve quality of life for this group of patients whose quality of life is often decimated for the time that they're alive at all.
It's a very exciting space.
Thank you. As a follow-on question, I know you touched on it, but to focus the question more, what do you see will be the impact to the community if LAP-ABLATE is successful for cancer care?
If an overall survival advantage is proven, then treatment delivering ablative dose will become the standard of care. I think specifically, to Sarah's point, I can't see a way in which it can be done anywhere near as well as it's done on MRIdian. Again, not to try and overcomplicate things, but the reason for that is that whilst others will say that it can be delivered on conventional radiotherapy platforms, the amount of the tumor that receives the full dose on those other platforms will be greatly reduced compared to treatment on MRIdian.
For all of the technical reasons that you've seen, that translates into the ability to deliver the full ablative dose to the whole tumor and get the overall survival advantage. I don't think people will be able to say, "Well, we can get that same benefit on another machine," just on this one.
Thank you, Dr. Good. Next, I'd like to talk future direction of MRIdian. Mr. Gearing, how do you see MRIdian evolving as a segment of the radiation therapy market in the coming years? What drove you to invest in six systems?
Well, look, I think MRIdian delivers on two main fronts. First is clinical, and as you've heard it from the experts, it has given clinicians the confidence to deliver high-dose stereotactic radiotherapy safely. They can visualize the tumor in real time, can adapt the plan every single day, reduce margins, and really critically, they can stop treatment should targets move. I think as we look to the forward, I personally feel very strongly knowing what we know now that every pancreas, liver, ultra-central lung or prostate should have access to a MRIdian platform. I think the second is around profitability. I think MRIdian is a premium product, but it now has the ability to deliver high volumes of patients' care, which ultimately will transform everyone's business cases overnight if you can treat 300 patients a year, for example.
Since we went live in Oxford, it very quickly became one of the top two or three most profitable centers in all of GenesisCare. Some other halo effects, which I think is really important, people sort of step over it, is although we've got a really successful MRIdian program, the center also saw a 60% growth in all of the other volumes in the center as well, which I go back to that point around doctor confidence and patients seeking out the best provider. The investment in MRIdian was to advance our stereotactic strategy for complex cancers. We've seen a 188% volume increase in our simple stereotactic volumes as well in the same time. These are choppy two years of waters because of COVID, and we delivered that sort of growth.
When I sort of look to the future, I genuinely believe MRIdian could become the standard of care. I think there's three comments I'd make. Firstly, I still think there's efficiencies to be realized. I fully expect us to have one clinical team being able to supervise the treatment of all of our MRIdians in the U.K., regardless of location. Secondly, we've all got to be able to predict the future, which is the fun bit, particularly when it comes to replacing conventional linear accelerators. Really got to stress test what is the best technology to be investing in, because that is a commitment you're making for the next eight-10 years.
One view that I definitely subscribe to is that fractionation will continue to tumble, the adoption of stereotactic radiotherapy will continue to increase, and thus one needs less machines to deliver the same quantum of treatment. What I do absolutely expect is a seismic shift in the ratio between MR guided and CT guided platforms.
Mm-hmm.
I think it's a very fair statement to say that MRIdian is very well-placed to cater for all of our needs. That's even before you get into the fascinating discussion about how you could utilize MRIdian to treat new indications.
Thank you, Mr. Gearing. Briefly, I'll go down the line with a similar question for each of you. Dr. Nagar, how do you see MRIdian advancing in the coming years?
Yeah. Sort of following up what Paul said, for me, MRIdian is the standard of care. I can't in good conscience not treat a patient with prostate cancer on this. We have, you know, in our gut that this is going to be better. Now we have phase III data. For me and a lot of the patients I treat, this is already the standard of care, so I can't use a CT. This is ethically not allowed for me to do that anymore. You know, this is just prostate-focused. Basically, if you can see it, this is likely going to be, and has already proven in multiple phases, a better machine to treat on. We just only have so much capacity as investigators to ask each question at the same time.
There's an ongoing national kidney trial where written in is if you have an MR-Linac, you need to use it, and we wrote out fiducial-based treatment on an NRG national kidney trial. Because you need the motion management, you need the visualization if you're going to deliver these, you know, 10 years ago were considered ridiculous doses you wouldn't even consider delivering to patients because you were gonna be so scared at causing a hole in various parts of the body, wherever that might be. The indications are just going to continue to grow, and as Paul, the fractionation is just going to continue to decrease. It's not, you know, you know, if MRIdian MR-guided radiation treatment, you know, is gonna become the standard of care.
It's becoming the standard of care, and how quickly everyone understands that is going to move the market much quicker. Right now, if you have a cancer that I treat, you need a strong, compelling reason that you can't get MRIdian Linac real-time treatment because you cannot unsee this. You cannot unsee what this machine does and what it doesn't do in terms of treating normal tissue because no one says, "Oh yeah, it's okay to miss once in a while." That is not a reality anyone can live with, the treating physicians or the patients themselves. Probably a little bold on the statement, but that's how we practice.
Thank you, Dr. Nagar. Dr. Good, how do you see MRIdian evolving over the coming years?
I think from my point of view as somebody who treats GI cancer and who treats a lot of metastatic disease.
See three directions of travel. The first, Himanshu's already touched on, which is ever reducing the number of radiation treatments that the patient needs to attend. Specifically, trying to get the ablation of oligometastases, which, for those who aren't aware of this, is a clinical situation in which there's a very limited number of secondary tumors and there's the possibility of ablating them all and curing some of those patients, so typically up to five metastases. Being able to do that in one fraction per tumor would be great for that patient, would be great for the hospital system. If you're going to deliver the full ablative dose in one go, you need to be 100% confident that it is going just to the tumor.
I hope that this whole conversation has got across to you our conviction that this platform is the kind of risk minimization platform of choice when it comes to doing this. Single fraction is one of them, and ViewRay have got a study in Miami and other centers looking at just that. The second theme would be the treatment of widely metastatic disease. There are now studies out of Canada, SABR-COMET 10, for example, looking at the application of that oligometastatic paradigm to patients with up to 10 metastases. You'll immediately see that if you're going to treat 10 metastases, you're also going to be ending up treating more normal tissue, right? My first point applies in this clinical scenario as well.
If you're going to do that, you want a platform that minimizes risk. Not least because, well, firstly, that minimizes the risk to that individual patient, but it also increases the number of patients to whom you're safely going to be able to offer that approach. An example of that from our own practice is that we've recently treated a patient with eight liver metastases. One radiation plan, five visits only, treating all eight liver metastases in one go. That a little bit out on the evidence risk curve for sure. What that patient achieved from that treatment was 10 months off chemotherapy, which was a very meaningful outcome to them because otherwise the only way of controlling their disease was to stay on chemo.
There are even studies. There's one called ARREST, for example, which is a phase I study looking at the treatment of up to 50. This is kinda going back to the surgical paradigm of maximal cytoreduction, right? Taking out as much cancer as you possibly can. That's the standard of care in ovarian cancer that's spread inside the abdomen. The same in colorectal cancer, the procedure of CRS and HIPEC. I can see us moving in a direction where we apply radiation to that scenario, but are able to treat a much greater number of patients than the surgeon can, however dexterous they are with their knife. Widely metastatic disease. The third area is drug radiation combinations.
Although it's beyond the scope of this discussion, I think, shorter courses of radiation seem to have interesting biological effects that are likely to interact positively with new cancer therapeutics, immunotherapeutics, and DNA damage response inhibitors in particular. Again, risk minimization. If you're gonna make the radiation more effective in the body, you're going to probably make it effective against more potentially damaging against the normal tissue as well. You want to do those studies and ultimately deliver that care on a platform that minimizes the associated risk. I mean, there's so much. You know, our minds race with the possibilities. I don't know where this is gonna go over the next 10 years. It's quite exhausting.
Right. Oh, yeah.
We're very excited to be doing it as well.
Well, thank you, Dr. Good. Dr. Hoffe, to help us wrap it up, based off your experience, what do you see as the future role of MRIdian in clinical practice?
I agree with everything that my colleagues have said, but one thing we haven't touched on, which I think is also a game changer, is the ability that on MRIdian you can see response. That is dramatic. To put it into context, imagine one of our patients who came to our center, he had locally advanced rectal cancer, and he was told at his outside facility that he was gonna have to have a permanent colostomy bag. For those of you in the audience, you can imagine getting a diagnosis like that.
He was able to come to our center and enroll on a clinical trial with MRIdian, and midway through his treatment, we were able to use the MRIdian system to look at his response. He was responding favorably at a very early time point. That's a game changer. We know on the panel, but to educate everybody in the audience, with traditional patient week by week, and they ask you, "Doctor, how is my cancer doing?" We cannot answer that, 'cause traditional systems, we have no way of telling the patient day by day what's happening to the tumor. This is a game changer with this system. This particular story, just to put it into context, this gentleman had an early response. He's now eight months, nine months out. He has evidence of disease. He did not have surgery. He remains fully continent.
I think, Hailey, to answer your question, the way I look at it too is the ability to predict response and to predict response early. What does that mean in terms of total number of treatments and what does that mean in terms of patients not having to have surgery when they don't need it? Granted, there'll always be patients who need surgery. There'll always be patients who need tri-modality therapy. Now we're able to select our patients better, I think, in the future and avoid the morbidity of such extremes.
Wonderful. Well, I'd like to thank our panel for the time and discussion this morning. This has been wonderful to talk with each of you. Next, we'll turn it over to Zach Stassen, our CFO.
I'm gonna touch on our financial outlook. We're gonna look out about three years here. Before I do that, I just wanna thank the panel. Yeah. These docs are on the front line of fighting cancer, and we have the privilege of getting to collaborate with them on a daily, weekly basis. You hear the stories. I've never worked at a company or worked with a technology with more powerful patient stories. You know, life-saving care, miraculous stuff. Really appreciate their time and input. We're gonna look out about three years, as I mentioned. You get a view of the top level strategy from Scott. You know, Paul went a little deeper into our market opportunity, and then Dr.
Fuss shared kinda his clinical input and kinda the exciting things we have going on in the clinical pipeline and getting to hear kinda bringing that home with the panel's input. We'll look at the growth we expect. Scott went a little bit. We're gonna dive a little deeper into kinda how we expect gross margins to expand in the coming years. Really dive into a little bit on the operating leverage front and how we plan to leverage our infrastructure. Let's turn to the growth profile. Sorry. Over the next three years, we expect that we can deliver greater than 30% revenue CAGR on the top line.
We see a very clear path to greater than 30% gross margin in that same timeframe, all while controlling operating expenses, really driving to our journey of adjusted EBITDA and cash flow breakeven in that 2025 or 2026 timeframe. Turning to the revenue growth side, I think the foundation of our growth is based on the strategic choices that were made years ago. We made the choice to lead with clinical data. That has translated into a wonderful customer response and a dramatic increase in customer demand that is just starting to get going, I think. We presented wonderful data at ASTRO on both the prostate and pancreas side, and that continues to resonate in the market and facilitate great discussions with prospects.
The other big foundation of our future growth and why we see a pretty clear path to greater than 30% growth over the next three years is related to our backlog. We finished Q3 with about $370 million of backlog. That's roughly 80 systems. Without taking another order, I think we see a pretty clear path to delivering the 30% with what we have in our backlog today. That's before down the road, we even enter our own replacement cycle, which I'll touch on in a second. We firmly believe that MRIdian is the technology of the future. You heard, you know, terms like future standard of care, et cetera, from the panel, and we look forward to capitalizing that.
I'll touch on the power of our installed base, kinda coupled with our backlog. Every one of these machines goes in the ground. Paul touched on this a little bit. It's a 10-year relationship, 10-year revenue stream. It's not just the initial system sale. It's followed up with 10 years of service revenue, and then what we expect to be a replacement machine towards the end of that 10-year period, kinda ±2 years. Some institutions replace equipment a little quicker, some a little longer. On the whole, these are $12 million revenue cycles, $6 million for the machine, roughly another $6 million for the service stream. We see a very powerful foundation building over time that will ultimately translate into better visibility and predictability of the business moving forward.
With 58 machines in the ground towards the end of this year, we view that almost as a backlog unto itself. Those machines we think will have a very high, if not, you know, perfect replacement cycle and translate into what is a very steady, stable business over time. This is really the power of the installed base. This is an industry that moves in, you know, not months or years, but a big technological shift in decades over time. Yeah. Let's turn a little bit to gross margin and talk about the key drivers. First and foremost, the biggest driver for our gross margin is growth.
We are still growing into our infrastructure, and we are leveraging installation teams, our operations team, and really that's gonna drive the biggest chunk of gross margin gain in the future. Coming in behind that, we are driving operational efficiency on the service side, and then we have a whole host of programs going on right now to just take cost out of the system. Our teams work incredibly hard to improve reliability and serviceability of the machine over the last several years, and that will start to pay dividends as we get deeper into our gross margin expansion journey. Let's take a look at total gross margin. What gives us confidence in getting to that 30% number, as we've talked about, is what we've already done.
Over the last two years, including this year, we expect to deliver roughly 1,500 basis points of margin improvement, if not a little bit better, by the end of this year. That gives us great confidence along with the programs and the concrete things we have underway to deliver an additional 2,000 basis points of improvement over the next three years. Let me touch a little bit on system and service separately. It's important to understand the structure of each of those businesses 'cause it's a little bit different path. On the system side, right now we are benefiting from the growth we are delivering. I think we are built, as I've said on a lot of earnings calls, we are built to install more than 20 units a year.
We have the infrastructure to do that, the teams to do that, and we are kinda growing into that as we speak. That is delivering a significant chunk of the margin expansion we expect to achieve in this time frame. The main drivers on the system side are pretty simple. It's the cost of the system, just the material cost of us to produce it with our manufacturing partners. It's the installation cost and then the overhead piece. We are in the stage of really absorbing the overhead and leveraging our installation infrastructure. As we move into the future, you can see kind of the smaller bar on the left is what we call our cost down program. Those programs are underway.
We have very clear line of sight to the work that needs to be done there. Those will start to yield benefit later in this three-year time horizon. Think of things like strategic insourcing of certain elements of the machine, fundamental redesign of certain elements of the machine with a cost reduction focus, also alternative manufacturing methods. You know, time to market was very important in the early days of MRIdian to prove the concept. That concept has been proven, and now it's time to circle back around and really make an economically attractive machine for ViewRay. All of these programs, I think, we are underway on the insourcing piece, and all of these have a goal of really taking about $1 million of total cost out of the system.
That would drop straight through to gross margin over time. We expect even beyond this time horizon for margin expansion to continue towards what in the industry, kind of industry standard margins, if you look at some of our other competitors, about 40% gross margin on the system side. Turning to service. Service is a little bit easier. Service is really driven by a function of our installed base. A lot of the systems we put out into the market in early days was. It was pretty geographically dispersed, which made it tough from an efficiency standpoint to effectively service the fleet. We are seeing more geographic density. We are seeing accounts, over 1/3 of our customers either have a second system, purchased a second system, or evaluating a second system.
In the case of GenesisCare, onto their sixth, plans for their sixth. That creates a great opportunity for both us and the customers to service things more effectively and really leverage our infrastructure. The primary cost drivers on the service side is really people and parts. As the fleet gets bigger, we get less vulnerable to any one major part failure, and we are able to deploy, you know, different ways of servicing. We've been kind of stuck in a one field service engineer to one machine ratio for a period of time here, and we are starting to see in select geographies our ability to move away from that and get to more of a, you know, 2/1 in certain instances, and hopefully even better.
COVID has already also given us a lot of opportunities to learn because we have not been able to get certain geographies during the COVID time period to come up with ways of creatively servicing systems. Working with our distribution partners, having our technical service teams support remotely, we're looking at different ways to modify the machine to make it accessible remotely, beyond just treatment planning and adaptive therapy, to help us be more serviceable. This will really drive a lot of margin with the goal of roughly industry standard around 50% margin at the end of the day. We see a really clear path to greater than 30% in the three-year time horizon. Looking at operating leverage and really the, you know, kind of mid-single-digit growth in OpEx.
I think we have the team and infrastructure to materially scale this business from an operating expense leverage point of view. This team with probably some incremental adds on the commercial side could support a several hundred-million-dollar revenue business. We have the R&D team in place that is solving the impossible with Dr. Dempsey, coupled with a great product development team on the hardware side. A big chunk of what we do on the product side is software-based, and we have a very robust software team around the world in place that we think can scale and keep us in the lead from an innovation standpoint. On the sales and marketing side, we have a lot of capacity from a, you know, ability to close deals standpoint.
I think you see us investing in market awareness that may come in the form of some additional teammates on our side to really spread the gospel of MRIdian to fill up the top end of the sales funnel. On the G&A side, I think the team's in place. We've upgraded our team and our systems to be prepared to scale to a several hundred million dollar revenue business over time. Don't anticipate a lot of incremental investment to get where we need to go. Tying it all back together, I think kind of the growth model on our side, you know, Paul touched on our total addressable market. We're in the very early innings. You know, 58 in the ground, 9,600 additional LINACs and vaults globally left to attack.
We're in a lot of, you know, exciting new geographies, just entering China. I think the market opportunity is there to derive growth for this foreseeable future. I think it's pretty clear in the two years that I've been here, you know, there was a question early on, are we a niche product? I don't think so. You heard from the panel, I mean, the wide variety of tumor sites they're treating, the benefit that MRIdian provides in, you know, every tumor setting. As the market shifts to SBRT, I think we are positioned to disproportionately benefit from that market shift over time.
Coming in behind top line growth, we've got the clear line of sight to margin expansion and, you know, I feel great about our path on delivering that. OpEx leverage really with culminating in the adjusted EBITDA and cash flow break-even in that 2025-2026 time frame. Importantly, you know, we're talking about three years here, which is really, I think, a lot can change in three years in this business. We've got a lot of exciting clinical trials underway that will impact standard of care over time. I think at the end of 2025, we are still in, you know, the early phases of our growth journey. We still will have a huge amount of total addressable market to go after.
We will be very early just on the cusp of our own replacement cycle. I think that our service business will have scaled to, you know, it in and of itself, probably close to $100 million. The future is bright even beyond 2025. I see the transition. We will be discussing adjusted EBITDA margin expansion at that point, and the future beyond 2025, I think is really exciting from my point of view. The reason that our feet hit the floor every morning is for the patients. You know, Scott touched on it, Paul echoed it, you've heard it from the panel.
I think we collectively, investors and management and the team at ViewRay and the clinicians using the system in the field, are changing the landscape in terms of how people treat cancer and giving people hope. We've treated thousands of patients to date, and there are millions more to go after in the future. I just wanna thank you all for being on that journey with us. With that, I think we'll open it up to Q&A. Oh. I think Chris had his hand up first, so we'll go.
Thanks. Chris Pasquale, Nephron. Bunch of different things I gotta ask you about. Zach, I wanna follow up, since we just talked about the financial piece. The idea of you guys moving into a replacement cycle is an interesting new aspect.
Mm-hmm.
Just based on the dates, it would seem like that might be coming relatively soon. The early systems that went in were Cobalt systems. Those have been upgraded in the years since. Does that change when the replacement cycle really starts to kick in for you guys?
I think it does. I think, you know, when we do, it's a pretty material upgrade.
Mm-hmm.
It is in some ways in like a new system. The magnets are pretty durable and so it's the new LINAC. You know, that's why I said we're on the cusp of a replacement cycle in that 2025 timeframe. I mean, I think you're just really building the foundation. It could be kind of one or two here and there in kind of that 2025-2026 timeframe, and then pick up steam probably from there over time.
Okay. That's still something that you view as kind of five years out and beyond?
Yeah. I think the thing that's interesting about this business when you look at our competitors, I mean, 80%-90% of their revenue is replacement based. In terms of the sustainable value that we're building, I think you really have to look at that in terms of the sea change in technology that it is a really durable long-term business over time. We will be growing our installed base for a very long time, but having that replacement cycle come in underneath as a anticipatable revenue stream, I think will be very beneficial for the enterprise.
That's helpful. I think I heard you say that you have capacity to install about 20 systems a year today.
Mm-hmm.
Did I get that right? You're not far from that in terms of the run rate of the business now. What does that mean for OpEx, incremental OpEx investment that you might need in 2023?
It's not really OpEx based. The capacity is really defined by our installation teams and, you know, where they're positioned globally. You know, we're putting systems in all over the planet. It's not a huge investment to add another installation team. It gets you an incremental kind of five or six installs per year. I have no worries about, like, even though we have supply chain challenges currently, our suppliers are well equipped to scale, you know, probably north of 50 systems per year. We've gone through a planning exercise with each of them in terms of understanding how they would do that. I think it's really small incremental investment to go beyond 20.
You know, we're probably between 20-25 in terms of how, you know, depending on how the schedule shakes out. It's adding three-four additional heads to, you know, get an extra five of capacity. It's not much from an OpEx standpoint at all.
Hi, Marie Thibault, BTIG. Thanks so much for hosting this day. Really enjoyed it. Wanted to ask a question here to Zach. You know, the 30% or greater than 30% revenue CAGR that you lined up for us certainly does seem like a pretty clear sign from, you know, the 80 that you have in backlog. Why not a higher growth rate given the acceleration we're seeing, the enthusiasm we heard today? Why not go a bit higher on that rate?
It is hard not to just feel the excitement and bullishness of our user base. I think what we've experienced is, you know, it takes time to shift a market. These are material investments. It is not, you know, wheeling something off a truck into an OR and getting going. There's a lead time to that planning cycle. I think we're very excited about the future and, you know, we did say, you know, more than 30%. You just don't wanna get ahead of yourself too much in this business despite how optimistic we are about the future. I don't know if you have anything to add, Scott.
You know, I think we wanna put numbers out there that we feel comfortable with, number one. I think our investors generally want and expect that from us. The other thing that I would say a little bit off the path of what you may anticipate, Marie, is as I look back over the past three years, I've been stunned in this business. What our customers are doing with the system, things like single fraction therapy and everything you heard the panel say today, these were not things in our minds. As a consequence of what I've seen our customers do, it would not surprise me at all that we're stunned again by what they do and what could take place in this business.
I think most of the surprises that we will face, uh, from a clinical perspective and therapy adoption perspective will likely be to the upside. Um, but we don't wanna put anything out there that we don't feel very comfortable that we can achieve.
Okay. Well understood. I thought I'd just ask that question. Just push it a little bit more. A follow-up here then on some of the clinical work. Dr. Fuss, thank you for your presentation. I will say that I'm pretty excited to see the survival data from SMART Pancreas. I wonder, you know, the clinical community, do they need to wait for LAP-ABLATE for that RCT to see the survival data? How meaningful is that SMART data going to be, and when might we see that two-year data?
It's a great question. You heard Dr. Nagar earlier opting out of a randomized clinical trial for his prostate cancer patients because of the conviction and the data he has seen in his own population. Pancreatic cancer is slightly different. You have to realize that we have a very binary almost approach to the treatment of pancreatic cancer in the world. In the United States, radiation therapy has always been part of the multidisciplinary treatment concept. However, outside of the U.S., trials like ESPAC, CONKO, LAP07, really have eliminated the role of radiation therapy. While in the U.S., I think the acceptance is already there, the understanding is there that with the MRIdian SMART approach, you can now deliver the doses that you always intended to deliver, and the number of patients being treated will grow fast, yeah.
Outside of the U.S., a randomized clinical trial will be needed to reestablish radiation therapy as a valuable modality in the context of pancreatic cancer.
Suraj, Oppenheimer. Hey, first question for Zach or Scott. Zach, please correct me if my math is wrong. Greater than 80 systems in planning equates to $480 million. Backlog is $370 million. The three-year guidance, my math tells me FY 2025 is approximately $230 million-$250 million. Can you help me connect the dots here?
When we talk about the $80, I think some of the $80 have been revenue recognition and are shipped and are awaiting ultimate installation, kinda which gets you know, down to the $370 in backlog. I think, you know, the 30% CAGR gets you in the low, low $200s.
I'm not sure exactly what, like, trying to what.
So the three seventy mil backlog.
Yeah.
Versus FY 2025, let's assume a number, $230 million-$240 million revenues.
Mm-hmm.
What does the delta of 130, 150, what does that imply? That they are further longer out than three years in terms of backlog or getting to fruition?
I don't know if I was trying to, like, tie the specific math of the backlog other than saying we have a path kind of with what we have. Also as the installed base builds and the work we've done on the service side, that revenue stream on the service side is growing very nicely coming in behind that. I expect that to be a material part of our revenue in that timeframe as well. I think, you know, the backlog kind of supports almost without adding to it, I think a good path forward for us. We have obviously every intention to continue to drive orders and adoption.
Got it. If I could just present a question to the physicians on the panel, maybe Dr. Nagar, good to see you again, and or Dr. Good. You guys obviously 11 systems at Weill Cornell, one is MRIdian. You know, I don't know how many systems are there, you know, with Dr. Good and others. If you were to draw a pie chart today, what would you say the pie chart looks like in terms of resistance to faster unit adoption in your center? Would it be cost? Would it be lack of RCT? Would it be you are the champion of MRIdian, others are not? We're all trying to get and having a personal experience in the space, it just makes sense. There is some level of resistance.
Would love to get your quantitative perspective on that resistance in the field.
Wish I took their mics away for this purpose.
Sorry.
Yeah, nice seeing you again, too. I think that's a great question because we struggle with it all the time because the question is, okay, everyone is seeing the data, everyone's clinically feeling it through their own patients. What's the resistance to just honestly bombard the market in our own facilities with MRIdian Linac? I think that's going to change very soon. The data just keeps coming and coming and coming, and you can't ignore it at this point.
So I think those that be definitely deeper pockets than I have, 'cause I have no pockets, uh, are going to s-- you know, are getting convinced of it, and we're, you know, going to see the adoption happen probably much quicker than, you know, we actually thought, uh, in terms of multiple systems and potentially my honest, you know, vision is that is sort of the backup LINAC in the s- in the system, and everything else is ViewRay because that's how it should be. And eventually, those that be are going to under-- or those that have the capacity to make that investment are going to do that. We just probably need just not that much more time to get there. And this is throughout the boroughs.
I didn't plant that question, but I loved it. Thank you, Suraj.
Hi, Neil Chatterji, B. Riley. Thanks for taking the questions. Just I guess first off on A3i, just wanted to kinda, you know, ask you know, what kind of feedback you've received from your first couple customers in terms of, you know, the workflow benefit in terms of time savings and clinical benefit. If you know, plan to add additional features or is the focus more on the broader rollout?
You wanna touch on that, Neil?
Sure. I touched on it briefly. We've got two customers currently utilizing it. We're in the midst of a number of upgrades right now and all through next year. The feedback really has been incredibly positive. We knew that going into it, just pre-showing it to folks, but the clinical utility has been fantastic. The ability to remote into the system and remote access, the parallel workflows, incredible feedback there. The treatment time reductions because of that ability, the auto-contouring tools have been really well received. The interface itself has been really well received. We've just treated a small number of patients with the brain treatment package as well. Some of you might have been at ASTRO and heard the panel talking about it.
I think we've got incredible runway there with the SBRT package. But definitely the collaboration, the autocontouring tools, the reduction in the treatment times right off the bat have been probably the most impressive feedback we've received so far. Obviously, we have a complete pipeline of future innovations. Again, we've said it multiple times on stage. I harken on it all the time in the field. We don't sell futures, but our product roadmap is being driven by those individuals over there. There is a next suite of innovations that Dr. Dempsey and his team is working on, and we'll see that roll out over the next few years.
Yeah, Neil, I'd complement it in two ways. I think you can anticipate that we will deliver a treatment planning solution that matches the elegance of our treatment delivery solution in the form of A3i. I think we're likely to see that sometime in late 2023, early 2024. The other thing that I would share with you is A3i. Those are really the tangible benefits that our customers were asking for in a really demonstrative way. What's coming beyond that, when I reference the complete personalization of radiation therapy, these are things that it's kind of the ceiling that Jim Dempsey thought his way through with this system two decades ago. It's almost hard to imagine where we're taking the therapy into the future.
A lot of it is just because of his considerable brainpower. If you think about the treatment paradigm, three years ago, treating Dr. Ha 50 Gray in five would've been thought to be an incredible mountain to climb. Today, our customers are doing that, pushing it to 60 and 70 Gray. Why 50 Gray in five? Why 60? Why 70? Why don't we optimize therapy for the individual patient, not a cancer type? I think that's where you're gonna see us going in the future. Star Trek kind of stuff.
Cecilia Furlong, Morgan Stanley. Thank you again for hosting today. I wanted to ask on China, which you didn't touch on today, just how you're thinking about beyond kind of your expectations to this LRP contributions from China, thinking about system capacity there today, really the role MRIdian can play even beyond 2025 in that region.
Yeah. Zieg, you wanna try that?
Yeah. Very, very early days for us with our partners in Chindex. Obviously, we've yet to even be able to get into the country. They had their largest trade show a couple weeks ago, CIIE, where they unveiled the MRIdian. We have a significant amount of interest already. They do have a palate for what they believe to be higher-end LINACs in that market space. We're early days with customers. We're early days with our distributors, but we've got a nice roadmap in front of us and a nice pipeline developing in that space. We'll probably, Zach touched on, you know, some expansion within the commercial team. We'll probably put some emphasis to help support our distribution partners in China.
I think there's more to come that next year, but really excited about the opportunity, for sure.
Could we view that then as upside to your LRP? Is that the best way to think about it?
Yeah, I would say that that's kinda how we look at it. I look at China on one hand very optimistically. It's the second largest and fastest-growing market. You know, they're really from a government and health services perspective, pushing for greater access to care. The throughput that we can deliver, along with the clinical impact, I anticipate will be a meaningful part of the solution that takes place in China over time. I, you know, I don't wanna get ahead of ourselves on that front. We view it as being either a risk mitigator or upside to what we see in our plan.
Okay. If I could follow up, just your definition of target centers today, really being those that have 2+ LINACs and contrasting that, and this is higher-level question, but contrasting that with kind of how you're thinking about expanding MRIdian to standard of care and what you've seen out of some of the centers that were early adopters. How does that, in your view, the TAM that you're targeting change over time as you potentially can see MRIdian look to supplant what has kind of been the traditional LINAC model? Thank you.
Yeah, I'll take that. Again, we're talking about where we're targeting today. In a single vault center, it's difficult for most single vault independent standalone centers to make MRIdian work in its current state. I will say that this hub and spoke belief of what can happen now with A3i and with remote access could change that, could turn that paradigm for us. I also think there's some realities around the disruption that operationally a clinic takes when they decide to do an MR-Linac. Remember, while we can fit in a standard vault, we have to have an MR-compatible vault. There are longer construction times and some operational hurdles that we have to overcome. When you only have a single vault center, there's nowhere to move those patients to.
I think over time, we're gonna be addressing with those. Some of those we're dealing with in the cost-down program. Our installation times are being driven down. I think we've got a path forward to tackle the broader market. If you looked at those numbers just in the 2+ vault centers, it's pretty incredible, the opportunity that's right there in front of us. We wanna stay focused and not chase every opportunity that's out there right now.
Maybe I can weigh in as well from a clinical perspective. It is exceedingly difficult to replace technology in a single vault center because you shut down your business literally. Yeah. Ramp down your patients. There will be no patient, no revenue while you install the next technology, and then you ramp back up. It's the new greenfield opportunities where we see a real opportunity, even for a single vault center. Give one example. The very first MR-Linac installed at Henry Ford went into a single vault facility, but it was an underperforming facility historically, and so they could afford to transfer those three, four, maybe five patients to a different facility 12, 13 miles away. Down the road with faster install times, and install times have been coming down significantly, this will be easier.
It is not the capability of the system and the performance in a single vault center once it's up and running. It is surviving the downtime to get this technology into a single-room facility.
Thank you for your talk. I'm Brett Reiss with Janney Montgomery Scott. I've got a standard of care question. Is one of the results of all of these studies to raise the standard of care to a legal standard so that if an institution is not offering your system, it might subject them to, you know, potential liability?
If it's not risen to that point yet, what is? If I get prostate cancer and I go to an institution that has old legacy systems and a MRIdian system, and I use the legacy system, and I wind up, you know, with the horrible side effects, and I find out that, you know, the MRIdian system was available, you know, what potential liability does the institution have in that case?
Yeah, I would say, you know, we're trying to take a little more of a positive approach where patients are kind of voting with their feet and traveling for treatment on the MRIdian system. I don't foresee a day where we're gonna, you know, kinda go after our customers legally if they don't offer our therapy. I think we can probably more positively drive this therapy adoption. Martin, you may have a point of view as a practicing physician. Himanshu, if you wanna weigh in that you can no longer treat on conventional systems. Any thoughts?
Yeah. That's a great question, and historically very difficult to answer because there are legacy systems in the market treating patients today. LINACs that are over 20 years old, lacking many of the technology features that you would consider a standard of care. Yeah. Guidelines that could drive that standard of care also don't explicitly detail the technological requirements for a platform to be suitable for the treatment of a particular disease.
Thanks. I feel like I'm on the mic way too much today. No, that's an excellent question. We were sort of side chatting because, you know, from a patient standpoint, if you're, you know. I don't wanna, you know, equate this to surgery. If you have an open prostatectomy versus a robot which is just sitting there, and you have data to suggest that that leads to less side effects for the surgeon to say, "I'm not gonna use that robot," for whatever reason, I can see sort of the analogy there. That's why, you know, now Amar Kishan at UCLA can't have the equipoise to even continue that trial on because of the early time points we've hit.
And so that trial had to stop because the ethics committee that we are all bound by won't let us do that anymore. So that's why now that we have that data, if you have an MR-LINAC viewer, you can't, you can't treat a patient with prostate cancer at your institution. Like, there's just no way that's, you know, ethically allowed, at least in my strong opinion, but others share that I practice with. So, um, it's a very... It's a question I've never actually thought of it that way, um, from a patient standpoint. But, you know, that's, as physicians, that's why we're not gonna do 50 in five on a CT for pancreas. We're not gonna dose escalate, you know, uh, if we have a MRIdian platform, um, in our clinic for prostate cancer. There, there are certain things that, A, we didn't think about doing before.
Now there's no way we do it on traditional machines. That's an excellent question and food for thought I'm definitely gonna take back home.
I do think, you know, just adding to that, you know, several miles down that same road, but maybe not all the way to the cul-de-sac, would be changing guidelines, which is what we hope to do with LAP-ABLATE.
Mm-hmm.
You know, really positive signals, positive proof in terms of the right and optimal way to treat a patient, those are the things that I think we're driving toward and anticipate that we'll have some success with that over time.
Hey, guys. Joe Downing here with Piper Sandler, here for Jason Bednar. Couple of questions from us. One, clarifying question on the $1 million cost down initiative, probably for Zach. Obviously targeted toward the ends of the three-year plan and could lift system revenue of upwards of 15 points, which would be great. We're just wondering, are you factoring the entirety of that cost down benefit into the three-year margin target, or is that more a part of the longer term 40% system margin target that you have?
It's more part of the longer term target of 40%. I think the primary driver in the next couple of years here is really growth and driving leverage of our infrastructure. I think the cost down efforts, which are projects that'll take a little more time, will start to kick in probably in the 2025 timeframe and carry us kinda the rest of the way through.
Great. Thanks. Just talking about guidance here. You started talking about how adjusted EBITDA would be more of a forward point that you guys would be touching on. Is this a sign that this metric you plan to use as a guidance point toward the future, maybe in lieu of the cash burn guidance that you've been offering?
It's a great question. Zach?
I think it's something we're contemplating as we get closer to issuing 2023 guidance on our Q4 call. Adjusted EBITDA is a bit more predictable for us. I think, you know, Scott mentioned the risk on some of the payment timing shifts and things like that. While I think cash is obviously supremely important, you know, we wanna put metrics out there that we feel super comfortable hitting. I think over time, Adjusted EBITDA will become more of a proxy for free cash flow or for cash flow for us. I think in this period of time, Adjusted EBITDA is something we are contemplating.
Great. Just one more quick follow-up. Just on the installation teams, we wanna confirm that on those new heads you're suggesting that would be needed, are those captured in the mid-single-digit OpEx increase you're focused on?
Yes.
Yeah. Actually those installation heads flow through COGS, so they are contemplated in the 30% margin target. That's something I didn't really say in my prepared remarks, but it's kind of this thing where if you look at us in the grand scheme of med tech companies, I think what we give up in gross margin, you know, we gain in OpEx leverage versus a disposable company model where you really have to continually add reps, you know, to continue to grow the business. They're given a lot of that 70%+ margin back in the SG&A line. Most of our headcount actually flows through COGS in the form of service techs and installation operations, et cetera.
Over time, I think we'll be able to, you know, deliver pretty attractive EBITDA and operating margins somewhat in line because we get scale with what we have.
Anthony , on for Stifel. Thanks for taking the questions. Maybe Scott first on the A3i launch. I think you mentioned at our conference earlier this week your expectation for the majority of customers to be converted to A3i by year-end. Can you put a finer point on that for us, what needs to be done? In terms of mix, are these primarily tech refresh customers? I guess last, when could we kind of see the entire MRIdian install base converted to A3i?
Yeah. Just to be clear, year-end 2023 from a majority standpoint, not 2022. Roughly 60% of our customers have tech refresh that they've been paying for over time in their service contracts, and we anticipate we'll get largely, if not completely, through that group throughout the full year of 2023. As Paul said, we've got a number of customers right now that are undergoing upgrades. I anticipate that we'll be through roughly that kind of number in 2023, and that gives me a lot of confidence that we'll probably complete the upgrade sometime in 2024, should customers want it. I anticipate that they will because I think there's a very attractive return in terms of what that throughput and clinical utility means for the customer.
Great. Zach, on guidance, maybe help us think about the components of revenue. I'm looking at my model over roughly 80% product, 20% service. Is that kind of the right mix as we think about five? Does service kind of creep up from there? How should we be thinking about it?
I think system's gonna, you know, outpace service for a while. I mean, the service side is really just a function of the growth of our installed base and systems getting installed, coming off of warranty, et cetera. You know, I think this year it'll be probably like 80/20-ish. I think that the system growth we expect next year might outpace the service growth a little bit. That's probably not a bad, you know, kinda 90/10, something along those lines.
I think we have time for like one more question.
Yeah.
Thanks. Chris Pasquale, Nephron again. Scott, during COVID, you talked about some of the bottlenecks that were emerging in trying to convert orders to installs. Just curious now as we kind of move past the deep part of the pandemic, is that getting better, and where do you see the friction points today?
Yeah. I think it is improving, Chris. We're in a very different place today than we were, you know, a year ago as it relates to the pandemic and some of the limitations we had there. You know, one little exception now is China, but we're really positioning that more as upside than anything else. Our ability to get in the country is still limited in terms of the quarantines that we would have to ask teammates to endure. I think we're in a much better position today. The primary risk that we face, as I mentioned, is on the supply chain side. We've been able to mitigate that thus far, and I do think the environment for us is improving.
I feel good about our ability to really get after things toward the end of this year and into 2023, but we wanna be very, you know, conscientious of that risk that does still exist.
Thanks. Could you just touch on the reimbursement environment in the U.S.? RO-APM ended up getting scrubbed. Now there's talk about potentially some more sort of blunt instrument cuts to reimbursement. Is that a potential challenge for the business? Is it something you can leverage into an opportunity?
You know, I don't think so. I think we stack up pretty well today in the current reimbursement scheme in the U.S. with, you know, what our customers are able to achieve, first of all, just with the throughput of the system and what that means to their top and bottom line, and secondarily, what on-table adaptive reimbursement means for them. I would tell you, this is my personal point of view, and Martin, maybe you wanna weigh in on this. It's impossible for me to believe that we are gonna continue on and have this ridiculous perverse incentive to drag cancer patients through hospitals 30, 40-plus times. That won't stand. There's plenty of people that see that, and there's plenty of people that are very forcefully expressing that point of view on behalf of cancer patients.
I, you know, I've got a little bit of information that feeds that belief, but a lot of that is just, you know, my conviction in terms of where our healthcare system overall is gonna go. It wouldn't surprise me that sometime down the road, we're gonna just pay for that episode of care for the patient, and if and when that happens, we are in an incredible position competitively.
Thanks.
That's it? Okay. Let me take the opportunity to kind of end where we began, and that's by thanking all of you for being here. We really appreciate your interest in the company. We're gonna pause for a moment, say goodbye to everybody that has joined us virtually, and thank you all for being here.