Accuray Incorporated (NASDAQ:ARAY) Q1 2024 Earnings Call Transcript

Ali Pervaiz : Brooks, thanks for the question. I would tell you in general, in terms of inflation, we’re certainly seeing that the supplier price increases have slowed down. I think that being said, we did see about a $2.5 million headwind related to inflation that hit our P&L this particular quarter. So it’s certainly not eased up for us. We do have quite a few specialty supply parts that go into our products that certainly have more exposure to inflation. So it is definitely a topic that still remains for us, and we continue to monitor it really closely.

Brooks O’Neil : Great. So my second question is, a couple of years ago, there was tremendous excitement about reimbursement changes that seemed to recognize both the patient and the provider benefits of your high-dose radiation therapy. Could you guys just give us a quick update on the state of any discussions about moving reimbursement in that patient and provider-friendly direction or not at this point?

Suzanne Winter : Yes, Brooks. So we had our Investor Day at ASTRO. We had a couple of speakers that kind of gave the state of the state in the U.S. on where RO-APM was and what some of the changes are in reimbursement. And the RO-APM, as you know, was sort of put on hold, and we were waiting to see if there would be any movement. And the positive movement is that ASTRO has come up with their own reimbursement model which they are proposing that actually does take into account exactly making equity between shorter duration treatments like SBRT compared to conventional treatments so that the U.S. hospitals are not losing money by going to a more advanced care, which is the, again, the shorter duration treatments, which is better for the patient, better for the healthcare system overall.

So that is a legislative process. So it probably will still take 1 year plus to be able to go through. But at least there’s alignment from the industry, the ASTRO Industry Conference, and it’s basically their design. So we are very hopeful not only in getting this through the legislative process, but also the signal that it sends to U.S. customers that this is the movement and it is toward the shorter duration treatments. And we see that as a positive thing for our technology.

Brooks O’Neil : Absolutely. Makes sense. Looking forward to the rest of the year.

Suzanne Winter : Thanks, Brooks.

Operator: [Operator Instructions] Our next question comes from Neil Chatterji with B. Riley.

Brandon Carney : This is Brandon Carney on for Neil. Congratulations on the strong quarter. I guess just first, maybe can you provide any update on the pending application for the Cenos online adaptive solution? And can you talk about any key feedback that you’ve received since the introduction at ASTRO?

Suzanne Winter : Yes, thanks for the question. We had a lot of momentum and interest for Cenos. And we showed it for the first time in some private demos at the ASTRO conference, and I will tell you that the feedback was excellent. And we had a number of demonstrations, sign-ups, and we were standing room only, and they were all booked up really by the end of the first day. So we take that as a very positive sign. Now we went into the show with Cenos’ 510(k) pending. Our expectations, just based on time lines, is that that will be available to order sometime in Q3 with shipments in the summertime. But the feedback was very positive. First of all, again, another tool to be able to make radiation therapy treatments more precise by adjusting to patient changes and this one being an online adaptive tool.

Now there are adaptive tools that are out there in the marketplace, but they require a lot of resources. They require additional treatment time. And so really, we learned a lot from the feedback from the existing offerings on what to do differently in Cenos and what to improve upon. So that was the kind of feedback that we got from customers. So we’re really excited about its ability to make a difference in patient care, but also differentiate the Radixact platform.