Specialist
Former director at ViewRay Inc
Agenda
- Elekta’s (STO: EKTA B) competitive positioning post-Siemens’ (ETR: SHL) Varian acquisition
- Key product review and pricing outlook – ViewRay’s MRIdian vs Elekta’s Unity
- Elekta’s positioning to face inflationary and supply chain pressures
- Future growth drivers and possibility of Elekta as an acquisition target
Questions
1.
Where would you say we are now in terms of MR Linac penetration and how could we think about that growing YoY in the short-to-medium term? Clinical analysis surrounding the MR Linac states it could be beneficial to around 25-30% of all RT [radio therapy] patients in the future and around 12-15% of all cancer cases.
2.
You said MR Linac penetration is around less than 10% in the US market. How could this figure trend over the next 3-5 years?
3.
We’ve seen a lot of publications around clinical data from the likes of ViewRay. What clinical data, if any, do you think we still need to see to encourage uptake? Do you think the key bottleneck here still lies within the reimbursement and the price point of view?
4.
We have this alternative payment model at play regarding the radiation oncology space. We were supposed to see that implemented at the beginning of 2022, but that obviously hasn’t happened. If we do see the implication of the RO APM [radiation oncology alternative payment model], what implication do you think it will have for players such as Elekta and ViewRay? What might be the implications on uptake here?
5.
MR Linacs are expensive when you look at their ASP. How much do we need to see pricing come down to also drive adoption here?
6.
How far away do you think we are, if at all, from seeing some reimbursement in MR Linacs and this becoming standard of care? What more do you think we need to see those positive shifts?
7.
In Elekta’s recent Q3 2021/2022 reporting, we saw a squeeze of margins but also stronger order uptake in Europe, along with less strong in America and APAC. What do you think is leading the stronger growth in the European region?
8.
You referenced beyond the US market is around China, where we have seen Accuray look to penetrate that market. How can we think about MR Linac adoption trending in the China market or the wider APAC region? How well-placed do you think Elekta is to capture market share there?
9.
What might be the timeline for MR Linac uptake or adoption in China?
10.
What do you think is going to drive adoption in the Chinese market?
11.
How would you compare Elekta’s Unity vs ViewRay’s MRIdian? We’ve heard from specialists in previous Interviews [see Viewray – MR Linac Market Update & Competitive Analysis – 09 March 2022] that due to Elekta’s Unity with its larger 1.5 tesla magnet, it may be more of a research tool compared to the MRIdian. What are your thoughts on this statement?
12.
When I look at the the Unity vs MRIdian, I can understand why an academic or research institution may choose the Unity over the MRIdian, but I struggle to understand why anyone else would choose the Unity over the MRIdian, due to the more expensive installation process. Where does the Unity’s differentiation lie? As you’ve mentioned, there isn’t enough clinical data to show this 1.5 tesla magnet is that much of a better image quality to go through that longer installation and more expensive installation process.
13.
How do you think ViewRay’s potential addressable customer base compares to Elekta’s? From my understanding, it seems it could look larger due to MRIdian’s smaller size vs the Unity and other factors we’ve discussed?
14.
Could you discuss Elekta’s partnership with Philips and how you think that might be helping drive sales for Elekta?
15.
How do you compare Elekta vs ViewRay’s commercial strategy and capabilities?
16.
Elekta has said it currently has the largest backlog in orders it’s ever had. How able might the company be to meet all the demand in an efficient manner, especially given the increased supply issues that we’re seeing globally?
17.
Another factor at play here, which is obviously a factor with most medtech players, is the inflationary pressures, higher freight costs and raw material inflation. How should we think about the squeeze on margins here as we see the cost of logistics and components continue to put pressure on margins for players such as Elekta?
18.
When we look towards the future of Elekta, we’ve heard from specialists in previous Interviews that they could see Philips acquiring Elekta. What does Elekta’s position in the market look like in the future? Do you think we could see it be acquired by a Philips or GE? What might make more strategic sense?
