ViewRay, Inc. (NASDAQ:VRAY) Q4 2022 Earnings Call Transcript

Scott Drake : Yeah. And Suraj, I’ll touch on the other part of your question. We continue to have a lot of conversations with customers about various kind of acquisition models, if you will. Oftentimes, we have a customer that wants to acquire MRIdian that doesn’t have the full amount of capital at the ready for the timing that they would like to get a system in. And we do have conversations about lower upfront models and more ongoing revenue. Those conversations, I would say, are ongoing, and if anything, increasing in frequency. But often when our customers do the math, they decide to just pay the average selling price of around $6 million for the system and the construction on top of that. And we’re always looking for creative ways to reduce the friction and to increase the velocity of our overall commercial funnel. I do not think we have cracked the code there, but we will continue to work on it.

Suraj Kalia : Thank you.

Operator: Your next question comes from the line of Neil Chatterji from B. Riley. Your line is now open.

Unidentified Analyst: Hi, this is Brandon on for Neil. Congratulations on a strong end to the year. Regarding the University Hospital NPA, do you think that kind of agreement has a sort of halo effect on the region? And would you expect orders to pick up in the Ohio Midwest region as a result?

Scott Drake : Yeah. I would say that it has certainly gotten the attention of other customers in Northern Ohio, also in Central Ohio, in Columbus and up in Pittsburgh as well. It’s instigating some pretty interesting conversations. And we can’t wait to get our first and hopefully multiple systems up and running with UH. I think they’re going to do amazing things with the team that they have assembled there. So it will be interesting to see what happens and other key accounts in that geography. It is definitely already incited, I would say, more intense conversations. But I don’t want to try to forecast something that’s inherently difficult to forecast. But I would say interest is increasing in that geography, at least in part due to the UH announcement.

Unidentified Analyst: Okay. Yeah. Do you have any color that you can provide on the recent China order with Chindex and the motivations in particular behind the system adoption in China? Are these motivations differentiated compared to other geographies?

Scott Drake : Yeah, Brandon, I would say a couple of things. I would say at the highest level, independent of ViewRay, China — the Chinese government is really putting their shoulder to the wheel to increase access to care, cancer generally. They have a real need there. The government has recognized it, and they’re putting their money where their mouth is with their 2030 Healthy China initiative. I think MRIdian can play. And in the conversations with Chindex and in their conversations with end customers, I think there is a degree of interest that is increasing as it relates to the role that MRIdian can play there. As we have shared previously, we do not have any kind of Class A or Class B indication as yet. We anticipate that, that won’t be the case until 2024.

And we’re more likely to be in that Class A categorization, given the cost and complexity of the system. But look, what’s true in China is true in the rest of the world. Cancer patients deserve more precise, more personalized care. They deserve shorter courses of treatment with fewer negative side effects. And I think that’s attractive to Chinese cancer patients. And frankly, I think it’s attractive to cancer patients everywhere. And we are highly motivated in our partnership with Chindex to bring this therapy to Chinese cancer patients.

Unidentified Analyst: Great. Thanks for that. Maybe one last one from us. What have you heard from KOLs regarding the MIRAGE study now that the results have been published? Do you think that the publication has any incremental impact that we haven’t already seen from, say, the ASTRO presentation?