Medical Device Daily Contributing Writer

LAS VEGAS — The old adage that there are many ways to skin a cat certainly applies in the medical device world as companies have pursued many different strategies to become successful.

In the case of Accuray (Sunnyvale, California), the company has enjoyed meteoric growth in recent years, via worldwide sales of its CyberKnife (CK) radiosurgery system. The CK system, selling for $3.5 million to $4 million, integrates modern imaging technology, intelligent robotics, and high-dose radiation delivery, merged with complex algorithms to precisely target cancerous tumors. This robotic system employs a combination of real-time image guided technology with continuous target tracking and feedback, a compact x-band linear accelerator, a robotic manipulator arm, and a Synchrony Respiratory Tracking System.

Since commercial launch of the CK in 2001, Accuray has experienced steady growth and as of June 30, 2007 (the end of its most recent fiscal year), the company had installed a total of 109 units worldwide, about two-thirds in the U.S. It also boasts a robust $619 million backlog, $321 million for new installations yet to be completed and $298 million in recurring service revenue yet to be realized.

Indicative of its impressive technology and market need, the company in FY07 registered worldwide revenue of over $140 million, up from $53 million in FY06 and just $22 million in FY05.

The CK system features two key advantages, typically used as adjuncts to traditional surgery, over radiation therapy: first, it targets tumors with highly precise accuracy (less than 1 mm). and second, the system can lock onto a tumor, constantly correcting the radiation beams for tumor and patient movement.

The most common CK uses are cancers of the brain, spine, lung, liver, prostate and pancreas, their main commonality being the difficulty of removing them with open surgery and their location, which requires highly invasive surgery and the potential risk of damage to surrounding critical anatomical structures.

The CyberKnife was first approved by the FDA in 1999 for treating the head and neck tumors, and the company has enjoyed rapid growth from treating intracranial tumors. About 8,000 intracranial procedures were performed in FY07, representing a dramatic roughly six-fold increase over FY04.

At an analyst meeting late last week, company management noted that while intracranial tumors are still an important contributor to its growth — with FY 07 increasing about 42% from the prior year — extracranial tumors (lung, prostate, pancreas, liver and spine) have increased significantly and are now accounting for over 50% of global procedures. These types of procedures accounted for a meager 10% of the FY04 total.

“Growth through adding new applications of our technology is a key part of our strategy,” said Euan Thomson, company president/CEO, in his presentation. He said that the company strives to stay close to its customers to identify new therapeutic opportunities, as well as to provide technology upgrades to expand its applications.

For example, procedures of the spine totaled only about 400 in FY04 and have more than quadrupled in FY07.

According to Omar Dawood, MD, VP of clinical development, the introduction of its Xsight Spine Tracking System has been a key factor in the robust growth of spine procedures. This system reduces or eliminates the need for surgical implantation of radiographic markers (called fiducials), doing away with a time-consuming and invasive procedure.

As an example, Dawood cited use of the CK at the Stanford Cancer Center (Stanford, California), where annual spinal procedures nearly tripled in one year after the XSight Spine upgrade installation. He also noted that the publication of a key article in the Jan, 15, 2007 issue of Spine, fueled spinal procedure growth.

That article, “Radiosurgery for Spinal Metastases: Clinical Experience in 500 Cases From a Single Institution,” concluded that “the results indicate the potential of radiosurgery in the treatment of patients with spinal metastases ... to improve long-term palliation.”

Another success story is in the treatment of lung tumors. In FY04, a paltry 200 procedures were performed, soaring 10-fold to about 2,000 in FY07.

According to Mike Saracen, director of business development, the introduction of the “truly revolutionary” Synchrony Respiratory Tracking System has been a key factor in that increase. Using intelligent robotics technology, this system enables real-time tracking, automatically detecting and correcting for tumors that may move due to the patient’s respiration or natural movement of the tumor. The benefit of this technology is that physicians no longer have to add significant margins or radiation to compensate for a moving target, thus sparing more healthy tissue and enabling a better outcome.

A budding success story is in progress for the treatment of prostate cancer. According to “Cancer Facts and Figures” from the American Cancer Society (Atlanta), prostate cancer is the most common seen in the U.S. It will afflict over 220,000 men this year and will account for 29% of the total male cancers in the U.S. in 2007.

The company notes that roughly 600 CK prostate procedures were performed in FY07, a tiny number relative to roughly 100,000 annual radiation therapy-based procedures formed in the U.S. in 2006.

And CK procedures are increasing rapidly as several centers around the U.S. are discovering its advantages.

According to Robert Meier, MD, a radiation oncologist from the Swedish Cancer Institute (Seattle), the CK features “exceptionally low toxicity” due to its extreme precision. And because it provides a more concentrated radiation dose, it reduces the 30 to 40 treatment sessions required for standard radiation therapy to four to five sessions for CK treatment.

Meier acknowledged that because of the relatively low number of patients so far treated and a short follow-up period it is too early to draw strong conclusions on its ultimate role in prostate cancer therapy. Nevertheless, he said CK technology appears to be “an ideal platform for the treatment of localized prostate cancer.”

The best prostate cancer data was provided by Mary Ellen Masterston-McGary, chief physicist at Naples Community Hospital (Naples, Florida), who reported that her hospital has treated over 200 patients to date. Those with 30-month follow-up are 99% cancer-free, as measured by their PSA levels.

The financial benefits to a hospital adopting a CK were presented by Linda Winger, VP of Georgetown Medical Center (Washington).

She said that her center was in deep financial straits when her hospital purchased its first CK in 2002 — and the first unit Accuray sold in the world. Usage has been so robust that the center recently purchased a second unit.

“The CK,” she said, “has been an important factor in the financial recovery of our hospital.”