SRTS correction

Mar 20, 2023

This is a brief note to address incorrect statements in my SRTS writeup.

SRTS is not the only player in town - Xstrahl, Xoft and a few others can (and do) sell in the US. Oncobeta cannot sell in the US, or, at least, their Rhenium device is not on the FDA approval list. I don’t know whether these companies can or cannot sell in China. Luckily, the incorrect statements about the competition do not break the investment thesis. Sensus is still the largest player in providing equipment for non-invasive NMSC treatment. 

Another important thing I missed - electronic brachytherapy (EBX) - another form of external beam radiation. I struggle to determine clear differences between SRT and EBX. They are both non-invasive, they both do not use radioactive isotope as a radiation source but generate radiation electronically, and they both can be used for NMSC treatment. One publication from the National Institute of Health (NIH) helps a little by providing the following information: "EBX should be considered short-contact SRT, since the energy source is the same and the technology is virtually identical to short-contact SRT devices'' and "SRT is superior to electronic surface EBX based on its abilities to vary energies from 50 to 100cGy and employ larger spot sizes. In contrast to EBX, clinical data on thousands of patients support long-term cure rates and cosmesis with SRT. Although the energy source is the same, SRT is currently more cost-effective in terms of equipment and patient cost". Before talking to experts in the field it is difficult to draw any conclusions but online research so far suggests SRT method is cheaper and more effective than EBX. 

iCAD is a medical device manufacturer with two divisions: cancer detection and radiation therapy. The radiation therapy division is represented by the Xoft subsidiary which is of interest to us because it competes with Sensus. Xoft solution for NMSC treatment is based on EBX. Xoft product sales are growing fast - 100% a year. Xoft does not solely focus on skin cancer - their products also target breast, brain, and cervical cancers. Despite this variety of the products the major growth is likely coming from dermatology/skin products according to management’s comments from the latest conference call. This makes sense to me. Awareness of non-invasive solution is rising and the huge market remains untapped and is up for grabs. Xoft seemed to have been more focused on intraoperative radiation therapy (IORT) for breast cancer treatment in the past. It will be interesting to watch whether their focus is going to shift to skin cancer due to high sales and demand. The entire therapy business revenue was $2.3 million in Q4 which tells us that Xoft operates at a smaller scale than Sensus. 

Xstrahl is a European company with offices in the UK, Germany and US. Their product RADiant is interesting because it has capabilities for both treatment methods - SRT and EBX. Company received FDA clearance in 2017 and has been selling their product in the US ever since. There is limited information about the sales. All I can say so far is that their website is much better and more modern than one that Sensus has. 

Another two devices that are cleared to sell in the US for NMSC treatment are Intrabeam from German Zeiss and Esteya from Dutch Nucletron (part of Swedish Elekta). 

Channel checks and conversations with industry experts are required to get more color on the competitive landscape. However, we can tell that Sensus is the dominant company by the scale of operations in the US. Market is large enough for everyone to benefit but it definitely helps to be ahead of the pack.