WPCNR East Ender. By John F. Bailey. October 11, 2004: The Director of Proton Beam Technology North America for Hatachi North America in Tarrytown, Vito Cappello , confirmed to WPCNR Friday in a telephone interview that Hatachi is in the process of negotiations with New York Presbyterian Hospital to build their proton accelerator facility on their White Plains campus. Mr. Cappello also said that his company invests in projects in return for a share of revenues “on a case by case basis.”

Cappello, in addition, confirmed Hitachi is bidding to build the proton accelerator in Philadelphia at the University of Pennsylvania, reported by WPCNR last week.

 In a world two years ago when the northeast medical oncological establishment was not even telling patients about proton accelerator therapy as an option to surgery, suddenly the proton accelerator is the cancer treatment the nation’s major cancer centers want to have. Three new proton facilities, in Houston, Jacksonville, Florida and Philadelphia are on target to open by 2006-07.

The University of Florida at Jacksonville is now building a proton accelerator, Cappello said, using a Belgian vendor, I.B.A., to build its accelerator.

In the Hunt.

Mr. Cappello confirmed his company is having discussions with White Plains New York Presbyterian Hospital.

“We’ve been following the New York Presbyterian Hospital matter, having had discussions with them,” Cappello told WPCNR. “These facilities take a while. We’ve had discussions with them, and trying to move it forward. We’re presenting our technology to them for consideration in their future plans.”

WPCNR asked Hatachi’s proton beam master if NYPH had decided yet on their vendor (since New York Presbyterian Hospital has refused to comment to the media, or provide any details directly on the state of their proton accelerator project, its negotiations or status).

Cappello said, “At this point, no, they’re still in discussions. I believe they are internal discussions and they’re discussing it with vendors such as Hitachi.”

Hitachi and M. D. Anderson Meet-Up

WPCNR asked how Hitachi proceeded with M.D. Anderson Cancer Center in Houston and how long it took before Hiatachi started the construction on the accelerator project there. (Hitachi has been building the M.D. Anderson Proton Therapy Center on the University of Texas campus for one year.)

“ We signed this (M.D. Anderson contract) in December of 2002. Our schedule is a 36-month schedule for the treatment of the first patient. We’re right on schedule (to open Spring 2006). (The 36-month schedule) incorporates the designs, the construction and the installation of the equipment, and the commissioning and testing. Keep in mind, our equipment needs to be approved by the F.D.A. Our equipment is for investigative purposes only until approved by F.D.A. The F.D.A. approval will be obtained prior to any treatment.”

The Selection Process

WPCNR asked how much lead-time was needed to design the facility to the M.D. Anderson specifications. Cappello said it was a speedy process:

“It’s all done within three years. Initially the way the sales cycle works when it gets to that point (before the contract is signed), the institution comes up with a broad specification for what they require. They sit down and have the vendors propose. Then the institution sits down with the vendor for two to three months and irons this out and then the subcontract is signed so you have a clear understanding of the specifications required.”

Cappello said institutions normally have customizations they want in their facilities: “Many institutions, John, have idiosyncracies they like to follow. There may be a need for additional imagery requirements at certain locations within the proton beam facility, things like that. That, at most would take several months, but much of the details are ironed out during the three years when the final design is made. It takes exactly 36 months. We try and improve on that obviously.”

Structuring the Deal.

Noting that Hitachi invested capital in the M. D. Anderson facility, we asked if Hitachi might structure a deal where revenues were shared with M. D. Anderson. Mr. Cappello said he was unable to talk about that: “At this point we sell our equipment for investigative purposes only until we get F.D.A. approval. That’s very clear. The way we structure our proposals is first and foremost, Hitachi would like to sell its technology and equipment, that’s our primary focus. That’s our way of doing things, unless there’s something very special and unusual we need to have done.”

“The normal course of events, John, is that there’s a need on the part of a large academic institution, they basically put together some preliminary specifications,and the deals are we provide the equipment and software for the proton facility. That’s our basic approach to the market place.”

Capital Investment? Possible!

I asked if Hitachi invested capital, normally, as it did with the M. D.Anderson facility, but Cappello said that was unusual: “The opportunities we are looking at are of that  nature. Many of the institutions, the hospitals, prefer to have ownership of them. Many of them are not-for-profit institutions. We are not a non-profit institution.”

Asked, if in return for an equity stake,  whether the investment (to construct an Hitachi proton therapy center)  would be less, Cappello repeated,  "Our basic approach to the market place is to provide the equipment, and software and the installation of our technology in return for a reimbursement for our equipment and technology.”

I asked if Hatachi would be able to offer the equipment for less: “Whatever the future holds, that’s something to be considered later on."

WPCNR asked the ever popular hypothetical question:  “Say the equipment cost a $160 Million, and Hatachi offered the technology for like say $125 Million, for a percentage of the revenues? Would you do that? ”

Cappello said, “I think we would consider it on a case by case basis. I can’t give you a blanket statement on that.”

Cost Caution.

Cappello said of the estimates of $160 million mentioned in previous stories, “when you hear those numbers you have to figure on what’s included or not, whether it’s the building, the accelerator, or the entire complex, and needs of the particular institution. There are no hard and fast rules though.”

The Midwest Proton Radiotherapy Institute, which opened in February of 2004 in Bloomington, Indiana cost $37 Million, according to a story on the Indiana University Media Relations website, because IU already had an existing cyclotron on the Indiana University campus. The same story estimates the cost of a from-scratch proton therapy center as $140 Million. (See the story at http://www.ihif.org/stories/december03/mpri.htm )

While the Accel  Instruments GmbH compact proton accelerator going into the Rinecker Proton Therapy Center in Munich, prices at 120 Million Euro, or $160 Million, because it is a complete facility building, according to Udo Klein, Managing Director of Accel Instruments GmbH.

The Loma Linda facility was built at a cost of $80 Million in 1990. 

Synchrotron comparable to Loma Linda facility.

I asked Mr. Cappello how the Hatachi proton accelerator model compared to the Loma Linda technology, how much better is it?

 “As far as the technology is concerned, there’s a heart of the proton  facility is two center focuses. One is on the accelerator itself which actually accelerates the proton, and second is the nozzle which basically delivers the treatment to the patient.

           Our system uses a synchrotron which is an accelerator that is fairly high energy, it can generate up to 250 million electron volts that translates into the depth a proton can go into the body. 250mev, as we call it, translates into about 38 centimeters into the body, (approximately one foot). It has been used in proton therapy for a long time. It’s safe, reliable, it’s maintenance is very easy to perform.  It uses a synchrotron as the facility at  Loma Linda uses.”

He said he could not comment on how it compares with the Accel proton accelerator, that is being installed at the  Roenicker  Proton Center in Munich, Germany.

March of the Proton Accelerators.

Cappello said there are currently three accelerators on line in the continental United States: Loma Linda, California, Bloomington, Indiana and Massachussetts General in Boston. He said coming on board are M. D. Anderson in Houston, the University of Florida at Jacksonville, and the University of Pennsylvania in Philadelphia, followed by the New York Presbyterian Hospital facility.

Cappello, when asked by WPCNR confirmed that Hitachi was definitely applying for the Philadelphia project with the University of Pennsylvania. “We definitely are, yes.”

A firm named I.B.A. built the proton beam facility at the Midwest Proton Radiotherapy Institute in Bloomington, Indiana, and is also constructing the University of Florida facility in Jacksonville, Florida. Their latest newsletter can be read at http://www.iba-worldwide.com/root_tg/downloads/IBANews_october2004.pdf

For more on the University of Florida facility, you may go to their website at http://www.med.ufl.edu/radonc/AbRT_proton%20therapy.htm

WPCNR asked why Cappello thought M.D. Anderson selected Hitachi: 

“That’s a good question. We’ve talked with M.D.Anderson, and essentially the reasons were were, number one, the safety and reliability of our system, utilizing a core synchrotron. In addition to that it was our dedication to the advancement of that technology. We spent a lot of money in research and development and enhancing our product. This product is very important to us. This facility is not something you put in and in three years it’s obsolete. You’ve got to keep advancing the technology. So I believe it's our safety, reliability and our dedication to proton beam from the standpoint of research and development.”

Bring on the Options.

I asked if it can be upgraded with new technology and software once installed. “Absolutely correct,” Cappello said, “There are components that we try and advance within our R & D and those elements are always applied. Key elements in proton facilities is the ability to control the beam and also to position the patient.”

Market Share Enough for Philly and White Plains.

Cappello said he did not see the Philadelphia facility competing with the White Plains facility for patients. “There are 1.3 million new cancer patients every year, and about half of those are prostate, lung  and breast cancer (that lend themselves to proton therapy treatment). The population intensity of the northeast I think will satisfy a number of facilities.”

Proton Therapy and the Surgeon/Radiologist.

I asked if oncologists were turning away from surgery as an option and turning more towards proton therapy as a first treatment option.

“I’m not a clinician, John, but I listen to clinicians from the medical, the radiation, and the surgicial, sometimes the multiple modalities are very helpful. So, I don’t think they’ll be an elimination of surgery nor medicine, but the proton beam certainly enhances the outcome of certain cancers, and in certain patients, like the young, because the proton effects are nil when you are treating pediatric cases. I’m repeating what clinicians are saying to me.”

I asked if he viewed the proton therapy as the first treatment of choice. He said that depending on the institution.

Cappello said he appreciated the opportunity to talk about his proton beam, “I think we’re being recognized as one of the best suppliers of this type of technology.”