by
Brendon Nafziger, DOTmed News Associate Editor | February 24, 2011
The various barriers to entry and the size of the market mean over the next 15 years, the optimistic projections which envision more than 100 centers in the United States, are three to five times off the mark, Morrison said.
Changing finances
One challenge faced by those looking to develop new facilities is they have substantially higher capital costs and lower debt leverage than their predecessors, even though the financing structures for the centers have "normalized" since the 1990s, when the technology began to be commercialized.
"The proton therapy centers that exist are the ones that can be financed, not the ones that deserve it," observed Yves Jongen, the founder and chief research officer of IBA.
For instance, financing the $135 million University of Florida Proton Therapy Institute, which treated its first patient in 2006, originally involved a complex arrangement, using a mixture of tax-exempt bonds and private loans, grants and philanthropy.
The foyer of the
Roberts Proton Therapy Center.
"The financing chart looked more complicated than the beamline," Morrison joked.
But the institute refinanced in 2008 on simpler terms, and more recent projects have had more "normal" health care financing, Morrison said. But even if it's more straightforward now, capital costs are higher. The inflation-adjusted capital costs are 1.5 times greater than in the past, Morrison said, even with artificially low short-term interest rates.
"All this means [is] that the cash that a new facility needs to generate for debt service and equity returns is around 2-3 times higher than the 'early adopters' needed," he said in his report.
Small-scale tech
The capital crunch means developers will look at ways to drive capitals costs down, and this could involve smaller-scale technologies.
"We recognize proton is difficult to finance," Jongen said.
That's why his company, IBA, is developing Proteus One, a smaller footprint cyclotron intended for a one-room treatment facility. It would feature a 220-degree compact gantry built within the design of the cyclotron. IBA told DOTmed News it's looking at a $20 million price tag for everything: beam line, software, gantry and cyclotron. The company expects to start treating patients on it as early as 2013, with further announcements likely at the American Society for Therapeutic Radiology and Oncology meeting next year.
Dave Dickey
Homework on Proton Beam system suppliers not done!
February 24, 2011 03:15
There are other companies that are developing less costly proton treatment systems, which were not mentioned in this article. At McLaren Health Care in Michigan, we are due to receive our system from Protom International, Inc., this summer, for a three gantry room configuration. Our project cost is less than half the cost of what was identified in the article. For our site, half the shielding is needed from what has historically been required, further reducing the cost of PBT, and our total time for construction and equipment installation is projected to be 14-16 months, far less than industry standard.
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