|Philips to acquire Agilents healthcare group, ADAC|
|Philips Electronics NV (Amsterdam), the parent of company of Philips Medical Systems North America (Shelton, Conn.), in mid-November announced two significant proposed purchases aimed at substantiating its position in the medical imaging marketplace.
Philips plans to acquire the patient monitoring and ultrasound portfolios of Agilent Technologies Inc.s (Palo Alto, Calif.) Healthcare Solutions Group (HSG of Andover, Mass.) for $1.7 billion. This announcement came four days after Philips unveiled its bid to acquire all of the common stock of nuclear medicine equipment manufacturer ADAC Laboratories Inc. (Milpitas, Calif.) for $426 million, or $18.50 per share.
Provided these transactions go through, Philips said that all totaled it will have invested more than $4 billion in its Medical Systems business over the past two years.
Agilent HSGs portfolio contains more than 400 healthcare products and services and is among the worldwide leaders in patient monitoring products and ultrasound systems.
HSG has annual sales of $1.5 billion, 5,000 employees and operations in more than 100 countries. Last August, it announced a global restructuring plan.
For the nine-month period, ending July 31, HSGs orders decreased to $1.02 billion, compared with $1.1 billion in the same period of FY99. Net revenues totaled $1.057 billion, up slightly from $1.043 billion in the same period of FY99. HSG posted a net loss of $53 million for the nine months, compared with net income of $86 million in the year-ago period.
Agilent said continued weakness in the U.S. hospital market resulted in a decline in orders in patient monitoring, HSGs largest product segment.
HSG and Philips Medical are developing an integration plan to put into place once the transaction closes, which is hoped will come in the next few months, according to Robert R. Walker, Agilent executive vice president and CFO.
In the meantime, Philips acquisition of ADAC is expected to close by the end of the first quarter of 2001.
Hans Barella, president and CEO of Philips Medical Systems, said in a company statement that the acquisition of ADAC Laboratories will broaden the scope of products and services that Philips is able to offer its customers, particularly in the area of cardiology.
In cardiology, one of our focus areas, this acquisition will significantly complement our HeartCare program, since nuclear medicine is one of the important tools clinicians rely on to assess cardiovascular disease, Barella said.
ADAC, which employs 900 people, reported revenues of $324.4 million for its fiscal year 2000, ended Oct. 1. Its net income for continuing operations before nonordinary charges stood at $15.7 million.
In fiscal year 2000, ADAC reported a loss of $1.7 million for its discontinued Health Care Information Systems business (HCIS of Houston), compared with earnings of $1.9 million in FY99. The company has agreements to sell its HCIS Cardiology Systems Group to Camtronics Medical Systems (Hartland, Wis.) and the remainder of HCIS to Cerner Corp. (Kansas City, Mo.). (See story page 12.) Both deals have closed.
|GE acquires SMV and intends to buy Parallel Design|
|GE Medical Systems (GEMS of Waukesha, Wis.) recently unveiled acquisitions to boost its offerings in nuclear medicine and ultrasound.
In mid-November, GE acquired nuclear medicine and PET systems firm SMV (Sopha Medical Vision of Buc, France). Terms for the transaction were not disclosed. This acquisition followed closely behind GEs intention to purchase ultrasound transducer developer Parallel Design Inc. (Phoenix) for an undisclosed amount.
SMV is one of the largest independent dedicated nuclear medicine companies in the world with operations headquartered in Twinsburg, Ohio, and Buc. SMV handles manufacturing and engineering operations in both locations. SMVs product line includes cameras, workstations, clinical software, cardiology applications, and networking and archiving solutions for nuclear medicine and PET applications.
This acquisition reinforces our commitment to leadership in functional imaging and molecular imaging, said Beth Klein, vice president and general manager of global functional imaging for GEMS, in a prepared statement. It will accelerate our development of advanced software applications and connectivity solutions.
In September, SMV America (Twinsburg) received FDA clearance for its PosiTrace imaging system. PosiTrace combines a PET camera and a CT scanner for oncology imaging.
Additionally, SMVs CT/PET product will allow GE to expand our CT/PET offerings and enter new market segments, Klein added.
To similarly substantiate its ultrasound business, GE has purchased Parallel Designs, which currently supplies approximately 20 percent of GEMS transducers, primarily on the Logiq 700 product.
Parallel Design was founded in 1991 as a technology consulting firm. One reason GEMS decided to buy Parallel Design was its financial growth. It began producing transducers in 1995 and has seen in its words dramatic growth in recent years.
I joined the company in March of 1997 and I was employee number 22, said Mehmet Salahi, Ph.D., president and CEO of Parallel Design. Our revenues multiplied nearly 20-fold between 1996 and this year.
Parallel Designs now has more than 170 employees.
GEMS officials hope the new acquisition will help ultrasound revenues top $750 million in 2001. GEMS projects ultrasound revenues of $660 million this year.
Officials from both companies said Parallel Designs would continue to service its existing OEM customers under GEMS ownership.
As part of the acquisition, GEMS will establish a Global Transducer Technology Center of Excellence in Phoenix. Salahi would head the center.
|Cerner buys rest of ADACs HCIS|
|Healthcare information systems giant Cerner Corp. (Kansas City, Mo.) has acquired the remaining portion of ADAC Laboratories Inc.s (Milpitas, Calif.) Health Care Information Systems (HCIS of Houston) business for $6 million in cash.
Cerner completed the transaction on Nov. 21. The company said it expects HCIS to begin to contribute to Cerners earnings in 2002. The company added that the acquisition broadens Cerners presence in radiology. With the addition of ADAC HCIS, Cerner also gains more than 125 new customers.
The deal came exactly two weeks after Camtronics Medical Systems (Hartland, Wis.) signed to acquire HCISs Cardiology Systems Group (CSG) segment. Terms of that transaction were not disclosed.
ADACs fourth-quarter and year-end financial results are expected to be lower than anticipated, prompting the company to sell HCIS, which has been unprofitable for several quarters going back to FY99.
ADAC anticipates taking a charge of $7 million in its fiscal fourth quarter, ending Oct. 2, as a result of two divestitures. The company estimated that it will take a $2 million charge associated with the sale of CSG to Camtronics.
ADAC also expects to treat the HCIS business as a discontinued operation and report a fourth-quarter loss of 5 cents per share for HCIS, separately from the results of its continuing operations.
Cerner seems to have no doubts about its ability to turn HCIS around, saying the new business will provide a unique complement to its existing radiology customer base.
Radiology is one of the most important diagnostic centers, said Neal Patterson, Cerner chairman and CEO, in a company statement. The acquisition of ADACs HCIS business will allow Cerner to broaden our market presence in the radiology industry.
Patterson said he expects the acquisition to be non-dilutive in 2001 and contribute positively to earnings in 2002.
|Alliance to Buy Molecular Biosystems|
|The ultrasound contrast agent market soon may have one less participant. Alliance Pharmaceutical Corp. (San Diego) plans to acquire Molecular Biosystems Inc. (MBI of San Diego) for $10.4 million in stock.
According to the deal, Alliance would acquire all shares of MBI in exchange for 770,000 shares of Alliance stock. That number could drop if undisclosed circumstances are not met. Alliance closed on Oct. 11, at $13.50 per share, valuing the transaction at $10.4 million.
Both companies have developed ultrasound contrast agents. MBI has Optison, which currently is marketed in the U.S. and Europe by Mallinckrodt Inc. (St. Louis). Alliance is developing its Imavist (formerly known as Imagent) agent with Schering AG (Berlin). In August, Imavist was deemed approveable by the FDA.
Upon completion of the transaction, MBI would become a wholly owned subsidiary of Alliance. Alliance would continue to receive royalties due MBI from MBIs existing marketing agreement with Mallinckrodt and Nycomed Amersham plc (Buckinghamshire, U.K.) and its marketing partnership with Chugai Pharmaceuticals Co. Ltd. (Tokyo) in Japan, South Korea and Taiwan.
MBI has been in existence since 1980. MBIs Albunex, a first-generation agent, and Optison, its replacement, were the first contrast agents approved by the FDA.
That the potential market for ultrasound contrast agents is just beginning to be realized and the use of these products could grow significantly in the coming years, said Duane J. Roth, chairman and CEO of Alliance in a prepared statement. We believe that by having both Imavist and Optison, Alliance will be well-positioned to take advantage of the expected future market for these agents, namely in Japan.
In November 1999, Palatin Technologies Inc. (Princeton, N.J.) proposed acquiring MBI for approximately $80 million. In March, that deal was called off when Palatin decided its own products were making satisfactory progress towards commercialization.
|Justice Department blocks Varians deal to acquire Impac|
|Varian Medical Systems Inc. (Palo Alto, Calif.) on Nov. 6 announced it would abandon its plan to acquire oncology software firm Impac Medical Systems Inc. (Mountain View, Calif.) after the U.S. Department of Justice said earlier that day that it would block the deal.
Impac provides software for Varians linear accelerators, as well as for units made by other companies. Varian makes software for its own systems and plans to begin offering software for other companies systems as well. The combination of the two companies would result in only one company providing software for all linear accelerators on the market, forcing Varians competitors to rely on it for software.
The proposed $135 million pact was signed in June, but, according to a Reuters report, Justice Department officials felt the two companies compete directly in innovation, quality and price for the sale of radiation oncology management systems. Justice Department officials said the combination of the two companies would hurt competition in the linear accelerator market, of which Varian holds approximately a 60 percent share.
Blocking this transition ensures that patients depending upon radiation therapy for their medical care continue to receive the benefits of undiminished competition … which has encouraged faster development and deployment of new radiation therapy treatments, said Douglas Melamed, head of the antitrust division at the Justice Department.
Varian did not consider a fight with the Justice Department for very long. Word broke late on Nov. 6 on the Departments decision and only two hours later, Varian distributed a statement saying it would scrap the acquisition to avoid a legal tussle, but did disagree with the decision.
Our intent with this acquisition was to advance and accelerate the standardization of modern multidisciplinary cancer diagnosis and treatment through the integration of the best aspects of the two companies oncology information systems, said Richard M. Levy, president and CEO of Varian in the prepared statement. We respectfully disagree with the Department of Justices market interpretation and conclusions regarding how this acquisition would affect consumers, but we believe we would be doing our customers and investors a disservice by entering what could be a protracted legal proceeding.
Varian said it will take a $2 million charge in Q4 2000 for costs related to the ill-fated transaction.
|Tyco buys Mallinckrodt for $4.2B|
|Tyco International Ltd. (Pembroke, Bermuda) in late October succeeded in growing its healthcare business by $2.6 billion by completing the $4.2 billion acquisition of healthcare products maker Mallinckrodt Inc. (St. Louis).
With the addition of Mallinckrodt, Tyco Healthcare becomes the second-largest manufacturer, distributor and servicer of medical devices worldwide, said Tyco CEO L. Dennis Kozlowski in a prepared statement. Mallinckrodts strong positions in the respiratory, pharmaceuticals and medical imaging segments will provide Tyco with excellent platforms for future acquisitions and licensing agreements.
Johnson & Johnson Inc. (Brunswick, N.J.) is ranked as the worlds largest healthcare products producer.
Kozlowski said the acquisition will be immediately accretive to Tycos earnings.
The Federal Trade Commission (FTC) approved the acquisition on Oct. 17, with the condition that Tyco sell within 10 days its line of endotracheal tubes for competitive reasons. Tyco plans to sell the line, which has a 14 percent market share, to Hudson Respiratory Inc. (Temecula, Calif.) and retain the Mallinckrodt line, which holds a 72 percent market share, according to the FTC.
In its fiscal year, ending Sept. 30, Tyco Healthcare reported $1.6 billion in sales, up from $1.5 billion in FY99. Mallinckrodt posted 1999 revenues of $2.6 billion, which would place the total for Tyco Healthcare in the $4.2 billion range.
|Sonus cuts jobs in wake of EchoGen withdrawal|
|The now-former contrast agent developer Sonus Pharmaceuticals Inc. (Bothell, Wash.) announced in late October it will cut 10 jobs, or 25 percent of its workforce, in a restructuring aimed at focusing the company on its blood substitute and drug delivery products.
The cost of that restructuring is expected to be $300,000 for severance and related packages.
The news follows Sonuss announcement one week earlier that it suspended development of its EchoGen contrast agent after reporting ailing revenues.
Revenues in the quarter ending Sept. 30 fell to $68,000, compared with $10 million in the same quarter of 1999. Revenues in the year-ago quarter were powered by a patent license agreement with Nycomed Amersham plc (Buckinghamshire, U.K.). Sonus reported a net loss of $2.2 million in the quarter, compared with net income of $6.9 million in the third quarter of 1999.
The suspension of EchoGen sent Sonus stock plummeting 70 percent in one day. On Oct. 23, the stock closed at 69 cents per share.
Reducing the size of our staff was a difficult decision, but we believe this restructuring is essential to our refocus and success in drug delivery and blood substitutes, said Michael A. Martino, president and CEO of Sonus. Sonus blood substitute product S-9156 is being developed for use in trauma centers and surgery centers. It currently is in non-clinical trials.
Sonus decision comes at a turbulent time in the ultrasound contrast agent market. The recent acquisition of Molecular Biosystems Inc. (MBI of San Diego) by Alliance Pharmaceutical Corp. (San Diego) is further shrinking the ultrasound contrast market in addition to the withdrawal of EchoGen. (See story on page 12.)
A 1998 report from Theta Reports (New York) cited MBI and Sonus as the two leading ultrasound contrast agent developers.
While Sonus1999 financials looked encouraging with sales more than doubling in the year, 2000 has not been kind to the company. In March, the FDA told Sonus it would conduct a reanalysis of EchoGen, after giving the product an approveable letter in 1999.
In April, Sonus renegotiated an existing deal with Abbott Laboratories (Abbott Park, Ill.) and lost financial support for the manufacture and distribution of EchoGen from Abbott.
|Digirad shifts to mobile nuclear cardiology|
|Gamma camera developer Digirad Corp. (San Diego) in November signed a deal to acquire the Florida Cardiology and Nuclear Medicine Group and use that acquisition to begin its new Orion Imaging Systems mobile nuclear cardiology subsidiary.
Florida Cardiology offers mobile cardiology services to more than 20 offices in the Florida area. Digirad also has purchased a mobile nuclear imaging company in Pennsylvania and is in the process of adding those 10 mobile routes to the list. Orion Imaging Systems looks to provide nuclear cardiology services to the more than 8,000 cardiology offices in the U.S.
At 425 pounds, Digirads 2020tc Imager can be placed in the back of a van and wheeled into a facility. Digirad began shipping the 2020tc in August.
|Imaging vendors show strength at ASTRO|
|The 42nd annual meeting of the American Society for Therapeutic Radiology and Oncology (ASTRO) opened fittingly on Oct. 22 in Boston with a fife and drum corps marching through the Hynes Convention Center to kick things off on the right note.
Varian Medical Systems (Palo Alto, Calif.) kept up the colonial theme by having a Benjamin Franklin impersonator making announcements periodically from the companys booth.
On the business side, Varian and GE Medical Systems (GEMS of Waukesha, Wis.) displayed a very close relationship at the show with several GEMS products finding a home in the Varian booth, including CT, MRI, PET and SPECT scanners. GEMS did not have a booth of its own.
The two companies launched the See and Treat Cancer Care treatment process that combines imaging and radiotherapy techniques for tumor location and eradication. The concept is that the closer medical imaging and treatment planning systems work together, the better the clinical result. The new program was born of a marketing and sales deal the companies signed earlier this year.
Richard M. Levy, president and CEO of Varian, said the new program embodies the worlds leading imaging and treatment equipment, as well as reliable service and comprehensive information for optimal patient treatment clinical management.
Varian also used ASTRO to release a new line of compact linear accelerators with high-resolution SmartBeam IMRT (intensity modulated radiation therapy) capabilities. The Silhouette Edition Clinac integrates high-energy accelerator capabilities with a small footprint to fit into small places, including older cobalt treatment rooms.
Healthcare facilities face the challenge of incorporating systems that can deliver the most advanced radiotherapy treatments into contained spaces, said Timothy Guertin, president of Varian Medical Systems oncology business.
Varian also released a new version of its Helios inverse treatment planning software. Helios 6.2 supports both stop-and-shoot and faster high-resolution techniques. The new version is available now.
Siemens Medical Systems Oncology Care Systems Group (Concord, Calif.) had several new items at ASTRO this year. The company showed advancements to its Beamview electronic portal imaging device for radiation therapy to streamline image acquisition. New features include automatic patient identification and reference image display, automatic image display, ability to send images via e-mail and DICOM compatibility.
Siemens also displayed an IMRT toolkit to help cancer clinics more quickly launch IMRT programs. The company also showed a model of its new Primatom system for image-guided radiation therapy, which includes a CT scanner and linear accelerator.
Marconi Medical Systems Inc. (Highland Heights, Ohio) brought its newly FDA-cleared AcQsim CT system to Beantown. The AcQsim which received FDA clearance on Sept. 28 has an 85-centimeter, large-bore opening, as well as a localization package, patient marking system and a virtual simulator capable of producing near real-time, digitally composited radiographs. The large bore allows advanced clinical capabilities. The scanner includes a fully integrated software package to provide 3D external beam radiation therapy planning.
Marconi also unveiled a deal for Elekta Oncology Systems Inc. (Norcross, Ga.) to offer the AcQsim CT worldwide.
Nucletron Corp. (Columbia, Md.) was on hand showing its Spot system for 3D ultrasound radioactive seed implantation. Spot enables 3D ultrasound, needle guidance, dose calculation and dose prescription. Nucletron also focused on its PLATOcomplete inverse treatment planning program, which provides features for preparing IMRT plans.
Computerized Medical Systems Inc. (St. Louis) came to ASTRO with fresh FDA clearance on its Focus IMRT system. Focus combines CT images with source dosimetry data from a linear accelerator and defines a target volume to be treated and critical structures. The user also can select the inverse planning capability. Company officials said plans can be iterated in 30 to 40 seconds, and the most complex plans are generated in minutes.
Radionics Software Applications Inc. (Burlington, Mass.), a division of Tyco Healthcare (Pembroke, Bermuda), brought new software for its Xknife stereotactic radiosurgery program to ASTRO. Enhancements to the software include real-time dose calculation, multiple courses and plans, automated planning and a new user interface.
Nomos Corp. (Sewickley, Pa.) flew its whole flock of products to ASTRO, most notably, the Peregrine treatment planning system. Peregrine allows dose calculations of within 2 percent, rapid calculation times, support of photon beam calculators and a simplified commissioning process.
Digitizer maker Vidar Systems Corp. (Herndon, Va.) showed the VXR-16 film digitizer and the VXR-16 DosimetryPro for radiation dosimetry. Both are designed to meet the needs of the radiation oncology market.
Zmed Inc. (Boston) recently completed the purchase of the Linac Scalpel stereotactic radiosurgery system and related assets from Medtronic Surgical Navigation Technologies (Minneapolis) and had the new product on display in Boston. The Linac Scalpel enables stereotactic radiosurgery on virtually any linear accelerator.
|GEMSIT makes Critikon its first acquisition|
|On Oct. 26, GE Medical Systems (GEMS of Waukesha, Wis.) revealed plans to acquire the privately held non-invasive blood pressure monitor maker Critikon Co. LLC (Tampa, Fla.) for an undisclosed amount.
The proposed merger expands an existing strategic joint development alliance the two companies signed in December 1999. That agreement allowed GEMS to integrate the Dinamap blood pressure monitor into GEMS Dash 3000 Pro patient monitor.
This acquisition will extend our reach into other areas of the hospital, specifically the sub-acute area where we did not have as large of a presence, said Greg Lucier, president and CEO of GE Medical Systems Information Technologies (GEMSIT). By combining GE Medical and Critikon, we create the largest patient monitoring business in the world today.
Critikon has been a private company since it was bought from Johnson & Johnson (Brunswick, N.J.) in November 1998 by a group of private investors led by Liberty Partners (New York). The company has approximately 800 employees worldwide and revenues in the $100 million range. Critikon says it has sold more than 300,000 Dinamap non-invasive blood pressure monitors worldwide.
We anticipate the Critikon sales force will become the GE Medical sub-acute sales force carrying Critikon and GE Medical products, said Gordie Nye, Critikons CEO.
The majority of Critikons products are serviced by depot repair. Nye said Critikons branded service is expected to continue, but details on the service of Critikons products under GEMSIT were not yet available.
Were about 70 percent monitoring products and accessories, said Nye, regarding Critikons business. The other 30 percent is inflatable blood pressure cuffs, which we sell on our monitors and other companies monitors.
|Justice Dept. sues Boston Scientific over patent dispute|
|The U.S. Justice Department has filed a civil lawsuit against surgical products maker Boston Scientific Corp. (Natick, Mass.) for alleged violation of a 1995 Federal Trade Commission (FTC) consent and eliminating competition in the intravascular ultrasound (IVUS) catheter market.
The case dates back to 1995 when Boston Scientific moved to acquire catheter makers Cardiovascular Imaging Systems Inc. and SciMed Life Systems Inc. The FTC blocked the acquisitions, because they would have limited the amount of competition in the market for ultrasound catheters.
To appease the FTC, Boston Scientific signed a deal with Hewlett Packard Co. (HP of Palo Alto, Calif.) and its then-Medical Products Group (Andover, Mass.). Boston Scientific would provide HP with patents and technology allowing HP to become a new player in the ultrasound catheter market. While the HP deal satisfied FTC for the short term, the FTC now accuses Boston Scientific of refusing to provide HP with a license for a patented device and information about several others.
HP exited the intravascular ultrasound market in November 1998. HP and Boston Scientific recently settled a separate lawsuit.
Boston Scientific is challenging the FTC action, saying it will defend itself vigorously. According to a company statement, The license agreement gave HP the undisputed right to all Boston Scientifics IVUS catheter patents and certain other technology. The statement adds that the information provided to HP was so thorough that HP wrote a letter to Boston Scientific thanking the company for its help.
Despite these efforts, the FTC has evidently concluded that a small number of minor disagreements between Boston Scientific and HP over the meaning of terms in the license agreement has somehow resulted in violations of the consent order, the statement reads. Boston Scientific maintains these disputes were not a major factor in HPs decision to exit the market.
Boston Scientific contends that the FTC misinterpreted significant portions of the original patent agreement with HP. Not only are the FTCs positions mistaken, the issues raised by the FTC had no material impact on HPs ability to compete in or on its withdrawal from the IVUS market, Boston Scientific said. The company added that the slow adoption of IVUS technology was to blame for HPs lack of success in this market.
According to a Bloomberg news report, Boston Scientific faces fines of up to $11,000 per day for violation of the consent decree. The FTC has been in negotiations with Boston Scientific over the claims for an undetermined period of time.
HP also had an agreement with Guidant Corp. (Indianapolis) to enter the IVUS market. That agreement came to an end two years ago.
|Sectra-Imtec debuts digital mammo unit|
|Swedish IT and medical technology firm Sectra-Imtec AB (Linkoping, Sweden) brought a new full-field digital mammography system as a works-in-progress to the annual meeting of the Radiological Society of North America (RSNA) last month.
Sectra officials said the direct-capture, silicon-based system will enhance image quality and reduce the amount of radiation from existing mammography systems by up to five times.
The key to the reduced radiation is a new sensor in the system. Torbjorn Kronander, president of Sectra-Imtek, said the new detector is based on advanced research in particle physics and is considered a photon counting device.
Every single photon is counted and we detect 97 percent of incoming photons, which is very close to the maximum performance for an X-ray detector, Kronander said. In film screen, close to 50 percent of the photons pass through the film-screen without being detected. This means that radiation reaches the breast but is of no diagnostic value at all.
Company officials are careful about what information they want to reveal at this point. The Sectra-Imtec system is far from a commercial product and clinical trials are expected to begin in Sweden within a year. The company currently has a prototype in its lab, but has yet to scan an actual human to date.
At RSNA, Sectra-Imtec showed sample images of the system and DQE curves.
|Marconi Medical, Fonar gain key FDA clearances|
|Marconi Medical Systems Inc. (Highland Heights, Ohio) and Fonar Corp. (Melville, N.Y.) recently gained FDA clearance on new products.
Fonar became the first MRI vendor to offer a stand-up MRI in October when it received the agencys OK on the Indomitable stand-up MRI system. The Indomitable is a full-body scanner that can image patients in a weight-bearing state in addition to recumbent positions. The 0.6 tesla system allows full-range-of-motion studies, which may be promising for sports-related injuries. Florida State Universitys Human Performance Lab (Tallahassee, Fla.) is exploring the new stand-up MRI for research purposes in the lab.
The system is equipped with a motorized patient handling system to move the standing patient into the magnet and place the anatomy of interest into the magnet gap.
Marconi in October received the green light on its Mx8000 dual-slice CT scanner. The new offering takes the existing technology of a quad-slice system and offers it in a dual-slice format. According to Marconi, the Mx8000 provides twice the resolution, speed, volume and power compared with single slice CT.
The aims of the new product include advanced applications and earlier disease detection. The LifeFlight CT trauma package optimizes the scan speed and interventional capabilities on the spot for stroke diagnosis and other trauma applications.
|Ultrasound transducer maker Misonix Inc. (Farmingdale, N.Y.) increased sales in its first quarter, ending Sept. 30, and vastly improved its net income. Sales increased 4 percent to $6.8 million, up from $6.5 million in the first quarter of FY2000. Net income was $2.3 million, compared with $605,328 in the year-ago quarter. The company said revenues were negatively impacted by reduced shipments of certain medical devices to allow for engineering design and manufacturing process changes.
Schick Technologies Inc. (Long Island City, N.Y.) posted a sluggish second quarter in terms of revenue, but trimmed its net loss in its second fiscal quarter, ending Sept. 30. Revenues declined to $3.4 million, down 26 percent from $4.6 million in the second quarter of FY2000. The net loss improved to $2.3 million, compared with a net loss of $3.6 million in the year-ago quarter. Schick blamed the drop in revenues on the changes in its distribution strategy in North America.
Merge Technologies Inc. (Milwaukee) reported a 25 percent drop in revenues and an increased net loss in the third quarter. Revenues slumped to $2.3 million, down from the $3.1 million in the third quarter of 1999. The net loss of $1.5 million compares with a net loss of $270,000 in the year-ago quarter.
Palatin Technologies Inc. (Princeton, N.J.) completed two private placements that netted the company gross proceeds totaling $15.2 million. In the latest round, investors purchased approximately 733,000 shares of common stock at $5.94 per share.
Strong demand for cancer treatment systems and X-ray products brought Varian Medical Systems Inc. (Palo Alto, Calif.) to record earnings, sales, net orders, and year-ending backlog in its fiscal year, ending Sept. 29. Sales advanced 17 percent to $689.7 million, up from $590.4 million in FY99. Net income grew to $54.3 million, compared with a net loss of $24.2 million in FY99. FY99s loss was due primarily to Varians reorganization into three separate companies.
Radiopharmaceutical firm Syncor International Corp. (Woodland Hills, Calif.) achieved sales and net income growth in the third quarter, with medical imaging operations growing through acquisitions. For the quarter, sales grew to $155.4 million, up 18 percent from $131.5 million in the third quarter of 1999. Net income nearly doubled to $6.3 million, compared with $3.2 million in last years 3Q. Sales for Syncors Comprehensive Medical Imaging Inc. subsidiary rose to $26.5 million, an 80 percent increase from $14.7 million in the year-ago quarter.
AFP Imaging Corp. (Elmsford, N.Y.) saw slumping sales, but trimmed its net loss for the fiscal year, ending June 30. Sales totaled $25.4 million, down from $29.4 million in FY99. The net loss of $807,882 compares with a loss of $2.2 million in FY99. Fourth-quarter revenues slipped to $6.6 million, down from $7.5 million in FY99s fourth quarter. The lower sales level reflected a temporary interruption in the supply of dental X-ray units. The net loss for the fourth quarter was $530,037, compared with a loss of $179,320 in the year-ago quarter. In the fourth quarter, AFP recorded a charge of $400,000 due to the recognized impairment in value of its graphic arts assets.
Despite a dip in sales, Fischer Imaging Corp. (Denver) said it was delighted with its recent third quarter financial results. Revenues declined slightly to $11.8 million, down 7 percent from $12.7 million in the third quarter of 1999. Net income, however, increased to $414,000, compared with a year-ago quarterly loss of $2.1 million. Louis E. Rivelli, president and COO of Fischer, said the results mark the fourth straight profitable quarter, reaffirming the companys business model.
Digitizer maker Howtek Inc. (Hudson, N.H.) saw a 71 percent increase in sales in the third quarter. The company also improved its net loss to less than $200,000. Sales beat expectations, ending at $2.8 million, up from $1.6 million in the third quarter of 1999. The net loss was $175,627, compared with a net loss of $559,380 in the year-ago quarter. Company officials said medical sales benefited from increased demand by key OEM customers in the CAD field and resellers.
SonoSite Inc. (Bothell, Wash.) greatly increased its revenues in the third quarter and reduced its net loss. Revenues ended at $8.3 million, compared with $745,000 in last years third quarter. The net loss of $4.6 million is improved from a net loss of $6.3 million in the year-ago quarter. Company officials said SonoSite plans to set up a direct sales force in Europe and release several new products over the next 18 months.
PET camera maker Positron Corp. (Houston) advanced revenues and net income in the third quarter. The sales of PET systems led the way. Revenues increased to $3.4 million, up from $385,000 in 3Q99. Net income was $1.5 million, compared with $28,000 a year ago.
Ultrafast CT developer Imatron Inc. (So. San Francisco) put up record revenues and net income in its third quarter. Revenues gained 60 percent to close at $17.8 million, compared with $11.1 million in the third quarter of 1999. Imatron posted net income of $1.6 million, compared with a net loss of $1.7 milion in the year-ago quarter. Imatron CEO S. Lewis Meyer said the company has moved into a new manufacturing and customer service facility to keep up with its growth.
Vital Images Inc. (Minneapolis) achieved a 65 percent jump in revenues in the third quarter, but the company reported an increased net loss with a greater investment in sales and marketing infrastructure. Revenues grew to $2.8 million, up from $1.7 in the third quarter of 1999. The net loss worsened to $525,000, up from $447,000 a year ago.
Eastman Kodak Co. (Rochester, N.Y.) reported slightly increased sales and much improved net income in the third quarter. Revenues grew to $3.59 billion, up from $3.58 billion in the year-ago quarter. Net earnings closed at $418 million, up significantly from the $235 million reported in the third quarter of 1999. Kodaks Health Imaging division reported $534 million in revenues for the third quarter, a 6 percent jump from $503 million in the year-ago quarter. Health Imagings earnings totaled $138 million, as sales of digital products increased 14 percent from a year ago.
Lumisys Inc.s (Sunnyvale, Calif.) online radiology site once again contributed to a net loss for the computed radiography (CR) equipment manufacturer in the third quarter. CR sales helped power revenues to $4.5 million in the quarter, up from $3.9 million in the third quarter of 1999. The net loss grew to $744,000, compared with a net loss of $263,000 in third quarter of FY99. Company officials said 82 percent of the quarterly loss comes from Lumisys online venture.
Analogic Corp. (Peabody, Mass.) posted record fourth-quarter revenues bringing its fiscal year to a strong finish. Revenues for FY2000, ending July 31, reached a record $297.6 million, up 6 percent from $279.7 million in FY99. Net income decreased to $14.1 million, compared with $19.5 million in FY99. Fourth-quarter numbers showed revenues up 29 percent to $89.2 million, compared with $69 million in the same quarter last year. Net income advanced to $5.4 million, up 40 percent from $3.9 million in the year-ago quarter. Analogic said OEM supply deals in digital radiography and CT helped fuel increased revenues in the fourth quarter.
Health Care Markets Inc./Medical Imaging Stock Index Analysis
|Thermo Electron Corp. (Woburn, Mass.) said it will take the remainder of Trex Medical Corp. (Danbury, Conn.) private before it sells the business.
The majority of Trex was acquired by Hologic Corp. (Bedford, Mass.) in late September for $55 million. That acquisition included all Trex product lines with the exception of its dental operations.
At the time of the acquisition, 60 percent of Trophys business was dental and the remaining 40 percent came from general purpose and specialty medical X-ray systems, including a remote R/F product.
Minority shareholders of Trex will receive $2.15 per share in a cash tender. The goal of the tender is to bring Thermo Electrons ownership to 90 percent. From there, a short-form merger will be held under which shareholders who do not participate in the tender offer also will receive $2.15 in cash for their Trex Medical shares.
If Thermo Electron successfully obtains ownership of at least 90 percent of Trex Medicals outstanding shares, it expects to complete the spin-in by the end of the fourth quarter.
They didnt say who it was or what they were talking about, but talks between DC DiagnostiCare (Edmonton, Alberta, Canada) and a third party were halted last month.
The company has been pursuing a partner for the sale of all or part of its business in the wake of a poor financial performance and last weeks revelation that it is in default on its credit facility. On Nov. 6, the company said it was in discussions with the third party with respect to a possible transaction to maximize shareholder value.
By the end of the day Nov. 7, that deal was off and DiagnostiCare was back to square one.
A spokesperson for DiagnostiCare would not say with whom the company was in discussions, but said there were others on the list of potential buyers.
This list is by no means exhausted, but there isnt anyone in the short-term that were especially engaged with, the company said.