July 2003

In its 2003 review of temporary healthcare staffing trends and incentives, Staff Care Inc. (Irving, Texas) found that the percentage of demand covered by a temporary medical imaging professional increased to 59 percent in 2002, compared with 39 percent in 2001.

In addition, healthcare facilities spent approximately $1.4 billion on temporary imaging services in 2002. The amount includes the cost of travel, housing, malpractice insurance, recruiting, professional services and other related expenses.

Staff Care results come from survey responses from 1,156 healthcare facility administrators and 1,352 medical imaging technologists who have worked temporary assignments from 2000 through 2002. The company gathered the data last year.

The report noted that no single factor contributed to the rise in temporary staffing coverage from 2001 to 2002. Ninety-six percent of traveling respondents said they are not looking for a permanent position, while more than half of the technologists plan to travel for several years, despite their concerns of being away from home.

With patients age 65 and older using medical imaging services an average of three times as often as younger patients, the graying of the American population, the report stated, “assures a significant need for providers into the near future. Technical innovations also spur demand for imaging technologists. Reimbursement regulations affect demand as well.”

Interestingly, approximately 40 percent of the temporary technologists who replied to the poll say their greatest contribution is preventing staff burnout at a healthcare facility. Sixty percent cited patient care as their greatest contribution.

With hospital MRI and CT procedures increasing approximately 8 percent each year since 1996, more than 95 percent of medical imaging departments reported a profit in 2002. The shortage of technologists, however, remains a greater need for facilities than nurses or physicians.

Radiologic technologists were in greatest demand (29 percent, down from 38 percent in 2001) in 2002 among the medical imaging specialists. Nuclear medicine technologist was the second-most wanted expert last year (19 percent), followed by CT technologist (16 percent) and ultrasound/vascular technologist (11 percent).

Temporary technologists said that location and pay rate were, by far, the two most influential factors in deciding whether to take an assignment.

Length of assignment and type or size of a facility ranked a distant third and fourth, respectively, on the priority list.

Other findings from the survey include:

• Eighty-three percent of respondents seek temporary technologists when they lose a staff member;
• Average daily expense is $801 per day, which includes travel, lodging, malpractice insurance and related costs;
• Sixty-three percent of administrators expect their staffs to accept the temporary technologist, while
• Twenty-nine percent said staff technologists tolerate the presence of the temporary colleague.

“This new position will no doubt further change the way we practice radiology,” said E. Stephen Amis Jr., M.D., chairman of the ACR’s board of chancellors, in a prepared statement. “We feel that this will produce a worthwhile outcome that will allow us to address our critical workforce needs while ensuring the highest level of care for our patients.”

The ACR defines a radiologist assistant as an “advanced-level radiologic technologist who works under the supervision of a radiologist to enhance patient care by assisting the radiologist in the diagnostic imaging environment.”

Under the proposal, a radiologist assistant would not interpret radiological examinations nor transmit observations other than to the supervising radiologist.

A radiologist assistant’s duties would include:

• Obtaining consent for and injecting agents that facilitate or enable diagnostic imaging;
• Obtaining clinical history from patient or medical record;
• Performing pre- and post-procedure evaluation of patients undergoing invasive procedures; and
• Assisting radiologists with invasive procedures.

The companies’ shareholders approved the merger, effective May 30.

The new entity’s headquarters will be in Birmingham, with visualization software development continuing in Madison.

Company executives say one reason for the merger is the collaboration of each company’s technology at 18 hospitals over the last six months. The combination of Emageon and UltraVisual products has been installed at Southeast Missouri Hospital (Cape Girardeau, Mo.), Liberty Health Care Systems Inc. (Jersey City, N.J.), Baptist Health System (Birmingham) and Allina Hospitals and Clinics (Minneapolis).

UltraVisual Medical Systems designs advanced visualization software technology to capture, display, distribute and store medical images and reports digitally. UltraVisual combines thin-client technology with visualization tools and smart workflow integration for hospitals, imaging centers and private radiology practices

Emageon enables integrated delivery networks (IDNs), hospitals, healthcare systems and imaging facilities to store multi-modality images across its enterprise. Emageon’s Enterprise DICOM management infrastructure software is designed for the seamless integration of open-systems viewing and workflow software and hardware.

Intermagnetics General estimates that the new pact will mean an additional $20 million in annual sales.

The agreement includes magnets for Philips’ recently introduced Enterprise MRI systems, which Philips added through its acquisition of the former Marconi Medical Systems, and awards Intermagnetics the exclusive right to develop superconducting magnets for any new Philips’ MRI system.

The companies also plan to develop other MRI product opportunities, as Intermagnetics contributes its technical and operational technologies.

With the new Philips’ pact, Intermagnetics General anticipates long-term earnings growth of 10 percent to 15 percent on an annualized basis over the next five years and beyond. Incremental revenue growth, the company added, is expected to begin FY04 and has “the potential to exceed $20 million annually by FY2006.”

“However, the initial net effect of … this strategic agreement is that we expect the upcoming quarter to result in minimal profitability followed quickly by run-rates that are expected to be in line with our long-term goals,” said Glenn H. Epstein, Intermagnetics General’s chairman and CEO.

Intermagnetics General forecasts increased sales of its new 3.0 Tesla MRI magnet, while its high-field 1.0 Tesla open magnet design is expected to be commercially available in 2005, depending on product introduction decisions made by MR system manufacturers.

The agreement has two components — an exclusive development and commercialization partnership for EP-2104R, Epix’s product candidate for the detection of thrombus (blood clots), and an exclusive research partnership to discover novel compounds for MRI.

Epix Medical CEO Michael D. Webb said his company could receive as much as $45 million in research, development, milestone and loan funding during the course of the agreements.

Schering will contribute as much as $9 million to support Epix Medical’s development efforts for EP-2104R. In return, Schering will have an option to late-stage development and worldwide marketing rights for EP-2104R, as well as all development candidates emerging from the MRI research collaboration.

Schering also will contribute approximately $4 million over the next two years and a loan of as much as $15 million for Epix Medical’s early research-and-development efforts. Half of the $15 million loan — with principal repayment beginning in 2007 — will be available to Epix immediately, while the remainder will be available in a year.

“The near-term financial impact for Epix is an expected $28 million in funding over the next two years,” said Epix Medical CFO Peyton Marshall. “With this funding on board, we have sufficient funding to get us well into 2005 through our expected regulatory process for [MRI contrast agent] MS-325.”

Epix Medical and Schering have been working on MS-325 for vascular imaging with MRI since June 2000. Epix Medical plans to announce this summer the results of two MS-325 studies, which will complete the clinical requirements for the company’s new drug application (NDA) submission to the FDA.

Schering is Epix Medical’s exclusive worldwide sales and marketing partner for MS-325.

Epix Medical does have the opportunity to increase its future royalty payments from the projected success of its imaging products by expanding its financial contribution to clinical development costs.

“We have the opportunity to obtain peak royalties just south of 20 percent,” Marshall said, “if we front just south of 20 percent of development expenses.”

Under the EP-2104R thrombus pact, Epix will conduct a clinical feasibility program in humans, with Schering paying as much as $9 million over two years to cover expenses.

The company unveiled plans to consolidate HealthCare PACS R&D in Waterloo, Ontario, Canada, and Mortsel, while it consolidates its HealthCare Equipment Repair U.S. in Atlanta, Ga., at the World Parts Center.

Part of the reorganization includes the closure of Agfa HealthCare operations in Glasgow, Del., by the end of 2003. The company employs approximately 75 people at the site and plans to move half of those employees to other Agfa assignments.

Robert S. Pryor, president of Agfa HealthCare in the Americas, said in a prepared statement that the company is “keenly aware of the impact on our people and community and will actively support these employees through this transition with a fair and competitive portfolio of services to those affected.”

The May 19 announcement continues Agfa’s reorganization, which included last year’s consolidation of Agfa’s x-ray film production worldwide. In the United States, Agfa consolidated U.S. x-ray film production at its Bushy Park, S.C., facility and closed its manufacturing operation in Brevard, N.C. The Brevard plant manufactured aqueous-coated, medical x-ray film and employed approximately 400 people.

Similar consolidations occurred at Agfa’s facilities in Germany, Belgium, Spain and the United Kingdom.

Agfa cited the healthcare market’s shift from medical screen film to dry hardcopy media for its strategic move in x-ray film production.

The Glasgow facility once housed E.I. DuPont de Nemours & Co. Inc.’s (Wilmington, Del.) Instrument and Manufacturing division, which designed, produced and supported diagnostics, medical imaging and printing and publishing products.

In 1996, The Sterling Group Inc. (Houston) acquired the medical imaging business from DuPont for an undisclosed amount.

In 1999, Agfa purchased Sterling Diagnostic Imaging Inc. (Greenville, S.C.) and the Glasgow facility through Sterling’s parent company, SDI Holding Corp. (Houston).

For the past four years, Glasgow has served as Agfa’s center for software development and integration for medical imaging and informatics products and the service parts repair for Sterling equipment.

Since InSight Health Services Corp. (Lake Forest, Calif.) became a private company again some 18 months ago, the fixed-site and mobile medical imaging services provider has been on a roll.

InSight is on pace to grow revenues 10 to 12 percent in FY03, ending June 30, recently completed one acquisition and is about to announce its second transaction in 2003.

The company began the year by unveiling in January its planned acquisition of 13 medical imaging centers in the greater Los Angeles, Ventura County and Orange County area from Cardinal Health Inc. (Dublin, Ohio) subsidiary Comprehensive Medical Imaging (CMI of Woodland Hills, Calif.). Cardinal had acquired CMI through its acquisition of Syncor International Corp. (Woodland Hills) in January.

The transaction was completed in April and brought to 25 the number of InSight medical imaging centers in the southern California region. The addition also is expected to add approximately $22 million in annual revenues to the company’s coffers.

With the company in growth mode, InSight President and CEO Steven T. Plochocki said that a second acquisition announcement could come in the third quarter. For now, he would only say that the transaction is in the Midwest United States and is approximately the same size as the Cardinal-CMI deal.

“This acquisition could put us on a run rate of nearly $300 million by this time next year,” Plochocki added.

So far in FY03, InSight’s positron emission tomography (PET) imaging procedure volume has increased 53 percent compared to FY02, while its lithotripsy business has gained 68 percent. MRI procedures continue to comprise the bulk of InSight’s business — approximately 80 percent of total revenues — with procedures up approximately 10 percent from last fiscal year.

“Our average daily scan base is up to almost 3,300 scans per day” compared to a year ago, Plochocki added.

InSight was acquired by the investment firms of J.W. Childs Associates L.P. (Boston) and The Halifax Group LLC (Washington, D.C.) in October 2001. Since then, the two owners have combined to provide InSight with as much as $75 million to move into its acquisition strategy this year and in 2004.

One of the first moves the owners made was to bring InSight back into the private sector and off the public stock market exchange.

“It was good to be private over these last few years, because even if you were a public company that was doing well, you weren’t going to get any run on your stock,” Plochocki said. “It was also a good time for us to look at acquisitions, because the economic situation in the country was weak.”

He added that InSight sees 2004 as a “breakout year in the American economy.” If it is and the company continues to grow, InSight’s owners may consider taking the medical imaging services provider public again and explore other options.

“It might be an opportunity to become part of some larger healthcare system or maybe an opportunity for us to merge with someone in a like business and create a significant company in this sector,” Plochocki said.

InSight’s services currently are available in 30 states, including California and Texas, as well as regions of the Southwest, Midwest, Northeast and Southeast United States.

InSight weathered some tough winter weather in late 2002 and early 2003 to post steady revenues in the company’s third fiscal quarter, ending March 30.

Revenues increased 1 percent to $56 million, compared with $55.5 million in the third quarter of FY02. For the nine-month period, revenues climbed 7 percent to $173 million, compared with $162 million in the year-ago period.

In the third fiscal quarter, InSight signed 15 new contracts, bringing to 264 the number of total company contracts. InSight’s fixed-site business gained 22 new volume-based agreements in the quarter, giving the company a total of 107 new contracts over the last 12 months.

The medical device company will close its manufacturing facility in San Lorenzo, Puerto Rico, and its heat sealing operation in Westbury, N.Y. E-Z-Em will outsource the operations to third-party manufacturers.

E-Z-Em Caribe owns the 38,600 square-foot facility in San Lorenzo, which fabricates enema tips and heat-sealed products.

The company anticipates that the closings will take approximately nine months to complete and save $2.2 million annually, starting in FY05, which begins on June 1, 2004.

E-Z-Em plans to take a charge of $1.1 million in the fourth quarter of FY03, ending May 31, primarily for employee severance-related expenses. Project costs of approximately $800,000 will reflect on FY04 books.

E-Z-Em President and CEO Anthony A. Lombardo said in a prepared statement that the restructuring plan will streamline the company’s manufacturing operation “to keep us flexible and cost-effective in a highly competitive and cost-conscious marketplace.”

When the closings are completed, E-Z-Em will have three remaining manufacturing facilities, in Glenn Falls, N.Y., Westbury, N.Y., and Montreal, Quebec, Canada.

Scott Faro, M.D., associate professor of radiology and director of Drexel’s MRI Research Laboratory, used fMRI to investigate the regions of brain activation while a subject was telling the truth or lying.

Three volunteers were tested simultaneously with a four-channel polygraph machine. An event-related MR design was used for collecting the functional MR images, and a relevant situation was created prior to the fMRI scanning. The study subjects were presented with relevant and control questions based on the created situation and were asked to either lie or tell the truth pertaining to the questions.

Faro said the results suggest that there may be “unique patterns of brain activation involved in truth telling or deception that can be measured using fMRI. The regions we discovered to be activated during the deception process were the same brain regions involved with judgment, fear and anxiety.”

The fMRI research was presented at the 41st annual meeting of the American Society of Neuroradiology (ASNR of Oak Brook, Ill.).

Drexel University College of Medicine was formerly known as MCP Hahnemann University.

Researchers say that DEI has provided detailed information on soft tissues that only has been available previously through ultrasound and MRI.

DEI in the past has been used to image tumors in breast tissue and cartilage in knee and ankle joints. Zhong Zhong, a physicist with the National Synchrotron Light Source (NSLS) at Brookhaven, said the study is the first time DEI has proven effective for soft tissues, such as skin, cartilage, ligaments, tendons, adipose pads, and collagen and large blood vessels.

“The ability to visualize such a range of soft tissues, as well as bone and other hard tissues with just one technique, has many potential applications in diagnosis,” Zhong added in a prepared statement.

The technique uses intense beams of x-rays, which are thousands of times brighter than those produced by conventional x-ray tubes and provide enough monochromatic x-ray flux for imaging. In conventional x-ray images, the various shades of gray are produced, because different tissues absorb different amounts of x-ray energy.

Conventional x-ray works well in imaging bones and other calcified tissues, said Zhong, “but less satisfactorily in imaging soft-tissues that have similar and low x-ray absorption.”

In DEI, the scientists review the x-rays that pass through the tissue and how they bend and scatter, because these properties vary more subtly between different types of tissue.

In the study, DEI images were produced with a lower x-ray dose than the dose used for diagnostic x-rays and no contrast agent was needed, making the technique viable as a potential screening tool, said Zhong.

Scientists currently are working on how to scale down the DEI design so that it can be used in a clinical setting, but they say that this option should be feasible. They add that DEI may enhance mammography and play a role in the detection of other soft tissue pathologies, such as osteoarthritis, breast cancer, and lung cancer.

The DEI study appears in the May 2003 issue of the Journal of Anatomy. Rush Medical College (Chicago) collaborated on the project.

HKW Capital Partners II LP (New York City) and Coeur Medical’s senior management on April 30 acquired Bison Investments’ (Tampa, Fla.) interest in PolyTen LLC (Washington). PolyTen was the parent company for both Coeur Medical and PolyTen Plastics (Washington).

The new company is named Coeur Inc. and includes both Coeur Medical and the newly named Coeur Plastics. Coeur Medical will account for approximately 75 percent of Coeur Inc.’s total revenues. Both divisions will remain at their current Washington location.

Coeur Inc. is HKW’s first investment in a medical device firm.

Coeur Medical markets high-pressure syringes for the delivery of contrast agents during cardiac cath lab, interventional radiology and CT procedures. All products are manufactured, assembled, and packaged in the company’s Washington facility.

Coeur Inc.’s senior management involved in the transaction includes William J. Cude III as president, J. Michael Cude as executive vice president, Don McClintock as vice president of sales and marketing, and Debra Manning as vice president of quality and regulatory affairs.

Boston Scientific also will make an equity investment in MediGuide, a privately funded venture in which Elbit Systems Ltd. (Haifa, Israel) is a majority shareholder. The pact includes exclusive global distribution of the new product and an option for Boston Scientific to acquire MediGuide at a future time.

Boston Scientific plans to integrate its device platforms with MediGuide’s advanced navigation technology known as the Medical Positioning System (MPS). MPS is designed to track in real-time miniature sensors integrated into therapeutic and diagnostic medical devices.

The devices allow physicians to track the progression of the device as it is manipulated through the human anatomy while continuously registering its exact location and orientation utilizing advanced diagnostic systems. Those systems would include Boston Scientific’s intravascular ultrasound (IVUS) system, as well angiography, MRI and CT scanners.

The resulting 3D image would provide more clinical information with the goal of easier interpretation of the image by interventional cardiologists.

Time-lapse videos were built on a Silicon Graphics Inc. (SGI of Mountain View, Calif.) Onyx visualization system, starting with data sets assembled on a 64-processor SGI Origin 3000 server at UCLA.

The images show the sequential destruction of brain areas that control memory function, emotion and inhibition, and sensation. They also show that Alzheimer’s spares small brain regions that control vision and other basic functions that typically remain intact in Alzheimer’s patients.

The analysis technique detects very fine changes in MRI brain scans and offers doctors and researchers a tool that potentially could speed diagnosis, intervention and development of new therapies. The use of the SGI Origin server enables researchers to examine results from scan computations after an overnight computer run, compared with a run of up to 10 weeks on previous technology.

Paul Thompson, an assistant professor of neurology at the David Geffen School of Medicine at UCLA and the study’s chief investigator, said the group was “stunned to see a spreading wave of tissue loss. Initially confined to memory areas, this loss moved across the brain like a wildfire, destroying more and more tissue as the disease progressed.”

Beginning July 1, Draxis Health will move its CFO office to Montreal. Current Director of Finance Mark Oleksiw will head the operation.

The company also announced that Senior Vice President of Finance and CFO James Garner will leave the company to take a senior position with a healthcare company in the Toronto area.

Since September 2002, Garner has served as acting president of Draxis Pharma Inc. (Kirkland, Quebec, Canada), the company’s pharmaceutical contract manufacturing subsidiary.

Draxis Health recently appointed John Durham as president of Draxis Pharma. Durham’s career in pharmaceutical manufacturing includes service at Alcon Laboratories (Fort Worth, Texas) and the McNeil Consumer Healthcare (Guelph, Ontario) division of Johnson & Johnson (New Brunswick, N.J.).

The operating business units in Montreal will be under the executive management of Durham and Draximage Inc. (Kirkland) President Richard Flanagan.

In other company moves, Draxis Health promoted Dan Brazier to senior vice president of corporate development and strategic planning, effective July 1. For the past five years, Brazier has served as president of Draxis Pharmaceutica, the Canadian pharmaceutical sales and marketing division.

Draxis currently is negotiating the divestiture of Draxis Pharmaceutica’s assets.

Draxis Health President and CEO Martin Barkin said in a prepared statement that the realignment of executives in Montreal “lays the groundwork for the anticipated growth in our core business activities — manufacturing, customer service and new product development and introduction.”

The report said heat generated by electrode-tipped probes was successful in eight of nine patients in a clinical study, but adds that more research must be done to confirm the effectiveness of percutaneous radiofrequency to treat osteoid osteomas.

Researchers noted that eight patients achieved complete pain relief after thin probes were inserted through the skin into the core of the bone tumor. Radiofrequency energy then was used to produce enough heat to destroy the tumor at its biological core. Five patients underwent the procedure with guidance provided by incorporating CT fluoroscopy at 13 frames a second in three places at once.

Kieran Murphy, M.D., director of neurointerventional radiology at Johns Hopkins and a member of the study team, said that while the reported success rate for such surgery is very high, it carries some risks. Depending on the size of the bone tumor, bone fractures can occur at the site of the tumor removal and bone grafting may be required.

One patient eventually required surgical removal of the tumor to achieve complete pain relief. No immediate or delayed complications were observed in any of the patients treated.

“Based on these early results, it appears that CT fluoroscopy offers the most precise imaging method for localizing the most critical area of the tumor in which to place the heat probe,” Murphy said in a prepared statement. “Combining the minimally invasive approach of radiofrequency ablation and the enhanced imaging guidance of CT fluoroscopy gives us a potentially powerful new alternative for treating these tumors.”

Results of the study are published in the March issue of the Journal of Vascular Interventional Radiology.

Planar Systems Inc. (Beaverton, Ore.) has appointed Steve Flieder as vice president and general manager of its medical business based in Waltham, Mass. Flieder’s career includes general management and senior positions in operations and marketing and sales at GE Medical Systems (Waukesha, Wis.) and Siemens Medical Solutions (Iselin, N.J.).

Eastman Kodak Co.’s (Rochester, N.Y.) Health Imaging Group has named Jonathan J. Tweed as director of its worldwide original equipment manufacturers (OEM) business and a vice president for the Health Imaging Group. Tweed most recently served in a similar capacity for Kodak’s former Europe, Pacific, Middle East, Africa and Russia region for three years. His 32-year career at Kodak includes time as general manager for Kodak’s worldwide dental business and two years in the United States as the segment manager for the general radiology business. Tweed will be based in London.

Roger Williams Medical Center (Providence, R.I.) has named Brian F. Stainken, M.D., as chairman of the department of digital imaging and president of the Imaging Network of Rhode Island, a practice composed of radiologists from Roger Williams. Stainken most recently served as chief of the division of vascular and interventional radiology at the University of Maryland School of Medicine (Baltimore). Currently, he also serves as annual meeting chairman of the Society for Interventional Radiology (Fairfax, Va.).

SourceOne Healthcare Technologies Inc. (Highland Heights, Ohio) has named Robert J. White as its senior vice president of sales and marketing. White most recently served as the senior vice president of worldwide sales and service for software and services firm Accelrys Inc. (San Diego). SourceOne also appointed John Mazzetti as southeast district sales manager. Mazzetti’s career includes 30 years in the medical imaging industry and most recently he served at Camtronics Medical Systems (Hartland, Wis.).

IDX Systems Corp. (Burlington, Vt.) recently announced that Larry Krassner, president and general manager of its Carecast division, is on a paid leave of absence. Michael Raymer, Carecast’s vice president of marketing, will take over the general manager post on an interim basis. Before joining IDX in 2001, Raymer served as vice president at Shared Healthcare Systems (Anacortes, Wash.), where he handled product development and quality assurance. IDX said that Krassner authorized the company to disclose that he was recently hospitalized for a medical condition.

The American Roentgen Ray Society (ARRS of Leesburg, Va.) has named James H. Thrall, M.D., as the organization’s new president. Thrall is chair of the department of radiology at Massachusetts General Hospital (Boston) and serves as professor of radiology at Harvard Medical School (Cambridge, Mass.). He served for five years as the chairman of the department of radiology at Henry Ford Hospital (Detroit) before accepting his current positions. Thrall also has served as treasurer of the ARRS from 1996 to 2001, vice president from 2001 to 2002, and president-elect from 2002 to this year.

SourceOne Healthcare Technologies Inc. (Highland Heights, Ohio) has named Brett Himes as its senior vice president and CFO. Himes most recently served as the senior vice president and CFO for medical and surgical supplies distributor McKesson Medical-Surgical (Richmond, Va.).

Molecular Imaging Corp. (San Diego) announced that Thomas Insley has resigned his position as CFO. Insley said he plans to pursue other opportunities. Vice President of Finance Anthony Turnbull will assume Insley’s responsibilities in the interim.

Nields has become president and CEO of SenoLase Inc. (Denver), a majority-owned Fischer subsidiary formed to develop a breast tumor ablation technology.

Nields will continue as a member of the Fischer board and take the role of chief technology officer (CTO) for Fischer Imaging. CTO Roman Janer will continue as senior vice president of research-and-development.

Schoettler has been a member of Fischer’s board since January and as the chair of the corporate governance committee. She previously served as U.S. Ambassador to the 2000 World Radiocommunication Conference. From 1995 to 1999, she served as Lt. Governor of the state of Colorado, while from 1987 to 1995, Schoettler served as Colorado State Treasurer.

The May announcement follows the April appointment of Harris Ravine as president and CEO. Ravine succeeded Gerald D. Knudson, who stepped down on April 24 for family reasons.

Ravine’s career includes eight years with Storage Technology Corp. (Louisville, Colo.), where he served in several posts, such as CFO, head of European operations, and executive vice president for the company’s midrange storage business unit.

from $418.6 million in the previous fiscal year. Earnings totals include discontinued operations. McKesson said that Information Solutions revenues increased 15 percent overall in FY03, driven by a 41 percent increase in software revenues. The company added that revenues in its Information Solutions segment should increase approximately 10 percent in FY04.

Gains in its computer-aided detection (CAD) product line boosted sales at iCAD Inc. (Nashua, N.H.) in the first quarter. Sales of CAD and medical imaging products totaled $2.2 million, compared with total sales of $775,633 in the first quarter of 2002. The company posted net income of $76,558, compared with a net loss of $521,122 in the year-ago quarter. In its first quarter report, iCAD warned that it may have an unprofitable second quarter due to legal expenses from an ongoing patent infringement suit brought by R2 Technology Inc. (Sunnyvale, Calif.) against iCAD in June 2002. iCAD also warned that General Electric Co.’s (Fairfield, Conn.) pending acquisition of Instrumentarium Corp. (Helsinki) could reduce orders in the short term from iCAD. Instrumentarium serves as iCAD’s exclusive U.S. distributor for its CAD products. In anticipation, iCAD has been developing an internal and external sales support staff.

CompuMed Inc. (Los Angeles) posted slightly lower revenues in its second fiscal quarter, ending March 31. Revenues decreased to $482,000, compared with $511,000 in the second quarter of FY02. The net loss improved to $59,000, compared with a net loss of $79,000 in the year-ago quarter. For the six-month period, revenues slipped to $934,000, compared with $963,000 in the first half of FY02. The net loss lessened to $207,000, compared with a net loss of $223,000 in the year-ago period. CompuMed added that it is “making progress” in its shift toward the “high growth” digital imaging market and added distributors in China and Korea for its OsteoGram bone densitometer.

Sales of its security imaging systems powered Analogic Corp. (Peabody, Mass.) to double-digit gains in revenues and earnings in the company’s third fiscal quarter, ending April 30. Revenues increased 38 percent to $100.3 million, compared with $72.9 million in the third quarter of FY02. Net income more than doubled $6.4 million, compared with $2.7 million in the year-ago quarter. For the nine-month period, revenues rose to $396.6 million, up from $221.3 million in the same period of FY02. Net income totaled $47.9 million, compared with a net loss of $3 million in the year-ago period. The year-ago net loss was due to an $8.9 million charge related to the closure of the company’s Anatel Communications subsidiary and its Test & Measurement division. Analogic also noted that sales of its cardiovascular image and information management equipment and advanced clinical ultrasound systems “improved substantially over the prior third quarter.”

Schick Technologies Inc. (Long Island City, N.Y.) scored positive gains in its fiscal year, ending March 31, 2003. Net revenues increased to $29.8 million, compared with $24.4 million in FY02. Net income advanced to $11.8 million, compared with $3.1 million in the previous fiscal year. FY03 earnings were enhanced with a net income tax benefit of $5.4 million.

The divestiture of its Colorado operations in January adversely affected sales at Colorado Medtech Inc. (Boulder, Colo.) in its third fiscal quarter, ending March 31. Sales totaled $7.9 million, compared with $17.7 million in the third quarter of FY02. Loss from operations was $5.6 million, compared with a loss from operations of $1.9 million in the year-ago quarter. The third quarter FY03 loss includes a loss of $6.4 million from the company’s sale of its Colorado operations. The net loss for the quarter was $5.6 million, compared with a net loss of $1.2 million in the year-ago quarter. For the nine-month period, sales dipped to $36.6 million, compared with $52.4 million in the same period of FY02. The net loss increased to $5.4 million, compared with $3.2 million in the year-ago period.

A $2.4 million loss at its Health Management Corp. of America subsidiary weighed on Fonar Corp.’s (Melville, N.Y.) third fiscal quarter results, ending March 31. Revenues dipped slightly in the quarter to $9.8 million, compared with $10.4 million in the third quarter of FY02. The company’s net loss increased to $6.3 million, compared with a net loss of $5 million in the year-ago quarter. For the nine-month period, revenues climbed to $39 million, up 33 percent from $29.4 million in the same period of FY02. The net loss was $12 million, compared with a net loss of $13.6 million in the year-ago period. During the nine-month period, Fonar received orders for 12 Fonar Stand-Up MRI scanners, compared with eight orders in the year-ago period.

The transition from an exclusive distribution relationship to direct sales adversely affected sales at North American Scientific Inc. (NAS of Chatsworth, Calif.) in the company’s second fiscal quarter, ending April 30. Net sales declined to $2.9 million, compared with $4.9 million in the second quarter of FY02. NAS posted a net loss of $2.4 million, compared with a net loss of $4.9 million in the year-ago quarter. The year-ago loss included a $2.7 million write-down of licenses and equipment and a $1.9 million write-down of net deferred tax assets. For the six-month period, net sales slipped 19 percent to $8 million, compared with $9.9 million in the same period of FY02. The net loss was $3.5 million, compared with $4.8 million in the year-ago period.

Computerized Thermal Imaging Inc. (Lake Oswego, Ore.) posted mixed results in its third fiscal quarter, ending March 31. Revenues increased to $390,586 compared with $314,213 in the third quarter of FY02. The net loss decreased slightly to $3.56 million, compared with a net loss of $3.65 million in the year-ago quarter. For the nine-month period, revenues rose to $1.2 million, up from $757,152 in the same period of FY02. The net loss reached $10.4 million, compared with a net loss of $7.1 million in the year-ago period.

In a prepared statement, Del President and CEO Samuel E. Park said the current management was “proud of what our team has been able to accomplish in two years at Del” and promised “a smooth and orderly transition” to new leadership.

Park joined Del in March 2001 following the resignation of Chairman, President and CEO Leonard A. Trugman, who stepped down in the wake of a shareholder lawsuit and a Securities and Exchange Commission probe into the company’s financial statements.

Since taking over at Del, Park navigated the medical imaging equipment manufacturer through settlement of the lawsuit, the closure of Del’s DynaRad Corp. (Deer Park, N.Y.) subsidiary in order to streamline operations, and the resurrection of Del Medical Imaging Corp. (Franklin Park, Ill.) and Del Power Conversion Group (Valhalla).

In its most recent financial report, Del Global reported net sales of $51.6 million for the six-month period, ending Feb. 1, compared with $43.9 million in the same period of FY02. The company’s net loss increased to $6.9 million, compared with a net loss of $1.7 million in the year-ago period.

The Nasdaq stock exchange has approved Merge Technologies Inc.’s (Milwaukee) move to the national market.

The radiology software and services company previously traded on the Nasdaq Small Cap Market. The company will keep its MRGE ticker symbol.

Merge, which was founded 16 years ago, posted sales of $6.1 million in the first quarter, a gain of 35 percent over sales of $4.5 million in the first quarter of 2002. Net income almost doubled to $1.3 million, compared with $704,000 in the year-ago quarter.

In the sidebar to “The Economics of PET” story in the June issue (page NM-32), Brad Herrington was misidentified. Herrington is the vice president of marketing for CPS Innovations, a joint venture between Siemens Medical Solutions Nuclear Medicine Group (Hoffman Estates, Ill.) and CTI Molecular Imaging (Knoxville, Tenn.). We regret the error.