June 2003

The proposal calls for Siemens to acquire a 35 percent stake in the new venture. In return, Draegerwerk will receive Siemens’ Electromedical Systems division. The Electromedical Systems division consists of two Siemens business units — Life Support Systems and Patient Care Systems.

Under terms of the EU approval, Siemens must divest its Life Support Systems segment, which specializes in anesthesia and ventilation devices. The joint venture also must make its patient monitoring systems compatible with patient monitoring devices made by other companies to avoid the emergence of exclusive standards.

When all is said and done, the venture will be called Draeger Medical AG & Co. KgaA (Luebeck) and will combine Draegerwerk’s Medical division with Siemens’ patient monitoring systems unit. Draeger Medical will have a worldwide workforce of approximately 5,700 people and annual sales of approximately $1.2 billion.

The companies said that net proceeds from the sale of Siemens’ Life Support Systems unit will accrue to the joint venture.

Draeger Medical CEO Wolfgang Reim said in a prepared statement that the EU Commission’s decision “assured us that we will be able to get the joint venture underway as briskly as possible.”

The new Draeger Medical will have production and research-and-development facilities in Luebeck; Best, Netherlands; Telford, Pa.; Danvers, Mass.; and Shanghai, China.

The companies plan to develop a seamless integration of acute care information within a hospital’s information technology (IT) network.

In an annual survey of healthcare recruiting trends and incentives, healthcare staffing firm Allied Consulting (Dallas) has found the demand for radiation therapists is surging, as more patients require cancer treatment.

As demand rises, so do salaries. The study found that compensation for

radiation therapists increased 22 percent last year, from an average of $49,500 in 2001 to an average of $60,500 in 2002.

Among a radiation therapist’s skills is the ability to operate a linear accelerator to direct cancer treatment for patients.

“It takes a considerable amount of training to operate these machines and there are fewer than 15,000 certified radiation therapists in the country,” noted John Hawkins, vice president of Allied Consulting, in a prepared statement. “We expect there to be approximately 5,000 cancer treatment center sites soon, so the workforce is being spread very thin.”

Radiation therapists are not alone in healthcare facilities’ searches to find more qualified staff. The number of searches Allied Consulting conducted for radiologic technologists increased by 78 percent in 2002, while the number of searches for nuclear medicine technologists, CT technologists and mammographers also rose.

According to Hawkins, the types of diagnostic imaging devices and the situations in which they are used have increased in recent years, driving the need for imaging technologists.

The number of searches Allied Consulting conducted for certified registered nurses anesthetists (CRNAs) grew 64 percent in 2002, while average salaries offered to CRNAs increased from $118,000 in 2001 to $129,000 in 2002. Some facilities reportedly offered CRNAs salaries as great as $180,000 last year.

With the demand for 3.0-tesla systems increasing and manufacturers more than willing to supply the higher field magnet technology, the U.S. MRI scanner market could reach $1.97 billion in 2009. The U.S. market for MRI systems and MRI coils reached $1.46 billion in 2002, the market’s best year ever, with approximately 1,055 units shipped.

The numbers and the forecast come from market research firm Frost & Sullivan (San Jose, Calif.).

“Hospitals and imaging clinics have begun to upgrade low-field systems with mid-field open and high-field closed scanners, relegating low-field open systems to smaller niche markets,” noted Jim Clayton, medical imaging research analyst and study author.

The report cited GE Medical Systems (Waukesha, Wis.), Siemens Medical Solutions (Erlangen, Germany) and Philips Medical Systems International (Andover, Mass.) as the top competitors in the U.S. MRI market.

High-field MRI systems with a closed architecture accounted for more than 75 percent of last year’s revenues, with 3.0-tesla scanners garnering the greatest interest among healthcare providers. Mid-field strength open scanners dominate the open MRI market.

Since for every action there is an equal and opposite reaction, the surge in higher field magnets has resulted in a decline in the low-field MRI scanner market, a trend which the report expects will continue through the forecast period. End-users with low-field scanners are transitioning to mid-field open and high field closed solutions.

For manufacturers, the trend is a double-edge sword, the report said. MRI system makers will be faced with what Clayton described as the “difficult task of meeting market demand for these new [3.0-tesla] scanners, while minimizing the effects of lost sales of the more established 1.5-tesla market.”

With the higher field strength MRI systems will come more clinical applications for the technology. The report opined that contrast-enhanced MR angiography, interactive cardiac MR, and interventional MR are set to entrench 3.0-tesla scanners as the MRI technology of choice.

In addition, niche markets will develop, further fueling U.S. MRI revenues. The report stated that specialty physician practices and surgical groups within larger hospitals will become more of a market force over the next several years.

“This trend will be more important for competitors who produce low-field MRI systems, as unit sales in this segment continue decline, ” Clayton said. “Minimizing this decline will not be easy, as new competitors will be introducing innovative MRI scanners at higher field strength to compete with low-field solutions now available for the niche markets.”

The bankruptcy decision by the court does not affect Jomed subsidiaries.

In a prepared statement, Jomed said that it is “looking at a way to exit the bankruptcy.” Jomed did not say specifically what plans it might have to correct the situation.

Jomed’s financial problems began to surface in January in a review of accounting policies to restate its financial results for 2001 and 2002.

In February, a preliminary audit of the company’s books by the accounting firm KMPG found that as much as $25 million in revenues were based on orders that never materialized into actual deliveries.

According to the company, Jomed issued a number of invoices prior to receiving any order for all of 2001 and the first nine months of 2002. Deliveries never came to fruition.

Planmed’s new MaxView is designed to bring more breast tissue into the field-of-view, potentially resulting in higher detection of cancer.

Planmed’s MaxView System is designed to bring the maximum amount of breast tissue into the imaging field-of-view, resulting in a higher percentage of lesion detection and earlier cancer diagnosis.

MaxView was developed with Daniel B. Kopans, M.D., professor of radiology for Harvard Medical School (Cambridge, Mass.) and director of the breast imaging department at Massachusetts General Hospital (Boston). The system received FDA clearance in 1999 and a production model debuted in late 2001.

Planmed began limited distribution of MaxView last year, with installation in approximately 50 beta sites in the United States and Canada and approximately 100 units worldwide. The beta sites include Massachusetts General Hospital (Boston); Breast Center of Harlem (Harlem, N.Y.); Imaging Associates (Seattle); Harbor-UCLA (Torrence, Calif.); and Mills Memorial Hospital (Terrance, British Columbia, Canada).

MaxView uses moving, hygenic, disposable, radiolucent sheets positioned on the upper and lower compression paddles of the mammography system that help to gently and evenly move the breast into the imaging field-of-view. Planmed said the feature adds as much as two centimeters of tissue into the imaging field compared to conventional mammography systems. The technique also serves to spread tissue sideways, minimizing superimposed tissue in the image. The upper and lower sheet can be independently manipulated for maximum tissue spread.

“Not only can you view a greater amount of tissue in the breast itself, imaging the tissues close to the chest wall is significantly improved — an area often missed by other imaging systems,” said Kopans in a prepared statement. “The MaxView System was developed to help the technologist to gently pull the breast as far into the mammographic system as possible in an effort to image as much tissue as possible.”

MaxView has a selling price in the mid $90,000 range.

SourceOne Healthcare Technologies (Highland Heights, Ohio) distributes Planmed’s line of mammography products in the United States.

The companies signed a three-year contract earlier this year, effective March 31.

Researchers from the University of Giessen (Germany) brought the two Cypress units along for the expedition to the summit of the world’s highest mountain to investigate changes in cardiac performance and lung function at extreme altitudes. The pulmonary project is the first of its kind.

Climbers prepare at base camp for their climb of Mt. Everest by having their hearts checked as part of a study on temporary hypoxia.

The two miniaturized, all-digital Acuson Cypress units were chosen because of their portability and weight of 19 pounds. The systems also each have digital storage capacity for more than 100 studies and network capabilities to send studies from remote locations.

As of press time, the team hoped to reach the summit of Mount Everest on May 20, exactly 50 years to the day that Sir Edmund Hillary and Tensing Norgay became the first climbers to make their trip to the summit.

The team underwent pulmonary testing at sea level and at Namche Bazar, Nepal, during its trek to Everest base camp. At base camp, the team was scheduled to undergo further pulmonary investigations before attempting to climb Mount Everest.

The project’s objective is to evaluate the effectiveness of suitable interventions for pulmonary hypertension (PHT) in a group of highly trained athletes under the extreme conditions of a Mount Everest expedition, said lead investigator Friedrich Grimminger, M.D.

The study subjects are voluntarily exposed to an acute PHT reaction caused by a lack of oxygen, or hypoxia. On the climb, reactions are induced — due to the high altitudes — which mimic those developed over years in patients with PHT disease, creating what researchers say is an ideal situation to perform the research.

Organ conditions in the expedition team are reversible due to the temporary hypoxia that occurs at high altitudes.

With this information, researchers hope to develop effective therapy for hypoxia in mountaineers and for patients with chronic cardiac and lung diseases with underlying pulmonary hypertension.

Amersham will combine its brachytherapy division with Galil Medical’s urology business and its cryotherapy technology. The companies hope to complete the transaction by the end of July.

Amersham and Galil Medical said the new company, to be headquartered in the United States, will offer brachytherapy and cryotherapy for patients with early, advanced and recurrent stages of cancer.

Amersham will hold a 75 percent stake in the new entity, while Galil Medical will own the remaining 25 percent.

The new company also will market Amersham Health’s line of prostate brachytherapy seeds and co-promote its bone pain palliation agent Metastron worldwide, except in Japan.

The annual meeting is scheduled for July 10 through July 16 at the Metro Toronto Convention Centre. ISMRM plans two days of education sessions on July 10 and 11, followed by the scientific program beginning July 12.

ISMRM was forced to postpone its original May plans on April 24 after the World Health Organization (WHO) extended its travel advisory to Toronto on April 23 due to several reported cases of SARS in the Canadian city. The WHO lifted its warning for Toronto effective April 30.

WHO Director-General Gro Harlem Brundtland said the advisory for Toronto was lifted, because there had been no outbreaks in the community at-large for at least 20 days, twice the length of the incubation period for SARS.

With the July dates in place, ISMRM President Richard L. Ehman in an open letter to members said that the organization is predicting “a highly successful program” with a record number of abstract submissions and pre-registrations.

“Over the coming weeks,” the letter continued, “our scientific program committee and education committee will be working intensively to renew [the May annual meeting] plan, with the goal of making the scientific, educational, business, and social events of the new program even better.”

U.S. authorities in March charged HealthSouth with overstating earnings by $1.4 billion and assets by $800 million since 1999 in what government agencies allege is a case of “massive accounting fraud.”

On April 24, federal prosecutors charged HealthSouth’s first CFO, Aaron Beam, with bank fraud and making false representations to HealthSouth’s lenders. Beam agreed to plead guilty at a later date. He served as CFO from the company’s creation in 1984 until October 1997.

The charges allege that from April 1996 to October 1997, Beam and others, including HealthSouth Chairman and CEO Richard M. Scrushy, devised a scheme to obtain loans and credit from a Birmingham bank by filing false and fraudulent financial information with the bank.

In a filing with the Securities and Exchange Commission (SEC), HealthSouth stated that it would mail a letter to its affiliated physicians, emphasizing that the company has sufficient funds to support its operations, as well as adequate insurance for the doctors.

The recipient is Staten Island (N.Y.) University Hospital. Plans are to complete the installation in September and to begin treating patients in October.

An artistic rendition of BrainLab’s BrainSuite includes Siemens’ Magnetom 1.5T MRI system.

BrainSuite, which is pending FDA clearance for some of its components, combines image-guided surgery (IGS), intra-operative MRI, visualization and data management technology. The neurosurgical OR includes a Magnetom 1.5 Tesla high-field MRI scanner from Siemens Medical Solutions USA Inc. (Malvern, Pa.).

“It allows [neurosurgeons] to perform all the high-grade diagnostic scans — MR spectroscopy, functional MR, perfusion tests — they would require to define how well they have done with surgery,” said Doug Garrabrant, BrainSuite manager for North America.

BrainSuite applications include tumor resections, vascular neurosurgery, and aneurysms, as well as less complicated procedures, such as catheter and needle placements. Garrabrant said that some prospective facilities have discussed the possibility of spine procedures and head and neck biopsies with BrainSuite.

“From the neck down, there is not a lot being done now with interoperative MR,” added Garrabrant, “but many sites are interested in looking at this application for procedures, such as prostate seed implants.”

The estimated cost of BrainSuite is between $5 million to $6 million, depending on configuration. The OR would include the Siemens’ Magnetom, related surgical and scanning devices and MR-compatible anesthesia equipment.

As for infrastructure, a facility would need magnetic shielding of the room and a floor that can hold an MRI magnet of approximately 12,000 pounds.

Because the process is integrated and automated, a patient can be moved from an operating position to a scanning position and then back to the operating position within four to seven minutes. Patient images and information are registered automatically for the surgeon’s view.

Staten Island University Hospital is a multi-site, academic medical center, which offers services such as stereotactic radiosurgery, the Heart Institute of Staten Island, a regional burn center and trauma center.

One study examined the benefits of a new contrast agent, ferumoxtran-10, Combidex. Mukesh Harisinghani, M.D., a radiologist at Massachusetts General Hospital (Boston), found that the combination of MRI and the contrast agent is effective in diagnosing testicular cancer.

Sixteen patients with proven testicular cancer were given an MR examination without the new contrast media and a separate examination 24 hours after Combidex was injected to determine if the disease had spread into lymph nodes.

When compared to the results of biopsy of the lymph nodes, the MR images were 92 percent accurate in identifying malignant disease.

Combidex is co-developed by Advanced Magnetics Inc. (Cambridge, Mass.) and Cytogen Corp. (Princeton, N.J.) and currently is awaiting FDA approval.

Another study presented at ARRS revealed that an interventional radiology procedure eases pain associated with uterine fibroids without adversely affecting fertility.

Hyun S. Kim, M.D., of Johns Hopkins Medical Institutions (Baltimore) and the lead author, reported that blocking the uterine and ovarian arteries feeding the fibroid can relieve patients’ symptoms.

Kim and a team of researchers performed ovarian artery embolization and uterine artery embolization on six patients during the initial procedure. The arteries were embolized using special particles or spheres of varying size. Three other patients were treated by ovarian artery embolization for residual fibroids after the initial procedure.

“Symptomatic improvements were seen in all nine patients and no premature ovarian failure was detected,” Kim said in a prepared statement.

Less is more, according to Richard Chesbrough, M.D., senior staff physician at Henry Ford Hospital (Detroit) and presenter of a study that tested a small ultrasound-guided biopsy needle.

The study found that the 14-gauge needle is more that 99 percent accurate in diagnosing breast cancer. While physicians have questioned the need to use a larger 8, 11 or 12-gauge needle in order to get enough tissue for an accurate breast diagnosis, the study found that the less-invasive needle is just as accurate at one-tenth the cost of larger needles.

A new study presented at ARRS advances CT-guided therapies for back pain sufferers as a highly accurate and minimally invasive therapy. The study indicates that the procedure decreases the need for pain medications and delays the need for surgical treatment.

According to Diego Aguirre, M.D., of Fundacion SantaFe de Bogota Medical Center and El Bosque University (Bogota, Colombia) and co-author of the study, CT-guided procedures are performed without patient sedation and imply no major risks. Primarily preformed by radiologists, an anesthetic and steroidal anti-inflammatory drug is injected into the probable site to “block” where the pain is originating.

Lodox Systems has launched its Statscan DR system in the U.S. with a selling price in the range of $400,000.

The company plans to tout Statscan’s speed of diagnosis, image quality, patient accessibility, radiation dosage and total cost of ownership in its marketing campaign.

Statscan is FDA-cleared as a fully compliant x-ray system. Lodox said the system is designed to provide a full body image for initial diagnosis and magnify specific smaller areas for a more detailed evaluation. The company cited a 2 1/2-year study at the trauma unit of Groote Schuur Hospital (Cape Town, South Africa), whereby the average patient time to produce medical images was five to six minutes, compared with as much as 48 minutes for conventional x-rays. The study found the mean radiation dose for the Statscan was 0.33 milliGray, compared with 5.73 milliGray for conventional x-ray devices.

Statscan also is designed to automatically compute and set all x-ray parameters. The radiograph is acquired from a C-arm that moves over and around the patient. The C-arm permits the operator to acquire frontal, oblique angle, lateral or horizontal projections. An image is available immediately for viewing on the diagnostic viewing station.

Lodox noted that Statscan is based on enhanced linear slot-scanning technology, which produces high quality radiographic images of any size in seconds. Statscan also is configured for bariatric (morbidly obese) patients with the capacity to capture medical images without scatter artifacts caused by the large amounts of soft tissue from these patients.

Lodox has priced Statscan in the range of $400,000 to $450,000, depending upon configuration and options.

Lodox Systems North America is a wholly owned subsidiary of Lodox Systems (Pty) Ltd. (Benmore, South Africa). Lodox Systems Ltd. is responsible for the worldwide sales, distribution and customer service support.

The buyers are the same owners from which HMCA purchased A&A in March 1998 for $10 million. A&A manages four primary-care practices located in Queens.

According to Fonar, A&A posted a net loss of $224,703 in the first six months of FY03, ending Dec. 31, 2002, and an operating loss of $77,978. In FY02, ending June 30, 2002, A&A posted a net loss of $5.4 million and an operating loss of $120,889.

HMCA said in a prepared statement that with the sale of A&A, HMCA will focus “on the management of physical therapy and rehabilitation facilities and MRI centers.”

Strong revenue growth in both its X-Ray Products business and Oncology Systems business helped Varian Medical Systems Inc. (Palo Alto, Calif.) surge in its second fiscal quarter, ending March 31.

Total sales increased 21 percent to $266 million, compared with $220.6 million in the second quarter of FY02. Net income rose to $34.2 million, up from $23.8 million in the year-ago quarter.

For the six-month period, total sales climbed to $472.9 million, compared with $395.7 million in the first six months of FY02. Net income increased to $55.2 million, compared with $37 million in the year-ago period.

Varian Medical’s X-Ray Products business achieved its best sales quarter in its history, with sales of $44.2 million, 59 percent greater than sales of $27.8 million in the first quarter of FY02. For the six-month period, X-Ray Products posted sales of $78.2 million, compared with $52.5 million in the year-ago period.

Varian Medical cited “significant increases” in shipments of its high-power, anode-grounded tube for CT scanners for its sales growth in this segment.

Compiled and analyzed by Health Care Markets Inc. (Hilton Head, S.C.), the stock indices above plot the performance of two market segments: Imaging Devices and Imaging Services. The indices are part of WDI’s healthcare database of more than 1,000 companies. For comparison we also plot the progress of the S&P 500. The indices began in January 1991 with a base of 100.

Net sales at Schering AG Group (Berlin) declined 6 percent in the first quarter to $1.3 billion, after adjusting for currency effects, compared with the first quarter of 2002. Net profit decreased 10 percent to $142 million compared with the year-ago quarter. Monetary amounts are in approximate U.S. dollars.

Harsher than normal weather caused scan volumes to decline in the Eastern half of the country for Alliance Imaging Inc. (Anaheim, Calif.) in the first quarter. Still, revenues increased 4 percent to $102.7 million, compared with $98.7 million in the first quarter of 2002. Net income, however, slipped to $6.9 million, compared with $7.9 million in the year-ago quarter. Alliance noted that its positron emission tomography (PET) business continued to “grow nicely,” increasing more than 130 percent over the first quarter of last year.

Hologic Inc. (Bedford, Mass.) notched an 8 percent gain in revenues in its second fiscal quarter, ending March 29. Revenues advanced to $50.3 million, compared with $46.4 million in the second quarter of FY02. Net income totaled $383,000, compared with $4.4 million in the year-ago quarter. Net income in the year-ago quarter includes $4.4 million relating to a tax refund from the President’s Economic Stimulus Bill. For the six-month period, revenues totaled $99.3 million, up from $94 million in the same period of FY02. Hologic posted a net loss of $529,000 in the period, compared with net income of $2.8 million in the year-ago period.

The addition of two mobile coaches helped Mobile PET Systems Inc. (San Diego) post a profit in the company’s third fiscal quarter, ending March 31. Revenues rose 33 percent to $5.6 million, up from $4.2 million in the same quarter of FY02. Net income from continuing operations totaled $61,921, compared with a net loss from continuing operations of $1 million in the year-ago quarter.

IDX Systems Corp. (Burlington, Vt.) notched a 12 percent advance in revenues in the first quarter, thanks in part to sales of its Imagecast PACS (picture archiving and communication system). Revenues increased 12 percent to $121.1 million, compared with $107.9 million in the first quarter of 2002. Net income slipped to $3.8 million, compared with $4.1 million in the year-ago quarter. Excluding a pre-tax gain of $4.3 million from the sale of its ChannelHealth subsidiary, 2002 first-quarter net income was $1.3 million. IDX added that it “remains comfortable” with 2003 revenue estimates of $400 million to $406 million.

Double-digit sales gains in the United States and Europe helped to boost revenues at SonoSite Inc. (Bothell, Wash.) in the first quarter. Revenues increased to $17.2 million, up 34 percent from $12.8 million in the first quarter of 2002. SonoSite also lessened its net loss to $2.6 million, compared with a net loss of $3.7 million in the year-ago quarter. SonoSite is anticipating revenues of $21 million to $23 million in the second quarter.

Merge Technologies Inc. (Milwaukee) achieved double-digit growth in sales and earnings in the first quarter. Net sales gained 35 percent to $6.1 million, compared with $4.5 million in the first quarter of 2002. Net income increased to $1.3 million, compared with $704,000 in the year-ago quarter. Merge said it stands by its estimate of $27 million to $28 million in net sales in 2003, which would represent 30 to 35 percent growth over 2002.

The lower dollar and the divestiture of its HealthCare Products division in the fourth quarter of 2002 adversely affected sales for Philips Medical Systems International (Andover, Mass.) in the first quarter of 2003. Sales declined to approximately $1.3 billion, compared with approximately $1.7 billion in the first quarter of 2002. Income from operations increased to approximately $70 million, compared with approximately $28 million in the year-ago quarter. Philips Medical said the gain in income was due primarily to fewer specialty items and savings of approximately $42 million from the integration of its acquisitions of the last two years. Philips Medical is targeting savings of approximately $350 million in 2003.

Continued growth in its AngioDynamics subsidiary and strong sales of its diagnostic products in CT powered E-Z-Em Inc. (Lake Success, N.Y.) to record net sales in its third fiscal quarter, ending March 1. Net sales reached $33.1 million, compared with $30.6 million in the third quarter of FY02. Net earnings slipped to $280,000, compared with $1.1 million in the year-ago quarter. For the nine-month period, net sales advanced to $96.3 million, up from $88.9 million in the same period of FY02. E-Z-Em posted net earnings of $527,000, compared with a net loss of $122,000 in the year-ago period. The first nine months of FY02 included a restructuring charge of $1.5 million.