Medison Co. Ltd., founded in 1985, employs approximately 300 people worldwide and markets its ultrasound systems in 90 countries. With 11 subsidiaries around the world, the company posted total sales of $230 million in 1998.
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Medison Co. Ltd. Medison America Inc. |
T I M E L I N E1985: Parent company Medison Co. Ltd. is founded by seven KAIST (Korea Advanced Institute of Science and Technology) researchers 1988: Medison Co. completes construction on first factory in Hongchon, Korea 1992: Medison Co. creates Medison America Inc. (Pleasanton, Calif.) 1994: Sales network encompasses 78 distributors in 70 countries, 11 subsidiaries and joint ventures in seven countries 1996: Medison Co. acquires Kretztechnik AG (Zipf, Austria) August 1997: Medison Co. buys ownership stake in ultrasound processor developer TomTec Imaging Systems GmbH (Munich) October 1997: Medison Co. launches the high-end, all-digital Voluson 530D system May 1998: Medison Co. and ATL Ultrasound (Bothell, Wash.) co-develop the low-end, all-digital Ultramark 400 system; Medison America joins with Varian Medical Systems Inc. (Palo Alto, Calif.) to co-market products for radiation oncology, urology and gynecology November 1998: Medison Co. and ATL unveil the all-digital HDI 1500 ultrasound system May 1999: Medison Co. and ATL introduce the new Ultramark 400C ultrasound system for ob/gyn market Key ManagementMedison America Inc. |
Based on a worldwide ultrasound market of $3 billion in 1998, Medison Co.’s market share would be approximately 6 percent.
While ultrasound accounts for the majority of Medison Co.’s sales and its industry reputation, the company also designs, manufactures and markets MRI and X-ray equipment, endoscopes, chemistry and breath analyzers, and PACS (picture archiving and communications systems).
Ultrasound is expected to remain Medison Co.’s core business and greatest revenue producer.
Medison America Inc. contributed approximately $16 million to 1998 sales. The subsidiary was founded in 1992 to serve as Medison Co.’s stepping stone in the U.S. to market ultrasound systems exclusively. The company has 10 field offices and approximately 55 employees.
While Medison Co. plans eventually to introduce its portfolio of products into the U.S., no definitive timetable has been set.
Chief Competitors
Medison fights for global market share against the top ultrasound manufacturers. The company cites as its prime competitors Acuson Corp. (Mountain View, Calif.), Agilent Technologies Inc. (North Andover, Mass.), ATL Ultrasound, a Philips Medical Systems Co. (Bothell, Wash.), Aloka Co. Ltd. (Tokyo), GE Medical Systems (Waukesha, Wis.), Siemens Medical Systems Inc. (Issaquah, Wash.) and Toshiba America Medical Systems Inc. (Tustin, Calif.).
Principal Products
Even though it has products in areas outside of the medical imaging arena, Medison is making its name in digital and 3D ultrasound technologies.
Medison’s Voluson 530D ultrasound system – which received FDA 510(k) clearance in 1997 – operates in either 3D or conventional 2D mode.
Due to its advanced acquisition and storage capabilities, Voluson 530D can display the surface of an anatomical structure and demonstrate structures within the anatomy, such as a fetal spine or cyst hidden within an adult liver. Medison markets the Voluson to hospitals and high-end office physicians.
Medison’s newest ultrasound product is the SonoAce 5500 digital grayscale ultrasound system, which received FDA 510(k) clearance in December 1999 and began shipping in January. SonoAce has been available in other parts of the world since mid-1999.
The unit – which is priced at less than $30,000 – targets individual and small group practices and is designed for applications in diagnosis of conditions, such as breast lesions, gall and kidney stones, liver masses, vascular insufficiencies, cardiac abnormalities, aortic aneurysms, thyroid masses, ovarian cysts and pregnancy.
The SonoAce 5500 – which has 3D ultrasound capabilities – uses digital pixel-based focusing to produce high-resolution, distortion-free images and selects the optimal number of array elements to image objects in the scanfield to enhance both near-field and overall lateral resolution.
SonoAce’s 3D component offers 3D surface rendering, allowing an office physician to see a 3D representation of the fetal face, arms, legs and torso.
Medison Co. also is developing 4D – dubbed by Medison as Live 3D – imaging technology, which produces real-time images of a moving fetus in 3D. The company also is targeting Live 3D for radiology, oncology, urology and perintology applications.
Medison also is working to integrate color flow Doppler with volume ultrasound to locate and gather information on tumors. The greatest potential for the works-in-progress would be in the acquisition of volume data of a tumor, blood flow characteristics and how the blood perfuses with the tumor.
The company sees the technology potentially opening the door for a new set of research applications for using 3D ultrasound with color Doppler and power Doppler to find and treat tumors throughout the body.
Medison Co. began commercialization of its 1.0 Tesla Magnum MRI in 1996 for the low- and mid-range market and followed with its 3.0 Tesla Magnum MRI in 1999.
Medison Co.’s X-ray business began in 1997 after the company acquired Japanese manufacturer Acoma. The products – now under name of MedisonAcoma – include the MCA-601 C-arm and MXR-200M mammography system.
Medison Co. also offers a mini-PACS through Mediface Company Ltd. (Seoul). Mediface develops teleradiology and PACS software, sells and installs PACS equipment in hospitals, and provides service and support.
Business Alliances
Despite its business rivalry, Medison has teamed with ATL over the last couple of years on several ultrasound products and projects.
In May 1998, ATL launched the Ultramark 400, a new all-digital system priced in the $30,000 to $50,000 range. It was ATL’s first venture into the low-end price market segment. ATL enlisted Medison Co. to manufacture Ultramark 400s in South Korea.
In November 1998, the two companies completed the second phase of their alliance with the release the all-digital HDI 1500 ultrasound system. With a list price of $75,000 to $100,000, the HDI 1500 is designed for many applications, including radiology, cardiology, vascular, and ob/gyn studies.
In May 1999, ATL and Medison introduced the new Ultramark 400C ultrasound system. The Ultramark 400C is aimed at the ob/gyn market and offers color flow Doppler, Color Power angio imaging, dual color mode and triple mode simultaneous and automatic Doppler tracing.
Most recently, the two companies this past December offered an upgrade package to the HDI 1500, targeting the mid-range ultrasound market. The so-called Performance 2000 package provides tissue harmonic imaging capabilities to the 1500, as well as trapezoidal imaging to enhance the field-of-view for small parts imaging. The result is more diagnostic information per scan with less manipulation by the clinician.
Medison America, needless to say, sees the ATL partnership as a positive for both companies. The arrangement helps ATL in low- to mid-range markets in which it has not competed before and helps advance the credibility and notoriety of Medison’s digital ultrasound technology.
Strengths
In 3D ultrasound, Medison asserts that it has no peers.
The company’s 3D ultrasound technology has four primary components – acquisition, 3D multiplanar display, 3D volume rendering and live 3D images.
The one component that separates Medison Co.’s technology from the competition the most is acquisition, so say both company officials and outside observers. Medison’s automatic acquisition enables the anatomy to be scanned and accurate measurements derived from the stored data without the need to move the probe. The feature is designed for consistent volume acquisition each time a patient is scanned.
Medison Co. says its goal is not to convert a 2D ultrasound world to 3D ultrasound completely, but to integrate 3D into routine exams as another diagnostic tool of physicians.
The company uses the example of color Doppler. Do physicians use color Doppler all the time? No, but they do use it occasionally, depending on the circumstances, perhaps to look for something specific.
Medison is encouraging that same kind of thinking with 3D ultrasound. Geographically, Medison Co.’s market strength is in the Far East, Latin America and Europe. If U.S. sales data were excluded, Medison Co. would rank among the top five ultrasound companies.
Once the company established its global base, Medison used that foundation and working capital to launch Medison America eight years ago.
Given its product range in ultrasound from the premium Voluson 530D to the low- to mid-priced SonoAce 5500, Medison feels it is well positioned to take advantage of growth in any area.
Weaknesses
Medison’s biggest challenge is overcoming its low name recognition within the U.S.
Medison Co. is committed to helping its subsidiary grow and prosper in the world’s largest healthcare products market, but the company also realizes there is stiff competition from a multitude of small and multinational ultrasound companies. The parent company also realizes that to be a globally influential company, a solid U.S. foothold is essential.
Medison also is lobbying for the Health Care Finance Administration (HCFA) to establish a reimbursement code for 3D ultrasound examinations to supplement existing codes for conventional ultrasound.
A reimbursement category would go a long way toward the acceptance of 3D ultrasound as part of a patient’s regular examination.
To have HCFA create a reimbursement code, scientific data must be presented to show that a given technology has changed patient management. The collection of that data takes time.
Medison America hopes that published clinical papers extolling the virtues of 3D ultrasound will increase, testifying to the technology’s attributes. In particular, 3D ultrasound has shown to benefit in oncology treatments and procedures, as well as examining the uterus and in endometrial deviation.
Medison America asserts that 3D ultrasound also can reduce healthcare costs through early detection of abnormalities and possibly avoiding more costly MRI and CT exams. 3D ultrasound exams are not more expensive than conventional 2D images.
Outlook
Given its range of ultrasound products, Medison America is hoping to take advantage of ultrasound’s growth across the entire price spectrum.
As the advanced technologies of high-end systems migrate down to mid-priced ultrasound units, equipment buyers are eyeing less expensive systems more favorably – especially if they save money and still deliver the technological features.
Given that scenario, Medison America sees the greatest growth potential in the low- to mid-priced market, targeting office physicians and specialists. While Medison America has looked at the expanding cardiology market, it has yet to make a move to try to take market share away from echocardiography leaders Agilent and Acuson.
The immediate plan is to continue to cultivate market share in ob/gyn and strengthen its strategic alliances with companies, such as ATL and Varian.
One of the key applications in cardiology is the assessment of structures – volumetric information – such as the ventricle. With 3D ultrasound technology, Medison products can accomplish that goal, but the company is shying away from a “shot-gun” marketing approach and spreading itself too thinly into too many segments.
Medison America is looking to establish itself in obstetrics, gynecology and pediatrics, as well as in breast cancer. One strategy in place is to develop alliances with other healthcare equipment companies. One example is Medison’s ultrasound alliance with ATL.
In 1998, Medison America and Varian Medical Systems Inc. (Palo Alto, Calif.) signed an agreement to market jointly certain products for applications in radiation oncology, urology and gynecology.
The agreement covers Varian Oncology’s VariSource high-dose rate (HDR) brachytherapy system and Medison America’s Voluson 530D 3D ultrasound system.
Voluson 530D is utilized to enhance the ability to see and treat tumors of the prostate and breast. Medison America says the results so far show that Voluson’s 3D technology helps perform more accurate volume measurements of the prostate compared to 2D ultrasound.
One cancer treatment uses HDR needles to inject radiation in the prostate. Ultrasound is used to help guide placement of the needle to the precise location of the tumor. 
