October 2000

In its first in a series of moves, GEMS acquired the clinical operations of high-field magnet developer Magnex Scientific Ltd. (Oxford, U.K.). Financial details were not disclosed.

The new company will be called GE Medical Systems Oxford Magnets Ltd. and remain in Oxford. The acquisition brings more than 50 scientists, engineers and manufacturing team members to GEMS.

The transaction also sets up GEMS to develop and commercially produce a 3.0 Tesla MRI, which is a goal of GEMS’, according to Dennis C. Cooke, GEMS’ general manager of global MR.

“The demand for 3.0T and above MRI systems continues to grow rapidly, driven by functional whole-body imaging and the exciting developments in MR related to molecular imaging,” Cooke said in a prepared statement. Currently, GEMS’ most powerful magnet is 1.5 Tesla.

Magnex was formed in 1982 and has a list of firsts in the field of MR. The two companies worked together in 1994 to develop the world’s first dedicated functional MRI magnet system.

Competition has been heated recently among MRI manufacturers to produce higher-field clinical systems.

In 1999, Marconi Medical Systems (Highland Heights, Ohio) acquired Surrey Medical Imaging Systems Ltd. (SMIS of Guildford, U.K.), a magnet producer which developed technology for whole body imaging systems of 3.0T and 4.7T strength for research applications.

Philips Medical Systems North America (Shelton, Conn.) has unveiled plans for a 3.0T MRI system with long-time Philips collaborator Intermagnetics General Corp. (Latham, N.Y.), which will supply the 3.0T magnet. Siemens Medical Systems (Iselin, N.J.) has designs for a 3.0T system as part of its strategic alliance with Bruker Medical (Ettlingen, Germany).

GEMS also announced plans in August to acquire the remaining half of its Elgems nuclear medicine joint venture from Elscint Ltd. (Haifa, Israel) and unveiled a new business unit to house its information technology businesses.

GEMS would spend $30 million to acquire the remaining 50 percent stake in Elgems, making it a wholly owned subsidiary of GEMS. Elgems was created in 1997, when GEMS and Elscint teamed to share manufacturing and R&D efforts in nuclear medicine. The joint venture withstood Elscint’s divestiture in late 1998 of its CT business to then-Picker International (now Marconi Medical Systems Inc. of Highland Heights, Ohio) and its MRI and ultrasound businesses to GEMS.

Elgems has been responsible for the research, development, engineering and manufacturing of all GEMS gamma cameras and other nuclear medicine products. Most recently, Elgems was closely involved in the development of GEMS’ Hawkeye imaging system, which combines CT and nuclear medicine to produce fused images.

In conjunction with the acquisition, the two companies also signed a sourcing deal for Elscint to continue as the primary source of components in Elgems’ nuclear medicine products.

The transaction is expected to close in October, giving GEMS 350 employees in Israel.

GEMS departed from its usual management style with the creation of a new information technology business, which brings several existing GEMS IT businesses under one name.

GE Medical Systems Information Technologies will combine six IT businesses, which GEMS has acquired over the last three years and one pending acquisition under a single business unit. (See chart.)

The move is a change from GEMS’ usual strategy of operating its acquisitions as separate businesses.

“We have been building the information technologies business brick by brick through internal development and acquisitions,” said Greg Lucier, president and CEO of the new IT business. He most recently served as vice president of global services at GEMS.

“We now have an integrated distribution strategy throughout the world,” Lucier said about the new business. “We also are integrating engineering wherever possible to have commonality of user interfaces and backbone architectures.

Lucier added that the new business will work to expand its PACS offerings to include RIS products and expand beyond the radiology department to areas, such as cardiology, that use images.

Lucier also said this fall GEMS will announce an enterprise-wide solution to integrate the various systems in the hospital.

In a surprise announcement, A. Ray Dalton (left), the entrepreneur and founder of OneSource Services Inc. (Cleveland), completed the sale of the clinical depot repair business to GEMS.

According to a statement from GEMS, OneSource’s successful depot repair business provides another option for GEMS to offer its in-house service customers.

“With the addition of OneSource Services, GEMS will broaden its focus on modality specific areas to help biomedical departments enhance their service productivity,” said Dale Jones, president and CEO of GE Clinical Services Inc. (Brentwood, Tenn.).

This is not the first time Dalton has sold one of his business ventures to GEMS. Dalton’s National Medical Diagnostics Inc. (Cleveland) was acquired by GEMS in 1996, when parent company General Electric Co. (GE of Fairfield, Conn.) purchased shares owned by Dalton, then-vice president Craig Gemmill and other investors. Dalton founded OneSource in 1997.

Dalton plans to leave OneSource by the end of October and launch a new business. Specific details on his next venture were not available.

“In October 1997, we were zero revenue. We were nobody,” he said. “Two-and-a-half years later, we’re more than $20 million in size and growing and expanding.”

The message he conveyed was not one of self-promotion or flattery, but more preaching his recurring gospel of opportunity.

“The important point there is not self-serving — it’s that other people can do that. I didn’t wake up one morning with more brains than anyone else,” Dalton added. “All the businesses I’ve run have been in the business of innovation and not entrepreneurism. Innovation is finding a better way of doing something that’s already being done and that’s what I’ve done.”

The secret, Dalton said, is a focused and aggressive growth plan. He opined that there are far too many medical service companies that are going through the day-to-day motions and not actively looking for growth opportunities. It is for that reason that a company, such as OneSource, can achieve growth so quickly. Dalton suspects that most of the business in the medical service market are missing the boat by not having such a plan.

“One of the things lacking in this industry is someone to help companies determine what their future will be,” he said. “We have so many companies that are just working for wages. They go to work everyday, they sign a contract, lose a contract, hire someone and someone leaves. This is the seventh company I’ve sold, but I continue to look forward and ask what’s next instead of being happy with where I am.”

One philosophy Dalton credits some of his success to is running any business like a public company, even if it is not considering going public. Adopting stricter accounting and hiring practices and growing the business as if one were answering to shareholders can provide the motivation to become a successful business quickly.

Luc Wanten, general manager of Agfa Impax Solutions Europe, said the majority position “basically gives us control of the company. We are going to have a majority stake with an option to buy the whole company.”

Wanten declined to disclose the selling price or any other financial details. He said only that the purchase was an all-cash deal and did not involve Agfa shares.

With the sale complete, Agfa is moving to integrate Quadrat’s RIS — Qdoc — into the Agfa Impax PACS product line. Qdoc is a second-generation product that initially will be available to European customers only.

“We are going to focus first on Europe, since this is where the installed base of Quadrat is, and we will move on from there,” Wanten said. “North America is not on the priority list right now.”

Wanten indicated that Agfa plans to deploy two of the newly integrated systems in September. One system will be in Esch Sur Alzeppe, Luxembourg; the other is an installation involving seven hospitals in the Nordic region. In anticipation of a successful Quadrat acquisition, Agfa introduced a prototype of its new offering at the European Congress of Radiology in Vienna in March.

Wanten said that Agfa “absolutely” will retain Quadrat’s 70 employees and may hire additional workers. All operation will continue at the Quadrat headquarters in Deurle.

In addition to integrating Qdoc into its Impax PACS, Agfa plans to continue with Quadrat’s other products: Qplanner, a hospital-wide resource planning and appointment software; MedFile, a results distribution server for patient data at the enterprise level; and MedAr, the electronic patient record.

Quadrat has more than 140 RIS installations throughout Europe and internationally, but none in the United States. The company reported sales of approximately $4.5 million in 1999.

Instead, the two companies have opted for an exclusive sales and marketing agreement.

In mid-July, Cytogen and Advanced Magnetics unveiled plans to merge, but, for various reasons — including the fluctuating price of the companies’ stock prices — both firms decided to reconsider their deal.

Jerome Goldstein, chairman and CEO of Advanced Magnetics, said the volatility of the stock price continually changed the value of the transaction.

“That brought into question whether our shareholders would even approve the deal,” he added. “Our principal interest when we approached Cytogen was as a marketing deal. Even though we ended up pursuing an acquisition, the market conditions made a marketing agreement more attractive.”

The sales and marketing pact gives Cytogen exclusive marketing rights to the Combidex MRI imaging agent. In exchange, Cytogen will provide 2 million shares of stock to Advanced Magnetics. The first 1.5 million shares were issued upon the closing of the deal and the final 500,000 will be issued upon completion of certain undisclosed milestones.

The initial stock exchange of 1.5 million shares is valued in the area of $13.5 million under current conditions, with an additional $4.5 million due in milestone payments. Advanced Magnetics will receive undisclosed royalties on sales of the products marketed by Cytogen.

In early September, laboratory products distributor Fisher Scientific International Inc. (Hampton, N.H.) and imaging products supplier PSS World Medical Inc. (PSS of Jacksonville, Fla.) called off their proposed merger after Fisher’s declining stock price drastically changed the value of the transaction to PSS shareholders.

When the two companies announced the proposed merger plan in June, the deal was valued at approximately $840 million, with PSS shareholders receiving 0.31 shares of Fisher for each share of PSS held.

Since then, the value of Fisher’s stock has plummeted dramatically. Had the deal been executed on Sept. 1, it would have been worth less than $500 million. Fisher stock has dropped 42 percent since the merger was announced in mid-June and PSS stock has slid 36 percent.

The boards of both companies agreed that “the transaction is not in the best interest of the respective shareholders.”

PSS had been looking for a merger partner for most of this year, but the Fisher deal met with skepticism from investors and analysts from the very beginning.

“This termination is not a huge surprise to us, given the sluggish results from PSS in its June quarter,” read a report from the investment firm of Lehman Brothers (New York) which ran on Reuters news service.

According to the Lehman report, there were bad signs from the beginning on the proposed merger. Among them, one of PSS’ directors, Charles Scott, voted against the merger before it was announced.

Section 45, CFR Part 142 of HIPAA encourages the development of an electronic data interchange (EDI) and/or healthcare information system (HIS); the security and confidentiality of all identifiable patient information on an EDI or HIS; and the authentication of anyone sending, receiving or viewing those records.

HIPAA covers all healthcare providers — from large delivery networks to clinics and single physician offices — payers, such as insurance companies and health plans, and clearinghouses that perform intermediary services for providers and payers.

The rule becomes effective Oct. 16. Deadline for compliance is Oct. 16, 2002.

Perhaps the most important component of HIPAA’s security mandates is a healthcare-related entity to audit and record which individuals access which records when. Those identities must be tracked to an individual for accountability. In addition, if a patient were to ask a healthcare-related entity for a record of whom accessed his or her records and when, the entity must be able to comply with the patient’s request.

In its final rule, HHS estimates there are some 400 formats for electronic health claims currently used in the United States.

The most stringent HIPAA security and confidentiality requirements cover patient information and transactions that are transmitted over the Internet. HIPAA requires virtually irrefutable evidence that only the appropriate person gains access to the information through two-factor authentication.

Security and authentication measures essentially are based on three criteria:

• Information that the user knows, such as his or her name and password;

• An item one has, such as a device which provides information to a user, who, in turn, supplies that information with a password as a second authentication factor;

• A unique personal characteristic, such as a fingerprint image, iris scan or voice or handwriting sample.

The most prevalent technology available on the Internet is public key infrastructure (PKI). PKI technology currently is incorporated into major Web servers and Internet browsers and has become the primary authentication technology on the Internet.

The final rule sets civil monetary penalties for violations of the rule as it pertains to any person who misrepresents his or her identity, or illegally obtains or discloses healthcare information. Fines range from $100 to $50,000 per person and a year in prison, depending on the violation.

As one would suspect, large hospital networks with greater financial and human resources began to work on securing internal and remote HIS networks as early as last year in anticipation of the coming HIPAA statutes. Smaller facilities, such as clinics and physician offices, generally have taken a wait-and-see approach, opting to evaluate final HIPAA rules before taking any action.

The study took 100 images from patients with normal chest X-rays and had both the human clinicians and neural networks estimate the percent likelihood that the patient would suffer a pulmonary embolism. The doctors never had seen the images before and had no information on the patients.

The computer’s results were compared to those of three experienced nuclear medicine specialists and found that, while both were accurate, when combined they were even more accurate than either method alone.

“The networks did quite well,” said James Scott, M.D., an associate radiology professor at Harvard Medical School (Boston) and lead researcher on the study. “But, if you combined the network and human interpretation and took the mean — say the human was 60 percent and the network said 100 percent, so you took 80 percent — that 80 percent figure was more accurate than the computer or the human alone. That means by having both the human and computer analyze the images, you’re getting better results than either one in isolation.”

Scott said that each method — human and computer — has its advantages.

“The nice thing about [the computer method] is it is all examined impartially without human preconceptions,” said Scott. “It is a truly independent assessment.”

Scott said he felt while the results of the study found the computer and human readings similar, he was confident the neural networks would outperform a resident or intern.

“Even for experienced people, having that additional input is useful, especially if you don’t have someone else around to take a look at the image.”

Scott has no immediate plans for commercialization of the technology, but feels it eventually could be used with almost any nuclear medicine camera.

“I would think equipment manufacturers could wire this into their programs easily,” Scott said. “You could have this give you a number — estimate of pulmonary embolism.”

More immediately, Scott plans to try the technology in images from patients that had abnormal chest X-rays. In the future, the technology could be used on other modalities, but it works best with smaller simplified images.

IVS’ main product for the past 10 years has been its Echo-Com stress echocardiography management system, which has 350 installations. In 1996, IVS released its Doku-Com image management product for echo labs.

Frank Schlau, senior vice president of marketing for TomTec, said the two companies have worked together since 1998, when TomTec began selling the Echo-Com and Doku-Com products through a licensing agreement.

IVS’ technology will be incorporated into the TomTec portfolio with particular emphasis on image management, DICOM and e-commerce. Schlau said the acquisition would allow TomTec to sell everything from 2D to 5D digital ultrasound products.

“We also will be able to combine our R&D resources into the development of these products to the benefit of our end user and OEM customers,” added Schlau.

The companies’ sales forces will be merged to “better address the requirements of the global marketplace,” according to the statement. TomTec gains the benefit of a sales force installed in Eastern Europe. Johann Wessels, one of the owners of IVS, will head the new sales organization.

With that goal established, Brockway and three colleagues founded Memory Testing Corp. (MTC of Davidson, N.C.) in 1993 to further develop and commercialize functional MRI. While it has been a gradual process, the company sees progress and is starting to actively market its commercial service to hospitals of all sizes.

Functional MRI performs brain mapping, which identifies certain areas in a patient’s brain. After a normal MRI brain scan is completed, additional protocols are used that have the patient listen to a sentence, squeeze a ball or wiggle his or her fingers while the images are taken. Functional MRI shows areas of the brain that become most active during these tests and helps create an individualized and detailed brain map.

“Brains are as individual as fingerprints,” Brockway said. “As activity levels change, so do the precise location of different mental activities. The exact spot where the process occurs appears on the MRI map as pinpoints of light.”

The exam itself takes approximately 75 minutes. Physicians using sophisticated software to “map” the brain analyze the images produced by the exam. MTC can use several different brain mapping software packages to perform the task. The company also offers both in-house services to perform the exams or remote services where a hospital has trained providers to administer the exam. The images are sent to MTC via the Internet. MTC provides image analysis, reconstruction, registration transmission and storage of images.

With an accurate brain map, a neurosurgeon can guide his surgery to avoid areas of the brain that are used for speech, comprehension and other vital activities. Previously, a separate brain surgery was required to determine this information using electrodes on the brain.

“Function is the key,” said Brockway. “Surgeons must preserve these areas, if at all possible, to support the patient’s quality of life.”

On the hardware side, Brockway said MRI scanners from GE Medical Systems (Waukesha, Wis.) are most compatible with functional MRI, but nearly any scanner will work.

Functional MRI was introduced in 1992. The technology currently is in place at less than 15 facilities nationwide, according to Brockway. Most of those sites are academic institutions using the technology in a research setting and not in a regular clinical setting.

Currently, MTC provides functional MRI services to three hospitals in the United States, but plans to expand its services in the coming months, focusing first on the eastern part of the U.S. from Washington D.C. to Florida.

Future applications for the technology include the prediction of surgical outcomes for epilepsy, tumor and stroke patients.

Under the terms of the new multi-year agreement, Siemens has exclusivity and expands its markets outside the United States from the hospital segment to now include clinics, breast imaging centers and physicians’ offices. Within the U.S., TransScan will distribute the TS2000 through independent dealers and direct sales. According to John Neugebauer, vice president of marketing at TransScan, Siemens is exclusive in the worldwide market, except for the U.S. and Israel.

Neugebauer said TransScan decided to distribute within the U.S., because the company feels it has an experienced staff and management structure that understands breast imaging in this country.

“We’ll be going through what we feel are the top level dealers in the U.S., because there are a lot of X-ray dealers, but there are some better known larger dealerships that do a very high quality job in breast imaging,” Neugebauer said. TransScan is in discussions with a variety of dealers regarding relationships and contracts, and company officials feel they have received a positive response in the market segment.

The initial agreement between Siemens and TransScan was a one-year deal, versus this new multi-year agreement, which Neugebauer said holds benefits for both companies.

The original agreement also called for Siemens to distribute worldwide including the U.S., but only in the hospital segment. The most recent arrangement allows TransScan to distribute in the U.S. in all segments and for Siemens to distribute in the rest of the world, again in all segments.

TransScan currently is evaluating 30 to 40 dealers within the U.S. to provide geographical coverage throughout the country. Neugebauer said there are some markets that are not covered well by dealers and in these cases, TransScan will add direct personnel.

TransScan has been selling the TS2000 in limited quantities in some countries, including Korea. According to Neugebauer, Siemens also has sold the product in South America, and has shipped systems in Europe.

Vital Images’ primary VScore product and VScore with EKG Gate are integrated options of its flagship 3D visualization and analysis software, Vitrea 2. According to Vital Images, the rapid growth of next-generation, multi-slice helical CT scanners has driven a substantial increase in the use of calcium scoring as a relatively fast and inexpensive method of screening those at risk for coronary artery disease. Imaged using VScore, calcium is a primary component of arterial plaque, which can indicate an individual’s likelihood of developing serious coronary problems in the future.

VScore uses image data from EBCT scanners, as well as from newer multi-slice helical CT scanners with coronary scanning capabilities. VScore is an optional feature of Vitrea 2 that quantifies the calcium in the major coronary arteries. It is multi-vendor compatible.

This new option is designed to match cardiac CT images with EKG signals and automatically identifies the images with the least motion, which can improve scoring accuracy.

The company’s Vitrea 2 and VScore options are tools for 2D and 3D evaluation of CT heart image data, designed to allow physicians to quickly and non-invasively evaluate patients for calcium deposits with the goal of early detection of coronary artery disease. VScore with EKG Gate and the updated version of VScore are available for purchase immediately to existing and new customers. The company said VScore with EKG Gate is planned for release outside of the United States later this year.

Imagent is being developed jointly by Alliance and Schering AG (Berlin).

The NDA for Imagent was filed in October 1999 and contained data from three multi-center studies showing the agent improved the imaging of the heart walls to assess the heart’s function. Schering will be the exclusive marketer of the product when commercialized.

The ultrasound contrast agent market is in its infancy, but several companies currently are in the process of pursuing FDA clearance. One company — Molecular Biosystems Inc. (MBI of San Diego) — has an FDA-cleared ultrasound contrast agent on the market — Optison.

The system combines a dedicated PET camera designed for whole-body FDG (fluorodeoxyglucose) imaging with a clinical CT scanner supplied by Analogic Corp. (Peabody, Mass.).

Positrace features a 50 cm axial field of view and a 70 cm opening to increase patient comfort.

“Up to this time, clinicians have had to perform mental gymnastics or use cumbersome registration software to combine a PET scan with CT slices,” said Lonnie Mixon, vice president of worldwide marketing for SMV.

The decision to develop and administer the exam was spurred by the growth in interest in the new technology. A 1998 survey of all 220,000 ARRT members showed that more than 19,000 registered technologists were interested in a bone densitometry certification exam.

“That was a primary motivator for this exam,” said Jerry B. Reid, Ph.D., executive director of ARRT. “Periodically, we change the questions on our renewal form to ask about interest in emerging modalities. More individuals were becoming involved in densitometry, so we put that question on the renewal form.”

According to the ARRT, exam candidates must comply with the rules of ethics in ARRT’s standard of ethics and be registered in one of the primary categories of radiography, nuclear medicine or radiation therapy.

The densitometry exam will be the first time-limited exam offered by ARRT. Certification will only be valid for five years, after which designees are required to re-take and pass the certification exam.

In May, three German scientists at the University of Witten/Herdecke’s medical computer science department founded Visus Technology Transfer GmbH & Co. (Bochum, Germany).

“We develop systems for the communication and presentation of medical images and findings,” said Jorg Holstein, managing director and co-founder of the company.

Despite its infancy, Visus has a budding product line under the JiveX brand name. To date, it has the JiveX Review, a Web-base image distribution system, JiveX Viewer Bean, a DICOM review software, the JiveX EP electronic patient record and the platform independent DICOM viewer, the JiveX CD.

A free “personal” version of its DICOM viewer product is available on the company’s Web site and its products currently are available in seven languages. Visus has products installed at two German facilities with three more due before the end of the year.

Visus sees itself as a partner to the PACS vendors and not a competitor. “We expect to achieve a good supplementation of the market through the high integration capability of our products,” Holstein said. “This is the perfect time to enter the market, because the new technologies are just establishing themselves and the demands are rapidly increasing.”

In 1998, the FDA cleared the ImageChecker system from R2 Technology Inc. (Los Altos, Calif.) for marketing as an adjunct to mammography readings. Now iMammogram.com (Westlake Village, Calif.) looks to bring ImageChecker technology to a much broader patient population by offering a remote CAD service to facilities that do not have access to a CAD system. The ImageChecker currently is the only FDA-cleared CAD system approved for use with digitized films, but not with digitally acquired mammograms.

iMammogram.com was founded in 1999 by practicing radiologist Larry Chespak, M.D. The service consists of sending mammogram films to a specified location and letting a radiologist scan them, run them through the ImageChecker system and return them to the patient’s original doctor with suspicious areas marked. The radiologist is able to review both the original films and the marked ones for comparison and consultation with the patient. A digitized version of the mammogram is stored by iMammogram.com on a secured, offline server.

The CloserLook service costs $75 per exam plus $4.50 for shipping. Right now, the service is not reimbursed by insurance.

As part of the second strategy, iMammogram.com is taking orders for the service on its Web site.

Biosound Esaote Inc. (Indianapolis) received FDA clearance for its Tissue Enhancement Imaging (TEI) feature on the Technos ultrasound system. TEI is Biosound’s proprietary harmonic processing technology for imaging more difficult patients. TEI is designed to improve tissue contrast and spatial resolution using non-linear harmonic resonance to double the transmitted beam’s frequency and provides a higher signal-to-noise ratio. Biosound also redesigned its line of broadband curved and linear array transducers for the Technos to simplify scanning.

Technology Marketing Group (TMG of Des Plaines, Ill.) has changed its name in light of its 1999 acquisition by IMV Limited (Greenbelt, Md.). TMG now is the Medical Information Division of IMV Limited. The Medical Information Division will remain in Des Plaines.

Marconi Medical Systems Inc.’s (Highland Heights, Ohio) Picker Technology Services (PTS of Lincolnshire, Ill.) signed a multi-vendor service agreement with GPO InSource Health Services (Wood Dale, Ill.). Under the agreement, a PTS on-site manager will provide a single point of contact in the hospital. Fred Keller, PTS general manager, estimated that InSource members could save as much as 25 percent on service costs.

Longport Inc. (Swarthmore, Pa.) has received the CE Mark to market its Episcan high-resolution ultrasound system in Europe. The Episcan images skin and underlying soft tissue to very high resolution to assess wounds, skin grafts, burns and dermatological conditions. Commercial shipments are expected to begin in the fall.

Digirad Corp. (San Diego) is delivering its mobile solid-state digital gamma camera, the 2020tc Imager, to hospitals, imaging centers and physician offices. The 425-pound camera allows gated SPECT to be performed in a room as small as seven feet by nine feet. As of early September, Digirad had delivered 10 systems in the U.S. and two units to Japan.

New York University Medical Center (NYUMC of New York) is using high-definition television or HDTV equipment from Sony Electronics Inc. (Park Ridge, N.J.) to expand the boundaries of surgery. The surgeons’ purchase of a HDTV system featuring Sony’s DXC-H10 high-definition video camera is the first purchase of such equipment for a medical application. Stephen B. Colvin, M.D., chief of cardiovascular surgery at NYUMC, said the DXC-H10 system will help the facility in its national and international training initiatives as the facility transmits surgeries, including new techniques and innovations, in real-time to colleagues in the U.S. and abroad. Colvin said the system

provides a significant improvement for NYUMC’s robotics assisted surgery research and development by virtue of its dramatically higher images definition.

DOBI Medical Systems (Mahwah, N.J.) has received approval from the FDA on its first of five modules in its pre-market approval application for the Dynamic Optical Breast Imaging system. The DOBI device currently is undergoing a series of preliminary clinical tests at several sites in the U.S. and Europe.

Spencer Technologies (Seattle) received FDA clearance on its transcranial Doppler (TCD) ultrasound product for monitoring blood flow into the brain. The device digitizes blood flow signals which allows the use of a patented display with increased functionality. Spencer officials call the device the first digital, stand-alone TCD product.

Medison America Inc. (Pleasanton, Calif.) used the recent 16th World Congress of the Federation of International Gynecology and Obstetrics (FIGO) meeting to unveil its SonoAce 9900 digital ultrasound system. The NT-based system offers multi-beam 3D volume imaging integration and is designed for multi-specialty applications.

Barco Display Systems’ Medical Imaging Systems Division (Atlanta) struck a one-year non-exclusive deal with Christie Group Ltd. (Quebec) under which Christie will sell, support and market Barco’s products in Canada. Christie will maintain an inventory of Barco display hardware and software to provide quicker access for customers.

ATL Ultrasound (Bothell, Wash.), a Philips Medical Systems Co., signed a multi-source, two-year agreement to supply ultrasound systems to HealthTrust Purchasing Group LP (HPG). The deal sets ATL up as a primary vendor for HPG’s 500 member facilities, allowing them to receive ATL system upgrades and support as well.

Syncor International Corp.’s (Woodland Hills, Calif.) subsidiary, Comprehensive Medical Imaging Inc. (CMI), has entered into an agreement with US Diagnostic Inc. (West Palm Beach, Fla.) to acquire

14 medical imaging centers in California and Florida. Following regulatory approval, CMI will pay approximately $39.5 million in cash and assume approximately $1.5 million in debt for the 14 centers. CMI operates 42 medical imaging centers in 11 states.

Philips Medical Systems North America (Shelton, Conn.) and ADAC Laboratories Inc. (Milpitas, Calif.) have signed a multi-year preferred vendor contract with hospital alliance Premier Inc. (Charlotte, N.C.). Under the terms of the contract, Philips — through its ATL Ultrasound division — and ADAC will offer their complementary lines of medical imaging systems to Premier’s member hospitals and healthcare systems. Philips will supply cardiac and vascular X-ray systems, radiography and fluoroscopy systems, ATL ultrasound equipment, surgical C-arms and Inturis for Cardiology and Radiology, the company’s integrated image and information management systems. ADAC will offer its C-PET Plus PET system and its line of nuclear medicine imaging systems.

Technical consultation service provider Orzon (College Station, Texas) has entered into an agreement with Samsung Data Systems America, Inc. (San Jose, Calif.) to become a master distributor in the U.S. for Samsung’s Raypax PACS. This technology has been designed to provide radiologists with a film-independent clinical environment that improves clinical accuracy and productivity at a lower cost.

Sonora Medical Systems Inc. (Longmont, Colo.) has acquired CraMar Technologies (Westminister, Colo.), a stress echocardiography support specialist. CraMar provides support for TomTec stress echo systems.

Biodex Medical Systems Inc. (Shirley, N.Y.) acquired the radiation protection product lines from Viox Corp. (Seattle). Biodex said that all inventory and production equipment will be moved from Seattle to Shirley for distribution to customers. Products in the acquisition include lead glass syringe shields, vial shields and eyewear.

FluoroScan (Northbrook, Ill.), a subsidiary of Hologic Inc. (Bedford, Mass.), now offers its Premier mini C-arm with a dual mode 6-inch or 4-inch intensifier. The 6-inch mode is designed for applications that require larger fields of visualization, while the 4-inch mode is intended for small bone applications, such as hand and foot/ankle cases.

Pinnacle Data Systems Inc. (Columbus, Ohio) received a $1.1 million order from Hologic Inc. (Bedford, Mass.) to supply Hologic with the central processing unit for the digital DirectRay operator console.

Marconi Medical Systems (Highland Heights, Ohio) has promoted Eliezer Tokman to the position of senior vice president of product strategies. Tokman came to Marconi in 1998 through its acquisition of Elscint Inc.’s (Haifa, Israel) CT business.

Inphact (Nashville) made two recent appointments. Kent Cunningham has become director of marketing. He previously served in brand management at food company ConAgra Inc. (Omaha, Neb.).

The company also named Brince Wilford as senior director of business development. He previously served as an account manager for group purchasing organization VHA Inc. (Irvine, Tex.) and as a program coordinator for Baptist Memorial Healthcare Systems (Memphis, Tenn.).

PSS World Medical (Jacksonville, Fla.) reported slightly increased sales in the first fiscal quarter, ending June 30. Sales reached $470.2 million, up from $437

million in the same quarter of 1999. Net income fell to $5.6 million, compared with $10.2 million in 1999’s first quarter. Net income decreased primarily to accounting for special charges related to acquisitions.

Positron Corp. (Houston) more than doubled its revenues in the second quarter, but reported a net loss on the sale of one Posicam-HZL system. Revenues were $1.5 million, compared with $453,000 in the same quarter a year ago. The net loss of $312,000 compared with net income of $46,000 in the year-ago quarter.

Schick Technologies Inc.’s (Long Island City, N.Y.) revenues fell to $1 million in its first fiscal quarter, ending June 30. The good news was that Schick’s net loss decreased by $3.5 million after drastically cutting costs. Revenues totaled $6.2 million, down 14 percent from $7.2 million in the same quarter of FY2000. The net loss was trimmed to $500,000, compared with a net loss of $4 million in the same quarter last year.

AccuImage Diagnostics Corp. (South San Francsico) achieved a strong increase in revenues and trimmed its net loss in its third fiscal quarter, ending June 30. Revenues advanced to $694,567, up 133 percent from $297,826 in the same quarter a year ago. The net loss improved to $90,258, compared with a net loss of $207,216 in the year-ago quarter. Company officials said sales of the AccuView 3D Workstation provided most of the revenues.

InSight Health Services Corp. (Newport Beach, Calif.) reported a 16 percent increase in revenues and a 17 percent increase in net income in its fiscal year, ending June 30. Revenues grew to $188.6 million, up from $162 million in FY99. Net income advanced to $7.2 million, compared with $6.1 million a year ago. InSight said that it will continue making selected acquisitions to expand its regional concentration and focus on reducing expenses, such as leases, equipment maintenance, travel and medical supplies.

DC DiagnostiCare Inc. (Edmonton, Alberta, Canada) saw sales increase in its third fiscal quarter. The company also posted a net loss of $12 million after accounting for interest and amortization costs of its aggressive acquisition program. Revenues grew to $17.5 million, a 32 percent increase from $13.3 million in the third quarter of FY99. The $12 million net loss came in contrast to $440,000 in net income in the year-ago quarter. In May, DC moved to consolidate its clinics and reduce overhead expenses. “However, the company does not have the funding necessary to fully implement the changes that are required,” a statement read. “The company is continuing to work with its investment bankers to find ways to access the capital required to implement the action plan.”

SonoSite Inc. (Bothell, Wash.) is warning that its FY2000 financial results will be on the low end of analysts’ expectations. President and CEO Kevin Goodwin said a physicians’ strike in South Korea and a cost freeze in Taiwan adversely affected sales in strongholds for the company. Goodwin also said the company expects to lower projections for bundled sales opportunities due to softness in higher-priced U.S. markets.

Imaging Diagnostic Systems Inc. (Fort Lauderdale, Fla.) has completed a $25 million equity financing from a private investor. The proceeds will be used for the ongoing clinical programs, product development and working capital.

Epix Medical Inc. (Cambridge, Mass.) has agreed to a financing arrangement covering the sale of up to $45 million of its common stock over the next 28 months. The agreement with Acqua Wellington North American Equities Fund Ltd. allows Epic to sell the shares, at Epix’s discretion, at a small discount to the market price at the time of the sale.

The transaction would include the assumption of $212.5 million in debt.

Radiologix shareholders would have the option to receive $7.25 per share in cash or convert each share currently held into 1.12 shares of the recapitalized company at an implied value of $8.25 per share.

“The transaction allows shareholders a premium to current market value, as well as an opportunity to continue an investment in Radiologix,” said Mark L. Wagar, Radiologix’s chairman and CEO. “For the past year, our board has been looking for the right way to capitalize the company going forward and continue to grow the way our performance deserves.”

The proposal is subject to regulatory review and is expected to close by the end of the year. Radiologix stock surged in the wake of the proposed deal to close at $6.06 on Aug. 23, the day of the announcement.

The new influx of capital is expected to boost growth for Radiologix and acquisitions are high on the priority list for achieving that growth.

“We think it’s the right time to grow and mature the company further,” Wagar told Medical Imaging. “This gives us access to capital that will allow us to grow not only internally, but through selected acquisitions in our existing and new markets. We see a number of acquisition opportunities that we plan to pursue when we complete this transaction.”

Wagar said the newer companies in the market, including Radiologix, focus more on market concentration and work more closely with radiology groups in the local markets. Radiologix targets specific geographic areas rather than spread itself across a larger region. Also, company officials feel offering services in multiple modalities in its markets rather than a single modality boosts its market share in a given area.