Siemens investing in molecular imaging

FDA sets goal to cut device review times

Volcano Therapeutics buys Jomed IVUS business

Sony storage goes petabyte

Kodak, Siemens expand scope of sales deal

Colorado Medtech completes merger with Civco Holding

US angio labs make big strides in digital invasion

Fischer SenoScan gets bow from ACR

iCAD debuts fee-per-procedure CAD for mammo

SIEMENS INVESTING IN MOLECULAR IMAGING
Siemens Medical Solutions is looking to make a mark on molecular imaging–based on a series of recent investments and technology collaborations.

Siemens has made an equity investment in VisEn Medical Inc (Woburn, Mass), a developer of agents and systems for molecular imaging, as well as signed an agreement with Gamma Medica Inc (Northridge, Calif) to market a molecular imaging system. Siemens also is working closely with Massachusetts General Hospital (Boston) to develop molecular imaging applications in laboratory models and clinical studies.

“The goal of Siemens Medical Solutions is to continually evaluate all areas of the health care continuum and determine where there are opportunities to make a significant contribution to improving the diagnosis and treatment of disease,” says Erich Reinhardt, Siemens president and CEO.

Molecular imaging allows noninvasive measurement of molecular and biological processes within the living body. Compared with conventional medical imaging, molecular imaging probes the molecular abnormalities that are the origin of disease rather than imaging the resulting conditions or morphologies caused by the disease.

VisEn Medical is developing proprietary imaging agents and system technology platforms that enable imaging at the molecular level in animals and in humans. The company is focusing its development programs on the imaging of diseases such as cancer, atherosclerosis, and rheumatoid arthritis both for animal research and human clinical imaging.

Siemens’ new agreement with Gamma Medica gives Siemens exclusive marketing rights for Gamma Medical’s molecular imaging system, X-SPECT, in the United States. X-SPECT–Gamma Medica’s second generation MicroSPECT system–provides the medical research community with the only dual-modality system for preclinical, small-animal imaging available today and is the market-leading-small-animal,

single-photon emission computed tomography (SPECT) product. Siemens is now marketing this MicroSPECT system to hospitals, universities, and pharmaceutical and biotech companies in the United States.

Under the pact with Mass General, Siemens will provide MRI systems, a picture archiving and communications system (PACS), nuclear imaging technologies, and prototype molecular fluorescence imaging systems.

FDA sets goal to cut device review times
The Food and Drug Administration (FDA) has committed to cut medical device review times–by 2005.

Fueled by added resources from the Medical Device User Fee and Modernization Act (MDUFMA) enacted last year, the FDA is set to reduce the cumulative review time it requires to approve expedited and traditional Pre-Market Approval Applications (PMAs). The FDA said it will work with sponsors to implement MDUFMA to improve the quality of the submitted applications and streamline the process for providing and reviewing evidence on the safety and effectiveness of new medical devices. This should reduce the number of cycles and time that sponsors and the agency spend in developing and reviewing additional information, and allow the agency to concentrate more on applications that can be reviewed quickly.

For both expedited and traditional PMAs, the FDA is committing to reduce its review time by 30 days for the fastest 50 % of those applications approved for FYs 2005 through 2007. The baseline for this goal is the 3-year average of FDA’s time for the fastest 50 % of approved PMAs for the applications filed during FY 1999-2001.

MDUFMA encourages more pre-submission meetings, especially for expedited products. CDRH will use these meetings to improve the quality of applications so there are fewer cases where the FDA needs to stop the review clock and go back to sponsors to seek more information. Outside experts from in and out of government also are developing clearer guidance for important and emerging new areas of device development.

Digirad Corp (San Diego, Calif) in August debuted the first upgradeable nuclear gamma camera.

Digirad’s latest innovation is the Cardius-1, a solid-state nuclear gamma camera with a single detector dedicated for cardiac imaging. What makes the system different is its upgradeability to a dual-head system to accommodate higher patient volumes with faster throughput.

“Cardius-1 is an exciting new product that allows customers to purchase a camera that fits their patient volume needs today yet is extensible to accommodate practice size growth and volume needs in the future,” said David Sheehan, Digirad CEO.

The Cardius-1 system is comprosed of a solid-state nuclear gamma camera, a portable acquisition/processing station, and an upright imaging chair. It also has a Solidium detector, Digirad’s proprietary third-generation solid-state technology. Shipments were expected to start in August.

VOLCANO THERAPEUTICS BUYS JOMED IVUS BUSINESS
Volcano Therapeutics Inc (Laguna Hills, Calif) in late July closed on its acquisition of Jomed Inc’s (Rancho Cordova, Calif) intravascular ultrasound (IVUS) and functional measurement businesses and related assets from parent company Jomed NV (Beringen, Switzerland).

The transaction closes the book on Jomed for 2003, which began in January with a review of accounting practices. By February, the company found approximately $25 million in improper bookings in 2002 and sought financing and other options to stay afloat. (See Medical Imaging News, Vol 12, No 5, Feb 7, 2003.)

The accounting and sales issues forced an Amsterdam district court to declare the company bankrupt and appoint two receivers to oversee Jomed’s operations. (See Medical Imaging News, Vol 12, No 18, May 9, 2003.)

The acquisition adds Jomed’s IVUS technology to Volcano’s development of its Virtual Histology IVUS product line. Volcano plans to add Virtual Histology to the installed base of more than 1,200 Jomed/EndoSonics IVUS consoles currently in clinical use worldwide.

Volcano also becomes the employer for some 400 now-former Jomed employees worldwide, including direct sales organizations in the United States and in Europe. Volcano had 20 employees before the Jomed deal.

Volcano will relocate its office to Jomed’s US headquarters in Rancho Cordova. Volcano’s European headquarters will remain in Brussels, Belgium.

Jomed came into posession of the Rancho Cordova property when Jomed acquired the former EndoSonics Corp and its IVUS products for approximately $205 million.

Volcano was founded in 2001 to develop and market products for the detection and treatment of atherosclerosis and vulnerable plaques in coronary arteries and peripheral vascular system.

Sony storage goes petabyte
Rising storage demands are now being met by the new SAIT PetaSite tape storage libraries from Sony Data System Solutions, a division of Sony Electronics (San Jose, Calif). The libraries feature up to 1.5 petabytes of storage on demand so organizations that aren’t yet backing up petabytes can start with a 10TB library and expand from there. This is the industry’s current highest-capacity tape technology.

The SAIT PetaSites are Sony’s first libraries based on its SAIT format, which offers 500 GB of native capacity per tape. Transfer rates of up to 2.88 GB per second allow for near-line backup, and restoring a file takes just over a minute.

A basic SAIT PetaSite system contains two SAIT drives, an Ethernet hub, a terminal server, and a control unit. Trial versions of PetaServe HSM software and PetaBack backup software also are included. Entry-level SAIT PetaSite systems are currently available for a starting price of $63,500. This basic entry system, encapsulated within a standard 19-inch rack console, is scalable to house up to 12 drives and 216 cartridges for up to 108 TB of native capacity in a flexible and highly available configuration. Up to seven cartridge and/or drive consoles can be added to the basic system.

KODAK, SIEMENS EXPAND SCOPE OF SALES DEAL
Relations between Eastman Kodak Co (Rochester, NY) and Siemens Medical Solutions (Erlangen, Germany) got a bit cozier in August with the expansion of a sales pact under which Siemens’ sales force will sell medical imaging systems from Kodak’s Health Imaging Group. This new 3-year global agreement expands on previous regional agreements between the two companies and took effect immediately.

Siemens is selling Kodak computed radiography (CR) and digital laser printing systems directly to Siemens’ customers. Kodak’s previous contracts established OEM sales agreements with Siemens in the US and Europe, while this new agreement broadens the scope around the world. Siemens has already begun selling Kodak medical imaging products in the US, Western Europe, and India, with worldwide coverage to be in place by the end of this year.

DRAXIS HEALTH COMPLETES PHARMACEUTICA UNIT SALE TO SHIRE BIOCHEM
Draxis Health Inc (Mississauga, Ontario, Canada) recently completed the divestiture of its Canadian pharmaceutical sales and marketing division, Draxis Pharmaceutica (Mississauga), to Shire BioChem Inc (Laval, Quebec, Canada) for $9.6 million in cash and other considerations.

Draxis Health also could receive as much as $2.9 million from the transaction in contingent milestone payments over the next several years. Draxis will receive royalty payments based on continuing Canadian sales of its former products at specified rates.

This transaction follows Draxis Health’s $6.5 million deal in March with affiliates of Elan Corp plc (Dublin, Ireland). Draxis Health returned the Canadian rights for several of Elan’s neurology products that had not achieved regulatory approval in Canada.

Shire BioChem is part of pharmaceutical company Shire Pharmaceuticals Group plc (Shire).

Draxis Health develops, produces, markets, and distributes therapeutic and diagnostic radiopharmaceuticals through Draximage Inc (Kirkland, Quebec, Canada).

COLORADO MEDTECH COMPLETES MERGER WITH CIVCO HOLDING
Colorado Medtech Inc (Boulder, Colo) has completed its merger with Civco Holding Inc (Denver), an affiliate of KRG Capital Partners LLC (Denver).

The transaction makes Colorado Medtech a private corporation wholly owned by Civco Holding. The new entity will continue to develop and manufacture medical devices and equipment for the ultrasound and minimally invasive OEM and end-user markets.

Under the terms of the proposal, Colorado Medtech shareholders received cash for each share of Colorado Medtech common stock with a total value of $62.5 million, plus a distribution of any Colorado Medtech cash remaining at the closing.

Fischer SenoScan gets bow from ACR
The FDA recently approved the American College of Radiology (ACR) to accredit Fischer Imaging Corp’s (Denver) SenoScan full-field digital mammography (FFDM) units.

ACR has begun contacting facilities that have already received FDA approval extending their MQSA certification to include the use of the SenoScan unit to advise them of the steps to take to achieve accreditation of these units. These facilities do not need to take any action toward accreditation until they are contacted by ACR and can continue to operate during the transitional period. More information will be available on the ACR Web site at www.acr.org.

Mainline, TeraMedica to collaborate on information management product
Mainline Information Systems Inc (Tallahassee, Fla) and TeraMedica Inc (Milwaukee) are combining their information management technologies to offer a better way for health care facilities to handle digital images.    

The companies plan to launch what they describe as the next generation for managing the storage and distribution of medical images across health care or hospital systems. The new software/server is designed to allow health care providers to reduce or eliminate dependency on film and provide physicians with secure access to patient records and images at an affordable cost.

TeraMedica is a spin-off company of the Mayo Foundation (Rochester, Minn) and Mayo Clinic’s Radiology Informatics Laboratory (Rochester). Mainline is a business partner with IBM Corp (Armonk, NY) and has experience in IBM eServer infrastructure services.

US angio labs make big strides in digital conversion
Approximately 80% of angiography labs in the United States have made the conversion to a filmless environment as departments strive to become more efficient. The conclusion comes from a new report on interventional angiography labs from IMV Medical Information Division (Des Plaines, Ill).

The rise in digital technology in the angio lab conversely had a negative effect on the use of devices that capture images on film, decreasing their presence to 23%. In addition, the IMV report found that the number of installations of the so-called puck film changers was “negligible” in 2002.

The report also noted that in 2002 the total number of non cardiac angio procedures stayed the same as the previous year at 2.5 million, as the number of fluoroscopic and non angiographic procedures increased. Non cardiac angio procedures include angioplasties, vascular access, stent placements, thrombolytic therapy, and embolization. In those angio labs, radiology continues to be the primary specialty, with more than 90%of the departments administered by radiology, special procedures, or interventional radiology.

iCAD debuts fee-per-procedure CAD for mammo
iCAD Inc (Nashua, NH) is marketing its iQ computer-aided detection (CAD) system to qualifying women’s health centers and mammography clinics through a fee-per-procedure program called ClickCAD. The iQ solution requires no user interface, screen, or keyboard and is designed specifically for clinics that perform fewer than 15 mammography procedures per day, on average.

Under the ClickCAD program, ICAD will install its iQ systems in mammography clinics at no up-front capital cost to the customer, and the clinics will then pay iCAD a fee of approximately $6.50 for each CAD procedure performed. Current CAD reimbursement rates run about $20 per study.

FINANCIAL NEWS

Kodak’s Health Imaging unit grows 7% in Q2
Higher-than-expected sales of digital radiography, computed radiography, and picture archiving and communications systems (PACS) led Eastman Kodak Co’s (Rochester, NY) Health Imaging unit to 7% growth in the second quarter.

Worldwide sales totaled $607 million in the second quarter, compared with $569 million in the second quarter of 2002. Earnings from operations in Health Imaging advanced to $131 million, compared with $112 million in the year-ago quarter.

Sales outside of the United States led the gain with a 14%jump (3% excluding a favorable impact of exchange) to $341 million, compared with $299 million in the year-ago quarter. US sales decreased to $266 million, compared with $270 million in last year’s second quarter.

Vital Images posts healthy gains
Double-digit gains in software license fees and maintenance and services powered Vital Images Inc (Minneapolis) to healthy growth in its second quarter.

Revenues advanced to $7.5 million, up 54% from $4.9 million in the second quarter of 2002. Revenue from the company’s software license fees and maintenance and services increased 59% to $6.7 million, compared with $4.2 million in the year-ago quarter. Net income more than tripled to $666,000, compared with $201,000 in 2002’s second quarter.

For the 6-month period, revenues increased 54% to $14.3 million, compared with $9.3 million in the first half of 2002. Revenues from core products and services rose to $13 million, up 60% from $8.1 million in the year-ago period. Net income reached $1.3 million, compared with a net loss of $46,000 in the same period of 2002.

Vital Images credited its direct sales agreement with Toshiba Corp, Medical Systems Co (Tokyo), for its sales gains. Toshiba accounted for 35% of the company’s second-quarter revenues–$2.6 million, compared with $1.4 million in the year-ago quarter. For the 6-month period, Toshiba generated revenues of $5.6 million for Vital Images, compared with $3.4 million in the same period of 2002.

The 3D imaging software company is projecting growth of 35% to 45% in revenues from software license fees and maintenance and services and net income of $2.5 million to $2.9 million in 2003. Vital Images posted total revenues of $21.1 million, and revenues of $18.2 million from its core products and services in 2002. Net income last year was $790,000.

2Q brings gains for IDX
New information technology contracts helped IDX Systems Corp (Burlington, Vt) grow revenues in the second quarter. Revenues increased to $98.3 million, compared with $85.1 million in the second quarter of 2002. Net income from continuing operations climbed to $5.4 million, compared with net income from continuing operations of $3.2 million in the year-ago quarter. For the 6-month period, revenues rose to $190.7 million, compared with $166 million in the same period of 2002. Net income from continuing operations totaled $9.1 million, up from net income from continuing operations of $6.5 million in the year-ago period. All revenue totals exclude IDX’s medical transcription services business, which IDX sold in June. The IT company added that it “remains comfortable” with its revenue projection of $400 million to $406 million from continuing operations in 2003.

Siemens AG’s (Munich) Medical Solutions group led all divisions with net income of approximately $371 million in the company’s third fiscal quarter, ending June 30. That total compares with net income of approximately $272 million in the third quarter of FY02. The profit gain came despite lower sales during the 3-month period. Sales declined to $1.9 billion, compared with $2.1 billion in year-ago quarter. The Medical Solutions group also benefited from a gain of gain of approximately $84 million from Siemens’ Electromedical Systems business’ joint venture with Draegerwerk AG (Lubeck, Germany). Siemens added that the currency exchange rate deflated sales growth by 13%. Excluding that factor, third-quarter sales increased by 4 percent.

Instrumentarium holds revenue line
Sales growth due to its 2002 acquisition of Spacelabs Medical (Redmond, Wash) helped Instrumentarium Corp (Helsinki) hold the revenue line in the first half of 2003. Net sales for the 6-month period held steady at $550 million compared with the same period of 2002. Net income slid to $25 million, compared with $37 million in the year-ago period. All amounts are converted into approximate US dollars. Net sales of medical imaging equipment declined compared with the same period of 2002.

NEWS BRIEFS

Merge Technologies Inc (Milwaukee) on July 17 completed its acquisition of radiology information systems (RIS) software company RIS Logic Inc (Solon, Ohio) for $2.7 million in cash. The transaction included 772,000 shares of Merge Technologies common stock and the issuance of replacement employee stock options. RIS Logic will operate as a division of Merge eFilm and continue to operate from its Solon facility. Dan Quigg, former RIS Logic president and CEO, is president of the RIS Logic division.

E-Z-Em Inc (Lake Success, NY) has entered into a copromotional agreement with Berlex Laboratories Inc (Princeton, NJ) for Berlex’s x-ray contrast agent Ultravist (iopromide) injection. E-Z-Em will promote Ultravist to CT facilities in the United States and provide Ultravist concentrations and sizes commonly used in CT exams and other procedures. The pact represents an expansion of an existing relationship between the two companies. Berlex is a US subsidiary of Schering AG (Berlin).

Array Corp USA (Brentwood, NH) has added three medical imaging equipment companies to its list of distributors. Comp-Ray Inc (Phoenix), iPro Inc. (Calhoun, Ga), and Merry X-ray Corp (San Diego) will supply the Array 2905 laser film digitizer, which is designed to scan 14-inch. by 17-inch. film at 2K resolution in 7 seconds.

Philips Medical Systems (Bothel, Wash) has launched EasyDiagnost Eleva, a new conventional radiography/fluoroscopy system, in North America. The Eleva’s features include the ability to facilitate department throughput by adjusting all relevant system parameters according to each user’s preferences. Eleva technology also adjusts automatically for patient size based on weight, height, and age.

CPS Innovations (Knoxville, Tenn) has introduced a technology called Pico-3D processing, designed to more than double the count rate performance of its PET-CT systems with LSO (lutetium oxyorthosilicate) detector technology. Pico-3D digitizes the output from each LSO detector every 500 picoseconds (one-trillionth of a second) and features an expanded 10-bit energy sampling to enhance the system energy resolution to 15% for better scatter rejection and higher-contrast imaging. CPS is a division of CTI Molecular Imaging Inc (Knoxville).

Diagnostic Ultrasound Corp (Bothell, Wash) has donated medical equipment valued at $165,525 to the International Volunteers in Urology. The donation is designed to help extend the benefits of safe, noninvasive, bladder-volume determination to developing countries. Diagnostic Ultrasound’s BladderScan features the company’s V-Mode 3D ultrasound technology, which measures a patient’s bladder volume noninvasively and prevents unnecessary catheterization and undiagnosed urinary retention.

Konica Medical Imaging (Wayne, NJ) is offering a new software upgrade for the CS-1 Control Station, free of charge to existing customers. The upgrade, Version 1.00, Release 4, features auto masking–which is fundamental for successful digital radiography, HIPAA–compliant enabling tools –such as multilevel-user log-in, auto-logout, and audit trail log and user-activated backup job manager.

Siemens Medical Solutions Oncology Care division (Concord, Calif) is offering a new Velocity suite of precommissioning services for Siemens ONCOR Impression and PRIMUS Linear Accelerators. Advanced Radiotherapy Consulting (ARC) Specialty Services Inc, of South Bend, Ind, will provide the Velocity suite of services.