Cerner to buy PACS firm Image Devices
Cerner Corp. (Kansas City, Mo.) in August unveiled plans to expand its European and U.S. market presence with the proposed acquisition of PACS (picture archiving and communications systems) software developer Image Devices GmbH (Idstein, Germany).

Image Devices has been one of Cerner’s business partners since 1999, developing and supplying the healthcare information technology (IT) company with the image archive component for Cerner’s ProVision PACS. Image Devices’ archive also is found in Cerner’s Open Image Foundation and Cerner’s Millennium architecture for enterprise-wide image storage. The Open Image Foundation allows healthcare organizations to store and retrieve images, as well as transmit images to other healthcare providers and clinicians.

Image Devices was created in 1990. Most of the privately held company’s 80-plus European PACS installations are in Germany, Switzerland and Austria. Image Devices’ image archive product is installed in more than 30 U.S. hospitals.

“Bringing Image Devices into Cerner will help us to improve our electronic medical record capabilities,” said Cerner President Trace Devanny in a prepared statement. “In addition, the acquisition will significantly increase our presence in Europe, giving us new clients to which we can introduce Cerner solutions.”

When the transaction closes, Image Devices will become Image Devices, a Cerner Company. PACS products will be sold under the Cerner ProVision PACS brand name in both the United States and globally. All of Image Devices’ employees will remain in place at the company’s Aachen and Idstein offices.

The Image Devices acquisition comes as Cerner enjoys good financial results so far in 2002. In the first six months of this year, revenues increased 42 percent to $355.9 million, compared with $250.8 million in same period of 2001. Net earnings — before non-recurring items — increased 61 percent to $22.4 million, compared with $13.9 million in the year-ago period.

Delft acquires 40 percent stake in MTS
Delft Instruments N.V. (Delft, Netherlands) in late August completed its purchase of a 40 percent stake in Medical Technology Services Inc. (MTS of Aurora, Ohio) for approximately $980,000.

Delft announced its intention to acquire part of MTS in June. The agreement includes an option for Delft to acquire a majority interest in MTS within three years and to purchase the remaining shares within five years.

With the transaction comes a name change for MTS to MTS-Delft, as the company becomes part of Delft Medical.

MTS-Delft — which currently has 37 employees — supplies picture archiving and communications systems (PACS) and medical imaging products and services for medical imaging centers and hospitals with a capacity of approximately 300 beds.

MTS-Delft has other ties to Delft Instruments through marketing agreements with Delft subsidiaries Nucletron B.V. (Veenendaal, Netherlands) and PACS software firm Rogan Medical Systems B.V. (Zeist, Netherlands).

Earlier this year, Delft increased its ownership in Rogan Medical to 70 percent. It was just a year earlier — at the beginning of 2001 — when Delft increased its share in the PACS company from 35 percent to 52 percent.

Delft Instruments N.V. has approximately 1,000 employees and annual sales of approximately $195 million.

FDA to revamp pharmaceutical GMP guidelines
It has been 25 years since the FDA updated its current Good Manufacturing Practice (cGMP) guidelines for drugs.

On Aug. 21, the agency said it is now time to embark on a major initiative to revamp the regulation of pharmaceutical manufacturing and product quality and — in the words of the agency — “bring a 21st century focus to this FDA responsibility.”

The effort will cover the cGMP program as it relates to human and veterinary drugs.

The FDA has three objectives for its campaign. One goal is to enhance the focus of the agency’s cGMP requirements more squarely on potential risks to public health by providing additional regulatory attention and agency resources on the aspects of manufacturing that pose the greatest potential risk.

Secondly, the FDA wants to help ensure that work in establishing and enforcing pharmaceutical product quality standards does not impede innovation and the introduction of new manufacturing technologies in the pharmaceutical industry.

Finally, the effort will enhance the consistency and predictability of the FDA’s approach to assure production quality and safety among the FDA’s centers and field components.

The FDA says it is undertaking the campaign, in part, because pharmaceuticals are playing a greater role in healthcare, and because there are fewer FDA manufacturing inspections due to dwindling resources. In announcing its plans, the agency said that resource limitations “prevent uniformly intensive coverage of all pharmaceutical products and production. Although the agency has been implementing risk-based programs, a more systematic and rigorous risk-based approach will be developed.”

Among the first steps planned is an external review of the existing cGMP program and product review practices. This phase will include reassessing and reevaluating the FDA’s current scientific approach to both the product review process and the cGMP program to achieve what the agency calls “a consistent, integrated systems approach to product quality regulation.”

The FDA did not say specifically how long it will take to complete its initiative, other than to say that some projects “will take longer than others.”

3D viewing advances to provide critical anatomical data
3D viewing of medical imaging data, once seen as futuristic among healthcare providers, has become the norm and is employed routinely in many medical institutions around the world.

3D visualization today provides critical insight into a patient’s anatomical structure, assisting a medical practitioner in defining the course of treatment. The technology also has helped to optimize workflow in all departments throughout the healthcare enterprise.

The Walton Centre for Neurology and Neurosurgery (Liverpool, United Kingdom) is one facility that has benefited from workflow improvements and enhanced patient care with 3D visualization technology.

“Modern imaging techniques now acquire large amounts of data describing a volume,” notes Paul Eldridge, M.D., a consultant neurosurgeon at Walton. “The traditional method of displaying data — a series of axial slices printed onto a film examined on a viewing box — is now impractical. Volume rendering solves this problem allowing visualization of anatomical and pathological relationships between structures.”

 At top: MR data reveals the relationship between venous anatomy and meningioma tumors. At bottom: An AVM (left) and aneurysm (right) are shown in CT databases.

Eldridge added that 3D viewing can also provide new insights in surgical planning.

“An important feature is the capacity to interact with the data and to analyze it recursively so as to concentrate on different types of structures,” he adds. “The importance of interactivity can be seen where the brain rendering is made translucent to show the veins and their relationships with the pathology. The surgeon may choose any useful orientation.”

In addition to planning the treatment of vascular structures, such as arteriovenous malformations (AVMs) and aneurysms, Eldridge employs the technology to rapidly and intuitively review complex structures, such as tumors, on which he will operate. Eldridge adds, “3D visualization reduces the need for an angiogram in cases where 3D vascular data are available.”

Walton uses 3D visualization technology from Cedara Software Corp. (Mississauga, Ontario, Canada).

Cedara’s history with 3D visualization technology dates back to 1989, when the company introduced the Allegro, the first commercial 3D medical image workstation, which combined Cedara’s custom acceleration hardware and software. Allegro, for the first time, allowed clinicians to review and manipulate the medical images interactively in 3D. Today, Cedara’s visualization software technology provides features such as ‘Point and Click Classification’ for rapid separation of tissues with minimal user interaction to assist clinicians improve clinical workflow.

Visualization in 3D also is applied to CT data. For example, aneurysms in the aorta can be viewed clearly. To generate this view, the system separately classifies the bone, skin and aorta and the software then allows each classified volume to be rendered with different parameters including color.

Novel applications for 3D visualization also have been investigated recently with data sets acquired from other medical imaging modalities.

3D visualization of ultrasound data have numerous applications, including obstetrics. St. Joseph’s Health Care (London, Ontario) uses Cedara visualization technology successfully to image the fetus in the womb from ultrasound data. The facility notes that pictures of fetal anatomy are useful to demonstrate both normal and abnormal structures in a developing fetus, as well as post-delivery surgical planning if needed.

In an upcoming issue of Ultrasound in Medicine and Biology, the journal is scheduled to publish research on the planning of neuroendoscopic interventions for hydrocepalus in infants based on 3D ultrasound data.

Cedara’s visualization software operates on off-the-shelf computer processors, eliminating the need for costly hardware accelerators. To ensure optimal system performance, Cedara works closely with the processor vendors, an example being Cedara’s longstanding collaboration with Intel Corp. (Santa Clara, Calif.).

Like many Cedara software offerings, 3D visualization technology is available as functionality that can be embedded in applications produced by Cedara’s vendor-partners in the medical imaging industry and in products produced by Cedara. For example, the 3D visualization is offered as a plug-in to Cedara’s PACS suite of products.

Cedara also believes there is enormous potential for efficiencies in clinician workflow through intelligent processing of medical image data.

Consider a patient presenting at an emergency room having experienced an epileptic seizure. The ER physician orders MR and MRA head scans and the MRA reveals an AVM on the right side of the patient’s brain.

During the work-up to the surgical treatment of the AVM, the neurosurgeon reviews the MRA data. From the slice data, it is apparent that the AVM is large and the neurosurgeon wishes to review the structure of the AVM more closely.

With Cedara technology, it takes a matter of seconds and a minimal number of user/computer interactions for the neurosurgeon to visualize the complex anatomy of the AVM while rotating the image, to view the AVM from several directions.

The deployment of medical imaging systems with 3D visualization capabilities continues to accelerate driven by process and workflow efficiency demands, a need for efficient methods of reviewing the enormous volumes of data originating from MRI and multi-detector CT (MDCT) scanners, and the technique’s ability to reveal anatomical details and relationships not readily visible in standard review.

NIH develops, licenses DT-MRI as new option for MR
The National Institutes of Health (NIH of Bethesda, Md.) has developed a new medical imaging technology that provides 3D maps of nerves and other soft tissue that NIH believes will help healthcare providers diagnose stroke, multiple sclerosis, autism, schizophrenia and other medical conditions.

Diffusion tensor magnetic resonance imaging (DT-MRI) differs from other MRI techniques in that it measures the 3D random motion of water molecules in soft tissues, producing images of soft tissue structure. The NIH says those images may help to better identify the development, degeneration, disease and aging in soft tissue.

DT-MRI is similar to conventional MRI in that it is non-invasive and does not need contrast agents to produce images.

Since its inception, the NIH says DT-MRI has been used to map nerve pathways in the brain, diagnose acute stroke, and gauge the effectiveness of new medicines for stroke prevention.

The technology also has helped detect changes in brain white matter in people with Lou Gehrig’s Disease, multiple sclerosis and epilepsy, and to assess the type and severity of brain tumors. Cognitive and behavioral disorders, such as schizophrenia, dyslexia and attention deficit disorder also have been studied using DT-MRI.

Earlier this year, GE Medical Systems (GEMS of Waukesha, Wis.) became the first company to sign a license agreement with the NIH to add DT-MRI to its MRI line. David Weber, manager of GEMS’ global high-field MR business, said, to his knowledge, GEMS is the only company with a DT-MRI pact with NIH.

With the agreement in place, GEMS began to adapt the DT-MRI technology to its systems.

“We had to find ways to perform the pulse sequence acquisition on the MR and make sure the MR met the requirements of the diffusion tensor concept,” Weber said. Among the MRI system requirements were advanced gradients with adequate fidelity.

The end results of DT acquisition are raw images, which generally are processed to create a single set of images. That processing algorithm also had to be integrated into the MRI system.

GEMS initially added DT-MRI capabilities to its Signa NV/i 1.5 tesla neurovascular MRI system and later adapted the technology to its high-field 3.0T systems. More recently, GEMS added DT-MRI capabilities to its 1.5T TwinSpeed and EchoSpeed.

“It is almost across the whole 1.5T and 3.0T line,” Weber said, “with the exception of some of the more standard level gradient performance options.”

Weber said that some healthcare providers are using DT-MRI for surgical planning, as they would use a functional MRI exam to map key areas of the brain.

“Most people view [DT-MRI] as a simpler exam than the fMRI exam, because it takes less patient cooperation,” he added. With DT-MRI, a physician is “getting a view of the anatomy of the brain that no other modality has been able to provide. You are seeing something that we have not been able to see in the past.”

DT-MRI is available from GEMS as a software upgrade for installed MRI systems. The technology is FDA-cleared.

RSNA creates new strategic plan
The Radiological Society of North America (RSNA of Oak Brook, Ill.) has devised a three-year, eight-point strategic plan to make the society more effective in meeting the needs of its membership and the radiologic community at large.

RSNA’s board of directors initially met in January to formulate its goals and approved the plan in February. The society already has presented the plan to various RSNA committees, which have been working on implementing the goals into their respective agendas.

The catalyst for the strategic plan is the changing role of radiology in healthcare and the growing influence of international RSNA members.

Radiology “has become such a key element of patient care and central to clinical operations that we have to pay increasing attention to where the specialty is going,” said RSNA Chairman Brian C. Lentle, M.D. “We also find that our [annual] meeting is increasingly being driven by the international community, as much as the North American community.”

RSNA’s eight goals are to:

  • Improve scientific and educational communication through all venues, including meetings, publications, and electronic media;
  • Maintain the preeminence of the Annual Meeting as a scientific and educational forum;
  • Promote the quality and quantity of research in the field of radiology;
  • Foster productive relationships with other societies for the purpose of strengthening radiology;
  • Define the RSNA’s role in international education and research in radiology;
  • Foster relationships with industry;
  • Govern and manage the RSNA in an effective, efficient, and fiscally responsible manner; and
  • Advance the digital environment within the profession and the RSNA.

The strategic plan already is in its third phase, which is to find measurable benchmarks to “show in a quantitative sense that the plan is impacting on operations,” Lentle said.

The RSNA board plans to review the progress of each goal by using quantitative benchmarks. Lentle cited factors such as attendance at various meetings, the number of communications with the society and members’ response to publications.

RSNA numbers are up from 2001
Pre-registration for the 88th Scientific Assembly and Annual Meeting of the Radiological Society of North America (RSNA of Oak Brook, Ill.) is up from last year and ahead of RSNA 2000 numbers.

At RSNA 2001, attendance declined 11 percent to 53,569 professional healthcare providers, guests and exhibitors in the wake of the Sept. 11 terrorist attacks in the United States. RSNA 2000 attracted a total of 60,443 attendees.

RSNA Chairman Brian C. Lentle, M.D., said pre-registration for this year’s annual meeting, which begins Dec. 1., shows “no evidence of any long-term impact of last year at all.”

Exhibit space, Lentle noted, also is ahead of last year’s total of 445,825 net square feet of paid exhibit space, making the annual meeting the largest medical trade show in the United States and Canada.

One new offering at RSNA 2002 will be a refresher course in general radiology. Lentle said that while members rated refresher courses as one of the reasons they attended the annual meeting, attendance at the courses consistently declined 15 to 20 percent per year over the last six or seven years. As the former liaison of education, Lentle sought ways to reverse the trend.

This year’s course in general radiology has shown a promising amount of interest, Lentle said.

“It is designed for the community or general radiologist or specialist who wants to go back and practice general radiology, given the changing environment,” Lentle said. “A lot of people who are in the situation of being highly specialized find that they need now to revisit their roots, so to speak.”

RSNA has received 7,674 scientific abstracts for the 2002 meeting, 56 more submissions than last year. The abstracts include 5,468 scientific paper or poster abstract applications and 2,049 education exhibit applications.

Hitachi Medical to move ultrasound to Twinsburg
On Oct. 1, Hitachi Medical Systems America Inc. (HMSA of Twinsburg, Ohio) was scheduled to move its sales, marketing and service responsibilities for Hitachi’s ultrasound products in the United States to Twinsburg.

Hitachi Medical Corp. (HMC of Tokyo) said the move consolidates all of Hitachi’s U.S. distribution of medical imaging products under the control of HMSA and closes operations in Tarrytown at the end of this year. In a prepared statement, HMSA President and CEO Richard L. Ernst said the relocation will allow Hitachi ultrasound products to “take advantage of the greater resources” of HMSA.

“By putting all U.S. distribution into HMSA, Hitachi ultrasound customers will benefit from our nationwide support organization,” he added. “On the sales side, the products can benefit from the strong customer relationships we’ve built in our other imaging modalities.”

HMSA began operations in the United States in 1989 with the introduction of Hitachi’s Open MRI system. Since then, HMSA estimates that it has installed more than 1,200 Open MRI systems in the United States.

eMed Technologies, CCA align on RIS/PACS
eMed Technologies Corp. (Lexington, Mass.) and Creative Computer Applications Inc. (CCA of Calabasas, Calif.) are partnering to integrate the eMed Ideal Image Management Suite with the CCA CyberRad radiology information system (RIS).

The companies say the integration of their technologies will result in a product that synchronizes medical imaging and clinical information workflow, designed specifically for medical imaging centers or smaller hospital enterprises. The product would automate processes at every point of patient care and scheduling, image acquisition, diagnostic reading, and results delivery.

eMed’s product line includes PACS components to capture, distribute, display and store medical images, RIS integration, scheduling and office workflow, Web-based image and report distribution, and Website development.

CCA’s CIS products include CyberLab, CyberMed and CyberRad. The company’s systems are installed in more than 500 healthcare sites.

This technology initiative is the first time the two companies have collaborated on a product.

Dave Mahoney, eMed’s vice president of sales, said the companies will target imaging centers, small community hospitals and larger healthcare facilities with the new integrated product.

“We still have a little bit of testing to do, then rolling out to the installed base of clients,” Mahoney added. “CCA has a lot of CyberRad users looking to formulate an imaging strategy, so they will be our first targets.”

The formal market launch is anticipated for the first quarter of 2003.

Sodexho acquires ISO Patriot Medical Technologies
Food and facilities management firm Sodexho (Gaithersburg, Md.) on Sept. 3 announced its acquisition of clinical

services provider Patriot Medical Technologies Inc. (Nashville, Tenn.) for an undisclosed amount.

Sodexho is the North American affiliate of Sodexho Alliance SA (Montigny-le-Bret, France). Sodexho employs approximately 130,000 people in North America and some 313,000 worldwide.

The new business unit will operate as Sodexho Clinical Equipment Services.

Ric Naylor, president and founder of Patriot Medical Technologies, declined to discuss specifics of the transaction, including the size of Patriot’s work force. However, he said that no employees are expected to lose their jobs; in fact, he predicted an increase in employment overall.

“There are only 16 people who work in Nashville. That office is going to stay open, and it will be the headquarters of Sodexho’s Clinical Equipment Services, and everybody will stay employed,” he commented. “As they [Sodexho] bring their resources to bear, to improve our marketing and sales and impact on the market, there actually will be some increase in employment there and in the company in general.”

Naylor will retain his title as president and remain with the company.

While the acquisition gives Sodexho the component it needs to provide medical equipment services to customers on its own, the two companies for years had engaged in a partnership arrangement through which Patriot provided clinical equipment services to Sodexho accounts.

“Sodexho and Patriot have been intertwined since Patriot was started,” Naylor explained. “We were under contract to provide their services on a partnership basis wherever they had an integrated-services account that included medical equipment services.

Patriot was formed in late 1997 to provide maintenance and repair of medical equipment, regulatory compliance services, cost-containment programs and field services for healthcare providers throughout the United States.

In March 1999, Patriot bought the ISO portion of Novare Services Inc., based in Cincinnati.

Six months later, in September, Patriot acquired Innovative Medical Solutions Inc. (IMS of Tustin, Calif.) for an undisclosed amount. IMS served the Southern California market, and Patriot had been looking to expand into that region.

Patriot’s founding management included healthcare veterans with roots that stretch back to the former Hospital Corp. of America.

Naylor started the company with Lawrence Fitzpatrick, senior vice president of business development. Naylor directed Columbia/HCA Healthcare Corp.’s (Nashville) internal clinical engineering program before it was transferred to GE Medical Systems (GEMS of Waukesha, Wis.) in 1996.

Sodexho estimates its annual U.S. and Canadian sales at $4.9 billion. Services include asset and materials management for corporations, healthcare and long-term care institutions.

Alliance opens door again to Baxter, PFC Therapeutics
Alliance Pharmaceutical Corp. (San Diego) says it is reconsidering its plan to terminate a licensing agreement with Baxter Healthcare Corp. (Deerfield, Ill.) and PFC Therapeutics LLC (San Diego).

PFC Therapeutics is a joint venture, owned equally by Alliance and Baxter, to oversee the development, manufacture, marketing, sales, and distribution of Oxygent (perflubron emulsion) in the United States, Canada and Europe.

On Aug. 28, Alliance told PFC Therapeutics that the

company would terminate the exclusive license it had granted PFC within 90 days if progress was not evident on the commercialization of Oxygent.

On Sept. 19, Alliance, Baxter and PFC Therapeutics entered into an agreement to place the matter on hold while the three entities negotiate confidentially on how best to — in Alliance’s words — “preserve and/or realize the value of PFC Therapeutics.”

Oxygent is an intravascular oxygen carrier intended to avoid the need for donor blood in elective surgery. Oxygent is a sterile perfluorochemical emulsion that contains no human or animal blood components. It is universally compatible with all blood types and has a shelf-life of approximately 2 years.

Alliance and Baxter currently are formulating final plans for an international Phase 3 study with patients undergoing various general surgery procedures.

Healthsouth to spin off its surgery center unit
Healthsouth Corp. (Birmingham, Ala.) has unveiled plans to spin-off its surgery center division into a new publicly traded company that would become the largest independent operator of freestanding outpatient surgery centers in the United States.

Healthsouth has proposed calling the new entity Surgical Care Affiliates. The company would operate 209 facilities in 37 states and have estimated annual revenues of more than $1 billion. Healthsouth would issue shares in the new surgery center company to Healthsouth stockholders on a tax-free basis.

Another catalyst for Healthsouth’s action is a recent policy change by the Centers for Medicare and Medicaid Services (CMS) regarding outpatient therapy reimbursement. Effective July 1, outpatient therapy services provided to two or more patients in a single time period are reimbursed under the group therapy payment code, regardless of whether the patients were engaged in the same activity. The directive reduces reimbursement for services previously paid as individual therapy.

If the proposed new company comes to fruition, Healthsouth will remain as the largest network of inpatient and outpatient rehabilitation facilities in the country, with some 1,427 outpatient rehabilitation centers, 118 inpatient rehabilitation facilities, four medical centers and 136 outpatient diagnostic centers.

Financial Pulse
 Alliance Pharmaceutical Corp. (San Diego) is facing some financial decisions that will affect the company’s near and long-term future.

One of the more pressing issues before the pharmaceutical development company is its possible delisting from the Nasdaq national market.

Following its March 31 quarterly report to the Securities and Exchange Commission (SEC), Alliance received a notice from Nasdaq that the company failed to comply with the net tangible assets and stockholders equity requirements for continued listing.

Alliance appealed Nasdaq notification and requested a hearing before the stock market’s Listing Qualifications Panel to offer a plan to meet Nasdaq’s minimum listing requirements. Alliance says the plan may include, among other options, the restructuring of debt, a royalty license agreement or other investment associated with future revenues from its Imagent ultrasound contrast agent.

Another option under consideration is the possible licensing of intravascular oxygen carrier Oxygent in areas of the world not covered by an existing agreement with Baxter Healthcare Corp. (Deerfield, Ill.).

In announcing its situation with the SEC, Alliance said that it is focusing its efforts

on improving its financial position, marketing Imagent, and resuming clinical studies with Oxygent.

Alliance currently is partnered with Cardinal Health Inc. (Dublin, Ohio) and inChord Communications Inc. (Columbus, Ohio) for Imagent’s marketing, while Alliance develops Oxygent in the United States, Canada and Europe with Baxter.

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.

Financial Watch
After a delay of one month, Fischer Imaging Corp. (Denver) filed its second-quarter financial report with the Securities and Exchange Commission (SEC). Fischer delayed the release of its second-quarter results, partly because the company had just hired a new accounting firm — Ernst & Young LLP (Denver) — in July after its previous auditors, Arthur Andersen LLP, had closed its Denver office. Fischer also had to include the financial impacts of the creation of a new division and the settlement of its patent litigation case against Thermo Electron Corp. (Waltham, Mass.) and its former subsidiary, Trex Medical Corp. For the three-month period, revenues decreased 29 percent to $9.1 million, compared with $12.8 million in the second quarter of 2001. Net income, however, increased to $5.8 million, compared with $751,000 in the year-ago quarter. The second-quarter fall-off in revenues was due primarily to a decrease in non-mammography product line sales of 68 percent. Second-quarter 2002 revenues included $316,000 of royalty revenue associated with a mammography patent license related to the settlement of its patent litigation case. For the six-month period, revenues declined 16 percent to $20.2 million, compared with $24.1 million in the first half of 2001. Net income increased to $6.2 million, compared with $958,000 in the year-ago period. Again, Fischer cited the decrease in non-mammography product line sales, while mammography product lines remained “relatively flat.” Fischer’s net income figures also were affected positively by its litigation settlement.

The newly created icad inc. (Boca Raton, Fla.) — formerly Howtek Inc. — showed some signs of its restructuring in its second-quarter financial report. Revenues totaled $776,600, compared with $932,160 in the second quarter of 2001. The company’s net income increased to $7.3 million compared with a net loss of $797,943 in the year-ago quarter. For the six-month period, revenues declined to $1.6 million, compared with $2.4 million in the first half of 2001. The net loss increased to $7.9 million, compared with a net loss of $1.4 million in the year-ago period. In the second quarter, icad posted charges of approximately $3.2 million associated primarily with graphic arts and photographic product lines. The charges consist of a $2.8 million inventory reserve and a writedown in the value of certain assets, including test equipment and software development costs, of approximately $400,000.

Continued growth among its radiographic imaging systems helped Schick Technologies Inc. (Long Island City, N.Y.) advance revenues and earnings in the quarter, ending June 30. Net revenues increased to $6.9 million, compared with $5.8 million in the same quarter of 2001. Net income more than doubled to $1.3 million, compared with $627,000 in the year-ago quarter.

Colorado Medtech Inc. (Boulder, Colo.) achieved profitability in its fourth fiscal quarter, ending June 30, but it was not enough to post earnings in FY02. Sales for FY02 decreased to $70.6 million, compared with $77.2 million in FY01. The company reported a net loss of $2.4 million, compared with a net loss of $2.7 million, including non-recurring items, in FY01. The FY02 net loss includes $3.1 million in expenses related to the company’s settlement with Gen-Probe Inc. (San Diego). In the fourth fiscal quarter, sales dropped to $18.3 million, compared with $20.4 million in the fourth quarter of FY01. Colorado Medtech posted a profit of $104,000, compared with a net loss of $804,000. In the quarter, the company had a write-down of inventory of $3.1 million related to the cancellation of a manufacturing program with Hitachi Medical Systems America (Twinsburg, Ohio).

North American Scientific Inc. (NAS of Chatsworth, Calif.) achieved sales gains in its third fiscal quarter, ending July 31. Net sales increased 9 percent to $5.3 million, up from $4.9 million in the third quarter of FY01. The net loss decreased to $350,000, compared with a net loss of $1.8 million in the year-ago quarter. The year-ago quarter included a one-time charge of $3.7 million for the write-off of NAS’ linear accelerators. For the nine-month period, net sales rose to $15.2 million, a 7 percent gain from $14.2 million in the same period of FY01. NAS’ net loss increased to $5.1 million, compared with a net loss of $2.1 million.

Two sales of its positron emission tomography (PET) systems boosted Positron Corp.’s (Houston) revenues in the second quarter. Revenues increased to $2.5 million, compared with $449,000 in the second quarter of 2001. Positron’s net loss was $859,000, compared with a net loss of $603,000 in the year-ago quarter. For the six-month period, revenues reached $4 million, up from $942,000 in the same period of 2001. Positron has sold three PET systems in 2002, compared with no system sales in the first half of 2001. The mid-year net loss increased to $1.4 million, compared with a net loss of $1.3 million in the year-ago period.

Cytogen Corp. (Princeton, N.J.) increased revenues through sales of ProstaScint, BrachySeed I-125 (iodine) and BrachySeed Pd-103 (palladium) in the second quarter. Revenues reached $3.2 million, a gain of 11 percent from $2.9 million in the second quarter of 2001. The net loss increased to $3.2 million, compared with a net loss of $3.1 million in the year-ago quarter. For the six-month period, revenues rose to $6.5 million, up from $5.9 million in the same period of 2001. The company posted a net loss of $8.2 million, compared with a net loss of $5.7 million in the year-ago period.