IGC calls off effort to sell scanner for clinical use
In a move that reflects the difficulties small companies face entering a mature MRI market, MR magnet supplier Intermagnetics General (IGC) of Latham, NY, opted this month to shut down its Field Effects subsidiary and abandon any attempt to market its 0.15-tesla permanent magnet MRI system for clinical applications. At the same time, IGC filed suit against its intended MRI sales partner, Trex Medical of Danbury, CT, claiming breach of contract over a scanner distribution deal that apparently went south.
IGC provides magnets, superconducting wire, and other related technology for several industries besides medical imaging. Most of its work involves OEM supply rather than direct sales, but the company began to branch out when it developed its own MRI scanner in conjunction with a British partner, Surrey Medical Imaging Systems (SMIS) of Guildford, U.K. IGC owns an equity stake in SMIS, which provided the imaging software and console for the MRI system. Field Effects developed the magnet and other parts of the system.
The scanner was cleared by the Food and Drug Administration in January of 1997, and IGC set up a limited-liability company, IMiG, to sell the system under the brand name IMiG-MRI. With a list price of $500,000, the scanner was touted as the lowest priced whole-body MRI scanner in the world, especially well suited for developing countries. Four units were sold under the IMiG label, according to Glenn Epstein, president and COO of IGC. Field Effects, however, continued to perform below a break-even profit level.
When Epstein joined IGC in 1997, he decided it would be best for the company to find a partner with an existing distribution network rather than trying to build its MRI business from scratch.
"We went looking (for a partner)," Epstein said. "Trex was also looking. They appeared to be an ideal partner. They had a strong distribution system, were already a dominant player in x-ray, and were interested in going to another modality."
Trex brought the IMiG-MRI system to the 1997 Radiological Society of North American exhibition and renamed the product Trex-MRI (SCAN 12/17/97). The relationship was seen as part of an effort by Trex to expand from its core franchise in x-ray into new markets. Although the relationship eventually broke down, Trex president and CEO Hal Kirshner said his company fully intended to sell the IGC scanner.
"Were we getting ready to go to market? Absolutely," Kirshner said.
