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Diasonics holds up in tight market


Diasonics managed to increase income from continuing operations15% in fiscal 1991 (end-December) despite ultrasound price competitionand softening imaging demand in Europe, according to Rod Young,president and CEO.Income for the year was $18.9 million,

Diasonics managed to increase income from continuing operations15% in fiscal 1991 (end-December) despite ultrasound price competitionand softening imaging demand in Europe, according to Rod Young,president and CEO.

Income for the year was $18.9 million, compared to $16.4 millionin 1990. Revenues rose 7% from $267.1 million in 1990 to $286.5million last year (see chart).

"The impact of lower pricing, coupled with our decisionto fund important development programs and to expand our salesforce, resulted in the (ultrasound) division remaining unprofitable,"Young said.

Despite the red ink, orders are up in the ultrasound business,said Bruce Moore, division president. Moore spoke with SCAN atthe 1991 Radiological Society of North America meeting in December.

"We are feeling a lot better about our ultrasound business,"Moore said. "Our order rate was substantially higher thisyear relative to what it was in 1990. But pricing in the marketplaceover the last year has been so aggressive that it is hard to makeup in volume in a short period of time what you lose in priceerosion."

Diasonics' objective is to increase ultrasound sales volumewhile keeping costs down and performance up, he said. The vendorfinalized the new color-flow Doppler architecture for its premiumSpectra system last May and launched eight new probes at the RSNAmeeting to take advantage of that color product, he said.

Spectra's color-flow package offers improved sensitivity tolow-flow states, Moore said.

"The most difficult exam to do in color is looking atveins in the leg. That is the lowest flow there is. With our previousarchitecture, we were not able to pick up the low flows in theleg. We are able to with the new architecture."

The color-flow system is also an asset in imaging highly occludedarteries. Spectra can detect flow even when an artery is 90% occluded.The artery will appear completely occluded in less sensitive systems,he said.

Diasonics has expanded the potential market for its intraluminalIVUS system by targeting applications outside of vascular work,such as imaging the esophagus. Intraluminal partner Boston Scientificdeveloped a 6.2-French catheter that combines the features ofultrasound imaging and endoscopy, said William E. Richardson,vice president of marketing.

Endoscope firms have attempted to add ultrasound imaging totheir products in the past, but have offered relatively poor imagequality. Most attempts have used 7.5-MHz frequencies, while IVUSoperates at 20 MHz, providing greater image clarity, Richardsonsaid.

OEC Diasonics has become increasingly important to its parentcompany as sales of Diasonics' Sonotron subsidiary in Europe softenedin the fourth quarter and the vendor's ultrasound division remainedin the red. OEC, a Salt Lake City specialty x-ray supplier, introduceda new C-arm at the RSNA show that Diasonics hopes will furtherboost sales of this subsidiary.

The 9400 mobile C-arm offers improved image processing andstorage capabilities, Young said.

The system has digital image storage with real-time playback.Pulsed fluorography functions at four or eight frames a secondwith instantaneous storage and viewing. Such computer-poweredimprovements in mobile systems are bringing them closer to theperformance of stationary C-arms, he said.

"This (the 9400) has the same kind of features you wouldfind with a much more expensive fixed room. A radiologist or interventionalistwho looks at it now will see that he can do almost everythingthat he can do in a fixed room," Young said. "That (OEC)business has been very successful for us and continues to lookvery good."


  • Interspec improved its bottom line significantly sinceits sale of Norwegian color-flow ultrasound vendor Vingmed Soundto Diasonics a year ago (SCAN 12/12/90). The Ambler, PA, ultrasoundfirm had a profit of $9.2 million in fiscal 1991 (end-November)compared to a loss of $1.2 million the year before. This includesa gain of $7.4 million from the Vingmed sale. Net sales were down5%, from $64.9 million in 1990 to $61.6 million last year (seegraph next page).

Sales last year were also helped by the Food and Drug Administration'smarket approval, granted in May, for Interspec's Apogee CX system,said Edward Ray, chairman and CEO. Interspec sells midpriced ultrasoundsystems into private office markets.

Several new products are under development, which should boostInterspec's ultrasound position worldwide, Ray said. Interspecentered into a joint R&D relationship with Siemens over ayear ago (SCAN 10/24/90).

  • Biomagnetic Technologies (BTI) of San Diego received marketclearance last week from the Japanese Ministry of Health and Welfare(Koseisho) to import and sell its Magnes magnetic source imagingsystem in Japan. Magnes is the only device of its kind to receivemarket approval in either Japan or the U.S. Despite its FDA 510(k)approval, however, sales of the biomagnetometer remain limitedbecause of its high cost and the fact that clinical use of thesystem is still emerging.

The biomagnetometer measures magnetic fields created by thehuman body, in order to detect functional brain disorders. Interestin this technology is high in Japan and clinical reimbursementmay be near in that market, said Michael A. Silver, MRI directorfor Instrumentarium Imaging, a low-field MRI supplier.

Instrumentarium showed a similar product, which it labeleda magnetoencephalography (MEG) system, at the 1991 RSNA exhibition.This unit was developed in a joint venture with Helsinki-basedNeuromag, using technology developed at the University of Helsinki.Siemens, Shimadzu and other medical vendors are also developingsimilar technology.

BTI undertook clinical trials of Magnes at the University ofTokyo and the National Center of Neurology and Psychiatry. Thesystem will be imported into Japan and marketed by Sumitomo MetalIndustries, a large steel company. This is SMI's first effortin the medical equipment field, according to Stephen O. James,BTI president and CEO.

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