Digital Radiography resolves supplier and backlog problems

October 1, 1999

Digital Radiography resolves supplier and backlog problemsAcquisition of DRC begins to pay off for HologicFueled by the deep pockets and long-term commitment of its new parent company, Hologic, digital x-ray developer Direct Radiography

Digital Radiography resolves supplier and backlog problems

Acquisition of DRC begins to pay off for Hologic

Fueled by the deep pockets and long-term commitment of its new parent company, Hologic, digital x-ray developer Direct Radiography Corp. is bullish about the future. The Newark, DE-based company has overcome supplier problems for both its flat-panel detectors and general radiography systems and is taking a broader approach to the market by capitalizing on the combined sales and engineering resources of DRC and Hologic.

Its acquisition by Hologic (PNN 6/99) is already having a dramatic impact on DRC. DRC expects to make a string of announcements over the next six months regarding both new OEM relationships and new products, and Hologic is actively pursuing other acquisitions that will complement the DRC technology.

Hologic’s presence may also have helped DRC solidify its supplier relationships. After its original supplier of thin-film transistor (TFT) arrays, Optical Imaging Systems (OIS), closed its doors last year (PNN 11/98), DRC was forced to find a new supplier of these highly specialized components. DRC ultimately signed a nonexclusive contract with LG-LCD, a division of Korea-based LG Corp., earlier this year and began taking delivery of the new arrays almost immediately (PNN 5/99). DRC formally announced the relationship last month.

These arrays are a critical component of DRC’s DirectRay flat-panel detectors, which are used in the company’s iiRAD dedicated chest and general radiography systems. DRC executives believe LG-LCD’s expertise in high-volume production of TFTs and LCD panels will help DRC produce more reliable detectors, reduce its current backlog of two dozen systems, and eventually reduce the cost of its radiography systems. DRC and LG-LCD are also collaborating on the development of detectors for fluoroscopic imaging and digital mammography applications.

“LG-LCD is a well-established TFT manufacturer that provides hundreds of thousands of TFTs annually for the computer market but wanted to go into the medical market,” said Tom Umbel, president of DRC and vice president of Hologic. “The application of their technology and manufacturing capability was a natural fit, and the end result is that their know-how and expertise has really improved the quality of our detectors and lowered the cost for us because of much higher yields.”

The announcement of the relationship with LG-LCD comes on the heels of DRC’s signing a three-year OEM agreement with E-Com Technology of Zhuhai, China, a value-added distributor and software developer for PACS that will now sell DRC detectors in China. DRC expects to work with various PACS vendors in the future as part of an overall effort to increase its market presence and product offerings.

“There is an ongoing dialogue about whether PACS precedes DR or vice versa,” Umbel said. “We believe we have to market some PACS components to generate DR sales, and it would make sense to look for partnerships with other players to market their PACS components or products, or turn our customers in their direction.”

In addition, Hologic has a well-established presence in several foreign markets including Europe, which accounts for 30% to 40% of the company’s sales. This, along with the recent appointment of Dick Pacenta as vice president of sales and marketing, should help DRC with international market penetration as the company’s products move ahead. Pacenta was previously director of marketing for corporate accounts at Sterling, DRC’s previous parent company, where he was also involved in global marketing.

“Hologic is a much different company (than Sterling),” Umbel said. “They have a better understanding of the capital equipment sales and service process, and they are very conscious of investing in a new technology and putting money and resources in the right places to grow the business.”