Elscint picks radiologist to head U.S. effort

November 17, 1993

Elscint's small position in the U.S. MRI market has proven a blessingin disguise for the Israeli multimodality medical imaging vendor.While MRI suppliers with a larger stake in the U.S. reel froma dramatic drop in system sales (SCAN 11/3/93), Elscint's

Elscint's small position in the U.S. MRI market has proven a blessingin disguise for the Israeli multimodality medical imaging vendor.While MRI suppliers with a larger stake in the U.S. reel froma dramatic drop in system sales (SCAN 11/3/93), Elscint's worldwiderevenues and profits continue to rise at a healthy clip.

Rather than cutting back in response to the drop in U.S. MRIpurchases, Elscint is in a position to build revenues furtherby increasing market share, said Shmuel Parag, president and CEOof the parent company, based in Haifa.

In a dramatic move setting the stage for what Elscint hopesis an expansion of its U.S. market share, Elscint will hire aradiologist next month as president of its U.S. company, Elscintof Hackensack, NJ.

Dr. Thomas Spackman, chairman of the department of radiologyat St. Francis Hospital in Hartford, CT, combines a medical andeconomic academic background with a knowledge of Elscint technologyand U.S. clinical requirements, Parag said.

"We are fortunate to have found a very good person wehave known for quite a while, who knows the industry and is himselfa radiologist," Parag told SCAN.

Executive vice president A. Robert Sohval, who headed up theU.S. company during its multi-year presidential search, will continuein his position.

Elscint had $60.4 million in revenues during the third quarterof 1993 (end-September), up 9% from $55.3 million in the sameperiod last year. Net income increased a stronger 11% for thequarter, from $5.3 million last year to $5.9 million.

Only 29% of Elscint's worldwide revenue comes from North America,compared to 47% from Europe. The vendor's MRI market share inthe U.S. is only about 3%, although Elscint is stronger in U.S.nuclear medicine, with about a 20% market share, Parag said.

"We have had an advantage, ironically, in that we arenot a major force in the U.S., where there has been a (market)problem," he said.

Another irony is that the now healthy Elscint was not longago the poor boy on the medical imaging block, weighed down bydebt and a continual flow of red ink. Following a crisis periodfrom 1985 to 1987, Elscint sold its unwise investment in the oldXonics x-ray business and later restructured and sold stock toits parent Elbit, thus eliminating most debt (SCAN 7/08/87 and11/22/89).

While major competitors cut staff to compete in a new health-careenvironment, Elscint has already trimmed itself into a low-costproducer without neglecting R&D. The vendor has produced uniqueproducts in both CT and nuclear medicine that would sell betterif the firm had the marketing clout of GE or Siemens. However,tight market periods are often times when the industrial balanceof power shifts, Parag said.

"It is a time of risk and a time of opportunity,"he said.

BRIEFLY NOTED:

  • Cine three-dimensional ultrasound processing company TomographicTechnologies of Chicago scored a coup this month by signing Acusonon as a development and marketing partner.

Acuson's scanners will be outfitted with software and transducersto acquire the data necessary for cine 3-D (or 4-D) presentationsof the beating heart, a moving fetus and other parts of the anatomy.Images will be displayed on Acuson's Aegis digital ultrasoundimage handling system.

The two firms, which were reportedly talking at the time ofthe American College of Cardiology meeting in Anaheim last spring,offered a joint display of the technology at the American HeartAssociation meeting this month in Atlanta.