Esaote sees success by growing medical business outside Italy

Ultrasound leads the way as sales and profit grow

Italian medical device manufacturer Esaote Biomedica reported continued progress in growing outside its home market of Italy. The Genoa vendor last month reported strong growth in both revenues and net profits for fiscal 1996 (end-December).

For the year, Esaote posted net sales of 275.1 billion lira ($165.1 million), up 7% compared with sales of 258 billion lira ($154.8 million) in 1995. Esaote's net profit in 1996 was 11.2 billion lira ($6.7 million), compared with net income of 8 billion lira ($4.8 million) the year before.

Esaote said its growth came despite stagnation in European markets and in Germany in particular, which is striving to rein in healthcare spending. The company's Artoscan niche MRI business experienced a year of what Esaote called consolidation, with sales up strongly in Japan and Latin America, up in Europe with the exception of Germany, and down in the U.S. in the fourth quarter of 1996.

Esaote has been trying to increase the percentage of sales it registers outside Italy (SCAN 1/22/97), and last year the company was successful. International sales made up 55.6% of the company's business in 1996, compared with 52.9% in 1995. Most of this growth came from ultrasound sales, which represent 60% of Esaote's revenues.

R&D spending increased 12.9% to 18.9 billion lira ($11.3 million) as the company prepares for new product launches this year and next. In a prospectus issued in conjunction with a public stock offering last year, Esaote stated that it was planning to release in 1997 an enhanced version of its AU4 Idea scanner that is optimized for contrast studies (SCAN 7/17/96). The vendor hopes to launch a new high-end scanner in 1998.

In other ultrasound news, Esaote reported that Biosound, its U.S. subsidiary in Indianapolis, has entered into a consortium funded by the U.S. Department of Defense's Defense Advanced Research Projects Agency (DARPA) to develop a portable 3-D ultrasound scanner for battlefield medicine uses. Also participating in the four-year, $9.5 million project are Lockheed Martin of Lexington, MA; TechniScan of Salt Lake City; Guided Therapy Systems of Mesa, AZ; Alta Technology of Sandy, UT; and the University of Utah in Salt Lake City.

Esaote also reported that it has authorized Biosound to proceed with the acquisition of a 10% stake in Secured Medical Archive of Indianapolis, a start-up firm that provides products and services for computer management of medical images and data.