Future owner tags Lorad for help with sonic CT

October 7, 1992

Mammography vendor Lorad signed a letter of intent last monthto be acquired by ThermoTrex, a San Diego-based research arm ofThermo Electron. ThermoTrex will purchase Lorad with $12 millionin cash and 1.35 million restricted shares of ThermoTrex

Mammography vendor Lorad signed a letter of intent last monthto be acquired by ThermoTrex, a San Diego-based research arm ofThermo Electron. ThermoTrex will purchase Lorad with $12 millionin cash and 1.35 million restricted shares of ThermoTrex commonstock. Lorad will continue to operate as an autonomous companyafter the acquisition and will retain its management staff andpersonnel, according to the company, based in Danbury, CT.

The acquisition would fit a pattern Thermo Electron has oftenfollowed to commercialize products developed by ThermoTrex, oneof Thermo Electron's seven subsidiaries, according to Ed Locke,director of strategic planning for ThermoTrex.

"ThermoTrex is the research and development lab out ofwhich the rest of these companies are spun," Locke said."As each piece of technology develops, it is spun off asa separate corporation."

Thermo Electron is a Fortune 500 company with sales of over$1 billion. Its subsidiary companies operate in a variety of fields,including energy, health care and the environment. Thermo Electronis based in Waltham, MA.

ThermoTrex is developing a medical imaging technology it hasdubbed "sonic CT," and believes that Lorad possessesthe manufacturing and marketing know-how to commercialize it.

Sonic CT uses sound to image the body, but differs from ultrasoundin that it does not use the echoes of sound wave pulses, Lockesaid. Sonic CT provides better information about tissue densitythan ultrasound and collects tomographic slices rather than longitudinalsections. The technology is also able to image deep within thebody without the signal attenuation that occurs in ultrasound,he said.

The company is targeting breast imaging as sonic CT's initialapplication. The technology uses no ionizing radiation and maybe able to differentiate between malignant and benign tissue bymeasuring tissue density, according to ThermoTrex.

Development of sonic CT is still in the early stages. A prototypehas not been built, and patents are pending. The company is planningto have a product on the market by late 1994 or 1995.

As ThermoTrex has no manufacturing capability, a partner wasneeded to further develop sonic CT. Lorad was determined to bea good fit because the company's x-ray mammography experienceparallels ThermoTrex's desire to develop sonic CT as a mammographyproduct.

"We can provide a complement to x-ray mammography becausethere are some types of tumors that x-ray has a hard time pickingup," Locke said. "Because sonic CT measures somethingdifferent than x-ray, it gives doctors additional information."

Lorad believes the match-up with ThermoTrex provides the financialbacking needed to strengthen its position in x-ray mammographyand to explore new markets, according to Hal Kirshner, presidentof Lorad.

"The alliance with ThermoTrex gives us the financial strengthof Thermo Electron to aggressively pursue technology and markets,"Kirshner said.

Both companies are in due diligence, according to Kirshner.A deal should be finalized by November.