Hitachi enters PET marketplace with low-end scanner from CPS

June 26, 2002

CTI seeks to proliferate core positron technologyHitachi Medical Systems formally unveiled an entry-level PET scanner at the annual meeting of the Society of Nuclear Medicine in Los Angeles June 15 to 19.The scanner, which Hitachi

CTI seeks to proliferate core positron technology

Hitachi Medical Systems formally unveiled an entry-level PET scanner at the annual meeting of the Society of Nuclear Medicine in Los Angeles June 15 to 19.

The scanner, which Hitachi calls Sceptre and was built by CPS Innovations, uses a partial-ring detector composed of lutetium oxyorthosilicate (LSO). This detector, which covers an are of approximately 180º, rotates around the patient using slip-ring technology commonly found on the gantries of CT scanners. The detector is constructed to allow isotropic 3D data acquisition. Error correction to account for scatter and random counts is built into the system.

"We believe PET is a very good complement to MRI," said Ray Wtulich, PET marketing manager for Hitachi. "In the head and neck, MR has some advantages over CT in providing better contrast and resolution. In fusing these images with PET, MRI can provide better localization."

Hitachi's entry into PET marks the first corporate expansion into this segment of the imaging industry, whose membership has changed but not grown for some time, despite booming sales (SCAN 2/20/02). Siemens was the dominant player through much of the 1980s and 1990s, a time when global sales of PET scanners barely edged into the double digits. Prospects appeared so bad that only about five years ago GE tried unsuccessfully to sell its PET business to Positron, a pioneer of PET technology that today is struggling to stay alive (SCAN 4/17/02). Reimbursement by Medicare and subsequently by third-party payers changed that. Industry consolidation brought nuc med company SMV to GE and ADAC Labs to Philips.

One major player, however, was not widely known outside industry circles until recently. For much of its 20-year commercial history, CTI has dominated PET technology. Through CPS (CTI PET Systems), which is a joint venture with Siemens, this Knoxville, TN, company developed and continues to evolve the positron imaging technology that has been the foundation for the German vendor's Ecat products.

Last year CPS Innovations, as it is now called, stepped out of the shadows, supplying a PET scanner to Marconi Medical and announcing plans to market its own line of PET products. The Marconi relationship was cut short by its acquisition by Philips Medical, which chose not to continue the supply agreement. But for CPS, this was just a bump in the road.

CPS cut an agreement last November to supply Hitachi with the entry-level Sceptre scanner. At the time, executives from the two companies hoped Hitachi would have a product ready for launch at the SNM meeting. Hitachi beat that timeline by about a month, said Brad Herrington, senior director of product marketing for Hitachi, integrating the PET scanner with a workstation supplied by Medasys and fusion software provided by Mirada Solutions. This allowed Hitachi to fine-tune the integrated product and push up the shipping date to July.

The Hitachi agreement is part of a larger strategy being carried out by CPS and its chief stakeholder, CTI. Since establishing a much higher profile last spring, executives at the two companies have consistently said that their goal is to dominate the PET market. CPS today sells or supplies to Siemens a broad range of PET products, from the flagship Ecat Accel, an LSO-based scanner, to the low-end Ecat ART, which utilizes bismuth germanate. The company also offers on its own the Ecat Reveal PET/CT, a hybrid system that combines LSO technology and CT. (Siemens thus far has chosen not to market CPS' latest development, which Hitachi sells under the name Sceptre, and CTI sells as Ecat Emerge.)

The same basic PET hardware is built into systems sold by Siemens and CPS. The primary distinctions relate to software, particularly the user interface. Although CTI is making a play for end-user sales, its forte is detector technology, which company strategists hope to use as a lever to establish CTI as a major player in the PET industry.

"We need to proliferate our core technologies," Herrington said.

Herrington hopes that OEMs, including GE and Philips, will one day buy detector technologies developed by CTI. In the meantime, CTI and CPS are looking into alliances with the makers of radiation therapy equipment. These companies are becoming increasingly interested in the use of imaging data to improve the accuracy of therapy.

"We see opportunities there everyday," he said. "The merger of imaging and therapy is already occurring, and PET is figuring highly in those plans."

CPS and CTI appear to be well positioned to take advantage of opportunities both in and outside the PET mainstream. CTI's proprietary LSO-based detectors are the fastest on the market, according to the company. And in PET, speed matters. Dedicated PET exams are the slowest of any medical imaging procedure, taking up to 40 minutes just to acquire the data. CPS wants to get the scan time down substantially and, in so doing, increase patient throughput. Using LSO crystal technology and CT to do attenuation correction can cut that time to about 15 minutes. Technological advances now in CPS' pipeline may cut it even more.

The scanner being supplied to Hitachi, however, is not participating in the current efficiencies, nor is it likely to benefit from future developments, which are aimed at the high end. Although the detector is made of LSO, it is only a partial ring. Sceptre's performance, therefore, cannot compare to that of higher end scanners.

"The system is designed for an imaging department with patient volumes less than eight or nine patients a day," Herrington said. "On this system you can accomplish PET at minimum cost."

At $1.4 million, Sceptre is far friendlier to the budget of prospective customers than high-performance systems, which can cost end users around $2 million. Sceptre also offers an image fusion feature as part of its Avia workstation. The software package was developed by England-based Mirada and is installed on a computer system supplied by Medasys.

The Mirada software, called Fusion7D, combines PET data with those obtained with such anatomically oriented modalities as CT and MR. This provides a built-in alternative to the far more expensive hybrid PET/CT technology being championed by Siemens, GE, and Philips.

These additional features distinguish the Hitachi Sceptre from CTI's Ecat Emerge. The company is wrapping this product in its new QuickStart, a turnkey program that includes custom financing, radiopharmaceuticals, scanner service, staff training, licensing, installation, and custom marketing initiatives.

"There are a number of ways to add value," Herrington said.

Hitachi's combination of PET scanner and workstation will complement its own unique sales strategy. The company hopes to leverage its installed base of open MR scanners, which includes more than 1200 open systems in the U.S. and more than 2300 worldwide. For the most part, the U.S. owners of these scanners represent virgin territory for PET sales. These MR units have been sited primarily in freestanding imaging centers, whereas most PET scanners are now operating at large hospitals and medical centers.

Hitachi is also exploring sales to mobile operators. Sceptre is due for a shake test in the coming weeks. Barring any unforeseen problems, Hitachi will soon pursue the several leads already in hand for selling the system for use on mobile routes, Wtulich said.

The 7D Fusion software built into Avia could provide Sceptre customers with the ability to compete with operators of hybrid PET/CT systems. Data from Hitachi MR scanners could provide the anatomical references. Or these references could come from CT, Wtulich said.

"Many of the centers with Hitachi MRs also have CT. With Avia we offer our customers a choice of fusing either type of image with PET," he said.

Hitachi's foray into PET is in line with a broader strategy to expand its breadth of offerings. The company owes its success in the U.S. to its sales of open MR scanners but has recently branched out to sell digital radiography equipment provided by Swissray.

As in the case of Swissray, Hitachi's success in PET would have an impact beyond its own corporate boundaries, boosting the suppliers of the technologies that go into Sceptre and Avia. Even more important, success with Sceptre could change the very character of PET, extending the reach of this modality beyond its traditional bounds of large medical facilities.