Imatron, Picker disband after Siemens signs on

April 10, 1991

Imatron and Picker International terminated their North Americandistribution agreement for Imatron's ultrafast computed tomographyscanner last month. The two medical imaging vendors parted ways after Imatron signedon Siemens in a collaborative effort

Imatron and Picker International terminated their North Americandistribution agreement for Imatron's ultrafast computed tomographyscanner last month.

The two medical imaging vendors parted ways after Imatron signedon Siemens in a collaborative effort to develop and market newCT systems based on Imatron's electron-beam scanning technology(SCAN 3/27/91). Picker sold the Imatron system under its own labelas Fastrac.

"As you can tell from our financial results, we haven'tbeen selling many machines. Part of that (sluggishness) stemsfrom our disappointing relationship with Picker," said RodneyDerbyshire, Imatron president and CEO.

Imatron's revenue declined from $13.8 million in fiscal 1989(end-December) to $9.7 million in 1990. The dedicated CT developer'slosses nearly doubled from $4.2 million in 1989 to $7.6 millionlast year (see graph). The firm's backlog of ultrafast scannersincreased to seven units at the end of 1990, from three unitsa year earlier.

Siemens will not sell the current Imatron system, althoughthe agreement calls for the German vendor's distribution of productsdeveloped through the collaborative effort, Derbyshire said.

Imatron has reinstituted direct sales of the current CT productin North America, he said. The South San Francisco firm had soldthe system in this market itself, before entering into a distributionagreement with Picker (SCAN 8/31/88).

Picker and Imatron discussed a possible joint venture to developnew CT products prior to the Siemens agreement, said Michael Peterson,manager of public relations for Picker. The OEM decided insteadto invest in the internal development of its own CT products,he said.

Imatron received immediate financial relief from Siemens inthe form of a $4 million up-front license fee, Derbyshire said.Siemens has also provided Imatron with a $4 million line of credit.

More importantly, however, collaboration with Siemens providesImatron with a strong endorsement of its electron-beam CT technologyfrom one of the world's largest medical imaging vendors. Futuredistribution by Siemens will provide a significant worldwide marketingboost for the smaller firm, Derbyshire said.

Imatron is hopeful that customer relations will improve asthe firm reinstates direct sales of the current product. AlthoughPicker will continue servicing installed Fastrac systems wherehospital contracts are in force, Imatron would not object to takingover these service contracts, he said.