Firm to focus on marketing ultrafast CT unitsWhen South San Francisco firm Imatron posted its 1997 fiscal results in April, it faced an all-too-familiar problem. Although sales of its premium ultrafast CT scanners had climbed, the company reported
Firm to focus on marketing ultrafast CT units
When South San Francisco firm Imatron posted its 1997 fiscal results in April, it faced an all-too-familiar problem. Although sales of its premium ultrafast CT scanners had climbed, the company reported an $11.4 million loss, which it attributed in part to its struggling HeartScan Imaging subsidiary.
Last month Imatron found a buyer for the division, announcing on July 23 that it had signed a letter of intent with LifeTest America of Atlanta for the sale of all of HeartScan's outstanding stock. LifeTest, an owner, operator, and manager of four heart disease risk assessment centers in the U.S., has agreed to pay $7.4 million in cash and to assume equipment-related lease liabilities. The deal is expected to close by September 15.
Imatron established HeartScan in 1993 with three goals in mind: to put Ultrafast CT into the hands of leading cardiologists, to provide alternative distribution channels for the scanners, and to build a business around providing early-stage diagnosis of coronary heart disease to the public. The company expected to have 70 centers open by 1999, but has only established five (SCAN 6/25/97). Imatron executives attribute HeartScan's slow growth to the lack of widespread insurance reimbursement for ultrafast CT coronary artery scans.
"(Reimbursement) is the single largest impediment to this business becoming huge," said Lewis Meyer, president and CEO. "The bottom line is that when you're changing the insurance landscape in the U.S., it just doesn't happen that fast."
With HeartScan becoming a drain on Imatron's profits, the company began seeking a joint-venture partner or buyer for the division last year. The company's termination of its seven-year marketing agreement with Siemens, and its June announcement of an alliance with GE Medical Systems (SCAN 6/24/98), added further impetus for a sale. In GE, Imatron has found a strong cardiology marketing partner, and to continue to establish HeartScan centers could have hindered the partnership.
"GE is out there with their cardiology sales force, and they have included ultrafast CT in the five principle products (that force) is selling," Meyer said. "Imatron can no longer be in the position of being the principle shareholder of a company that a buyer of an EBT (electron beam tomography) scanner might view as a competitor."
Selling HeartScan serves Imatron well, from both a cash and debt assumption standpoint: The company will not be required to recognize any operating losses HeartScan may incur in the future. And with LifeTest's expanded network of nine centers, Imatron expects LifeTest to be its biggest customer for future sales of ultrafast CT scanners. With HeartScan divested, Imatron will shift its corporate strategy.
"Our business is selling and servicing ultrafast CT scanners, not healthcare service," Meyer said.
Lombardo to head ALI's U.S. office
GE Medical Systems veteran Anthony Lombardo has joined ALI Technologies as president of ALI Imaging Systems, the ultrasound miniPACS developer's new U.S. subsidiary. Based near Milwaukee, ALI Imaging Systems will serve as the Richmond, British Columbia-based firm's U.S. field sales organization. Lombardo previously served as general manager of sales for the Integrated Imaging Solutions division of GEMS before leaving his post in June.