IS2 hatches plans to expand customer base but keep equipment design simple

September 5, 2001

IS2 Research is a modern-day marvel, a company that makes high-quality, extraordinarily durable gamma cameras that sell for about half the price of competing models. A uniquely simple design allows the company to produce a range of systems

IS2 Research is a modern-day marvel, a company that makes high-quality, extraordinarily durable gamma cameras that sell for about half the price of competing models. A uniquely simple design allows the company to produce a range of systems capable of general imaging, as well as dedicated functions such as cardiac imaging. But building a better mousetrap has never guaranteed sales success, and IS2 is living proof.

After some two years in the marketplace, IS2 has managed to place only about 20 systems. Iain Stark, IS2 chief technology officer and chair of the board, speaks buoyantly about the dozen or so back orders and the company’s efforts to fill them. But he knows his company and products could do better if they looked a bit more appealing and had snappier names.

“We have stressed the ability of our machines to work reliably for a long time, and appearance has been something of a secondary consideration,” Stark said. “We realize that the machines must look good and the names, well, the names have not necessarily been, shall we say, inspired.”

The company tried to come up with some sparkle, initially christening the product line “NuCamma.” That name never really caught on, however, and the company lapsed into using designations as functional as its equipment. (The single-head circular gamma camera, for example, is called the “SC.”)

Stark, who is reputed in the industry to be both a raconteur and an entrepreneur, loves to tell stories that demonstrate the reliability of his equipment. One of his favorites is when an IS2 gamma camera fell from a forklift while being moved to an exhibit booth.

“When you drop a camera on its face, it’s a fairly serious test of how strong the machine is,” Stark said. “Not only did it still work fine, it was within 1/2-mm center of rotation accuracy.”

The secret to developing a low-cost, low-maintenance gamma camera may be the right packaging. The electronics that run IS2 products are built into the detector heads, allowing unprecedented compatibility of the circular and rectangular detectors with different products.

“It’s really easy to make a variety of cameras, all of which have the same performance,” Stark said. “We can develop different cameras very rapidly and, of course, it helps tremendously in production, because we can produce one box of electronics that can run any machine.”

This approach has been a guiding principle in the development of IS2’s work-in-progress scintimammography system. The detector is identical to the one built into the company’s dedicated cardiac system. The only differences are the collimator and the analytical software, which are specific for scintimammography. Shaping the breast containment system to accommodate the patient has been the biggest challenge. Engineers are fine-tuning the design to produce images up to the chest wall so that no lesions are missed.

Studies with phantoms suggest that the new system can visualize lesions between 2 mm and 5 mm in diameter. The system may be able to localize the lesion in 3-D space with enough precision to serve as a reference for biopsy or even minimally invasive excision.

“Doing so is the real value of scintimammography,” Stark said. “We think bringing these crucial factors together will make scintimammography a very useful adjunct to x-ray mammography screening.”

The true test of the system will come in clinical studies. About a half dozen luminary sites are planned. Several should be operating before the end of the year, according to Stark. But to be successful, the company must expand its installed base well beyond its current market penetration. To achieve that, IS2 must compete effectively against the giants of the radiology industry.

The big four-GE, Siemens, Philips’ ADAC Laboratories, and Marconi-dominate the nuclear medicine marketplace. The industry could shrink even more over the coming months, if Philips’ acquisition of Marconi goes through. Stark takes the position that IS2’s small size and well-considered designs allow greater flexibility and afford a better response to customer needs. Customers talk to the top brass, not account executives.

Stark and colleagues hope to turn this spirit of entrepreneurship and doggedness to their advantage. But they are battling a tough foe, a presumption among prospective customers that favors larger companies.

As merger mania heated up in the late ‘90s, customers grew increasingly reluctant to buy from small companies, fearing that they could go out of business. Stark is carrying some of that baggage himself. Prior to founding IS2, he designed gamma cameras for a Scottish company called Scintronix, which folded in 1988. He moved to Park Medical, which declared bankruptcy in 1997. Stark had left the company some three years before Park folded, however, after which he developed the gamma camera design used to found IS2.

Chastened by his earlier experiences, Stark was determined to learn from history, not repeat it. He has kept the size of IS2 small, its bureaucracy minimal, and its cameras inexpensive. The single-head cameras list for about $150,000, and the dual-heads, including the cardiac camera, are $230,000 or less-well below the price of competing systems.

He and his team of designers are now working on several product variations. Two or three will probably debut next year at the annual meeting of the Society of Nuclear Medicine. A PET scanner is on the drawing board.

Stark is willing to bow to the pressures of modern marketing, accepting the need to give his products a more appealing look and more attractive names. But he will not, perhaps cannot, dispense with old school thinking when it comes to building gamma cameras.

“Our company has an internal motto: ‘If the science is right, the product is right,’“ he said. “If you’ve got the science right, putting new covers on is a relatively trivial job.”