Lunar and Hologic aim high in bone densitometry field

December 28, 1994

Products target expanding market for bone examsTwo leading vendors of bone densitometry equipment, Lunar andHologic, are in the peak financial condition following recordsales in 1994. Both companies expect their fortunes to improveeven further

Products target expanding market for bone exams

Two leading vendors of bone densitometry equipment, Lunar andHologic, are in the peak financial condition following recordsales in 1994. Both companies expect their fortunes to improveeven further with the impending introduction of osteoporosis drugsand widening Medicare coverage for bone mineralization exams inthe U.S.

Several pharmaceutical companies, including Merck and Eli Lilly,are developing drugs that promise to treat as well as preventosteoporosis. In addition, about half of all Medicare carriersnow reimburse for dual-energy x-ray absorptiometry (DEXA) exams.

"We see explosive growth as a function of these drugs reachingthe marketplace, which we expect to happen in the beginning of1996," said S. David Ellenbogen, CEO and chairman of Hologicof Waltham, MA.

James DePass, national sales manager for Lunar in Madison, WI,believes the research on these drugs and more widespread reimbursementfor DEXA is already fueling the market for bone densitometry equipmentin the U.S.

"There is growing interest in osteoporosis diagnosis andtreatment and we think that goes hand in hand with densitometrysales," DePass said. "The more doctors feel they needto diagnose patients, the more equipment we think we will sell."

Both Lunar and Hologic have been chalking up steady gains recently.Lunar revenues for the fiscal quarter ended Sept. 30 increased46% compared to the previous year's quarter, with sales of $9.1million and income of $1.6 million. Hologic sales for the fiscalyear, which also ended Sept. 30, rose some 55% over the previousyear to $38.5 million with net income of $3 million. In preparationfor further market expansion, each company unveiled prototypesof new bone densitometers at the Radiological Society of NorthAmerica meeting.

Hologic introduced the QDR-4500A Acclaim, which the company describesas the flagship of its QDR product family. The QDR-4500A provideshigh-resolution images of the spine, lateral spine, hip and otherskeletal sites and can be combined with capabilities that enablevertebral dimensions to be determined to assess spinal deformitiesand to monitor the effectiveness of therapy. The system is designedspecifically to address the needs of routine clinical practice,combining state-of-the-art technology into a compact package thatcan be installed in a standard exam room, Ellenbogen said. Thesystem is designed for simplicity and cost-effective operation.

"The Acclaim incorporates all the features we have beenworking on over the last eight years," Ellenbogen said. "Theadvantages of the linear array of its solid-state detectors isfaster scanning speed and improved image quality."

The company expects to begin shipping Acclaim to overseas clientsin early 1995. Commercialization in the U.S. depends on Food andDrug Administration clearance.

The same is true for Lunar's new high-end Expert-XL, which hasnot yet been cleared by the FDA for sale in the U.S. Expert-XLcan measure the height of the lateral spine vertebrae -- T5 throughL5 -- in as little as 30 seconds. Measurements are completed withoutthe need for separate thoracic and lumbar radiographs and at radiationdoses five to 10 times lower than radiography. The key to theseimprovements is a more efficient, proprietary new detector materialthat allows faster scan time and conservation of x-ray dose.

Both Lunar and Hologic use a technique called vertebral morphometryto measure the bone, a technique that both companies claim astheir own. The two competitors are locked in a legal battle overwhich owns the rights to patents related to this technique (SCAN9/28/94 and 9/14/94).

In the meantime, the market prospects for their technologiesare improving. Densitometry companies got their first big breakabout a year ago when the American Medical Association assigneda CPT code for DEXA and the Health Care Financing Administration,which administers Medicare, assigned a suggested relative valueunit (RVU) for the exam, leaving the final coverage decision toindividual Medicare part-B carriers.

"It has been a kind of domino effect, since the RVUs wereestablished last December," DePass said. "Slowly butsurely, region by region, carriers have been evaluating this andslowly most of them are looking favorably on it."