Money problems force Volumetrics to reorganize

February 16, 2000

It’s crunch time for 3-D ultrasound pioneer Volumetrics Medical Imaging. Pressed by dwindling cash reserves and customer demands for key clinical capabilities not found on its flagship echocardiography system, V360, the Durham, NC, company has begun

It’s crunch time for 3-D ultrasound pioneer Volumetrics Medical Imaging. Pressed by dwindling cash reserves and customer demands for key clinical capabilities not found on its flagship echocardiography system, V360, the Durham, NC, company has begun shifting its focus from marketing to engineering.

Left behind has been most of Volumetrics’ field sales staff and part of its marketing staff, according to general manager Jim Mundell, who is shopping the company around the medical devices industry in hopes of attracting a partner. In the absence of such a partnership, rerouting existing funds to engineering should keep the company going long enough to create a product that will be able to do all the exams commonly required of echocardiography systems.

“3-D is really very compelling but, guess what, nobody gets reimbursed for it,” Mundell said. “If you can’t do a full clinical exam, it’s tough to get clinical people to buy this thing.”

V360, a real-time volumetric ultrasound unit, was unveiled as a work-in-progress at the annual meeting of the American Heart Association in November 1999. Among its notable features are real-time 3-D gray scale and color flow, as well as quantitative measurements of volumes and function. Interactive capabilities allow for a 3-D visual analysis of the heart, as well as real-time guidance for interventional procedures.

“It’s as though you are sitting down in the apex, looking up toward the valves; you’ll see the catheter come down into the ventricle and you’ll see where it goes,” said Mike McElroy, product marketing manager. “In 2-D, it takes a lot of manipulation to make sure you stay in the proper plane, and even then you’re not absolutely sure you’re seeing the tip of the catheter at all times.”

Conspicuously absent, however, are certain common and critically important capabilities, such as continuous wave Doppler. Although CW Doppler is widely available on 2-D systems, developing a 3-D version has been challenging.

“We’re in a kind of retooling phase, where we’re adding that particular feature (CW Doppler), as well as a couple of others, so that docs can take this machine in the clinic and do all their studies with it,” Mundell said.

A fully featured V360 could be finished within a year. But whether Volumetrics will have the finances to capitalize on the reborn product is not known. Venture capital to keep the privately owned company afloat has been hard to find.

“It’s difficult raising money in the dot com world,” Mundell said. “Fortunately, some internal investors have come through to keep the company moving in a positive direction.”

Engineers have been efficient with the money given them so far. Volumetrics’ proprietary 3-D technology has been hatched for less than $10 million, a relatively modest sum compared to the $70 million to $100 million that other manufacturers have spent to create super-premium 2-D systems. Between $10 million and $20 million more is needed to finish development, however.

Even in its underdeveloped state, the Volumetrics 3-D technology has found clinical utility. Physicians who have used either V360 or its predecessor, Model 1, describe the technology as a substantial advance over competing 3-D systems.

“To image the heart, other three-dimensional units need a gating system that is very complicated and can’t be used on critically ill patients or emergency cases,” said Dr. Taka Shiota, director of 3-D echocardiography in the Cardiovascular Imaging Center of the Cleveland Clinic Foundation. “The Volumetrics system is very easy to use. It can image a volume simultaneously and is fast enough to view the dynamic motion of the heart.”

The key to making this technology a commercial success may be found in partnering with an established ultrasound vendor, according to Mundell. Such a partner would provide the financial strength to continue development, as well as the sales and distribution channels to move the finished product into the market.