Norland expands bone densitometry line with purchase of Dove Medical

April 10, 1996

No sales side-effects from Fosamax warningNorland Medical Systems has acquired Dove Medical Systems in amove that unites two competitors in the low-cost segment of thebone-mass measurement market. Norland and Dove hope to hit paydirt by selling

No sales side-effects from Fosamax warning

Norland Medical Systems has acquired Dove Medical Systems in amove that unites two competitors in the low-cost segment of thebone-mass measurement market. Norland and Dove hope to hit paydirt by selling their products to office-based physicians whowant to conduct bone densitometry but can't afford the more expensivemachines made by Lunar and Hologic.

Norland, of White Plains, NY, announced this month that itused stock to acquire Dove and paid cash for patents and otherassets related to Dove's technology. Norland said that it wouldmaintain Dove's Newbury Park, CA, headquarters, and Dove willcontinue to be headed by president Joan Piccioni, who will reportto Norland president and chairman Reynald Bonmati. Dove chairmanRobert Piccioni is expected to join Norland's board of directors.

Dove was founded three years ago to market a bone densitometrydevice purchased from a company called Osteon. The device, OsteoAnalyzer,was based on technology developed by NASA to monitor bone lossin space.

Early sales of OsteoAnalyzer were to countries in the Far East,where bone mineral loss is more of a public health problem thanin the U.S., according to Joan Piccioni. Dove began U.S. salesof OsteoAnalzyer two years ago, when the company recognized thepotential windfall that might develop from Merck's rollout ofits new Fosamax drug for treatment of osteoporosis (SCAN 10/11/95).Sales in the U.S. have begun rising since Fosamax's debut, andDove recorded revenues of $2 million in the past 12 months.

OsteoAnalyzer is a single-energy bone densitometry device,which should complement Norland's dual-energy devices. Dove lastmonth announced the latest system in the OsteoAnalyzer line, SXA3000 (SCAN 3/27/96). The device sells for under $20,000 and enablesphysicians to measure bone mineral density with the push of asingle button.

Norland also recently introduced a new low-cost product, pDEXA,which is a compact dual-energy x-ray densitometer selling forabout $27,000 (SCAN 12/27/95).

Norland's acquisition gives Dove the backing necessary to allayany doubts about Dove's staying power, according to Piccioni.

"Anyone who was afraid to buy from us because we werea small company doesn't have to worry about that anymore,"she said. "Norland is a respected company."

The acquisition will also give Dove access to Norland's marketsin Europe, where Dove has not had a sales presence. Norland andDove have not decided how they will sell products in new markets,although Piccioni said that Dove will maintain its current channelsin markets where it already has a dealer presence.

Fortunately for Dove, Norland, and other bone densitometryvendors, recent reports of side-effects from use of Fosamax donot appear to have had any impact on sales of new systems. Mercklate last month sent out letters to thousands of doctors and pharmacies,informing them of 36 cases in which patients reported seriousnausea after using Fosamax.

Stomach irritation is a known side-effect of Fosamax. The symptomscan be alleviated by following the drug's labeling, which advisespatients not to take the drug before breakfast.

Dove has not seen any slowdown in bone densitometer purchasingsince Merck sent the letters, and Piccioni praised the companyfor the way it handled the incident.

"I credit (Merck) for jumping on it so quickly and admittingthere was a problem," she said