R2 garners PMA approval from FDA for ImageChecker CAD workstation

July 22, 1998

Firm cancels plans for initial public offeringAfter years of R&D, R2 Technology’s efforts to bring its ImageChecker M1000 technology to market have finally paid off. The Los Altos, CA, company announced July 1 that the Food and Drug

Firm cancels plans for initial public offering

After years of R&D, R2 Technology’s efforts to bring its ImageChecker M1000 technology to market have finally paid off. The Los Altos, CA, company announced July 1 that the Food and Drug Administration has approved its computer-aided diagnosis (CAD) mammography workstation and software when used to analyze digitized mammography films. With the FDA hurdle overcome, R2 now faces the prospect of familiarizing U.S. radiologists with a technology that could dramatically change the way they read mammograms.

ImageChecker M1000 acts as a second pair of eyes for mammographers, using pattern-recognition algorithms to identify suspicious areas on mammograms. Mammography films are input into ImageChecker’s digitizer, which transmits the data to a workstation for processing and reading by a mammographer, who makes a preliminary interpretation. ImageChecker’s software then marks possible breast abnormalities, such as microcalcifications or mass lesions, with an arrow on the display screen. The product’s software employs a form of artificial intelligence, called neural networks, to distinguish lesions from normal tissue.

With ImageChecker’s suggestions, the mammographer can choose to revisit the earlier interpretation of the film and make adjustments accordingly. The system includes a laser digitizer, software, a motorized viewer with display monitors, and a Pentium II computer with neural net boards. It lists at $179,500.

R2’s clinical research suggests that as many as 15% of breast cancers are overlooked by mammographers, and that ImageChecker detects up to 85% of those missed cancers. But some radiologists are not convinced that ImageChecker is the most efficient way to double-read mammograms.

“It’s measurably better than nothing, but not as good as another radiologist,” said Dr. Edward Sickles, chief of breast imaging at the University of California, San Francisco. “The question for radiologists is, would you be willing to spend ($179,500), plus what it costs to run it?”

R2 was founded in 1993 to market the University of Chicago’s emerging CAD technology, which was developed at the Kurt Rossman Laboratories for Radiologic Image Research at the university’s department of radiology (SCAN 10/20/93). The company began selling the systems in Europe in spring of 1997 and has placed about six units. It sees ImageChecker as particularly suited for the U.S. mammography segment, with its well-developed screening system.

“In the U.S., 40% to 50% of women who are eligible are in a screening program,” said James Pell, president and CEO of R2. “We do believe Europe will be a good market, because (similar) screening programs will be put in place, but it takes a while.”

R2’s efforts in the U.S. will be aided by GE Medical Systems of Milwaukee, which in April signed an exclusive OEM supply deal with R2. GE agreed to package ImageChecker with its work-in-progress full-field digital mammography systems (SCAN 4/29/98). The fruition of that relationship is awaiting GE’s receipt of FDA approval for its full-field technology, however, as R2’s pre-market approval did not cover the use of ImageChecker with data gathered by a digital mammography unit. R2 may apply for a joint application for clearance with GE for ImageChecker’s digital software and processor.

R2 believes its decision to seek a PMA for ImageChecker will give it a head start over other companies developing CAD products, a group that includes Scanis of Foster City, CA, and Qualia Computing of Beavercreek, OH. By establishing the more arduous PMA process as the approval route for CAD mammography, R2 hopes that it will force other developers to do the same and, therefore, winnow out companies without the resources to weather the often lengthy PMA process.

R2 has not yet licensed rights to ImageChecker when sold as a stand-alone product with digitized x-ray films. For now, R2 will sell its film-based ImageChecker in the U.S., but it expects to bring in distributors over the next six to 18 months, as the market dictates, according to Pell.

R2 has been mulling over an initial public offering during the last several months, and ImageChecker’s FDA clearance would make the company’s stock an attractive option for investors. R2 has called off plans to launch an IPO, however. In May, R2 raised $11 million in a private round of financing, with GE as the primary investor. The money gave R2 sufficient funds to move forward as a private entity, according to Pell.