Resonex opts out of direct U.S. sales, focuses on growing foreign MR business

February 2, 1994

MRI supplier Resonex reported last week that it has ceased directsales and marketing operations in North America, choosing insteadto build on its growing business in China, other Asia/Pacificmarkets and Latin America. The Fremont, CA, firm is talking

MRI supplier Resonex reported last week that it has ceased directsales and marketing operations in North America, choosing insteadto build on its growing business in China, other Asia/Pacificmarkets and Latin America. The Fremont, CA, firm is talking withseveral companies--including an unnamed major medical imagingvendor--about the sale of manufacturing and distribution rightsfor its resistive MRI equipment in the U.S.

As of the December meeting of the Radiological Society of NorthAmerica, Resonex had hoped to counter depressed U.S. MRI marketconditions with a niche orthopedic imaging strategy. The MRI-onlyfirm had flat sales last year, but only because of a strong burstin its international business that balanced a U.S. decline, accordingto Gerald D. Knudson, president and CEO.

Resonex booked a 10-system order through its Chinese distributorin 1993, of which five units were shipped last year, he told SCAN.An additional China contract was under negotiation for 1994.

The U.S. firm anticipates opening a Chinese office this yearto support its distribution efforts, Knudson said. Joint venturepossibilities are also under consideration.

"It would be to our advantage to establish an early-stagemanufacturing/assembly program for China," he said.

Resonex's decision to focus on China and other emerging MRImarkets reflects a consensus within the industry that Asia/Pacificwill become the dominant region for MRI sales moving into thenext century.

The vendor's retreat in the U.S. indicates that intensifyingprice and technological competition among the giant multimodalityimaging manufacturers finally proved too much for one of the fewsmall, dedicated MRI suppliers in the market. Service and applicationsorganizations will remain in place for support of U.S. installationsand upgrades will continue to be offered, the company said.

Resonex has about 65 Paradigm and older Rx 4000 systems installed worldwide. Of these, 80% are functioning in the U.S., Knudsonsaid. Apart from China, the vendor has obtained orders in LatinAmerica, Eastern Europe and the Middle East.

The Resonex vertical-field, resistive MR technology has somesiting advantages over superconductive systems, which is relevantin markets with developing infrastructures. The scanners can shutdown and restart quickly when necessary. No ramping up is required.In addition, Paradigm can be taken apart into four pieces forease of transportation and installation, he said.

"(Developing markets) are ideal for this system, primarilybecause of its ease of siting," Knudson said. "It isa robust system."

Resonex developed a U.S. medical advisory board last year comprisingorthopedic surgeons and orthopedic radiologists, and was coordinatingthe establishment of what it labeled "a network of orthopediccenters of excellence" throughout the U.S.

The vendor's RSNA product highlights over the past two yearshave focused on positioning devices and other technology to providequantitative and repeatable MRI information for orthopedists.International sales, on the other hand, were aimed at brain andother general MR imaging applications.