Siemens and Toshiba sign deal for sales of E.Cam gamma camera

Siemens chief predicts nuclear medicine shakeout in the next year

Two more gamma camera competitors joined forces last month when the nuclear medicine divisions of Siemens and Toshiba signed a deal in which Siemens would provide its E.Cam variable-angle gamma camera to Toshiba on a reseller basis. The agreement highlights the growing speed with which nuclear medicine vendors are consolidating and collaborating in response to lower sales prospects in the modality.

Under the agreement, the nuclear medicine group of Siemens Medical Systems will provide E.Cam to Toshiba on a worldwide basis, and Toshiba will sell and service the cameras. Siemens will also sell E.Cams through its own organization, and the relationship is nonexclusive for both parties.

The deal has obvious benefits for Toshiba. Until the agreement was signed, the company was one of the few major nuclear medicine vendors without access to a variable-angle dual-head camera, which represents one of the fastest growing segments in the nuclear medicine market. Toshiba is now able to sell a variable-angle system without spending years and millions of dollars developing a system on its own, according to Steve Sickels, acting director of the nuclear medicine business unit for Toshiba America Medical Systems in Tustin, CA.

"We get to play in a whole segment of the market that we haven't been playing in up to this point: the variable-angle segment, which is so highly focused on the cardiac market," Sickels said. "The cardiac market is the growing segment of any modality."

The benefits are less obvious for Siemens, which in essence is providing its high-end product to a competitor. But in the topsy-turvy world of nuclear medicine, the agreement makes perfect sense by increasing the number of cameras Siemens can manufacture at its Hoffman Estates, IL, facility, according to Barbara Franciose, group vice president of the division.

"Quite honestly, it's volume," Franciose said. "We get their volume for our manufacturing facility. It leverages our fixed cost by expanding into much larger quantities than just our market alone."

Siemens does not consider Toshiba, with its market share ranging from 8% to 10% in the U.S., as a major competitor in this market, or in other countries where Siemens is strong, such as Germany. In regions where Toshiba is more powerful, such as Japan, Siemens does not have a major presence. Franciose pegged Siemens' U.S. market share at 20%.

Siemens introduced E.Cam at last year's Society of Nuclear Medicine meeting in Denver (SCAN 6/5/96). The system is designed to be a versatile, workhorse gamma camera that also supports new technologies like high-energy imaging, digital detectors, and attenuation correction. Siemens plans to begin commercial shipments of E.Cam in the next several weeks, with shipments to Toshiba beginning slightly after that, according to Franciose.

Toshiba plans to differentiate its version of E.Cam from the Siemens model by substituting its own image processing workstation in place of Siemens' Icon computer. This move should be well received by nuclear medicine customers, as Toshiba recently moved its image processing software to the powerful UltraSPARC platform manufactured by Sun Microsystems.

The Siemens/Toshiba agreement comes only weeks after GE Medical Systems and Elscint agreed to form a joint venture to consolidate the development of new nuclear medicine products (SCAN 2/19/97). Franciose and Sickels say their agreement is different from the GE/Elscint deal, primarily because each company will continue to conduct product R&D on its own.

Still, the driving force behind both deals is similar. Despite the fact that the U.S. market grew 2% to 3% last year, nuclear medicine's growth prospects are not bright enough to support the large number of companies participating in the modality. In fact, Franciose believes that there will be further consolidations among the nine remaining gamma camera vendors.

"I believe there will be four major players this time next year," Franciose said. "It won't take long."