SonoSite unveiled SonoSite Plus and SonoHeart Plus on April 19, amid sobering news of the company’s financial state.The new versions of handheld ultrasound scanner SonoSite 180 and SonoHeart received FDA clearance in February and are expected to
SonoSite unveiled SonoSite Plus and SonoHeart Plus on April 19, amid sobering news of the company’s financial state.
The new versions of handheld ultrasound scanner SonoSite 180 and SonoHeart received FDA clearance in February and are expected to begin shipping in May. They offer several features usually found only on cart-based systems, including pulsed-wave Doppler and tissue harmonic imaging. The SonoHeart Plus, which is optimized for echocardiography, also offers an ECG capability and M-mode. The all-digital, hand-carried systems weigh 5.4 pounds and cost between $14,000 and $25,000, said Jens Quistgaard, chief product and marketing officer for the Bothell, WA, company.
“When you put pulsed-wave Doppler on the product, it increases the potential for reimbursement worldwide,” Quistgaard said.
The enhanced products were released the same day as results for the first quarter, ending March 31, which showed a net loss of $6.7 million, more than double the $3.2 million net loss reported in the fourth quarter of 2000. Revenue was up slightly compared with the previous year’s quarter, $8.2 million versus $8 million.
The company called the simultaneous announcements coincidental. Quistgaard said, however, that SonoSite Plus and SonoHeart Plus must succeed commercially if the company is to meet its ambitious goals for the coming year.
“We’re projecting profitability in 2002,” he said.
To achieve this goal, SonoSite has sharply curtailed its dependence on distributors, opting last year to use an in-house sales force (SCAN 3/28/01). In this context, the numbers may indeed be better than they seem. Revenue reported in the first quarter of 2000 was mostly dealer- stock orders, whereas this year’s Q1 results were virtually all end-customer sales. Also encouraging is an apparent acceleration in sales. The company reported bookings exceeding $9 million in Q1, 2001.
The addition of pulsed-wave Doppler should drive sales further, as its absence had limited the diagnostic value of the earlier unit. SonoSite products are now on an even footing with much more expensive systems, according to Quistgaard.
“There’s nothing you see on a big system that affects diagnosis that you don’t see on ours,” he said. “We can go up against systems that cost well over $100,000, and very much hold our own-if not beat them.”
Giving the SonoSite products an edge are their portability and affordability, which could be decisive factors in purchasing if the country’s economic downturn continues, Quistgaard said. Although no sales projections have been developed, SonoSite believes the market opportunity for the two products is about $250 million.
SonoSite strategy has changed over the two years since the company, which was spun off from ATL, began marketing the hand-
carried devices. Initially, the SonoSite products were expected to revolutionize the practice of medicine, competing with stethoscopes as one of the ubiquitous products in a general practitioner’s office. A company survey shows that 74% of its customer base had not used ultrasound previously.
Increasingly, however, the company is repackaging the miniature scanner as an adjunct to existing ultrasound products. A primary sales target is the physician who uses diagnostic ultrasound regularly, such as Dr. Greggory R. DeVore, an obstetrician at the Fetal Diagnostic Center in Pasadena, CA, who uses high-performance systems in his office. DeVore began using a hand-carried SonoSite system for exams in the field.
“Often, as we go to hospitals and consult, the machines that we find there are antiquated,” he said. “SonoSite gives us all the features of a large machine in an environment where there isn’t a large machine. Portability is an important issue for us.”