Regulatory triumph won't guarantee commercial success for Swiss companySwissray International continues to stay one step ahead of its competition in the race to market digital-detector x-ray technology. The Hitzkirch, Switzerland vendor announced
Regulatory triumph won't guarantee commercial success for Swiss company
Swissray International continues to stay one step ahead of its competition in the race to market digital-detector x-ray technology. The Hitzkirch, Switzerland vendor announced this month that it has received 510(k) clearance from the Food and Drug Administration to market its AddOn-Multi-System, which uses CCD-based detectors to digitize analog x-ray exams. Swissray plans to begin installing the first AddOn-Multi-System at a medical imaging center in Fargo, ND, this month, and another four systems are in the company's U.S. backlog.
The clearance allows Swissray to claim the title of the first medical imaging vendor to win the FDA's approval to sell an integrated digital-detector x-ray system. But being first to market may not guarantee commercial success for Swissray: The company must overcome several obstacles that could hinder AddOn-Multi-System's penetration of the U.S. market.
Swissray received clearance for AddOn-Multi-System on Dec. 18, almost a month after getting clearance for AddOn-Bucky, the digital-detector component of the system. Another detector developer, Sterling Diagnostic Imaging of Greenville, SC, has also received 510(k) clearance for its DirectRay detector, but as of mid-January Sterling was still waiting for the FDA's go-ahead for completed iiRad x-ray systems using the DR panels.
Swissray is a bit of a maverick in medical imaging circles. The company was virtually unknown in the U.S. until 1995, when it debuted AddOn-Bucky at the Radiological Society of North America meeting (SCAN 12/13/95). Swissray is better known in Europe, where the company has sold conventional x-ray systems for years.
Despite Swissray's relatively low profile, the company has ambitious plans. Swissray has formed several subsidiaries targeting new businesses, such as multivendor service, healthcare consulting, and PACS, that normally are the purview of much larger companies. Swissray's strategy is to offer a wide range of integrated products and services that serve nearly all the needs of a radiology department, according to Ueli Laupper, vice president of international sales and marketing. AddOn-Multi-System is a key component in this plan, as it provides Swissray with a product that sets the firm apart from the competition.
"We have a unique product that nobody else can offer," Laupper said. "It is the missing link in the (creation of the) digital radiology department, and it will drive our information solutions and service businesses."
Swissray will market AddOn-Multi-System as a versatile product that can handle all of a radiology department's x-ray imaging studies, replacing both bucky tables and wall stands. This approach differs from that taken by Sterling, which has developed dedicated chest and table systems. Swissray believes its approach will help radiology departments save money: A single AddOn-Multi-System, ranging in price from $400,000 to $500,000 depending on configuration, will cost more than a dedicated Sterling system, which will sell for between $300,000 and $350,000, but the Swissray system's versatility will offset the higher price.
An evolving business plan. The development of AddOn-Multi-System represents an evolution from Swissray's original business model, which was to sell AddOn-Bucky as a retrofit for x-ray systems in the field. Since the detector's debut, however, Swissray has decided to forgo the retrofit market in favor of new systems, according to Laupper. New integrated systems enable Swissray to exert more control over the quality of the images produced because the company can optimize the components used with the detector. New systems also remove potential confusion over who is responsible for servicing upgraded devices. Selling a single versatile system rather than a number of dedicated rooms also makes it easier for customers to upgrade their operations to digital technology, the company believes. Swissray will offer AddOn-Bucky to OEMs for incorporation into their x-ray systems, Laupper said.
Although Swissray is the first to win clearance for an integrated system, the company is one of the few imaging vendors developing CCD-based detectors for general medical purposes other than mammography. Sterling's DirectRay detectors are based on a combination of amorphous selenium and amorphous silicon, while most other companies developing digital detectors are using amorphous silicon.
Swissray, however, believes that CCDs have distinct advantages. For one thing, CCDs are an established technology that have more of a track record in industrial applications than amorphous selenium and amorphous silicon arrays, Laupper said. The system's contrast resolution is superior to that of film, the company believes, making it better suited for soft-tissue imaging. AddOn-Multi-System's 17 x 17-inch detector has spatial resolution of 3 line pairs/mm in a 2.5K x 2.5K matrix.
One issue Swissray must deal with is the fact that its future digital-detector competitors have stronger name recognition and distribution channels in the U.S. Unlike GE, Sterling, and some other detector developers, Swissray does not have a large dedicated sales force already calling on U.S. hospitals. Instead, Swissray plans to offer AddOn-Multi-System directly in populous areas of the U.S. and through dealers in more remote areas, an approach that may not provide the results that a national direct effort could. In any event, Swissray will have distribution coverage of the entire U.S.
Sterling also believes that as an imaging equipment OEM it has advantages over its closest competitor, Sterling. As a film vendor, Sterling simply lacks the expertise to compete in the equipment market, according to Laupper.
"I think Sterling is a good company in terms of films, chemicals, and laser imagers, but I don't think they will be successful in the equipment market," he said. "The equipment market belongs to the OEMs."
And what about the other OEMs developing digital detectors, like GE, Siemens, and Philips? Laupper believes that finished products from those firms are 18 to 24 months from market, giving Swissray ample time to build a large installed base.
In the future, Swissray plans to develop dedicated x-ray systems using the AddOn-Bucky detectors and may also examine other types of detectors for the devices. Although the company favors the CCD approach now, it is looking at flat-panel detectors and could switch if the technology proves itself.
"We have flat-panel technology available, but it is not yet right for market, and we don't know if flat-panel will prevail," Laupper said. "For at least the next three years, we are convinced that CCD is the right way to go."