TomTec, Prism Merger Soups up Ultrasound

January 19, 1994

Less than a year after moving its headquarters from Germany tothe U.S., ultrasound image processing firm Tomographic Technologies(TomTec) has secured an established manufacturing and R&Dfacility in the Denver area and expanded its ultrasound OEM

Less than a year after moving its headquarters from Germany tothe U.S., ultrasound image processing firm Tomographic Technologies(TomTec) has secured an established manufacturing and R&Dfacility in the Denver area and expanded its ultrasound OEM stablethrough a merger with stress echo supplier Prism Imaging/FreelandSystems.

The resulting company, TomTec Imaging Systems, is based inBroomfield, CO. The two companies together realized between $15million and $20 million in revenue last year, said Robert M. Zieseri,CEO.

TomTec's revenue growth is projected at 30% to 50% annuallyfor the next several years, he said. The combined firm is supportedby eight venture capital firms, including Platinum Venture Partners,of which Zieseri is managing director.

Both Prism and TomTec are suppliers of add-on technologiesfor use with ultrasound scanners, with a focus on cardiac applications.TomTec is still awaiting Food and Drug Administration approvalof its cine 3-D cardiac (or 4-D) imaging system. The 4-D technologyuses a unique transesophageal probe, which automatically movesup the length of the heart, taking images coordinated with theheart cycle (SCAN 12/4/91).

Prism/Freeland is the major supplier of stress echo systems,which digitize and analyze the cardiac ultrasound video image.The firm also offers digital networking technology. Prism's majorstress echo competitor is ATL, according to Zieseri. John Freeland,a stress echo pioneer and holder of patents in the field, continueswith TomTec as vice president of advanced products. Freeland hadserved as director of research and development at Prism/Freeland.

Together the two firms have OEM relationships with 80% of theworld's ultrasound scanner suppliers, said Peter Klein, president.TomTec formed a 3-D development partnership last year with Acuson,one of the top two radiology ultrasound suppliers. The firm alsoworks with Interspec, Kretz, and Diasonics subsidiary Vingmed,among other OEMS.

While 90% of Prism/Freeland's sales were direct to echocardiologyusers, they were accomplished mostly through joint marketing agreementswith other vendors. The enlarged TomTec will have 10 such marketingpartnerships, Klein said.

The combination of the companies is backed by sound logic,he said. Both firms have worked to expand the capabilities ofultrasound in cooperation with scanner vendors. Together theywill offer the closest thing there is to a one-stop shop for ultrasoundadd-on features.

"There is no add-on ultrasound OEM supplier offering networking,3-D and stress echo from one vendor," Klein said.

Multiplanar and 3-D imaging offer the potential of expandingultrasound into clinical areas now dominated by more expensiveand less mobile imaging modalities, such as CT and MRI, he said.

One of TomTec's first applications objectives is to develop3-D ultrasound for use in surgical planning, particularly in emergencysituations, Klein said.

"(Doctors) require good image acquisition to determinewhat has to be done in surgery, but often they can't bring thepatient into MRI or CT for practical reasons. This is an areawhere ultrasound is competitive and 3-D ultrasound adds significantpotential," he said.