Trex signs five-year exclusive deal to sell low-cost IMiG-MRI scanners

Trex CEO to emphasize MRI breast imaging

In its first major venture outside of its radiography and mammography specialities, Trex Medical has signed an exclusive five-year contract with IMiG-MRI, a subsidiary of Intermagnetics General (IGC), to sell its MRI systems in U.S. and world markets.

The agreement, announced last month, provides Danbury, CT-based Trex with a low-risk opportunity to expand into MRI, while allowing IMiG-MRI, a joint venture between IGC and Surrey Medical Imaging Systems in the U.K., to concentrate on manufacturing and product development.

According to Trex CEO Hal Kirshner, the alliance with IMiG-MRI met his criteria for entering the highly competitive MRI market sector.

"I've always said that we would be interested in MRI if we could get a cost advantage and/or a technological advantage. I think we have both with this unit," he said.

The partnership also fits the needs of Intermagnetics General, according to Ian Pykett, vice president of technology development for the Latham, NY, company. Most of IGC's success in medical imaging stems from component supply relationships, like those with Philips and Hitachi for superconducting magnets.

Kirshner is interested in modifications to the IMiG-MRI system for breast imaging and biopsy guidance to complement Trex's industry-leading position in x-ray mammography and stereotactic biopsy equipment. He also points to his close relationship with IGC's board and top management as a vehicle for collaborations in MRI product development.

"We are open to relationships at many levels. It is our goal to position this product initially and collaborate together on additional products that fit certain niches that leverage the technological advantages that IGC has with our marketing and distribution capabilities," Kirshner said.

Several moves made by IGC in 1997 gave it the engineering know-how to realize Kirshner's aspirations. The acquisition of Milwaukee-based MRI RF coil developer Medical Advances, in particular, is expected to further its MR breast coil development effort.

Trex will concentrate its initial marketing campaign for the 0.15-tesla scanner in the U.S., according to Dennis Bleser, Trex vice president of sales. The company plans to sell the system through about 45 independent dealers who have exclusive contracts to sell radiographic and fluoroscopic products made by Trex's Continental subsidiary, Bleser said.

To avoid problems that dogged other manufacturers when they sold MRI through dealers, follow-up evaluations are planned to determine which dealers are best suited to represent the product, Bleser said. They will be used mainly to generate leads for regional MRI sales specialists, who will actually close the deals, he said.

A retail price for systems sold in the U.S. has not been established, but it will be similar to if not below the current prices of open MRI systems, Bleser said. Open MRI systems cost between $650,000 and $950,000.

The partnership's international strategy was not as well defined when officials met with SCAN to discuss the deal at the Radiological Society of North America conference earlier this month. After the U.S. effort begins, they plan to use elements of Trex's Lorad and Bennett international distribution networks to sell IMiG-MRI overseas.

"We will look at both groups to see which organizations are best suited to sell the product," Bleser said.

IMiG-MRI was touted as the world's least expensive whole-body MRI system when it was introduced to international markets in mid-1996 at a retail price of about $500,000 (SCAN 7/3/96). The scanner features a composite permanent magnet that eliminates eddy currents and the need for gradient-coil magnet shielding, according to the vendor. This feature enabled designers to boost its signal-to-noise performance by positioning the coils closer to the patient.

With dealerships in nine countries and two U.S. sales representatives, IMiG-MRI concentrated its sales and marketing efforts on Russia, the former states of the Soviet Union, and other developing nations. Its first installation was in St. Petersburg, Russia, in 1996. IMiG-MRI installed systems in Russia, the U.K., and China this year, according to Paul Domigan, IMiG-MRI general manger. It has not sold the scanner to a U.S. customer since gaining Food and Drug Administration clearance in January.

While the alliance is a potential boon for IMiG-MRI, it has troubling implications for Score Medical, a Los Angeles company that assembles MRI systems for placement in developing countries. The deal left Score without a magnet supplier for its Universal Max, an economical scanner that featured the same 0.15-tesla IGC magnet used on IMiG-MRI. Score shipped six systems to customers, mainly in central Asia, in the past year.

Standing beside a Universal Max in Score's RSNA exhibit, James West, president of Score, told SCAN that IGC followed through with a threat to discontinue the supply relationship because he started marketing the scanner in the U.S. and displayed it at the RSNA show. Radiologists at the University of California, Los Angeles are scheduled to begin research on an investigational Universal Max at the hospital in January.

Pykett denied that IGC made the threat, noting that IGC intends to fulfill its contract with West's company. The contract calls for the delivery of one more magnet. Score is negotiating with another supplier to convert the product into an open-style configuration, West said.