Xoran, Varian Medical Systems ink flat-panel detector agreement

April 18, 2005

In a move that points to anticipated growth, Xoran Technologies has cut a deal with Varian Medical Systems to receive flat-panel x-ray detectors. Varian will supply its PaxScan amorphous silicon flat-panel detector for use with Xoran’s MiniCAT CT scanner. The product was developed for use by ear, nose, and throat specialists.

In a move that points to anticipated growth, Xoran Technologies has cut a deal with Varian Medical Systems to receive flat-panel x-ray detectors. Varian will supply its PaxScan amorphous silicon flat-panel detector for use with Xoran's MiniCAT CT scanner. The product was developed for use by ear, nose, and throat specialists.

Announcement of the business deal comes five months after Xoran began shipping the compact CT system, which is capable of producing 0.22-mm slice images. Final terms of the deal have not been revealed.

Jim Bertolina, marketing director for Xoran, said numerous MiniCAT systems have already been shipped. He declined to provide the exact number of shipped systems or project future sales but noted that Xoran has been hard-pressed to meet demand.

"We've been very successful so far," Bertolina said.

The trick, he said, is not to compete for the same market as the major CT vendors.

"If the customer is trying to image the whole body, then we're out of the game," Bertolina said. "This system scans only the head."

Cleared by the FDA last summer, MiniCAT is a compact, upright in-office CT scanner designed for medical use. It enables otolaryngologists to generate high-resolution digital CT images in their offices and to display, store, and transmit them for teleradiology consultations.

The lightweight (450 pounds) system features 40-second scanning and compatibility with image-guided surgery systems. MiniCAT, which sells for about $200,000, is designed for scanning temporal bones, the skull base, and sinuses, according to Xoran. It is sold primarily to physician offices and radiology departments. The principal means of marketing has been through word of mouth, although the company may begin selling via direct sales, distributors, or another avenue in the near future, Bertolina said.

The system is manufactured by Imaging Sciences International (ISI) of Hatfield, PA. Xoran, based in Ann Arbor, MI, developed its own software for the product.

"It's a very large market. There are about 4000 ENT doctors in the U.S., and this technology is within reach of all of them," Bertolina said.

He added there is currently no competition for a dedicated ENT scanner such as the MiniCAT.

Xoran was established in 2001 by research scientist Predrag Sukovic, Ph.D., the company's current president and CEO, and Neil Clinthorne, its vice president. Both are research scientists at the University of Michigan.

The company's first product, iCAT, was a dental scanner that ISI sold with considerable success over the past year, according to Bertolina. MiniCAT evolved from a CT scanner that Sukovic had planned to integrate with a PET system.

Early developmental work was supported by some $4 million in research funding from the National Institutes of Health. NIH funds were first awarded in 2001.

Xoran is developing a CT system similar to MiniCAT for orthopedic and neurosurgical applications. A product for customers in these markets could be available in the next one to two years, according to Bertolina.