A Diagnostics & Imaging Week

China Medical Technologies (Beijing), a manufacturer of advanced in vitro diagnostic products, said it has completed the previously announced sale of its high-intensity focused ultrasound (HIFU) tumor therapy system business to Chengxuan International, a major shareholder of the company.

In looking for potential buyers for the HIFU business, China Medical turned to Xiaodong Wu, CEO of the company, who was the founder of the HIFU business and who expressed an interest in purchasing that business. The company said it engaged an independent international firm to carry out an independent valuation of the business, and a final selling price was set at $53.5 million.

Chengxuan is a company owned by Wu.

In a Dec. 18 press release, China Medical had said it was selling the HIFU business due to conditions in the global financial markets, more stringent regulatory requirements on therapeutic equipment from the State Food and Drug Administration (SFDA) in China and the significant capital investments required to obtain U.S. and EU regulatory approvals for the HIFU equipment.

The company said last week that it believes business conditions and the outlook going forward for the HIFU business have "deteriorated significantly due to the recent global financial turmoil."

It noted that certain HIFU distributors have recently experienced severe difficulties in obtaining financing in China, which has negatively affected their working capital and liquidity. "As a result, some of them have delayed their planned delivery schedules of the purchased HIFU equipment from the company to a much later date and others did not place purchase orders with the company based on [our] previous expectations."

China Medical added that some Chinese hospitals that have previously considered purchases of its HIFU equipment have recently informed distributors to put their proposals on hold. The company added that it also has experienced slower collections and recorded higher accounts receivable from its HIFU distributors.

The company said that in order to improve the outlook for the HIFU business, it would need to adopt aggressive measures, including providing price reductions as well as entering into profit-sharing arrangements with hospitals.

It added that its HIFU registration certificate renewal application has been under review by the SFDA for some time. In November, the SFDA said it would require China Medical to provide new clinical trial data for each approved indication for the renewal assessment, which was not required in the previous renewal process for therapeutic medical equipment.

The company said it expects the new requirements from the SFDA to prolong the renewal process.

It cited anticipated similar delays in obtaining European and U.S. approvals.

Company management said it believes it is in the best interest of the company to focus its resources on its advanced in vitro diagnostic (IVD) operations, which provide recurring revenue from selling consumables for diagnostic purposes.

It said the global financial turmoil has had much less impact on its IVD operations because the needs for medical consultation are generally less influenced by economic environment.

With the sale of the HIFU business, China Medical becomes a pure advanced IVD company. It said it expects to use the proceeds from the sale of the HIFU business to support the further development of its fast-growing molecular diagnostic businesses.

iCAD links up with Planmed, Agfa

iCAD (Nashua, New Hampshire), a provider of computer-aided detection (CAD) solutions, reported that its SecondLook Digital CAD technology customized for use with Planmed's (Helsinki, Finland) Nuance FFDM system is now available outside of the U.S.

iCAD has received CE-mark approval to market and sell its customized solution with Planmed Nuance mammography systems. It said units have been placed at Terveystalo Breast Cancer Screening Center in Helsinki.

"When analyzing iCAD s SecondLook Digital CAD with Planmed Nuance Full Field Digital Mammography unit using selenium flat-panel detector ... the true positive findings detected at double readings of screening mammograms were also marked accurately by CAD," said Martti Pamilo, MD, of Terveystalo, the leading private healthcare provider in Finland.

Vesa Mattila, vice president of Planmed, hailed the results of the iCAD integration to the Nuance FFDM system, saying, "As CAD is becoming widely accepted in Europe, iCAD's technology is an important addition to Planmed's digital mammography systems and solutions."

"Our partnership with Planmed marks an important step in iCAD's mammography strategy," said Ken Ferry, president/CEO of iCAD. "Coupling our SecondLook CAD technology with Planmed's ... system is a key element in our overall goal to increase the use of iCAD's systems in markets around the globe to better enable clinicians to identify breast cancer earlier."

Currently available in more than 2,200 healthcare centers worldwide, iCAD's solutions aid in the early detection of the most prevalent cancers, including breast, colon, prostate and in the future, lung cancer.

Planmed is focused on developing imaging equipment and accessories allowing early detection of breast cancer.

Separately, iCAD reported that its SecondLook Digital CAD technology customized for use with Agfa HealthCare's (Mortsel, Belgium) computed radiography (CR) systems is now available throughout Europe.

iCAD has received CE-mark approval to market and sell its customized solution with Agfa HealthCare's CR systems, and units have been placed at Bundes-Knappschaftkrankenhaus P ttlingen in Germany.

"The availability of our CAD technology with Agfa Healthcare's solutions in Europe marks another milestone in our business strategy to increase the use of iCAD systems outside of the U.S.," said Ferry. "Our new partnership underscores Agfa's leadership in diagnostic image management solutions and our shared commitment to improving early detection of breast cancer in Europe."

Agfa HealthCare, a member of the Agfa-Gevaert Group, is a provider of IT-enabled clinical workflow and diagnostic image management solutions, and systems for capturing and processing images in hospitals and other healthcare facilities.