Canadian digital x-ray developer Imaging Dynamics is looking for a fresh start. The vendor has appointed a new CEO, changed its business plan, and is working to finalize a large venture capital investment.
Taking the helm of the low-cost DR provider is Darryl Stein, who has served as vice president of sales and marketing at the Calgary-based vendor since November 1999. Stein replaces Michael Baker, who had been president and CEO since June 2001. Baker, along with board member Denis O'Connor, resigned for personal reasons, according to IDC.
Stein and IDC's board of directors have changed course from the company's previous strategy, which was focusd on building a direct sales capability. Instead, IDC is focusing on completing its installed base of luminary sites and signing on channel partners for distribution and service. These luminary institutions will help IDC further refine its charge-coupled device (CCD)-based Xplorer 1700 system during clinical use, Stein told AuntMinnie.com.
IDC's previous management had sought to build a direct sales and service organization, but costs associated with those activities placed a financial burden on the company, he said.
"At the end of the day, we decided to concentrate all of our money and focus on the completion of the product," he said. "We believe that our strategy of focusing on our client sites will deliver a better return."
Targeting economical DR
With the goal of overcoming the cost concerns that have plagued the digital radiography market, IDC formally entered the sector in mid-2000 with Xplorer 1000, a 14 x 17-inch CCD detector with an asking price of approximately $100,000 (U.S.) for a retrofit installation. The firm's second-generation system, Xplorer 1700, features a 17 x 17-inch detector and includes network connectivity provided by Canadian PACS vendor ALI Technologies. It also features a new stand and improvements in dose reduction and image quality, Stein said.
IDC appeared to be off to a hot start with Xplorer 1700, securing 43 orders for the system as of April 2001. Some of those orders, which included multi-unit contracts, have been installed under IDC's luminary program, while others remain in the backlog as the company completes work on the system, Stein said.
In the meantime, costs associated with building a direct sales and service infrastructure led to a hefty burn rate, forcing the company to seek additional capital by the end of 2001, he said. As part of its new business plan, IDC has consolidated corporate activities into its headquarters in Calgary, laying off its U.S. direct sales and service personnel. Future sales and service will be conducted via a dealer and distributor network, and IDC is also pursuing OEM partnerships, Stein said.
As a result of these and other cost-cutting moves, IDC's monthly burn rate has been reduced by roughly $150,000, Stein said. IDC is also in the final stages of negotiating a large financing package from a "high-profile" Canadian venture capital firm, Stein said.
"We're a lot closer to being successful financially (this way) than the route we were on," he said. "Sales, marketing, and distribution-wise, this is the right path to be on. We've seen a lot of success from a lot of companies in this industry that didn't go out and build their own sales force."
With the departures of Baker and O'Connor, as well as the planned refinancing, IDC initiated a pause in trading of its stock with the Canadian Venture Exchange (CDNX) in March, Stein said. Trading is expected to resume next week, following announcement of the completed investment, he said.
With its new business model complete, IDC is busy working with its luminary sites to complete development of Xplorer 1700's image processing algorithms, as well as final versions of the system's software, camera, and stand, Stein said. By this year's RSNA meeting, IDC hopes to add 9 to 14 more luminary sites to its current installed base of 6 customers.
While the distribution strategy has changed, IDC continues to believe in the market potential of a low-cost DR offering. A retrofit version of Xplorer 1700, including detector, stand, and workstation, would cost approximately $175,000, while a complete system, including the generator and tube, would cost $240,000.
By Erik L. Ridley
AuntMinnie.com staff writer
April 11, 2002
Imaging Dynamics gains $1.5 million investment, July 24, 2001
Xplorer arrives at Edmonton cancer institute, July 18, 2001
Imaging Dynamics names Baker CEO, June 1, 2001
Imaging Dynamics books 43rd Xplorer sale, April 23, 2001
Imaging Dynamics enters digital x-ray market with CCD-based detector, July 27, 2000
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