Tag Archives: Modality

CT Equipment

Signify Premium Insight: Nanox Investing; Another Extreme Sport

Nanox, the upstart medical imaging vendor which promised to revolutionise access to medical imaging thanks to its unique cold cathode X-ray source has finally overcome the most significant barrier that has so far stymied the vendors’ growth.

The vendor originally expected to receive regulatory approval from the US-FDA for its multi-source 3D X-ray device in 2021. This timeframe was repeatedly pushed back, which, along with other unusual factors, led to some questioning the vendor’s prospects. The most scathing of which compared the vendor to disgraced fraudulent blood testing firm, Theranos.

Nanox, although later than planned, has prevailed through these difficult times and has now secured full FDA approval for its ARC scanner. The award, which clears the device for commercial sale caused the vendor’s shares to jump after proving that there is some substance to the company’s claims. Approval is only one part of the puzzle, however; the question becomes will anyone buy it?


Signify Premium Insight: Neusoft Medical to Float on United Imaging’s Rising Tide

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Chinese medical imaging modality vendor Neusoft Medical has revealed its continuing ambitions to list publicly, and has announced that, for the fourth time, it plans to launch an IPO.

The vendor, which has three times failed to float, once in Shanghai and twice in Hong Kong, hopes that this time will be different. The move is being sponsored by investment banks CICC and Goldman Sachs, with the vendor hoping the fundraising will enable it to continue growing, both domestically and abroad.

The Signify View

With three previous attempts at listing publicly made already, Neusoft Medical has made it clear that raising funds through a public offering is central to its growth ambitions. Becoming a leading medical imaging vendor is, after all, an expensive business. This could be particularly true for Neusoft Medical given its modality portfolio.

At the heart of Neusoft Medical’s growth to date is its range of CT systems. Of the vendor’s total revenues, which for the first six months of 2022 accounted for RMB1.5b (~$210m), 56 percent were derived from sales of CT systems. This is far ahead of any other business line, with equipment service and training, GXR (General X-ray) and MDaaS (Medical Device as a Service), the next largest segments, accounting for 14.5%, 8.9% and 6.2% respectively.

Such a reliance on CT system sales would have been a significant asset during the peaks of the coronavirus pandemic. This is especially true given the vendor’s dependence on its domestic market. In 2021, the company derived more than 83 percent of its revenues from China. China was the first country to  feel the impacts of Covid 19. CT was used as the primary diagnostic imaging modality in the country, so those vendors that were able to quickly deliver CT systems to Chinese hospitals were able to capitalise on the rapid increase in demand. This is reflected in Neusoft Medical’s results, with CT system revenues almost doubling from around $114m in 2019 to almost $221m in 2021.

This recent Covid-catalysed rally is one of the reasons why Neusoft Medical is eager to list publicly as soon as possible. The demand in the country quickly accelerated the vendor’s growth, provided a flattering portrait to show potential investors. The reality may however be somewhat more sedate. The exceptionally high growth in China in recent years will mean that many providers’ CT system needs have recently been met, potentially tempering the opportunities for the vendor in coming years.

Certain Strengths

Despite this, there are some reasons to be optimistic. Neusoft Medical will benefit from government policy which promotes Chinese medical imaging vendors potentially giving it an advantage in some situations over international competitors such as GE HealthCare, Philips and Siemens Healthineers.

There are also other opportunities for Neusoft Medical to secure growth. Its cloud-based MDaaS (Medical Data and Devices as a Service) for instance differentiates the product from its domestic competitors, giving providers a reason to choose a system from Neusoft Medical, rather than one of the many other CT system vendors in China. The offering also helps to secure sticky recurring revenues, that are less susceptible to fluctuations in markets, and changes in demand.

Moreover, by offering some cloud capability, Neusoft Medical can hope to open up new markets. Away from major urban centres in China, as well as in other emerging markets that Neusoft Medical may look to target, there is often a shortage of radiographers and radiologists, which renders the procurement of additional CT capacity unnecessary, given that providers will be unable to utilise it. If cloud and AI tools reduce the requirement for expertise at these sites, and allow doctors to collaborate with experts remotely, then Neusoft Medical may be able to sell additional systems to providers that would otherwise have been unable to utilise them due to a lack of resource.

These opportunities could become more significant with the added capital afforded by listing publicly. The vendor’s research and development spending is relatively low, for example, and could benefit from the added capital. The vendor spent 14.4% of its revenue on research and development in the first six months of 2021. As a percentage this is in line with some of its competitors, but in absolute terms it is a small figure. At $10.4m it is dwarfed by that of United Imaging, which in the first six months of 2021 spent $60.7m on R&D, let alone that of major international competitors such as GE HealthCare, Philips and Siemens Healthineers, which spend many times that amount each year.

Finding a Niche

Investing in research and development makes sense for the vendor. While it is unlikely to challenge the top-end of the CT imaging market, by investing in technologies such as cloud and AI it can still hope to differentiate itself from other competitors and establish itself as a competitive vendor offering some advanced capability in an affordable package. While this is unlikely to worry top vendors in established markets, Neusoft Medical could still carve out a niche for itself in second and third tier hospitals in China, as well as in some emerging markets across the world.

This latter ambition will, however, remain a challenge. Providers in emerging markets, as with providers in developed markets, tend to prefer products from large, reliable international brands with good support networks and post-sale service. This is true even if it means forgoing some extraneous features. Such preference does, however, also highlight another area where Neusoft Medical may choose to invest the money from its IPO: its sales and support operations.

Currently the Chinese vendor relies heavily on distribution partnerships. While this is an efficient way to be able to offer products across a wide range of markets, a vendor is not always able to guarantee the neutrality and knowledgeability of the distributor, nor the ability and dependability of its after-sales support and service. Further, by sharing sales revenues with a distributor, Neusoft Medical will have to accept lower margins. This might be worth the trade-off if it allows Neusoft Medical to facilitate sales further across the world, and potentially compete in more volatile markets in which it would be unwise to overly invest, but in most cases, over the longer term, it will become a hindrance. Sales made through distributors have also been a source of accusations of bribery and improper conduct, allegations which, whether true or not, could impact Neusoft Medical’s reputation by association.

Opportunity Knocks

This will become particularly acute as Neusoft Medical strives, as it must, to scale. To continue to grow, the vendor must establish itself as an alternative to the many other vendors offering increasingly affordable CT systems. To do this it needs to scale to be able to continue to invest in the product to differentiate itself, and to be able to leverage the economies of scale to be able to improve its returns. Improving margins will be of particular importance given that a sizeable proportion of its profits weren’t a result of product sales or service contracts, but were in fact derived from other sources, such as government grants and foreign exchange gains. In 2021, for example, of the vendor’s $48m net profit before tax, $40.5m is a result of ‘other income’.

Such strategic focuses and such spending priorities could, over time help Neusoft Medical continue to establish itself as an attractive vendor in the Chinese and some other emerging markets, which offers reasonable technical prowess at affordable prices. What is ultimately having a more direct impact on Neusoft Medical’s prospects, however, is something the vendor has no control over.

Earlier this year United Imaging, China’s biggest domestic medical imaging vendor, listed publicly on Shanghai’s STAR index. While that vendor has a different focus to Neusoft Medical and aspires to target medical imaging’s most technically advanced segment and secure sales in developed markets, it bears some similarities to Neusoft Medical. Significantly, its listing, which netted more than $1.6bn for the vendor, was oversubscribed more than 3,500 times. This means that Neusoft Medical will benefit from the excitement that United Imaging’s listing will have raised and capitalise on the strong prospects for the Chinese medical imaging market that the public company touts. Moreover, it will also offer an opportunity for those investors that were unable to put their money into United Imaging to bet on a similar alternative, which competes in many of the same markets, and will benefit from similar market conditions as United Imaging.

Given this rising tide, despite the severity of some of the challenges facing Neusoft Medical, it could still capitalise. As demonstrated by its repeated attempts to go public, listing does appear to be the only way forward for the Chinese vendor, and now, when the conditions are in its favour, represents the firm’s best opportunity yet to realise its ambition.

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Signify Premium Insight: What Providers Want – Keeping Demand for CT Systems High

This Insight is part of your subscription to Signify Premium Insights – Medical ImagingThis content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here.

Research Manager, Bhvita Jani

As with many medical imaging modality markets, the story of CT is closely entwined with the all-encompassing story of the Covid-19 pandemic and its spread around the world. This story is detailed in Signify Research’s CT Equipment – World – 2022. But, as the report’s author, Research Manager Bhvita Jani explains, the effects of the pandemic are nuanced and will affect the market for years to come, while other clinical trends and technological innovations are also set to have a significant impact.

The Signify View

In China, the first country to be affected by Covid-19, CT quickly became the preferred modality for the diagnosis and assessment of the infection. As a result, demand for the modality quickly increased.

“However,” explains Jani, “given this significant increase in demand in China, there was some expectation that there would be a similar increase in demand across the rest of the World. What actually happened was that while some countries, particularly in Western Europe adopted CT as the main diagnostic modality, most other countries used mobile DR as the first diagnostic imaging tool, and only used CT to monitor critical cases.

“Even with some increased demand in the US, and Asia Pacific, for example, and emergency funding made available to pay for equipment purchases, in many cases in developed countries, hospitals had spare capacity with the systems which were already installed. So, unlike in China where CT systems were already operating at full capacity, these countries didn’t need large numbers of extra systems to meet the increase in demand.”

Even without some of the anticipated demand for CT systems coming to fruition in 2020, it still represented a significant jump from 2019, reaching $5.1bn globally in 2020, up from $4.1bn in 2019. Despite this rapid increase in 2020, however, further growth is still anticipated over the report’s forecast period until 2026.

High vs Low

“There are still moderate growth prospects from 2021 to 2026,” Jani continues, “With a 3.7% CAGR for the period.”

“What we’ve found is that, as a result of CT’s use in Covid care, there were more sales of the lower end of vendors’ portfolios, the 17-63 slice systems, in 2020. That product segment had one of the largest increases in 2020. In 2021, this dynamic shifted, and most growth came from hospitals modernising their fleet of CT systems, in order to better deal with the backlog of procedures delayed amidst the disruption caused by Covid in 2020.

“There is still demand for the lower tier products, but this is mainly in developing markets which are aiming to expand access to advanced imaging. However, in developed markets, demand is highest for mid-to-high end offerings, as hospitals face huge waiting lists and want access to the latest available clinical capabilities.”

The impetus to upgrade to more modern systems is therefore currently high. Many providers are looking to take advantage of CT imaging and the technological developments in the CT space over recent years. Reductions in dose, reduction of scan times, improved image quality and better efficiency all have made CT more attractive across a range of clinical settings including neurology, musculoskeletal imaging, cardiology and orthopaedics.

“This is particularly true on the software side,” notes Jani. “CT is an advanced imaging technique, which means that scan times and the time it takes for post processing images can be high. That means there is a lot of opportunity for innovation to make significant improvements. So, in developed markets in particular, providers are willing to upgrade to access the better operational features which allow higher patient throughput, more accurate patient positioning, bespoke software applications for dedicated clinical use cases and other features that can help improve a hospital’s operational workflow.”

The Next Technologies

Vendors are also making technological leaps on the hardware side, with two of the most significant innovations being dual energy or spectral CT and photon counting CT. The commercial impacts of these technologies varies throughout the forecast period, with the impact of photon counting CT in particular likely to be slight.

Though dual energy devices do not provide as greater image quality and definitive tissue characterisation as PCCT devices, they are more affordable and accessible, and so will have a continuing impact in the CT market over the short- and mid-term in developed economies, and a growing role in developing and emerging economies over the longer-term. Commercialisation of photon counting CT is not expected to accelerate for around five years with widespread use expected to take even longer, at around five to seven years. However, there is expected to be continued investment and uptake at leading university hospitals, which will continue to demonstrate the clinical benefits of the technology. The price, however, at around 50 percent more than other top-end scanners, will remain a barrier for the immediate future.

This is less of a hurdle for dual energy CT which is already deployed in China, and tends to be more affordable than photon counting CT, but longer term, photon counting CT, at least according to its acolytes, is expected to become ubiquitous.

“It’s a technology that offers better image quality [compared to conventional CT], decreased noise, better spatial resolution, lower radiation dosing and better tissue determination, so when it comes to diagnosis and treatment planning, its impact could be dramatic,” Jani explains.

“But, until there are more entrants to the market which will help to bring down the price, these impacts are still some way away. Other entrants are beginning to emerge though, Siemens Healthineers received FDA approval for a photon counting CT system in late 2021, while Samsung Neurologica was the second vendor to receive approval in March 2022 for its mobile photon counting CT system. Other vendors such as GE HealthCare, Philips and Canon are also developing products. These are in the testing and evaluation phase are still not commercially available, but should lead to a decline in prices when they enter the space commercially.”

There are other factors that will also improve the affordability of such systems over time.

“Photon counting CT requires considerably more computing power to process the vast amounts of data generated. The cost of this processing power will inevitably fall in the coming years.”

The Way to Work

One of the other technologies driving CT sales growth is artificial intelligence. Much of the excitement surrounding AI focuses on image analysis, but for CT, the technology can also offer significant advantages across an imaging workflow.

“In CT, AI is typically being used in edge applications,” comments Jani, “there is a focus on the operational aspects of CT imaging such as dose reduction, patient positioning, image acquisition and image reconstruction.

“What this means is that in developed healthcare settings, high-end hospitals are increasingly starting to purchase premium CT systems with embedded AI as they are able to benefit from the increased patient throughput that these systems offer.

“This continued focus on reducing scan time, increasing operational facilities, increasing the return on investment, and all these tasks that AI is being used for, is giving providers a reason to upgrade before systems were originally meant to be ready for replacement.

“The CT image analysis market, on the other hand, is primarily being driven by start-ups and scale-ups, alongside modality vendors. This is being driven by several high-value clinical applications, such as coronary artery disease, cardiac assessment, stroke assessments, chronic lung assessment and vertebral compression fractures, while in the mid-term lung cancer, traumatic brain injury, bone density and liver disease are also set to be key clinical use cases driving the market forward.”

Providing for Providers

Although supply to the market is very consolidated, with almost 93 percent of the market accounted for by just six vendors, the current pace of innovation means that CT sales are forecast to grow over the coming years. Short-term challenges such as the logistical headaches and component shortages affecting most areas of medical imaging will cause costs to rise for users, but these aren’t expected to dampen demand.

Instead, new features, new capabilities, and new opportunities afforded to providers will keep demand high.

“There is currently a lot of focus on usability, with consideration given to noise reduction, reliability, enhanced image quality, ease of operation, faster throughput, and more efficient image acquisition all taking a central role.

“Futuristic technologies such as photon counting CT will maintain this momentum in the years ahead, while a diverse portfolio, serving both the performance as well as the high-end market will help current sales.

“In the end, what this comes down to,” concludes Jani, “is putting providers’ needs first.”

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Signify Premium Insight: The Questions that Nanox Would Rather Not Answer

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Nanox Imaging, the young vendor which hopes to bring 3D medical imaging to a bigger audience with a new, more affordable modality has recently released its first quarter 2022 results.

The figures were a mixed bag. Revenues of $1.8m marked a considerable improvement on no revenue for the comparable quarter in 2021, and a fair improvement on the $1.3m taken in the prior quarter. Of this revenue $1.7m came from teleradiology services stemming from Nanox’s 2021 acquisition of USARAD, while another $0.1m came from AI solutions brought in by the vendor’s acquisition of Zebra Medical Vision last summer. As such the vendor generated no revenue from its flagship Medical Imaging-as-a-service product.

Although revenues grew, so did losses, with Nanox reporting a net loss for the period of $21.7m, $9m greater than for the same period last year. The Israeli vendor pins this loss on expenses related to the consolidation of its acquisitions.

The Signify View

It is easy, and very often unfair, to take an innocuous moment and bestow it with undue significance, but on occasion, for those scrutinising a company’s strategy, those moments are hard to resist. So it was during the analyst call for Nanox’s first quarter results. As the Q&A portion of the call began, the first question pertained to the expected timeframe for the regulatory approval of the vendor’s key, multisource scanner. The device around which the company’s entire business is hung.

“For some reason I can’t hear you” came the response from Nanox CEO Erez Meltzer.

The question was asked again.

“I can’t hear for some reason” Meltzer repeated, “There’s a lot of noise in the background.”

“Can you repeat the question?”

Eventually, the message got through, and Meltzer offered a response, albeit one that failed to elaborate on details given elsewhere. It would, however, have perhaps been easier for Nanox had these technical difficulties not been resolved.

The Nanox Keystone

The Israeli vendor’s strategy is, after all pinned to the success of its Nanox.ARC multisource tomosynthesis system. This scanner, which is reliant on the vendors’ proprietary cold-cathode X-ray source, sits at the heart of an ecosystem that brings together scanners, AI tools, cloud-based imaging software and teleradiology services into a single, affordable, ongoing service. Approval for this tomosynthesis system, has however not been forthcoming. Originally, Nanox planned to deploy scanners in the first half of 2021, this date got pushed back and last spring was revised to a “late 2021” launch. Now, having submitted 510(k) documents to the FDA in June 2021, responded to a request in August, withdrawn the submission in January 2022, applied via a different pathway in January 2022 giving details of a refined version of the scanner, the vendor is in dialogue with the FDA and expecting to submit supplementary information and an entirely new 510(K) application in the future. Notably, no time frame, other than noting the FDA’s 510(K) process usually takes three to 12 months, has yet been given for these stages.

But without approval, other than revenues which are, quite frankly, insignificant for a vendor that raised more than $160m in its IPO, the company cannot hope to stem its losses and begin generating more palatable returns. With approval, however, the vendor can look to quickly scale, utilising its new chip fabrication plant in South Korea to produce ARC scanners in significant numbers. These can be deployed for minimal upfront cost for the customer, with Nanox instead deriving revenues from their use of its teleradiology services, AI tools, and software packages, as well as paying a fee for each use of the scanner. This is when Nanox hopes to be able to begin justifying the excitement and investment it has enjoyed.

Agree to Disagree

There is, on the face of it, considerable appetite for this approach. Nanox has already entered into 11 agreements to deploy 6,500 systems in 17 countries, which, according to the vendor’s Form 20-F will bring in a minimum of $187.5m annually. There are some caveats to this rosy response, however.

Many of these agreements were made in 2020. At this time there was a lack of clarity surrounding the expectations for Nanox’s ARC scanners, with since-removed images claiming capability equal to tomography rather than tomosynthesis systems.

Image comparing Nanox’s system to a traditional scanner, taken from www.nanox.vision, archived on 02/07/2019

The customers’ expectations about the Nanox.ARC may have been quite different to the actual systems that Nanox is (assuming FDA approval) ultimately able to deliver. Another pressing concern for Nanox is that in some cases the initial terms of these early agreements are quickly approaching. With the earliest coming in February 2023. Given Nanox’s difficulties in bringing the products to market, and the now clearer understanding of what the ARC scanners are actually capable of, it is possible that many of these early customers will choose not to continue with their initial orders, an eventuality given more credence by the fact that the vendor only signed two new agreements in 2021, with none more recent than October last year.  It is also interesting to note that, despite Nanox’s self-prescribed mission of bringing medical imaging to parts of the world where such capability is scarce, many of these deals are with distributors and resellers in developed markets. Not only does this raise questions about claims from Nanox and others who plan to ‘democratise medical imaging’, illustrating that perhaps the cost of the hardware itself is only one reason for the lack of adoption, with lack of infrastructure, lack of healthcare professionals and lack of onward treatment facility all also hindering the uptake of medical imaging. The lack of orders also raises questions about Nanox’s stated aim of expanding the total market rather than competing with the existent incumbents. The vendor’s 11 initial agreements suggest that this opportunity for market expansion might have been overestimated.

A final facet to these agreements is Nanox’s acknowledgment that, according to the recently submitted Form 20-F, these customers should provide Nanox with a letter of credit or financial guarantee, however, as Nanox notes: “There can be no guarantee that our counterparties will be able to obtain such letter of credit or financial guarantees”. A note which raises questions about the ability of these entities to ultimately pay those minimum fees on which Nanox is counting.

Straws on a Camel’s Back

In isolation, none of these challenges are too much to overcome, but combined and compounded leave Nanox looking like a vendor with a forward looking concept, which aims to usefully connect separate pieces of the medical imaging puzzle in a helpful and ultimately noble way. Assuming the technology is legitimate, and the most scathing early criticisms prove to be unfounded, there are still so many disparate strands, with numerous barriers in each, that must be woven together before Nanox’s vision can be realised. As these numerous individual tasks are countenanced, not only will money begin to run out, but other factors such as the languishing share price and the declining employee numbers will start to eat away at morale and diminish any hope, making success seem even further out of reach.

One comment in a press release from the vendor noted that 15 years and more than $1bn has been invested in developing the cold-cathode X-ray source technology that underpins Nanox’s scanners and is so pivotal to the company’s future success. Impressive figures no doubt, but also numbers which highlight how underwhelming the company’s Q1 figures really are. As Nanox stated in its 20-F filing, “We anticipate that our future cash requirements will continue to be significant” and “we expect that we will need to obtain additional financing to implement our business plan”. At the end of 2021 the company had marketable securities, cash and cash equivalents of $156.6 million, and given the upward trend in losses and the further delays to the launch of Nanox.ARC, the company may need additional funding before the year’s out. Yes, there may be a bright future for the would-be-disruptor’s vision, but investors have only so much patience and requests for more time and money will be met with increasing disdain if Nanox cannot show any progress quickly.

Instead, it is looking more likely that, while FDA approval will eventually be forthcoming, profitably connecting its hardware with the revenue-generating service side of the business looks too much of a mountain to climb. The vendor still has a chance to silence its critics, but time is running out. Every results announcement without a huge increase in revenue, and every month that passes without good news about FDA approval, is another step closer to the vendor selling up and letting investors take the hit.

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Signify Premium Insight: Blurring Boundaries: CT, X-Ray and KA Imaging

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Canadian X-ray detector manufacturer KA Imaging recently announced that it is investing almost $1.5m in the development of what it claims is the world’s first dual-energy mobile X-ray system.

The move marks a shift for the vendor, which has hitherto only produced flat panel detectors for medical applications. As such, the new system will utilise its own Reveal 35C dual-energy X-ray detector. This will enable the system to create three images in a single exposure. As well as a standard X-ray, a soft tissue image without bone, and a bone image without soft tissue are also captured simultaneously.

KA Imaging says the device expands on the diagnostic capability of X-ray, and will be most useful in cases where critical patients cannot be moved to traditional imaging rooms, or in rural or remote communities where access to fixed X-ray systems, CT scanners and MR systems is limited.

The Signify View

The volume of diagnostic medical imaging procedures is, and is set to continue, rising. Signify’s Diagnostic Imaging Procedure Volume Database showed growth in both CT and X-ray imaging, with the growth in CT outstripping that of X-ray, this is true in North America, where X-ray procedure volumes are forecast to grow at just 0.6% CAGR between 2019 and 2025 compared to 2.7% for CT.

This difference in growth masks a burgeoning trend which sees an increasing convergence between high end X-ray imaging and lower end CT. This is evident in both directions, with value-oriented CT systems being chosen over high-end X-ray systems in some cases, while high end X-ray systems are, in some cases, also beginning to bridge the gap in capability to low end CT. KA Imaging’s dual energy mobile system is indicative of this convergence, promising to offer improved image quality compared to traditional digital radiography (DR), at a lower radiation dose than CT, and requiring less technical expertise.

The lower infrastructure requirements of X-ray systems compared to CT systems means that they are, in some respects, more versatile, easier to install and can be deployed across a greater range of clinical settings. This versatility has also been one of the focuses of KA, which for its first foray into device manufacture, decided on a mobile system. This is a sensible decision. One of the developing trends in medical imaging is an increasing shift toward outpatient sites. These sites could benefit from higher image quality than a traditional DR system affords. Such fidelity could allow these centres to improve their diagnostic precision and promote the use of the more sophisticated modality as a differentiator from their local competition. However, the cost, infrastructure, and expertise required to purchase and operate CT could be prohibitive, leaving these centres to instead utilise devices effectively occupying a middle ground such as that promoted by KA.

System Builder

The fact that KA Imaging has sought to make a device at all is also significant. The vendor’s mobile X-ray system is reliant on its previously released Reveal 35C X-ray detector, a category that, for medical applications at least, the vendor is better known. Its decision to release a system, instead of merely relying on the detector itself, raises questions as to the traction the detector has so far received in the market. The vendor’s decision to launch a system could therefore represent a bid by KA Imaging to promote its dual energy technology directly to the providers and physicians that will utilise it, rather than being beholden to large medical imaging vendors who must first select KA’s dual-energy detector for use in their systems, before themselves selling it on to the end users. KA Imaging’s strategy has also been to sell directly to end users, and the decision to create an end-to-end dual energy mobile DR solution was primarily driven by feedback from end users.

This is unlikely to be a long-term strategy for KA Imaging, which will instead use the device to increase awareness of its detector technology and demonstrate its benefits in a clinical setting. This, KA will hope, will be enough to convince the likes of GE Healthcare, Philips and Siemens Healthineers to use KA’s detectors to adopt the technology in their own systems. However, this will mean the dual energy mobile DR system will also be in competition with KA Imaging’s OEM customers. Longer-term, KA Imaging could struggle to compete with larger medical imaging vendors, given their advantages in scale, medical device manufacturing, and established supply networks and sales channels. However, producing a system in the near term, selling to several, well-heeled and influential customers, could help promote the vendor’s dual-energy detector.

The Cost of KA

These first customers, who must be willing to pay the significant premium the dual energy technology demands compared to traditional X-ray systems, could find benefit in some of the advantages in image quality and usability that the system offers compared to X-ray and CT respectively. However, at present the cost is likely to be prohibitive for any broader adoption, given that for providers, it represents a significant investment in what is still a limited niche. KA Imaging has suggested some use cases and are conducting studies to support them, with one paper referenced by the company claiming that the technology helped detect 25% more pneumonia cases than traditional X-ray.

The vendor will be targeting providers who are looking to bring the detector to the point of care, making imaging more comfortable and convenient for patients, as well as more challenging settings like critical care units and paediatric wards. Another possibility is for several departments to share a dual energy mobile detector, reducing each department’s reliance on busy shared CT resource. This could be helpful for time sensitive acute conditions which benefit from earlier particularly given the quicker turnaround times offered by X-ray compared to CT.

However, in some countries, such as China, providers are increasingly skewing towards the purchase of CT instead of high-end X-ray systems. These sites are increasing the proportion of CT scanners they have compared to high-end X-ray systems. This trend is particularly driven by the increased affordability and maturity of CT systems from local manufacturers. There are penalties for such a shift, with lower throughput than X-ray systems, as well as a higher level of expertise required by radiologists and technicians in terms of patient positioning and image interpretation. However, the improved image quality, CT’s versatility and, importantly for providers, the additional reimbursement that CT affords, could render KA Imaging’s target of the premium X-ray an insurmountable challenge.

The Hard Sell

Price is a constant consideration for providers when it comes to purchasing medical imaging equipment. At present, this is major challenge that KA Imaging will face with its dual energy X-ray system. The device does offer advantages compared to other mobile X-ray systems that will be valued by some, and the ability to upgrade existing systems with the dual energy detector will help mitigate the cost of upgrading, but at present, progress for KA Imaging will be hard won. If KA can gain traction with its dual energy detector, and garner interest from large international imaging vendors, the price of acquiring the technology will fall and a successful niche could be established.

However, this boundary between X-ray and CT will increasingly become a bitterly fought space. Digital tomosynthesis solutions, currently being promoted by the likes of Adaptix and Nanox for example, could be used outside of breast imaging, combining some of the advantages of X-ray and CT. Another potentially transformative technology is AI. Workflow tools could be used to improve the efficiency of CT imaging and to aid less experienced technicians, while diagnostic algorithms could be used in reading rooms to supplement the expertise of radiologists.

Whether KA Imaging can make headway in such a changeable space remains to be seen. The device and the detector technology it relies on could help doctors, particularly if its cost can be reduced enough to be a viable alternative for more providers. Unfortunately, given the price differential, without a key application or remarkable use case, its appeal could be lost on providers who have the luxury of choosing between several viable options. KA Imaging’s dual energy system and particularly its dual energy detector has an opportunity, but the vendor must now work to make sure that providers get a chance to experience its potential.

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