Tag Archives: Varex

Signify Premium Insight: Varex Banking on the Micro-X-Factor

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Last month, Varex and Micro-X announced that they had signed a long-term strategic collaboration agreement, centred around Micro-X’s multi-beam X-ray tubes.

For a non-refundable fee of $7.5m, the deal will grant Varex an exclusive license to use Micro-X’s NEX Technology for cold-cathode multi-beam X-ray tubes, along with an equity subscription to achieve a 9.9 percent holding in Micro-X.

As one of the world’s largest producers of X-ray tubes and flat panel detectors, Varex’s interest will also help commercialise multi-beam emitter technology, and help Micro-X better monetise its core technology.

The Signify View

Many technological innovations are developed by smaller specialist vendors, with very particular expertise and experience serving niche markets. These smaller vendors, however, frequently lack the size to scale their innovations and turn them into a commercial success. In these cases, forging ties with larger companies, through, for example, partnerships, licensing agreements or even acquisitions can help turn a smaller specialist vendor’s innovations into a broader commercial success.

Micro-X will hold such hopes in its agreement with Varex. Micro-X has worked to develop its NEX cold cathode multi-beam X-ray tubes, but by licensing its use to Varex, the vendor’s X-ray tubes could be sold to a far greater customer base in far greater numbers than would be possible otherwise. Varex is, after all, among the market leaders in the X-ray tube and flat panel detector markets, claiming 19 percent market share in the latter.

Despite its strength in these markets, however, the company does face challenges. It does, like many of its peers, face being undercut by cheaper Chinese vendors, which have, over recent years, driven down the prices of flat panel detectors and caused large FPD manufacturers like Varex to review their supply chains and manufacturing facilities as a result. More sophisticated technology, such as Micro-X’s multibeam emitter technology is less likely to face such affordable competition given the technical hurdles it presents, and therefore represents a sensible area in which Varex can diversify.

Optimisation Opportunity

The deal also makes sense for other reasons. By offering both the multi-beam emitter and the flat panel detectors, Varex can optimise the package as a complete system, rather than X-ray system manufacturers having to undertake such optimisation. This will give Varex an advantage, allowing it to leverage its strong sales of flat panel detectors to strengthen its position in the X-ray tube market, while also enhancing its technical prowess, making it a stronger competitor in more advanced imaging use cases.

Such a plan would not be new for Varex, which adopted a similar strategy in 2019, when it acquired photon counting specialist Direct Conversion. While the move was focused on the detector rather than emitter component of an X-ray imaging system, the principle was the same. It allowed Varex to access sophisticated, specialist technology developed by Direct Conversion, and utilising its global reach, its strong sales network, its reputation and its connections to many of the world’s leading medical imaging X-ray manufactures, offer its customers an improved X-ray detector.

The rationale with Varex’s agreement with Micro-X is very similar. However, the execution is somewhat different, with Varex opting to enter into a licensing agreement with an equity subscription, rather than an outright acquisition as it did with Direct Conversion. Such a decision may present some obstacles, with the vendor foregoing the ability to have complete control over the X-ray tube producer. However, given that the agreement between Varex and Micro-X is exclusive, the difficulty this causes will be minimal. What’s more, such an agreement will also be advantageous for Micro-X, which as well as offering systems for the medical imaging market, also offers X-ray tubes for specialist industrial and security uses.

Beam Convergence

Aside from the direct impacts on Varex and Micro-X themselves, the move furthers developing trends in the medical imaging market including the convergence of X-ray and CT imaging. The use of multi-beam X-ray emitter technology, particularly if used in conjunction with photon counting detectors, could offer higher resolution and better tissue characterisation. What’s more, such advantages could be gained while systems also become smaller, lighter and more portable than traditional X-ray devices, allowing X-ray and tomography to be taken out of the more traditional settings.

Largely these advantages stem from the fundamental differences in Micro-X’s NEX nanotube X-ray emission technology. This innovation uses a cold cathode electron source rather than the traditional heated filament. Such an approach makes the electron source smaller, lighter and more robust, allowing it to be utilised in more sophisticated ways in medical imaging systems.

At present, there are very view vendors commercially offering cold-cathode nanotube X-ray source technology, giving Micro-x and now Varex an advantage when it comes to commercialising their product. Perhaps the most high-profile competitor is Nanox, which places a cold-cathode carbon nanotube X-ray source at the centre of its Arc scanning system. Nanox has, however struggled to get its commercial, multi-source X-ray source approved by the FDA, rendering it, as yet an untenable option for many providers.

This does nothing to improve the Israeli vendor’s reputation, which was severely tarnished by a number of short-sellers, and a general lack of clarity around its product when it first listed publicly in 2020. Micro-X and Varex, on the other hand are both well-established vendors, with well-proven products, and hard-earned reputations from satisfying significant customer bases for many years. This should give systems developed using Micro-X’s X-ray source a significant advantage over lesser established vendors such as Nanox, although if Micro-X systems demonstrate sizable improvements, other vendors, including Nanox, which are developing comparable systems, could also find their credibility improved.

Brand Loyalty

This is particularly true given that Varex provides solutions to some of the biggest names in medical imaging, including Canon Medical, GE HealthCare, Elekta, United Imaging and Varian among others. This commercial reach will expedite the uptake of Micro-X’s technology and continue the advancement of X-ray technology. Varex’s scale will allow the X-ray sources to be produced more affordably, while the technology offered will allow both Varex and the customers it serves to differentiate themselves from the milieu of other, potentially cheaper vendors, which lack the top-end capability.

Ultimately, as with almost any technological advancement, adoption is gradual, with customers taking their time to appreciate, and more importantly, invest in a product’s touted benefits. The same is likely to be true of Micro-X’s NEX technology. However, alongside photon counting CT and dual-energy CT, the adoption of cold cathode emission technology by a market leader in the X-ray space means another opportunity has come to the fore, ready to be leveraged by modality manufacturers looking to distinguish themselves from the competition.

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This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This 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 Research. To view other recent Premium Insights that are part of the service please click here

The Medical Flat Panel Detector (FPD) Market Experienced a 4% Increase in Unit Sales in 2020

Cranfield, UK, February 23rd 2022; Written by Bhvita Jani and Graham Cooke: The medical flat panel detector (FPD) market experienced a 4% increase in unit sales in 2020 reaching a market size of just under 70,000 units. However, the market revenues declined by almost 10%, equating to a market size of $2.1 billion USD. Market fluctuations echoed those seen in the X-ray modality markets, with static FPDs used primarily in fixed digital radiography (DR) rooms and mobile DR experiencing  10% year-on-year growth. Growth was driven by healthcare providers globally buying mobile X-ray systems for diagnosis of pneumonia as an indicator of COVID-19. Conversely, the market for dynamic panels, often used for fluoroscopy, surgical and interventional procedures, saw a sharp decline with units falling by 18% from 2019 to 2020 as elective surgeries were postponed or cancelled.

Signify Research predicts the medical FPD market to reach 85,000 units by 2025.  However, as average selling prices are expected to continue to fall, market revenues are predicted to decline.

In 2021, market dynamics shifted with demand for static panels used in mobile radiography declining, as the surplus demand in 2020 had been met during the initial waves of the pandemic. However, as elective procedures returned in 2021, demand for dynamic panels for mobile C-arm and interventional applications subsequently increased. In 2021, unit sales of dynamic panel increased by just under 15%, almost returning to pre-pandemic levels.

Wireless flat panel technology is increasingly adopted globally

Demand for wireless technology is continuing to increase in applications such as fixed and mobile radiography, especially in developed markets where benefits such as increased workflow capabilities are widely recognised. In 2020, wireless detectors accounted for 53% of all FPD unit sales. By 2025, this is forecast to grow to 61%. Physical parameters such as detector weight, extended battery life, and liquid damage protection also play a role in the purchasing process, although these factors are typically a lower priority than image quality and dose reduction. Purchasers are also paying attention to the pixel resolution and detective quantum efficiency (DQE). Manufacturers of FPDs are developing thicker scintillator layers and increasing the DQE level possible with their detectors.

Suppliers of FPDs are developing new products that have reduced scatter, lower noise, higher resolution and require lower dose exposure, a key consideration for healthcare providers and increasingly for patients as well. A combination of these features can reduce the need for retakes and increases clinical precision, enabling imaging departments to perform more efficiently.

Another key consideration when purchasing FPDs is the reliability and durability of the panel. Providers are demanding more robust, reliable panels, with a greater return on investment before replacement is required. As a result of this, providers are requesting service contracts or extended warranties to support increasing the lifespan of the detectors.

Demand for Gadox continues to decrease

Cesium iodide is the gold standard for medical imaging FPDs, but limited demand for gadolinium oxysulfide (Gadox) panels remains. Cesium iodide panels are more sensitive and produce higher quality images than Gadox equivalents, but come with a higher associated cost. The focus on reducing radiation dose in Western Europe and North America is limiting demand for Gadox panels. However, they continue to be sold in some price sensitive markets across Latin America,  . Demand for Gadox detectors is forecast to decrease throughout the forecast to 2025. As the prices of cesium iodide panels become more affordable, these panels are becoming more accessible to a wider range of customers. In addition, as the dose optimisation benefits of cesium iodide FPDs are further acknowleded in emerging countries, this will drive adoption of this panel type. Demand for Gadox panels will be maintained beyond the forecast period by smaller clinics and independent medical imaging facilities where cost is the primary consideration,

Competitive Analysis

The medical flat panel detector market remains a highly fragmented and competitive sector, with 15 vendors having at least a 2% market share each.  Varex leads with 18%, followed by Trixell Thales in second position and iRay in third position completing the top three.

Chinese FPD vendors gained market share in 2020, due to increased production and surplus inventory to supply to mobile X-ray system manufacturers. As a result, companies such as iRay, Careray and PZ Technology increased their market share in 2020.

Chinese FPD companies continue to drive an aggressive price war, forcing international FPD vendors to re-evaluate supply chains and open production facilities in lower cost countries such as China.

In the coming years, a key opportunity for vendors with cost-efficient FPDs is expected to be developing markets, such as Latin America, Africa and parts of Asia. With many of the countries in these regions having large installed bases of analogue or computed radiography systems, there will be ongoing digitalisation as the affordability of digital X-ray systems continues to increase.

Future outlook  

As the low-end FPD market continues to become saturated and the price ware continues, with newer Asian FPD vendors increasing market presence globally, margins for FPD vendors are increasingly at stake. After years of double-digit price erosion, medical FPD prices are forecast to stabalise with only single-digit price annual declines forecast through to 2025. As a result, FPD vendors are progressively investing in research and development to upgrade their product lines to showcase latest hardware innovation and establish a niche. Such developments include IGZO, flexible detectors, photon counting and addition of AEC chambers on the detectors themselves. Target markets for these higher-end FPD products include developed countries and high-end hospitals where clinical precision is still paramount.