Dental x-ray company Schick takes aim at digital radiology

Company has big plans in digital mammography

Schick Technologies has some grand ambitions, and potentially the technology to achieve them. The six-year-old company, headquartered in Long Island City, NY, is using digital x-ray technology, developed and proved in dentistry, to spearhead its way into mainstream radiology.

Schick's first moves into the radiology market were taken late last year when the company began marketing its accuDEXA (dual x-ray absorptiometry) bone densitometer for the assessment of women suspected of osteoporosis. Next up is a foray into digital mammography, specifically a low-cost digital sensor measuring 18 x 24 cm. The sensor is designed to retrofit existing diagnostic systems.

The company has already developed a prototype 8 x 8-cm spot mammography sensor for use in biopsy systems (SCAN Special Report 12/97). This prototype, consisting of a sensor, a computer board, and software, is now available to OEMs as part of a development kit that is priced at around $10,000. Food and Drug Administration clearance to sell the kit for general use has not yet been obtained. Resolution is 40 microns, and the sensor can be scaled up to larger sizes with relative ease, according to the company.

OEMs are not the preferred means for addressing markets, according to Schick executives. The company has built a sales force for direct sales, and prefers to maintain control over pricing and product development, neither of which is common in OEM agreements. But partnering with OEMs is a good way to develop the technology.

"You learn a lot by being with an OEM, because people are constantly coming back to you with their specifications," said Eli Schick, director of investor relations and brother of the company's founder, David Schick.

Company executives hope to move into full-field diagnostic mammography with a commercial product sometime in 1999. The plan is to retrofit mammography systems for about $90,000. Eli Schick said the company hopes to hit a price point below what established vendors are charging, while making it easy for users to upgrade.

"Just stick in this cartridge and you are up and running right away digitally," Schick said. "There will be no learning curve."

To reach that point, however, the company must get through the FDA. No company has yet done so with a full-field digital mammography product, although Trex has a 510(k) application in review for its CCD-based sensor. The competitive environment in digital mammography will be as formidable as the regulatory hurdles. Firms much larger than Schick dominate the mammography market, and for this reason the company decided to first target niche markets like dental and bone densitometry.

"There's a reason we didn't start with mammography," Schick said. "We had to make sure we were solidly rooted in a market first."

Potential in dental. Schick Technologies has gained ground in dentistry, which today provides about 98% of the firm's revenues. Over the last nine months, the company has grossed more than $26 million, with average quarterly revenue increases of more than 100%. Since launching its digital x-ray system for dentistry in March 1994, Schick has sold more than 3000 CDR (computed dental radiography) systems around the world, in spite of stiff competition from several companies, including Gendex, Trophy, and Regam, each of which offers digital sensors for dental applications.

Schick estimates that there are about 150,000 dentists in the U.S., each operating an average of 2.5 radiography units. This translates into a potential market of 375,000 devices. The rest of the world has about 600,000 dentists who typically practice in smaller offices with an average of 1.25 radiography units, constituting a potential market of 750,000 devices. Only about 2% of this market is digital, Schick said.

For about $10,000, the company offers a solid-state detector, in sizes matching dental films, that retrofits existing x-ray equipment. The x-ray detector fits inside the mouth and works in concert with a tiny video camera, called CDRCam. Together they provide side-by-side views on a television monitor of the exterior and interior of the teeth. The video has more to do with patient relations than with diagnosis.

The company seems fixated on $10,000, as it sells not only the spot mammography product and CDR at that price, but also accuDEXA, which received FDA clearance late last year. Customers seem to like the price and the products, and Schick's force of 33 salespeople have sold more than 300 accuDEXAs for use in peripheral bone exams.

AccuDEXA is about the size of a small microwave and measures the density of bone in the finger. Ease of use and a relatively quick return on investment, even with the $40 per scan paid by Medicare and many other third-party payers, have made the system a success. The only major impediment has been state regulations regarding the operation of x-ray equipment. Schick has handled that problem by putting together a package that describes the regulations specific to the state in which the customer works.

"Once we get the doctors and the office staff in touch with those state departments, it takes away a little bit of the fear factor," said Sean Ryan, national sales manager.

The core technology of accuDEXA, CDR, and the still-evolving line of mammography sensors came from research conducted at the Jet Propulsion Laboratory (JPL) in Pasadena, CA, where engineers sought a replacement for CCD-based cameras, which NASA had been launching on deep-space probes. The result was the "camera-on-a-chip" technology licensed to Schick by a company called Photobit, which was founded by JPL engineers.

Schick's sensor is composed of a scintillator, which turns x-rays into photons, and a solid-state photo array integrated with microcircuitry, called complementary metal-oxide-semiconductor (CMOS). CMOS is used in all modern microprocessors, memory chips, and application-specific integrated circuits (ASICs). The combination, called CMOS active pixel sensor (APS), allows the direct readout of energy registered by the photodetector array.

The next step in the clinical application of this technology-digital mammography-has parallels to the company's already successful dental product. Much like the CDR system, the mammography sensor promises to offer image processing, such as zoom and contrast, and reduced radiation dosage, about 10% of the dosage commonly applied by dentists. The company may also argue that its mammography sensors have the same cost benefits as its dental systems, such as enabling users to save staff time and eliminate consumable materials, such as film and chemicals. If those arguments succeed in mammography, arguably the toughest segment of radiology, the company will likely continue to expand its reach into other applications.

"Every manufacturer has the grand vision of being the Intel of the imaging chip," Ryan said. "We'd like to see any product that's on the market doing some sort of digital imaging, whether it is x-raying luggage at the airport or taking dental films, driven by a Schick sensor."