Founder of Park Medical resurfaces with new gamma camera company IS2

Iain Stark plans to avoid pitfalls that trapped Park

The founder of defunct gamma camera developer Park Medical Systems has returned to the nuclear medicine market with IS2 Research, a company formed to commercialize a new generation of gamma cameras with digital detectors. Iain Stark believes that his new firm will hew more closely to his original vision for Park, which was to offer high-quality digital cameras with lower price tags than products from major gamma camera OEMs.

IS2 is based in Nepean, Ontario, and made its conference debut at the Society of Nuclear Medicine meeting in June, displaying two digital single-head cameras under the brand name NuCamma (SCAN Special Report 6/98). The company has already filed 510(k) applications for the systems and plans to begin North American sales sometime this year.

The NuCamma systems are based on the next generation of the detector architecture that Stark developed for Isis, which later evolved into Park Medical. That design employs the use of an analog-to-digital converter on each photomultiplier tube, which in the early 1990s was unique in the industry. Prior to Park, Stark designed cameras manufactured by Scottish nuclear medicine firm Scintronix, which went out of business in 1988.

Stark parted ways with Park in early 1994, just as the company was bringing its Isocam line of single-head and variable-angle dual-head systems to market. Although Park's technology was well-regarded, the firm was hindered by the high price tag of the Isocam cameras, a protracted slump in gamma camera purchasing in the mid-1990s, and the growing reluctance of hospitals to buy expensive technology from small companies. Park filed for bankruptcy in 1997, and some Isocam users have been replacing their systems after the Food and Drug Administration issued a safety alert following the failure of an Isocam II system in the U.K. (SCAN 4/1/98).

The Park experience offers a number of lessons that IS2 takes to heart, according to Stark. For one thing, IS2 is eschewing the premium end of the market in favor of low-cost systems that offer good image quality and reliability. Because its overhead is much lower than that of a large OEM, IS2 will be able to sell its products at a steep discount to systems from larger companies. IS2's circular-head NuCamma system will carry a list price in the range of $150,000, while its rectangular-head offering will be priced at about $200,000 (U.S. dollars).

"Because we have a very efficient, small group here, that can develop products very effectively and very quickly, our overheads are much less than the major companies, so we can produce a better product but at a lower cost," Stark said. "You can buy three of our (single-head) cameras for the price of a typical dual-head."

In fact, Stark believes that the price tag of his company's products will be so low that IS2 will find most of its competition coming from refurbished cameras rather than new systems. And, given the same price tag, most prospective buyers will choose a camera with state-of-the-art digital electronics rather than a refurbished system, Stark said.

Another lesson comes from Park's experience as a public company. Stark believes that Park may have been distracted by trying to meet the short-term expectations of shareholders while at the same time trying to launch the Isocam line. IS2 differs from Park in that it has the support of a number of Canadian investment groups that understand the amount of time needed to get a company on its feet. Stark does not plan to go public with IS2, at least not in the near future.

Digital advances. On the technology side, IS2 has made improvements on the concept of using one ADC per PMT by reducing the size of NuCamma's electronics to the point where all the camera's electronics can be located in the detector head, with only the power supply located externally. In addition to reducing the siting requirements for the camera, it also makes the systems easier to service, Stark said.

IS2 sees its expertise in detector design as its core technology. It has chosen to outsource other NuCamma components to other firms, which further helps cut costs. For example, NuCamma gantries will be manufactured by Theratronics International of Kanata, Ontario, which already makes gantries for radiation therapy systems. NuCamma's Windows NT-based processing workstations are contributed by Segami of Ellicott City, MD, a nuclear medicine software firm formed by former employees of Sopha Medical. IS2 will integrate these components into completed systems.

IS2 plans to sell its cameras through a network of dealers and distributors rather than directly, another difference between the company and Park. Many distributors are interested in expanding the product lines they offer, from x-ray equipment into nuclear medicine, and IS2 is working with them to train sales specialists and service personnel. When NuCamma sales begin in the next several months, IS2 will have some 70 representatives selling the cameras in North America, Stark said. International sales will also be a priority: Stark believes that the NuCamma line will be well-suited for developing countries that want new technology at a reasonable price.

Further down the road, IS2 plans to expand the NuCamma line to offer a 180 dual-head camera and a variable-angle dual-head system. The company also has another system in the works, although Stark declined to provide details about it, other than to say that it will be "quite revolutionary."

Although some industry observers believe that the last thing the nuclear medicine market needs is another competitor, Stark believes that IS2's focus on providing advanced technology at a reasonable price will create a niche for the firm.

"It is clear that what the market wants is reliable, low-cost machines with top-quality performance," Stark said. "This is what will create the success of the company."