iCAD hatches plan to dominate mammography CAD

FujiFilm Medical Systems USA has forged a key distribution agreement with iCAD to serve as a supplier of computer-aided detection products for Fuji's CR mammography. As important as this deal is to Fuji, it may be even more important for iCAD.

Until several months ago, iCAD had been a principal supplier of CAD to Hologic. Then, in April, Hologic made a bid for CAD pioneer R2 Technology (Hologic bids $220 million for CAD pioneer). At the time Hologic framed the pending acquisition as a way to reduce costs by bringing a major supplier in-house, raising the prospect of increased use by Hologic of R2's ImageChecker.

Ken Ferry, chief executive officer at iCAD, believes the recently completed acquisition will eventually cut iCAD out of the picture with Hologic, a process that may have already begun.

"Hologic, I think, has forbidden its people from quoting our CAD any longer," Ferry said. (Hologic executives refused comment regarding any such instructions.)

The next step, he believes, will be for Hologic to begin optimizing the performance of R2's CAD to the detectors built into the company's Selenia full-field digital mammography system. This could occur to a degree beyond what iCAD and other vendors can match.

"In time, they will market something that is differentiated (from competing CAD systems) and our chances of getting an order directly from Hologic will be quite low," he said.

But Fuji's deal to distribute iCAD products through its U.S. sales channels could more than make up for any losses iCAD might suffer, according to Ferry. He believes the market for mammography could go completely digital in five years and that CR could control 50% to 60% of this installed base.

To capitalize on this opportunity, the company hopes to strike agreements with CR providers other than Fuji as they enter the mammography field. Discussions are already underway with Agfa. Other prospects include Kodak and Konica. Meanwhile, iCAD will continue supplying makers of DR-based full-field digital mammography other than Hologic, namely GE Healthcare and Siemens.

"We want to surround Hologic by being the CAD of choice for all of the other companies," Ferry told DI SCAN.

The distribution deal with Fuji is the first step in that plan. The Japanese company will sell two iCAD products: TotalLook and SecondLook Digital.

TotalLook digitizes mammography films, allowing side-by-side soft-copy displays of archived and current exams. Fuji can begin selling this product immediately. SecondLook Digital, configured with the company's version 7.2 CAD algorithm, will enhance Fuji CR systems with computer-aided detection, but Fuji's sales efforts are on hold pending FDA approval.

The FDA is currently reviewing the company's application, submitted the day after Fuji received written notification of its PMA approval for CR mammography. The company has been queried twice by staff at the agency, and iCAD responded the same day in both instances, Ferry said. About three weeks have passed without further contact, but Ferry is not concerned.

"What we have been asked about has been very straightforward and we have a lot of confidence in what we submitted," he said. "So if that counts for anything, we hope to have approval in the month of September."

The SecondLook Digital configuration to be supplied to Fuji has been specifically optimized for use with Fuji CR, just as this platform has been tweaked for other vendors that iCAD supplies, Ferry said.

"It is tuned for their specific detectors," Ferry said. "We get cases from them, we run our algorithm, and we tune it with minor configurable changes to produce moderate changes in performance."

The distribution agreement with Fuji is not exclusive, but Ferry believes the CR maker will shy away from sending business to R2.

"All the signals I am getting is that rather than feed their competitor (R2's parent Hologic), Fuji would much rather do business near exclusively with us," he said.

As iCAD presses forward with plans to supply CR and DR mammography vendors and their end users, the company enjoys a continuing revenue stream from the agreement struck two years ago with Hologic, which has a record backlog of orders for Selenia that include SecondLook Digital, according to Ferry.

"Our sales people are reminding customers of their commitments," he said.