Market slowness prompts Infimed to bring R&D home

Infimed has consolidated operations in an effort to cut costsand improve internal communications. The company will close itstwo external research and development offices in Rockville, MD,and Redwood City, CA, and shift their functions to company headquartersin Liverpool, NY. The move will leave only the firm's sales andservice personnel external to company headquarters, accordingto president William Greenway.

"The market for capital equipment has tightened up andcompetitive and cost pressures have gotten significantly greater,particularly over the last six to 12 months," Greenway said."We felt that it would be difficult to continue to competesuccessfully in that environment with the added cost of sustainingtwo functions at satellite locations."

The primary responsibility of the two offices was R&D forInfimed's cardiac digital imaging and radiation therapy products,although some marketing activity was conducted. All R&D forInfimed's main radiographic imaging products was already locatedin New York. Having two outside facilities also presented a problemwith communication flow, Greenway said.

"It was more difficult to get information into our productionfacility (in New York) and to get information disseminated toall of our people," he said. "This move will significantlyimprove our communications flow."

To make room for the two groups, 10,000 sq. ft. were addedto the main facility in New York. Although the new corporate structureis still being finalized, Infimed has tabbed William D. Yaegerto head up the R&D functions previously performed by the twooffices. Yaeger formerly served as senior engineer for the company,Greenway said.

Infimed's sales volume had been climbing about 30% per yearthrough the latter part of 1992, but growth this year has droppedto only a few percentage points, Greenway said.

"We attribute a lot of that to the Clinton health reformplans because that change in our sales picture coincided withthe election of Mr. Clinton," he said.

Most of the staff members at the two offices to be closed havechosen not to move to New York, Greenway said.

"There were very good people at both those locations andwe hated to lose them," he said. "But the ability tocommunicate and to be a little more cost-effective were big factorsin our mind. The Clinton health-care plan has made these factorsthat much more important."

The R&D group in Redwood City, which was formed upon theacquisition of the Angiotec division of Andros Analyzers (SCAN10/9/91), was working primarily with the IMX and FMX cardiac digitalimaging product lines. FMX is a memory-based digital loop storagedevice for cardiac imaging, and IMX is an optical disk archivalsystem aimed at replacing cine film at cardiac cath labs, Greenwaytold SCAN

While IMX has performed well since the acquisition, the FMXline has not been as successful. Infimed unveiled its AngiotecFMX 3230B upgrade to the 3230A in July, which the vendor hopeswill increase user-friendliness and overcome its predecessor'sshortcoming of limited recording time.

The product development group in Rockville focused on a radiationtherapy product called Theraview, a patented technology that usesthe high-energy radiation produced by linear accelerators or cobalttherapy systems to verify patient positioning during cancer treatment.This group will also fall under Yaeger's responsibilities, Greenwaysaid.

Infimed's radiography/fluoroscopy products, FC2000RF and FC2000MP,are sold by Shimadzu through its U.S. and Canada dealer/distributornetwork (SCAN 11/18/92). The 2000RF system is geared towards generalR/F work, while the 2000MP performs peripheral angiography inaddition to general R/F work. Sales of these systems have beenflat compared to last year, Greenway said.

"We think it's a reflection of general market conditionsfor that type of capital equipment," he said. "But we'rehoping to see improvement, probably towards the end of the thirdquarter or certainly in the fourth quarter."