Elscint
 | This article contains promotional content. (June 2018) |
| Company type | Public |
|---|---|
| Industry | Medical imaging |
| Founded | 1969 |
| Founder | Avraham Suhami |
| Defunct | 2005 |
| Fate | sold |
| Headquarters | , |
| Products | Computerized tomography, Magnetic resonance imaging, Ultrasound, X-ray scanners |
| Revenue | US$ 311,000,000 (1996)[1] |
| US$ 8,100,000 (1996)[1] | |
Number of employees | 2000 (1996) |
| Parent | Elron |
Elscint Ltd. was an Israeli technology company that developed, manufactured and sold medical imaging solutions, including: Nuclear medicine, computed tomography magnetic resonance imaging and X-ray scanners. Elscint's shares traded on the NASDAQ as well as on the Tel Aviv Stock Exchange. At its height, Elscint was a world leader in the development of medical imaging technologies. Most of Elscint's activities were sold to GE Healthcare and Philips Medical Systems.[3]
History
Early Years
Elscint (a portmanteau of the words "electronic" and "scientific) was founded in 1969 by Dr. Avraham Suhami, who was a nuclear physics professor at the Technion – Israel Institute of Technology at the time, after receiving encouragement to apply his scientific and technical knowledge for commercial applications from Uzia Galil, founder of Elron, a technology investment company.[4] Elscint was founded as a subsidiary of Elron with an initial investment of 250.000 US dollars, Suhami was appointed as the company's CEO and Dan Tolkovsky (who was the CEO of Discount Investment Corporation parent of Elron at the time) was appointed as Chairman.[3]
The first product developed by the company was a nuclear measurement device for laboratory testing, but since the entire global market for the device was a few hundred units, which sold for $ 800 only, it was decided to refocus on the field of medical imaging. Elscint's first product in this field was a nuclear camera designed to detect cancer, but it failed commercially. Later, the company developed the VDP1, a gamma scanner used to monitor radioactive isotopes in the body. The product, sold at a price of $ 25,000 and was the first in the world with digital imaging capability.[5]
This VDP1 was the Elscint's first commercial success, and helped the company to reach sales of a million dollars, with a loss of $ 25,000 at the end of first year of operation. The VDP1 product was displayed in trade show in Los Angeles and drew the attention of General Electric, the world leader in medical imaging; and in 1971, Elscint and General Electric signed an exclusive distribution agreement in North America. General Electric insisted that the product met its quality standards, forcing the young company to expand its technical capabilities and its manufacturing capabilities quickly. In 1972, in order to bring the company's products to world markets outside North America, Elscint opened its first international sales and marketing subsidiary in Belgium.[5]
IPO on NASDAQ
In 1971, Fred Adler, an East Coast venture capitalist, invested in Elscint and 1972 helped the company undertake an initial public offering on the NASDAQ, making Elscint the first Israeli company to list on the NASDAQ.[6] In the early 1980s, in an effort to move from NASDAQ to the NYSE, Avraham Suhami and Donald T MacEwan teamed up to make presentations to private investor groups and investment banking companies, e.g. Prudential-Bache Securities. In 1984, Elscint secured a listing on the New York Stock Exchange.[7]
Elscint becomes a leading force in the medical imaging market
By 1975, sales of gamma scanners, VDP-1, and other products generated $12 million in revenue, and a profit of $ 400,000 for Elscint. Also in September 1975, Dr. Moshe Ben Porath, head of Elscint’s USA subsidiary, hired Donald T MacEwan to expand VDP-1 sales. From that time until December 1979, Elscint’s newer Nuclear Medicine systems, Dymax Gamma Cameras and Dycomette computer processors, gained a significant nationwide market share. So much so, that by March 31, 1979, Elscint USA contributed 33% of Elscint’s total Net Revenues. Concurrently, Avraham Suhami decided to enter a new market - Computerized tomography, at the time a new emerging medical imaging technology. The company spent 2 years developing a Computerized tomography scanner, which it started selling in 1977.
The company's sales began a steady growth, from $21 million in fiscal year ending March 31, 1979 to almost $29 million in fiscal year ending March 31, 1980. In January 1980, Elscint's corporate management asked Elscint USA’s Donald T MacEwan to execute his EXEL CT marketing plan. Donald had studied the CT market and determined that the Certificate of Need (CON) process significantly reduced the hospital CT market. However, it had opened a new price sensitive market for free-standing CT ventures. By March 23, 1981, the first phase of the plan had installed 30 EXEL 905 CTs.[8] Also, in 1981, Elscint acquired Pfizer's CT scanner business. After Donald’s further review of CON, the second phase of his plan had been field tested by Elscint USA’s development team. From those experiments, they crafted the hardware and software for the shared central computer for the remote EXEL 905 CT acquisition gantries. Thanks to Kevin J Lynch’s determined pursuit of Philadelphia’s Bell System, all key components could be linked by Bell System's DDS 56,000 bps digital data transmission lines or to an alternative site-to-site two-way microwave transmission system. Donald named it SATELLEX. The three remote EXEL CT acquisition gantries with central computer SATELLEX was the same cost as a General Electric mobile CT. In Philadelphia, with the legal assistance of attorney Allen J Beckman, Methodist Hospital’s Dr. Anthony J Sattilaro, Graduate Hospital’s Paul Scholfield and St. Agnus Hospital’s Harry Caruso championed the shared CT concept and were granted a CON. Soon thereafter, the first SATELLEX system was installed. The November 15-20, 1981 Radiology Society of North America meeting in Chicago's McCormick Place was the official launch of SATELLEX. There, for the first time in Radiology history, Graduate Hospital’s Dr. Arnold Chait read and manipulated digital CT images, for example, coronal, sagittal or oblique reconstructions, ROIs, Hounsfield units and measurements, at a 770 mile remote SATELLEX console, TELEXEL. In the January 1982 Radiology issue, on pages 18A and 19A, there was an Elscint advertisement for SATELLEX. Elscint’s 1982 Annual Report stated Net Revenues jumped to $71,901,000.00, Net Profit to $10,0760,00.00 and Earnings per Share increased to $1.38[9]. Of note, Elscint’s SATELLEX didn’t rule out Mobile CT business. Elscint’s Bob Schneider worked assiduously to house EXEL 905’s in trailers for a private investment group in Florida. And, Jay Miller, who had already placed two SATELLEX systems in Maryland, won a Wilmington Veterans Hospital bid for a CT Scanner to be housed in a specially modified trailer. In May 1986, the Wilmington VA mobile EXEL 2002 CT was accepted for patient use. Elscint's CT market share grew to 10 percent by the middle of the 1980s.[5]
In the first half of the eighties Elscint acquired several other companies and also expanded its product offering to nuclear cameras, ultrasound, digital and conventional X-ray equipment, thus providing products for all medical imaging technologies. By March 31, 1983 the company had sales of $132 million, a net profit of $12.6 million and more than 3,000 employees in factories, research and development facilities in Boston, England, Paris, Milan, Jerusalem, Haifa and Chicago.[5]. Additionally in 1983, Elscint developed its own equipment for the latest breakthrough in medical imaging, magnetic resonance imaging systems and displayed it at the 11/13-11/18/1983 RSNA Meeting. Eric Sevareid’s Enterprise show closely followed Elscint's FDA process and the RSNA launch. “The Million Dollar Scan” was aired on WGBH-TV Channel 2 on 7/19/1984 at 9 PM in Boston.[10] Also, during the 1983 RSNA Meeting, Suhami asked MacEwan to evaluate and advise him on the prospect of a Xonics, Inc. acquisition. Within 24 hours, MacEwan finished the due diligence required to submit a report. It ended with this paragraph, “There are a few good employees that can be integrated into our leading edge technology but, the majority appear to be old guard cigar chomping x-ray employees. Except for a respectable mammography unit, Xonics equipment is mediocre and, according to doctors I spoke with who use Xonics R/F, it is not reliable. So, to your question, “Should we buy Xonics?” My answer is NO.” A few weeks later in December 1983, Avraham Suhami completed the acquisition of a near bankrupt Xonics. A few days later Xonics President Charles Haverty and his management team replaced Elscint USA’s management team. That same night, MacEwan received a call from Elscint’s Haifa HQ. In that call, Ron Biran assured MacEwan that he was protected. A few months later, MacEwan was transferred to Southern California to manage Elscint's West Coast operations. On March 13, 1985, Charles Haverty resigned from Elscint and Avraham Suhami assumed the helm of the USA operation.[11] In June 1985, Shuhami, resigned from Elscint stating, "the loss resulted from the business strategy of which I was the author and executor, and I must take responsibility." In early 1986, Elscint cut more than a third of its workforce, reorganized management, brought in the former head of the Israeli Air Force, Gen. Benjamin Peled, to lead Elscint's operations. In March 1986, the company's financial fiasco was revealed. Revenues had fallen to $120 million and Elscint posted a loss of $115 million.[12] In a 9/9/1987 letter from Benjamin Peled, “Wake-up Dear Donald; it’s time you realized the picnic is over”. MacEwan replied, “I didn’t buy the ants that ruined the picnic”. In mid-October 1987, MacEwan assumed a Vice President position in another medical bio-tech company with research and management ties to Israel.
In 1996, Elscint invented the world's first multi-slice CT scanner called the "twin". This system could acquire two images with every rotation of the gantry, this was something no other scanner in the world at the time could do. After the Twin the company wished to create a 4 slice system, but this would require a totally new gantry design. In an effort to save time the company decided to sell the multi-slice detector design to Siemens in exchange for their gantry and table. This allowed Siemens to enter into the multi-slice CT game and Elscint shorter to market time for the system that was to be known as the VolumeX. The VolumeX was never produced. By the time it was ready the company was sold to Picker and GE
By 1996, Elscint's revenues reached $311 million.[5]
Breakup of Elscint
In 1990 Elbit Computers Ltd, a sister company of Elscint, and a subsidiary of Elron, acquired a majority share in Elscint.[13] In 1996, Elbit Computers was spun off into three independent companies, one of them Elbit Medical Imaging became the holding company of Elscint. During the 12/1-12/6/1996 RSNA Meeting, Donald T MacEwan had one of his last interactions with Elscint. It was a private dinner meeting with Elscint USA’s CEO, Thomas Spackman, M.D., and Elscint Ltd’s CEO, Johnathan Adereth. Thomas and Johnathan wanted Donald’s thoughts on improving Elscint’s fortunes. Donald responded, “Your leading edge technology is your most valuable asset. However, your sales, marketing and service can’t be highly profitable while competing with GE, Siemens and Picker. So, sell your assets to one of them or whoever is the highest bidder for any particular asset.” Five months later (4/21/1997), Spackman resigned from Elscint USA.[14] Then on 9/1/1998, Adereth resigned from Elscint, Ltd and, within two weeks, Elbit Medical Imaging announced the sale of Elscint’s Nuclear Medicine and MRI assets to GE and Elscint’s CT asset to Picker.[15] These acquisitions were finalized prior to the 11/29-12/4/1998 RSNA. [16]
In 1999, Elron Electronic Industries sold all its holdings in Elbit Medical Imaging to Europe Israel Ltd., formerly an Israeli company listed on the Tel-Aviv Stock Exchange and controlled by real estate developer Mordechay (Moti) Zisser, for a sum of approximately $127.8 million.
Following the acquisition in May 1999, Zisser integrated his existing real estate activities into the company and restructured Elbit Medical Imaging as a holding company, focusing on: real estate, hotels development, shopping and entertainment malls.[17]
In 2005, Elscint was delisted and became a wholly owned subsidiary of Elbit Medical Imaging. By that time, Elscint was no longer engaged in its original medical imaging equipment activities.[18]
See also
References
- ^ a b Elscint posts small gain for 1997, Diagnostic Imaging, March 18, 1998
- ^ The 64 Slice CT Scanner Archived 2016-03-10 at the Wayback Machine
- ^ a b GE Healthcare Israel - About Us
- ^ Elron's story - Technology Investment With Vision Archived 2010-06-18 at the Wayback Machine
- ^ a b c d e Elscint Ltd. - Company history FundingUniverse
- ^ The growth of venture capital: a cross-cultural comparison edited by Dilek Çetindamar, p 277
- ^ https://www.nytimes.com/1984/07/08/business/israel-s-apostle-of-high-technology.html
- ^ March 23, 1981 Fortune magazine
- ^ Elscint annual report 1981-82
- ^ https://www.youtube.com/watch?v=5db6_6Z3Al0
- ^ http://articles.chicagotribune.com/1985-03-13/business/8501140603_1_elscint-sales-and-services-organization-diagnostic
- ^ http://www.company-histories.com/Elscint-Ltd-Company-History.html
- ^ Elbit Computers Ltd. announces acquisition of controlling interest in Elscint PR Newswire, January 5, 1990
- ^ http://www.diagnosticimaging.com/vendors/elscint146s-spackman-leaves-chief-executive-us-unit
- ^ http://www.diagnosticimaging.com/vendors/elbit-sells-elscint-businesses-through-deals-picker-and-ge
- ^ http://www.diagnosticimaging.com/ge/picker-and-ge-complete-deals-acquire-elscint-business-units
- ^ Elbit Medical Imaging - Company History
- ^ Elscint Enters Into Merger Agreement With Elbit Medical Imaging, PR Newswire, Aug. 22 2005