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Welcome to our comprehensive profile on Positron Corp.
(OTCBB: POSC)
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MARKETING & COMPETITION
Marketing Strategy
The Company recognizes the significant financial burden of establishing their own sales and marketing organization. It is for this reason that in May 2008, the Company signed an agreement with NuView Radiopharmaceuticals, Inc (“NuView”) to represent the Company’s product lines. NuView has a team of >30 salespeople strategically located across the country. NuView has a proven track record in representing products in the medical industry and is prepared to sell their products. NuView will be showcasing the Company’s products at professional society trade shows across the country.
The Company will be launching its new dedicated cardiac PET scanner, the Attrius™, in June 2008, at the Society of Nuclear Medicine annual meeting.
Positron is currently the only vendor that offers an affordable dedicated cardiac PET scanner coupled with disease specific software solutions and high-performance SPECT cameras, which makes it easier for them to compete with the larger, better funded vendors, as they don’t have a specific and specialized product offering for the cardiology market segment. The company hopes to add low-cost radiopharmaceuticals once funded which will round out their complete cardiac offering. This will allow Positron to strengthen their financial position and prepare to emerge into the oncology and neurology market segments and more effectively compete against the other vendors in those segments.
Competition
The Company faces competition primarily from three very large commercial manufacturers of molecular imaging systems and from other imaging technologies. The Company does not believe that MRI and CT scan imaging represent significant competing technologies, but rather complementary technologies to PET and SPECT, since PET/SPECT, MRI and CT scans each provide information not available from the others. However, magnetic resonance angiography ("MRA") and computed tomography angiography (“CTA”) is seen by some cardiologists to be competitive with PET myocardial perfusion imaging ("MPI").
The Company's primary competition from commercial manufacturers of PET systems comes from General Electric Medical Systems ("GEMS") a division of General Electric Company ("GE"), Siemens Medical Systems, Inc. ("Siemens") which recently acquired its joint venture partner, CTI, Inc., and ADAC Medical Systems, which was acquired by Philips Medical ("Philips"). GE, Siemens and Philips have substantially greater financial, technological and personnel resources than the Company. In addition, two Japanese manufacturers, Hitachi and Shimadzu, have manufactured and sold PET scanners in Japan and are beginning to sell in the United States. These manufacturers represent additional sources of competition that have greater financial, technological and personnel resources than the Company.
In 2001-2002, GE, Siemens and Philips have introduced PET/CT systems that combine CT scanning and PET in one unit. Since then sales of standalone PET scanners were constantly declining. As a result, all major competitors of Positron have totally ceased production of standalone PET scanners and shifted to high price PET/CT systems with an average price tag of over $2 million dollars. This new trend has put Positron at a competitive disadvantage. This scanner is being developed by the Company's joint venture in China with Neusoft Medical Systems Co. Ltd. At the same time, Positron believes, however, that there is a vast market of non-imaging specialists (e.g., cardiologists, neurologists, urologists) interested in smaller and less expensive standalone PET scanners that can be used in their offices. Positron intends to target these billion dollars niche markets with its low cost (~$600K USD) cardiac PET scanner due to delivery from the joint venture with Neusoft in the beginning of 2009.
The Company’s PulseCDC cameras also face competition from Siemens, Philips, GE and DigiRad with significantly greater financial and technical resources and production and marketing capabilities than the Company has. They believe that their product is superior due to supine imaging and is cost competitive. They believe that with the addition of a direct sales and marketing staff that they be able to sell systems in the face of their competition.
The Company’s Pharm-Assist product also has competition from regional nuclear pharmacies such as Cardinal Health. The Company believes that they have the only device of its kind in the United States at this time however cannot predict any future devices entering the market.
Third-Party Reimbursement
Positron molecular imaging systems are primarily purchased by medical institutions and clinics, which provide health care services to their patients. Such institutions or patients typically bill or seek reimbursement from various third-party payers such as Medicare, Medicaid, other governmental programs and private insurance carriers for the charges associated with the provided healthcare services. The Company believes that the market success of imaging depends largely upon obtaining favorable coverage and reimbursement policies from such programs and carriers. Reimbursement for SPECT imaging has been well established for more than 20 years. This majority of this section will cover cardiac PET reimbursement.
Medicare/Medicaid reimbursement - In 1995, CMS approved reimbursement for one PET procedure in cardiology. Whether CMS will continue to approve additional reimbursable procedures, and whether private insurers will follow CMS's lead are unknown at this time. PET scanner demand in the US increased markedly after the announcement of increasing reimbursement. For example, recent increased reimbursement for cardiac PET procedures has rejuvenated cardiologists’ interest in PET scanning. It is unknown at this time if the increase in demand will be sustained as reimbursement expands.
Private insurer reimbursement - Until the expansion of coverage of CMS, most insurance carriers considered PET imaging to be an investigational procedure and did not reimburse for procedures involving PET imaging. However, this perspective has begun to change as a result of Medicare's expanding acceptance of reimbursements for certain PET procedures. The Company believes that certain private insurance carriers are expanding coverage as experience is gained with PET imaging procedures. While they may not have broad PET reimbursement policies in place today, those providing some reimbursement for PET scans do that on a case-by-case basis.
Any limitation of Medicare, Medicaid or private payer coverage for molecular imaging procedures will likely have a material adverse effect on the Company's business, financial condition, results of operations and cash flows.
Manufacturing
All of the Company’s PET systems are manufactured through its joint venture Neusoft Positron Medical Systems at its developmental and manufacturing facility in Shenyang, China. PET scanners are generally produced by assembling parts furnished to the Company by the joint venture to outside suppliers. The lead time from system ordering, to manufacturing, shipping, delivered and fully operational can be processes within 12 weeks from initial order.
The Company manufactures all its gamma cameras at its facility in Ottawa, Canada. This facility is also home of a number of R&D projects that are currently in process. The facility can also be used for manufacturing of new nuclear imaging devices. The Company will also manufacture all of its Pharm-Assit products in Ottawa. |
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