No one would accuse Fonar of lacking imagination. It was, after all, the company that invented MRI in the mid-1970s, when founder Dr. Raymond Damadian toiled with fellow scientists Michael Goldsmith and Lawrence Minkoff to build the world's first MRI scanner.
As the story goes, Damadian's large frame was no match for the small magnetic coil on the prototype machine, so Minkoff, by default, got to model for the first successful full-body MRI images in 1977.
Size remains an issue even today, as Fonar finds itself squeezed on all sides by larger competitors in the MRI market. The Melville, NY, company, which reported net MRI product sales of just $978,000 for the quarter ended September 30, must overcome perceptions that it cannot compete successfully in a market dominated by much larger companies.
It's not a question of cash, but rather of the company's long-term relevance. By unofficial accounts, Fonar still has plenty of money in the bank resulting from settlements it has won since 1995 in MRI patent infringement lawsuits against nearly all the major MRI manufacturers.
For the next several years at least, the company can continue to fund what it calls substantial research and development into new MRI technology. But the question remains: Will Fonar's investments pay off?
An impressive display
In an immediate sense, they already have. At this month's RSNA show in Chicago, Fonar mounted an impressive display of commercially available products and works in progress, housed in an imposing two-story booth that was a third larger than in past years.
Taking center stage was the company's Open Stand-Up MRI, a work-in-progress scanner. The system has been shown at previous meetings, but is now approaching commercialization. Fonar plans to submit a 510(k) application for the scanner early next year, with approval expected sometime in mid-2000.
Open Stand-Up MRI's claim to fame is that, for the first time, MRI images can be taken in the weight-bearing state, which is useful for orthopedic and sports medicine applications. A large overhead display at the company's booth showed dynamic motion cines of the lumbar and cervical spine, with clear images of a patient flexing his neck.
"In the weight-bearing position you can see pathology that no other MRI can see," said Dan Culver, Fonar's director of communications.
Completely new for Fonar were two new systems, the work-in-progress Pinnacle and the entry-level Echo scanner. Pinnacle is an open MRI system based on a high-field superconducting magnet, with a field strength that will range from 0.6 tesla to 1 tesla. The images shown at the RSNA conference were based on the 0.6-tesla field strength, with the 1-tesla imaging capability still in development.
The 0.35-tesla Echo was touted as the smallest and least expensive whole-body open MRI scanner on the market. It's aimed at smaller hospitals, physician groups and international markets that need MRI technology but can't afford a high-end scanner. Fonar says that Echo's $630,000 list price makes it cheap enough to compete with extremity-only scanners on the market.
Fonar believes its technology investments have also paid off in features like the smaller magnetic fringe fields surrounding the company's scanners. Compared with competitors' products, Culver said, Fonar's scanners are better suited for use with wheelchairs and gurneys. The smaller fringe fields also make the magnets easier to site.
Things are looking up
Overall, things seem to be looking up for the company. At the RSNA meeting, Fonar appeared to have been successful in at least showing that it has the drive and commitment it will need to survive under fierce competition. From a financial standpoint, the company may be able to weather prolonged slow sales while new products are approved and new marketing efforts take hold.
While the company's future prospects cannot be known, Culver remains upbeat about Fonar's long-term viability.
"Fonar has been a leader in technology since Dr. Damadian developed the concepts used in MRI scanning," Culver said. "We don't need to sell as many as Siemens to be a runaway success. Siemens will always beat us in numbers, and so what?"
By Eric BarnesAuntMinnie.com staff writer
December 9, 1999
