Combined Companies to Offer Industry Leading Continuum of CAD Products
NASHUA, New Hampshire and BEAVERCREEK, Ohio, Dec. 1 /PRNewswire-FirstCall/
-- iCAD, Inc. (Nasdaq: ICAD), CADx Systems, Inc. and CADx' parent company,
Qualia Computing, Inc., today announced that they have entered into definitive
and binding agreements under which iCAD will merge with privately held CADx
and Qualia (together, "CADx"). The companies are now working on a joint and
coordinated basis, and the merger should be completed within two weeks.
iCAD's common stock will continue to trade on NASDAQ under the symbol "ICAD"
before and after completion of the merger.
The combination of iCAD and CADx represents a merger of two leading and
growing Computer Aided Detection (CAD) companies with complementary strengths
and minimal duplication of activities. Together, iCAD and CADx will offer a
unique continuum of CAD products, including industry leading clinical
performance, upgradeability to digital platforms, and CAD solutions that are
accessible to all health care providers. With distribution already
established in major markets throughout the world, the combined companies have
installed over 300 computer aided detection systems for the early detection of
breast cancer. On a stand-alone basis, CADx' sales for 2003 and 2004 are
currently projected to exceed iCAD's sales, with profitable operations
anticipated for CADx in the fourth quarter of 2003 and in 2004. iCAD has
projected profitable operations for 2004.
To complete the merger, iCAD will issue 4.3 million shares of its common
stock in exchange for all outstanding shares of Qualia Computing Inc. and CADx
Systems, Inc. This will represent approximately 16% of the combined
companies' outstanding shares on a post-merger basis. Additionally, iCAD will
pay $1.55 million in cash, and execute a 36-month secured promissory note in
the amount of $4.5 million, to purchase Qualia shares that are owned by two
institutional investors.
"The benefits of this merger for CADx and its customers include access to
iCAD's new iQ(TM) technology, which allows all women's health care facilities,
regardless of size, to offer CAD solutions to women at risk," observed Dr.
Steven Rogers, President and Chief Executive Officer of CADx and Qualia
Computing, Inc. "As the only vertically integrated company in the CAD market,
iCAD combines leading cancer detection software, proprietary imaging and
optical technologies, and the most efficient manufacturing capabilities, to
offer increased cancer detection performance and the most affordable products
in the market. On a post-merger basis, we believe iCAD will be the strongest
independent CAD company. Together, we plan to extend our CAD applications
into additional areas of medical imaging, while exceeding current customer
requirements and expectations."
Dr. Rogers will be named Chief Scientific Officer of iCAD, Inc. and will
be elected to the Company's Board of Directors. In 1997, he founded Qualia
Computing, Inc., which acquired CADx Medical Systems in September 2002. Dr.
Rogers spent twenty years designing smart weapons for the U.S. Air Force, and
he has published more than 200 papers and several books pertaining to neural
networks, pattern recognition, and optical information processing. He is a
Fellow of the Institute of Electrical and Electronics Engineers (IEEE) as a
result of his design, implementation and fielding of neural solutions to
Automatic Target Recognition, as well as a Fellow of the International Society
for Optical Engineering (SPIE) for his contributions to the science of optical
neural computing. Dr. Rogers is also a charter member of the International
Neural Network Society (INNS).
Following completion of the merger, W. Scott Parr will continue as iCAD's
President and Chief Executive Officer, and Robert Howard, one of iCAD's
founders, will continue as Chairman of the Company's Board of Directors.
CADx will operate as an independent subsidiary of iCAD, Inc. while the
companies' combined management team completes the integration of operations.
James Corbett, currently Executive Vice President of CADx, will be appointed
President of the CADx subsidiary and Chief Operating Officer of iCAD, Inc.
Mr. Corbett has twenty years of experience in Sales, Marketing, Product
Development and Strategic Planning, and he was previously Corporate Vice
President with BioChem Immunosystems. Prior to joining BioChem, Mr. Corbett
held a variety of domestic and international positions with Abbott
Laboratories.
"With R&D, engineering and business development investments, to date, in
excess of $50 million, CADx is recognized for its world-class research and
development team and extensive intellectual property," stated W. Scott Parr,
President and Chief Executive Officer of iCAD, Inc. "Under Dr. Rogers'
leadership, CADx' platform technologies are being applied to the early
detection of breast cancer using full field digital mammography; the early
detection of lung cancer utilizing low-dose spiral Computed Tomography (CT);
the early detection of colon cancer utilizing CT, drug and vaccine discovery;
and intelligent patient monitoring. Research programs utilizing CADx' core
technology in cardiovascular disease applications are also in the planning
stages."
"During the course of its research, CADx has compiled what we believe to
be a strong and broad patent and intellectual property portfolio position
involving CAD for mammography and other medical imaging applications. This
complements iCAD's valuable patent and intellectual property position in CAD
and optical technologies."
"Additionally, we believe that CADx now has the strongest distribution
channels of any independent CAD company, and such channels are an ideal fit
with iCAD's developing distribution system," continued Parr. "Finally, CADx
was recently presented the Consumer Value leadership award by nationally
recognized consulting firm Frost & Sullivan. We believe CADx and iCAD are
equally committed to customer support and patient care, and the combination of
our two companies should further magnifiy such commitments."
Together, iCAD and CADx will have strong and complementary distribution
channels:
* CADx products are distributed by SourceOne Healthcare Technologies, the
largest distributor of imaging equipment, supplies, accessories and
service in the United States. SourceOne supplies capital equipment,
provides e-business leadership through its Web site, and
manufactures/distributes an array of traditional consumables to
healthcare providers. SourceOne also provides national distribution
services through all major medical group purchasing organizations.
* CADx has development, licensing and/or distribution agreements with a
number of world-class OEM partners, including General Electric Medical
Systems (GEMS); Hitachi Medical Systems; Hologic, Inc.; and Fischer
Imaging.
* CADx has established distribution relationships in key international
markets. This should allow iCAD's new iQ product to rapidly access
important foreign markets, specifically in parts of Europe, where low
volume mammography facilities are widespread.
* iCAD has distribution agreements for its network-ready MammoReader(TM)
CAD products with National Imaging Resources (NIR) and selected other
dealers that were chosen for their experience in the installation,
integration and support of networkable medical imaging, archiving and
communications systems.
* iCAD has agreements with Merry X-Ray and selected other resellers that
offer iCAD's new iQ computer aided detection system to mammography
facilities with lower patient volumes.
* The combined companies have established purchasing agreements with key
corporate and group buying organizations, including Kaiser-Permanente;
Premier; Healthcare Services of New England; Radiology Partners, Inc.;
MAGNET, Inc.; HealthTrust Purchasing; CareCore; and Consorta, Inc.
CADx' new Second Look Version 6.0 cancer detection software is being
released at the 2003 RSNA meeting, which started November 30 in Chicago. The
innovative design of the Second Look platform provides radiologists with a
choice of three operating points, one with the highest sensitivity in
detection of potential cancers, another with increased specificity (reducing
the total number of markers the radiologist must review), and a median
selection that optimizes sensitivity and specificity. Radiologists can select
the operating point appropriate for their clinical environments and workflows.
With U.S. Food and Drug Administration (FDA) approved claims of up to 96.2
percent overall sensitivity, and specificity as low as 1.6 False Positives
(FP) per case, the new cancer detection software makes the Second Look product
the most powerful CAD system available. The improved cancer detection
benefits of this new software will be available to all future iCAD and CADx
customers.
During the past several weeks, iCAD has announced a number of other
positive developments:
* CAD received marketing approval from the FDA for its new iCAD iQ
Computer Aided Detection system. The iQ system is designed specifically
for women's health centers and breast clinics that perform less than 20
mammography procedures per day. Shipments of the iQ system are
scheduled to begin during the fourth quarter of 2003, and orders are
currently being accepted.
* iCAD received FDA approval for the use of its CAD technology with the
Fischer Imaging SenoScan(R) digital mammography system, thus expanding
iCAD's ability to serve both the full field digital mammography and
traditional screen film mammography markets.
* ICAD expanded its agreement with Fischer Imaging to include the iCAD
iAD(TM) product, which will enable Fischer to offer a complete CAD
product solution to women's health centers that utilize both film and
digital source images of mammography screenings. The compatibility of
the iAD with such mixed workflows will provide Fischer Imaging the
necessary versatility for customers that are transitioning to digital
mammography but retaining traditional film mammography as well.
* iCAD announced a strategic partnership with i3ARCHIVE, which
specializes in the national and cross-enterprise distribution of, and
access to, health images and data. ICAD's CAD Technology will be
offered on the i3ARCHIVES' leading product, The National Digital
Mammography Archive(TM) (NDMA), which expands CAD's accessibility,
affordability, and portability.
* iCAD announced that it has raised $5.9 million in a private placement
of common stock.
CADx, which is based in Beavercreek, Ohio, currently has 71 employees and
operates field locations domestically and internationally. Additional
information about CADx Systems, Inc. can be found by visiting the CADx Systems
web site at http://www.cadxsystems.com .
About iCAD, Inc.
iCAD, the only vertically integrated company in the CAD industry, also
manufactures medical film digitizers for a variety of medical imaging and
other applications. The Company currently has 46 employees, is headquartered
in Nashua, New Hampshire, and operates field locations in Tampa, Florida and
San Mateo, California. Its common stock is listed on The Nasdaq Stock Market
under the symbol "ICAD". More information on iCAD's products can be found at
http://www.icadmed.com .
Certain statements contained in this News Release constitute
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve a
number of known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially from such forward-looking
statements. Such risks include, but are not limited to, uncertainties
associated with litigation and/or government regulation, changes in Medicare
reimbursement policies, competitive factors, and other risks that are detailed
in the Company's periodic filings with the Securities and Exchange Commission.
The words "believe," "demonstrate," "intend," "expect," "estimate,"
"anticipate," "likely" and similar expressions identify forward-looking
statements. Readers are cautioned to avoid placing undue reliance on such
forward-looking statements, which speak only as of the date the statements
were made.
For more information on iCAD, Inc. please contact,
RJ Falkner & Company, Inc., Investor Relations Counsel, at (800) 377-9893
or via email at info@rjfalkner.com.
SOURCE iCAD, Inc.
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Related links:
http://www.cadxsystems.com
http://www.icadmed.com
CONTACT:
RJ Falkner & Company, Inc., Investor
Relations Counsel, +1-800-377-9893, info@rjfalkner.com, for iCAD,
Inc.
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