Vital Images, Inc.
Vital Images, Inc.
5850 Opus Parkway, Suite 300
Minnetonka, Minnesota 55343
Telephone: (952) 487-9500
Fax: (952) 487-9510
Web site: http://www.vitalimages.com
Sales: $51.7 million (2005)
Stock Exchanges: NASDAQ
Ticker Symbol: VTAL
NAIC: 511210 Software Publishers
Vital Images, Inc., is a leading niche producer of medical imaging software. The company brought to market new so-called volume imaging technology in the late 1980s. Its advanced imaging software made for faster, easier, and more efficient use of existing medical diagnostic tools such as microscopes, computed tomography (CT) scans, and magnetic resonance imaging (MRI). Vital Images' products are used in hospitals across the United States and in Europe, principally by cardiologists, radiologists, oncologists, and other medical and surgical specialists. The company's main product lines include Vitrea software, ViTALConnect software, and ViTALCardia. Vitrea creates two-dimensional, three-dimensional, and four-dimensional images from CT or MRI data, allowing doctors and technicians to see and explore inside the body. Vitrea has discrete applications for different medical specialties such as cardiac applications, colon imaging, or vessel probes. ViTAL-Connect allows physicians to access images in a web-based application, with enhanced tools and navigation. ViTALCardia is a fast and efficient tool made specifically for viewing inside coronary vessels and the heart. Other Vital Images products include web-based applications that allow remote access to images and multiuser access so that specialists at several locations can consult online. The company is headquartered in Minnesota, and maintains overseas offices in the Netherlands and in China.
HIGH TECH IN THE RURAL HEARTLAND
Vincent Argiro, then a physiology professor at Maharishi International University in Fairfield, Iowa, founded Vital Images in 1988. Argiro had done his undergraduate work at Yale and earned a Ph.D. in neurobiology from Washington University in St. Louis. His main interest was cell biology, yet until around the mid-1980s, his work was hampered by the lack of good microscope technology that would allow in-depth study at the cellular level. By the mid- to late 1980s, several advances in computer and microscope technology made cell-level work possible. New laser microscopes could form more powerful views of cell-level data, and people working in CAD/CAM (computer-aided design/computer-aided manufacturing) and computer graphics began to develop software that made sense of some of what the new microscopes could pick up. Argiro's interest became putting the visualization software together with the visualizing instruments to improve biologists' ability to do cell-level research.
Argiro's work at Maharishi's Laboratory for Advanced Biological Cell Imaging was highly regarded, and he was able to win two government grants to form a company in Fairfield that would exploit commercial applications of the imaging tools. Argiro's work at the university focused on three-dimensional rendering of living nerve cells. The development of a new generation of microscopes made ever finer pictures of living cells available to the human eye. The link that makes sense of the image is the software that renders the information in a three-dimensional form on a two-dimensional computer screen. To get an accurate three-dimensional image, the software must have a way of modeling the data acquired so that on the screen it has features such as rotation and projection. The addition of coloring and shading also makes the image easier to read, as some surfaces are picked out from others.
Prior to the mid-1980s, scientists built three-dimensional images from microscope views with extreme difficulty. The mathematics to build such models was extremely complex, so accurate images could take weeks to create. An image could be compiled in a different way if the microscopist could physically cut the tissue to be viewed into very fine slices. Either way, this kind of work was extremely painstaking. A radiologist quoted in a Des Moines Business Record profile of Vital Images (January 4, 1999), speaking about the earlier generation of microscopes, claimed that not only was the process time-consuming, but the microscopes "needed a Ph.D. to run them."
Argiro developed software that made such microscopes and scanners drastically simpler to use. His software took apart two-dimensional images in blocks of "voxels" (volume elements) that could be easily reassembled in a three-dimensional view. Earlier software had done the same thing with regular shapes. In an article Argiro coauthored for Unix Review (March 1989) he gave the example of an airplane wing. The smooth regularity of an airplane wing is relatively simple to render with voxels, creating a view that a computer user could rotate and view from different angles. Argiro's software did the same thing, but for irregularly shaped things: living cells.
In 1988 Argiro got backing from the National Science Foundation, which gave him a grant of $450,000, and the Iowa Department of Economic Development, which contributed $150,000, to start his company. In the late 1980s Iowa was in the midst of a farm crisis, and agricultural concerns were having great difficulty staying afloat. The state was eager to diversify its economy, and a high-tech medical imaging company seemed just the thing Iowa needed. Vital Images began marketing its software, then called VoxelView, principally to research biologists. It had another product, VoxelGeo, which it marketed to oil and gas companies. The company dropped this market within a few years, and concentrated on medical and biological applications.
UNDER NEW OWNERSHIP
Vital Images was small through its first few years, with only a couple dozen employees. The company had research partners at several universities in the United States and in Canada. It improved VoxelView, for example bringing out a version for Mac computers in 1991, as it pursued hospital customers in the Midwest and across the country. Vital Images, in collaboration with a researcher at McGill University in Toronto, also developed sophisticated three-dimensional imaging software that coordinated with ultrasound scanners. Vital Images' products were quite expensive. They made up for the price in speed and ease of use; if hospitals could do more scans per day, better and more quickly, Vital Images' technology could soon pay for itself. Nevertheless, research and development costs were steep, and in 1993 the young company sought outside investors. This led to its merger with a Minnesota biomedical company, Bio-Vascular, the next year.
Vital Images strives to continuously develop industry leading advanced visualization tools that enhance physicians' ability to cement their role as a critical component in exceptional patient care.
We believe that advanced medical visualization can revolutionize medical practice by strengthening the ability to non-invasively visualize anatomy and pathology, enhancing communication among clinicians and patients, and improving pre-procedural and pre-operative planning as well as post-surgical follow up.
Bio-Vascular was only a few years older than Vital Images, founded in 1985. Its principal products were types of coronary grafts. For three years, Vital Images was under Bio-Vascular's wing. It kept its Fairfield offices open, but actually had an easier time attracting skilled researchers in the Minneapolis metropolitan area. The company's Minnesota offices employed more people than its original Iowa facilities, and eventually Vital Images moved its headquarters there. The company worked on developing a successor to VoxelView. Ultimately, Bio-Vascular spun off Vital Images in 1997, as the parent company was itself squeezed for cash. Vital Images reemerged as a public company, selling its stock over the counter. Though it kept a small facility in Iowa, the new Vital Images remained headquartered in Minnesota.
Vital Images had more potential than an actual track record at that point. The company lost money in 1997 and 1998, and its stock price ranged from only $1 to about $3. Yet it launched a new product in 1997, Vitrea, successor to VoxelView. This got rave reviews, with one radiologist (quoted in the Des Moines Business Record article mentioned above) comparing the software to the advent of automatic transmission for cars. Because Vitrea was so much faster than older generations of MRI or CT scans, a hospital could break even on the admittedly steep initial purchase price by doing only a few scans a day, while the swift software made possible as many as 70 scans a day.
NEW PRODUCT LINES
Vital Images continued to raise capital so that it could develop new products and improve its existing lines. In January 2000, the company raised about $5.4 million through private placement. In September of that year, Vital Images moved its stock to the NASDAQ, and took the ticker symbol VTAL. Founder Vincent Argiro continued at the company as vice-president and chief technology officer. In 2002 the company announced a new president and chief executive when Albert Emola resigned, to be replaced by Jay Miller. Miller had previously been Vital Images' vice-president of business development.
Vital Images had many partners in the imaging industry. For example, Vital Images worked with a Washington company, Confirma, that specialized in breast MRIs, to link its Vitrea software to Confirma's specialized computer-aided detection programs. It had many partners in the segment of the radiology industry called PACS, for picture archiving and communication systems. PACS companies helped organize a radiologist's workflow and produce reports. A system that combined PACS and imaging technologies in one was a great boon to hospital workers, and Vital Images thus partnered with a variety of PACS specialists, including McKesson Medical Imaging Group, Eclipsys, DR Systems, and the Swedish company Sectra. Vital Images also had radiology technology partners such as R2 Technology.
By 2005, Vital Images had a fuller suite of imaging software. Besides its flagship Vitrea product, it marketed ViTALConnect, an interactive web-based software, and ViTALCardia, for specialized cardiac imaging. ViTALCardia included several components, such as a function that allowed automated cardiac vessel measurement, and it had the ability to customize cardiac reports pulling from a wide range of data.
The medical imaging field was growing quickly, and Vital Images responded by focusing on applications for the detection of heart disease and cancer. Heart applications were especially valuable because of the time Vital Images' new technology could save. Company President Jay Miller explained to the Minneapolis Star Tribune (June 16, 2006) why its heart imaging technology in particular was "the hottest application we have right now." Patients brought to the emergency room with chest pain waited on average from 20 to 24 hours for test results that showed whether or not they had had a heart attack and how much the heart was damaged. For a hospital that had Vital Images' technology in place, a coronary scan took 12 seconds, and the entire procedure less than an hour. This was unarguably a vast improvement. A doctor quoted in the same article said, "Most people are knocked off their feet when they see this technology." The company also developed specialized scanning applications for gastrointestinal imaging.
- Company is founded in Fairfield, Iowa.
- Business merges with Bio-Vascular.
- Vital Images is spun off as a public company.
- Company moves stock from OTC to the NASDAQ.
- Founder Vincent Argiro retires.
Vital Images had lost money in the late 1990s. By 2006, sales were trending strongly upward. The company's stock, which had once changed hands for a few dollars, was in the range of $30. The company made a renewed public stock offering in late 2006, raising close to $100 million. Vital Images planned to continue to invest in product development, as well as to expand its sales and marketing efforts overseas. With the company on a firm footing, founder Argiro retired in 2006.
GE Healthcare; Philips Medical Systems; Siemens Medical Solutions.
Cohen, Raines, "VoxelView Brings 3-D Visualization to Mac," MacWEEK, May 21, 1991, p. 17.
Day, Bill, "An Image of the Future," Des Moines Business Record, January 4, 1999, p. 13.
"Grants, Contracts," Medical Device Week, May 20, 2005.
"Imaging Software Integrates with ImageChecker," Product News Network, May 24, 2006.
Kupfer, Andrew, "New Images of Babies Before Birth," Fortune, August 9, 1993, p. 87.
"Medical Software Characterizes and Measures Coronary Plaque," Product News Network, November 14, 2006.
"Minnetonka-Based Vital Images Software Making Diagnosis, Treatment of Cancer, Heart Disease Better," Finance and Commerce Daily Newspaper (Minnesota), August 24, 2006.
Moore, Janet, "Doctors Look at the Heart in an Entirely New Way," Minneapolis Star Tribune, June 16, 2006, p. 1D.
Van Zandt, William, and Vincent Argiro, "A New 'Inlook' on Life," UNIX Review, March 1989, p. 52.
"Vital Images Completes $3.7 Million Warrant Redemption," Finance and Commerce Daily Newspaper, January 17, 2002.
"Vital Images Founder, CTO Argiro Sets May Retirement," Medical Device Week, February 17, 2006.
"Vital Images Over-Allotment Sale Pushes Offering to $98 Million," Diagnostic Update, December 7, 2006.
"Vital Images Shows Analysis, Visualization Product Line," Diagnostic Update, December 14, 2005.