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1 TriMark Publications Volume: TMRPET POSITRON EMISSION TOMOGRAPHY MARKETS (SAMPLE COPY, NOT FOR RESALE) Trends, Industry Participants, Product Overviews and Market Drivers 2011 TriMark Publications, LLC. All rights reserved 1

2 TABLE OF CONTENTS 1. Overview Scope of This Report Methodology Executive Summary PET Technology: An Overview History and Development of PET Early Beginnings The 1950s: Pioneering Ideas for PET The 1960s and 1970s: The Development of PET The 1980s: PET s Advancement and Performance in Research Sector The 1990s: PET s Progression in the Clinical Sector PET Advancements of the 1990s PETS Ability to Identify Pathophysiology Insurance Coverage for PET Availability of FDG The 2000s: PET/CT Scanner The Working of PET Coincidence Detection Coincidence Imaging PET Modes Obstacles to Widespread Use of PET Dedicated PET Equipment PET s Comparison with Other Conventional Imaging Procedures Trends in PET Instrumentation Advances in PET/CT Imaging Promise of PET/MR Imaging Cost Considerations in PET Scanners Economics of Hybrid Systems Hybrid Optimization Image Quality and Hybrids PET Applications: An Overview Applications of PET and PET/CT in Oncology PET/CT s Growth in Clinical Oncology in the U.S. and Europe Cancer: Global Incidence and Mortality PET: The Most Powerful Imaging Tool in Cancer Management Increases in Cancer Imaging Costs New Criteria for Diagnosing Alzheimer's disease Expanded Applications for PET in Oncology PET Scanning for Prostate Cancer PET/CT in Radiation Treatment Planning for Cancer Patient Treatment PET in Radiation Therapy Planning Imaging Protocols for PET in Radiation Therapy Planning Applications of PET in Cardiology Cost of Cardiovascular Disease CVD: The Single Largest Killer in Adults Prevalence of CVD in the U.S Economic Cost of CVD in the U.S PET: The Established Diagnostic Tool in Cardiology PET and Heart Disease Diagnosis PET/CT s Suitability in Cardiac Imaging Need for Dedicated PET Devices for Cardiac Imaging Impact of PET in Reducing Biopsies TriMark Publications, LLC. All rights reserved 2

3 Current Status of Nuclear Medicine in Cardiology Current Status of Cardiac Nuclear Medicine in Asia Current Status of Cardiac Nuclear Medicine in Europe Current Status of Cardiac Nuclear Medicine in Latin America Current Status of Cardiac Nuclear Medicine in North America SPECT vs. PET in Cardiology Application of PET in Neurology PET s Promising Role in Diagnosing Migraines and schizophrenia PET s key role in Parkinson s research PET s Prediction on Surgical Outcome in Refractory Epilepsy Patients Disease-Specific Applications of PET and PET/CT in Neurology PET Imaging of Brain Tumors PET and Brain Metastases PET in Dementia PET in Epilepsy PET Radioisotopes and Radiopharmaceuticals Types of Radiopharmaceuticals Diagnostic Radiopharmaceuticals Suppliers of Radiopharmaceuticals Radioisotopes Used in Medicine Cyclotron Radioisotopes FDA-Approved Radiopharmaceuticals Some Common Radiopharmaceuticals in PET Imaging Nitrogen-13 Ammonia Rubidium Oxygen-15 Water Flourine-18 fluorodeoxyglucose (FDG) Generator-Produced PET Radiopharmaceuticals New PET Agents for Cardiology New Neuronal Imaging Agents Market Analysis Global Market for Medical Imaging Modalities Global Medical Imaging Market Share by Modality, PET and PET/CT Market Pet and PET/CT s Application Areas Global Spending on Cancer U.S. Spending on Cancer and Cancer Imaging U.K. Spending on Cancer Global Market for Diagnostic Imaging Equipment for Oncology Improved Diagnosis and Staging by Technological Advances Importance of Imaging to Cancer Treatment PET/CT Market in Oncology Sector Percent Share of PET/CT Utilization by Type of Cancer The Lion s Share of PET/CT Imaging in Oncology Economic Evaluation of PET and PET/CT in Oncology Costs for PET and PET/CT in Oncology Cost Effectiveness of PET and PET/CT in Selected Cancer Types Cost Effectiveness in the diagnosis of Solitary Pulmonary Nodules Cost Effectiveness in the Detection of Non-Small Lung Cancer Cost Effectiveness in the Detection of Colorectal Cancer Cost Effectiveness in the Detection of Head and Neck Cancers Cost Effectiveness in the Detection of Malignant Lymphoma Cost Effectiveness in the Detection of Pancreatic cancer Cost Effectiveness in the Detection of Other Solid Neoplasms TriMark Publications, LLC. All rights reserved 3

4 5.2.4 PET/CT: Business Models The Models Market Forces Rising Demand for PET Changes in PET Reimbursement Initial Results from the National Oncologic PET Registry (NOPR) The Road toward Open Coverage for PET Future of SPECT and PET Imaging Markets in Cardiology Nuclear Imaging of Heart Global Utilization of Nuclear Imaging in Cardiology Future of Global Nuclear Cardiology Utilization Utilization of Nuclear Cardiology Procedures in Developed Countries Utilization of Nuclear Cardiology Procedures in Latin America Utilization of Nuclear Cardiology Procedures in Asia/Oceania Utilization of Nuclear Cardiology in Africa Utilization of Nuclear Cardiology and Mortality Rate Cost-Effectiveness in Nuclear Cardiology Epidemiology of Cardiovascular Diseases in Developing Countries Global Opportunities for Nuclear Cardiology Products Competition in Nuclear Cardiology Market Need for Dedicated PET Imaging in Cardiology Market for PET Imaging Systems Growth Rate for PET Cameras The Decline of SPECT and the Rise of PET Dedicated PET vs. Hybrid PET The Different Paths of SPECT/CT and PET/CT U.S. PET Landscape PET and PET/Studies in the U.S. for Oncology PET/CT Studies in the U.S. for Cardiology PET/CT Studies in the U.S. for Neurologic Studies U.S. Growth Rate for PET Procedure Volume Utilization of PET Scanners in the U.S. Finger Lakes Region U.S. PET Utilization by Body Site PET Utilization by Payment Type U.S. PET Utilization Rates U.S. Demand for SPECT, SPECT/CT, PET and PET/CT U.S: Cardiac PET Payments Opposition for Reduction Breakeven Point CMS Coverage for Cancer Patients and PET/CT Growth Opportunities for the Providers of PET and PET/CT Medicare Reimbursement for PET Procedures Coding Reimbursement Payment for Diagnostic Radiopharmaceuticals U.S. Market for PET PET Landscape across Canada PET scanning in Canada Publicly Funded PET Scanning in Canada Privately Funded PET Scanning in Canada Utilization of PET in Ontario CVD: Number One Killer in Canada PET Landscape in Europe PET Installations in Europe Growth of PET/CT in the E.U. Market TriMark Publications, LLC. All rights reserved 4

5 PET/CT Procedures in Europe Locations of PET Centers in Europe PET Studies per Million Population in Europe The Commercial Isotope Market in Europe Availability of PET in U.K PET Units in Europe Cyclotron-Based Isotopes Nuclear Imaging Leaders in Europe European Market for PET/CT Nuclear Imaging System Market in Germany Nuclear Imaging Market in France U.K. Nuclear Imaging System Market Nuclear Imaging System Market in Italy PET Services in Europe PET Services in England Availability of PET in U.K Costs of Setting up a PET Center in U.K. with a Distant Supply of Tracer Capital Costs Operating Costs Fixed Costs Variable Costs Costs of Setting up a PET Center in U.K. with Full Production of Tracer Operating Costs Staff Costs Radiotracer Production Fixed Costs Variable Costs Radiotracer Production Nuclear Medicine Equipment and Consumables in India Market Trends Key Market Drivers Status of PET in India Historic Perspective The Isotope FDG Supply Ownership of Cyclotron Issues of the Cyclotron Regulation for Cyclotron and Isotope Supply Cyclotron Supply Issue Isotope within the End User Site Hardware Issues Indications for PET Studies in India Indian Nuclear Medicine Equipment Market Nuclear Medicine Shortage of Isotopes for Medical Imaging The Supply of Medical Radioisotopes Isotopes Used in PET Imaging Isotopes Used in SPECT Imaging Rapid Growth of Radiotracers Global Market for Mo-99/Tc-99m Global Market for Mo-99 by Geography Global demand for Tc-99m Market Trends for Tc-99m Supply Uncertainties Pricing Impact of Tc-99m Pricing on Health Care Budgets TriMark Publications, LLC. All rights reserved 5

6 5.4.7 Impact of Technetium Shortage Global Impact Popular Medical Uses of Tc-99m Market Trends for Tc-99m Supply Uncertainties Pricing Impact of Tc-99m Pricing on Health Care Budgets F-fluorodeoxyglucose (FDG) Positron Emission tomography (PET) FDG Utilization in Europe Future of Radiopharmaceuticals U.S. Radioisotopes Industry Industry Trends and Developments Market Trends for Radiopharmaceuticals and Brachytherapy Supply Disruptions U.S. Shipments, Consumption and Trade U.S. Trade of Radioisotopes U.S. Exports of Radioisotopes U.S. Imports of Radioisotopes Company Profiles Actinium Pharmaceuticals, Inc Advanced Medical Isotope Corporation AMIC s Medical Isotope Products Bio-Nucleonics Strontium Chloride Sr Rubigen Bracco Diagnostics, Inc CardioGen Covidien, PLC Covidien s Nuclear Medicine Products Duosafe Indium In-111 chloride sterile solution Octreoscan Sodium Iodide I-131 Capsules Technescan HDP Thallous Chloride Tl Ultra-Technekow Dry-Top Eluting (DTE) Gallium Citrate Ga-67 Injection Tc 99m Sestamibi Sodium iodide I Technescan MAG Technescan PYP Ultratag RBC DRAXIMAGE, Inc FluoroPharma, Inc FluoroPharma s technology CardioPET BFPET VasoPET GE Healthcare GE s PET and PET-Related Products CardIQ Fusion CardIQ Physio Dynamic VUE MINItrace PETtrace TriMark Publications, LLC. All rights reserved 6

7 Discovery PET/CT Discovery PET/CT Discovery VCT Discovery STE Discovery ST Optima PET/CT Lantheus Medical Imaging, Inc Selected Products from Lantheus Cardiolite (Kit for Technetium Tc99m Sestamibi for Injection) Technetium Tc 99m Generator MIM Software Inc MIMfusion MIMcardiac MIMviewer MIM Storage Server Neusoft Medical Systems Co., Ltd Truesight PET BeyondImage Workstation (BW) CardioCARE PETCare Nordion Inc Nordion s Business Strategy Nordion s Medical Isotope Business Priorities Nordion s Sterilization Technologies Business Priorities Nordion s Medical Isotopes Numa, Inc NumaLink NumaList NumaList Plus NumaStore NumaRead NumaServer NumaManage Numa s Core Lab system Philips Healthcare Ingenuity TF PET/CT GEMINI TF Big Bore PET/CT GEMINI TF PET/CT GEMINI TF Ready PET/CT GEMINI LXL Positron Corporation Attrius Cardio-Assist Radiopharmaceuticals Tech-Assist Siemens Healthcare Biograph TruePoint (16-slice PET/CT) Syngo.via Thinking Systems Corporation MDStation MDStation for PET and PET/CT 192 INDEX OF FIGURES Figure 2.1: Illustration of the SMART Scanner 22 Figure 2.2: Illustrations of PET, CT and Fused PET/CT Scans TriMark Publications, LLC. All rights reserved 7

8 Figure 2.3: Collision of a Positron and Electron and the Creation of Two Resultant Gamma Rays 23 Figure 2.4: Discharge of Two Gamma Rays at 180 Degrees 24 Figure 2.5: A Sinogram with Coincidence Lines 24 Figure 2.6: PET Images Viewed in Axial, Coronal and Sagittal Planes 25 Figure 2.7: Block Diagram of PET Scanner 26 Figure 2.8: Principles of Operation of a Combined PET/CT Scanner 30 Figure 2.9: Two Scanners Mounted Back-to-Back for Sequential Acquisition 31 Figure 2.10: Full Integration of a Whole-Body PET/MRI System 31 Figure 3.1: Projection for Global Cancer Deaths, Figure 3.2: Projected Cost of Cardiovascular Disease, Figure 3.3: CVD: The Single Largest Killer in Adults 41 Figure 3.4: Prevalence of CVD in Four of the Ethnic Groups in the U.S. 42 Figure 3.5: Percentage Breakdown of Deaths from CVD in the U.S. 43 Figure 3.6: Costs of Major CVD Types in the U.S. 43 Figure 3.7: Increasing Number of Heart Failures in Europe, Figure 3.8: CVD in Middle Income Countries 48 Figure 3.9: CVD in Developed Countries 49 Figure 5.1: Global Market for Medical Imaging Equipment by Geography, Figure 5.2: Global Medical Imaging Market Share by Modality, Figure 5.3: Global Cancer Cases, Figure 5.4: U.S. Spending on Cancer, Figure 5.5: Spending on Cancer in U.K., Figure 5.6: Percent Comparison of Spending on Cancer, Figure 5.7: Volume Distribution in Cancer Imaging in the U.S. 73 Figure 5.8: Distribution of Outpatient Cancer Services in the U.S. 74 Figure 5.9: Global Market for Diagnostic Imaging Equipment for Oncology, Figure 5.10: PET/CT s Share in Oncology Imaging Market, Figure 5.11: Percent PET/CT Imaging by Cancer Type 76 Figure 5.12: Percent Share of Oncology, Cardiology and Neurology in PET/CT Scanning 77 Figure 5.13: Nuclear Cardiology Procedures for 100,000 of Population per Year for Developing vs. Developed Countries 84 Figure 5.14: Future of Nuclear Cardiology in Figure 5.15: Approximate Use of Cardiac Diagnostic Testing, U.S. 86 Figure 5.16: Utilization of Nuclear Cardiology in Developed Countries 86 Figure 5.17: Utilization of Nuclear Cardiology in Latin America 87 Figure 5.18: Utilization of Nuclear Cardiology Procedures in Asia/Oceania 88 Figure 5.19: Utilization of Nuclear Cardiology in Africa 89 Figure 5.20: Global Market for PET Services, Figure 5.21: Projected Market Share of PET and SPECT in Figure 5.22: Growth Rate for SPECT and PET, Figure 5.23: Number of Cameras: SPECT Switching to PET, Figure 5.24: Top Ten Body Sites of Cancer for Men in the U.S. 96 Figure 5.25: Top Ten Body Sites of Cancer in U.S. Women 96 Figure 5.26: U.S. PET and PET/CT Patient Studies in Oncology, Figure 5.27: U.S. PET and PET/CT Patient Studies in Cardiology, Figure 5.28: U.S. PET and PET/CT Patient Studies in Neurology, Figure 5.29: PET-Only Sites/Studies vs. PET/CT Sites/Studies 99 Figure 5.30: Trends in PET Procedure Volume in Finger Lakes Region, Figure 5.31: U.S. PET Utilization by Body Site, Figure 5.32: U.S. PET Utilization Rate, Figure 5.33: Approximate U.S. Sales of SPECT & SPECT/CT and PET & PET/CT, Figure 5.34: Cardiac PET HOPPS payments, Figure 5.35: U.S. Market for PET, Figure 5.36: Percent Self-Reported Heart Disease By Age Group 118 Figure 5.37: Installed Units of PET in E.U, Figure 5.38: Installed Units of PET/CT in E.U., TriMark Publications, LLC. All rights reserved 8

9 Figure 5.39: Growth of PET and PET/CT Examinations in E.U., Figure 5.40: Location of PET Centers in Europe 121 Figure 5.42: PET Studies per Million Populations in Europe 122 Figure 5.41: Evolution of Cyclotron in Europe 123 Figure 5.43: Location of PET Cameras in Europe 124 Figure 5.44: Growth of Cyclotron Units in Europe, Figure 5.45: European Nuclear Imaging Market Share by Geography, Figure 5.46: European Market for PET/CT, Figure 5.47: Nuclear Imaging Market in Germany, Figure 5.48: Nuclear Imaging System Market in France, Figure 5.49: Nuclear Imaging System Market in U.K., Figure 5.50: Nuclear Imaging System Market in Italy, Figure 5.51: Number of Installed Bases in Nuclear Medicine in India 142 Figure 5.52: Nuclear Medicine Equipment Market in India 143 Figure 5.53: Indian Nuclear Medicine Equipment Market by Application 143 Figure 5.54: Global Demand Trend for Mo-99/Tc-99m 147 Figure 5.55: Global Market for Mo-99 by Geography/Country, Figure 5.56: Global Demand for Tc-99m (48 Million Doses/Year), Figure 5.57: Composition of Nuclear Medicine Procedures Utilizing Tc-99m 152 Figure 5.58: Global Demand for Mo-99 and Tc Figure 5.59: U.S. FDG Sales, Figure 5.60: U.S. Sales of Diagnostic Radiopharmaceuticals, Figure 5.61: U.S. PET Procedure Volume Increase, Figure 5.62: U.S. Sales of Fluorodeoxyglucose (FDG), Figure 5.63: U.S. Export Share in Radioisotopes by Major Markets, Figure App. 2.1: Number of Global Nuclear Medicine Procedures Using for 99mTC/99Mo, Figure App. 2.2: Growth of 99Mo Requirements, Figure App. 2.7: Quantity of 99Mo Delivered to End-Users by Geography, Figure App. 2.8: Regional Shares of Reactor Production of 99Mo, Figure App. 2.9: Regional Shares of Reactor Production and Requirements of 99Mo, Figure App. 2.10: Regional Shares of Reactor Production and Requirements of 99Mo, Figure App. 5.1: Types of Nuclear Medicine Procedures that Can be Done Using Tc-99m 211 Figure App. 5.2: The basic linear supply chain for Tc-99m 212 Figure App. 5.3: North American Supply Chain for Tc-99m 213 Figure App. 5.4: Global Supply Chains for Tc-99m 214 Figure App. 5.5: Global Market Share by Reactor for Tc-99m 214 Figure App. 6.1: Growth in Allowed Services and Allowed Charges for Advanced Imaging Paid Under the MPFS, 1995 to Figure App. 6.2: Percentage of Total Growth in Allowed Services by Imaging Modality, 1995 to Figure App. 6.3: Percentage of Total Growth in Allowed Charges by Imaging Modality, 1995 to Figure App. 6.4: Growth in Advanced Imaging Utilization Rates, 1995 to INDEX OF TABLES Table 2.1: Comparison of PET with Other Imaging Modalities 27 Table 2.3: Average Adult PET and PET/CT Scan Times 33 Table 2.4: Applications of PET in Oncology 35 Table 3.1: Applications of PET in Cardiology 40 Table 3.2: Characteristics of SPECT vs. PET in Cardiac Imaging 45 Table 3.3: List of Common PET Tracers Used in the Evaluation of Neurological Disorders 52 Table 4.1: Common PET Radioisotopes 55 Table 4.2: Examples of PET Radiopharmaceuticals 55 Table 4.3: Estimated Radiation Dose with Intravenous Administration of FDG in a 70-kg Patient 56 Table 4.4: PET Radiopharmaceuticals: Their Applications, Mechanisms of Uptake and Localizations 59 Table 4.5: FDA-Approved Radiopharmaceuticals as of August 3, Table 5.1: U.S. PET Locations and Exams TriMark Publications, LLC. All rights reserved 9

10 Table 5.2: Utilization by Payment Type in Finger Lake Region, Table 5.3: Effect of Coverage Changes on Oncologic Uses of FDG PET 105 Table 5.4: Volume Outlook for Outpatient Imaging, Table 5.5: Medicare Reimbursement for PET Procedures 109 Table 5.6: Publicly Funded PET Scanners in Canada, Table 5.7: Funding for PET Scans (Period prior to October 1, 2009) 112 Table 5.8: Alberta Indications 113 Table 5.9: Estimated Ontario New Cancer Cases, Table 5.10: Publicly Funded PET Scanners in Ontario Table 5.11: Approved International Indications for Clinical Use of 18F-FDG 116 Table 5.12: Availability of Publicly Funded Clinical PET Scanning in Canada 116 Table 5.13: European PET, PET/CT, PET/NM Installations 119 Table 5.14: Typical Radiation Doses 123 Table 5.15: PET Scanning Facilities in Europe 129 Table 5.16: PET Scanning Facilities in England 130 Table 5.17: Typical Radiation Doses 131 Table 5.18: Capital Costs for a PET Center with a Distant Supply of Tracer 132 Table 5.19: Staff Costs per Annum for Imaging with a Distant Supply of Tracer 132 Table 5.20: Fixed Costs per Annum for Imaging with a Distant Supply of Tracer 133 Table 5.21: Variable Costs per Annum for Imaging with a Distant Supply of Tracer 133 Table 5.22: Total Capital Scanning Costs for Imaging and Radiotracer Production Facility 134 Table 5.23: Capital Costs for Full Production of Radiotracer within an Imaging and Full Production of Tracer Facility 134 Table 5.24: Staff Costs per Annum for an Imaging and Full Production of Tracer Facility 136 Table 5.25: Staff Costs for the Cyclotron and Radiochemistry Within an Imaging and Full Production of Tracer Unit 137 Table 5.26: Fixed Radiotracer Production Costs 137 Table 5.27: Variable Scanning Costs 137 Table 5.28: Radiotracer Production Variable Costs 138 Table 5.29: Medical Cyclotrons in India 140 Table 5.30: PET/CT Scanner Profile in India 141 Table 5.31: PET/CT Scanners by Number of Slices in India 141 Table 5.32: Major current 99Mo producing reactors 145 Table 5.33: Characteristics of Positron Emitting Tracers Used in PET Perfusion Imaging 146 Table 5.34: Worldwide Production Capacity of 99Mo, Table 5.35: Small Scale Production of 99Mo, Table 5.36: Nuclear Medicine Procedures that Use Tc-99m 154 Table 5.37: Radiopharmaceuticals of Clinical Use in Europe 157 Table 5.38: Useful Radionuclides for Molecular Imaging 158 Table 5.39: U.S. Shipments, Consumption and Trade of Radioisotopes 161 Table 5.40: U.S. Exports, Imports and Trade Balance by Selected Countries, Table 5.41: U.S. Imports of Radioisotopes for Consumption, Table 6.1: Actinium s Product Pipeline 165 Table App. 1.1: Global Reactor Landscape 194 Table App. 1.2: Global Share of Nuclear Medicine by Reactor, Table App. 2.1: Radionuclides for Which Supply is Believed to be in Jeopardy in Table App. 3.1: Imaging Properties of PET Crystals 203 Table App. 3.2: Average adult PET and PET/CT Scan Times 204 Table App. 3.3: Common PET Radioisotopes 205 Table App.3.4: Examples of PET Radiopharmaceuticals 205 Table App. 4.1: Research Reactors Producing Radioisotopes 207 Table App. 4.2: Estimated Worldwide Value of Radioisotope Production 210 Table App. 6.1: Ten Most Frequently Billed Advanced Imaging Procedure Codes, Table App. 6.2: Growth in Allowed Charges for Imaging Under the MPFS by Year, Table App. 6.3: CT Services Billed Under the MPFS by Provider Specialty, Table App. 6.4: PET Services Billed Under the MPFS by Provider Specialty, TriMark Publications, LLC. All rights reserved 10

11 1. Overview The medical imaging segments are poised for a major new phase of growth fueled by the availability of new technology coming out of the computer and digital information technology segment. Continuous improvements in technology are resulting in a growing number of new imaging tests that combine high levels of accuracy with rapid, easy-to-use product formats. Part of that medical imaging improvement is coming from positron emission tomography (PET). PET is a scanning technique used in combination with small amounts of radio-labeled compounds to visualize the anatomy and function of the brain. The purpose of this TriMark Publications report is to describe the specific market segment of the diagnostics medical imaging market called PET scanning. This sector includes all of the generally accepted imaging activities that are currently used in PET, including equipment for PET, PET/CT, SPECT and the use of radiopharmaceuticals for imaging. It examines these clinical measurement devices and their reagents and supplies as used in hospitals and clinics. It also reviews associated clinical market segments in which PET scanning has taken a prominent role including cancer treatment, cardiology, and neurology imaging markets. PET scanning is the fastest growing medical imaging modality in the U.S. as well as the European and other developing regions of the world. Its principal role has been in oncology, where it has an increasing role in diagnosis, the monitoring of treatment or the progression of disease and in the staging of patients for radiation therapy. Most of the oncology PET procedures are now reasonably reimbursed under Medicare and by insurance companies. Research has proved the effectiveness of diagnostic applications in cardiology and neurology and reimbursement as clinical procedure is expected soon. Growth of the PET market from its clinical beginnings in the early 1990s has been rather impressive, but it has been hindered by the non-availability of the radiopharmaceutical required for imaging. As the physical half life of 18 F (FDG) is short (110 minutes) and as it has to be generated using a particle accelerator (e.g., cyclotron), each PET scanner is required to be in close proximity to a commercial PET radiopharmaceutical manufacturing facility that costs $2 million to $4 million to construct. Consequently, clinical PET is usually available only in big cities where a radiopharmaceutical manufacturing facility can offer its radioisotope to a minimum of four or five PET scanners. Commercial PET radiopharmaceutical manufacturing, and to some extent PET scanning itself is not a profitable business in a geographical region with an accessible population of less than 500,000. The recent PET scanners available in the market are made up of a large number of detectors arranged on numerous rings and are able to identify pairs of 511 KeV photons emitted at 180 to each other which are formed following the annihilation of a positron when it meets an electron. In a PET/CT hybrid scanner, the PET and CT tomographs are placed in a single gantry with a single patient bed and workstation. PET/CT scanners can also be used either as a dedicated PET scanner or as a dedicated CT scanner. On reconstruction, both the PET images and the CT images can be viewed side by side and overlaid. PET/CT brings together functional (PET) and structural (CT) information into a single scanning session, enhancing lesion localization and interpretation accuracy. Presently, PET/CT is the most advanced technique of metabolic imaging and the most efficient tool for tumor staging in the pretreatment, post-treatment and follow-up phases. Technological improvements of PET/CT scanners are anticipated in the near future with an improvement in the efficiency of detector crystals, the spatial resolution and a reduction in acquisition times of the emission images. 1.1 Scope of This Report The main objectives of this report are to: Identify viable technology drivers through a comprehensive look at various platform technologies for PET. Obtain a complete understanding of the use of PETpredictive, screening, prognostic, diagnostic and monitoringfrom its basic principles to its applications TriMark Publications, LLC. All rights reserved 11

12 Discover feasible market opportunities by identification of high-growth applications in different imaging areas, with a focus on the biggest and expanding markets for PET. Focus on global industry development of PET through an in-depth analysis of the major world markets for medical imaging, including forecasts for growth. Establish the essentials of the PET imaging market including definitions, processes and trends. Market figures regarding the current value of the medical imaging market are taken from the most recently available data of the global medical products industry. This report covers the following categories of medical imaging: PET. PET/CT (computed tomography) combinations. SPECT (single-photon emission computed tomography). Radiopharmaceutical imaging. Analysis of PET scanning includes the use of charts and graphs measuring product growth and trends within the marketplace. In addition, a discussion of research into the medical imaging arena provides the reader with a deeper understanding of the possibilities for future treatment and avenues for possible R&D budgets. Company-specific information, including sales figures, product pipeline status, and research and development trends, is provided throughout the report. The study will: Assess the PET market drivers and bottlenecks, from the perspective of the medical and scientific communities. Discuss the potential benefits of the PET market for various sectors of the medical and scientific community. Establish the current total market size and future growth of the PET market and analyze the current size and growth of various segments. Provide current and forecasted market shares by company. Discuss profit/business opportunities by imaging segment. Provide strategic recommendations for near-term business opportunities. Assess current commercial uses of the PET technology platforms. Review the PET business models. PET products consist of hardware, software and supplies used to create, view and manage visual images of non-visible organs of the human body for purposes of research, diagnosis and guidance of non-invasive surgery. This report will focus on end-user markets including hospitals, research facilities, freestanding clinics and equipment-leasing companies. In the past few years, several multimodal products have been developed in an attempt to combine the advantages of structural and functional imaging. Multimodal combinations discussed in this study include: CT/SPECT units. CT/PET units. The emphasis in this analysis is on those companies that are actively developing and marketing PET technologies. The reader should consult other TriMark reports at for a detailed discussion of the other important individual market segments that are related to the medical imaging markets, such as X-ray and radiography, mammography, magnetic resonance imaging (MRI), ultrasound, gamma camera market, computed tomography (CT) scans, and picture archiving and communication systems (PACS). This report concentrates on the medical imaging market segment in important worldwide markets such as the U.S. and Europe. It focuses primarily on the hospital market segment, and, separately, on a description of the instruments, reagents and supplies marketed by major companies in the PET segment. The analysis discusses the market size, growth rates and market components for instruments and reagents, controls and consumables used in PET, with mention of contrast media and biopharmaceuticals used to enhance imaging 2011 TriMark Publications, LLC. All rights reserved 12

13 resolution. This study reviews the market for medical imaging in the clinical and research hospital market. It defines the dollar volume of sales of the market, both worldwide and in the U.S., and analyzes the factors that influence the size and the growth of the market segments. The report discusses activity and trends in the PET market and goes on to discuss in detail the trends that have stimulated this market. This analysis also comments on the patterns of information processing in the PET market. It surveys all of the companies known to be marketing, manufacturing or developing PET equipment in the U.S. and worldwide. Leading companies are discussed in depth with a section on the history of the company, the product line, business and marketing analysis, and a subjective commentary of the position of the company in its market. 1.2 Methodology The author of this report is a Ph.D. in biochemistry from the University of Minnesota with many decades of experience in science writing and as a medical industry analyst. He has been a senior director of several large regional and national healthcare laboratories. The editor is a retired college professor with three decades of experience in teaching biochemistry, biotechnology and pharmacology. Company-specific information is obtained mainly from industry trade publications, academic journals, news and research articles, press releases and corporate websites, as well as annual reports for publicly-held firms. Additionally, important data sources include American Hospital Association (AHA), American College of Radiology (ACR), World Health Organization (WHO), National Cancer Institute, American Cancer Society (ACS), International Atomic Energy Agency (IAEA), Journal of Nuclear Medicine and Technology (JNMT), Biomedical Imaging and Intervention Journal, International Academy of Cardiovascular Sciences and Medical Imaging & Technology Alliance (MITA). Where possible and practicable, the most recent data available have been used. Some of the statistical information was taken from Biotechnology Associates databases and from TriMark s private data stores. The information in this study was obtained from sources that TriMark believes to be reliable, but do not guarantee the accuracy, adequacy or completeness of any information or omission or for the results obtained by the use of such information. Key information from the business literature was used as a basis to conduct dialogue with and obtain expert opinion from market professionals regarding commercial potential and market sizes. Primary Sources TriMark collects information from hundreds of Database Tables and many comprehensive multi-client research projects and Sector Snapshots that we publish annually. We extract relevant data and analytics from TriMark s research in the past three years as part of this data collection. We also extract qualified data feeds from e-questionnaire responses and primary research responses for this compilation. Secondary Sources TriMark uses research publications, journals, magazines, newspapers, newsletters, industry reports, investment research reports, trade and industry association reports, government affiliated trade releases, and other published information as part of its secondary research materials. The information is then analyzed and translated by the Industry Research Group into a TriMark study. The Editorial Group reviews the complete package with product and market forecasts, critical industry trends, threats and opportunities, competitive strategies and market share determinations. The report conclusions are verified through intensive interviewing of the top-ranking companies in the industry TriMark Publications, LLC. All rights reserved 13

14 TriMark Publications Report Research and Data Acquisition Structure The general sequence of research and analysis activity prior to the publication of every report in TriMark Publications includes the following items: Completing an extensive secondary research effort on an important market sector, including gathering all relevant information from corporate reporting, publicly-available data and proprietary databases. Formulating a study outline with the assigned writer, including important items, as follows: Market and product segment grouping, and evaluating their relative significance. Key competitors evaluations, including their relative positions in the business and other relevant facts to prioritize diligence levels and assist in designing a primary research strategy. End-user research to evaluate analytical significance in market estimation. Supply chain research and analysis to identify any factors affecting the market. New technology platforms and cutting-edge applications. Identifying the key technology and market trends that drive or affect these markets. Assessing the regional significance for each product and market segment for proper emphasis of further regional/national primary and secondary research. Completing a confirmatory primary research assessment of the report s findings with the assistance of expert panel partners. 1.3 Executive Summary There will be a steady increase in demand for PET services as resolution improves and PET is combined with other modalities like CT. The medical imaging segments are poised for a major new phase of growth fueled by the availability of new technology coming out of the computer and digital information technology segment. Continuous improvements in technology are resulting in a growing number of new imaging tests that combine high levels of accuracy with rapid, easy-to-use product formats. Another major driver is the high interest of individual older baby boom patients and general healthcare consumers to monitor health status. Competition in the development and marketing of PET products is intense, and these diagnostic technologies have been subject to rapid change. We estimate that the competitive factors in the PET market include resolution, price and product performance as well as the distribution, advertising, promotion and brand-name recognition of the marketer. There are relatively few large, dominant global players selling PET equipment; these are matched by many small companies with a few or one product aiming at niche markets. A relative handful of firms led by GE Medical Systems, Philips Medical Systems International BV and Siemens Medical Solutions dominate the world medical imaging equipment market. However, due to the broad technology underlying the various forms of medical imaging, there are many other companies that perform very well in this sector, such as: Carestream Health, Inc. (U.S.). Fonar Corporation (U.S.). Hitachi Medical Systems America, Inc. (U.S.). Hologic, Inc. (U.S.). Medison America, Inc. (U.S.). The Esaote Group (Italy). TomTec Imaging Systems GmbH (Germany). Toshiba America Medical Systems (U.S.) TriMark Publications, LLC. All rights reserved 14

15 With the development of combined PET/CT devices, the market for PET scanners has decreased as it has increased for PET/CT scanners. The number of commercial facilities providing FDG has increased and the number of doses of FDG provided per facility has increased. PET/CT scanners continue to improve, and provide better quality images in shorter acquisition times. The PET/CT scanners have resulted in the capability of doing more patients per day than could be done by PET alone devices. Because of the reimbursement and the rapid expansion of clinical indications, the PET market grew rapidly. Most metropolitan areas in the U.S. have ready access to FDG and back-up production sites are generally available to provide FDG if a primary site has a problem. PET became a billion dollar industry as early as in The current new sales are 94% PET/CT, with very few PET alone devices being sold. The reasons that PET only systems were being bought in recent years are the following: software image fusion can provide registration of the PET with CT or MRI images; CT adds from $600,000 to $1,000,000 to the cost of the device. The reasons that combined PET/CT devices are being bought are the following: noise-free attenuation correction; short duration transmission scans; shorter duration scans and faster patient throughput; anatomic lesion localization; potential added revenue from CT; competition factor (having the newest and best); adjunct to already established CT service (additional CT access); and improved registration, not only for diagnostic purposes but also for use with radiation oncology for radiation therapy planning and intensity-modulated radiation therapy. The efficacy of dedicated PET and PET/CT scanners depends on the type of scintillation crystal employed in the detector and the crystal oxyorthosilicates was the clear winner in For Siemens, over half of its orders in 2010 were for scanners with the LSO (lutetium oxyorthosilicate) crystal. For Philips Medical Systems, its proprietary GSO (gadolinium oxyorthosilicate) offers improved throughput and image quality by allowing more counts than BGO (bismuth germanate) and sodium iodide, the older, established crystal technologies. Philips and Siemens provide PET scanners with BGO scintillators as lower cost recourse to their premium systems. Philips Allegro and Siemens Ecat Accel are built from fast scintillators, as the wave of the future. These manufacturers, along with CTI Molecular Imaging, see a chance to gain not only revenue but a marketing edge over rival GE Medical Systems. That edge is achievable for both dedicated PET and PET/CT scanners, because GE s PET systems use only BGO. The collaboration between CTI and Siemens, called CTI PET Systems (CPS) provides both companies with LSO-based detectors. CTI announced booming sales in 2010, mostly due to the increasing popularity of LSO. Siemens sales outperforms those of CTI mainly because of Siemens name recognition and its well-established distribution channels in radiology. Speed is responsible for the growing popularity of LSO and GSO. These two crystals, after emitting a flash of light, become ready to emit another flash in about 60 nanoseconds. BGO needs a period five times as long. The time required for an imaging is thus much shorter for GSOand LSO-based systems than those built around BGO. The global market for PET/CT is on the upswing as PET s clinical use continues to attract global recognition. The hybrid PET/CT is increasing PET s functionality with radiologists, enabling the images easier to interpret in a familiar format. Growth in number of procedures is also increasing mainly due to approvals of indications such as breast imaging and increased utilization of PET in detecting lung cancer, colon cancer, lymphoma and melanoma. The major application of PET is only in oncology and yet, utility in cardiology applications is expanding in diagnosing myocardial viability and follow-up to equivocal SPECT studies. Procedure volume is also being propelled by the availability of PET/CT with multislice configurations appropriate for cardiac imaging. The quick adoption of PET/CT has increased the financial pressure on PET service providers and as a result they are trying to offset the high capital investment with billable procedures. This has generated unprecedented competition for PET referrals. PET/CT has been accepted very quickly both in the U.S. and internationally. Vendors have geared up for higher shipments in the U.S., anticipating sales growth. The cost of PET scanners has declined to an average price of $1.8 million to $1.9 million per scanner. TriMark s research reveals that the global sales of PET systems will increase from about $763 million in 2010 to $1.4 billion by According to the market projection by PlanClear Company, the number of PET cameras globally will increase from a mere 640 in 2011 to 6,800 in TriMark estimates that the U.S. market for PET systems was worth about $757.5 million in 2010 and it is anticipated to reach $1.6 billion in TriMark s research also reveals that, in the U.S. there were approximately 164 PET units and this number is likely to increase to 322 units in TriMark Publications, LLC. All rights reserved 15