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Imaging3 (IMGG.OB) is learning an important, if painful, lesson: A picture really is worth a thousand words.
IMGG has been trying for years to secure regulatory clearance for a new device that, it says, can produce real-time 3D images that will revolutionize the practice of medicine. Now that yet another projected date for approval of the device has passed without results, however, investors are starting to ask a very basic question. Specifically, they want to know why IMGG has failed to share the remarkable images that its device is supposed to be capable of delivering.
Other than a few promotional images featured on its website, critics say, IMGG has offered limited evidence that its technology actually works.
IMGG missed a prime opportunity to showcase its best images last month, when the company displayed its new device – known as the Dominion Vi Scanner – at the annual conference hosted by the Radiological Society of North America. After promising investors that it would bring new images to the conference, which ranks as the largest industry event of its kind, the company showed up less than a month later with old images instead.
Radiologists apparently noticed, sharing their disappointment with a fellow physician who owns stock in the company. When that shareholder voiced some concerns during IMGG’s latest conference call, held on Dec. 9, the company set off alarms with its response.
“We did take some new 3D images, but they were not all that great,” CEO Dean Janes told the physician. “The display machine couldn’t house what we wanted to show.”
For some, that explanation raised serious questions. Why, they wondered, would IMGG show up at the RSNA show – the premiere event for showcasing radiological devices – armed only with images that were either outdated or too poor to share? After all, they reasoned, the company had supposedly spent years perfecting its device and the images it could create.
Seeking reassurance, they asked IMGG to post new images on its website so they could see them for themselves. Although IMGG had offered to do just that ahead of the RSNA conference, however, the company wound up backing away from that plan – with a curious excuse – in the end.
“We believe we’re so close with the FDA (Food and Drug Administration) that we don’t want to change our marketing, including our website, to throw it off,” Janes stated when asked for the images during the company’s recent conference call. “I just don’t want to rock the boat; I really don’t … We’ll put those up as soon as we can – when we have FDA approval.”
With IMGG still waiting for that regulatory clearance, the company has seen its stock plummet from $1.20 to 90 cents a share – losing 25% of its value – in the meantime.
Mixed Messages
Seeking answers, The Street Sweeper decided to search for clues about IMGG – and the company’s missing images -- on its own. It started at the beginning, way back in 1993, when Janes first established the company that would eventually become IMGG.
Janes launched that company “out of the back of his car,” the San Fernando Valley Business Journal reported, originally remanufacturing medical equipment sold by other companies. After succeeding at that endeavor, the business journal said, Janes decided to branch out in 2002 by creating his very own medical device.
The previous year, Janes had successfully navigated through the FDA’s 510(k) clearance process to win approval for an updated version of an imaging device made by another manufacturer. He has since claimed to clear other devices through the 510(k) process – a record that impresses IMGG investors – although Internet searches reveal only one FDA approval in his name.
Meanwhile, by the time Janes managed to take IMGG public in late 2005, another medical company had already won FDA approval for a device that sounds remarkably similar to the Dominion scanner. In May of 2005, Breakaway Imaging – a private company financed by prominent spine surgeons – announced that it had secured 510(k) clearance to sell its “O-Arm” imaging system. Medtronic (MDT), an industry leader in the medical device space, began marketing Breakaway’s scanner later that year before going on to purchase the entire company in April of 2007.
Notably, when Medtronic first announced plans to distribute the O-Arm, it described the imaging system as “the only approved platform that provides surgeons with real-time 3D images” in the country. IMGG has portrayed its own device as the only scanner capable of producing real-time 3D images as well.
By now, IMGG has been touting the Dominion’s “unique” capabilities for years. After going public in December of 2005, IMGG spent much of 2006 publicizing media reviews of the Dominion – back when the device was still in development – before finally unveiling a prototype of the scanner at RSNA’s big annual conference that November.
At first, IMGG simply said that its new device had been “well-received” at the conference. A week later, however, IMGG issued a new press release with much stronger claims – saying that its scanner was “greeted with interest usually reserved for a rock band” – at the big industry trade show.
“With the prototype of our Dominion imaging device operating in real time, our booth was packed from the time the show opened until it closed every day,” IMGG gushed in that follow-up press release three years ago. “We were visited by hospitals from throughout the country, and we have come away with indications of interest from multiple facilities throughout the U.S. who are looking to become ‘luminary’ sites for the next stage in our product testing and development … These luminary sites are an important step toward achieving market success for the company.”
IMGG then went on to predict that the luminary sites would start using the scanner in late 2007, “following FDA approval” of the device.
Less than three months later – before IMGG had even submitted its FDA application – the company announced that it had already closed a deal with Oregon Health & Science University to serve as a luminary site for the device. IMGG portrayed OHSU as “the first of numerous planned luminary sites for the company’s Dominion device,” although it never announced another.
Meanwhile, Janes has sent conflicting messages about even the OHSU deal. In a mid-2007 message posted in a chat room hosted by InvestorsHub (which Janes recently identified as his favorite message board for IMGG’s stock), he clearly stated that OHSU would not take delivery of its Dominion scanner until after the FDA cleared the device for sale. About one year later, however, Janes reappeared in the same chat room with a message stating that OHSU had “stepped up to buy” one of the scanners already.
Janes has since indicated that such a transaction, inked before FDA clearance of the device, would be illegal.
“I could sell it,” he stated during the company’s Dec. 9 conference call. “But then the government would arrest me.”
Sweet Nothings
During its long wait for FDA approval, IMGG has looked elsewhere for validation of its device. The company found reason to celebrate about two years ago.
With obvious pride, IMGG announced in early 2008 that it had won the “North American Medical Imaging Product Innovation of the Year” award given by Frost & Sullivan. The company promised to “proudly display” the new prize for all of its employees (a staff of nine) and visitors to see.
Two years earlier, another healthcare company had rejected a similar award altogether. The company, Promega, said it would not accept the prize because Frost & Sullivan wanted payment for an “award license” in return.
“We clearly regard the fact that the publication of obtaining a prize is associated with costs for the prize-winner as ethically questionable,” Promega CEO Peter Quick stated at the time. “We find that this equals an invitation to corrupt behavior.”
By the end of 2008, IMGG was paying “MoneyTV” – a show run by a past target of securities regulators – for publicity as well. (Click here for more details.) In November of that year, the company appeared on the show two times in as many weeks to promote its upcoming participation in RSNA’s annual conference in Chicago.
“This is our fifth year exhibiting at RSNA,” Janes stated in a press release issued just two years after IMGG completed the first prototype of its device. “The images we will unveil in Chicago this year will be dramatic, and as a result, we expect to garner significant interest from both attendees and exhibitors alike.”
As expected, IMGG investors interpreted “attendees” as future Dominion customers and “exhibitors” as possible buyers for the entire company. But another year passed without the FDA clearance that might lead to such transactions. Last month, after IMGG showed up at the RSNA conference without FDA clearance for its device – or even updated images produced by the scanner – some investors clearly started to wonder.
They are now asking a series of troubling questions. Specifically, they wonder, why have no physicians publicly endorsed the Dominion, testified about its capabilities or published scientific articles about its results? And why has IMGG itself failed to show the scanner in action and, ultimately, deliver the actual 3D images created by the device?
After all, they note, Janes has readily acknowledged the importance of those pictures himself. For proof, they say, just look at Janes’ own words.
“Our goal is imagery that defines what our product does and how it will impact the average person’s life,” Janes stated in an online message more than two years ago. “They say a picture is worth 1,000 words – and that couldn’t be more true with our product.”
* To contact Melissa Davis, the author of this story, please send an email to editor@thestreetsweeper.org.
Imaging3 (IMGG.OB) is learning an important, if painful, lesson: A picture really is worth a thousand words.
IMGG has been trying for years to secure regulatory clearance for a new device that, it says, can produce real-time 3D images that will revolutionize the practice of medicine. Now that yet another projected date for approval of the device has passed without results, however, investors are starting to ask a very basic question. Specifically, they want to know why IMGG has failed to share the remarkable images that its device is supposed to be capable of delivering.
Other than a few promotional images featured on its website, critics say, IMGG has offered limited evidence that its technology actually works.
IMGG missed a prime opportunity to showcase its best images last month, when the company displayed its new device – known as the Dominion Vi Scanner – at the annual conference hosted by the Radiological Society of North America. After promising investors that it would bring new images to the conference, which ranks as the largest industry event of its kind, the company showed up less than a month later with old images instead.
Radiologists apparently noticed, sharing their disappointment with a fellow physician who owns stock in the company. When that shareholder voiced some concerns during IMGG’s latest conference call, held on Dec. 9, the company set off alarms with its response.
“We did take some new 3D images, but they were not all that great,” CEO Dean Janes told the physician. “The display machine couldn’t house what we wanted to show.”
For some, that explanation raised serious questions. Why, they wondered, would IMGG show up at the RSNA show – the premiere event for showcasing radiological devices – armed only with images that were either outdated or too poor to share? After all, they reasoned, the company had supposedly spent years perfecting its device and the images it could create.
Seeking reassurance, they asked IMGG to post new images on its website so they could see them for themselves. Although IMGG had offered to do just that ahead of the RSNA conference, however, the company wound up backing away from that plan – with a curious excuse – in the end.
“We believe we’re so close with the FDA (Food and Drug Administration) that we don’t want to change our marketing, including our website, to throw it off,” Janes stated when asked for the images during the company’s recent conference call. “I just don’t want to rock the boat; I really don’t … We’ll put those up as soon as we can – when we have FDA approval.”
With IMGG still waiting for that regulatory clearance, the company has seen its stock plummet from $1.20 to 90 cents a share – losing 25% of its value – in the meantime.
Mixed Messages
Seeking answers, The Street Sweeper decided to search for clues about IMGG – and the company’s missing images -- on its own. It started at the beginning, way back in 1993, when Janes first established the company that would eventually become IMGG.
Janes launched that company “out of the back of his car,” the San Fernando Valley Business Journal reported, originally remanufacturing medical equipment sold by other companies. After succeeding at that endeavor, the business journal said, Janes decided to branch out in 2002 by creating his very own medical device.
The previous year, Janes had successfully navigated through the FDA’s 510(k) clearance process to win approval for an updated version of an imaging device made by another manufacturer. He has since claimed to clear other devices through the 510(k) process – a record that impresses IMGG investors – although Internet searches reveal only one FDA approval in his name.
Meanwhile, by the time Janes managed to take IMGG public in late 2005, another medical company had already won FDA approval for a device that sounds remarkably similar to the Dominion scanner. In May of 2005, Breakaway Imaging – a private company financed by prominent spine surgeons – announced that it had secured 510(k) clearance to sell its “O-Arm” imaging system. Medtronic (MDT), an industry leader in the medical device space, began marketing Breakaway’s scanner later that year before going on to purchase the entire company in April of 2007.
Notably, when Medtronic first announced plans to distribute the O-Arm, it described the imaging system as “the only approved platform that provides surgeons with real-time 3D images” in the country. IMGG has portrayed its own device as the only scanner capable of producing real-time 3D images as well.
By now, IMGG has been touting the Dominion’s “unique” capabilities for years. After going public in December of 2005, IMGG spent much of 2006 publicizing media reviews of the Dominion – back when the device was still in development – before finally unveiling a prototype of the scanner at RSNA’s big annual conference that November.
At first, IMGG simply said that its new device had been “well-received” at the conference. A week later, however, IMGG issued a new press release with much stronger claims – saying that its scanner was “greeted with interest usually reserved for a rock band” – at the big industry trade show.
“With the prototype of our Dominion imaging device operating in real time, our booth was packed from the time the show opened until it closed every day,” IMGG gushed in that follow-up press release three years ago. “We were visited by hospitals from throughout the country, and we have come away with indications of interest from multiple facilities throughout the U.S. who are looking to become ‘luminary’ sites for the next stage in our product testing and development … These luminary sites are an important step toward achieving market success for the company.”
IMGG then went on to predict that the luminary sites would start using the scanner in late 2007, “following FDA approval” of the device.
Less than three months later – before IMGG had even submitted its FDA application – the company announced that it had already closed a deal with Oregon Health & Science University to serve as a luminary site for the device. IMGG portrayed OHSU as “the first of numerous planned luminary sites for the company’s Dominion device,” although it never announced another.
Meanwhile, Janes has sent conflicting messages about even the OHSU deal. In a mid-2007 message posted in a chat room hosted by InvestorsHub (which Janes recently identified as his favorite message board for IMGG’s stock), he clearly stated that OHSU would not take delivery of its Dominion scanner until after the FDA cleared the device for sale. About one year later, however, Janes reappeared in the same chat room with a message stating that OHSU had “stepped up to buy” one of the scanners already.
Janes has since indicated that such a transaction, inked before FDA clearance of the device, would be illegal.
“I could sell it,” he stated during the company’s Dec. 9 conference call. “But then the government would arrest me.”
Sweet Nothings
During its long wait for FDA approval, IMGG has looked elsewhere for validation of its device. The company found reason to celebrate about two years ago.
With obvious pride, IMGG announced in early 2008 that it had won the “North American Medical Imaging Product Innovation of the Year” award given by Frost & Sullivan. The company promised to “proudly display” the new prize for all of its employees (a staff of nine) and visitors to see.
Two years earlier, another healthcare company had rejected a similar award altogether. The company, Promega, said it would not accept the prize because Frost & Sullivan wanted payment for an “award license” in return.
“We clearly regard the fact that the publication of obtaining a prize is associated with costs for the prize-winner as ethically questionable,” Promega CEO Peter Quick stated at the time. “We find that this equals an invitation to corrupt behavior.”
By the end of 2008, IMGG was paying “MoneyTV” – a show run by a past target of securities regulators – for publicity as well. (Click here for more details.) In November of that year, the company appeared on the show two times in as many weeks to promote its upcoming participation in RSNA’s annual conference in Chicago.
“This is our fifth year exhibiting at RSNA,” Janes stated in a press release issued just two years after IMGG completed the first prototype of its device. “The images we will unveil in Chicago this year will be dramatic, and as a result, we expect to garner significant interest from both attendees and exhibitors alike.”
As expected, IMGG investors interpreted “attendees” as future Dominion customers and “exhibitors” as possible buyers for the entire company. But another year passed without the FDA clearance that might lead to such transactions. Last month, after IMGG showed up at the RSNA conference without FDA clearance for its device – or even updated images produced by the scanner – some investors clearly started to wonder.
They are now asking a series of troubling questions. Specifically, they wonder, why have no physicians publicly endorsed the Dominion, testified about its capabilities or published scientific articles about its results? And why has IMGG itself failed to show the scanner in action and, ultimately, deliver the actual 3D images created by the device?
After all, they note, Janes has readily acknowledged the importance of those pictures himself. For proof, they say, just look at Janes’ own words.
“Our goal is imagery that defines what our product does and how it will impact the average person’s life,” Janes stated in an online message more than two years ago. “They say a picture is worth 1,000 words – and that couldn’t be more true with our product.”
* To contact Melissa Davis, the author of this story, please send an email to editor@thestreetsweeper.org.
