Market Insight

Flat panel detector powerhouse Varex Imaging to acquire photon counting technology ambassadors Direct Conversion

March 26, 2019

Bhvita Jani Bhvita Jani Analyst, Healthcare Technology, IHS Markit
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Varex Imaging Corporation has recently announced plans to acquire Sweden based Direct Conversion. Direct Conversion leads innovation within the detector market with its photon counting technology and linear array digital detectors.

Photon counting is the next generation flat panel detector (FPD) technology offering benefits of improved image quality with a lower dose administration. Photon counting technology has had slow adoption within the flat panel detector market with the higher associated costs being an initial barrier . However, Direct Conversion has successfully commercialized this technology with its current portfolio including: XC- THOR, XC- HYDRA, XC-TDI, XC- ACTAEON.

Development of the flat panel market

The FPD market is becoming more commercialized and consumer focused, with end-users purchasing detectors not just through system manufacturers but also directly through panel suppliers. As a result, the look and feel, ergonomics and usability are key considerations of purchasing decisions, in addition to the quality of images and dose optimization capabilities of detectors.

The added benefits of higher patient throughput, enhanced image quality and lower dose administration will be key factors facilitating uptake of photon counting technology within the high end flat panel detector market.

Price is becoming the most important factor

As traditional technology matures within the FPD market, the average selling price (ASP) of FPD technology is continuing to descend. This is driven by pricing pressure and increased competition, particularly at the lower end of the market, as well as the reduction in manufacturing cost and components. Flat panel detector systems are becoming more affordable and accessible to healthcare facilities. Reduced ASPs are propelling uptake of FPD X-ray systems and facilitating the digitalization of the X-ray market.

Margins amongst multi-national FPD manufacturers are being threatened by heightened pricing pressures as a result of increased presence and emergence of Asian FPD manufacturers. In response, many traditional medical FPD manufacturers have now diversified their portfolios and are setting foot in the industrial FPD market. Despite this market being niche, the wave of digitalization is yet to come, offering opportunity for those active in the market. With Varex’s acquisition of Direct Conversion, both its industrial and medical FPD portfolio will be strengthened.

Varex Imaging’s position is likely to be strengthened further

There are a number of long-standing partnerships between some of the largest X-ray system manufacturers and a number of the larger panel suppliers. These deals make it more difficult for less established panel suppliers to displace their larger competitors in the FPD market. Therefore, the expectation is that by combining Varex Imaging’s market leading position within the flat panel detector market with Direct Conversion’s photon counting portfolio, adoption of this technology will be fueled with Varex’s strong established network of global X-ray system manufacturers.

 

Research by Market
Healthcare Technology
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