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Diagnostic imaging

SonoSite buys innovative Canadian ultrasound company

TORONTO and BOTHELL, Wash. – SonoSite, Inc., a Bothell, Wash.-based company that’s a leader in bedside and point-of-care ultrasound, announced it has acquired privately held VisualSonics, a Toronto-based company focused on ultra high-frequency micro-ultrasound technology, for US$67.9 million.

“This acquisition positions SonoSite for long-term growth in the pre-clinical and clinical point-of-care markets and enables the creation of potential breakthrough imaging products for both market spaces,” said Kevin M. Goodwin, SonoSite President and CEO. “With unmatched ultra high-frequency technology, which operates at five times the centre frequency of a conventional ultrasound, VisualSonics’ micro-imaging technology has the potential to revolutionize clinical medicine and continue to transform pre-clinical research.”

VisualSonics’ ultrasound imaging technology is said to have the potential to revolutionize the diagnosis of prostate and breast cancer because of the unprecedented high resolution it shows of the first three centimetres below the skin surface or within an organ. Its ultrasound imaging machines are in 600 labs and companies worldwide.

“We can see things other clinical ultrasounds cannot,” VisualSonics CEO Anil Amlani told CBC News.

“You get unbelievable resolution,” said venture capitalist Sam Ifergan, who owns Toronto-based Hargan Ventures.

VisualSonics is “a great Canadian success story” that has changed both research and clinical medical worldwide in just over eight years, according Ifergan. It was Ifergan’s investment of $1.5 million over that time that helped take VisualSonics to where it became a takeover target.

Ifergan came up with funding after an introductory meeting with VisualSonics founder Stuart Foster in 2002 in Foster’s lab over a jar of eyeballs. The jar was key to Foster’s pitch for money, because he was then using an early version of the technology to image eyeballs.

“I remember that meeting, because it was fairly different,” said Ifergan. “He imaged that, and I was pretty impressed with the image. After that, I went to some people [in the research field] who said, ‘wow, that’s never been done before.’”

Foster, who is based at Toronto’s Sunnybrook Health Sciences Centre, spent 20 years figuring out how make the technology before building his prototype in 1998. Multiple improvements led to the founding of VisualSonics in 2002 and the development of a technology used in 600 locations worldwide.

VisualSonics’ manufacturing facility at Yonge Street and Lawrence Avenue in Toronto will remain in the city.

It’s employed in Toronto at the Hospital for Sick Children in tumour imaging, at St. Michael’s Hospital to measure the arterial wall and determine a patient’s risk of cardiovascular disease, and has recently been approved by Health Canada for research into male infertility at Mount Sinai Hospital.

The technology has been instrumental in research into cardiovascular health, cancer, gene therapy and the evaluation of drug therapies.

“So SonoSite, which has the resources and the infrastructure, will be able to take this Canadian technology and make it available to all the people that are suffering today,” Amlani explained.

But both Amlani and Ifergan said there could be many more success stories than there are. “I think the venture capital companies are missing the boat a lot in Canada,” said Amlani.

“Canada has phenomenal research capability. Sunnybrook is the world’s foremost research centre for high frequency [imaging].”

Ifergan agreed. “What we’ve seen is the evaporation of early stage venture capital in Canada,” he said. “And it’s very sad, because these are the companies that create leading-edge technology and jobs in Canada.”

He blamed some early-stage funds, especially labour-sponsored funds, which made “horrible” choices, “burned” their investors and now, with the downturn, there is a lack of funds available.

The manufacturing facility at Yonge Street and Lawrence Avenue in Toronto, where 100 VisualSonics employees design and develop its extreme high-resolution ultrasound imaging systems, will remain in the city.

Posted July 15, 2010