Mexican Medtech Firm Buys Naviscan Assets

The assets of Naviscan, a San Diego, Calif.-based maker of high-resolution medical imagers, have been acquired by a Mexican medical company that continues to manufacturing locally.

Compañía Mexicana de Radiología SA de CV, or CMR, values Naviscan’s manufacturing expertise and doesn’t want to risk that by moving production, said Larry Lugo, general manager of Naviscan CMR, the company’s San Diego subsidiary.

Naviscan specialized in positron emission imaging, an alternative to X-ray imaging. The company was funded by venture capital firms led by San Diego-based Sanderling Ventures. Naviscan struggled to commercialize the technology.

Last year, CMR contacted Sanderling about buying Naviscan’s assets, and the deal was concluded in the fall, Lugo said. Naviscan itself was closed; to continue its operations in San Diego, CMR established the subsidiary. Terms of the transaction were not disclosed.

“Their customers in Mexico are excited by the technology, and it just seemed an easy fit for them,” Lugo said. “You read a lot about manufacturing going to Mexico. This is a Mexican company coming up here and saying, there’s a fit. They don’t want to mess with the technology, it’s proven.”

Founded in 1995, Naviscan moved to San Diego from Maryland in 2005. Four years later, Naviscan received a Most Innovative New Product award from Connect, a nonprofit that promotes technology and entrepreneurship, for a breast biopsy device that uses positron imaging.

More recently, Naviscan developed a new positron emission mammography scanner to be its flagship product. Positron emission technology is more precise than conventional X-ray mammography, said Lugo, Naviscan’s former chief operating officer. Such scanners are used for imaging dense breast tissue.

In positron emission imaging, patients are given a radioisotope that emits positrons, the antimatter equivalent of electrons. When positrons and electrons collide, they annihilate each other. The collision produces tiny bursts of gamma rays, which the device detects. The technology also provides information about metabolism not available through X-rays.

CMR sees a market in Mexico and in the United States for these imaging devices, Lugo said. The sister company will add them to its existing line of X-ray scanners and medical information systems, giving it an extended portfolio.

To sell the mammography scanner in the United States, CMR must file a new marketing approval application with the U.S. Food and Drug Administration, Lugo said. This and other paperwork to establish CMR Naviscan as a medical device company in the United States will be filed over the next couple of months.

Naviscan had originally made its own equipment, but about a year ago it outsourced manufacturing to a company in Carlsbad, Calif. — Spectrum Assembly, which has about 85 employees.

“We realized we were a technology company,” Lugo said. “We add zero value turning screws and nuts and bolts. That allowed us to focus on next-generation technology development and engineering. Spectrum Assembly was a partner of ours. They said, hey, we can make the whole thing for you.”

Naviscan had seven employees when the sale was completed; the new CMR Naviscan will bring back the company’s service manager to ensure customer service, and a few more to work the front office, Lugo said. Production of the scanners will take place at Spectrum Assembly, as under Naviscan.