R2 Technology, Inc. ("R2"), the leader in computer aided detection (CAD) technology for the earlier detection of cancer and other medical conditions, today announced that it achieved record results for 2005. The company sold more than 650 ImageChecker(R) CAD units -- the highest number in the company's history -- marking a 31 percent increase over 2004. Orders in 2005 increased every quarter, with Q4 orders exceeding $14 million and a year-end backlog of $25 million in products and service agreements. R2 is forecasting double-digit year-over-year growth for 2006.

"We had an excellent year in 2005, marked largely by the introduction of innovative CAD solutions, particularly for the growing digital mammography sector," said John Pavlidis, R2's president and chief executive officer. "Customers embraced these new offerings and we saw progressively higher demand for our digital and film-based ImageChecker systems throughout the year. We are also seeing increased demand for our ImageChecker CT Lung CAD system, for use in the early detection of actionable lung nodules and pulmonary artery filling defects. We expect more data to come out in 2006 showing the effectiveness of our CT lung CAD system, which should further increase adoption rates of this valuable tool in the fight against lung cancer -- the leading cancer killer of both men and women in the United States."

In 2005, R2 also entered the mammography workstation and breast PACS (Picture Archiving and Communication System) market with its new Citra(TM) Mammography Applications Suite, for use with the Sectra IDS5(TM)/mx.net Breast Imaging Workstation. Citra is the first system to use "CAD intelligence" to help standardize the display of digital or digitized mammography images -- regardless of their source -- and to optimize the presentation of images and CAD information for improved decision support and workflow.

Strong partnerships with many of the leading medical imaging companies also contributed to R2's success in 2005. R2 has been Hologic, Inc.'s preferred CAD solution for its digital mammography products since 2003, and R2 continues to see strong performance from its relationship with Hologic. In 2005, R2 also expanded its marketing and distribution agreements to include Agfa, Sectra and Siemens Medical Solutions. R2 offers the only CT lung CAD solution endorsed for Vital Images' Vitrea workstation and in 2005, R2 completed important developments for its CT lung CAD software package to be integrated into the Vitrea workstation. R2 expects to continue to expand its partnerships in 2006 for increased distribution capabilities and growth.

"The aging patient population and the rapid growth in imaging procedure volumes, combined with the continuing pressure on reducing medical errors and overall healthcare costs, mean that the CAD industry is poised for strong growth," said Mr. Pavlidis. "For example, in the U.S., mammography CAD is becoming the standard of care, as we estimate that the number of mammograms read with the support of CAD is close to 50 percent. We also believe that CAD will increasingly be used to assist healthcare professionals in the earlier detection and improved management of a growing list of diseases. Our customers need help managing the rapid increase of images per procedure and they require access to CAD results on their department or enterprise PACS. R2 is pleased to continue to lead the industry with innovative CAD solutions that serve these needs."

Other accomplishments toward R2's operating and strategic milestones included:

* Hiring key new executives to strengthen the management team, with

in-depth expertise in the medical imaging and software industries,

in order to lead the company's increased expansion of CAD into

additional modalities, disease states and PACS connectivity.

* Launch of five new products and ten major new features across the

entire spectrum of the company's offerings.

* Introduction of ImageChecker V8.1 as an available upgrade for R2's

worldwide installed base of mammography CAD systems.

* Achieving the highest profitability and gross margins in the

company's history.

* Standardized (DICOM) display of R2 mammography and CT lung CAD

results on more than a dozen leading PACS systems and OEM

workstations.

* Publication of two new independent, prospective clinical studies and

numerous peer-reviewed papers and abstracts showing the efficacy of

R2's CAD solutions.

"R2 is extremely well-positioned -- both financially and in terms of our excellent business alliances -- to seize the growing opportunities for CAD in an increasingly digital and integrated medical imaging environment," said Terry Kinninger, chief financial officer and executive vice president of business development for R2 Technology. "Our revenues and profitability increased every quarter in 2005 and we set a strong foundation for solid growth in 2006. Our vision and plans are supported by our investors and the board of directors, which include some of the best-known and highly respected investors and management executives in the healthcare industry."

R2 pioneered the CAD industry in 1998 and developed the first FDA PMA approved CAD solutions for both mammography and lung CT. Over 2500 CAD systems have been shipped by R2 since its inception and R2's customers include a majority of the leading imaging and mammography centers in the world. R2 owns or has exclusive rights to more than 115 patents issued or pending related to medical imaging and CAD. In April 2005, R2 initiated arbitration proceedings against iCAD Inc. alleging infringement of certain R2 patents. R2 expects a decision regarding this patent infringement arbitration in March 2006.

About R2 Technology, Inc.

R2 Technology, Inc., headquartered in Sunnyvale, CA, is the recognized leader in the development and commercialization of computer aided detection (CAD), an innovative technology that assists physicians in the earlier detection of breast cancer, actionable lung nodules and other lung abnormalities. As a medical imaging company dedicated to diagnostic decision support, increasing physician productivity and preventing medical errors, R2 Technology is developing CAD systems for a variety of imaging modalities and disease states. For more information, visit http://www.r2tech.com or call 866-243-2533.

NOTE: ImageChecker is a registered trademark of R2 Technology, Inc.

Source: prnewswire