CEO SUMMARY: Tamtron’s fortunes look much brighter with its acquisition by IMPAC Medical Systems, Inc., a healthcare information vendor with existing products for radiation oncology, medical oncology, and urology. IMPAC’s strategy is to create a “total solution” for oncology. That means Tamtron’s anatomic pathology information system is expected to play a major role in IMPAC’s core strategy.
CAN TWO LETTERS make a difference to Tamtron, Inc.? Sold by IMPATH to IMPAC six weeks ago, Tamtron’s new owner has ambitious plans for the company and PowerPath® , its anatomic pathology information system.
For Tamtron, IMPAC Medical Systems, Inc. is its second owner in 22 months. Tamtron’s PowerPath should fit right in with IMPAC’s existing product mix. IMPAC sells several healthcare information systems, including IntelliLab™, a laboratory information system (LIS). For the fiscal year ending 9/30/03, IMPAC posted revenues of $61 million.
Steve Tablak, Tamtron’s President, says the new owner creates several opportunities for Tamtron that didn’t exist during the short time that Tamtron was owned by IMPATH. “We see the new relations with IMPAC as positive for everyone,” he said. “For Tamtron, it means we can devote full attention to enhancing PowerPath and its capabilities.
“Moreover, IMPAC bought both Tamtron and IMPATH’s Cancer Registry (now called Medical Registry Services),” added Tablak. “These two products can be integrated with IM- PAC’s IT products in radiation oncology, medical oncology, and urology.
“This gives us all the pieces to create a meaningful oncology suite for health systems and clinics,” he continued. “We want to develop total solutions to address the diagnosis, treatment, and outcome management of cancer patients.”
Unmet Expectations
For both Tamtron and its pathology group customers, the acquisition by IMPAC was welcome. Tamtron had been purchased by IMPATH in early 2002. But IMPATH’s deteriorating financial problems throughout 2002 and 2003 meant that Tamtron never received the capital and resources it expected at the time of the sale.
When IMPATH filed a Chapter 11 bankruptcy petition on September 29, 2003, both Tamtron employees and PowerPath customers became more concerned about how IMPATH’s problems might affect Tamtron. (See TDR, November 10, 2003.) However, because Tamtron was viewed as a non-core asset by the bankruptcy court and IMPATH’s creditors, there was swift agreement that the company could be sold. IMPAC was the eventual buyer and the transaction closed at the end of December.
Employee Loyalty
“Tamtron is a stronger company as a result of this experience,” declared Tablak. “During those turbulent times, we retained almost all our employees. That’s important, because it was a statement to our customers about our confidence in the future. Of equal importance, it allows us to maintain a continuity of service with our customers. Putting IMPATH’s bankruptcy behind us removes those customer concerns and allows us to restore our focus on innovation and execution.”
…many customers were uneasy about Tamtron’s relationship with IMPATH, which they considered to be a competitor in at least some aspects of the anatomic pathology marketplace.
One interesting opportunity that IMPAC’s ownership opens for Tamtron is the ability to sell PowerPath internationally. “IMPAC already has the process and quality credentials in place to compete internationally,” noted Tablak. “IMPAC has placed its products in 56 countries world-wide. Short-term, Tamtron will continue to concentrate on the domestic market. Long-term, however, we expect IMPAC’s expertise will open doors for PowerPath internationally.”
Tamtron will enjoy another benefit as a result of its new owner. “None of our pathology group customers consider IMPAC to be a competitor,” explained Tablak. “In contrast, some pathology group customers considered IMPATH to be a competitor and that situation complicated their business relationship with Tamtron. Obviously, since we are no longer owned by IMPATH, that concern has disappeared.”
In the short-term, IMPAC’s ownership of Tamtron is not expected to change some existing business relationships. “Early indications are that McKesson and Siemens Medical Systems will both continue to be strategic partners,” noted Tablak. “At this point, both companies seem to be pleased that it was IMPAC that acquired Tamtron.”
For anatomic pathology group practices which use Tamtron’s PowerPath system, news of IMPAC’s acquisition was most welcome. As noted by Tablak earlier, many customers were uneasy about Tamtron’s relationship with IMPATH, which they considered to be a competitor in at least some aspects of the anatomic pathology marketplace.
But of greater concern was whether IMPATH’s rapidly-declining business fortunes would have a negative impact on Tamtron. The concerns centered on whether Tamtron would be able to provide a high level of ongoing support while also constantly upgrading and improving the product. Those concerns were heightened when IMPATH filed bankruptcy last September.
However, less than 12 weeks later, Tamtron found itself acquired by a company with grand plans for the oncology marketplace. Tamtron’s anatomic pathology information system certainly appears to be a complementary fit with IMPAC’s existing software systems for radiation oncology, medical oncology, and urology. There is a commonality in products and services, which will bring strength to Tamtron, and potential future growth.
And at least one person is enthusiastic about Tamtron’s future. Tablak quipped “The future’s so bright, we gotta wear shades!” That statement certainly captures the reversal of fortunes at Tamtron in recent months. But much hard work remains ahead if Tamtron is to make the most of its new opportunity and the potential synergy from IMPAC’s oncology strategy.
Tamtron Has New Opportunities for Expanding the Anatomic Pathology Informatics Market
UNDER NEW OWNERSHIP, Tamtron is developing an expanded vision for pathology informatics. One element of this new vision is the concept of a “total” oncology solution.
“IMPAC is developing a ‘total’ oncology solution, one that includes pathology, laboratory, practice management, specialized charting, cancer registry, and data aggregation and reporting,” stated Steve Tablak, President of Tamtron. “In acquiring Tamtron and IMPATH’s Cancer Registry, IMPAC added two important pieces to this project.
“The goal is to make comprehensive, accurate data readily accessible for use in population-based reporting,” he continued. “Ultimately, we hope these tools positively impact the lives of cancer patients and their families.”
The “total” oncology solution might give PowerPath®, Tamtron’s information system for anatomic pathology, an interesting competitive advantage. That’s because almost 70% of pathology cases are cancer-related. The emphasis on population-wide reporting has triggered work between IMPAC, Tamtron, and the National Oncology Database (NODB). The three organizations are exploring ways to compare data with national standards related to treatment and outcomes of cancer cases.
“Pathology information is a valuable subset of the total information the cancer registrar must track,” observed Tablak. “We are investigating ways in which pathology information can be electronically transferred directly from PowerPath to IMPAC’s registry products. At the same time, we’d like to incorporate pathology information into IMPAC’s oncology EMR (electronic medical record) which, in turn, would feed our registry products.”
Tablak also discussed the issue of single field capture versus whole slide imaging. “Single field capture was our solution to make the imaging module simple and efficient,” he said. “The goal was to allow the pathologist to capture selected images without having to be a professional photographer. Pathology customers tell us this capability is finding wider use for education purposes and in marketing their pathology services to referring physicians.
“To date, the whole slide imaging technologies we’ve reviewed show promise. But there are technical limitations to their use, such as workflow issues and managing the data generated from whole slide imaging. At this time and at this stage of technology development, these are not yet practical. However, whole slide imaging is a fast- developing field. We may all be surprised at how quickly these types of technologies become robust and ready for widespread adoption.”
