Computer bone scan breaks lull at medical firm.

CompuMed Inc. made its name as a telemedicine pioneer, offering one of the largest telecommunications networks that provides for remote interpretation of electrocardiograms taken at healthcare facilities around the country.

Their CardioGram product has provided a steady, though not spectacular revenue stream, leaving the company's shares languishing around 65 cents in the over-the-counter market.

But the 30-year-old Los Angeles medical device company's latest product, aimed at maturing Baby Boomer women, shows more promise to attract some attention.

The DICOM OsteoGram enables a digital X-ray of a hand to be used to determine bone mineral density in order to screen for, diagnose and monitor osteoporosis, a thinning of the bones that can lead to fractures, especially in older women.

The software-based system can be integrated into a new digital imaging workstation or added as an accessory to existing equipment at a doctor's office or imaging center. Even traditional film X-rays can be used once they are converted to a digital image.

The system is being marketed to orthopedic surgeons as an alternative to more expensive and cumbersome hardware-based bone marrow density systems.

And because the procedure is now eligible for Medicare reimbursement, CompuMed also is touting the system as an additional revenue stream for imaging centers when female patients come in for their annual mammogram, a test with notoriously low insurance-reimbursement rates.

"That's the business model that we think will drive our business the most," said Chief Executive Jerry McLaughlin. "I think the mammogram aspect is really neat on its own. Women will like it because they get a twofer for their time. The imaging centers will like it because they normally don't make much money, or even lose money, on just doing mammograms by themselves."

The medical imaging divisions of Eastman Kodak Co. and Fuji Photo Film Co. Ltd. recently licensed CompuMed's technology for their computed radiography systems, which creates digitized images of x-rays.

Fuji is scheduled to launch its version of the integrated system next month.

Revenues from OsteoGram sales and services for the first quarter of fiscal 2006, ended Dec. 31, increased nearly 20-fold to $157,000, from $8,000 for the same period a year ago when the system was just being introduced.

Excluding the impact of a large, one-time sale of another product that distorted first quarter 2005 financials, overall revenues for the company were up 51 percent from a year ago. Its net loss decreased to $41,000, a 55 percent decrease from $93,000 a year ago.

Future uses under study for OsteoGram include helping doctors diagnose and track arthritis and scoliosis, as well as assisting pharmaceutical companies evaluate the effectiveness of experimental drugs.