Syncor and CTI announce joint venture to accelerate the growth of the positron emission tomography radiopharmaceuticals market.

CHATSWORTH, Calif.--(BUSINESS WIRE)--May 1, 1996--Syncor International Corp. (NASDAQ:SCOR) and CTI Inc. (privately held) have entered into a joint venture aimed at combining forces to accelerate the development of positron emission tomography radiopharmaceuticals for clinical diagnostic imaging.

The joint venture will operate under the name of P.E.T.Net Pharmaceutical Services, LLC.

Positron emission tomography (PET) is a well-proven imaging technology that has been used by leading medical institutions around the world for more than 20 years. PET has been widely recognized as a source of unique, valuable diagnostic information in a broad range of applications in oncology, cardiology and neurology.

Positron imaging is widely respected for its superior accuracy and the unique metabolic information it provides. PET has demonstrated superior clinical accuracy in the staging of lung, colorectal and breast cancers.

Both Syncor and CTI believe that broader availability of PET technology will improve both the quality and cost of care, consistent with the shift in the U.S. health-care system to managed care. Traditionally, the high cost and operating complexity of PET imaging programs has limited this technology to major research and academic centers in the United States.

By combining the unique operational and technology expertise of its two parent companies, P.E.T.Net Pharmaceutical Services will allow patients, providers and payors to benefit from the routine clinical use of PET imaging.

Syncor, the pioneer of centralized radiopharmacy since 1974, is firmly established as the leader in nuclear medicine with 119 domestic radiopharmacies. In 1990, Syncor leveraged its core competencies within nuclear medicine and began compounding and dispensing PET isotopes at the first of what are now four pilot PET radiopharmacies.

In January 1996, Syncor's board of directors approved a commitment of $14 million for the development of a nationwide network for PET radiopharmacies. Its long-term goal is to have more than 20 PET radiopharmacies by the end of 1998.

CTI, based in Knoxville, Tenn., is the worldwide leader in the supply of PET products and services, including PET scanners and cyclotrons. It also operates six PET compound distribution centers.

The 10 PET facilities currently operated by Syncor and CTI will be the nucleus of a nationwide network to be developed by P.E.T.Net Pharmaceutical Services. These facilities most commonly compound and dispense F-18 fluorodeoxy-glucose, generally known as FDG, to PET and SPECT imaging facilities within a limited geographic area.

FDG is a form of glucose incorporating a small amount of radioactive fluorine, and must be used within several hours of its preparation.

``CTI is clearly the worldwide leader in medical cyclotrons and has an established market position and quality reputation,'' said Gene R. McGrevin, Syncor's vice chairman and chief executive officer, and chairman and CEO of the new joint venture. ``Our joining of forces is a logical partnership between two leading companies committed to growing the PET radiopharmaceutical market.''

``Syncor's leadership in `traditional' nuclear medicine brings tremendous operational expertise, as well as an unparalleled array of relationships with major group purchasing organizations and individual hospitals and clinics,'' noted Terry Douglass, CTI's chairman and CEO.

``Working together in this joint venture will allow us to combine our respective strengths to make the remarkable capability of PET imaging available to patients and physicians outside the academic research setting.''

James Monaco, president and chief operating officer of the new joint venture, added: ``CTI and Syncor have both been working to make the routine clinical use of PET radiopharmaceuticals an everyday reality.

``This joint venture takes advantage of the synergies that exist between our companies and will enable us to be more effective in helping the health-care community benefit from this technology.''

PET has demonstrated significant value in the initial diagnosis, staging and grading of many types of cancer.

PET improves the staging and management of cancer because of the unique nature of the data it provides -- because PET images display small differences in metabolic activity, a whole body scan can detect distant and often early metastatic disease frequently missed by anatomic imaging modalities such as CT (computed tomography) and MRI (magnetic resonance imaging).

Recent studies in peer review journals are demonstrating that PET is a clinically effective modality whose superior accuracy can enable health-care providers to make better, more cost-effective patient management decisions.

P.E.T.Net's development of a national network to provide PET radiopharmaceuticals will remove technical and economic barriers that have prevented community hospitals and outpatient clinics from taking advantage of PET imaging.

In addition, new developments in imaging camera technology will enable these institutions to perform scans with PET radiopharmaceuticals with a much smaller equipment investment than has been traditionally required.

CTI is the leading supplier of products and services for positron emission tomography (PET). CTI provides a complete line of products, including the ECAT Scanner, marketed and distributed worldwide by Siemens Medical Systems, and the RDS Cyclotron which has the largest installed base of any cyclotron in the world.

CTI, its employees and its customers have played key roles in the development of clinical PET and metabolic imaging. Many of the CTI employees participated in the initial invention and development of PET and have subsequently led the commercial progress of PET into the clinical market.

CTI Services Inc. complements the CTI PET development initiatives, and is wholly owned by CTI. The core business of CTI Services has been to develop and operate PET Compound Distribution Centers (PCDC) for the production and commercial supply of PET isotopes and radiopharmaceuticals to PET and SPECT customers.

CTI Services currently operates six PCDCs nationwide, and is aggressively developing PCDCs in other strategic regions of the country.

Syncor International operates an expanding network of 119 domestic and nine international nuclear pharmacy service centers and four positron emission tomography radiopharmacies.

The company compounds and dispenses patient-specific unit dose radiopharmaceutical prescriptions, as well as distributing bulk radiopharmaceutical products for use in diagnostic imaging and provides a complete range of advanced pharmacy services.

Syncor services more than 7,000 customers and is the only national pharmacy network of its kind that provides a combination of diagnostic and information services to hospitals and alternate site markets. -0-

NOTE: References: Valk, P.; Pounds, T.; Hopkins, D.; Haseman, M.; Hofer, G.; Greiss, H.; Myers, R.; Lutrin, C.; ``Staging Non- Small Cell Cancer by Whole Body Positron Emission Tomographic Imaging,'' The Society of Thoracic Surgeons, 1995; 1573-82.

CONTACT: Syncor International Corp., Chatsworth

Gene R. McGrevin, 818/717-4556

Mary L. Meusborn, 818/717-4643

or

CTI Services Inc., Knoxville

James H. Monaco, 423/966-0072, ext. 650