John Brooks, CEO of ImaSight. (Darren Brown, OBJ)

Digital X-ray maker ImaSight Corp. (TSX-V:IAS) has seen a lot of drama in the lead-in and beginning of its life as a public company – mostly because of its absorption this summer of troubled drug maker Liponex Inc., by way of reverse takeover – but CEO John Brooks is quietly optimistic that markets will begin to take notice as the firm's technology captures the small medical facility space.

The Gatineau-based company, which received approval to begin trading as a Tier-2 company on the TSX Venture Exchange in early July after its $10-million marriage with Liponex, has seen little movement in its stock since switching spots with the previously public drug company.

ImaSight's stock price has ranged from around 18 cents to 40 cents, closing last week at 30 cents, with trading volumes remaining low.

But the company is also contending with the spectre of its subsidiary's past life – Liponex shares soared to as high as $15.50 in early 2007 after Pfizer pulled its rival 'good cholesterol' drug from trials, but the stock crashed in March of that year following disappointing results for its lead drug candidate.

That marked the beginning of a downward spiral that would see the stock reduced to mere pennies.

Still, the digital radiography market is a growing one, and sales reached $574,387 in the company's first eight months as a public entity. So what's the prognosis for ImaSight?

The company's view: Mr. Brooks said ImaSight's digital X-ray system has been well-received in its target market, namely veterinary and chiropractic clinics in Canada and the United States. While sales volumes have been small – the company has installed only about 25 units of its ImaSight 4600 product line – the reviews have been good and the technology seems to stack up well against its bigger rivals.

"The nicest thing that we always hear is that (the ImaSight 4600) takes a great picture every time, so there's consistency, whereas there have been uneven results for the competition," said Mr. Brooks. "We're becoming recognized as the best digital sensor in the veterinary space for the price and quality they're getting, so it bodes well for the future."

In the near future, he added, the company is looking at expanding into the human medical market in the developing world; ImaSight's already talking to potential customers in Latin America, he said. The company also recently announced a partnership deal with Mississauga's CAN-med Healthcare and Colorado-based Apexx Equipment, which have agreed to distribute the digital X-ray sensors.

As for the Liponex side of the business, Mr. Brooks said he remains convinced that the company is on to something with the CRD5 lead drug candidate, which increases high-density lipoprotein or 'good cholesterol' in the body to treat heart disease and essentially works like niacin without the vitamin's unpleasant facial flushing effect.

He said the company's troubles were no indication of the value of the drug, since Liponex's ill-fated trials using mini-pigs had been the wrong model to begin with.

"There was no barrier to continuing human studies ... but they spent the money (on the trials), the stock crashed and the board figured they'd reached the end of the life of the product," said Mr. Brooks. "(Liponex founder Dr. Daniel Sparks) and I vigorously disagreed, and now several major pharmaceuticals are disagreeing too. I am convinced it works."

Now, the company is working on announcing a partnership deal for the Liponex technology for late fall which will allow research and development to continue on CRD5.

However, Mr. Brooks noted one of the three potential investors is interested in marketing CRD5 as an over-the-counter nutraceutical instead of a drug, which could mean lower revenues since most nutraceuticals do not have patent protection. As well, he says he is unsure how much involvement ImaSight will have in the development process, since that will depend on whether the new partner would choose to license the technology and work with Liponex's existing local scientists on development.

Still, despite the various worries related to Liponex, the digital X-ray side of the company is going strong, and Mr. Brooks said the company plans to hire more people, add 3,000 feet of office space, and enhance assembly operations.

The analysts' data says: As ImaSight is newly public, few analysts were available to specifically comment on the company's prospects in the markets. However, a Frost and Sullivan study cited in a 2004 analyst report on Calgary-based competitor Imaging Dynamics noted that the global digital radiography market could grow to more than $1 billion by 2010.

The same report, prepared by Versant Partners analyst Douglas Loe, said digital radiography had been limited to large hospitals with more than 500 beds up until very recently, since the cost had been too high for smaller facilities. ImaSight's focus on the relatively unexplored small facility market could therefore be a good strategic move.

Meanwhile, analysts have been skeptical that ImaSight can bring Liponex's technology back to life, but if the company does manage to commercialize the heart disease drug, it will be tapping into a market worth more than US$30 billion.

Catalysts to watch: New distribution agreements for the digital X-ray technology; successful expansion into developing economies; completion of a partnership deal to co-develop or sell CRD5.