Medicsight PLC (AIM: MDST), industry leader in the development of Computer-Aided Detection (CAD) and image analysis software to assist in the early detection of disease, is pleased to announce its Preliminary Results for the twelve months ended 31 December 2008.

2008 Highlights

• In the year ended 31 December 2008 Medicsight recorded £103,000 of revenue, and has a strong balance sheet with cash reserves of £18,387,000 at 31 December 2008.

• Signed three new global partnership agreements: a preliminary agreement with the Systems Integration (PACS) Division of Toshiba Medical Systems Corp. and global distribution agreements with INFINITT Co. Ltd. and Ziosoft Inc.

• Launched MedicRead™ 3.0, Medicsight's own advanced 3D visualisation workstation featuring Colon, Lung and Liver imaging modules, at the Radiological Society of North America (RSNA) meeting in November 2008

• Colon product regulatory approvals were granted in China and Brazil.  ColonCAD™ 510(k) FDA Pre-market Notification submitted to the FDA in November 2008.

Highlights post year end

• ColonCAD™ 4.0 launched in Europe.

• Board restructured. New CEO streamlining costs to conserve cash reserves.

David Sumner, Chairman of Medicsight PLC, commented: "During this period, we continued our business development and added Toshiba, INFINITT and Ziosoft to our existing partnership agreements.  We also completed work on our latest and best performing version of ColonCAD™ to date, which was launched in March 2009. One of Medicsight's key achievements of the period was submitting a 510(k) Pre-market Notification to the United States Food and Drug Administration (FDA) for clearance to market ColonCAD™ in the United States.

In early 2009 we took the decision to streamline operating costs across the group and protect our cash position. This means deferring or cancelling some discretionary spend and reducing headcount.  We are confident that this is the correct decision to take at this time.  We have reviewed the product and clinical roadmap and this reduction in costs will not jeopardise our longer term business plans.

During 2008, we laid a great deal of groundwork in terms of partnerships and regulatory approvals. I see 2009 as a critical year for Medicsight.  I look forward to reporting regulatory approvals in the USA and Japan, and the company delivering meaningful revenues in due course."

Notes to editors
Medicsight PLC is a UK-headquartered, research driven, leading developer of computer-aided detection (CAD) and image analysis software for the medical imaging market. The CAD software automatically highlights suspicious areas on computerised tomography (CT) scans of the colon and lung, helping radiologists to identify, measure and analyse potential disease and early indicators of disease. Medicsight's CAD software has been validated using one of the world's largest and most population diverse databases of verified patient CT scan data. Medicsight's ColonCAD™ and LungCAD™ software products are seamlessly integrated with the advanced 3D visualisation workstations of several industry-leading imaging equipment partners.

About Computer-Aided Detection
With increasingly sophisticated radiological imaging hardware such as Multi-Detector CT scanners, radiologists are facing a growing challenge in the amount of detailed patient image data that they must review for each patient examination. Some CT scan examinations generate as many as 1000 images per patient. Review of this data by the radiologist is not only time-consuming but also prone to error due to reader fatigue. CAD software can help the reviewing radiologist by analysing the image data and automatically highlighting suspicious regions of interest for closer inspection. Without CAD software some potential abnormalities or areas of disease may be overlooked. This is critical for diagnosis and the management of patient outcomes as early detection of disease greatly increases the probability of successful treatment and a positive therapeutic outcome.

About Medicsight's CAD software
Medicsight's ColonCAD™ and LungCAD™ software use an advanced CAD algorithm to analyse CT scans of the colon and lung and automatically highlight suspicious areas that may be indicators of disease. CAD may highlight areas easily overlooked by the reviewing radiologist, such as small lesions or regions that are hidden from view behind folds in the colon or normal structures and surrounding tissue in the lung.

Both CAD products seamlessly integrate with the advanced 3D visualisation platforms of industry-leading imaging equipment partners. The integrated systems provide sophisticated image viewing capabilities, including 3D reconstructed image data, with the added advantage of demonstrating automatic CAD findings to assist clinical end users in the detection and analysis of disease. This allows clinical end users to perform either a 'second read', where CAD findings are displayed to the user after completion of an initial review of the CT scan data, or a 'concurrent read' where CAD findings are displayed during the user's initial review of the original CT scan images.

Since inception, Medicsight has developed close and lasting relationships with some of the world's foremost clinicians in product related areas. This provides the Company with a wealth of clinical expertise and dedicated clinical research to support ongoing product development. Medicsight also collaborates with a number of leading academic institutions and clinical research programmes worldwide to develop the Company's comprehensive database of population diverse verified patient CT scan data, thus allowing Medicsight's products to be validated to the highest possible standards.

Chairman's Statement

Medicsight is an industry leader in the development of Computer-Aided Detection (CAD) and image analysis software to assist radiologists in the early detection of disease.

The Group's focus continues to be on developing CAD software applications and related technologies that help radiologists analyse medical images generated from Computerised Tomography (CT) scanners. The technology helps to identify, measure and analyse potential disease and early indicators of disease, such as colorectal polyps.  In the year ended 31 December 2008 Medicsight:

• continued to improve the performance of the Medicsight ColonCAD™ application

• continued development of the Medicsight product range

• signed a preliminary agreement with the Systems Integration (PACS) Division of Toshiba Medical Systems Corp.

• signed new commercial distribution agreements with INFINITT Co. Ltd. and Ziosoft Inc.

• received regulatory approval in two new markets: China and Brazil

• submitted the ColonCAD™ application for 510(k) clearance to the USA Food and Drug Administration (FDA)

In the year ended 31 December 2008 Medicsight recorded £103,000 of revenue, and has a strong balance sheet with cash reserves of £18,387,000 at 31 December 2008.

Financial review

Whilst still limited, revenues are growing - we recorded £103,000 in 2008 compared to £20,000 in 2007. Medicsight ended 2008 with net assets of £17,475,000 including £18,387,000 of cash and short term deposits.  At various points during the year we have invested our surplus cash in highly liquid, blue chip marketable securities and foreign currencies generating £2,664,000 of finance revenue.  At 31 December 2008 all of our liquid assets were held as short term cash balances, mainly in Sterling. Post year end, we continue to hold our surplus cash on short term deposit in Sterling.

Medicsight continues to have strong internal controls over accounting and financial reporting procedures as governed by its parent company's Sarbanes-Oxley programme. In early 2009, the board completed a review of the product development roadmap, the status of regulatory approvals and partner integration activities, and initiated a cost restructuring program to drive cash flow savings without jeopardising the Group's longer term plans.

As part of this process and to concentrate on restructuring the MGT Capital Investments, Inc. group of companies, Tim Paterson-Brown stepped down as Executive Chairman but remains on the board as a Non-Executive Director. I was promoted to the role of Executive Chairman and Allan Rowley, previously Chief Financial Officer, was promoted to Chief Executive Officer. Troy Robinson, previously Group Financial Controller was promoted to Chief Financial Officer.

Commercial progress

Medicsight's primary route to market is via partnerships with global advanced visualisation companies, PACS suppliers and other OEM's.  

In February Medicsight signed a preliminary agreement with the System Integration division of Toshiba Medical Systems Corporation for the resale of its MedicRead™ Colon and ColonCAD™ software solutions throughout Japan. To complement this, Medicsight continues a local Japanese clinical research and education programme to deliver clinical studies and training workshops to support both the regulatory and sales and marketing efforts of Medicsight and Toshiba.

In April Medicsight announced new global marketing partnership with INFINITT Co Ltd, and successfully demonstrated the integration of Medicsight's ColonCAD™ software and INFINITT Xelis-Colon application at major tradeshows in Korea and USA.

In November, Medicsight signed a global partnership agreement with Ziosoft Inc for the integration of Medicsight ColonCAD™ API within the Ziosoft 3D advanced visualisation platform and distribution through the Ziosoft network.

These partnership agreements are in addition to our existing agreements with Vital Images Inc., TeraRecon Inc., Viatronix Inc. and Barco N.V. (which has recently been acquired by Toshiba), 3mensio Medical Imaging B.V. and Intrasense SAS.

We have commercial discussions in progress with other global partners that we expect to complete in 2009.

Regulatory approvals and submissions

In November 2008 Medicsight submitted a ColonCAD™ 510(k) Pre-market Notification to the Food and Drug Administration (FDA) for clearance to market the product in the USA. In December 2008 we received an Additional Information (AI) letter from the FDA. In March 2009 we submitted our response to the FDA's enquires.

In November 2007 we submitted our MedicRead™ Colon application to the Ministry of Health, Labour and Welfare (MHLW) regulatory authorities in Japan. During 2008 we attended a number of meetings with ministry officials, demonstrated the product, answered specific questions regarding the product application and formally responded to questions from the MHLW.

In 2008 the Group received approvals from the Chinese State Food and Drug Administration ("SFDA") for its MedicRead™ Colon workstation and from the Brazilian regulatory agency, Agencia Nacional de Vigilancia Sanitaria ("ANVISA"), for its ColonCAD™ and MedicRead™ Colon Products. In addition to the above, ColonCAD™ has Canadian regulatory approval from the Therapeutic Products Directorate of Health Canada and the Australian Therapeutic Goods Administration (TGA).

In March 2009 the Group CE marked the latest version of the Medicsight ColonCAD™ 4.0.

Product development

Medicsight's core technology is the proprietary ColonCAD™ algorithm that is integrated into visualisation workstations for radiologists to use when reviewing patients' colon scan data. The CAD algorithm assists the radiologist as they search for polyps in the CT scan image data. The radiologist uses the visualisation software to review the patient's CT scan images on the screen and search for polyps (lesions on the wall of the colon which may be pre-cursers to colorectal cancer). After a full review the radiologist then activates the Medicsight ColonCAD™ software - which immediately displays "CAD marks" on the images, drawing the radiologist's attention to potential polyps. The radiologist will then assess the marked regions in order to make the final decision as to the presence or absence of a lesion.

Clinical studies have demonstrated that radiologists assisted by Medicsight's ColonCAD™ technology have a significantly higher sensitivity for the detection of polyps in CT colonography image data compared to unassisted reading (i.e. traditional reading without the assistance of ColonCAD™).

In a recent study presented by Dr Stuart Taylor (a consultant radiologist at London's University College Hospital) at the 2008 annual Radiological Society of North America (RSNA) Conference, ColonCAD™ demonstrated a sensitivity of 85% for the detection of colonic polyps sized 5mm or larger, and a sensitivity of 95% for the detection of polyps 10mm or larger. Polyp size is the main criterion for follow-up action after a positive CT colonography finding; polyps in the 6mm to 9mm range are often monitored over time whilst polyps with a diameter of 10mm or greater are recommended for optical colonoscopy follow-up and possible removal.

During 2008 the Group completed work on ColonCAD™ 4.0 API and formally launched this product at the European Congress of Radiology (ECR) in March 2009. This new release significantly reduces the number of false-positive CAD marks presented to a radiologist reviewing a patient data set. This should lead to further improvements in reader performance when readers are assisted by the ColonCAD™ software.

This latest ColonCAD™ 4.0 upgrade will be integrated with our partners' workstations and released into the European market during 2009. We believe that this version of ColonCAD™ extends Medicsight's position as a provider of one of the world's leading colon CAD software solutions. Medicsight's ColonCAD™ has been developed and validated using a large database of CT scans from hospitals around the world and has been assessed in many clinical studies, the results of which have been published in peer-reviewed publications and presented at leading radiology conferences.

The MedicRead™ product is Medicsight's advanced visualisation software application with integrated Colon, Lung and Liver modules. Medicsight launched MedicRead™ 3.0 in 2008. The next version of this product will be released in 2009 and will include improved workflow flexibility and improved 3D visualisation options, as well as ColonCAD™ 4.0 within the CT colonography module.

MedicRead™ is a flexible option for hospitals and clinics unable to invest large capital sums in new image analysis workstation infrastructure. MedicRead™ can be deployed either on a standalone basis or integrated into an existing clinical IT infrastructure (e.g. a PACS environment). In addition to which, MedicRead™ 3.0 will be available directly to end users via an easily accessible on-line download from the Medicsight website.

In 2008 Medicsight began work on MedicServer™ - a server-based application which enables the centralisation of the ColonCAD™ data processing and then the distribution of the CAD results to workstations around the healthcare enterprise network. We will begin integrating MedicServer™ into our partner applications in 2009. As clinical IT architecture moves towards an enterprise model and central processing, and away from desk-top solutions, we believe that MedicServer™ will become a compelling offering to the market.

At the Radiology Society of North America (RSNA), 95th Scientific Assembly and Annual Meeting, Medicsight unveiled its on-line MedicRead™ colon, lung and liver solution. We plan to regulate and release this product in selected territories during 2009.

Longer term projects

Our recent focus has been on developing the colon family of products. Some longer term colon related opportunities that we are researching include:

• Flat lesions (which are non-protruding lesions in the colon) have recently received much clinical interest. The Medicsight team are researching CAD technology for the detection of these flat lesions to compliment the existing ColonCAD™ application.

• Working with leading London academic and clinical centres, Medicsight has initiated research projects to explore additional CAD technologies in the field of optical endoscopy, with a view to these technologies improving workflow and combining information from multiple data sources in real time.

• In addition to the colon CAD applications Medicsight have developed an early version of a CO2 insufflation device called MedicCO2lon™. Each patient that has a CT colonography (CTC) scan requires their colon to be insufflated (distended) with either CO2 gas or room air administered prior to the acquisition of their CTC images. Good quality insufflation is essential for the acquisition of high quality images from the CTC examination.

Clinical Activity

The Group's Clinical Development team continued their work with Medicsight's network of global medical luminaries. A North American Medical Advisory Board meeting was held in Boston in 2008. A European Medical Advisory Board meeting was held in January 2009. In total 16 key opinion leaders attended, contributing valuable feedback towards Medicsight's product roadmap and clinical development plan.

Medicsight ColonCAD™ is being used in a number of government-funded studies looking at the performance of CT colonography and the comparison of CT colonography with existing imaging methods, such as barium enema (DCBE) examination and optical colonoscopy, both used for assessment of the colon and in the detection of colorectal cancer.

The British Special Interest Group in Gastrointestinal and Abdominal Radiology ("SIGGAR") completed patient recruitment for the SIGGAR1 trial in late 2007. (SIGGAR1 is the largest UK randomised control trial to date and compares CTC with two other widely-used imaging approaches, optical colonoscopy and barium enema). Medicsight's ColonCAD™ is the only CAD product to be involved in this trial. The study outcome data was reviewed in 2008, with the results currently undergoing final statistical analysis and expected to be announced later this year.

ColonCAD™ has also been used in the first CT colonography colorectal cancer screening programme undertaken in Japan. The screening trial is ongoing at the National Cancer Centre in Tokyo. ColonCAD™ has been used on a number of patients within the screening programme and the results of this assessment are currently undergoing review between Japanese and UK clinicians with the expectation that results will be presented later in 2009.

The Medicsight ColonCAD™ software is also integrated into visualisation software used to read CT colonography examinations for the French STIC trial (Sciences et Technologies de l'Information et de la Communication, Information and Communication Science and Technology). The trial, undertaken across more than 20 sites in France, is a prospective multi-center evaluation of CTC as a screening technique, including the use of CAD for examination interpretation. The study will also assess the cost effectiveness of CTC screening. Recruitment has continued throughout 2008 towards the target of 1,500 trial participants.

In 2008 we signed an exclusive CAD clinical research agreement with leading US CT Colonography radiologists, Dr. Perry Pickhardt and Dr. David Kim, from the University of Wisconsin Medical School, Madison, Wisconsin. Dr Pickhardt, Associate Professor of Radiology and Dr Kim along with The University of Wisconsin were the first US group to establish a third-party reimbursed CT colonography colorectal cancer screening programme in 2004. Since then they have both played an instrumental role in building the clinical evidence base that has proven the comparable effectiveness of CTC for the detection of colorectal neoplasia within an asymptomatic population in relation to Optical Colonoscopy. A key milestone recently achieved partly as a result of their research, was the release of the American Cancer Society 2008 Consensus Guidelines, focusing on colon cancer prevention, which for the first time have recommended CTC be provided every five years for adults aged 50 years and over. Under the agreed collaborative research program Drs Pickhardt and Kim will undertake a research study evaluating the standalone performance of Medicsight's latest ColonCAD™, version 4.0, in comparison to experienced radiologists in detecting colorectal polyps.

Medicsight's products continued to have a high profile at many major international radiology conferences and throughout 2008 the Group exhibited its ColonCAD™ and MedicRead™ Colon applications at the European Congress of Radiology (ECR) annual meeting in Vienna in March, the annual meeting of Japanese Radiological Society (JRS) in April, the European Society of Gastrointestinal and Abdominal Radiology (ESGAR) in Istanbul in June, the Japanese Digestive Disease Week (JDDW) congress in October 2008, the Asia Oceanic Congress of Radiology (AOCR) in Seoul in October and the Radiological Society of North America (RSNA) annual meeting in Chicago in November; as well as exhibiting at other international radiology conferences. Scientific research featuring Medicsight's ColonCAD™ application was also presented at the ECR, ESGAR and RSNA meetings.

Through 2008 Medicsight continued its support of a number of international CT colonography training workshops. Workshops were held in Victoria, BC, Canada in May and Chicago, Illinois in August. Medicsight once again supported the two annual ESGAR CTC workshops - in Vigo, Spain and Berlin, Germany during 2008. All these workshops train radiologists to interpret CTC images using the latest visualisation and CAD technology and are fundamental to the increasing acceptance and implementation of CT colonography as a routine imaging examination for investigation of the colon.

Outlook

In 2008 Medicsight continued to make progress on all fronts: receiving regulatory approvals in China and Brazil; submitting the 510(k) ColonCAD™ Pre-market Notification to the FDA; signing new commercial distribution agreements; and completing work on ColonCAD 4.0.

At 31 December 2008 the Group had strong cash reserves of £18,387,000 and has taken action post year end to reduce operational costs without jeopardising the longer term plans.

In 2009 we expect to announce further regulatory approvals and more commercial progress.

As your Chairman and on behalf of the Board I would like to thank you for your continuing support.

David Sumner
Chairman
31 March 2009

NOTES TO PRELIMINARY RESULTS
The financial information set out above which is unaudited has been prepared in accordance with International Financial Reporting Standards (IFRS) and those parts of the Companies Act 1985 that remain applicable to companies reporting under IFRS and does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.

The Company's auditors have indicated that they intend to issue an unqualified auditor's report, which will not contain any statement under Section 237(2) or (3) of the Companies Act 1985, on the statutory financial statements for the year ended 31 December 2008.

There have been no changes to the group accounting policies and the group has followed the policies as previously published.

Loss per share and diluted loss per share

Loss per share is calculated by dividing the loss attributable to ordinary shareholders for each year amounting to £8,242,000 (2007: £7,003,000) for the year ended 31 December 2008 by 155,525,000 (2007: 141,896,000), being the weighted average number of ordinary shares in issue during each year.