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Hologic Grows Diagnostics Portfolio

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Hologic (HOLX - Free Report) , a prominent player in the women’s healthcare market, has expanded its diagnostics portfolio. The company received approval from the US Food and Drug Administration (‘FDA’) for its Aptima HPV 16, 18/45 genotype assay to be used on the Tigris instrument system. Commercialization of the assay is scheduled during the first quarter of fiscal 2013.

The FDA approval is immensely beneficial to patients as the 16, 18 and/or 45 strains of the virus are associated with approximately 80% of all invasive cervical cancers worldwide. The Aptima HPV assays were inducted in Hologic’s portfolio with the acquisition of Gen-Probe that was completed in August 2012. The Gen-Probe deal should add value to the company over the long term. Additionally, the deal has provided Hologic with the access to the molecular diagnostic platforms of Tigris and Panther systems. With 61% of revenues from molecular diagnostics and 35% from blood testing, Gen-Probe is a prominent player among molecular diagnostics products and services that are used primarily to diagnose human diseases; screen donated human blood, and helps ensure transplant compatibility.

During the last reported quarter, Hologic derived approximately 34% of its revenues from the Diagnostics business. However, it is expected to go up substantially following the acquisition of Gen-Probe. During the quarter, the Diagnostics segment recorded 10% growth with three-fourths coming from core diagnostics businesses, primarily ThinPrep pap test and the balance from molecular diagnostics products. Thinprep sales recorded 30% growth in the international market on the back of better penetration in Europe and focus on emerging markets.

The Molecular business recorded 30% growth in the quarter, almost all of which came from the sales of Cervista HPV in both US and China. Growth was driven by new customer accounts, growth at existing accounts and international penetration. With full commercial launch of Cervista HPV in China in the second quarter, the company is encouraged with the initial response. The Gen-Probe acquisition is deemed to further strengthen this franchise.  We are also encouraged to note that the launch of the Cervista HTA system has been well received in the US market, with 30 units in the domestic market already installed, which reflects positive customer feedback.

While the company is working on expanding its Diagnostics portfolio, this market is highly competitive with the presence of players such as Becton, Dickinson and Company (BDX - Free Report) and Qiagen (QGEN - Free Report) , among others.

Hologic carries a Zacks #3 Rank (Hold) in the short term.

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