Hologic (HOLX), a leading player targeting the women’s healthcare market, plans to focus on cervical cancer screening at a conference currently underway in Germany. The company’s ThinPrep 5000 STS (Sample Transfer System) and Cervista MTA (Medium Throughput Automation) system will be featured at the conference.
Small-to-mid-sized laboratories (that run less than 12,000 HPV tests per year) will have access to the fully-automated solution for Human Papillomavirus (HPV) testing by combining the Cervista MTA system with the ThinPrep 5000 STS. The combined system will enable laboratories to do away with a manual method thus saving time besides improving the quality of results. HPV is one of the most common sexually transmitted diseases and is regarded as the cause of most cervical cancers.
According to Hologic, precise diagnosis and effective treatment have been successful in reducing the number of new cancer cases, advanced-stage tumors, and mortality from cervical cancer in particular. However, next to breast cancer, cervical carcinoma still remains the second most frequent cancer affecting women worldwide.
The Diagnostics segment at Hologic generated sales of $143.4 million in the most recent quarter, up 4.4% year over year (4% on a sequential basis) on the back of strong growth in Cervista HPV and higher ThinPrep pap tests volume. This is encouraging news given the declining revenues recorded at the segment over the past few quarters.
The growth in ThinPrep units was based on a 10% volume expansion in the international market while volume in the domestic market remained static. The US market continues to remain under pressure due to softness in patient visits though the situation has improved from the year-ago period. However, the encouraging part is that pricing has been stable with the company able to maintain its market share globally. Hologic recorded a 20% year-over-year growth in its Molecular franchise during the reported quarter based on 70% growth in Cervista revenues.
With a diverse product suite, Hologic has become an industry giant in the field of women’s health products. However, the company operates in a tough competitive landscape with the presence of large players like Abbott Laboratories (ABT), Qiagen (QGEN) among others. Moreover, the US economy is once again in uncertain waters that might impact patient visits in the forthcoming period.
We currently have a Neutral recommendation on Hologic for the long term, which is in line with the Zacks #3 Rank (hold) that the stock holds over the short term.
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