Hologic (HOLX), a leading player in the women’s healthcare market, plans to showcase some of its latest products at the 97th Scientific Assembly and Annual Meeting of the Radiological Society of North America, starting November 26 to December 2, 2011 in Chicago.
The products to be featured include three-dimensional (3D) Mammography (breast tomosynthesis) for breast cancer screening and diagnosis; Breast Biopsy Devices, which are designed to offer radiologists swift and efficient system for reduced procedure times; Specimen Radiography and Magnetic Resonance Imaging (MRI) products. The product display will allow researchers globally to have a direct experience of Hologic’s instruments.
With a diverse product suite, Hologic has emerged as the leading player in the women’s health products market. In February 2011, the company received approval from the US Food and Drug Administration (FDA) for its Selenia Dimensions 3D digital mammography tomosynthesis system. Selenia has been developed on the Dimensions platform utilizing tomosynthesis technology to produce both 3D and the conventional two dimensional (2D) full field digital mammography (FFDM) images.
The company’s Dimensions 3D system is a major technological breakthrough and should help generate higher revenues. Hologic is satisfied with the increase in sales of 3D Dimensions and believes that all 2D Dimensions sold will be upgraded to the 3D platform over time.
The company noted that sales of the 3D Dimensions is in its initial stages of launch in the US and despite growth on a sequential basis, significant contribution is not expected before mid-fiscal 2012. Nevertheless, they are confident of being able to achieve the target of placing 500-700 3D systems in the US within the first two years. Going forward, the Dimensions portfolio is expected to be an important growth driver for the Breast Health segment.
However, the economic uncertainty is taking a toll on Hologic as high unemployment is forcing many people to defer physician visits. The company derived about 24% of its revenues from capital equipment.
As a result, the company is exposed to lower hospital spending exacerbated by economic challenges. Moreover, the company faces tough competition from the likes of Conceptus (CPTS), Laboratory Corporation of America Holdings (LH), among others.
We currently have a ‘Neutral’ recommendation on Hologic over the long term (in line with its peers), which also corresponds to a Zacks #3 Rank (hold) over the short term.
