Hologic Grows Skeletal Health Range

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In line with its strategy of portfolio expansion, Hologic Inc. (HOLX) launched its redesigned DXA (dual energy X-ray absorptiometry) imaging system – Horizon. This novel system will be used for the determination of the triad of critical health problems – obesity, cardiovascular disease and osteoporosis.  The Horizon platform is simultaneously being commercialized in the domestic market and other countries.

The Horizon platform is embedded with Hologic’s proprietary technologies. It is expected to improve workflow efficacy on the back of superior design components and expanded technical capabilities.

Hologic spearheaded into the DXA market with the launch of the foremost QDR bone densitometer. Following this, management asserts that it maintained its authoritative stance in the DXA market on the heels of persistent investment in research and development. According to the company, the commercialization of the Horizon platform further strengthens its foothold in the market.

Market Potential

Considering the exponential rise in incidence of cardiovascular disease, osteoporosis and obesity-related problems across the globe, there is a vast market opportunity for Hologic’s Horizon platform.  According to estimates from Handout on Health: Osteoporosis, one in two females over the age of 50 are prone to osteoporosis-related fracture during their lifetime. The same applies to one in four men over 50 years of age.

As per findings from World Health Organization (:WHO), roughly 17 million deaths worldwide are caused by cardiovascular disease annually. Moreover, WHO estimates that approximately 2.8 million individuals annually die of obesity-related complications.  

Besides, according to medical journal The Lancet, there has been 82% rise in the incidence of obesity over the last 20 years. Thus, these problems present an attractive opportunity for Hologic to garner incremental revenues.

Our Take

The market launch of the Horizon platform is an upside for the company as it will expand Hologic’s Skeletal Health business. In the last quarter, higher sales of densitometry systems led growth for the franchise. We believe that commercialization of lucrative products will boost segment revenues.

On the tepid side, Hologic is still plagued by looming challenges such as lower sale of legacy products, economic uncertainties in Europe, slower sales cycles and increasing pricing pressure. The company’s downward revision of guidance for the ongoing fiscal reflects that any near-term improvement in the situation is unlikely.

The estimate revision trend for the ongoing and next fiscal year also underlines bearish sentiments towards Hologic. Currently, the stock carries a Zacks Rank #5 (Strong Sell).

While we prefer to avoid Hologic, other stocks such as Cyberonics Inc. (CYBX), Thoratec Corp. (THOR) and Luminex Corporation (LMNX) warrant a look. While Luminex carries a Zacks Rank #2 (Buy), the other two are Zacks Rank #1 (Strong Buy) stocks.

Read the Full Research Report on HOLX

Read the Full Research Report on THOR

Read the Full Research Report on LMNX

Read the Full Research Report on CYBX

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