Hologic (HOLX) Product Pipeline Strong, Competition Rife
On Jun 27, we issued an updated research report on Hologic, Inc. HOLX, headquartered in Bedford, MA. The company manufactures mammography systems for breast examination and osteoporosis assessment. Hologic currently carries a Zacks Rank #3 (Hold).
Over the past one year, Hologic has been trading above the Zacks categorized Medical - Instruments industry. The company has gained 33.7%, when compared to the 15.3% gain of the broader industry.
We are encouraged to note that the company is constantly making efforts to expand its business. Hologic recently announced the receipt of FDA clearance to market the Aptima Herpes Simplex Virus (HSV) 1 & 2 molecular assay on the fully automated Panther system.
Also, the company announced that the U.S. FDA has granted an expanded clearance for Cynosure's non-invasive body contouring product, SculpSure, to treat the back as well as inner and outer thighs.
In February, Hologic launched a next-generation NovaSure ADVANCED product in the U.S. for the treatment of abnormal uterine bleeding. Further, the company announced FDA approvals for two important new diagnostic assays. These are viral load tests for HIV-1 and the hepatitis C virus. Hologic also announced that its Aptima Zika Virus diagnostic assay received CE mark in Europe for the detection and diagnosis of the Zika virus in patients. Management also continues to expect U.S. regulatory clearance for its hepatitis B assay in 2018.
The company’s strong product pipeline is also encouraging. In this regard, Hologic is working on innovation and product launches. At Diagnostics, it recently filed for regulatory approval of its Aptima Hepatitis C viral load test in the U.S. and anticipates the product launch in 2017, following the introduction of its HIV viral load assay. Under the breast health segment, Hologic has focused its R&D strategy on continuous innovation to fortify its leadership position in 3D mammography. Meanwhile, the Affirm prone biopsy system and upcoming Brevera products are likely to provide real-time specimen radiography to improve breast biopsy workflow and patient experience.
This apart, the company acquired Medicor, its long-time distributor of breast and skeletal health products in Germany, Austria and Switzerland. This opens up considerable scope for the company and also helps it to gain direct access to customers.
Moreover, the Medicare payment rates, which came into effect on Jan 1, 2015, will allow providers in the U.S. to determine coverage policies specific to screening and diagnostic 3D mammography. Management expects the new Medicare payment rates to allow more women to gain access to this 3D screening test, which is the only one approved by the FDA as clinically superior to standard mammography. We believe the availability of reimbursement for 3D mammography coupled with the substantial body of published studies, which showed positive results in favor of the 3D test, will boost demand for the same.
On the flip side, foreign exchange headwinds continue to affect the company’s international performance. Hologic operates in a highly competitive industry. Its mammography, related products and subsystems compete on a worldwide basis with products offered by the likes of General Electric Company (GE), Siemens, Koninklijke Philips NV, or Philips, FUJIFILM Holdings Corporation, or Fuji, I.M.S., and Toshiba Corporation, to name a few.
Key Picks
A few better-ranked medical stocks are Align Technology, Inc. ALGN, Inogen, Inc. INGN and Accelerate Diagnostics, Inc. AXDX. Notably, Inogen sports a Zacks Rank #1 (Strong Buy), while Align Technology and Accelerate Diagnostics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 30.7% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 19.7% over the last three months.
Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has added roughly 17.9% over the last three months.
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