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Hologic Snaps Up Fibroid Specialist Acessa For $80M; BTIG Bullish

support@smarteranalyst.com (Ben Mahaney)
·3 mins read

Hologic (HOLX) has snapped up Acessa Health, a privately-held innovator in minimally invasive treatment for fibroids, for approximately $80 million in cash plus payments based on future revenue growth.

“Acquiring Acessa Health strengthens our leadership position in the GYN surgical space and broadens our fibroid treatment portfolio with a highly complementary new product,” said Essex Mitchell of Hologic.

Acessa Health markets the Acessa ProVu system, a fully integrated laparoscopic system that combines radiofrequency ablation with advanced intra-abdominal ultrasound visualization and guidance mapping, enabling physicians to effectively and safely treat women with symptomatic, benign uterine fibroids.

Clinical studies have shown that the Acessa ProVu system is a safe and minimally invasive alternative to hysterectomy and myomectomy. The system is indicated for treatment of benign uterine fibroids and is designed to detect more fibroids as compared to current imaging modalities.

Radiofrequency treatment of fibroids is supported by clinical data demonstrating less blood loss and faster recovery times as compared to standard treatments currently available.

Uterine fibroids are common, benign tumors that grow in or on the uterus. The incidence of uterine fibroids among women is between 50% and 60%, increasing to approximately 70% by age 50.

Hologic estimates that Acessa Health will generate approximately $13 million of revenue in fiscal 2021. The acquisition is expected to be slightly dilutive to Hologic’s non-GAAP earnings per share in fiscal 2021, break-even in 2022, and accretive thereafter.

Shares in Hologic are up 27% year-to-date, and the stock scores a cautiously optimistic Moderate Buy Street consensus. That’s with an average analyst price target of $77 (16% upside potential).

Following discussions with management, BTIG analyst Ryan Zimmerman reiterated his buy rating on Hologic with a $84 price target. He focused on the outlook for Hologic’s COVID-19 tests, which have received emergency approval in the US. These tests detect the virus from a respiratory specimen taken via a nose or throat swab.

“While there is likely to be some reduction in testing following the approval of a vaccine, we think it is unlikely that the need for testing changes dramatically over the next year or two” commented Zimmerman.

“This view is based on our skepticism around how quickly a vaccine can be rolled out given the scale required, our continued belief that testing represents the cornerstone of a functioning post-COVID society, and the fact that vaccines are not typically more than 50% to 60% effective” he continued.

As a result, the analyst concludes that COVID testing is here to stay, and HOLX is well-positioned from a competitive standpoint. (See HOLX stock analysis on TipRanks).

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