Dutch Approval for Hologic's HPV HR - Analyst Blog

By Zacks Equity Research,

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Hologic ( HOLX ), a prominent player in the field of women's health, recently got the Netherlands Society for Pathology's ("NVVP") approval for its Human Papillomavirus ("HPV) high-risk test Cervista HPV HR for the use in the national cervical screening programme of Netherlands. The latest approval for HPV HR will help Hologic to tap the growing molecular diagnostic market in the Netherlands and will boost its international endeavors.

The Cervista HPV HR test helps detect HPV, one of the widely held sexually transmitted diseases ("STD") causing cervical cancer. This test uses sample collected through Hologic's ThinPrep Pap test and works on its Cervista MTA (Medium Throughput Automation) system for the extraction of DNA and HPV detection. Following the approval, The National Institute for Public Health and the Environment in The Netherlands ("RIVM") suggested routine Pap testing and HPV HR triage for ASCUS/LSIL testing for women aged 30 and above.

With a wide range of products, Hologic has become an industry giant in the field of women's health. The company is undertaking several steps, including acquisitions, international expansion and product development to bolster its top line. Moreover, the pending acquisition of Gen-Probe (GPRO) will position Hologic favorably in the molecular diagnostics segment with special focus on the women's health.

It is expected that the acquisition will prove to be valuable for Hologic over the long term. With 61% of revenues from molecular diagnostics, Gen-Probe is a major player in molecular diagnostics products and services that are deployed primarily to diagnose human diseases, screen donated human blood, and helps ensure transplant compatibility. Hologic will also have access to Gen-Probe's molecular diagnostic platforms of Tigris and Panther.

However, we are disappointed with Hologic's preliminary third quarter 2012 result. The company will report revenues of approximately $470 million in the quarter, up 4.2% year over year but lower than the current Zacks Consensus Estimate of $477 million.  We also remain concerned about the high leverage of the company owing to the Gen-Probe deal. Hologic is also suffering from weak procedure volumes due to macro-economic issues and persistent unemployment. The company faces stiff competition from players such as Qiagen ( QGEN ) and Abbott Laboratories ( ABT ). 

Currently with 80% market share in HPV space with its largest selling consumable product digene HC2 HPV Test, Qiagen is a dominant player in this market. The company also expects to strengthen its position further in this field with the recent acquisition of AmniSure International.

Qiagen currently retains a Zacks #3 Rank (short-term Hold), in line with Abbott. However, Hologic holds a Zacks #4 Rank (short-term Sell rating).

ABBOTT LABS (ABT): Free Stock Analysis Report
HOLOGIC INC (HOLX): Free Stock Analysis Report
QIAGEN NV (QGEN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: ABT , GPRO , HOLX , QGEN

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