In a major achievement,
), a prominent player in the field of women's health, has won an
award for its Selenia Dimensions (3D/2D) mammography systems in the
digital mammography category in the KLAS annual survey. KLAS, a
research firm tracking the performance of healthcare vendors, is
committed to improving healthcare delivery.
Hologic's Selenia Dimensions (3D) digital tomosynthesis system
has been getting positive feedback supported by gradual uptake
subsequent to approval from the US Food and Drug Administration
(FDA) in February 2011. Selenia has been developed on the
Dimensions platform utilizing tomosynthesis technology to produce
both 3D and the conventional 2D full field digital mammography
("FFDM") images. The images can be used to screen and diagnose
breast cancer. Although increasing the patient's radiation
exposure, a combination of both 2-D and 3-D images enhances the
accuracy of detection of the disease.
Sales of Dimensions continued to gain traction and represented
67% of digital mammography revenue and 57% of units in the most
recent quarter (ahead of 62% of revenues and 50% of units in the
first quarter of 2012). Besides, Tomosynthesis upgrades represented
approximately 20% of total tomosynthesis unit sales. Given the
current status (35% accomplished till date and targeting 60% at the
end of the current fiscal), the company is confident of placing the
targeted 500-700 3D systems in the US within the first two years of
approval. Going forward, we believe that the Dimensions portfolio
would be an important growth driver at the Breast Health
With a wide range of products, Hologic has become an industry
giant in the field of women's health. The company is also
undertaking several steps, including acquisitions, international
expansion and product development, to bolster its top line.
Moreover, the proposed acquisition of
(GPRO) will propel the company to a prominent position in the
molecular diagnostics segment.
We were disappointed with the second quarter revenue number that
missed the consensus estimate and was on the lower end of the
company's guidance. We are nonetheless reassured by the company's
reaffirmation of its fiscal 2012 guidance despite the
discontinuation of Adiana.
However, procedure volumes are feeling the brunt of a weak
economy and persistent unemployment, which adversely affect sales.
Moreover, we remain concerned about the high leverage of the
company owing to the Gen-Probe deal. The company also faces stiff
competition from players such as
), among others.
We have a Neutral recommendation on Hologic. The stock retains a
Zacks #3 Rank (hold) in the short term.
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