Hologic's Alliance With Philips to Boost Breast Health Unit

In a bid to enhance the breast health portfolio, Hologic, Inc.HOLX recently announced a worldwide collaboration deal with Royal Philips PHG , a leading health-technology company. The global partnership agreement will provide integrated imaging solutions for women's health.

Notably, the financial details of this multi-year, non-exclusive global partnership agreement have not been disclosed.

The agreement has been signed to offer integrated solutions to care professionals. These solutions will include diagnostic imaging modalities, advanced informatics, and services for screening, diagnosis and treatment of women across the world.

The deal, coupled with Hologic's innovative mammography technologies and Philips' leading portfolio of ultrasound, MRI, CT, X-ray systems, advanced informatics and broad range of services, is anticipated to boost the Breast and Skeletal Health Solutions segment of the former.

With this partnership, Hologic and Philips will work on projects which, previously, could not be undertaken by the companies. Per the press release, as part of the multi-modality deals for hospitals and health systems, Philips will now be able to offer select products from Hologic's breast health portfolio, including the latter's new 3Dimensions mammography system.

Breast Health Unit in Focus

Solid Growth

We are upbeat about Hologic's consistent efforts to gain traction in the Breast Health business that has contributed 36% to the company's overall top-line growth in first-quarter fiscal 2018. This segment has recorded 4.2% growth at constant currency in the quarter.

The company's unique direct-to-consumer initiatives in the segment have provided it with a competitive edge in the niche space.

Recent Developments in the Segment

In November 2017, the company announced a development and distribution agreement with Clarius Mobile Health for its portable ultrasound scanner system. The company also announced the receipt of the 510(k) clearance from the FDA for its Quantra 2.2 Breast Density Assessment Software later in the month. Notably, the software can be used with Hologic 3D Mammography systems.

Within this segment, the company has redesigned its R&D strategy toward continued innovation around its leadership position in 3D mammography. Also, in November, the company announced plans to make all of its mammography systems available for the Dutch Breast Cancer Screening Program in collaboration with Tromp Medical, Hologic's distributor in the Netherlands.

In line with this, starting 2018, Hologic's latest 3Dimensions mammography systems will be installed in mobile and stationary screening facilities in the Netherlands. In September 2017, Hologic announced the commercial launch of the 3Dimensions mammography system in Europe.

Notably, in conjunction with enhanced 3D image quality for radiologists, this system provides improved workflow for technologists. Moreover, it aims to provide a more comfortable mammography experience with low-dose options. The company is optimistic about the recent addition to its suite of breast cancer screening, diagnostic and interventional solutions under the Breast Health business.

Market Trends Buoy Optimism

Per a report by DPI Research on Medium, the breast cancer screening market in the United States is expected to reach a value of roughly $5.8 billion by 2022.

Also, per a report by GBI Research, the global breast cancer treatment market will reach a value of $17.2 billion by 2021, at a CAGR of 7.3%.

Thus, the company clearly has solid prospects in this market.

Share Price Performance

Over the past month, Hologic has declined 5.4%, underperforming the industry 's gain of 0.8%. However, the company's estimate revision trend for the current year has been encouraging. In the past couple of months, 11 analysts moved north versus one movement in the south. Earnings estimates have been raised around 5.6% to $2.25 per share during the same time frame.

Zacks Rank & Key Picks

Hologic carries a Zacks Rank #2 (Buy).

Couple of top-ranked stocks in the broader medical sector are Bio-Rad Laboratories BIO and PerkinElmer PKI .

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

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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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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