Hologic (HOLX) Focuses On Breast Health, Ties Up With Clarius

Hologic, Inc. (NASDAQ:HOLX) has continued to make a series of strategic developments within its core Breast Health business that contributes to approximately 40% to the company’s overall top line. Lately, the company announced a development and distribution agreement with Clarius Mobile Health for its portable ultrasound scanner system.

Per the company, the integration of Clarius’ wireless ultrasound system with Hologic’s deep learning algorithms will improve the line of breast health solutions available to patients. However, the financial terms of the agreement remain undisclosed.

We are upbeat about Hologic’s consistent efforts to gain traction in the Breast Health business. Last week, the company also announced the receipt of 510(k) clearance from the FDA for its Quantra 2.2 Breast Density Assessment Software. Notably, the software can be used with Hologic 3D Mammography systems. In June, Hologic announced that the FDA has labeled its Genius 3D Mammography exam better than the standard 2D mammography for routine breast cancer screening of women with dense breasts.

Within this segment, the company has redesigned its R&D strategy toward continuous innovation around its leadership position in 3D mammography. This month, 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 new 3Dimensions mammography systems will be installed in mobile and stationary screening facilities in the Netherlands. Notably, roughly 1.3 million women in the country are invited for screening every year under this program.

In September, Hologic announced the commercial launch of 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 upbeat about the latest addition to its suite of breast cancer screening, diagnostic and interventional solutions under its Breast Health business.

In August, Hologic announced the commercial launch of the Brevera breast biopsy system with CorLumina imaging technology in the United States. This is a real-time breast biopsy and verification system that enhances workflow, improves patient experience and streamlines the entire biopsy process. Management is optimistic that Brevera will contribute more in 2018.

In April, Hologic acquired the long-time distributor of breast and skeletal health products, Medicor. This distributor covered sales in Germany, Austria and Switzerland and gives direct access to customers and has full control over commercial strategy. Moreover, this acquisition has started contributing to the top line. In this context, the company witnessed an increase in international sales in fiscal 2017, courtesy of the Medicor buyout.

Per data provided by Markets and Markets, the breast imaging market is expected to reach a worth of $4.14 billion by 2021, at a CAGR of 8.5% since 2016. However, more searches reveal that the global breast biopsy market is set see a CAGR of 10.70% in the 2017-2021 period (per Research and Markets data published in Business Wire).

Share Price Performance

Moreover, Hologic has been gaining investor confidence on consistently positive results. Over the past month, the stock has gained 9.8%, outperforming the broader industry’s 3.4%. The company has also outperformed the 1.3% gain of the S&P 500 market.

Zacks Rank & Key Picks

Hologic carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. (NASDAQ:PETS) , Myriad Genetics, Inc. (NASDAQ:MYGN) and Luminex Corp. (NASDAQ:LMNX) . While PetMed and Myriad sport a Zacks Rank #1 (Strong Buy), Luminex carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 76.8% in a year.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has gained 12.5% over the last three months.

Luminex has a long-term expected earnings growth rate of 16.3%. The stock has rallied 15.5% over the last three months.

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