How Hologic Gained Strength Under the Cloud of COVID

Hologic is emerging from the COVID-19 pandemic a stronger company than it was before. Here's how.

Amanda Pedersen

February 3, 2023

5 Min Read
Hologic breast health imaging system with a clinician imaging a patient using the machine
Image courtesy of Hologic

To say that Hologic is not the same company today that it was three years ago might be an understatement. The Marlborough, MA-based company is one of the few that has been able to successfully diversify itself through both organic R&D as well as strategic tuck-in acquisitions to emerge from the COVID-19 pandemic a stronger medtech company than it was before.

CEO Stephen MacMillan reflected on the logic behind Hologic's transformation this week during the company's fiscal first-quarter earnings call.

"Reflecting on our transformation, it really started well before COVID," MacMillan said during the call, according to SeekingAlpha transcripts. "Three years ago we were ready to show the world how we had diligently and thoughtfully strengthened our business for growth. Then, the pandemic hit. And when it did, we established three goals. One, take care of our employees, which we have done. Two, meet the world's needs for highly accurate molecular diagnostic COVID testing, which we continue today. And three, emerge as a fundamentally stronger company, which is happening now."

Hologic's performance during the first year of the COVID-19 pandemic made such an impression on you, our readers, that it was voted MD+DI Readers' Choice for Medtech Company of the Year 2020. This year it was our editorial team's turn to be impressed with the Marlborough, MA-based company.

Hologic's performance during the first year of the COVID-19 pandemic made such an impression on our readers that it was voted MD+DI Readers' Choice for Medtech Company of the Year 2020. The following year, Hologic was again honored by MD+DI readers for its commitement to women's health, and also was selected by our editorial team as the Medtech Company of the Year 2021.

"Under the cloud of COVID, while successfully deploying Panthers and producing our COVID assays, we strengthened Hologic for the long term, to a level higher than even we had imagined prior to the pandemic," MacMillan said. "We achieved this through the combination of innovative internal R&D efforts, plus a series of tuck-in acquisitions. As a result, we've had continuous new product releases that have fundamentally transformed our business and boosted our growth profile. Now as the COVID cloud begins to clear, it is increasingly more evident that we are geared for success, geared for growth, and geared to sustained performance over the long term."

Diversification of the company's portfolio has been key to this transformation, and served Hologic well last year as it grappled with the global chip shortage on the breast health imaging side of the business.

"Across all divisions, we are innovating, acquiring and building new markets, entering underdeveloped markets, and penetrating existing segments," MacMillan said. "All while continuing to defend and even grow share in the markets we lead. Our growth in each division is grounded in strong and durable core products. These resilient core franchises are backed by long established clinical needs and commercial relationships, which provide a rock solid foundation to leverage into our newer growth drivers. We leverage our installed bases and customer relationships to advance our newer products, which we expect to both diversify the portfolio and accelerate growth."

Hologic's diagnostics division has grwon from primarily a U.S. women's health business to a global diagnostic franchise with multiple growth drivers. The company has more than 3,350 Panthers worldwide, and has expanded its footprint with the acquisitions of Biotheranostics, Diagenode, and Mobidiag. MacMillan said Hologic is already seeing solid contributions from those acquisitions.

"Driving future growth for diagnostics means leveraging our expanded Panther installed base. These customers are adopters of our newer assays, including BV/CV/TV, and M.gen. We add menu, promote guidelines, and drive adoption through our women's health clinical channel. Likewise, we also leverage our Panther installed base to enter established categories such as virology, and respiratory testing," MacMillan said.

Hologic Panther diagnostic testing system

In breast health, revenue from our 3D mammography equipment and related service represents the core revenue foundation of the division, MacMillan said. He also noted that the division is primed for future growth through a further portfolio expansion, and that fiscal 2023 growth is being driven by the return of chip supply and gantry availability.

"We have expanded from what was once a capital intensive business by growing service revenue and adding more recurring disposable revenue," MacMillan said. "In doing so, we are creating new markets as with our Brevera breast biopsy system, while also entering existing markets where we compete with clinically differentiated products. And while we are leaders in the screening space, our R&D teams are poised to keep us ahead of the pack."

Hologic's surgical business has also changed dramatically, the CEO noted. What once was essentially a two-product division is now much more robust and diverse. In the fiscal first quarter of 2023, revenue outside of NovaSure and MyoSure represented roughly 25% of the division's total compared to only about 10% in fiscal 2019.

" While NovaSure and core MyoSure still formed a strong durable base of the division, the business is far more dynamic than pre-pandemic," MacMillan said. "We now have meaningful growth drivers outside of these two core product lines from acquisitions, new in-house products and also improvements to existing products."

The company's internal R&D efforts on the surgical side has included Fluent, a solution designed for hysteroscopic fluid management, and NovaSure V5, an endometrial ablation system. 

"By acquisition, the Acessa procedure and the Bolder advanced vessel sealing portfolio also diversify and elevate the division's growth trajectory," MacMillan said. "These are both laparoscopic tools that we've moved swiftly to acquire during COVID times and have added to our prior hysteroscopic-only offering. Acessa is a unique radio frequency fibroid removal solution where we are building a new market and improving payer coverage. In Bolder, we are entering an underdeveloped market by deploying our large surgical sales force to introduce our advanced sealing portfolio to the OB/GYN market."

The CEO also noted during the call that Hologic's international business is much stronger and poised for future growth post-pandemic.

"We are now a transformed, much stronger Hologic with more diverse growth drivers across each business and a much larger, more capable international presence," MacMillan said. "And through our innovative R&D and effective tuck in acquisition strategy, we are well positioned to continue to drive strong sustainable growth for years to come."

About the Author(s)

Amanda Pedersen

Amanda Pedersen is a veteran journalist and award-winning columnist with a passion for helping medical device professionals connect the dots between the medtech news of the day and the bigger picture. She has been covering the medtech industry since 2006.

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