- Hologic has added to its portfolio of technologies focused on women's health with the announcement Monday that it acquired Somatex Medical from E-Med Solutions of Berlin. Hologic paid $64 million for Somatex, which makes minimally invasive devices for breast tumor diagnosis, biopsy and treatment.
- The move comes as Hologic has benefited from a surge in molecular diagnostics sales due to demand for COVID-19 tests. Revenue in that business line more than tripled in the fourth quarter ended in September.
- Hologic CEO Steve MacMillan, speaking to analysts on Hologic's earnings call in November, signaled the company's intent to put its cash flow to work in pursuit of a "full funnel" of acquisition targets.
Hologic seized the opportunity to ramp its testing business to meet demand created by the COVID-19 pandemic and has reaped the rewards of that considerable effort. Revenue surged more than 55% in the fourth quarter, driven by a 376% increase in worldwide molecular diagnostics sales, even as the company's women's health businesses were hurt by reduced procedure demand amid the turmoil caused by the pandemic.
Analysts have viewed Hologic's core businesses of women's health and diagnostics as particularly well suited to withstand the uncertainties of the current healthcare environment: A second wave of COVID-19 infections portends sustained demand for testing products, while breast health stands to benefit from a return to normal healthcare routines.
MacMillan in November suggested ongoing screening for the virus will continue to buoy demand for testing tools for years to come. Yet even with its success in emerging as a major supplier of COVID-19 tests, Hologic seems to be laying the groundwork for future growth in a post-pandemic world.
Somatex's Tumark devices facilitate the precise marking of biopsy sites and lesions in the breast tissue. Before the acquisition, Hologic distributed the tissue marker's products in the U.S. for Somatex.
Acquiring the device maker will help Hologic expand its growing breast marker portfolio while boosting its sales presence in Europe with a direct channel in Germany and a network of regional and international distributor partners, the Marlborough, Massachusetts-based company said. The acquisition is expected to be slightly accretive to non-GAAP earnings per share starting in the current fiscal year, according to Hologic.
The deal follows Hologic's $80 million acquisition of fibroid treatment developer Acessa Health, which closed in the fourth quarter, and the divestiture of its Cynosure medical aesthetics business at the end of 2019.
Looking ahead, MacMillan has indicated more acquisitions could be on the horizon for the company, saying in November he would be "surprised if we didn't complete at least another deal or two in fiscal 2021." The CEO also indicated a desire to broaden Hologic's diagnostics platform.