- The Department of Health and Human Services and Department of Defense committed up to $7.6 million to Hologic for the company to bolster production of sample collection and processing supplies to expand availability of COVID-19 testing in the U.S., the agencies announced over the weekend.
- The investment, intended to support a 40% increase in manufacturing by the company, comes as commercial labs such as Quest Diagnostics and LabCorp scramble to increase coronavirus testing capacity to meet demand and companies including Abbott, BD, Roche and Thermo Fisher Scientific introduce new tests.
- Increased volumes of the tube, cap and multi-tube unit consumables, which perform molecular diagnostic tests on Hologic's Panther and Panther Fusion systems, are expected to reach the market by January, the agencies said.
The federal government said its funding will result in a boost to Hologic's production from 4.8 million COVID-19 tests per month to 6.8 million tests per month. “Hologic’s platform is in high demand, and with this investment, we will be able to improve the supply to laboratories across the country,” HHS Assistant Secretary for Health Brett Giroir said in a press release.
William Blair analysts, in a note to clients, said the 40% increase to Hologic's capacity will have a meaningful impact in the fight against the pandemic, while increasing the company's share of the COVID-19 laboratory testing market. Hologic has more than 1,100 Panther and Panther Fusion systems installed domestically. One system can perform more than 1,000 tests in a 24-hour period.
The Blair analysts pegged the company's current share of the U.S. COVID-19 molecular testing market between 25% and 30% and predicted the manufacturing expansion could create a $150 million windfall in quarterly revenue for Hologic.
Funding for Hologic's expanded production effort comes from the Paycheck Protection Program and Health Care Enhancement Act that enables domestic expansion for critical medical resources.
In early March, Hologic received about $700,000 from the Biomedical Advanced Research and Development Authority to support development of its first COVID-19 test, compatible with the company's Panther Fusion system. Later in March, it received an FDA emergency use authorization for the test. In May, Hologic gained an EUA for a second assay, called Aptima, for its more widely used Panther platform.