Hologic's FDA Nod For Quantra Software Boosts Breast Health

Hologic, Inc. (NASDAQ:HOLX) announced the receipt of FDA 510(k) clearance for its Quantra 2.2 Breast Density Assessment Software. This software helps clinicians provide women with consistent breast density assessments during routine breast cancer screenings.

To understand the distribution and texture of breast tissue in a better way, Quantra software analyzes mammography images and delivers patient-specific breast density assessment to clinicians. Physicians can now provide an unbiased breast density assessment that rules out possibilities of visual subjectivity.

Quantra software is available for use with Hologic 3D Mammography systems, including the new 3Dimensions mammography system. Notably, the software leverages on the company’s flagship Hologic Cenova Server and minimal technical specs platforms. Notably, Hologic Cenova and Quantra products are only available on Hologic mammography systems.

Breast Health Segment Gets a Boost

The latest regulatory progress is likely to enhance Hologic’s Breast Health Segment. Notably, revenues at the Breast Health segment (37.5% of net revenues) increased 2.9% on a year over year basis (up 2.4% at CER) in the last reported fourth quarter. Revenues in the United States slipped 1.2%. International revenues however climbed 20.6% year over year at CER.

Hologic is consistently trying to improve its Breast Health business. In line with this, the company recently announced a development and distribution agreement with Clarius Mobile Health for its portable ultrasound scanner system. Also, Hologic announced the commercial availability of its SmartCurve breast stabilization system. This has been clinically proven to deliver a more comfortable mammogram without compromising on image quality, workflow or dose.

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.

Moreover, per an article by BreastCancer.Org, approximately 252,710 new cases of invasive breast cancer in women are likely to be diagnosed in the United States in 2017. They project 63,410 new cases of non-invasive (in situ) breast cancer this year as well.

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 bountiful prospects in this market.

Shares Shine Bright

Over the past month, the company’s share price has outperformed the broader industry. The stock has gained 9.8%, higher than the broader industry’s 3.4%. The company has also outperformed the 1.3% gain of the S&P 500 market.

Bottomline

We believe an ageing population, rising awareness and expenditure in healthcare will continue to drive growth in the breast cancer screening market. Not just America, the growing demand for breast imaging in Asian countries and technological developments in breast cancer detection are expected to open up opportunities for market players.

On the other hand, high installation cost of breast imaging systems, side-effects of radiation exposure and errors in breast cancer screening and diagnosis are impeding the global breast imaging market.

This market is dominated by well-established players, Quest Diagnostics (NYSE:DGX) being the most prominent one. Quest Diagnostics’ Quest Vantage services help discover genetic variants related to the hereditary risk of 15 types of cancer, including breast, colorectal, pancreatic and renal.

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. 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 gained 15.5% over the last three months.

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