Hologic's Zika Virus Test Gets FDA Nod For Emergency Use

Hologic, Inc. (NASDAQ:HOLX) was recently authorized by the FDA to use its Aptima Zika Virus test in all 50 states, Puerto Rico and territories of the U.S., for emergency purpose only. Notably, the Aptima Zika Virus assay is a molecular diagnostic test used to identify the presence of Zika virus in human blood.

Hologic will run this in-vitro diagnostic assay on its market leading Panther platform, which is a fully automated molecular testing workflow and substantially reduces hands-on time for laboratories and the potential for manual errors.

Zika Virus Test

Although discovered first in 1947, the first human affected by the Zika virus was reported in 1952 and since then small outbreaks have been reported in tropical Africa, Southeast Asia, and the Pacific Islands. However, it was in May 2015 that the Pan American Health Organization (PAHO) issued an alert regarding the first confirmed Zika virus infection in Brazil. On Feb 1, 2016, the World Health Organization (WHO) declared Zika virus a Public Health Emergency of International Concern (PHEIC).

So far this virus has been predominantly affecting tropical countries only. However, as of Jun 08, 2016, more than 691 confirmed cases of Zika infection have been reported in the continental U.S.

Since no FDA approved tests are currently available in the market to detect the virus, the aforementioned authorization for Hologic’s Aptima Zika virus test will definitely boost this company’s share in the billion-dollar molecular diagnostic market.

Management believes that running this high-complexity test on the Panther platform, which continued to garner new placements and competitive wins in the domestic market (in the last reported quarter), will facilitate quicker results thereby improving patient care.

Our Take

With the Centers for Disease Control and prevention (CDC) currently suspecting a Zika outbreak in new areas, the availability of Hologic’s Aptima Zika virus test, even if for emergency use, is expected to improve test revenue growth for the company.

However, it is worth noting that symptoms of Zika infection are similar to those of chikungunya as well as dengue. So in the event of co-infected patients, Hologic’s Aptima test alone will not suffice. Separate tests should be considered for chikungunya and dengue. Nevertheless, the fact that Hologic introduced the first ever diagnostic assay to detect Zika virus in the market lends it an advantage over its peers in the molecular diagnostics market; which is projected to reach $9 billion by 2020.

Zacks Rank & Key Picks

Hologic currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks are Baxter International Inc. (NYSE:BAX) , ICU Medical, Inc. (NASDAQ:ICUI) and LeMaitre Vascular, Inc. (NASDAQ:LMAT) . All these stocks carry a Zacks Rank #2 (Buy).