• AI
  • Molecular Imaging
  • CT
  • X-Ray
  • Ultrasound
  • MRI
  • Facility Management
  • Mammography

Hologic emphasizes women's health, edges toward exit as maker of end-user DRs

Article

Concentration on mammography and bone densitometry will growClaiming the top spot in analog mammography market share, Hologic has announced plans to ramp up its women's health business while deemphasizing sales of its DirectRay

Concentration on mammography and bone densitometry will grow

Claiming the top spot in analog mammography market share, Hologic has announced plans to ramp up its women's health business while deemphasizing sales of its DirectRay end-user product line. The Bedford, MA, company will concentrate its resources largely on mammography and bone densitometry in coming years, but will continue selling its DirectRay detector to OEMs for integration into their end-user systems.

The announcement came as Hologic reported substantially higher revenues for both the fourth quarter and the year ended Sept. 27. Net income for the quarter and fiscal year were also higher. Company executives predicted continued growth through 2004.

In pledging that women's health will be ratcheted up, Hologic chair and CEO Jack Cumming said that the company's ultimate goal is to become a full-service center for women's imaging. Hologic also announced finalization of an agreement giving it exclusive distribution rights in the U.S. for ultrasound products manufactured by Aloka and customized to Hologic's specifications. The three-year agreement includes automatic one-year renewal options.

Hologic may diversify beyond ultrasound. Company strategists are eyeing breast MR as a business option at some point in the future.

Under the ultrasound agreement, which the companies jointly announced on Nov. 11, Aloka will manufacture a high-performance diagnostic ultrasound system optimized for women's imaging, with emphasis on finding and diagnosing abnormalities within the breast. The product will carry a joint Aloka-Hologic label.

"Our entrance into the breast ultrasound market represents a perfect fit with the needs of our current customer base and call patterns of our sales associates," Cumming said. "The system we have customized with Aloka is an elegant platform that will provide the highest image quality and be affordably priced."

Increased emphasis on women's health plays to Hologic's strong suit. Mammography revenue increased 14% to more than $23 million in the fourth quarter, accounting for nearly half the company's total revenue for the period. Osteoporosis assessment revenue rose 15% for the quarter.

The company's sales of Selenia digital mammography systems grew more than 65%, from 16 units in the third quarter to 27 in Q4. Cumming expects Hologic to install more than 100 systems in 2004. Supplying partners Siemens and Agfa with detectors for their digital mammography systems would add another 30 systems.

"Our revenue this quarter hit a record," said Glenn Muir, executive vice president and chief financial officer for Hologic. "We exceeded expectations for the sale of Selenias, bringing the total installed this year to 57, seven more than our earlier expectations for fiscal 2003."

Mammography and osteoporosis assessment sales each showed double-digit growth and were largely responsible for the company's bright earnings report. Those segments and its mini-C-arm business are expected to be the main drivers for future growth within the company.

"For fiscal 2004, we are expecting revenue in this core group (mammography, osteoporosis assessment, and mini-C-arm) to increase approximately 10%, led by a significant increase in sales of Selenia," Muir said.

Cumming had been expected to announce a decision to stop selling DR systems to end users. Instead, company strategists have decided to "redirect" DR resources while continuing to sell the system for at least the next few years.

"We will develop alternate sales channels and alternate manufacturing sites, including ones offshore," Cumming said. "We believe this repositioning will enable us to focus our resources on markets and technology that are more consistent with our emphasis on women's health and have stronger growth potential."

The DirectRay line of end-user products includes Epex, a system for general radiography exams, and Radex, a dedicated outpatient and ambulatory radiography system.

Hologic sold about 70 DirectRay end-user systems in 2004, increasing its installed base to about 150, Cumming said. Sales of these units have not met expectations, however.

"We're essentially selling our systems in competition with our OEMs, which doesn't make much sense," he said.

The company reconsidered dropping the product line after consulting with customers and potential customers. But demand is not sufficient to maintain a strong sales and manufacturing effort. Sales were down from 18 in the third quarter to 15 in Q4.

"We are expecting sales of DR systems to begin trailing off throughout fiscal 2004 as we deemphasize these systems," Muir said. "We have also reduced and reallocated certain costs, which should help improve and lower the operating loss in this segment."

Related Videos
Can Fiber Optic RealShape (FORS) Technology Provide a Viable Alternative to X-Rays for Aortic Procedures?
Does Initial CCTA Provide the Best Assessment of Stable Chest Pain?
Making the Case for Intravascular Ultrasound Use in Peripheral Vascular Interventions
Can Diffusion Microstructural Imaging Provide Insights into Long Covid Beyond Conventional MRI?
Assessing the Impact of Radiology Workforce Shortages in Rural Communities
Emerging MRI and PET Research Reveals Link Between Visceral Abdominal Fat and Early Signs of Alzheimer’s Disease
Reimbursement Challenges in Radiology: An Interview with Richard Heller, MD
Nina Kottler, MD, MS
The Executive Order on AI: Promising Development for Radiology or ‘HIPAA for AI’?
Related Content
© 2024 MJH Life Sciences

All rights reserved.