Hologic forges strategy in women’s health, orthopedics, and rheumatology

October 10, 2005

Hologic is diversifying its product base while consolidating its strengths in core areas.

Hologic is diversifying its product base while consolidating its strengths in core areas.

In late August, the company, a major provider in women's healthcare, signed an exclusive agreement with Esaote to distribute the Italian firm's extremity MR systems in the U.S. The deal, publicly disclosed Sept. 22, runs for three years.

As Hologic began introducing Esaote's E-scan and C-scan products to its direct sales force, company executives were closing another deal: the purchase of Fischer Imaging's mammography intellectual property for $32 million in cash.

Fischer had been among the first companies to introduce a full-field digital mammography system to the U.S. marketplace. But Hologic, whose revenues have boomed on the sale of its own FFDM, was not interested in Fischer's SenoScan slot-scanning device. Rather, the IP purchase was aimed at acquiring the rights to Fischer technology developed to perform breast biopsy.

The two apparently disparate moves are part of an unfolding strategy at Hologic, one the company will implement by leveraging existing distribution channels.

The campaign to sell Esaote-supplied MR equipment kicked off at a meeting dedicated to hand surgery, a seemingly unlikely venue for such a debut, yet one that made sense to Hologic. Company strategists had decided to utilize the sales force that sells Fluoroscan x-ray C-arms to sell the Esaote MR C-scan and E-scan products. This group, composed primarily of independent distributors, was at the Sept. 22 to 24 meeting in San Antonio, said Tom Umbel, vice president of business development at Hologic.

The introduction was the first of several planned steps in the company's preparations to sell the MR extremity scanners.The next step is to bring in the sales force, direct and otherwise, connected with the company's bone densitometers. With the mobile C-arm sales force, they will address the two key medical areas associated with extremity MR.

Orthopedics has been Hologic's core constituency, Umbel said, but the growth opportunity is in rheumatology.

"The availability of new therapies is driving rheumatologists to perform diagnostics," said Brad Herrington, vice president and general manager of Hologic's bone densitometry, C-arm, and now MR products. "Outpatient rheumatology is the new wild card that can change the market dynamics of extremity MR."

Not included in the agreement with Hologic is Esaote's latest development, G-scan. This system, introduced last year at the RSNA meeting, is a compact MR scanner dedicated to musculoskeletal imaging. A tilting table allows scans with the patient standing or supine. So far G-scan is being marketed only in Europe, but the company has obtained FDA clearance.

"E- and C-scan are the first two products and that is by design," Umbel said. "We want to walk before we run. But after we are established with these products, there may be new product offerings."

As the MR deal takes root, Hologic will add MR specialists to its direct sales force. They will be called in when initial contacts uncover interest in extremity MR.

The purchase of Fischer's mammography IP reflects a different part of Hologic's strategy, this one aimed at opportunities expected to grow in lockstep with the proliferation of FFDMs. Next-generation FFDM systems are being outfitted with the ability to perform biopsies, but Umbel expects this use to be limited by the need to maximize screening and diagnostic efficiency.

"Digital mammography systems are the workhorses of these departments and the primary devices for workflow," he said. "To stop and use them to do half-hour procedures for biopsy is not the ideal situation. Plus, women are more comfortable on a prone table."

Owning Fischer's IP strengthens Hologic's position in the market segment dedicated to prone biopsy tables, which it addresses with the Lorad MultiCare Platinum table. Hologic did not purchase the Fischer installed base, nor does it plan to market the Fischer product, although it may consolidate some of the technology in future systems, according to Umbel.

"The IP will strengthen our sales and has put us in a better position with the biopsy companies to talk to us about building relationships with them in the marketplace," he said.

Hologic's recent moves will not be its last. Company executives are keeping an eye open for other strategic efforts, including alliances and acquisitions. They could be in any field related to their core competencies, Umbel said, but will most likely address women's health.