Hologic readies tomosynthesis product for early 2008

Hologic will soon add to the digital fever sweeping the mammography community with a new product that creates volumetric reconstructions of the breast. The company's version of tomosynthesis technology is currently under FDA review. Chairman and CEO Jack Cumming said he expects U.S. sales of the product to begin by March 2008.

Because 3D visualization solves tissue overlap problems that can obscure signs of cancer, breast tomosynthesis promises lower recall rates and improved detection, according to the company. Algorithms will assemble data obtained from multiple low-dose exposures into a 3D model of the breast.

Much of the company's current success is tied to the rising popularity of digital mammography and its Selenia full-field digital system, sales of which have boomed over the past few years. During Selenia's first quarter introduction in 2003, Hologic sold just three units. By the end of that fiscal year, quarterly sales had risen to 27, then slowly climbed until taking off in 2006. Last year the company sold 555 Selenia units. In the first two quarters of 2007, it sold 510. By the end of this quarter, the company's backlog for orders had risen to 533.

"Driving the adoptions are the clinics that need to stay competitive with hospitals across town," Cumming said June 14 at the Needham & Company Biotechnology and Medical Technology Conference in New York. "This is being driven by patient awareness asking clinics if they offer digital."

Selenia has earned Hologic a 38% share of the worldwide market for full-field digital mammography systems and about 45% of the U.S. market, according to the company. If Hologic can hold or increase its share, revenues will likely continue to boom.

"The demand for digital equipment has accelerated earlier than might have been thought," Cumming said. "And we are still in the early stages of its adoption."

Data accumulated by the FDA as of June 1, 2007, indicate that just 21% of the 8812 facilities in the U.S. certified to conduct mammography have obtained full-field digital mammography systems. About the same percentage of the 13,446 accredited units are digital.

Hologic's rising fortunes and an increasing profile in the investor community may have helped spread rumors that the company is the target of an unsolicited takeover. Forbes.com reported Cumming's denial of a rumor that the Hologic board had turned down a $75 per share offer, quoting the chief executive as saying the rumor was "ludicrous."

Hologic itself has been on a buying spree the last couple of years and is currently engaged in a $6 billion-plus deal to merge with women's health specialist Cytyc. Last year the company bought computer-aided detection pioneer R2 Technology, breast biopsy maker Suros, and selenium detector-plate provider AEG.

In the fiscal year ahead, which begins in October, Hologic is predicting revenue in excess of $1.7 billion and long-term annual revenue growth of 20%.