Stephen P. Macmillan, Chairman, President, and CEO
Robert W. McMahon, Chief Financial Officer
Jay A. Stein, Co-founder, Chairman Emeritus, Senior VP, and Chief Technical Officer
Thomas P. O’Neill, Division President, GYN Surgical Solutions
Peter J. Valenti III, Division President, Breast and Skeletal Health Solutions
Thomas A. West, Division President, Diagnostics Solutions
NUMBER OF EMPLOYEES: 5,290
GLOBAL HEADQUARTERS: Marlborough, Mass.
Before examining Hologic Inc.’s 2015 finances, let’s first wish the company a very happy birthday. The multinational firm turned 30 last year, and even if the company leaving young adulthood doesn’t tickle your fancy, it’s an excellent excuse to celebrate with some cake.
Hologic’s Selenia Dimensions breast tomosythesis cancer screening system—featuring the company’s Genius 3D Mammography exam—was approved by the U.S. Food and Drug Administration (FDA) in 2011. Since then, the technology has begun to draw attention with celebrity spokeswomen to sing its praises, as well as generate awareness for the importance of breast cancer screening in general.
In June 2015, award-winning actress, singer, and Broadway veteran Kristin Chenoweth became the first celebrity to represent Genius 3D’s national campaign.
Chenoweth is the daughter of a two-time breast cancer survivor, so she fully understands how critical an accurate breast cancer screening tool can be. “Every woman knows that early detection is crucial when it comes to fighting breast cancer, but what so many don’t realize is that not all mammograms are the same,” she said in a company press release. “That’s why I’m partnering with Hologic and urging women across the country to demand that their hospitals or facilities offer the Genius 3D Mammography exam. Women need to take advantage of this more accurate screening—but that’s only possible if they have access to it.” Nothing garners attention for a campaign like a Broadway star.
That is, except for Grammy award-winning singer/songwriter and breast cancer survivor Sheryl Crow, who was named national spokesperson for the campaign in early June 2016. “Early detection saves lives—it’s that simple,” said Crow. “Women need to be advocates for their health, and that means getting annual mammograms starting at age 40 and taking advantage of the best, and most accurate, technologies available.”
Fiscal 2015 (year ended Sept. 26) brought $2.7 billion in revenue, representing a 6.8 percent increase from FY14. An increase in both product and service revenue are responsible, according to the company. 2015’s net product sales of $2.27 billion (accounting for 83.9 percent of total revenue) showed an 8.4 percent bump over 2014. The company’s net service revenue, mainly generated within its Breast Health segment, of $434.6 million (accounting for 16.1 percent of total revenue) displayed a 0.3 percent decrease from 2014. Most of Hologic’s revenue was gained domestically—the U.S. market represented 76 percent of fiscal 2015’s total revenues. For the rest of the world, the European region was responsible for 11.8 percent of total net sales, the Asian-Pacific for 8.5 percent, and all other regions for the remaining 3.7 percent.
Hologic’s business is divided into four segments: Diagnostics, Breast Health, GYN Surgical, and Skeletal Health. All four segments generated an increase in product revenues in FY15, on both a domestic and worldwide basis, though growth was partially offset by the impact of negative foreign currency exchange due to the strengthening of the U.S. dollar.
The $1.2 billion in Diagnostics product revenue represented a 4.2 percent increase from fiscal 2014. Much of this can be attributed to the increase in Hologic’s Molecular Diagnostics family of products, particularly in the company’s Aptima family of assays for increased volumes based on an increased installed base of its Panther instruments. Also responsible for the increase is the company’s higher HPV screening assay sales volumes, also used in the Panther system. However, these increases were partially offset by the company’s lower Cervista HPV revenues resulting from customer transition to the aforementioned Aptima assay and Panther system. Lower instrumentation sales also occurred in FY15 due to Quest’s purchases in the first quarter of fiscal 2014.
Breast Health’s $685.1 million in net sales represents an impressive 16.5 percent hike over 2014. Most of this bump comes from the company’s digital mammography and related products increase, specifically the larger number of 3D Dimensions units sold on a worldwide—but primarily domestic—basis. Somewhat marring this growth was lower average selling prices, as well as a product mix shift within 3D offerings to systems with fewer features. Though not occurring during fiscal year 2015, it must also be noted that in October 2015, the American Cancer Society introduced new guidelines for mammograms, which recommends that women begin annual screening at 45 rather than 40, and that women be screened every two years instead of annually. Fewer overall mammograms may result in a decrease in purchases of Hologic’s mammography systems.
The GYN Surgical segment reported 2015 net sales of $334.6 million, a 9.1 percent increase from 2014. Mainly responsible for the gain are the MyoSure and NovaSure devices; however, MyoSure’s sales increase was offset by a decline in Novasure revenue—largely due to the negative impact of foreign currency exchange rates.
Skeletal Health’s $66.6 million in FY15 revenue represents a 4.9 percent increase over 2014, mainly due to volume increases in Hologic’s Horizon osteoporosis
assessment product sales on a worldwide basis. During the third quarter of fiscal 2015, Hologic decided to close its Bedford, Mass. facility where it manufactures its Skeletal Health products and supports select manufacturing services for its Breast Health segment. Henceforth, manufacturing of Skeletal Health products will be outsourced to a third party. Breast Health manufacturing services—along with research and development, sales and services support, and administrative functions—will be dispersed among its Danbury, Conn., and Marlborough, Mass., facilities. The transaction should be completed by the end of fiscal 2016.
Product and People News
In November 2014, Hologic announced the launch of its NovaSure 6mm global endometrial ablation system, designed to deliver radiofrequency energy to the endometrium and gently remove the uterus lining in two minutes or less. Used to treat women with abnormal uterine bleeding or heavy periods, the procedure can be done once in the doctor’s office in about five minutes. The new NovoSure offering adds to the company’s growing GYN Surgical portfolio. However, although over 2 million NovaSure endometrial ablation procedures have been performed to date and full market release occurred in both the domestic and international markets in December 2014, the company experienced a decline in domestic NovaSure sales.
The company also received CE mark clearance for its Aptima HIV-1 Quant Dx assay for use on its Panther molecular diagnostics system in December 2014. Using real-time transcription-mediated amplification technology, Hologic claims the product is the first viral load assay with both diagnosis and treatment monitoring capabilities.
Aptima’s launch in Europe was a large factor in the increased revenue for its Diagnostics sector. The assay is not yet approved for use in the U.S.
In June 2015, it was announced that David LaVance would resign as chairman of Hologic’s board of directors, to be replaced by president and CEO Steve MacMillan. “It has been a great honor to contribute to Hologic’s growth and development since 2002,” LaVance said. “The company’s future is bright, so this is the right time for me to transition leadership to the experienced team that’s now in place.” Another notable addition was the appointment of John Griffin, former vice president and deputy general counsel for Covidien plc, as general counsel, bringing nearly 30 years of experience across a wide variety of legal matters. In addition to his stint with Covidien, Griffin served as an assistant U.S. district attorney in Massachusetts.