Hologic, Inc. HOLX recently announced the amendment of the FDA’s Emergency Use Authorization (EUA) that was initially received for its Aptima SARS-CoV-2 assay in May. Post the receipt of the amended EUA, the Aptima assay is now authorized for testing of asymptomatic individuals (without symptoms) along with those having symptoms of the COVID-19 infection.
Additionally, the FDA has authorized Hologic’s pooling protocol, which was announced on Aug 11, for symptomatic testing with the Aptima SARS-CoV-2 assay. For investors’ note, Hologic received the EUA for its Panther Fusion SARS-CoV-2 assay in September, which is another molecular diagnostic test for COVID-19.
A key characteristic of a test to be used effectively in asymptomatic screening and pooling workflows is high analytical sensitivity. A recent report by the FDA has established that Hologic’s assays are the most analytically sensitive of the fully automated high-throughput molecular tests currently available in the market.
With the recent regulatory revision, Hologic is expected to strengthen its Diagnostics business on a global scale.
Significance of the Approval
Per management, molecular tests have been recognized as the gold standard for infectious disease diagnostics, which are critical for checking the spread of the pandemic. The high sensitivity and accuracy of molecular testing are of utmost importance while screening asymptomatic individuals or individuals with known contact with infected people. Such individuals will not be even aware about their infectious state.
Notably, Hologic’s Aptima and Panther Fusion SARS-CoV-2 tests run on the company’s fully-automated Panther and Panther Fusion systems, respectively.
For investors’ note, the FDA authorized the asymptomatic screening claim based on available analytical data as well as Hologic’s assurance to submit results from an ongoing clinical evaluation currently underway. Further, each of the assays can provide the initial results in roughly three hours and process more than 1,000 coronavirus tests in a day.
Per a report by Grand View Research, the global molecular diagnostics market was valued at $9.2 billion in 2019 and is expected to reach $18.2 billion by 2027, at a CAGR of 9%. Factors like increasing prevalence of infectious diseases and technological advancements in molecular diagnostics are expected to drive the market.
Given the market potential, the regulatory amendment is expected to significantly boost Hologic’s business globally.
Of late, Hologic has witnessed a series of developments across its businesses.
The company announced this month that its CE-marked Aptima HIV-1 Quant Dx assay has been awarded World Health Organization prequalification for testing of dried blood spot samples.
Hologic, in August, announced the addition of improved features to its Brevera Breast Biopsy System with CorLumina Imaging Technology. In the same month, the company purchased privately-held Acessa Health Inc. with an aim to broaden its foothold in minimally-invasive surgical procedures.
Further, in August, Hologic announced a definitive collaboration with RadNet, Inc. to advance the use of AI in breast health.
Shares of the company have gained 39% in the past year compared with the industry and S&P 500’s 27.4% and 16.5% growth, respectively.
Zacks Rank & Key Picks
Currently, Hologic carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the broader medical space include QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Globus Medical, Inc. GMED.
QIAGEN’s long-term earnings growth rate is estimated at 22.3%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings growth rate is estimated at 15.5%. It currently carries a Zacks Rank #2 (Buy).
Globus Medical’s long-term earnings growth rate is estimated at 13%. The company presently carries a Zacks Rank #2.
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