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Hologic Fiscal Q1 Revenues Rise 89 Percent as Dx Testing Demand Surges

NEW YORK – Hologic reported after the close of the market on Wednesday that revenues for its first quarter of fiscal year 2021 surged 89 percent year over year, driven by sales of its diagnostic testing products for SARS-CoV-2.

For the three months ended Dec. 26, 2020, the Marlborough, Massachusetts-based firm reported revenues of $1.61 billion compared to $850.5 million in fiscal Q1 2020, above the consensus Wall Street estimate of $1.40 billion and in line with preliminary estimates.

"Hologic had a strong start to fiscal 2021 across all our businesses and major geographies," Steve MacMillan, the company's chairman, president, and CEO, said in a statement. "Our Diagnostics division continued to deliver incredible performance by making a massive impact against COVID-19."

The firm's Diagnostics division reported fiscal Q1 revenues of $1.13 billion, up 262 percent from $311.5 million in the prior-year period. Excluding the divested blood screening business, Diagnostics division revenues rose 274 percent year over year to $1.12 billion from $299.5 million.

Within Diagnostics, the firm posted Molecular Diagnostics revenue of $995.3 million, up more than fivefold from $178.5 million in fiscal Q1 2020. Blood Screening revenues were $8.1 million, down 33 percent from $12.0 million in the prior-year period. Cytology and Perinatal revenues were $124.8 million, up 3 percent from $121.0 million in the prior-year quarter.

In its fiscal Q1, higher production volumes in diagnostics enabled Hologic to leverage its fixed cost base as year-over-year organic revenue more than doubled and earnings per share increased more than fourfold, MacMillan said during a conference call to discuss the firm's financial results.

The company continues to make good progress on its plans to expand manufacturing capacity for its two SARS-CoV-2 assays at its plants in San Diego and Manchester, UK, MacMillan said. In the recent quarter, Hologic sold about 30 million SARS-CoV-2 assays and booked $745 million from the sales.

Hologic is now selling more SARS-CoV-2 tests each quarter than all of the molecular tests it had produced per quarter before the pandemic, and "we're on track to meet our goal to produce at least 75 million total molecular diagnostic tests a quarter globally by January of 2022," MacMillan said. That would represent a more than threefold increase in total capacity from before the pandemic.

Demand for new Panther instruments "remains very strong," MacMillan said, adding that in fiscal 2020, the firm placed more than 500 new Panther systems worldwide, more than double its usual run rate, and placed an additional 150 systems in Q1 2021.

SARS-CoV-2 test sales contributed to total international revenue of $472 million in the quarter.

In other business segments, Breast Health revenues rose less than 1 percent year over year to $332.7 million from $331.1 million, Gyn Surgical revenues rose 4 percent year over year to $124.0 million from $119.1 million, and Skeletal Health revenues rose 6 percent year over year to $24.9 million from $23.5 million.

Among the highlights of its first fiscal quarter, Hologic announced in January that it is acquiring molecular diagnostics firm Biotheranostics for approximately $230 million.

Additionally, the US Food and Drug Administration approved a diagnostic claim for the company's Aptima HIV-1 Quant Dx viral load monitoring assay, making it the first dual-claim assay for both diagnosis and viral load monitoring in the US.

Hologic posted no revenue for its divested Medical Aesthetics business in Q1 but booked $65.3 million in the year-ago quarter. Hologic had acquired a medical aesthetics business, Cynosure, in 2017 for $1.6 billion but sold it for about $140 million.

Hologic reported net income attributable to the firm of $654.4 million, or $2.50 per share, compared to $386.1 million, or $1.43 per share, in the prior-year quarter. The firm reported adjusted EPS of $2.86 and beat analysts' estimates for adjusted EPS of $2.17.

The firm spent $59.3 million on R&D in fiscal Q1 2021, down 3 percent from $61.2 million in Q1 2020. Its SG&A expenses fell 6 percent to $219.5 million from $232.5 million in fiscal Q1 2020.

Hologic reported cash and cash equivalents of $868.7 million as of Dec. 26, 2020.

For fiscal Q2 2021, Hologic guided to revenues of between $1.5 billion and $1.56 billion and EPS of between $2.34 and $2.46. Adjusted Q2 EPS is projected to be between $2.56 and $2.68. Prior to the release of the financial results, analysts on average expected $1.36 billion in revenue and $2.02 in adjusted EPS for the firm's fiscal second quarter.

In early Thursday morning trading on the Nasdaq, Hologic shares were up more than 6 percent to $76.89.