CEO Stephen MacMillan took the microphone at the J.P. Morgan Healthcare Conference in San Francisco to describe “the new Hologic” in three words—a medtech company made “bigger, faster and stronger” in the wake of the COVID-19 pandemic.
From 2020 through early 2023, Hologic took its windfalls in coronavirus testing revenues and funded a half-dozen deals totaling $1.4 billion in M&A, aimed at bolstering its core capabilities through tuck-in acquisitions—including, but not limited to, the takeovers of cancer diagnostic developers Biotheranostics and Diagenode, as well as the infectious disease-focused Mobidiag.
“Lots of companies around the world said they were going to come out of COVID stronger. Some have, many have, but many have not. We said we would, and we clearly have,” MacMillan said.
Starting on the point of “bigger,” Hologic’s global revenue—excluding the high highs and low lows of COVID testing-related sales—has grown 25% between 2019 and 2023, from $2.88 billion to $3.62 billion.
In diagnostics overall that includes 40% growth, while in molecular testing alone the company’s sales have grown about 80%—again, excluding COVID’s impacts on the equation.
“Early in COVID, we, like many companies, placed far more instruments. In our case, they were our Panther instruments, as we ramped up to help solve the world's need for COVID tests,” he said, as the high-throughput analyzers’ installed base grew from about 1,700 instruments in 2019 to about 3,260 in 2023.
“At the end of the day, the big lurking question was always going to be, ‘Are they going to be used post-COVID?’ This, folks, is the answer,” MacMillan said. “What that tells you is more Panthers are running more menus with more customers globally.” At the same time, the company’s breast health revenue grew about 10% and surgical sales gained about 40%.
When it comes to being faster, MacMillan pointed to new growth drivers in new markets, including recent launches of breast biopsy hardware, supported by 3D mammography and artificial intelligence programs: “We have these incredible installed bases that drive incredible growth and the ability to surround those products with more products.”
But what about strength? On its balance sheet, Hologic also didn’t only spend its COVID earnings on M&A; the company redeployed its free cash flow across the organization, and also spent over $2.8 billion on share repurchases.
Meanwhile, the company put out a preliminary financial review of its first fiscal quarter. Revenues of about $1.01 billion represented a decrease of 5.7% compared to the same period in the prior year, but exceeded the company’s previous sales guidance range of $960 million to $985 million.
Diagnostics sales of $388 million held steady outside of COVID at 0.1% growth—but their total sum was about 20% down year-over-year when adding coronavirus tests back into the mix. Breast health was up 13.0% to $378 million, while gynecological surgery gained 5.3% to breach $162 million; skeletal health sales were down 4.5%, to $25 million. Hologic said it plans to report its full financial results February 1, alongside updated guidance for the 2024 fiscal year.
Another measure of becoming stronger has been the satisfaction of the company’s staff.
“I always laugh internally when we do our annual employee engagement survey, because the first year we did it was back in 2015. And the results were a whopping 36%,” MacMillan said. “And at that point in time, many of our employees said, ‘Yeah let’s not repeat that’—but in fact, we've done it, and we've been topping out in the high 90s for the last few years.”
“At the end of the day, we are very proud of a lot of the decisions and actions we took during COVID and how, if anything, they strengthened the bonds with our employee base—especially over the last few years, when for many folks that's been a more difficult challenge.”