Hologic Gets Wider Breast Cancer Approval (HOLX)
Hologic, Inc. (NASDAQ: HOLX) has scored an FDA approval for the company’s breast cancer treatment. Today’s decision is for 510K, or marketing approval, for Holgic’s MammoSite(®) ML radiation therapy system. This device allows radiation oncologists to actually shape the radiation dose for typical cases and to treat patients who are otherwise not appropriate candidates for traditional brachytherapy. The devices first approval by the FDA came back in 2002 as a single-lumen device and it is the most widely used form of accelerated partial breast irradiation used in the United States with more than 50,000 breast cancer patients treated so far in the U.S.
The use of the device allows a full course of radiation to be delivered in just five days and the targeted therapy of the breast limits radiation exposure to normal and healthy tissue. The company noted that 2008 had roughly 240,000 confirmed cases of breast cancer in the U.S.
Hologic expects to commercially launch MammoSite ML in the first quarter of fiscal year 2010, but this is the quarter ending December 26, 2009 on the calendar as Hologic has a fiscal year that is not the same as a calendar year.
Stifel Nicolaus got this one right, at least on the brokerage analyst expectations. Just last week the firm initiated Hologic with a BUY rating. Shares closed at $16.20 today and the 52-week trading range is $9.31 to $21.86.
JON C. OGG
SEPTEMBER 1, 2009
Hologic-Third Wave: Molecular diagnostic reagent merger (HOLX, TWTI)
Hologic, Inc. (NASDAQ: HOLX) has signed a definitive agreement to acquire Third Wave Technologies, Inc. (NASDAQ: TWTI) for a purchase price of $11.25 per share, or approximately $580 million in value. This represents about a 24% premium to Third Wave’s average trading price over the last three months. The Boards of Directors of both companies unanimously approved the transaction.
This merger is one of the more interesting in medical and diagnostic companies, despite neither company being a household name. Third Wave develops and markets molecular diagnostic reagents for a wide variety of DNA and RNA analysis applications for conditions such as Cystic Fibrosis, Hepatitis C, cardiovascular risk and other diseases. Its HPV market opportunity is a $200 million market and growth in excess of 40% in each of the past five years. Hologic believes the global market for HPV testing will increase to $800 million in the next few years.
Third Wave shareholders will receive an aggregate amount of an estimated $580 million in cash, assuming the conversion of Third Wave’s outstanding convertible notes, warrants and restricted stock. Hologic plans to finance this transaction with a $600 million loan in the form of a senior secured credit facility, and it has secured fully committed debt financing for the full consideration from Goldman, Sachs & Co.
Hologic expects the acquisition of Third Wave to help accelerate the growth of its diagnostics division, and once the pending FDA approval is granted it sees a higher diagnostic growth business for womens’ health. The company noted “If and when Third Wave’s HPV tests receive FDA approval, which we hope will be in the first half of calendar 2009, we will be well-positioned to take these products quickly and effectively to market.”
The transaction should close in the third calendar quarter of 2008, and is expected to be modestly dilutive to Hologic’s adjusted earnings per share in the first full year after closing, and increasingly accretive thereafter.
It is expected to be slightly dilutive to Hologic’s non-GAAP EPS in Fiscal 2008 and it anticipates $0.02 to $0.03 per share dilution to previous guidance, excluding acquisition-related charges. The acquisition is expected to be approximately $0.10 dilutive to non-GAAP EPS in Fiscal 2009 and to be accretive to non-GAAP EPS beginning in Fiscal 2010. The transaction is expected to be cash flow neutral in Fiscal 2009 as a result of the use of $160 million in acquired tax NOLs, including interest and financing expense of approximately $40 million from the term loan of approximately $600 million to finance the acquisition.
Jon Ogg
June 9, 2008
Hologic-Third Wave: Molecular diagnostic reagent merger (HOLX, TWTI)
Hologic, Inc. (NASDAQ: HOLX) has signed a definitive agreement to acquire Third Wave Technologies, Inc. (NASDAQ: TWTI) for a purchase price of $11.25 per share, or approximately $580 million in value. This represents about a 24% premium to Third Wave’s average trading price over the last three months. The Boards of Directors of both companies unanimously approved the transaction.
This merger is one of the more interesting in medical and diagnostic companies, despite neither company being a household name. Third Wave develops and markets molecular diagnostic reagents for a wide variety of DNA and RNA analysis applications for conditions such as Cystic Fibrosis, Hepatitis C, cardiovascular risk and other diseases. Its HPV market opportunity is a $200 million market and growth in excess of 40% in each of the past five years. Hologic believes the global market for HPV testing will increase to $800 million in the next few years.
Third Wave shareholders will receive an aggregate amount of an estimated $580 million in cash, assuming the conversion of Third Wave’s outstanding convertible notes, warrants and restricted stock. Hologic plans to finance this transaction with a $600 million loan in the form of a senior secured credit facility, and it has secured fully committed debt financing for the full consideration from Goldman, Sachs & Co.
Hologic expects the acquisition of Third Wave to help accelerate the growth of its diagnostics division, and once the pending FDA approval is granted it sees a higher diagnostic growth business for womens’ health. The company noted “If and when Third Wave’s HPV tests receive FDA approval, which we hope will be in the first half of calendar 2009, we will be well-positioned to take these products quickly and effectively to market.”
The transaction should close in the third calendar quarter of 2008, and is expected to be modestly dilutive to Hologic’s adjusted earnings per share in the first full year after closing, and increasingly accretive thereafter.
It is expected to be slightly dilutive to Hologic’s non-GAAP EPS in Fiscal 2008 and it anticipates $0.02 to $0.03 per share dilution to previous guidance, excluding acquisition-related charges. The acquisition is expected to be approximately $0.10 dilutive to non-GAAP EPS in Fiscal 2009 and to be accretive to non-GAAP EPS beginning in Fiscal 2010. The transaction is expected to be cash flow neutral in Fiscal 2009 as a result of the use of $160 million in acquired tax NOLs, including interest and financing expense of approximately $40 million from the term loan of approximately $600 million to finance the acquisition.
Jon Ogg
June 9, 2008
