|Trends & Perspectives|
In July, Hologic Inc. (Bedford, MA) further injected itself into the IVD industry with its acquisition of molecular diagnostics company Third Wave Technologies Inc. (Madison, WI) for $580 million. Hologic's initial market entry came in October 2007 with its $6.2 billion purchase of Cytyc Corp. (Marlborough, MA). Now, Hologic expects to strengthen its IVD presence with Third Wave's two HPV tests, currently pending FDA approval.
“That is the first and the most significant milestone that we have to get through,” said Tom Umbel, senior vice president of business development at Hologic.
The company intends to use its established sales and distribution networks with labs, obstetricians, and gynecologists to quickly commercialize Third Wave's emerging technology. According to Umbel, its infrastructure in combination with the HPV tests' performance advantages “will allow Hologic to be very successful in this market.”
While this buy marks a further departure from Hologic's core businesses of breast health and osteoporosis, this move represents “a natural fit,” said Umbel. The company believes the global market for HPV testing will grow to $800 million during the next several years. After gaining access to Cytyc's ThinPrep Pap test, the most widely used cervical cancer test in the United States, Hologic has identified this sector as key to its future growth.
“We felt that the combination of the ThinPrep offering and the Third Wave HPV offering, Cervista, was just an ideal combination,” said Umbel.
Industry analyst Jeff Ellis, head of diagnostics M&A at Crosstree Capital Partners (Tampa, FL), agrees. “With Cytyc,” he said, “Hologic basically bought all of the right customers for a product like Third Wave's HPV to be pushed to. So, from a strategic standpoint, it's a no-brainer. In fact, I think a lot of people were just waiting for it to happen.”
However, Manfred Scholz, PhD, president of Scholz Consulting Partners (Medford, MA), thinks otherwise. “I don't think that the money paid is a good value,” said Scholz. “Qiagen has too much of a market footprint and plenty of defense options to limit Hologic's opportunity.”
Not surprisingly, Hologic feels that Cervista has enough advantages over Qiagen's HPV test to gain market share.