BTIG: Hologic To Gain From Higher 3D Mammogram Reimbursements

Hologic, Inc. HOLX hit a gusher with new Medicare reimbursement rates for its three-dimensional mammography imaging technology.

Rates unveiled Monday by the federal Centers for Medicare & Medicaid Services came in at the high end of investors' expectations, BTIG's Sean Lavin said in a note Monday.

"We are somewhat guessing, but we would expect shares to climb between 2 percent and four percent today," Lavin said.

In midday trading, Hologic has gained about 2.5 percent, changing hands recently at $26.86 per share.

New reimbursement rates were about 25 percent higher than the average expectation, according to Lavin, who maintained a Neutral rating on Hologic.

Higher reimbursement for doctors will help spur widespread adoption of Hologic's 3D imaging technology because the machines are more expensive than traditional 2D machines, while reading results require more time and training, Lavin said.

Revenue for the company's breast health segment, which includes the machines, grew 4.8 percent in the most recent nine months to $703.2 million.

Hologic supplies a range of diagnostic products imaging systems and surgical products for gynecological medicine.