Interlace Now Entwined with Hologic - Analyst Blog

Hologic (HOLX) has strengthened its GYN surgical segment with the acquisition of privately-held Massachusetts-based Interlace Medical for $125 million in cash and two annual contingent payments, depending on the incremental revenue growth of the prior year. Interlace manufactures MyoSure hysteroscopic tissue removal system. Hologic plans to begin physician training and education programs for MyoSure thereby leading to promotion of the product in early 2011.

There is strong potential in this field as approximately 5 million women in the US suffer from symptomatic fibroids or polyps that can be treated with the MyoSure procedure. In addition, clinical studies have shown that the efficacy rate for hysteroscopic removal of fibroids is on the higher side with 96% of patients witnessing reduction in their symptoms and recurrence within five years for less than 10% of the patients.

During the last reported quarter, GYN surgical accounted for 17% of Hologic's total revenues. Other prominent products of this segment consist of the NovaSure system and the Adiana system. While the former enables physicians to treat women suffering from excessive menstrual bleeding, the latter is a form of permanent female contraception intended to work as an alternative to tubal ligation.

In May 2010, Hologic launched the next generation NovaSure system, which should contribute to growth going ahead. Revenues during the last quarter increased 8.4% year over year to $73.0 million due to domestic sales growth of Adiana devices and modest increase of NovaSure devices. The company is pleased to see the progress made by Adiana with an approximate market share in the range of mid-teens. Several physicians are being trained to perform the procedure. However, Hologic faces tough competition from Conceptus (CPTS) which markets the Essure, apermanent birth control system.

 
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