Hologic inks its largest COVID-powered acquisition yet with $795M for test maker Mobidiag

After reaping a windfall from COVID-19 diagnostic demand, Hologic’s spending spree continues with its largest acquisition yet: It’s claimed Mobidiag, the Finnish-French molecular test maker, with a $795 million deal.

Hologic saw its diagnostic sales jump 450% over the last quarter alone, built on the back of its high-throughput Panther and Panther Fusion laboratory hardware and coronavirus kits. Now, adding Mobidiag promises to bring in molecular tests for various infectious diseases used at the point of care.

Mobidiag's ability to test for multiple diseases at the same time—quickly and on demand—will beef up Hologic's diagnostics business worldwide, Jan Verstreken, Hologic's international group president, said in a statement

The company’s automated Novodiag platform is designed to screen a sample for multiple pathogens on demand, with a scalable, tabletop PCR analyzer that provides results in about one hour.

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Meanwhile, its larger Amplidiag system is aimed at mid- to high-volume screening for gastrointestinal and respiratory bugs, including hospital-acquired infections and potential resistance to antibiotics. 

Taken together, Mobidiag brought in about $42 million in 2020 revenue—and Hologic said it plans to invest in developing new assays for the Novodiag product line. Hologic's U.S. commercial teams will take over Mobidiag's products, opening them up to a broader base of customers.

Overall, Mobidiag gives Hologic access to an acute-care market expected to "roughly double" in the next five years, Hologic CEO Steve MacMillan said.

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The acquisition follows three large deals since the top of the year, all designed to build out Hologic’s core businesses—kicking off with back-to-back January acquisitions of German breast cancer biopsy player Somatex, for $64 million, and oncologic diagnostic developer Biotheranostics for $230 million.

In March, Hologic continued expanding its testing business with $159 million for Diagenode, the Belgian developer of more than 30 CE marked PCR tests, kits and devices. Meanwhile the Mobidiag deal, with about $714 million in cash and the remainder in net debt, is expected to close early in this year’s fourth quarter.

It’s all part of a relatively straightforward strategy, put simply by MacMillan: “One of our key goals is to use our strong cash flow to create a larger, faster-growing company for a post-pandemic world.”

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Growth will, as always, be necessary, as many expect the financial boon of COVID-19 testing to diminish as more people receive vaccines and return to daily life.

Earlier this week, ahead of the deal, analysts at Jefferies said data from the Centers for Disease Control and Prevention point toward “a precipitous decline [in testing volumes] as mandates ease,” with drops of 20% to 30% expected each quarter later this year, until the coronavirus testing market resembles something like the seasonal flu. However, they also expect Hologic to emerge in a strong position with its augmented diagnostic footprint.