After cracking its wallet just one day earlier for a comparatively modest tuck-in deal, Hologic has opened it a little wider.
Buoyed by revenue from COVID-19 testing over the past year, the company now plans to spend some of that new wealth—about $230 million—for cancer diagnostic maker Biotheranostics to help expand its lab capacity and develop new tests.
The acquisition aims to jump-start the company's entry into additional areas in oncology alongside its previous efforts in cancer and women's health, said Kevin Thornal, president of Hologic’s diagnostics division.
“Together with the Biotheranostics team, we can leverage our commercial capabilities and expertise in molecular diagnostics automation to accelerate growth, help physicians make more informed decisions, and deliver more personalized treatment and better clinical outcomes for more women,” Thornal added.
Biotheranostics’ two PCR-based genetic tests are well established in the U.S.: Breast Cancer Index for helping physicians decide on a course of extended endocrine therapy and CancerTYPE ID aimed at metastatic disease.
The San Diego-based company brought in about $33 million in sales over the 2020 calendar year, according to Hologic, which expects the deal to close next month and begin adding to the bottom line in 2022.
Hologic’s second deal of the week quickly follows its $64 million acquisition of Somatex, which makes devices used to guide breast biopsies and mark tumor tissue; that deal has already closed. But the two outlays combined only make a small dent in the windfall Hologic gained from COVID-19 testing, after posting $1.3 billion in sales for a single quarter late last year.
Since then, Hologic executives have said they have a full slate of acquisition targets across all of the company’s divisions, but aim to remain disciplined until the right quarry comes along.
“Using our strong cash flow to further expand our core businesses into large, fast-growing adjacencies is a key goal of our capital deployment strategy,” Chairman, President and CEO Steve MacMillan said. “Acquiring Biotheranostics leverages our strengths in molecular diagnostics and complements our leadership in breast health, while providing attractive growth and return on invested capital.”