By Christiana Sciaudone
Investing.com -- Hologic Inc (NASDAQ: HOLX )shares rose more than 5%, hitting a record, after Cowen upgraded the medical device maker on demand for Covid-19 testing. Shares have almost doubled since March.
Analyst Chris Lin upgraded Hologic to outperform from market perform and boosted his price target to $64 from $55, according to GenomeWeb. Hologic should place a greater number Panther diagnostic systems this year.
“While these placements are primarily driven by Covid-19 testing needs in the near term, we believe labs will continue to utilize these instruments once Covid-19 testing abates,” said Lin, who estimates Hologic will generate more than $1.5 billion from SARS-CoV-2 test revenue through the end of fiscal 2021.
Hologic has the capacity to manufacture more than 1 million SARS-CoV-2 tests per week, and management expects that capacity to "meaningfully increase" later this year, Lin said.
The U.S. Food and Drug Administration granted Emergency Use Authorization for Hologic's Panther Fusion SARS-CoV-2 assay in March and for its Aptima SARS-CoV-2 assay running on the Panther system in May.
In the second quarter, molecular diagnostics revenue of $191 million increased about 14%, the division’s highest growth rate since 2012, which included $3.4 million of sales from the Panther Fusion SARS-CoV-2 assay. Hologic scaled up manufacturing and is now producing nearly 600,000 Panther Fusion SARS-CoV-2 tests a month, representing a 12-fold increase in capacity for similar tests that run on the Panther Fusion system.
The company withdrew its financial guidance in April, saying that the Covid-19 pandemic would likely have a significant negative impact on future revenue and operating income.
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