Hologic CEO on innovating in women’s health

Hologic CEO on innovating in women’s health


MARIA: WELCOME BACK MENT EARNINGS ALERT, GLOBAL WOMEN’S HEALTH GIANT REPORTING EARNINGS OF 58th A SHARE ON — 58th A SHARE, ABOVE EXPECTATIONS FOR THE QUARTER. THE COMPANY RAISING THEIR FULL YEAR EARNINGS AND REVENUE GUIDANCE. JOINING ME RIGHT NOW IS THE CEO OF PRO LOGIC, STEVE McMILL McMIL OF PRO LOGIC, STEVE McMILL McMIA OF PRO LOGIC, STEVE McMILL McMI. PRAY WHAY WHAT DROVE THE QUARTER?>>THE BREAST HEALTH BUSINESS AND OUR INTERNATIONAL BUSINESS. WE’RE NOW APPROVED FOR DENSE BREASTS. WE’RE THE ONLY ONES THAT HAVE 3D FOR DENSE BREASTS. WE KEEP GAINING MARKET SHARE IN THE U.S. AND THEN YEARS AGO ALSO REALLY PAYING OFF. WE’VE HAD SEVEN STRAIGHT QUARTERS OF DOUBLE DIGIT INTERNATIONAL GROWTH. MARIA: I WANT TO TALK ABOUT INTERNATIONAL GROWTH FOR SURE. I ALSO WANT TO GET YOUR TAKE ON THE TARIFFS CONVERSATION WE’RE HAVING. IN TERMS OF THE BREAST HEALTH AND THE 3D MAMMOGRAPHY MACHINES, THIS IS AN IMPORTANT PRODUCT. IT’S DRIVEN YOUR BUSINESS FOR TELL US ABOUT FALSE POSITIVES. WHEN YOU HAVING SO SPECIFIC LIKE THAT, 3D MAMMOGRAPHY, ARE THERE MORE FALSE NERVES FOR WOMEN THAN NOT?>>NO. I’M SO GLAD YOU ASKED THAT. NUMBER OF FALSE POSITIVES. WHAT WE HAVE GOING ON IS WE’RE FINDING MORE CANCERS EARLIER, BUT WE’VE BEEN DRAMATICALLY REDUCING THE FALSE POSITIVES. AS YOU KNOW, THAT’S ONE OF THE BIG PROBLEMS WITH 2D AND THE OLDER TECHNOLOGIES AND THEN THE RESULT OF THAT IS YOU’RE ASKING WOMEN TO GO AND HAVE BIOPSIES THAT DON’T NEED THEM. I THINK THE GREAT PART ABOUT 3D, IT’S PROBABLY THE HIDDEN GEM, WHILE IT WAS DESIGNED TO HE DETECT CANCERS BETTER, IT’S ACTUALLY REDUCED THE FALSE POSITIVES BY A LARGE PERCENTAGE. SO WE’VE GOT A LOT FEWER WOMEN HAVING TO GET BUY ON AT HAVING TO GET BIO ON AT HAVING TO GET BIOPSN AT HAVING TO GET BIOPSIEAT HAVING TO GET BIOPSIEST HAVING TO GET BIOPSIES THAT DON’T NEED THEM. MARIA: THERE’S A FEELING YOU NEED A MAMMOGRAPHY WHEN YOU’RE 50? IS THAT THE LINE?>>MOSTLY 40, UNLESS YOU HAVE A HISTORY OF BREAST CANCER IN YOUR FAMILY. MARIA: USUALLY 40, UNLESS YOU HAVE A HISTORY, THEN YOU DO IT AT 50. FAMILY. THERE ARE WOMEN IN THEIR 20s AND 30s THAT WE ARE MARIA: IS THERE A DANGER TO GETTING A MAMMOGRAPHY TOO SOON.>>THERE’S ALWAYS CONCERNS ABOUT RADIATION EXPOSURE. THE RADIATION EXPOSURE IS LESS THAN A CROSS-COUNTRY AIRPLANE FLIGHT. IT’S ONE OF THOSE MITTS IT’S ONE OF THOSE MYTTS IT’S ONE OF THOSE MYTHS THAT’S BIGGER.>>YOU HEAR PEOPLE TALK ABOUT IT BUT IT’S VERY LITTLE EXPOSURE. WAS THE GROWTH AND WHAT ARE YOU EXPECTING TO BE THE BIG DRIVERS IN THE COMING YEARS?>>WHAT WE’RE REALLY EXCITED ABOUT, ACTUALLY BOTH OUR EUROPEAN AND OUR ASIAN BUSINESS, BUT OUR EUROPEAN BUSINESS IS SHOWING STRONG GROWTH BEHIND ALL OF FRANCHISES, BREAST HEALTH BUSINESS, DIAGNOSTICS AND SURGICAL BUSINESS. WE PUT NEW LEADERSHIP INTO THE EUROPEAN BUSINESS A FEW YEARS AGO. THEY’VE REALLY GOTTEN THEIR SEA LEGS AND ARE DRIVING THE BUSINESS BEHIND ALL OF OUR PRODUCTS. MARIA: DO YOU THINK THAT YOU’RE GOING TO GET TARIFFED ON YOUR MAMMOGRAPHY MACHINES?>>WE ARE A LITTLE WORRIED ABOUT THAT. WE’LL SEE WHERE THIS GOES. AS WERE YOU TALKING EARLIER, I’M NOT SURE TARIFFS ARE REALLY THE GREAT WAY TO FIGHT SOME OF THESE PUTTING TARIFFS ON MAMMOGRAPHY MACHINES. WE’RE ACTUALLY ONE OF THE RARE COMPANIES THAT STILL PRODUCES 100% OF OUR MAMMOGRAPHY MACHINES ARE MADE IN DANBURY, CONNECTICUT. WE’RE PROBABLY THE LAST PEOPLE WE ARE A NET EXPORTER OF OUR MACHINES BECAUSE OF THE QUALITY, EVERYTHING ELSE. WE’VE MADE IT SO THERE’S THAT UNCERTAINTY AS WE GO INTO NEXT YEAR, THE ANALYSTS ARE TRYING TO FIGURE OUT WHAT WOULD BE THE IMPACT. SO WE WOULD PREFER THAT THE TARIFF STUFF KIND OF DIES DOWN HERE AND GETS SETTLED MANUFACTURE HOW HAS .MNUFACTURE HOW HAS .MARFACTURE HOW HAS .MARIACTURE HOW HAS .MARIA:TURE HOW HAS .MARIA: URE HOW HAS .MARIA: HE HOW HAS .MARIA: HOWHOW HAS .MARIA: HOW HAS YS .MARIA: HOW HAS YOUR BUSINESS BEEN WITH CHINA? DO YOU FEEL YOU WERE HAVING TO FORCE TECHNOLOGY AND INNOVATION TO THE CHINESE.>>IT’S ALWAYS BEEN THAT ACQUISITIONS THERE THAT, FRANKLY, DIDN’T PAN OUT VERY WELL. IT’S THE CLASSIC YOU BUY THEM AND THEN THE PEOPLE LEAVE AND KIND OF START UP A COMPETITOR. MARIA: EXACTLY, AFTER YOU TRANSFERRED YOUR TECHNOLOGY. THAT’S WHAT THE PRESIDENT IS TRYING TO STOP.>>AS YOU WERE TALKING EARL YES,>>AS YOU WERE TALKING EARL YESE>>AS YOU WERE TALKING EARL YESR>>AS YOU WERE TALKING EARL YESI>>AS YOU WERE TALKING EARL YESR>>AS YOU WERE TALKING EARL YES, AND THE HARDER ISSUE TO ADDRESS. THAT WE CAN MONITOR THE PRACTICES. IT’S A SLOWER BUILD BUT IT’S MUCH MORE ENDURING AND SHOULD PREVAIL OVER TIME. MARIA: TELL US ABOUT THE BLOW-UP THAT EVERYBODY WAS WORRIED ABOUT IN THE LAST QUARTER, WHAT CAN YOU TELL US ABOUT THIS.>>THIS IS AN ACQUISITION WE DID A LITTLE OVER A YEAR AGO TO GET INTO THE MEDICAL AESTHETICS SPASMS IT’S SPACMS IT’S SPACE. IT’S IT’S A BIGGER TRANSITION FOR US. CLINICAL EVIDENCE, WE THOUGHT WE COULD BRING THAT TO THE MEDICAL AESTHETICS INDUSTRY. IT’S EXACTLY WHAT WE ARE BRINGING TO IT. THE CULTURAL SHIFT IN THE BEGINNING, WE LOST SOME SALESPEOPLE AS WE CLAMPED DOWN ON PRACTICES. THE TEAM THAT STAYED AND THE NEW TEAM IS STARTING TO DELIVER. I THINK THAT WAS THE REAL EXCITEMENT IN THE REPORT LAST NIGHT THAT WE EXCEEDED THE ESTIMATES FOR THE QUARTER ON THAT BUSINESS AND I THINK IT’S TAKEN US A YEAR BUT WE’VE GOT IT SCIENCE TO THAT PART OF THE INDUSTRY. MARIA: YOU’VE ALSO ANNOUNCED YOU’RE ACQUIRING SAXATROON BIOPICS ALONG WITH A SHIFT IN THE CORPORATE MANAGEMENT STRUCTURE. ARE THERE MORE HOLES TO FILL IN TERMS OF ACQUISITIONS. TELL US WHAT THIS ACQUISITION DONE.>>THIS IS A GREAT ONE. AS WE’RE IDENTIFYING CANCERS EARLIER IN WOMEN, WE’RE ABLE — ONE OF THE GROWTH AREAS IS INSTEAD OF WOMEN HAVING TO HAVE FULL-BLOWN MASTECTOMIES, AS WE CAN FIND CANCERS SMALLER, EARLIER, ONE OF THE KEY AREAS IS TO BE ABLE TO GO AND JUST REMOVE THE CANCER AND NOT HAVE TO TAKE OUT THE WHOLE BREAST. SO THERE’S SOME OF THE LOCALIZATION TECHNOLOGIES THAT HELP THE SURGEONS MARK IT AND BE ABLE TO GO AND GET JUST THE SURGERY, HOW IT’S EVOLVED, WHETHER HIPS, KNEES, BREAST, ANYTHING, WE WOULD GO IN AND CARVE OUT AS MUCH AS WE CAN. EVERYTHING IS TRYING TO GET SMALLER AND SMALLER. THIS WILL FIT BEAUTIFULLY INTO THAT SPACE FOR US. MARIA: THE HOUSE VOTED TO IF THIS TAX ENDS UP BEING IMPLEMENTED IN 2020, WHAT EFFECT DOES IT HAVE ON THE COMPANY? WE’VE TALKED ABOUT THIS MEDICAL DEVICE TAX FOR A WHILE. GIVE US THE STATUS CHECK.>>WE WERE VERY PLEASED WITH THE HOUSE VOTE. WE WOULD LOVE TO SEE THE SENATE COME ALONG AND DO THE SAME THING. THE MEDICAL DEVICE INDUSTRY IS VERY DIFFERENT THAN MOST INDUSTRIES. IT’S CHARACTERIZED BY A LOT OF SMALL STARTUP COMPANIES. THAT 2.3% SALES TAX, IT’S AN EXCISE TAX, IT’S NOT AN INCOME TAX, IT’S A HUGE BARRIER TO INNOVATION IN THE INDUSTRY. R&D SPENDING, EVERYTHING ELSE, AND PUTTING IT INTO INNOVATION WHICH IS WHERE WE WANT TO SEE AND THAT’S FUELING THE INNOVATION IN THE INDUSTRY. WE WOULD LOVE TO GET THAT MORE PERMANENTLY REPEALED AND WE WERE VERY PLEASED WITH THE HOUSE ACTION. MARIA: BETWEEN THAT AND THE TARIFFS, ARE YOU POISED TO RAISE PRICES?>>INCREASINGLY IT’S A TOUGHER MARKET TO RAISE PRICES. WE’VE GOT TO LOOK AT SOME OF THOSE THINGS, PARTICULARLY IF THE TARIFFS GO INTO EFFECT IN CHINA, IT’S PROBABLY GOING TO HAVE TO BE HIGHER PRICING OVER THERE. IF THE TAX CAME BACK, WE’RE GOING TO HAVE TO PASS SOME OF THAT ON. WE CAN’T ABSORB ALL OF IT OURSELVES. SO THOSE — WE WERE BIG WINNERS FROM THE TAX CUTS EARLIER IN THE YEAR AND THAT’S BEEN GREAT BECAUSE WE USED THAT TO FUEL ADDITIONAL INVESTMENTS. MARIA: WE WILL LEAVE IT THERE. STEVE, GREAT TO SEE YOU.

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