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Hologic to Acquire Focal Therapeutics for $125 Million, Strengthening Breast Surgery Franchise

September 26, 2018

MARLBOROUGH, Mass.--(BUSINESS WIRE)--Sep 26, 2018--Hologic, Inc. (Nasdaq: HOLX), a global leader in women’s health, announced today that it has signed a definitive agreement to acquire Focal Therapeutics, a privately-held company, for $125 million in cash. In conjunction with Hologic’s recent acquisition of Faxitron Bioptics, Focal strengthens the Company’s position in the rapidly growing market for breast conserving surgery.

The transaction adds Focal’s innovative BioZorb marker to the Company’s Breast Health product portfolio. BioZorb is an implantable three-dimensional marker that helps clinicians overcome challenges in breast conserving surgery, or lumpectomy. The marker, placed by the surgeon, is used to mark the tumor excision site for monitoring and future treatments, and its unique open design allows for tissue in-growth during the healing process.

“Focal Therapeutics has commercialized an innovative marker that improves the standard of care for breast cancer patients by creating a permanent, three-dimensional indicator of the surgical site,” said Pete Valenti, Hologic’s Division President, Breast and Skeletal Health Solutions. “Coupled with our recent acquisition of Faxitron, BioZorb further expands our ability to help women diagnosed with breast cancer from screening through surgery.”

“Acquiring Focal Therapeutics strengthens our position in an attractive, adjacent breast health market, and is consistent with our capital deployment goals,” said Steve MacMillan, Hologic’s Chairman, President and Chief Executive Officer. “The transaction is accretive to our revenue growth rate and gross margin, broadens our recurring revenue base, and provides attractive return on invested capital.”

Focal generated approximately $16 million of revenue in the last 12 months. The acquisition, which is expected to close in early October, is estimated to be neutral to Hologic’s non-GAAP earnings per share in fiscal 2019, and accretive thereafter.

“We are very excited to become part of Hologic,” said Dr. Gail Lebovic, Focal’s co-founder and Chief Medical Officer. “Hologic’s long-standing commitment to early cancer detection is key for success in breast conserving surgery. Hologic is the perfect fit for our company.”

About Hologic, Inc.

Hologic, Inc. is an innovative medical technology company primarily focused on improving women’s health and well-being through early detection and treatment. For more information on Hologic, visit  www.hologic.com. Hologic is a trademark and/or registered trademark of Hologic, Inc. and/or its subsidiaries in the United States and/or other countries.

About Focal Therapeutics

Focal Therapeutics, Inc. is a medical device company based in Sunnyvale, Calif. The company’s BioZorb marker is a proprietary, bio-absorbable device that provides radiographic marking of soft tissue sites. The BioZorb device is placed at the time of surgical removal of tissue, such as during breast surgery, and the device’s three-dimensional array of marker clips has unique clinical utility for patient imaging. BioZorb has received 510(k) clearance from the U.S. Food and Drug Administration. The device is available in a range of sizes to accommodate a variety of clinical situations.

Non-GAAP Financial Measures

This press release discusses non-GAAP diluted EPS, which is a non-GAAP financial measure. The Company’s definition of non-GAAP diluted EPS may differ from similarly titled measures used by others. The Company defines its non-GAAP EPS presented in this press release to primarily exclude the amortization of intangible assets, acquisition- and integration-related charges, and income taxes related to such adjustment.

Non-GAAP diluted EPS adjusts for specified items that may be non-cash, or can be highly variable or difficult to predict. In the context of forward-looking statements, the non-GAAP financial measures facilitate period-to-period comparisons by excluding the effects of events that have occurred in the past or may occur in the future and have accounting consequences that can mask underlying operational trends, such as acquisitions, restructurings, debt extinguishment and impairments.

This non-GAAP financial measure should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.

Future GAAP EPS may be affected by changes in ongoing assumptions and judgments, and may also be affected by non-recurring, unusual or unanticipated charges, expenses or gains, which are excluded in the calculation of the Company’s non-GAAP EPS as described in this press release.

When Hologic provides its expectations for non-GAAP EPS on a forward-looking basis, a reconciliation of the differences between these non-GAAP expectations and the corresponding GAAP measures are not available without unreasonable effort because Hologic has not estimated the fair value of the assets and liabilities expected to be acquired in the transaction. Nor has the Company determined the fair value of acquired intangible assets and related annual amortization expense that would be required in order to provide the corresponding GAAP measure. The variability of the items that have not yet been determined may have a significant, and potentially unpredictable, impact on Hologic’s future GAAP results.

Forward-Looking Statements

This news release contains forward-looking information that involves risks and uncertainties, including statements about each company’s plans, objectives, expectations and intentions. Such statements include, without limitation: financial or other information based upon or otherwise incorporating judgments or estimates relating to future performance, events or expectations; each company’s strategies, positioning, resources, capabilities, and expectations for future performance; and each company’s outlook and financial and other guidance. These forward-looking statements are based upon assumptions made as of this date and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated.

Risks and uncertainties that could adversely affect either company’s business and prospects, and otherwise cause actual results to differ materially from those anticipated, include without limitation: the risk that the transaction will not close in the expected time period, or at all; the possibility that the anticipated benefits from the proposed transaction cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Focal Therapeutics’s operations with those of Hologic will be greater than expected; the ability of Hologic and Focal Therapeutics to retain and hire key personnel; the coverage and reimbursement decisions of third-party payers and the guidelines, recommendations, and studies published by various organizations relating to the use of products and treatments; the uncertainty of the impact of cost containment efforts and federal healthcare reform legislation on each company’s business and results of operations; the ability to successfully manage ongoing organizational and strategic changes, including Hologic’s ability to attract, motivate and retain key employees; the impact and anticipated benefits of completed acquisitions and acquisitions Hologic may complete in the future; the ability to consolidate certain of Hologic’s manufacturing and other operations on a timely basis and within budget, without disrupting Hologic’s business and to achieve anticipated cost synergies related to such actions; the development of new competitive technologies and products; regulatory approvals and clearances for products; production schedules for products; the anticipated development of markets in which products are sold into and the success of products in these markets; the anticipated performance and benefits of products; estimated asset and liability values; anticipated trends relating to Hologic’s financial condition or results of operations; and Hologic’s capital resources and the adequacy thereof.

The risks included above are not exhaustive. Other factors that could adversely affect each company’s business and prospects are described in the filings made by the applicable company with the SEC. Hologic and Focal Therapeutics expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements presented herein to reflect any change in expectations or any change in events, conditions or circumstances on which any such statements are based.

View source version on businesswire.com:https://www.businesswire.com/news/home/20180926005948/en/

CONTACT: Hologic, Inc.

Media Contact

Jane Mazur

Vice President, Divisional Communications

(508) 263-8764

or

Investor Contact

Michael Watts

Vice President, Investor Relations and Corporate Communications

(858) 410-8588

KEYWORD: UNITED STATES NORTH AMERICA MASSACHUSETTS

INDUSTRY KEYWORD: WOMEN SURGERY HEALTH MEDICAL DEVICES ONCOLOGY OTHER HEALTH CONSUMER

SOURCE: Hologic, Inc.

Copyright Business Wire 2018.

PUB: 09/26/2018 04:01 PM/DISC: 09/26/2018 04:01 PM

http://www.businesswire.com/news/home/20180926005948/en

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