NEW YORK — The US Department of Health and Human Services (HHS) said on Sunday that it and the US Department of Defense (DoD) have awarded up to $7.6 million to Hologic to help the company expand production of custom sample collection and processing consumables for SARS-CoV-2 testing.
Hologic's tube, cap, and multitube consumables enable SARS-CoV-2 tests on its automated Panther and Panther Fusion sample-to-answer molecular diagnostic systems including the company's Aptima assay and Quest Diagnostics' PF SARS-CoV-2 assay. The HHS said that there are more than 1,100 of the systems, which can perform over 1,000 tests within 24 hours, installed in the US.
According to the HHS, the demand for Hologic's sample collection and processing consumables had exceeded its production capacity. With the investment, the Marlborough, Massachusetts-based company will be able to boost this capacity to 6.8 million tests per month from its current 4.8 million by January.
"Hologic's platform is in high demand, and with this investment, we will be able to improve the supply to laboratories across the country," HHS Assistant Secretary for Health Brett Giroir said in a statement.
In March, Hologic received $699,000 from the HHS' Biomedical Advanced Research and Development Authority (BARDA) to develop a SARS-CoV-2 test. A few months later, the firm was awarded an additional $13 million from BARDA to develop the Aptima assay.
The demand for Hologic's Panther systems, driven by the ongoing SARS-CoV-2 pandemic, prompted Cowen in June to upgrade the company's stock to Market Perform and increase its share-price target to $64 from $55.
In a research note issued on Monday, William Blair Analyst Brain Weinstein noted that the increase in Hologic's manufacturing capacity resulting from the HHS and DoD investment has the potential to add $150 million in incremental quarterly revenue for the company, which posted fiscal second quarter revenues of $756.1 million.