Hologic CEO John Cumming will never be accused of being passive. Just two weeks after taking over as CEO, Cumming laid off 10% of Hologic's 350 employees and announced the Bedford, MA-based vendor's intent to achieve the top position in digital mammography.
Yet Cumming, who assumed the CEO role after the death of Hologic co-founder David Ellenbogen, is first emphasizing a return to the black. The company's recent acquisitions and R&D programs, particularly in digital radiography development, "have come at the expense of profitability and positive cash flow," he said.
Instead of scaling back Hologic's R&D efforts, however, Cumming said his goal was to focus the company’s research goals more intently.
"There are lot of digital technologies you can chase," he said. "We're looking at all projects company-wide, and we're working on what is going to bring the highest return."
As for growth, Cumming will seek to leverage Hologic's installed base of mammography systems after the Food and Drug Administration gives premarket approval for its digital mammography technology. The vendor filed its PMA application at the beginning of May, seeking clearance for charge-coupled device (CCD) technology gained via its acquisition of Trex Medical (from Trex's Lorad mammography division).
Thus far, GE Medical Systems' Senographe 2000D is the only full-field digital mammography system approved for commercial use. In its bid to join GE in the digital mammography marketplace, Hologic decided to follow the Waukesha, WI-based vendor's lead by proceeding with the PMA process, which is viewed as an easier clearance route for digital mammography systems. Trex had spent two years trying to get 510(k) approval for its CCD-based system, only to have the FDA reject its application in August 1999.
While Hologic is initially filing a PMA for CCD technology, the company’s amorphous selenium flat-panel detector is being readied for use in its Lorad M-IV high-end analog mammography system, Cumming said.
"We have close to 3,000 of our (analog systems) installed," he said. "You can take the bucky or plate on the M-IV and replace the tray with either our CCD system or the selenium system, which is what we're putting our emphasis on."
The retrofit capability will allow Hologic's customers to avoid purchasing new machines when they switch to digital. "The room size is [also] the same," he said.
Upon receiving digital mammography clearance from the FDA, Hologic will file a supplement for soft-copy reading. The company will then file a second supplement for its flat-panel detector.
"Our amorphous selenium digital mammo plate and system is expected to be available by early calendar 2002," Cumming said.
Despite the importance of returning the firm to profitability, savings resulting from restructuring, workforce reductions, and cost-saving measures will not be enough to sustain Hologic in the long run, Cumming said.
"By itself, it can't get you to profitability, because you're not going to save your way to prosperity --not with the losses the company has sustained in the past couple of years," he said. "It's a question of trying to bring new products to market where you have some holes."
To that end, Hologic will showcase two new mammography systems at the upcoming RSNA meeting.
"We will introduce some products on the mammo side at the RSNA that will fill two gaps that we don't really participate in, " Cumming said. "One will be a mid-tier product and one will be a lower-end product. They will have features that other products at those price points don't have."
By Robert Bruce
AuntMinnie.com contributing editor
September 18, 2001
Related Reading
Hologic trims net loss, August 13, 2001
Hologic settles with Fleet, August 10, 2001
Hologic appoints Cumming as CEO, August 1, 2001
Hologic names Stein as interim CEO, June 22, 2001
Hologic CEO Ellenbogen dies, June 21, 2001
Hologic files PMA for Lorad digital mammography system, May 4, 2001
Hologic to use both Trex, DRC technology in digital mammo, March 2, 2001
Hologic to sharpen focus on women's imaging with acquisition of Trex, August 15, 2000
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