Hologic (NSDQ:HOLX) today lowered the revenue expectations for its Cynosure division by $15 million to take into effect lost and reduced sales associated with an FDA warning from last month which raised concerns about the validity and functionality of “vaginal rejuvenation” products and procedures.
Last month the company said that Cynosure will suspend the marketing and distribution of its TempSure Vitalia handpieces and probes after the FDA released a warning about a lack of evidence to support certain “vaginal rejuvenation” products in July.
The reduced revenue expectations are due to lost sales of the TempSure Vitalia in the fourth quarter, refunds and rebates from prior sales of the device, unused probes for the system and reduced sales of its MonaLisa Touch, Hologic said in an SEC filing.
Marlborough, Mass.-based Hologic said that in spite of the losses, it reaffirmed its revenue guidance for the fiscal fourth quarter, originally provided in late July, expecting to see sales of between $800 and $815 million. Earnings per share expectations were reaffirmed as well, but the company said it expects them to be at the low end of the previously provided range.
“Hologic cannot yet predict when it will resume selling TempSure Vitalia. The company is committed to marketing its products in compliance with FDA requirements and believes a higher level of scrutiny from regulatory authorities will benefit its customers and patients,” Hologic wrote in an SEC filing.
While the company was optimistic, industry analysts expect that the issue could create larger hurdles in the long term for the company, who didn’t provide any guidance beyond its fiscal fourth quarter of this year.
“While we are encouraged the base business could offset the [Cynosure] revenue headwind for F4Q18, we still suspect there will be downward bias to consensus estimates in 2019 as consensus TempSure/MonaLisa Touch (MLT) estimates need to adjust accordingly (our rough estimate is a ~$40m [Cynosure] headwind to overcome in ’19),” Leerink Partner analyst Richard Newitter wrote in a letter to investors.
Steve MacMillan took over as CEO of Hologic in 2013, drawing on his experience at medtech titans like Stryker and Johnson & Johnson. Since then, Hologic has grown into a $3 billion business.
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