Will the nation’s second-largest pathology business rebound from major setback?

MedTech & Diagnostics News: In addressing recent setbacks, the second-largest pathology group in Australia has announced a comprehensive review of its structure and assets. The decision comes in the wake of Australian Clinical Labs withdrawing its bid for Healius last December, a move blocked by the Australian Competition and Consumer Commission (ACCC).

Despite recent challenges, Healius experienced an upswing, with shares soaring by 14% on Tuesday morning following the announcement of the strategic review. The company aims to leverage this momentum by engaging investment banking advisors to collaborate with management and the board throughout the review process.

Healius also disclosed the immediate resignation of its CEO, Maxine Jaquet. Stepping into the leadership role is the current CFO, Paul Anderson, a former CEO of Network Ten. Mr Anderson is set to spearhead the strategic review, focusing on optimising the company’s performance in its network of 2000 pathology collection centres and 100 testing labs. Over the past 12 months, Healius has witnessed a significant dip in its shares, plummeting by almost 50%.

“Despite operating in a tough industry environment, we have heard our shareholders loud and clear. We will focus on structuring and operating the business with a clear goal to maximise their investment,” stated Mr Anderson. He emphasised the strength of Healius’s assets in imaging and pathology across Australia, highlighting the growth prospects of subsidiaries like Agilex in the rapidly digitising diagnostics industry.

Healius faced financial turbulence in the past year, reporting a net loss after tax of -$636 million in the last half. This setback was compounded by a non-cash impairment charge of $603.2 million to the goodwill of its pathology unit, attributed to lower volumes in the business. The margins for Australian Clinical Labs stood at 7% in December, while Healius lagged behind at just 1%.

While the potential sale of Healius’ Lumus Imaging may solve the debt issue, it would leave the company with an underperforming pathology business.

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