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In an attempt to expand its portfolio through acquisitions and collaborations, Laboratory Corporation of America Holdings (LH - Analyst Report) recently formed an alliance with Mitsubishi Chemical Medience Corporation (MCM), Japan’s prominent diagnostic laboratory and central lab. As per the deal, the clinical trials division of LabCorp and MCM will extend their service offerings in Japan and worldwide.

Both the companies are confident about the deal, which is expected to enhance their global footprint, adding competitive advantage. With their complimentary product and services, LabCorp and MCM are optimistic about the launch of a complete global solution for customers conducting trials in Japan or internationally. The companies are currently discussing their plans in the Drug Information Association (DIA) annual meeting in Boston. 

Earlier in April, LabCorp expanded its long-term alliance with Bristol-Myers Squibb Company (BMY - Analyst Report) by signing a new five-year agreement. Under this agreement, Bristol-Myers selected LabCorp Clinical Trials as a preferred provider for the company’s full-service global central laboratory services and biomarker testing. However, financial terms of the deal were not disclosed.

The agreement is likely to support both the companies’ clinical development pipeline. Earlier, LabCorp’s global central lab, biomarker and specialty testing capabilities supported Bristol-Myers Squibb’s several early and late-stage clinical development programs. Some of the other collaborating partners are Abbott (Lung Cancer – Xalkori), Roche (Melanoma – Zelboraf; multiple infectious diseases – Cobas AmpliPrep/Cobas TaqMan HCV test, v2.0) and John Hopkins (Melanoma)

Moreover, the reproductive portion of Genzyme's business and LabCorps’ legacy genetics business were brought together to form ‘Integrated Genetics’. Genzyme's Oncology business and LabCorp's legacy oncology business have been added to ‘Integrated Oncology’. The company views the scope of sequencing as a support tool for molecular diagnostics and thus, is progressing to launch new testing panels to support this technology.

Given the continuous focus on portfolio expansion, we are confident about LabCorp garnering higher revenues from specialized testing, going forward. The stock carries a Zacks Rank #3 (Hold).

However, other stocks in the medical device sector, carrying a Zacks Rank #1 (Strong Buy), such as Myriad Genetics Inc. (MYGN - Analyst Report), and Haemonetics Corporation (HAE - Analyst Report) appear impressive.

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