Quest Diagnostics Incorporated ( DGX Quick Quote DGX - Free Report) recently signed a non-exclusive license agreement with Zora Biosciences Oy, a renowned clinical diagnostics company working to identify robust markers of disease. The agreement is expected to enable Quest Diagnostics in the development of a test service based on Zora's patented ceramide-analysis technology, as an aid in identifying patients at risk of cardiovascular-related disease and death, subject to successful test development and favorable market conditions.
For investors’ note, research has shown that ceramides (a type of blood lipid) can detect potential cardiovascular-related death risk in patients with stable coronary heart disease and acute coronary syndrome independent of LDL (or low-density lipoprotein)-cholesterol status.
It should be noted that Quest Diagnostics expects to make the test available in the United States next year.
With the signing of the latest license agreement, Quest Diagnostics aims to strengthen its Cardiovascular Metabolic and Endocrine franchise on a global scale.
Rationale Behind the Deal
Per estimates provided by the American Heart Association, approximately half of the American population will suffer from some form of cardiovascular disease by 2035. Further, in the United States, someone has a heart attack every 40 seconds at present. Given this, the agreement is expected to expand the use of ceramides in the United States, where cardiovascular disease is the leading cause of death.
Per Quest Diagnostics’ management, the data supporting the utilization of ceramides highlights its potential to identify patients who are at risk of recurrent heart attacks and death. These insights will enable healthcare providers and patients to take preventive measures to reduce risk and improve outcomes, along with lowering healthcare costs. Management also believes that ceramide-based lab services would complement and extend its portfolio of cardiometabolic tests.
Zora's management believes that reducing the healthcare burden via early detection and effective intervention is essential to ultimately lower patient morbidity, mortality and societal costs in the post-pandemic period.
Industry Prospects Per a report by MarketsAndMarkets, the global cardiac marker testing market size is projected to reach $5.5 billion by 2025 from $3.6 billion in 2020 at a CAGR of 8.9%. Factors like growing incidence of cardiovascular diseases, rapidly increasing elderly population and prevalence of lifestyle diseases are expected to drive the market.
Given the market potential, the well-timed agreement is expected to significantly strengthen Quest Diagnostics’ business on a global scale.
Recent Agreements Signed by Quest Diagnostics
Of late, Quest Diagnostics has been signing a slew of agreements.
In March, the company, announced a definitive agreement with Mercy, a renowned name in integrated multi-state health care systems, to acquire the latter’s outreach laboratory services business.
The same month, Quest Diagnostics renewed its long-standing strategic relationship with BlueCross BlueShield of Western New York and BlueShield of Northeastern New York (two of New York’s well-known insurance carriers) to provide comprehensive clinical laboratory services for members of both companies.
Also, this month, Quest Diagnostics announced a collaboration with 98point6, an on-demand digital primary care service, to deliver text-based virtual primary care to patients following employer-sponsored biometric and laboratory health screenings from Quest Diagnostics.
Quest Diagnostics, in February, entered into an agreement with GRAIL, Inc. to provide phlebotomy services to support Galleri, GRAIL’s multi-cancer early-detection blood test. Also, in February, Quest Diagnostics renewed its long-standing strategic relationship with EmblemHealth, a renowned non-profit health insurer, to provide comprehensive clinical laboratory services for the members of EmblemHealth and its affiliate, ConnectiCare.
Shares of the company have gained 43.1% in the past year versus the 31.2% rise of the
industry and 59.2% rise of the S&P 500. Zacks Rank & Key Picks
Currently, Quest Diagnostics carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are
Hologic, Inc. ( HOLX Quick Quote HOLX - Free Report) , IDEXX Laboratories, Inc. ( IDXX Quick Quote IDXX - Free Report) and Abbott Laboratories ( ABT Quick Quote ABT - Free Report) .
Hologic’s long-term earnings growth rate is estimated at 15.4%. The company presently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IDEXX’s long-term earnings growth rate is estimated at 15.8%. It currently carries a Zacks Rank #2.
Abbott’s long-term earnings growth rate is estimated at 14.1%. The company presently carries a Zacks Rank #2.
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